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SWAP AND GROW AGREEMENT

FAQs

Update: November 2016
(Public Version)

 

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A- Who can subscribe to the Swap and Grow agreement?

Everyone who holds a valid Power Clouds Lease Agreement or Hire Purchase Agreement is eligible to subscribe to the Swap and Grow Agreement.

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B- How can I subscribe to the new Swap and Grow Agreement?

By following a few simple steps:

  • access their personal area (powerclouds.com);
  • go to Legal section (by clicking on the fourth button on top);
  • download and read the contract by clicking on “DOWNLOAD” button;
  • print the contract and if you agree, then the authorized person must sign on the last page;
  • scan the signed agreement;
  • upload the signed agreement together with a copy of the authorized person’s government issued valid ID, by clicking on “UPLOAD” button in the in Legal section.

 

At this point, the Power Clouds Holdings reserves the right to verify the uploaded documents and respond to the users within a few days.

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C- What is the deadline to exchange my current contract with the Swap and Grow Agreement?

The offer is currently valid until the end of year 2016.

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D- If I accept the new Swap and Grow Agreement, will I receive the previous requested and outstanding payments, and what will happen to my Wallet?

When you accept the new Swap and Grow Agreement, you give up all rights concerning the previous Hire Purchase agreement or Lease Agreement, included any payments due from these agreements. However, you get to keep any payments already made to you.

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E- How many shares will I receive when I sign the new Swap and Grow Agreement? 

The amount of shares you’ll receive will be determined by the Max Price as defined in the “Option and Release Agreement” in the Swap and Grow offer.

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FWhat is PWCL?

PWCL is the ticker symbol for Power Cloulds Inc.(and link to www.powercloudsinc.com), a US public listed company.

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G- What is PCH?

PCH is Power Clouds Holdings Pte Ltd is the Singapore company that is responsible for the payment commitments under the Lease and Hire Purchase agreements.

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HWhen does the Option Period end?

31st December, 2017.

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I- What is the value of PWCL on the world market today?

The current price for PWCL shares may be found here http://www.otcmarkets.com/stock/PWCL/quote

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J- How has the PWCL share price evolved over the last 2 years?

The share price has ranged from $0.03 to $0.40. which is based solely on the asset values and financial performance of the current parks in Romania.

Over the last 18 months PWCL has been restructuring the business model and is now focused on acquiring already operational and profitable solar parks, rather than exclusively building solar parks which have higher risks and takes a longer time from the moment of investment to actual cash generation. This new strategy means that each time PWCL completes the purchase of a solar park, there is instant positive cash flows which is a less risky model. More details on PWCL’s current business strategy, growth plans and other investor related information has been filed by PWCL and can be found at http://www.otcmarkets.com/financialReportViewer?symbol=PWCL&id=160809

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K- What guarantees do I have that I will get my shares in exchange for my agreement?

PCH has placed Thirty Million (30,000,000) shares of PWCL common stock in a reserve account with PWCL directly to cover the anticipated amount of Shares that will be assigned as part of this Agreement. PCH has also completed a proxy voting agreement whereby these Shares automatically vote in line with recommendations made by the Board of PWCL.

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L- What will the PWCL share price be in 2018?

The PWCL share price in 2018 will be determined solely by how the US public market values the implementation of the new Power Clouds business plan. At the moment, PWCL share price is a reflection of a number of factors including market sentiment and income generation potential of PWCL, ultimately determined by the number of Megawatts owned and managed by PWCL today.  PWCL is now focused on acquiring solar parks (rather than building them) and so the Megawatts under management is expected to grow in the next two years. More details on PWCL’s current business strategy, growth plans and other investor related information has been filed by PWCL and can be found at http://www.otcmarkets.com/financialReportViewer?symbol=PWCL&id=160809.

 

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M- What happens if I do not accept the new agreement and keep the old one?

Power Clouds Holdings Pte Ltd (“PCH”) will need to restructure the payments of the current agreements to match the delayed and reduced cash flows from the Romanian and Otaru parks. Whereas full details of this have not yet been finalized, this will most likely mean that all past payments due and future payments will be suspended until mid-2018 and thereafter will be at a reduced monthly rate with a bullet payment at the end of the period to provide the originally expected return. Full details of this will be released before end of the exchange deadline at the end of 2016.

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N- Why has Power Clouds stopped paying panel agreement holders?

As has been previously communicated, due to a fundamental change in the Romanian Green Certificate regulations, the cash flow streams originally expected from the Romania projects where significantly reduced, permanently. In addition, the Otaru project in Japan has not come on stream yet due to various factors, some within and some outside the control of management. Otaru is not now scheduled to come into production until mid-2017 and so the expected revenues from this plant have also not been available to service the payments under the Agreements in recent years.

Until recently Power Clouds Holdings has strived to maintain the payments it had agreed under the Lease and Hire Purchase agreements, despite these setbacks. Unfortunately, this is no longer sustainable going forward and Management has worked very hard to find suitable alternatives in order to address the situation. One of these was the spin out of Power Clouds Inc. into a US Public company to provide the necessary platform for growth in the future in order to continue the founding philosophy and become a global player in the renewable energy market. Given the market dynamics, Power Clouds Inc. has made great strides in the last 18 months to stabilise the current operations and has put in place the necessary financial structures to grow again, with 12MW of new Solar project acquisitions announced in Italy. Power Clouds Holdings remain extremely confident in the Power Clouds founding vision and in the professional management team of Power Clouds Inc., where Roberto Forlani is the Chairman and CEO.

The success and potential of Power Clouds Inc. has enabled the current opportunity – Swap and Grow. In this opportunity, we are offering the Agreement  Holders an opportunity to participate directly in Power Clouds Inc.’s success as it continues to adds additional projects, rather than being geographically restricted and limited to just Romania and Japan. This offer is designed to give Agreement holders an opportunity to exit their Agreements and potentially receive more return than was originally planned in a shorter timeframe. Please log in to your User Area for more details.

So what changed in Romania?

The Power Clouds business model in Romania relied on income from the sale of Green Certs (which Power Clouds contractually receives from the Romanian government for the production of solar energy).  Unfortunately, the Romanian government cut its Green Cert allocation by half in January 2014 [1].

Although there was hope for recovery, during 2014 and 2015, the market price for Green Certs collapsed [2]. Consequently, Power Clouds projected income surplus from the sale of Green Certs was significantly eroded making the original Power Clouds business model unsustainable, requiring Power Clouds to find an alternative viable business plan.

The effect of the reduction in income can be seen from the chart below:

romania-green-cert-drop-2014

Incidentally, Power Clouds is not the only green energy producer having problems in Romania, as the “Romanian green power sector literally being dismantled as developer tears down turbines” [3].

 

[1]  “Romania halves certificates for solar PV starting January 2014” : http://www.pv-magazine.com/news/details/beitrag/romania-halves-certificates-for-solar-pv-starting-january-2014_100013804/#ixzz4PdBYNzj1.

 

[2 ] The price of Green Certs dropped in the market because:             (a) the price was capped by the “Romania’s Energy Regulatory Authority has set this year’s price limit for trading green certificates, thus the cost of a green certificate on the corresponding market will range from 130.69 lei (29.28 euro) to 266.22 lei (59.647 euro).”http://govnet.ro/Energy/Economics/ANRE-establishes-new-price-trading-limits-of-green-certificates-in-2014             (b) there was a huge surge in incentive lead solar energy production, see: https://www.greentechmedia.com/articles/read/how-romania-became-a-1-gigawatt-market             (c) which triggered a collapse, please see:  “Romania: Green certificate market ‘collapsing’  12/10/2015 “http://www.energyworldmag.com/12/10/2015/romania-green-certificate-market-collapsing/.

 

 [3]  http://www.icis.com/resources/news/2015/08/14/9914232/romanian-green-power-sector-literally-being-dismantled-as-developer-tears-down-turbines/

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O- Why isn’t the Otaru plant in Japan generating income? 

The Otaru solar park has not been completed yet.  Firstly, it took longer than expected to clear and reform the site to make it suitable to house the solar panels and then it was not possible to erect the solar panels because there was snow on the ground in Otaru for 6 months of the year. Whereas the snow will not affect energy production once the plant is live, it makes the construction window very tight.  This limitation delayed the project construction and therefore caused Power Clouds to miss the grid connection timetable.  It has recently agreed a new date with the local power company and so expects to have the solar part completed and grid connection by the end of Q2’17.

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P- In the User Area, why are the outstanding payments still listed as pending? 

If a Panel Agreement Holder chooses not to sign-up for Swap and Grow, then Power Clouds Holdings intends to restructure the payment timetable. Consequently, the outstanding amounts are shown as pending until the restructuring plan has been agreed. An update on this restructuring will be announced before the end of the 2016.

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Q- Can I ask from my panel back as per my agreement?

Yes. Please Contact Us and request that you wish to return your panel in exchange for your Panel Agreement and we will start the panel return process.

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R- Will Power Clouds Holdings build another solar park based on the original Power Clouds model?

Sadly, no.  Given the changes in the solar energy industry and the Green Certificate market, the original Power Clouds business model is no longer viable. All future growth in the Power Clouds concept will be through Power Clouds Inc. – that has recently announced the planned acquisition of 12MW of already constructed plants in Italy. More information on Power Clouds Inc. growth plans can be found at http://www.otcmarkets.com/financialReportViewer?symbol=PWCL&id=160809.

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S- What is the relationship between Power Clouds Holdings and Power Clouds Inc.?

Power Clouds Holdings owns about 60% of Power Clouds Inc. of which half (30 million shares) have been reserved for Swap and Grow.

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T- Can someone explain the Power Clouds Inc. business model? 

Yes, it is all explained in a Vincent Browne, CFO, Power Cloud Inc. recent webcast here:  https://www.youtube.com/watch?v=ZmLW2BVgoWA.

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