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Registration Statement No. 333-135967
(To Prospectus dated November 30, 2006)
Limited Liability Company Membership Units
Minimum Offering Amount | $ | 55,000,000 | Minimum Number of Units | 55,000 | ||||||
Maximum Offering Amount | $ | 110,000,000 | Maximum Number of Units | 110,000 |
Minimum Purchase Requirement: Twenty-Five Units ($25,000)
Additional Purchases in Increments of Five (5) Units
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• | Our ability to secure our Title V air permit and other necessary licenses and permits; | ||
• | Changes in the environmental regulations that apply to our plant site and operations; | ||
• | Our ability to enter into a definitive debt financing agreement for the debt financing necessary to construct and operate our ethanol plant; | ||
• | Our ability to construct the ethanol plant and coal gasification energy center within our current budget; | ||
• | Our ability to enter into a definitive agreement for the engineering and construction of our coal gasification energy center; | ||
• | Our ability to enter into definitive agreements for our required supply of coal, natural gas and electricity; | ||
• | Changes in the availability and price of coal, natural gas and corn, and the market for distillers grains; | ||
• | Our ability to obtain federal and state grants and tax relief; and |
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SECURITIES AND EXCHANGE COMMISSION
þ | Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934. |
o | Transition report under Section 13 or 15(d) of the Exchange Act. |
Iowa (State or other jurisdiction of incorporation or organization) | 20-3919356 (I.R.S. Employer Identification No.) |
Riceville, IA 50466
(Address of principal executive offices)
(Issuer’s telephone number)
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(A Development Stage Company)
BALANCE SHEET (UNAUDITED)
3/31/2007 | ||||
CURRENT ASSETS | ||||
Cash and cash equivalents | $ | 2,111,326 | ||
Certificate of deposit | 614,488 | |||
Attorney escrow account | 224 | |||
Accrued interest receivable | 13,701 | |||
Prepaid offering costs | 235,587 | |||
Prepaid expenses | 14,105 | |||
Total current assets | 2,989,431 | |||
PROPERTY AND EQUIPMENT, at cost | ||||
Land | 1,483,126 | |||
Equipment | 23,816 | |||
Construction in progress | 190,359 | |||
Less accumulated depreciation | (1,242 | ) | ||
1,696,059 | ||||
OTHER ASSETS | ||||
Loan fees, net of amortization $390 | 17,182 | |||
Land options | 24,774 | |||
41,956 | ||||
Total Assets | $ | 4,727,446 | ||
LIABILITIES AND MEMBERS’ EQUITY | ||||
CURRENT LIABILITIES | ||||
Accounts payable | $ | 82,514 | ||
Notes payable | 3,517,572 | |||
Accrued interest payable | 6,449 | |||
Total current liabilities | 3,606,535 | |||
COMMITMENTS AND CONTINGENCIES (NOTE 7) | ||||
MEMBERS’ EQUITY | ||||
Capital units, less syndication costs | 1,305,893 | |||
Deficit accumulated during development stage | (184,982 | ) | ||
Total members’ equity | 1,120,911 | |||
Total liabilities and members’ equity | $ | 4,727,446 | ||
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(A Development Stage Company)
STATEMENTS OF OPERATIONS (UNAUDITED)
For the Quarter Ended March 31, 2007, for the period
from December 7, 2005 (Date of Inception) to March 31, 2007 and for the
period from December 7, 2005 (Date of Inception) to March 31, 2006
Period from | Period from | |||||||||||
Quarter Ended | inception to | inception to | ||||||||||
3/31/2007 | 3/31/2007 | 3/31/2006 | ||||||||||
OPERATING REVENUE | $ | — | $ | — | $ | — | ||||||
OPERATING EXPENSES | ||||||||||||
Professional expenses | 51,162 | 128,559 | 16,234 | |||||||||
Engineering & design | — | 18,652 | 2,177 | |||||||||
Feasibility studies | — | 67,750 | 6,000 | |||||||||
Filing fees/permits | 1,158 | 12,928 | — | |||||||||
Land options | — | 1,650 | — | |||||||||
Insurance | 4,619 | 6,159 | — | |||||||||
Office Expense | 3,169 | 9,736 | — | |||||||||
Depreciation | 949 | 1,242 | — | |||||||||
Amortization | 390 | 390 | — | |||||||||
Rent | 1,200 | 1,800 | — | |||||||||
Utilities | 3,171 | 3,242 | — | |||||||||
Misc expenses | 820 | 2,261 | 350 | |||||||||
Total Expenses | 66,638 | 254,369 | 24,761 | |||||||||
OTHER INCOME | ||||||||||||
Interest income | 11,327 | 44,387 | — | |||||||||
Grant income | 14,125 | 25,000 | — | |||||||||
Total Other Income | 25,452 | 69,387 | — | |||||||||
Net loss during development stage | $ | (41,186 | ) | $ | (184,982 | ) | $ | (24,761 | ) | |||
Basic and Diluted loss per capital unit | $ | (14.45 | ) | |||||||||
Basic and Diluted weighted average captial units O/S | 2,850 | |||||||||||
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(A Development Stage Company)
STATEMENTS OF CASH FLOWS (UNAUDITED)
For the Quarter Ended March 31, 2007, for the period
from December 7, 2005 (Date of Inception) to March 31, 2007 and for the
period from December 7, 2005 (Date of Inception) to March 31, 2006
Period from | Period from | |||||||||||
Quarter Ended | inception to | inception to | ||||||||||
3/31/2007 | 3/31/2007 | 3/31/2006 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||||
Net loss during development stage | $ | (41,186 | ) | $ | (184,982 | ) | $ | (24,761 | ) | |||
Depreciation and Amortization | 1,339 | 1,632 | — | |||||||||
Write off land options | — | 1,650 | — | |||||||||
Adjustments to reconcile net loss to net cash used in operating activities | ||||||||||||
Changes in assets and liabilities | ||||||||||||
Increase in other current assets | (3,710 | ) | (28,030 | ) | (11,044 | ) | ||||||
(Decrease) increase in accounts payable | (79,308 | ) | 16,009 | — | ||||||||
Increase in accrued interest payable | 6,449 | 6,449 | — | |||||||||
Net cash used in operating activities | (116,416 | ) | (187,272 | ) | (35,805 | ) | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||||
Proceeds from maturity of certificate of deposit | — | 600,000 | — | |||||||||
Purchase of certificate of deposit | — | (1,214,488 | ) | — | ||||||||
Payments for construction in progress | (123,854 | ) | (123,854 | ) | — | |||||||
Purchase of equipment | — | (23,816 | ) | — | ||||||||
Purchase of land | (1,483,126 | ) | (1,483,126 | ) | — | |||||||
Purchase of land options | (11,163 | ) | (26,424 | ) | — | |||||||
Net cash used in investing activities | (1,618,143 | ) | (2,271,708 | ) | — | |||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||||
Proceeds from short-term borrowing | 3,500,000 | 3,500,000 | — | |||||||||
Payments for prepaid offering costs | (11,824 | ) | (235,587 | ) | — | |||||||
Contributed capital | — | 1,325,000 | 200,000 | |||||||||
Payments for sydication costs on capital units issued | — | (19,107 | ) | (6,222 | ) | |||||||
Net cash provided by financing activities | 3,488,176 | 4,570,306 | 193,778 | |||||||||
Net change in cash | 1,753,617 | 2,111,326 | 157,973 | |||||||||
CASH AND CASH EQUIVALENTS | ||||||||||||
Beginning of period | 357,709 | — | — | |||||||||
End of period | $ | 2,111,326 | $ | 2,111,326 | $ | 157,973 | ||||||
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING & FINANCING ACTIVITIES | ||||||||||||
Accounts payable related to construction in progress | $ | 66,505 | $ | 66,505 | $ | — | ||||||
�� | ||||||||||||
Loan fees related to short-term borrowings | $ | 17,572 | $ | 17,572 | $ | — | ||||||
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(A Development Stage Company)
1. | Nature of Business |
2. | Summary of Significant Accounting Policies |
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(A Development Stage Company)
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(A Development Stage Company)
3. | Development Stage Enterprise |
4. | Debt |
5. | Members’ Equity |
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(A Development Stage Company)
6. | Related Party Transactions |
7. | Commitments and Contingencies |
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(A Development Stage Company)
8. | Subsequent Events |
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• | Investors’ ability to pay the outstanding balances on promissory notes after the closing of the offering; | ||
• | Our ability to obtain the debt financing necessary to construct and operate our plant; | ||
• | Our ability to enter into binding agreements with Fagen, Inc. and ICM, Inc. to build our plant; | ||
• | Our ability to enter into a binding agreement with a Design-Build Firm to build our coal gasification energy center; | ||
• | Changes in our business strategy, capital improvements or development plans; | ||
• | Construction delays and technical difficulties in constructing the plant; | ||
• | Increases in the price of corn as the corn market becomes increasingly competitive; | ||
• | Our inelastic demand for corn, as it is the only available feedstock for our plant; | ||
• | Changes in the availability and price of coal and natural gas to power our plant; | ||
• | Changes in the environmental regulations that apply to our plant site and operations; | ||
• | Ability to secure all necessary licenses and permits; | ||
• | Changes in federal and/or state laws (including the elimination of any federal and/or state ethanol tax incentives); | ||
• | Changes and advances in ethanol production technology; and | ||
• | Competition in the ethanol industry and from other alternative fuel additives. |
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• | commence construction of the plant using all or a part of the equity funds raised while we seek another debt financing source if the board of directors in their discretion determines that we could likely find another debt financing source; |
• | hold the equity funds raised indefinitely in an interest-bearing account while we seek another debt financing source; or |
• | return the equity funds, if any, to investors with accrued interest, after deducting the currently indeterminate expenses of operating our business or partially constructing the plant before we return the funds. |
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(1) | offer a pension or profit-sharing plan for all employees; | ||
(2) | produce value-added goods or be in one of 11 targeted industries; | ||
(3) | provide medical and dental insurance and pay 80% of the premiums; and | ||
(4) | have active productivity and worker safety improvement programs. |
(1) | a local property tax exemption of up to 100% of the value added to the property for a period not to exceed 20 years; | ||
(2) | a refund of state sales, service or use taxes paid to contractors or subcontractors during construction; and | ||
(3) | an investment tax credit equal to a percentage of the qualifying investment, amortized over 5 years. |
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• | Property Layout Drawings; | ||
• | Grading, Drainage and Erosion Control Plan Drawings; | ||
• | Culvert Cross Sections and Details; | ||
• | Roadway Alignment; | ||
• | Final Interior Plant Grading; | ||
• | Utility Layouts for Fire Loop, Potable Water, Well Water, Sanitary Sewer, Utility Water Blowdown, and Natural Gas; | ||
• | Geometric Layout; | ||
• | Site Utility Piping Tables Drawing; | ||
• | Tank Farm layout and Details Drawings; | ||
• | Sections and Details Drawing (if required); and | ||
• | Miscellaneous Details Drawing (if required). |
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• | Waste Water Discharge Permit |
• | New Source Performance Standards |
• | Storm Water Discharge Permit and Storm Water Pollution Prevention Plan (SWPPP Permits) |
• | Spill Prevention, Control and Countermeasures Plan |
• | High Capacity Well Permit |
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• | Alcohol Fuel Producer’s Permit |
• | Risk Management Plan |
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Maximum | ||||||||
110,000 | Percent of | |||||||
Sources of Funds(1) | Units Sold | Total | ||||||
Unit Proceeds | $ | 110,000,000 | 46.12 | % | ||||
Seed Capital Proceeds | $ | 1,325,000 | 0.56 | % | ||||
Senior Debt Financing | $ | 127,160,000 | 53.32 | % | ||||
Total Sources of Funds | $ | 238,485,000 | 100.00 | % |
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If 94,069 | Percent of | |||||||
Sources of Funds(1) (2) | Units Sold | Total | ||||||
Unit Proceeds | $ | 94,069,000 | 39.44 | % | ||||
Seed Capital Proceeds | $ | 1,325,000 | 0.56 | % | ||||
Senior Debt Financing | $ | 143,091,000 | 60.00 | % | ||||
Total Sources of Funds | $ | 238,485,000 | 100.00 | % |
Minimum 55,000 | Percent of | |||||||
Sources of Funds(1) | Units Sold | Total | ||||||
Unit Proceeds | $ | 55,000,000 | 23.06 | % | ||||
Seed Capital Proceeds | $ | 1,325,000 | 0.56 | % | ||||
Senior Debt Financing | $ | 182,160,000 | 76.38 | % | ||||
Total Sources of Funds | $ | 238,485,000 | 100.00 | % |
(1) | We may receive federal and state grants. Additionally, we may receive bond financing. If we receive grants or bond financing, we expect to reduce the amount of equity proceeds or senior debt financing necessary for our capitalization by the same or similar amount. | |
(2) | We have used 94,069 units as a mid-point because based on our directors’ past experience with similar projects, preliminary discussions with lenders and our independent research regarding capitalization requirements for similar ethanol plants, financing our project with 60% in senior debt financing and the balance in equity financing is a feasible capitalization ratio. |
Percent of | ||||||||
Use of Proceeds | Amount | Total | ||||||
Plant construction | $ | 109,706,788 | 46.00 | % | ||||
CCI contingency | 8,500,000 | 3.56 | % | |||||
Coal Gasification Energy Center | 64,500,000 | 27.05 | % | |||||
Land cost | 3,500,000 | 1.47 | % | |||||
Site development costs | 7,670,000 | 3.22 | % | |||||
Pipeline costs | 4,000,000 | 1.68 | % | |||||
Construction contingency | 2,013,212 | 0.85 | % | |||||
Construction performance bond | 400,000 | 0.17 | % | |||||
Construction insurance costs | 150,000 | 0.06 | % | |||||
Construction manager fees | 125,000 | 0.05 | % | |||||
Administrative building | 760,000 | 0.32 | % | |||||
Office equipment | 85,000 | 0.03 | % | |||||
Computers, Software, Network | 175,000 | 0.07 | % | |||||
Rail Infrastructure | 12,300,000 | 5.16 | % | |||||
Rolling stock | 500,000 | 0.21 | % | |||||
Fire Protection, water supply and water treatment | 3,500,000 | 1.47 | % | |||||
Capitalized interest | 2,000,000 | 0.84 | % |
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Start up costs: | ||||||||
Financing costs | 2,750,000 | 1.15 | % | |||||
Organization costs(1) | 1,400,000 | 0.59 | % | |||||
Pre production period costs | 950,000 | 0.40 | % | |||||
Working capital | 7,000,000 | 2.94 | % | |||||
Inventory — corn | 2,000,000 | 0.84 | % | |||||
Inventory — chemicals and ingredients | 500,000 | 0.21 | % | |||||
Inventory — Ethanol | 2,500,000 | 1.04 | % | |||||
Inventory — DDGS | 500,000 | 0.21 | % | |||||
Inventory — Coal | 250,000 | 0.10 | % | |||||
Spare parts — process equipment | 750,000 | 0.31 | % | |||||
Total | $ | 238,485,000 | 100.00 | % |
(1) | Includes estimated offering expenses of $480,000. |
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# Full-Time | ||||
Position | Personnel | |||
Production Supervisors | 4 | |||
Operating Workers | 12 | |||
Compliance Officers | 3 | |||
Maintenance/Repair Workers | 3 | |||
Welders | 3 | |||
Electrical/Electronic Engineering Technicians | 2 | |||
Director of Lab Operations | 1 | |||
Lab Assistant | 2 | |||
Laborers | 10 | |||
General Manager | 1 | |||
Plant/Commodity Managers | 2 | |||
Director of Finance and Accounting | 1 | |||
Office Clerk | 1 | |||
TOTAL | 45 |
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Exhibit No. | Description | Method of Filing | ||||
10.14 | Phase I and II Engineering Services Agreement dated December 5, 2006 between Homeland Energy Solutions and Fagen, Inc. | *+ | ||||
10.15 | Business Loan Agreement dated March 23, 2007 between Homeland Energy Solutions and Home Federal Savings Bank | * | ||||
10.16 | Acknowledgement of Assignment of Deposit Account dated March 23, 2007 between Homeland Energy Solutions and Home Federal Savings Bank | * | ||||
10.17 | Assignment of Deposit Account dated March 23, 2007 between Homeland Energy Solutions and Home Federal Savings Bank | * | ||||
10.18 | Assignment of Rents dated March 23, 2007 between Homeland Energy Solutions and Home Federal Savings Bank | * | ||||
10.19 | Disbursement Request and Authorization dated March 23, 2007 between Homeland Energy Solutions and Home Federal Savings Bank | * | ||||
10.20 | Limited Liability Company Resolution to Borrow/Grant Collateral dated March 23, 2007 between Homeland Energy Solutions and Home Federal Savings Bank | * | ||||
10.21 | Mortgage dated March 23, 2007 between Homeland Energy Solutions and Home Federal Savings Bank | * | ||||
10.22 | Promissory Note dated March 23, 2007 between Homeland Energy Solutions and Home Federal Savings Bank | * | ||||
10.23 | Change in Terms Agreement dated April 23, 2007 between Homeland Energy Solutions and Home Federal Savings Bank | * | ||||
31.1 | Certificate pursuant to 17 CFR 240 15d-14(a) | * | ||||
31.2 | Certificate pursuant to 17 CFR 240 15d-14(a) | * | ||||
32.1 | Certificate pursuant to 18 U.S.C. Section 1350 | * | ||||
32.2 | Certificate pursuant to 18 U.S.C. Section 1350 | * |
(*) | Filed herewith. | |
(+) | Material has been omitted pursuant to a request for confidential treatment and such materials have been filed separately with the Securities and Exchange Commission. |
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HOMELAND ENERGY SOLUTIONS, LLC | ||||
Date: May 15, 2007 | /s/ Stephen Eastman | |||
Stephen Eastman | ||||
President (Principal Executive Officer) | ||||
Date: May 15, 2007 | /s/ Bernard Retterath | |||
Bernard Retterath | ||||
Treasurer (Principal Financial and Accounting Officer) |
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Exhibit No. | Description | Method of Filing | ||||
10.14 | Phase I and II Engineering Services Agreement dated December 5, 2006 between Homeland Energy Solutions and Fagen, Inc. | *+ | ||||
10.15 | Business Loan Agreement dated March 23, 2007 between Homeland Energy Solutions and Home Federal Savings Bank | * | ||||
10.16 | Acknowledgement of Assignment of Deposit Account dated March 23, 2007 between Homeland Energy Solutions and Home Federal Savings Bank | * | ||||
10.17 | Assignment of Deposit Account dated March 23, 2007 between Homeland Energy Solutions and Home Federal Savings Bank | * | ||||
10.18 | Assignment of Rents dated March 23, 2007 between Homeland Energy Solutions and Home Federal Savings Bank | * | ||||
10.19 | Disbursement Request and Authorization dated March 23, 2007 between Homeland Energy Solutions and Home Federal Savings Bank | * | ||||
10.20 | Limited Liability Company Resolution to Borrow/Grant Collateral dated March 23, 2007 between Homeland Energy Solutions and Home Federal Savings Bank | * | ||||
10.21 | Mortgage dated March 23, 2007 between Homeland Energy Solutions and Home Federal Savings Bank | * | ||||
10.22 | Promissory Note dated March 23, 2007 between Homeland Energy Solutions and Home Federal Savings Bank | * | ||||
10.23 | Change in Terms Agreement dated April 23, 2007 between Homeland Energy Solutions and Home Federal Savings Bank | * | ||||
31.1 | Certificate pursuant to 17 CFR 240 15d-14(a) | * | ||||
31.2 | Certificate pursuant to 17 CFR 240 15d-14(a) | * | ||||
32.1 | Certificate pursuant to 18 U.S.C. Section 1350 | * | ||||
32.2 | Certificate pursuant to 18 U.S.C. Section 1350 | * |
(*) | Filed herewith. | |
(+) | Material has been omitted pursuant to a request for confidential treatment and such materials have been filed separately with the Securities and Exchange Commission. |
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 18, 2007
HOMELAND ENERGY SOLUTIONS, LLC
(Exact name of registrant as specified in its charter)
Iowa | 333-135967 | 20-3919356 | ||
(State or other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
106 W. Main Street, Riceville, IA | 50466 | |
(Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code:(641) 985-4025
(Former name or former address if changed since last report.) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 1.01 — Entry Into Material Definitive Agreements.
Lump Sum Design-Build Agreement between Homeland Energy Solutions, LLC and Fagen, Inc.
On July 18, 2007, we entered into a Lump Sum Design-Build Agreement with Fagen, Inc. for the design and construction of a one hundred (100) million gallon per year dry grind ethanol production facility (the “Design-Build Agreement”) on our plant site located near the City of New Hampton, Iowa. Pursuant to the Lump Sum Design-Build Agreement, the effective date is July 6, 2007. Under the Design-Build Agreement, we will pay Fagen, Inc. a total contract price of $109,706,788, subject to any mutually agreed-upon adjustments and previously paid amounts that may be treated as credits. Fagen, Inc, will design and build the plant using ICM, Inc., technology. As part of the total contract price, we will pay Fagen, Inc. a mobilization fee of $20,000,000 at the earlier of Financial Closing or the issuance of our Notice to Proceed. We currently expect the construction to be completed in winter 2008, however, there is no assurance or guarantee that construction will stay on schedule or that we will be able to commence operations at the plant by summer 2009.
First Amendment to Lump Sum Design-Build Agreement between Homeland Energy Solutions, LLC and Fagen, Inc.
On July 18, 2007, we also entered into a First Amendment to the Design-Build Agreement. Pursuant to the Amendment, Fagen, Inc. will accept Notice to Proceed on an earlier date than that set forth in the Design-Build Agreement. In exchange for beginning work on an earlier date, we have agreed to pay Fagen, Inc. an increased contract price of $120,000,000. So long as we give Fagen, Inc. a valid Notice to Proceed on or prior to November 30, 2007, there will be no adjustment of the Contract Price based on an increase in the Construction Cost Index (“CCI”) published by Engineering News-Record Magazine, as was set forth in the Design-Build Agreement.
In addition, Fagen will finance a portion of the contract price in the form of a progress payment credit in the amount of $1,800,000, plus any increase in the contract price resulting from a change in the CCI should Notice to Proceed not be given prior to November 30, 2007. The credit will be issued after all equity funds have been utilized. At that time, we will execute a Subordinated Secured Promissory Note in favor of Fagen, Inc., which will be subordinate to the construction and working capital loan proceeds obtained at Financial Closing. The increase in the contract price pursuant to the Amendment is within our construction and CCI contingencies in our budget. Thus, we do not anticipate an increase to our total estimated project cost of $238,485,000 unless we do not submit a valid Notice to Proceed prior to November 30, 2007, in which case there may be an increase due to any increase in the baseline CCI as set forth in the Amendment.
Item 7.01 Regulation FD Disclosure
We have issued a newsletter to our investors providing updates on the progress of our ethanol plant. The newsletter is attached hereto as Exhibit 99.1. Pursuant to the rules and regulations of the Securities and Exchange Commission, such exhibit and the information set forth therein and herein shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and shall not be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits
(c) Exhibits
99.1 Investor Newsletter dated July 20, 2007
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
HOMELAND ENERGY SOLUTIONS, LLC
Date: July 20, 2007
/s/Stephen Eastman
Stephen Eastman
President
(Principal Executive Officer)
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EXHIBIT INDEX
Exhibit | ||
Number | Description | |
99.1 | Investor Newsletter dated July 20, 2007 |
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Exhibit 99.1
July 20, 2007
Homeland Energy Solutions, LLC
P.O. Box C
Riceville, IA 50466
The Board of Directors of Homeland Energy Solutions has been working behind the scenes. As many of you know, no dirt has been moved on the site at this time. This does not mean we have not been busy.
The land for the plant has been purchased and sowed with oats to control weeds on the site before starting the dirt work. Corn has been planted on land that will not be utilized for construction.
Homeland met with the department of Natural Resources on May 23rd. Homeland has applied for a Title V air permit, which requires a 30 day public comment period. We anticipate that our comment period will approximately run from July 5th to August 5th. Homeland has decided to wait with the dirt excavation until the permit had been signed. Homeland may ask you as members to submit your positive comments to the DNR. We will notify you by e-mail or you may look for updates on the web page about up coming public meetings.
In other business, Homeland’s debt financing is on track, as we have entered into a preliminary proposal with Home Federal Savings Bank of Rochester, Minnesota to provide debt financing. Under this proposal, Home Federal is offering credit up to $140 million. We paid an underwriting fee of $50,000 to Home Federal upon signing this proposal. We anticipate that we will be able to enter into a definitive loan agreement with Home Federal for our necessary debt financing.
Homeland has a member equity figure at this time of approximately $98 million. Homeland can accept equity to $110 million. Homeland has budgeted approximately $238 million in which to build our plant. If you would like to purchase additional units, please contact the office and we’ll work out the details.
Homeland Energy Solutions has entered into a design build contract with Fagen Inc. This has been secured within our budgeted values.
EPIC/Burns and McDonald/Peabody (coal gasification contractors) have continued to engineer and provide services to provide our plant the lowest cost of energy for production.
Cornerstone has also negotiated a natural gas line TAP agreement with Alliance for Homeland. Dairyland/Hawkeye REC is working with the utilities board to provide a substation agreement.
Homeland has also been working towards some state and federal grant/loans. Homeland has received a grant for $100,000 from VAAPFAP. We have also applied for state income state tax credits, state sales tax credits and property tax relief.
Homeland continues to move forward each day. The board is taking the necessary steps to get this plant into production. If you have any concerns please feel free to talk to one of the board members or call our office. We would be pleased to answer your questions.
Thank you for your continued support and trust in Homeland Energy Solutions.
Respectively,
Your Board of Directors