Frequently Asked Questions
Questions About Luma Solar And The Investment Process
1What do I get for my investment?
Investors receive Convertible Preferred Units in Luma Resources LLC (dba Luma Solar).
2How do I get a return on my investment?
The Convertible Preferred Units entitle you to an annual distribution of your pro-rata share of 10% of Luma’s earnings before interest, taxes, depreciation, and amortization (EBITDA) until 100% of your investment has been returned to you. At that time your Preferred Units automatically convert into Common Units. Officers of Luma only own Common Units of the company, and your Preferred distribution is made before any profits can be paid to anyone else. The Common Units represent your ownership stake in Luma, and their value will increase or decrease based on Luma’s future profitability.
3Why is Luma Solar using Regulation CF/equity crowdfunding for its stock offering?
We want to invite our customers, fans, and anyone who likes what we are doing to be a part of our company. By doing so they can help us grow, and become not just a bigger company and more recognizable brand, but also to become a community of people pulling together to make that happen. We could have raised capital from other sources alone, but that is not what we are about. We want as many people like you to join us as possible in our efforts to make the world a better place, and earn good profits along the way.
4Can I invest in Luma Solar if I’m not an accredited investor?
Yes, Regulation CF allows both accredited investors and non-accredited investors to invest in Luma Solar. The main difference is that accredited investors are allowed to invest more than those who are not accredited.
5What is an accredited investor?
An accredited investor is someone who meets specific criteria outlined by the SEC and by federal law and is therefore eligible to participate in certain investment offerings.
In order to be considered accredited, an individual must have had an income of at least $200,000 for the past two years (or $300,000 of income combined with their spouse or spousal equivalent), or have a net worth of over $1 million not including their primary residence.
Institutions such as trusts, endowments and venture funds can also be certified as accredited provided that they have more than $5 million in assets.
There are other criteria to consider. If you want to read the exact language of the law defining the term “accredited investor” click here:
https://www.ecfr.gov/current/title-17/chapter-II/part-230/subject-group-ECFR6e651a4c86c0174/section-230.501
6How do I make an investment in Luma Solar?
After you have read the offering page, Form C, the educational materials and you have done any additional due diligence, just fill out the form when you click the “Invest” button. In the online form (which is much like opening an account on Amazon or any other e-commerce site) we’ll ask for some additional information to identify you (as required by federal securities law) such as your SSN and date of birth. We’ve tried to make the process as simple as possible, but if you have any questions feel free to email us at r2@lumasolar.com.
If you want to cancel your investment commitment before it is finalized and you officially become an investor, here is what you need to know:
Investors may cancel an investment commitment until 48 hours prior to the deadline identified in the offering materials;
Cultivate Capital Group LLC will notify investors when the target offering amount has been met;
If the target offering amount (the minimum required to hold a first closing) is met prior to the deadline identified in its offering materials, Luma Solar may close the offering early if it provides notice about the new offering deadline at least five business days prior to such new offering deadline (absent a material change that would require an extension of the offering and reconfirmation of the investment commitment);
If an investor does not cancel an investment commitment before the 48-hour period prior to the offering deadline, the funds will be released to Luma Solar upon a closing of the offering and the investor will receive securities in exchange for his or her investment; and
If an investor does not reconfirm his or her investment commitment after a material change is made to the offering, the investor's investment commitment will be cancelled and the committed funds will be returned.
7How much does the investment cost?
The minimum investment is $1000.
8Is this investment risky?
Yes. All investments are inherently risky and early stage businesses are generally considered more high risk than established businesses. That’s why it’s so important that before you invest in any offering, you do your own due diligence so you understand not only the business and investment, but also the risk factors specific to that company. Also, read the educational materials on our website. If you cannot afford to lose the money you plan to invest if things do not work out as the company hopes, you should not invest. Read and understand the documents and talk to your own advisors before you invest.
9What is the investment process?
Just click on the “Invest” button and fill in the blanks. The entire process takes about 10-15 minutes, and is much like opening an account on Amazon or any other e-commerce site. We’ll ask for some additional information to identify you (as required by federal securities law) such as your SSN and date of birth. You have to electronically sign some forms to make it legal. We’ve tried to make the process as simple as possible, but if you have any questions feel free to email us at r2@lumasolar.com.
If you want to cancel your investment commitment before it is finalized and you officially become an investor, here is what you need to know:
Investors may cancel an investment commitment until 48 hours prior to the deadline identified in the offering materials;
Cultivate Capital Group LLC will notify investors when the target offering amount has been met;
If the target offering amount (the minimum required to hold a first closing) is met prior to the deadline identified in its offering materials, Luma Solar may close the offering early if it provides notice about the new offering deadline at least five business days prior to such new offering deadline (absent a material change that would require an extension of the offering and reconfirmation of the investment commitment);
If an investor does not cancel an investment commitment before the 48-hour period prior to the offering deadline, the funds will be released to Luma Solar upon a closing of the offering and the investor will receive securities in exchange for his or her investment; and
If an investor does not reconfirm his or her investment commitment after a material change is made to the offering, the investor's investment commitment will be cancelled and the committed funds will be returned.
10Can I invest more than once?
You sure can! Just make sure you fill in the same information (name, email, address).
11Can I buy shares as a gift for someone else?
Because of compliance procedures we must perform on all investors and certain limitations as to transferring Regulation CF shares, we cannot allow you to buy shares as a gift for someone else. However, after you have purchased shares and they have been issued to you it is possible in some circumstances to give those shares as a gift to certain people, but we cannot help you to do so.
12Can I invest if I’m not 18?
No. You must be at least 18 years old to invest.
13Can I invest if I don’t live in the U.S.?
Yes! This stock offering is open for anyone across the world to invest, as long as in your country and jurisdiction it is legal. We recommend consulting with a lawyer in your jurisdiction before investing in any company in case your country or situation requires specific legal or investment advice.
14Can I sell my securities after I invest?
You cannot sell your securities after you invest for one year, unless you sell them to an accredited investor or a few other limited potential buyers. However, keep in mind that as Luma Solar is not a publicly traded company, there is no marketplace to sell their securities, so you’ll need to find your own buyer. If you are looking to buy the securities and sell them quickly, this is not an investment for you.
15Is there a minimum amount I can invest?
Yes, the minimum investment is $1000.
16Is there a maximum amount I can invest?
There is no maximum you can invest (other than the total amount we are raising which is $1,235,000) if you are an accredited investor.
If you are not an accredited investor, you are limited as an individual to
• The greater of $2,500, or 5 percent of the greater of your annual income or net worth, if either your annual income or net worth is less than $124,000; or
• Ten percent (10%) of the greater of your annual income or net worth, not to exceed an amount sold of $124,000, if both your annual income and net worth are equal to or more than $124,000.
In addition, if you are not an accredited investor, you have an aggregate limit that applies to all Regulation CF investments made over a 12-month period. This limit is aggregate to all Regulation CF offerings across all websites on a rolling 12-month period from the date preceding each transaction.
17How do I calculate my net worth?
To calculate your net worth, you simply add your assets and subtract your liabilities. The result is your net worth. Please note that for purposes of determining eligibility in Reg CF offerings, the value of your primary residence is not included in your net worth calculation. In addition, any mortgage or other loan on your home does not count as a liability up to the fair market value of your home. If the loan is for more than the fair market value of your home (i.e., if your mortgage is underwater), then the loan amount that is over the fair market value counts as a liability under the net worth test. Further, any increase in the loan amount in the 60 days prior to your purchase of the securities (even if the loan amount doesn’t exceed the value of the residence) will count as a liability as well. The reason for this is to prevent net worth from being artificially inflated through converting home equity into cash or other assets.
18Why do I have to give my social security number and date of birth to invest?
Federal and state securities laws require our broker-dealer to verify your identity and to do certain compliance tests behind the scenes when you apply to invest. While we would prefer to not have to ask you for this information, the broker-dealer cannot do what federal law requires them to do unless we get that information from you. As an investor in our company, we want you to understand that we take the legal aspects of our job very seriously, and that we do our best to comply with all laws that apply to us, including these.
19Why do I have to give my income and net worth to invest if I’m not an accredited investor?’
This is a requirement of federal securities laws and of Regulation CF. The law is designed to ensure that people do not invest more than a certain amount, so we have to collect this information if you are not an accredited investor. As an investor in our company, we want you to understand that we take the legal aspects of our job very seriously, and that we do our best to comply with all laws that apply to us, including these.
20What are you doing to protect my information?
The personal information you provide to us will be provided in an encrypted manner, and we do what we can within the limitations of the existing computer and online world to protect that information. We take your privacy seriously and will not distribute or sell your private information to anyone, other than regulatory bodies that require it or people like our broker-dealer who have to have it to do what is required under federal and state laws. However, please understand that we, like every other company in the world, are subject to possible criminal malfeasance or someone who attempts to hack our systems. We cannot ever (nor can anyone else) 100% guarantee that such criminal acts or hacking will never occur, but we take commercially reasonable steps, like any responsible company, to prevent that from happening.
21What are my options for paying for my investment?
You can pay by credit or debit card, ACH (bank payment) or wire.
22Can I get a refund?
Once your investment is finalized, we cannot provide you with a refund. If you change your mind prior to the time your investment is finalized, write to us at r2@lumasolar.com and we will do our best to work something out for you, if we can.
If you want to cancel your investment commitment before it is finalized and you officially become an investor, here is what you need to know:
Investors may cancel an investment commitment until 48 hours prior to the deadline identified in the offering materials;
Cultivate Capital Group LLC will notify investors when the target offering amount has been met;
If the target offering amount (the minimum required to hold a first closing) is met prior to the deadline identified in its offering materials, Luma Solar may close the offering early if it provides notice about the new offering deadline at least five business days prior to such new offering deadline (absent a material change that would require an extension of the offering and reconfirmation of the investment commitment);
If an investor does not cancel an investment commitment before the 48-hour period prior to the offering deadline, the funds will be released to Luma Solar upon a closing of the offering and the investor will receive securities in exchange for his or her investment; and
If an investor does not reconfirm his or her investment commitment after a material change is made to the offering, the investor's investment commitment will be cancelled and the committed funds will be returned.
23Can I invest through my broker?
No, you can only invest through the Cultivate Capital website.
24Can I invest through my IRA, trust or retirement account?
Yes, if your IRA, trust or retirement account allows it. Most self-directed IRAs and retirements accounts allow you to invest in private companies like ours, and so do most trusts, so check with them first.
25What is a rolling close?
We may choose to do a rolling close to receive some of the money raised and start using it to grow our business. The name comes from the fact that investments may be closed on a rolling basis, as opposed to all at once the end of the offering.
If you have made an investment in our securities offering before a rolling close:
• You will receive a notification announcing when the rolling close will happen (5 business days or more in advance)
• If you don’t cancel or lower your investment, it will become finalized at the rolling close date, just like at the end of the entire offering. You will not be able to get a refund after a rolling close.
• The funds raised to the date of a rolling close will be sent to us, and the offering will continue.
• If you wish to cancel or lower your investment, you must do so more than 48 hours before the announced rolling close date.
• If you wish to increase your investmnt in the company after the rolling close, you can do so.
26Can I increase my investment after I am issued shares by a company in a rolling close?
Yes, you can increase your investment. However, because of Regulation CF rules, you can only later cancel or amend this new part of your total investment if you change your mind later. Once you are issued your shares by a company, we cannot undo that transaction.
For example, you had a $2,000 investment finalized in a closing, then you later invested an additional $1000. You cannot cancel any part of your original $2,000 investment, and if you later cancel your $1000 investment prior to the cancellation deadline, you will still have your original $2,000 investment.
27How does the waitlist work?
If our stock offering reaches its maximum goal, no more investments can be accepted and all subsequently made investment commitments are added to a waitlist.
If one of the earlier investors decides to cancel or otherwise does not close on the investment, the space opens up and investors from the waitlist takes that investor’s space.
The order of the waitlist is in our discretion, but often is based on the amount of the investment commitment cancelled and available investors on the waitlist who can match the amount of the investment commitment cancelled.
28Why do I need to give my personal information like my SSN and date of birth during the investment process?
We wish we didn’t have to ask for your private information but because we are following the rules of Regulation Crowdfunding, we are responsible for verifying the identity of each investor. This is required under U.S. federal law to prevent terrorist financing and money laundering. Think of it just like if you opened a bank account… you have to prove to the bank who you are or they will not open an account for you.
When you provide your private information to us, we use it, along with our FINRA licensed broker-dealer Cultivate Capital Group LLC, to verify your identity through a secure link to an established third party verification service. Many people have the same or similar names, but no two people can have the same date of birth and social security number.
As an investor, we hope you understand that following these rules is very important to all of us at Luma Solar. That’s the responsible thing to do to protect all of us, and you as an investor.
Here’s what we need from you in addition to the information you would have to give any online company (like Amazon, or Facebook) to open an account, and why we have to collect it or you cannot legally become an investor in our company:
1. Your date of birth and social security number or other national ID number. Securities laws require us to verify your identity and to do certain compliance tests behind the scenes when you apply to invest. The only way they can verify you are who you say you are is by checking these two things.
2. Your income and net worth, if you are not an accredited investor.
While none of us at Luma Solar think the government should distinguish between possible investors based on how much money you have or how much you earn, this is the way the Regulation Crowdfunding law was written that allows private companies to sell you stock if you are not an accredited investor. Just so you know, for many years before this 2016 law – non-accredited investors were generally not allowed to invest in securities issued by private early stage companies.
The personal information you provide to us will be provided in an encrypted manner, and we do what is reasonable within the limitations of the existing computer and online world to protect that information. We take your privacy seriously and will not distribute or sell your private information to anyone, other than regulatory bodies that require it or people like third-party identification providers who need it to do what is required under securities laws. However, like every other company in the world, we are subject to possible criminal acts like someone who attempts to hack our systems. We cannot ever (nor can anyone else) 100% guarantee that such criminal acts or hacking will never occur, but we take commercially reasonable steps, like any responsible company, to prevent that from happening.
29Why does Luma Solar, or our broker-dealer Cultivate Capital Group LLC sometimes reach out to investors for more information such as a passport, driver’s license, utility bill or other documents?
Most investors are verified through an established third party verification service without any more information required other than your name, address, SSN and date of birth. But sometimes people are flagged by the third party verification service because the information does not match up or because their name is similar to someone who is on a list of potential bad actors. For example, you might have recently moved to a new home, so the third party verification service raises a flag that you do not match information in their system. In a case like that, we may ask you to upload a recent utility bill or another document that shows your new address.
30What Do Luma Solar and Cultivate Capital Group Do To Protect My Personal Information?
The personal information you provide to us will be transmitted in an encrypted manner, and we take every measure within the limitations of the existing computer and online world to protect that information. We take your privacy seriously and will not distribute or sell your private information to anyone. We do provide your information to regulatory bodies that require it, to third parties who have to use it to perform tasks required under federal and state laws, and to providers for verifying your identity or processing a payment. However, please understand that we, like every other company in the world, are subject to possible criminal malfeasance or someone who attempts to hack our systems. We cannot (nor can anyone else) 100% guarantee that such criminal acts or hacking will never occur. We take every commercially reasonable step to prevent that from happening.
31How do I find your stock symbol?
Luma Solar is not a public company and does not have a stock symbol. While our securities offering is open to the general public, we are still a private company and thus our securities are not traded on any exchange. This means there is no stock symbol, and the only way to invest is via this website.
32What happens if Luma Solar doesn’t reach their minimum to first closing amount?
If we fail to meet our minimum to first closing amount, all investments will be cancelled and refunded.
33How to communicate with Luma Solar during the securities offering?
Regulation CF rules states that pretty much all communications relating to your investment must be in writing, and publicly posted on the offering page until the offering is closed or your investment is finalized and your securities are issued.
After you have invested in Luma Solar, we can message you outside of the website and offering page, but these communications cannot contain any material information about the company that is not included on their public offering page.
34Does it cost to invest in Luma Solar other than the securities price?
No, you will only be charged for the amount of your investment, nothing more. While some companies and broker-dealers or funding portals pass along payment processing fees or other charges to investors, we have chosen to not do so.
35Who should I contact if I have more questions?
Still have questions? Reach out to us through the offering page. If you are already an investor, reach out to us at r2@lumasolar.com and we’ll do what we can to help.
Questions About Equity Crowdfunding And Regulation Crowdfunding
1What is crowdfunding?
Some people refer to the way Luma Solar is raising capital (and how they allow you to invest) as “equity crowdfunding.” Put simply: crowdfunding is raising funds from a crowd of people. The term might be new, but the concept is not – if you’ve ever thrown in $5 toward an office party, you have witnessed crowdfunding in action. The term “crowdfunding” generally applies to using the internet as a means of raising money online by collecting (relatively) small amounts of money from a large number of people.
2What is the difference between rewards and equity crowdfunding?
If you give someone money on a rewards-based crowdfunding site, you are either making a donation or purchasing a product that doesn’t exist yet. If you give someone money like what we are doing, you are investing in the company and are purchasing securities in the company.
Sites like Kickstarter, Indiegogo and GoFundMe are all rewards-based crowdfunding platforms. They allow people to raise money for a project by offering some sort of perk or reward in exchange for contributions. They are not allowed to sell securities, ownership or equity in a business to raise funds.
Luma Solar’s offering utilizes equity crowdfunding, which allows companies to raise money for their business by selling securities online to people like you.
3What is the JOBS Act?
The JOBS Act is a law passed in 2012 that allows everyday people to invest at an early stage in a private company. This is something that most everyday people were not allowed to do with limited exceptions until the JOBS Act went into effect. Before that, mostly the rich and well-connected, or venture capital firms invested in early-stage private companies.
The U.S. Congress passed the JOBS Act with bipartisan support and the President signed the bill in April of 2012. The U.S. Securities and Exchange Commission (SEC) finalized the rules for “Regulation Crowdfunding” of the JOBS Act in 2016. That made it legal for companies like Luma Solar to sell our securities online to the general public, and made it easier for anyone to invest in a company like ours, for the first time in 80 years.
4What is Regulation Crowdfunding?
Regulation Crowdfunding (also called Regulation CF or Reg CF) is a section of the JOBS Act. For far less than the cost and effort of a traditional IPO, companies can use Regulation Crowdfunding to raise up to $5 million in an online securities offering, and all investors, not just the rich and well-connected, can invest in companies like Luma Solar. Regulation Crowdfunding has helped to democratized investment in private, early stage companies, making it available online for everyone.
Questions About Investments In General
1Do you have any tips for a first-time investor in a Regulation Crowdfunding securities offering?
Neither we, nor our broker-dealer Cultivate Capital Group LLC can give you investing advice or legal advice, but some things to consider before you make an investment are the following:
1. Never invest more than you can afford to lose in any investment.
2. Do your research. Read the materials on our offering page. Read our Form C. Ask us questions you may have on our offering page.
As we mentioned, these are not recommendations or advice, just some common things to consider. Everyone should consult with their own investment professional or trusted advisor before making any investment.
2What is the purpose of a transfer agent?
Transfer Agents maintain a company’s records of ownership (who owns the securities the company has issued). Transfer Agents were created by federal law to ensure a licensed third party would facilitate the issuance, exchange, cancellation and payments related to securities issued by certain companies. In general, the purpose of a Transfer Agent in most cases is to track each investor’s investment to facilitate the delivery of information, the exercise of voting rights if they exist, the delivery of dividends if holders are entitled to them and the conversion or exchange of the security in the event of a liquidity event such as a change of control, merger or initial public offering.
3What are the potential risks of investing?
There are risks to any investment, including not getting your money back. You should never invest any money you cannot afford to lose if the investment does not work out. In this particular investment, read the entire offering page and the Risk Factors set out in Form C. Also, the SEC has stated these general risks for Regulation CF offerings:
• Risk of Loss: The risk that the investor may not receive part, or all, of the amount invested to purchase the security. Investors should only invest money in Regulation CF securities that they can afford to lose.
• Liquidity Risk: The risk of a lack of an active secondary market for securities purchased. Investors will not be able to sell Regulation CF securities for the one-year resale restriction period. Further, there may not be a ready market to sell Regulation CF securities after the restricted period is over.
• Market risk: The possibility for an investor to experience losses due to factors that affect the overall performance of the financial markets in which the investor is involved.
• Performance Risk: It is not possible to predict the performance of a company based upon its past performance. Past performance is not indicative of future results and there can be no assurance that targeted results will be achieved. Loss of principal is possible, and even likely, on any given investment.
• Dilution Risk: The risk that the issuing company may issue additional equity securities in the future, which will result in the percentage of ownership that the investor previously head will be lower after the additional issuance of equity. Accordingly, there is a risk of having limited voting power as a result of dilution after subsequent equity with voting rights has been raised.
• Inflation Risk: The risk that the purchasing power of the investment asset does not keep pace with the purchasing power of another asset such as the currency used to initially purchase the investment asset.
• Interest rate risk: The risk that arises for bond owners from fluctuating interest rates. How much interest rate risk of a bond depends on how sensitive its price is to interest rate changes in the market. The bond’s sensitivity depends on two things, the bond's time to maturity, and the coupon rate of the bond.
• Call Risk: Debt securities may contain a "call' provision, giving the issuer the right to retire (redeem) the debt before the scheduled maturity date. For the issuer, a benefit of a call feature is the ability to replace outstanding debt with lower-interest-cost new debt. For the investor, a “call” feature creates uncertainty as to whether the bond will remain outstanding until its maturity date. The risk to investors in callable bonds is losing a bond with a higher rate of interest when rates have declined and the issuer decides to call its bonds. If the bond is called, an investor may be faced with having to reinvest of the principal amount in securities with lower yields.
• Credit Risk / Default Risk: This is the risk associated with whether the Issuer of the security will continue to be able to pay its debt, including any stated interest rate to the investor.