PART II – OFFERING CIRCULAR
SAN CARLOS
RESORT, LLC
Best Efforts Offering of 200,000 Secured Debt Notes
Secured by Real Property
Estimated Subject to Completion Value: $30,000,000
Total Loan to “As Developed” Value: 66%
NOTE: The Estimated Subject to Completion Value of $30,000,000 is the Overall Development’s Estimated Value at Completion of all Proposed Development of the Property, and this does not represent any investment or ownership interest that you or the Company has in the development.
This Offering Circular relates to the offer and sale of up to $20,000,000 in principal amount (the “Offering”) of Series A Secured Debt Notes of SAN CARLOS RESORT, LLC, a Florida Limited Liability Company (the “Company”). The Company’s principal office is located at 1710 ESTERO BLVD, SUITE #6, FORT MYERS BEACH, FLORIDA 33931.
The Secured Debt Notes will be issued in the minimum amount of $100.00 USD, and in multiples of $100.00 USD. The Secured Debt Notes will be offered with a maturity of 60 months from the date issued, with a fixed interest rate depending on the terms of the Secured Debt Note(s) as defined below. The Company will typically issue Secured Debt Notes on the same or next day, after deposit by the Company of the Subscriber’s payment check and the check is collected by the Company’s Bank. See “Description of Secured Debt Notes” on Page 28 of this Registration Statement. The Interest Rate for each Secured Debt Note will be based on the formula set forth below and varies according to the terms of the Secured Debt Note as defined below. See “Description of Notes – Principal, Maturity and Interest” on Page 29 of this Registration Statement. The Minimum and the Maximum Fixed Interest Rates which are offered will change from time to time in response to changes in the current “Wall Street Journal’s Prime Rate” data obtained from the Wall Street Journal, or a similar credible source. The “Prime Rate”, as reported by the Wall Street Journal’s Bank Survey, is among the most widely used benchmark in setting home equity lines of credit and credit card rates. It is in turn based on the Federal Funds Rate, which is set by the Federal Reserve. The Interest Rates for new Secured Debt Notes are set on the First Monday of each month at the start of business based on the Wall Street Journal’s Prime Rate on that day. Such rates are paid on all Secured Debt Notes issued between the start of business on that Monday and the close of business on the last day prior to the First Monday of the next month. The following table sets forth the formula for determining the Interest Rates for the Secured Debt Notes and the Initial Interest Rate based on the most recent Wall Street Journal’s Prime Rate as of MONDAY, JANUARY 4th, 2016.
Notes Number | Sales Price / Face Value | Note Class | Priority in Liquidation | Loan to Value | Annual Rate of Interest | Note Term | Interest Payments to Investors |
1 to 20,000 | $100 | A Class | First | 6.6% | Prime + 4% (3.50% + 4% = 7.50%) (2.5% Risk Discount) Realized Rate: 5.00% | 5 years | Annually |
20,001 to 40,000 | $100 | A Class | Second | 13.3% | Prime + 4% (3.50% + 4% = 7.50%) (2.0% Risk Discount) Realized Rate: 5.50% | 5 years | Annually |
40,001 to 60,000 | $100 | A Class | Third | 20% | Prime + 4% (3.50% + 4% = 7.50%) (1.5% Risk Discount) Realized Rate: 6.00% | 5 years | Annually |
60,001 to 80,000 | $100 | A Class | Fourth | 26.6% | Prime + 4% (3.50% + 4% = 7.50%) (1.0% Risk Discount) Realized Rate: 6.50% | 5 years | Annually |
80,001 to 100,000 | $100 | A Class | Fifth | 33.3% | Prime + 4% (3.50% + 4% = 7.50%) (0.5% Risk Discount) Realized Rate: 7.00% | 5 years | Annually |
100,001 to 120,000 | $100 | A Class | Sixth | 40% | Prime + 4% (3.50% + 4% = 7.50%) - PAR - Realized Rate: 7.50% | 5 years | Annually |
120,001 to 140,000 | $100 | A Glass | Seventh | 46.6% | Prime + 4% (3.50% + 4% = 7.50%) (0.5% Risk Premium) Realized Rate: 8.00% | 5 years | Annually |
140,001 to 160,000 | $100 | A Class | Eighth | 53.3% | Prime + 4% (3.50% + 4% = 7.50%) (1.0% Risk Premium) Realized Rate: 8.50% | 5 years | Annually |
160,001 to 180,000 | $100 | A Class | Ninth | 60% | Prime + 4% (3.50% + 4% = 7.50%) (1.5% Risk Premium) Realized Rate: 9.00% | 5 years | Annually |
180,001 to 200,000 | $100 | A Class | Tenth | 66.6% | Prime + 4% (3.50% + 4% = 7.50%) (2.0% Risk Premium) Realized Rate: 9.50% | 5 years | Annually |
pg. 2
The Initial Rates set forth above will be effective only for Notes issued between MONDAY, JANUARY 4th, 2016 and FRIDAY, JANUARY 29th, 2016. The Interest Rates fluctuate based on the formula set forth above, and to determine the current rates, prospective investors in the Notes should call the Company at (239) 537-1333, or consult the Company’s web page: http://www.NanocapMarket.com and/or http://www.SanCarlosResortLLC.com.
The Company may prepay some or all of the Secured Debt Notes at any time prior to their Maturity with the following premium:
·
All Secured Debt Notes repurchased by the Company in Months 1-12 shall be repurchased for the full Face Value, all accrued interest due up to the date of repurchase, plus an additional six months of interest. No fractional Secured Debt Notes shall be repurchased.
·
All Secured Debt Notes repurchased by the Company in Months 13-24 shall be repurchased for the full Face Value, all accrued interest due up to the date of repurchase, plus an additional five months of interest. No fractional Secured Debt Notes shall be repurchased.
·
All Secured Debt Notes repurchased by the Company in Months 25-36 shall be repurchased for the full Face Value, all accrued interest due up to the date of repurchase, plus an additional four months of interest. No fractional Secured Debt Notes shall be repurchased.
·
All Secured Debt Notes repurchased by the Company in Months 37-48 shall be repurchased for the full Face Value, all accrued interest due up to the date of repurchase, plus an additional three months of interest. No fractional Secured Debt Notes shall be repurchased.
·
All Secured Debt Notes repurchased by the Company in Months 49-54 shall be repurchased for the full Face Value, all accrued interest due up to the date of repurchase, plus an additional two months of interest. No fractional Secured Debt Notes shall be repurchased.
·
All Secured Debt Notes repurchased by the Company in Months 55-59 shall be repurchased for the full Face Value, all accrued interest due up to the date of repurchase, plus an additional one month of interest. No fractional Secured Debt Notes shall be repurchased.
The Company will pay Interest on Secured Debt Notes annually or at Maturity, at the Holder’s option. All Secured Debt Notes will be issued in fully registered form.
The Secured Debt Notes will NOT be subject to automatic rollover. Due to the fact automatic rollovers do not apply to the Secured Debt Notes, Investors will receive full payment of principal at Maturity.
The proposed sale will begin as soon as practicable after this Offering Circular has been qualified by the Securities and Exchange Commission. A Maximum of 200,000 Secured Debt Notes are being offered to the public at $100.00 USD per Secured Debt Note. The Offering is contingent upon the sale of a minimum of THIRTY THOUSAND SECURED DEBT NOTES ($3,000,000) to be sold to Investors through this Offering for the Company to have access to the Offering proceeds. The Company may accept subscriptions as they are received after this minimum number of Secured Debt Notes to be sold has been achieved or surpassed. The Offering will terminate upon the earlier to occur; (i) the date that is not more than one year after the Offering is qualified by the United States Securities and Exchange Commission (the “Commission”), (ii) the date on which $20,000,000 USD of Secured Debt Notes qualified have been sold, and (iii) a date prior to one year from the date of this Offering begins that is so determined by the Company’s Management (the “Offering Period”).
The Company is offering the Secured Debt Notes directly to Investors through its Officers on a “Minimum and Maximum Best Efforts Basis”. The Secured Debt Notes will be issued at their principal face value, without a discount, and are not being sold through commissioned sales agents or underwriters. See “Plan for Distribution” on page 13 of this Registration Statement.
The Secured Debt Notes will not be listed on any exchange or quoted on any automated dealer quotation system. Currently, there is no public market for the Secured Debt Notes.
This Offering Circular shall not constitute an offer to sell or the solicitation to an offer to buy, nor shall there be any sales of these Secured Debt Notes in any state in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the laws of any such State.
pg. 3
THERE IS AT THIS TIME, NO PUBLIC MARKET FOR THE SECURITIES
THESE SECURITIES ARE OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION WITH THE SECURITIES AND EXCHANGE COMMISSION; HOWEVER, THE COMMISSION HAS NOT MADE AN INDEPENDENT DETERMINATION THAT THE SECURITIES BEING OFFERED ARE EXEMPT FROM REGISTRATION. THE SECURITIES AND EXCHANGE COMMISSION DOES NOT PASS UPON THE MERITS OF OR GIVE ITS APPROVAL TO ANY SECURITIES OFFERED OR THE TERMS OF THE OFFERING, NOR DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF ANY OFFERING CIRCULAR OR OTHER SELLING LITERATURE.
THE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES LAWS, AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THESE LAWS. THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE REGULATORY AUTHORITY NOR HAS THE COMMISSION OR ANY STATE REGULATORY AUTHORITY PASSED UPON OR ENDORSED THE MERITS OF THE OFFERING OR THE ACCURACY OR ADEQUACY OF THIS OFFERING CIRCULAR. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
GENERALLY, NO SALE MAY BE MADE TO YOU IN THIS OFFERING IF THE AGGREGAGE PURCHASE PRICE YOU PAY IS MORE THAN 10% OF THE GREATER OF YOUR ANNUAL INCOME OR NET WORTH. DIFFERENT RULES APPLY TO ACCREDITED INVESTORS AND NON-NATURAL PERSONS. BEFORE MAKING ANY REPRESENTATION THAT YOUR INVESTMENT DOES NOT EXCEED APPLICABLE THRESHOLDS, THE COMPANY ENCOURAGES YOU TO REVIEW RULE 251 (d)(2)(i)(C) OF REGULATION A. FOR GENERAL INFORMATION ON INVESTING, THE COMPANY ENCOURAGES YOU TO REFER TO WWW.INVESTOR.GOV
THE COMPANY IS FOLLOWING THE “OFFERING CIRCULAR” FORMAT
OF DISCLOSURE UNDER REGULATION A
AN OFFERING STATEMENT PURSUANT TO REGULATION A RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. INFORMATION CONTAINED IN THIS PRELIMINARY OFFERING CIRCULAR IS SUBJECT TO COMPLETION OR AMENDMENT. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED BEFORE THE OFFERING STATEMENT FILED WITH THE COMMISSION IS QUALIFIED. THIS PRELIMINARY OFFERING CIRCULAR SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR MAY THERE BE ANY SALES OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL BEFORE REGISTRATION OR QUALIFICATION UNDER THE LAWS OF SUCH STATE. THE COMPANY MAY ELECT TO SATISFY ITS OBLIGATION TO DELIVER A FINAL OFFERING CIRCULAR BY SENDING YOU A NOTICE WITHIN TWO BUSINESS DAYS AFTER THE COMPLETION OF A SALE TO YOU THAT CONTAINS THE URL WHERE THE FINAL OFFERING CIRCULAR OR THE OFFERING STATEMENT IN WHICH SUCH FINAL OFFERING CIRCULAR WAS FILED MAY BE OBTAINED.
pg. 4
TABLE OF CONTENTS:
Item # | Description | Page # |
Item 2 | Distribution & Spread | 06 |
Item 3 | Summary Information & Risk Factors | 08 |
Item 4 | Dilution | 13 |
Item 5 | Plan for Distribution | 14 |
Item 6 | Use of Proceeds | 15 |
Item 7 | Description of Business | 18 |
Item 8 | Description of Company Property | 24 |
Item 9 | Management’s Discussion and Analysis of Financial Condition and Results of Operation | 24 |
Item 10 | Directors, Executive Officers, and Significant Employees | 25 |
Item 11 | Executive Compensation | 26 |
Item 12 | Security Ownership of Certain Beneficial Owners and Management | 27 |
Item 13 | Interest of Management and Others in Certain Transactions | 27 |
Item 14 | Securities Being Offered | 28 |
Financial | Financial Statements Section | 37 |
pg. 5
ITEM 2: DISTRIBUTION SPREAD
Number of Securities Offered | Offering Price | Selling Commissions | Proceeds to Company | |
Per Security | ------- | $100.00 | $5.00 | $95.00 |
Total Minimum | 30,000 | $3,000,000.00 | $150,000 | $2,850,000 |
Total Maximum | 200,000 | $20,000,000.00 | $1,000,000 | $19,000,000 |
1)
We are offering a maximum of 200,000 Secured Debt Notes at the price indicated
2)
We expect to incur offering and registration expenses:
a.
Florida: $1,000
3)
Additional Fees for Legal Review and Opinion(s), Accounting Costs related to the drafting of this Registration Statement and Professional Services Fees should not exceed $52,500 USD. Any costs above $52,500 will be paid by the Executives of the Company.
4)
Until the “Total Minimum” has been raised (invested), all proceeds of the Offering will be held in a Bank Escrow Account with FundAmerica until the “Total Minimum” has been reached. A copy of the Company’s escrow agreement is provided as an Exhibit to this Registration Statement, and the Company’s Bank Escrow complies with all rules and regulations set forth by SEC Rule 15C2-4.
5)
We do intend to use a Broker-Dealer for this Offering (up to 5% Commission of the Offering Price).
THIS OFFERING CIRCULAR CONTAINS ALL OF THE REPRESENTATIONS BY THE COMPANY CONCERNING THIS OFFERING, AND NO PERSON SHALL MAKE DIFFERENT OR BROADER STATEMENTS THAN THOSE CONTAINED HEREIN. INVESTORS ARE CAUTIONED NOT TO RELY UPON ANY INFORMATION NOT EXPRESSLY SET FORTH IN THIS OFFERING CIRCULAR.
THE U.S. SECURITIES AND EXCHANGE COMMISSION DOES NOT PASS UPON THE MERITS OF ANY SECURITIES OFFERED OR THE TERMS OF THE OFFERING, NOR DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF ANY OFFERING CIRCULAR OR SELLING LITERATURE. THESE SECURITIES ARE OFFERED UNDER AN EXEMPTION FROM REGISTRATION; HOWEVER, THE COMMISSION HAS NOT MADE AN INDEPENDENT DETERMINATION THAT THESE SECURITIES ARE EXEMPT FROM REGISTRATION.
INVESTMENT IN SMALL BUSINESSES INVOLVES A HIGH DEGREE OF RISK, AND INVESTORS SHOULD NOT INVEST ANY FUNDS IN THIS OFFERING UNLESS THEY CAN AFFORD TO LOOSE THEIR ENTIRE INVESTMENT. IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE ISSURER AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE OFFER MADE BY THIS OFFERING CIRCULAR, NOR HAS ANY PERSON BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS OFFERING CIRCULAR, AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON. THIS OFFERING CIRCULAR DOES NOT CONSTITUTE AN OFFER TO SELL OR SOLICITATION OF AN OFFER TO BUY IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICIATION WOULD BE UNLAWFUL OR ANY PERSON TO WHO IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICIATION. NEITHER THE DELIVERY OF THIS OFFERING CIRCULAR NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE AS HAS BEEN NO CHANGE IN THE AFFAIRS OF OUR COMPANY SINCE THE DATE HEREOF.
THIS OFFERING CIRCULAR MAY NOT BE REPRODUCED IN WHOLE OR IN PART. THE USE OF THIS OFFERING CIRCULAR FOR ANY PURPOSE OHER THAN AN INVESTMENT IN SECURITIES DESCRIBED HEREIN IS NOT AUTHORIZED AND IS PROHIBITED.
AN OFFERING STATEMENT PURSUANT TO REGULATION A RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
INFORMATION CONTAINED IN THE PRELIMINARY OFFERING CIRCULAR IS SUBJECT TO COMPLETION OR AMENDMENT. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME AN OFFERING CIRCULAR WHICH IS NOT DESIGNATED AS A PRELIMINARY OFFERING CIRCULAR IS
pg. 6
DELIVERED AND THE OFFERING STATEMENT FILED WITH THE COMMISSION BECOMES QUALIFED. THIS PRELIMINARY OFFERING CIRCULAR SHALL NOT CONSTITUTE AND OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALES OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE LAWS OF ANY SUCH STATE.
THE OFFERING PRICE OF THE SECURITIES IN WHICH THIS OFFERING CIRCULAR RELATES HAS BEEN DETERMINED BY THE COMPANY AND DOES NOT NECESSARILY BEAR ANY SPECIFIC RELATION TO THE ASSETS, BOOK VALUE OR POTENTIAL EARNINGS OF THE COMPANY OR ANY OTHER RECOGNIZED CRITERIA OF VALUE.
NASAA UNIFORM LEGEND:
IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY THE FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
FOR ALL RESIDENTS OF ALL STATES:
THE SHARES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF CERTAIN STATES AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF SAID ACT AND SUCH LAWS. THE INTERESTS ARE SUBJECT IN VARIOUS STATES TO RESTRICTION ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER SAID ACT AND SUCH LAWS PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THE OFFERING CIRCULAR. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
pg. 7
ITEM 3. SUMMARY INFORMATION, RISK FACTORS AND DILUTION
Investing in the Company’s Secured Debt Notes is very risky. You should be able to bear a complete loss of your investment. You should carefully consider the following factors, including those listed in this private securities offering.
Development Stage Business
San Carlos Resort, LLC commenced operations in November of 2015. The Company was formed as a Florida Limited Liability Company. Accordingly, the Company has only a limited history upon which an evaluation of its prospects and future performance can be made. The Company’s proposed operations are subject to all business risks associated with new enterprises. The likelihood of the Company’s success must be considered in light of the problems, expenses, difficulties, complications, and delays frequently encountered in connection with the expansion of a business, operation in a competitive industry, and the continued development of advertising, promotions and a corresponding customer base. There is a possibility that the Company could sustain losses in the future. There can be no assurances that San Carlos Resort, LLC will operate profitably.
Inadequacy of Funds
Gross offering proceeds of a maximum of $20,000,000 may be realized. Management believes that such proceeds will capitalize and sustain the Company sufficiently to allow for the implementation of the Company’s Business Plans. If only a fraction of this Offering is sold, or if certain assumptions contained in Management’s business plans prove to be incorrect, the Company may have inadequate funds to fully develop its business.
Although the Company believes that the proceeds from this Offering will be sufficient to help sustain operations during the complete development and build-out of this project, there is no guarantee that the Company will raise all the funds needed to adequately fund development Operations. The Company has determined that $3,000,000, in addition to traditional bank financing or alternative funding, will be needed to fund planned operations for the first twelve months, though the construction timeline for the completion of the entire development may be much greater.
Dependence on Management
In the early stages of development, the Company’s business will be significantly dependent on the Company’s management team. The Company’s success will be particularly dependent upon: Mr. Joe Orlandini, the Company’s Founder, Managing Member and Chief Financial Officer.
Minimum Amount of Capital to be Raised
The minimum amount of Secured Debt Notes that need to be sold in this offering for the Company to access the investment funds is $3,000,000. All Secured Debt Note Proceeds will be administered by AltaVista Capital Markets, LLC. The proceeds of the Secured Debt Notes will remain in an account maintained by FundAmerica “for the benefit of “for the benefit of SAN CARLOS RESORT, LLC” until disbursed pursuant to the terms and conditions of this Registration Statement. If the Offering terminates before the offering minimum is achieved, or if any prospective Investor’s subscription is rejected, all funds received from such Investors will be returned without interest or deduction. The Company’s ability to meet financial obligations, cash needs, and to achieve objectives, could be adversely affected if the entire offering of Secured Debt Notes is not fully subscribed.
Investors in this Offering will have NO Voting Rights in the Company, Managerial, Contractual or Other Ability to Influence the Company, or Control Over the Property.
Investors in the Company’s Secured Debt Notes will have no voting rights with respect to the Company, and will have no managerial, contractual or other ability to influence the Company’s activities or operations of the Property. The Secured Debt Note Holders lack of voting rights gives all control under the Operating Agreement to the Managing Member. The Managing Member’s operations of the Company could materially and adversely affect the value of the Property and the Company, and materially and adversely affect the returns realized by the Investors.
pg. 8
The Property is planned to be the Company’s Principle Asset, and Factors Outside of the Company’s Control Could Significantly Decrease the Value of that Asset.
The property is planned to be the Company’s principal asset. The prospects of the Company depend upon the Property maintaining and increasing its rental rates and overall sales value, or increasing in such value. The typical risks relating to an investment in real estate will apply to the Property and its value. These include, but are not limited to:
·
Changes in the General Economic Climate and Market Conditions, those applicable to the region in which the Property is located;
·
Complications involving the development and construction of the property;
·
Limited availability of mortgage funds or fluctuations in interest rates which may render the refinance or sale of the Property difficult;
·
Unanticipated increases in real estate taxes and other operating expenses;
·
Environmental Considerations;
·
Zoning laws and other governmental rules and policies; and
·
Uninsured losses including possible acts of terrorism and natural disasters.
Any one or more of the preceding factors could materially adversely affect the value of the Property. If the anticipated rental rates for the property’s rental units is never achieved, or if the value of the Property were to decrease significantly, the Company may not be able to repay the Secured Debt Note Holders, or obtain new financing to repay outstanding loans from Investors on favorable terms, if at all. Additionally, if the value of the Property were to decrease and the Company were to choose to sell the Property, liquidate and distribute its remaining assets to Secured Debt Note Holders, you might not be able to recover the amount of your investment, if you were to receive funds at all.
The Company is Liable for any Potential Environmental Hazards
The Company’s failure to uncover and adequately protect against environmental issues in connection with the development of the property may subject the Company to liability as the owner of the Property. Environmental laws and regulations impose liability on current and previous real property owners or operators for the cost of investigating, cleaning up or removing contamination caused by hazardous or toxic substances at the property. The Company may be held liable for such costs as the owner of the Property. Liability can be imposed even if the original actions were legal and the Company had no knowledge of, or were not responsible for, the presence of the hazardous or toxic substances. Further, the Company may also be held responsible for the entire payment of the liability if it is subject to joint and several liability and the other responsible parties are unable to pay. The Company may also be liable under law to third parties for damages and injuries resulting from environmental contamination emanating from the site. Insurance for such matters may not be available. Additionally, new or modified environmental regulations could develop in a manner that could adversely affect the Company. In the event of such liability, the Company may be forced to use part of all of the Secured Debt Noteholders capital contributions to cover the costs to remedy any environmental hazards, which could adversely impact the value of the Property and affect the Company’s ability to repay its debt to the Secured Debt Noteholders.
If the Company’s Decision to Acquire and Develop, or Redevelop, the Property may be unsuccessful
The Company plans to acquire and Develop the Property. The Company may be unsuccessful in its development of the property due to a variety of factors, including mismanagement, the poor selection of third-party contractors, an inability to raise the necessary capital to complete the development, changes in zoning laws and increases to construction costs. If the development effort is delayed, suffers significant cost increases, does not prove as valuable as projected or cannot be completed, the Company may become unprofitable or be forced to dispose of the Property for a total price that is less than the Company’s outstanding liabilities.
The Company will Face Competition
The Company will face competition from other companies and persons developing and renting or selling real estate in the area. Any number of competitors makes the Company vulnerable to competitors that may act irrationally or are able to operate at zero or negative margins, have longer operating histories, more market experience or contacts, or greater financial resources than the Company. The Company may not be able to compete effectively.
pg. 9
The Company May Not be Able to Provide Adequate Insurance for the Property
If the insurance market changes or the Company needs to make claims on its insurance or for other factors affecting insurance rates, it may not be able to renew or find new insurance on acceptable terms, if at all. Failure to carry appropriate insurance could significantly increase the Company’s liability in the event of torts or other actionable events occurring on the Property that affect sales of the Units, or could even force the Company to cease sales of the Units.
The Company may be Required to Raise Additional Capital and May Not be Able to Obtain such Capital on Favorable Terms or at all.
In the future, the Company may be required to raise additional capital through the issuance of additional debt notes or the addition of a second mortgage secured to the property. If the Company incurs additional indebtedness, a portion of the Company’s cash flow will have to be dedicated to the payment of principal and interest on such new indebtedness. Typical loan agreements also might contain restrictive covenants, which may impair the Company’s operating flexibility. Such loan agreements would also provide for default under certain circumstances, such as failure to meet certain financial covenants. A default under a loan agreement could result in the loan becoming immediately due and payable and, if unpaid, a judgment in favor of such lender which would be senior to the rights of shareholders of the Company. A judgment creditor would have the right to foreclose on any of the Company’s assets resulting in a material adverse effect on the Company’s business, operating results or financial condition.
Payments of Secured Debt Note Interest depends Entirely on the Payments Received from the Company for the Rental of Apartment Units of San Carlos Resort. If the Company Does Not Receive Payments from the Rents of Units at San Carlos Resort, You Will Not Receive any Payments on your Secured Debt Notes
The Company will make payments on the Secured Debt Notes only to the extent that the Company receives cash from the rent of apartments at the proposed San Carlos Resort, or from the sale of the Real Estate Assets of San Carlos Resort, LLC. Payments will be made primarily from the proceeds of the Company for the renting the apartment units associated with San Carlos Resort, LLC, or from the refinancing or sale of the real estate property connected with this Offering. If the Company is unable to rent the apartment units at desired rental rates and terms, or if the company is unable to sell or refinance the property, the Company will be unable to make its Secured Debt Note Interest Payments, and you will not be entitled to the corresponding payments under the terms of the Secured Debt Notes.
The Secured Debt Note Interest Payment Obligations of the Company are Not Guaranteed or Insured by any Third Party, and, in the Event of a Default, you must Rey on a Third-Party Collection Agency to Pursue Collection Against the Company
The Secured Debt Note Interest Payments and any other obligations of the Company are not guaranteed or insured by any third party or backed by any governmental authority in any way. In the event of a default on such payment obligations, therefore, you may need to rely upon a collection agency to pursue collection against the Company in the event of any default. If the Company fails to make payments on the Secured Debt Notes, you will not receive the corresponding payment on your Secured Debt Notes.
Control by Management
As of January 1st, 2016, Mr. Joe Orlandini, the Company’s Managing Member and Chief Financial Officer, owned 100% of the Company’s outstanding Equity Membership Units. Upon completion of this Offering, Mr. Joe Orlandini will own 100% of the issued and outstanding Equity Membership Units. Investors will not have the ability to control either a vote of the Company’s Managers or any appointed officers. See “COMPANY MANAGERS” section.
The Company’s Continuing as a Going Concern Depends Upon Financing
If the Company does not raise sufficient working capital and continues to experience pre-operating losses, there will most likely be substantial doubt as to its ability to continue as a going concern. Because the Company has generated no revenue, all expenditures during the development stage have been recorded as pre-operating losses. Revenue operations have not commenced because the Company has not raised the necessary capital.
Broker - Dealer Sales of Units
The Company’s Membership Units and Secured Debt Notes are not included for trading on any exchange, and there can be no assurances that the Company will ultimately be registered on any exchange. The NASDAQ Stock Market, Inc. has recently enacted certain changes to the entry and maintenance criteria for listing eligibility on the NASDAQ SmallCap Market. The entry standards require at least $4 million in net tangible assets or $750,000 net income in two of the last three years. The proposed entry standards would also require a public float of at least 1 million shares, $5 million value of public float, a minimum bid price of $2.00 per share, at least three market
pg. 10
makers, and at least 300 shareholders. The maintenance standards (as opposed to entry standards) require at least $2 million in net tangible assets or $500,000 in net income in two of the last three years, a public float of at least 500,000 shares, a $1 million market value of public float, a minimum bid price of $1.00 per share, at least two market makers, and at least 300 shareholders.
No assurance can be given that the Company will ever convert to a Stock Corporation and No assurances can be given that the Company’s Stock Units would ever qualify for inclusion on the NASDAQ System or any other trading market until such time as the Managing Members deem it necessary. As a result, the Company’s Secured Debt Notes are covered by a Securities and Exchange Commission rule that opposes additional sales practice requirements on broker-dealers who sell such securities to persons other than established customers and qualified investors. For transactions covered by the rule, the broker-dealer must make a special suitability determination for the purchaser and receive the purchaser’s written agreement to the transaction prior to the sale. Consequently, the rule may affect the ability of broker-dealers to sell the Company’s securities and will also affect the ability of members to sell their units in the secondary market.
Secondary Market
No application is currently being prepared for the Company's Securities to be admitted to the Official Listing and trading on any regulated market. No application is being prepared to include the Securities to trading on an "Over-the-Counter" or "Open Market”. There can be no assurance that a liquid market for the Securities will develop or, if it does develop, that it will continue. If a market does develop, it may not be liquid. Therefore, investors may not be able to sell their Securities easily or at prices that will provide them with yield comparable to similar investments that have a developed secondary market. Illiquidity may have a severely adverse effect on the market value of the Securities and investors wishing to sell the Securities might therefore suffer losses.
Unavailability of Rule 144 for Resales
The Company may be regarded under Rule 12b-2 of the Securities Exchange Act of 1934 as a shell company. Noteholders who hold Secured Debt Notes of the Company which are not subject to a registration statement under the Securities Act often rely upon Rule 144 for their resale. Rule 144 is not available for the resale of Secured Debt Notes initially issued by either reporting or non-reporting shell companies (other than a business combination related shell company) or an issuer that has been, at any time previously, a reporting or non-reporting shell company, unless the issuer meets specified conditions. A security holder may resell securities pursuant to Rule 144’s Safe Harbor if the following conditions are met:
1)
The Issuer of Securities that was formerly a reporting or non-reporting company has ceased to be a shell;
2)
The Issuer of the Securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act;
3)
The Issuer of the Securities has filed all reports and material required to be filed under Section 13 or 15(d) of the Exchange Act, as applicable, during the preceding 12 months (or for such shorter period that the issuer was required to file such reports and materials), other than Form 8-K reports; and
4)
At least one year has elapsed from the time the issuer filed current Form 10 type information with the SEC reflecting its status as an entity that is not a shell company.
The Company May Exercise its Right of Repurchase with Regard to the Secured Debt Notes
The Operating Agreement allows for the Company to exercise a right of repurchase, in its sole discretion, with regard to the Secured Debt Notes at any time. While the Company will be entitled to exercise this right of repurchase, it has not made any determination to exercise this right of repurchase as of the date hereof, and does not intend to exercise the right of repurchase.
Long Term Nature of Investment
An investment in the Company’s Secured Debt Notes may be long term and illiquid. As discussed above, the offer and sale of the Secured Debt Notes will not be registered under the Securities Act or any foreign or state securities laws by reason of exemptions from such registration, which depends in part on the investment intent of the investors. Prospective investors will be required to represent in writing that they are purchasing the Secured Debt Notes for their own account for long-term investment and not with a view towards resale or distribution. Accordingly, purchasers of Secured Debt Notes must be willing and able to bear the economic risk of their investment for an indefinite period of time. It is likely that investors will not be able to liquidate their investment in the event of an emergency.
Compliance with Securities Laws
The Company’s Secured Debt Notes are being offered for sale in reliance upon certain exemptions from the registration requirements of the Securities Act, applicable Florida Securities Laws, and other applicable state securities laws. If the sale of Notes were to fail to qualify for these exemptions, purchasers may seek rescission of their purchases of Secured Debt Notes. If a number of purchasers were to obtain rescission, we would face significant financial demands, which could adversely affect the Company as a whole, as well as any non-rescinding purchasers.
pg. 11
Offering Price
The price of the Secured Debt Notes offered has been arbitrarily established by our current Managers, considering such matters as the state of the Company’s business development and the general condition of the industry in which it operates. The Offering price bears little relationship to the assets, net worth, or any other objective criteria.
NOTICE REGARDING AGREEMENT TO ARBITRATE
THIS OFFERING MEMORANDUM REQUIRES THAT ALL INVESTORS ARBITRATE ANY DISPUTE ARISING OUT OF THEIR INVESTMENT IN THE COMPANY. ALL INVESTORS FURTHER AGREE THAT THE ARBITRATION WILL BE BINDING AND HELD IN THE STATE OF WYOMING, IN THE COUNTY OF LARAMIE. EACH INVESTOR ALSO AGREES TO WAIVE ANY RIGHTS TO A JUR TRIAL. OUT OF STATE ARBITRATION MAY FORCE AN INVESTOR TO ACCEPT A LESS FAVORABLE SETTLEMENT FOR DISPUTES. OUT OF STATE ARBITRATION MAY ALSO COST AN INVESTOR MORE TO ARBITRATE A SETTLEMENT OF A DISPUTE.
NOTICE REGARDING THE TRUST INDENTURE ACT OF 1939
THE TRUST INDENTURE ACT OF 1939 SUPPLEMENTS THE SECURITIES ACT OF 1933 IN THE CASE OF DISTRIBUTION OF DEBT SECURITIES IN THE UNITED STATES. THE TRUST INDENTURE ACT (“TIA”) REQUIRES THE APPOINTMENT OF A SUITABLY INDEPENDENT AND QUALIFIED TRUSTEE TO ACT FOR THE BENEFIT OF THE HOLDERS OF THE SECURITIES, AND SPECIFIES VARIOUS SUBSTANTIVE PROVISIONS FOR THE TRUST INDENTURE THAT MUST BE ENTERED INTO BY THE TRUSTEE. THE TIA IS ADMINISTED BY THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION. INVESTORS OF THIS OFFERING WILL NOT BENEFIT FROM A TRUSTEE, INDENTURE, OR THE PROTECTIONS AFFORDED BY THE TRUST INDENTURE ACT OF 1939.
pg. 12
ITEM 4. DILUTION
An early-stage company typically sells its equity shares (or grants options over its equity shares) to its founders and early employees at a very low cash cost, because they are, in effect, putting their “sweat equity” into the company. When the company seeks cash from outside investors, the new investors typically pay a much larger sum for their shares than the founders or earlier investors, which means that the cash value of the new investors stake is diluted because each share of the same type is worth the same amount, and the new investor has paid more for the shares than earlier investors did for theirs.
The Company was formed as a Florida Limited Liability Company in November of 2015. Upon its formation, the Company has issued ONE THOUSAND Equity Membership Units as illustrated below:
Name and Address of Record Owner | Prior to Offering: | After Offering: |
Mr. Joe Orlandini Managing Member & Chief Financial Officer 1710 Estero Blvd., Unit #6 Fort Myers, Florida 33932 |
Equity Membership Units: 1,000 (100%) | Equity Membership Units: 1,000 (100%) |
Future Dilution
The Company, for business purposes, may from time to time issue additional shares, which may result in dilution of existing shareholders. Dilution is a reduction in the percentage of a stock caused by the issuance of new stock. Dilution can also occur when holders of stock options (such as company employees) or holders of other optionable securities exercise their options. When the number of shares outstanding increases, each existing stockholder will own a smaller, or diluted, percentage of the Company, making each share less valuable. Dilution may also reduce the value of existing shares by reducing the stock’s earnings per share. There is no guarantee that dilution of the Common Stock will not occur in the future.
pg. 13
ITEM 5. PLAN OF DISTRIBUTION
The Offering will commence promptly after the date of this Offering Circular and will close (terminate) upon the earlier of (1) the sale of 200,000 Secured Debt Notes, (2) One Year from the date this Offering begins, or (3) a date prior to one year from the date this Offering begins that is so determined by the Company’s Management (the “Offering Period”).
A minimum of $3,000,000 must be invested prior to the Company having access to the Investment Proceeds. A maximum of $20,000,000 will be received from the offering. No Secured Debt Notes are being offered by any selling Noteholders. The Company will receive all proceeds from the sale of Secured Debt Notes after the minimum of $3,000,000 has been reached. All Secured Debt Note Proceeds will be administered by AltaVista Capital Markets, LLC The proceeds of the Secured Debt notes will remain in an account maintained by FundAmerica “for the benefit of SAN CARLOS RESORT, LLC” until disbursed pursuant to the terms and conditions of this Registration Statement. If the Offering terminates before the offering minimum is achieved, or if any prospective Investor’s subscription is rejected, all funds received from such Investors will be Promptly Refunded without interest or deduction. The Company will have 180 days to reach an investment minimum of $3,000,000. If the Offering terminates before the offering minimum is achieved, or if any prospective Investor’s subscription is rejected, all funds received from such Investors will be returned without interest or deduction. Any investor who purchases Secured Debt Notes after the investment minimum of this Offering has been achieved will have no assurance that other purchases of the Company’s Secured Debt Notes will occur. Accordingly, if the Company should file for bankruptcy protection or a petition for insolvency is filed by creditors against the Company, Investor funds may become part of the bankruptcy estate and administered according to the bankruptcy laws.
The Secured Debt Notes are being offered by the Company on a “Best Efforts” basis without the benefit of a Placement Agent. The Company can provide no assurance that this Offering will be completely sold out. If less than the maximum proceeds are available, the Company’s business plans and prospects for the current fiscal year could be adversely affected.
The Secured Debt Notes to be offered with this proposed offering shall be initially offered by Company, mainly by Mr. Joe Orlandini, the Managing Member and Chief Financial Officer of the Company. The Company anticipates engaging members of the Financial Regulatory Authority (“FINRA”) to sell the Secured Debt Notes for the Company, though the Company has not yet engaged the Services of any FINRA Broker Dealers. The Company intends to engage a FINRA Broker Dealer to offer the Secured Debt Notes to prospective investors on a “best efforts” basis, and the Company’s Broker Dealers will have the right to engage such other FINRA Broker Dealer member firms as it determines to assist in the Offering. The Company will update this Registration Statement via an amendment to this Registration Statement upon any engagement of a FINRA Broker Dealer to offer the Secured Debt Notes.
The Company anticipates that any FINRA Broker Dealer Manager will receive selling commissions of up to FIVE PERCENT of the Offering Proceeds, which it may re-allow and pay to participating FINRA Broker Dealers who sell the Company’s Secured Debt Notes. The Company’s FINRA Broker Dealer Manager may also sell the Securities as part of a selling group, thereby becoming entitled to retain a greater portion of the selling commissions. Any portion of the selling commissions retained by the FINRA Broker Dealer Manager would be included within the amount of selling commissions payable by the Company and not in addition to.
The Company anticipates that that its FINRA Broker Dealer Manager may enter into an agreement with the Company to purchase “Underwriter Warrants”. Should the Company enter into an Underwriter Warrants Agreement with its FINRA Broker Dealer Manager, a copy of the agreement will be filed with the United States Securities and Exchange Commission as an Exhibit to an amended Registration Statement of which this Offering is part.
The Company anticipates that the Company and any FINRA Broker Dealer will each enter into a Broker Dealer Manager Agreement, which will be filed with the United States Securities and Exchange Commission as an Exhibit to an amended Registration Statement of which this Offering is part, for the sale of the Company’s Secured Debt Notes. FINRA Broker Dealers desiring to become members of a Selling Group will be required to execute a Participating Broker Dealer Agreement with the Company’s FINRA Broker Dealer, either before or after the date of this Registration Statement.
In order to subscribe to purchase the Secured Debt Notes, a prospective Investor must complete, sign and deliver the executed Subscription Agreement, Investor Questionnaire and Form W-9 to San Carlos Resort, LLC. and either mail or wire funds for its subscription amount in accordance with the instructions included in the Subscription Package.
The Company reserves the right to reject any Investor’s subscription in whole or in part for any reason. If the Offering terminates or if any prospective Investor’s subscription is rejected, all funds received from such Investors will be returned without interest or deduction.
In addition to this Offering Circular, subject to limitations imposed by applicable securities laws, we expect to use additional advertising, sales and other promotional materials in connection with this Offering. These materials may include public advertisements and audio-visual materials, in each case only as authorized by the Company. Although these materials will not contain information in conflict with the information provided by this Offering and will be prepared with a view to presenting a balanced discussion of risk and reward with respect to the Secured Debt Notes, these materials will not give a complete understanding of this Offering, the Company or the Secured Debt Notes and are not to be considered part of this Offering Circular. This Offering is made only by means of this Offering Circular and prospective Investors must read and rely on the information provided in this Offering Circular in connection with their decision to invest in the Secured Debt Notes.
pg. 14
ITEM 6. USE OF PROCEEDS TO ISSUER
The Company seeks to raise maximum gross proceeds of $20,000,000 from the sale of Securities in this Offering. The Company intends to apply these proceeds substantially as set forth herein, subject only to reallocation by Company Management in the best interests of the Company.
A. Sale of Company Common Stock
Category | Maximum Proceeds | Percentage of Total Proceeds | Minimum Proceeds | Percentage of Proceeds |
Proceeds from Sale of Securities | $18,946,500 | 94.7% | $2,796,500 | 93.2% |
B. Offering Expenses
Category | Maximum Proceeds | Percentage of Total Proceeds | Minimum Proceeds | Percentage of Proceeds |
Offering Expenses | $1,053,500 | 5.3% | $203,500 | 6.8% |
1)
We are offering a maximum of 200,000 Secured Debt Notes at the price indicated
2)
We expect to incur offering and registration expenses:
a.
Florida: $1,000
1)
Additional Fees for Legal Review and Opinion(s), Accounting Costs related to the drafting of this Registration Statement and Professional Services Fees should not exceed $52,500 USD. Any costs above $52,500 will be paid by the Executives of the Company.
2)
Until the “Total Minimum” has been raised (invested), all proceeds of the Offering will be held in a Bank Escrow Account with FundAmerica until the “Total Minimum” has been reached. A copy of the Company’s escrow agreement is provided as an Exhibit to this Registration Statement, and the Company’s Bank Escrow complies with all rules and regulations set forth by SEC Rule 15C2-4.
3)
We do intend to use a Broker-Dealer for this Offering (up to 5% Commission of the Offering Price).
pg. 15
USE OF INVESTMENT FUNDS:
Amount | Percentage | Details |
$2,500,000 | 12.5% | Land Acquisition |
$14,996,500 | 75% | Cost of Construction (see business plan for details) |
$1,450,000 | 7.25% | One Year Interest Reserve |
$1,000,000 | 5% | Broker Dealer Commission |
$53,500 | 0.25% | Cost of Offering (SEC filing, State Registration, Legal Opinion) |
pg. 16
USE OF MINIMUM INVESTMENT FUNDS:
Amount | Percentage | Details |
$2,500,000 | 83% | Land Acquisition |
$196,500 | 6.5% | Pre-Construction Soft Costs |
$250,000 | 8% | Broker Dealer Commission |
$53,500 | 1.5% | Cost of Offering (SEC filing, State Registration, Legal Opinion) |
pg. 17
ITEM 7. DESCRIPTION OF COMPANY & ASSETS
San Carlos Resort, LLC. (Company) is a limited liability company formed in the State of Florida. The primary purpose of the Company is to acquire, own, hold, develop, construct, lease, manage, operate, mortgage, real estate which consists of real estate located at 19220 San Carlos Blvd. Ft. Myers Beach, FL 33931 and 19170 San Carlos Blvd. Ft. Myers Beach, FL 33931. Both Properties located at 19170 San Carlos Blvd. and 19170 San Carlos Blvd. consist of a 1 masonry building on each parcel and they both are currently that is currently vacant and will be demolished prior to the new construction project beginning.
Joe Orlandini, the sole member of San Carlos Resort, LLC. currently has a purchase contract on 19220 San Carlos Blvd. for $2,000,000 and a purchase contract on 19170 San Carlos Blvd. for $499,000 and will transfer both purchase contracts to San Carlos Resorts, LLC. upon bond approval. Proceeds of this Offering may be used in whole or in part to complete the purchase of both properties at a total acquisition cost of $2,499,000.
Due to its location in the rapidly growing Ft. Myers Beach Area the Property offers an excellent opportunity for development a 130 unit complex that is and will be in high demand. The Properties are lot numbered Twenty Nine (29) and Thirty through Thirty Three (30-33) of San Carlos on the Gulf.
Key Property Highlights:
" Management believes that the Property is well-suited for a 130 Unit extended stay business model. This will combine a seasonal weekly use, and some longer annual stays.
" Each unit will have a full kitchen and lounging area for longer term guests. The property is in an area of intense traffic and centrally located. The building will be a 5 stories with the first story being utilized for parking.
" Recent statistics openly support the growing demand for this type of development as seen online at Forbes.com “Fort Myers, Sacramento, and Bradenton-Sarasota. Rents in these areas increased 23.6%, 17.6% and 17.2% between the third quarter of 2014 and the third quarter of 2015, high enough spikes to grant these cities the number 1, 2 and 3 spots on the Rent Range list (respectively). Source: Forbes.com Oct 19, 2015 @ 08:10
" “Rents in South Florida and other places in Florida have exceeded growth in income over the past two years,” said Ralph McLaughlin, a housing economist with Trulia, which tracks real estate listings nationwide. Source: Trulia.com
Key Financial Highlights:
"
Projected 8.2% projected yield to the Company at stabilization.
"
In Management’s opinion, there is tremendous growth of real estate in the Ft. Myers Beach Area.
Upon acquiring the Property, Orlandini Development, the Companies manager will start demolition and construction on the project.
pg. 18
We estimate that it will take twenty one months to design, permit, and build and that approximately $19,034,267 in building costs (both hard and soft costs) will be necessary for completing construction and deliver the project in turnkey condition. The cost estimate includes all costs to develop and build the 130 unit complex to turnkey condition. The breakdown of the development and construction costs are as follows:
Total Costs:
Property Acquisition:
$2,499,000
Building Construction Costs (To Turnkey):
$13,062,500
Impact Fees:
$80,000
General Contractor Fee (7%):
$914,375
Hard Contingency (5%):
$653,125
A&E (2.5% of Hard Costs):
$326,563
Legal:
$35,000
Tax & Insurance Carry:
$25,000
Developer Fee:
$882,635
Construction Interest:
$175,000
Insurance, Permits, Fees:
$261,250
Appraisal, Survey, and Environmental:
$10,000
Financing Fees:
$40,000
Marketing & Sales Overhead:
$25,000
Soft Contingency (5%):
$44,819
Total Development and Construction Costs :
$19,034,267
The Company plans to market the Property for lease using a multitude of online platforms such as Trulia, VRBO, and our own company website we will develop prior to construction completion.
The Manager is currently in talks with 2 of the largest General Contracting Companies in Southwest Florida. The Manager will decide the best company to contract with to construct the project in a timely manner and on budget.
The project upon completion will bring annual rental pricing in line with the local competition at $1600 a month for the three bedroom $1300 for the two bedroom and $1000 for the one bedroom. The seasonal is also relatively priced to the local market at $1000 a week for the one bedroom and $1300 a week for two bedroom and $2400 a week for three bedroom. This Rental data was provided by Sun Palace Vacation Rentals located on Ft. Myers Beach. Sun Palace is a reputable and well established vacation rental business and an authority in the local Ft. Myers Beach market.
The Property location has minimal or no competition. The nearest comparative complex is just over five miles away and is a strictly an annual rental facility. It is close in structure, but not a great example of the financial model that makes this property so unique. Most proprietors on the island are of a smaller scale, and are focusing on the seasonal rental market. We are able to capture seasonal and annual rental because of the shortage of island annual rentals and our unique location allowing us the ability to offer to seasonal rentals.
The Company will conduct environmental tests and studies on the sites prior to its acquisition. The Company expects the prospective development of the Property to have little to no negative impact on the environmental conditions of the Property.
A fully constructed Property offers an opportunity for strong Cash Flow over the mid-term, as the Ft. Myers Beach Area continues its emergent growth as one of the most rapidly developing and sought after vacation spots in South Florida.
The Company expects to obtain end mortgage financing in a timely manner after the project is completed. With the projected cash flow provided by the lease income the Company believes the completed project appraised value will be at a level that will be more than except able to traditional bank commercial financing. The Company’s exit strategy to pay off the bond financing will be in the form of a refinance to traditional bank commercial financing and the timely payoff of our obligations under this offering.
pg. 19
Market Context
Florida is by far the most common top-of-mind vacation destination for warm weather activities – more than eight out of ten travelers volunteer the state or a specific destination in the state when asked to think of an area that provides warm weather activities. Leisure travelers are much more likely to mention locations on the state’s east coast and inland, without prompting, than to mention destinations on the Gulf coast.
Once prompted, one out of three leisure travelers are aware of Fort Myers, Sanibel, and Captiva (34%), placing it in the middle tier among the set of Florida beach destinations queried. A similar share of travelers describe themselves as very or somewhat familiar with the area when shown a map of Lee County and its location in the state. One out of ten travelers have taken a trip to Fort Myers Beach in the past five years (11%) – a level that rivals the leading destinations in the state (Fort Lauderdale, Miami Beach, and Tampa). The incidence of past five year visitation is notably higher among travelers who claim they are aware of Fort Myers, Sanibel, and Captiva – with one-third saying they have been there in that timeframe.
Importantly, the majority of those who are aware of the destination would consider visiting Fort Myers in the next five years (81%) – a much stronger relationship between familiarity and consideration than seen for other Florida beach destinations. Still, this translates to only one-quarter of the total respondents who would consider Fort Myers (28%) since awareness of the destination is only moderate.
Fort Myers has one of the largest gaps between the share of travelers who have been there in the past five years and the share who would consider traveling there, suggesting an aspiration to visit and an opportunity for conversion to increase visitation.
Property Background
The Properties were marked to be a Hotel several years ago, but was cancelled when the economic fallout took hold in the United States. The Company was able to ascertain the previous blueprint plans and planners to help us transition our new ideas, creating a time and monetary savings. There are also hidden advantages in that a lot of zoning and elevations have already been put into place. The Company believes the incredible location and the shortage of reasonable housing will insure great success.
pg. 20
The Manager
Orlandini Development, LLC. was founded by Joseph Orlandini. Mr. Orlandini comes from a strong background of finance, construction, and development and has been a hands on in the field participant for over 20 years.
Mr. Orlandini has construction and development experience most recently on Ft. Myers Beach were he has been a leader in high end residential real estate construction, development, and sales.
Mr. Orlandini also has been involved in several ground up multi-family projects and several renovations. His experience with land planning, relationship building with the city of Ft. Myers Beach and Lee County has made him an authority on construction and development in the Ft. Myers Beach Area.
Mr. Orlandini is also a forward thinker and he employs the services of the most informed highly educated attorneys, surveyors, land planners, and general contractors available in Southwest Florida.
Management of Property
The Property is currently vacant and the Company currently has no source of revenue. After acquiring the Property, the Company plans start construction and complete the project in 20 months.
Management believes the following scenario for the Property:
Construct a 130 Unit Vacation Rental and Annual Lease Complex:
The Property will be constructed into a 130 Unit Vacation Rental and Annual Rental Complex. Upon completion traditional bank commercial financing will be obtained to meet our obligations of this offering.
Online Project Resources
A detailed website with project data, renderings, site plan, videos, aerial footage, plus more details are available 24/7 online for your inspection at:
www.SanCarlosResortLLC.com
pg. 21
tERMS AND CONDITIONS OF THE OFFERING
The following is a summary of the certain principal terms of the proposed investment in SAN CARLOS RESORT, LLC
The Company | SAN CARLOS RESORT, LLC is a Florida Limited Liability Company.
|
Security Offered | The Company shall hold a Senior Lien (Junior only to any bank loans that may be obtained in the form of a “Mortgage Loan” to account for any investment funds not secured through this Offering) on all the Assets of the Company as defined in this Registration Statement in an amount never to exceed 75% of the “As-Completed” value of the property during the construction phase, and never greater than 75% of the “As-Is Value” of the property after the completion of Construction as detailed in this Registration Statement. |
Company Managers | Biographies of all Managers can be found starting on Page 25 of this Offering. |
Minimum Capital Commitment | Each investor will be required to purchase a minimum of One - Secured Debt Note. |
The Offering | The Offering will commence promptly after the date of this Offering Circular and will close (terminate) upon the earlier of (1) the sale of 200,000 Secured Debt Notes, (2) One Year from the date this Offering begins, or (3) a date prior to one year from the date this Offering begins that is so determined by the Company’s Management (the “Offering Period”). A minimum of $3,000,000 must be invested prior to the Company having access to the Investment Proceeds. A maximum of $20,000,000 will be received from the offering. No Secured Debt Notes are being offered by any selling Noteholders. The Company will receive all proceeds from the sale of Secured Debt Notes after the minimum of $3,000,000 has been reached. All Secured Debt Note Proceeds will be administered by AltaVista Capital Markets, LLC The proceeds of the Secured Debt notes will remain in an account maintained by FundAmerica “for the benefit of SAN CARLOS RESORT, LLC” until disbursed pursuant to the terms and conditions of this Registration Statement. If the Offering terminates before the offering minimum is achieved, or if any prospective Investor’s subscription is rejected, all funds received from such Investors will be Promptly Refunded without interest or deduction. The Company will have 180 days to reach an investment minimum of $3,000,000. If the Offering terminates before the offering minimum is achieved, or if any prospective Investor’s subscription is rejected, all funds received from such Investors will be returned without interest or deduction. Any investor who purchases Secured Debt Notes after the investment minimum of this Offering has been achieved will have no assurance that other purchases of the Company’s Secured Debt Notes will occur. Accordingly, if the Company should file for bankruptcy protection or a petition for insolvency is filed by creditors against the Company, Investor funds may become part of the bankruptcy estate and administered according to the bankruptcy laws. |
Interest Distributions | Interest shall be paid to the Investors Annually. Interest due for all Notes shall be paid on the following dates each year: · Secured Debt Notes purchased during the First Calendar Quarter of 2016 will be paid on the Last Business Day of April 2017, 2018, 2019, 2020 and 2021. · Secured Debt Notes purchased during the Second Calendar Quarter of 2016 will be paid on the Last Business Day of July 2017, 2018, 2019, 2020 and 2021. · Secured Debt Notes purchased during the Third Calendar Quarter of 2016 will be paid on the Last Business Day of October 2017, 2018, 2019, 2020 and 2021. · Secured Debt Notes purchased during the Fourth Calendar Quarter of 2016 will be paid on the Last Business Day of January 2018, 2019, 2020, 2021 and 2022. |
Principal Repayment Early Repurchase of Notes by the Company Voting Rights Ranking Advancement of Secured Debt Note Proceeds Reports to Investors | All Principal shall be paid to the Investor at Maturity (Five Years) or at any early redemption made by the Company. All Secured Debt Notes repurchased by the Company in Months 1-12 shall be repurchased for the full Face Value, all accrued interest due up to the date of repurchase, plus an additional six months of interest. No fractional Secured Debt Notes shall be repurchased. All Secured Debt Notes repurchased by the Company in Months 13-24 shall be repurchased for the full Face Value, all accrued interest due up to the date of repurchase, plus an additional five months of interest. No fractional Secured Debt Notes shall be repurchased. All Secured Debt Notes repurchased by the Company in Months 25-36 shall be repurchased for the full Face Value, all accrued interest due up to the date of repurchase, plus an additional four months of interest. No fractional Secured Debt Notes shall be repurchased. All Secured Debt Notes repurchased by the Company in Months 37-48 shall be repurchased for the full Face Value, all accrued interest due up to the date of repurchase, plus an additional three months of interest. No fractional Secured Debt Notes shall be repurchased. All Secured Debt Notes repurchased by the Company in Months 49-54 shall be repurchased for the full Face Value, all accrued interest due up to the date of repurchase, plus an additional two months of interest. No fractional Secured Debt Notes shall be repurchased. All Secured Debt Notes repurchased by the Company in Months 55-59 shall be repurchased for the full Face Value, all accrued interest due up to the date of repurchase, plus an additional one month of interest. No fractional Secured Debt Notes shall be repurchased. Secured Debt Noteholders have NO VOTING RIGHTS The Secured Debt Notes will be the Company’s Secured Obligations and will: · Rank Superior with all future secured indebtedness (unless a Bank Mortgage Loan is obtained, the the Notes will be junior to the Bank Loan Indebtedness); · Rank Superior with all existing and future unsecured indebtedness; · Be Superior to all of the Company’s (including any future subsidiaries) existing and future secured obligations to the extent of the value of the assets securing such obligations; and · Be Superior to all future indebtedness (no current indebtedness) and other liabilities of any future subsidiaries. The Secured Debt Note proceeds will be administered by FundAmerica, and held in a Business Escrow Account established by FundAmerica. The proceeds of the Secured Debt Notes (less any fees and expenses as detailed in this Registration Statement) will remain in an account maintained by FundAmerica in the name of “FundAmerica for the benefit of San Carlos Resort, LLC” until disbursed pursuant to the terms of this Registration Statement. AltaVista Capital Markets, LLC will typically direct FundAmerica to disburse amounts to the Company from time-to-time as acquisition or development advances. For advances of $50,000 or more, AltaVista Capital Markets, LLC will direct FundAmerica to advance the funds direct from the established escrow account direct to the receiver. AltaVista Capital Markets, LLC will not be permitted to direct FundAmerica to make any disbursements to the Company if the Company is in the arrears on its annual interest payments to more than 15% of its Secured Debt Noteholders without a vote of no less than 75% of the Company’s Secured Debt Noteholders. AltaVista Capital Markets, LLC shall not be permitted to direct FundAmerica to make any disbursements of Investor Funds that differs from the Stated Use of Funds Schedule by more than 5% with a favorable vote of more than 75% of the Secured Debt Noteholders. The Company will furnish un-audited quarterly statements to investors. The Company’s Accounting Firm, at the expense of the Company, will furnish to the investors after the close of each fiscal year an annual report containing audited financial statements of the Company prepared in accordance with “Generally Accepted Accounting Principles” (GAAP). |
Valuations | The Company Managers will, at least once per year, perform an internal valuation of the Company’s assets, using accepted valuation techniques (including, but not limited to: Real Estate Appraisals, Cost Analysis, Sales Comparisons, and/or Income Capitalization Approaches), to establish the fair market value of each asset as the end of such year. The fair market value of the assets will be deemed to be the ownership interest in each asset valued at. In addition, detailed financial modeling will be performed using “current market assumptions” and discounted cash flow analysis. |
ITEM 8. DESCRIPTION OF PROPERTY.
The Company intends to purchase the land for the proposed development for $2,499,000 USD with investment funds raised through this Offering. The legal description of the properties is: 19220 San Carlos Blvd. Ft. Myers Beach, FL 33931 and 19170 San Carlos Blvd. Ft. Myers Beach, FL 33931. Both Properties located at 19170 San Carlos Blvd. and 19170 San Carlos Blvd. consist of a 1 masonry building on each parcel and they both are currently that is currently vacant and will be demolished prior to the new construction project beginning. The Noteholders of this Offering will hold a LIEN POSITION on this property, a Lien position that will never exceed 75% of the “As-Completed Value” of the property during the construction phase, or 75% of the “As-Is Value” of the property after the construction phase of the property as detailed in this Registration Statement. The Company also currently rents office spaces at 1710 Estero Blvd., Unit 6, Fort Myers Beach, Florida 33931.
ITEM 9. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATION
The following discussion and analysis of the Company’s Financial Condition and results of operations should be read in conjunction with the Company’s consolidated financial statements. In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. The Company’s actual results and timing may differ from those anticipated in these forward-looking statements and planning as a result of many factors, including those discussed under “Risk Factors” and elsewhere in the prospectus.
The Company is a Developmental Stage Company with limited operating history:
The Company was formed as a Florida Limited Liability Company in November of 2015. Accordingly, the Company has only a limited history upon which an evaluation of its prospects and future performance can be made. The Company’s proposed operations are subject to all business risks associated with new enterprises. The likelihood of the Company’s success must be considered in light of the problems, expenses, difficulties, complications, and delays frequently encountered in connection with the expansion of a business, operation in a competitive industry, and the continued development of advertising, promotions and a corresponding customer base. There is a possibility that the Company could sustain losses in the future. There can be no assurances that San Carlos Resort, LLC will operate profitably.
Overview:
Gross offering proceeds of a maximum of $20,000,000 may be realized. Management believes that such proceeds will capitalize and sustain the Company sufficiently to allow for the implementation of the Company’s Business Plans. If only a fraction of this Offering is sold, or if certain assumptions contained in Management’s business plans prove to be incorrect, the Company may have inadequate funds to fully develop its business.
Although the Company believes that the proceeds from this Offering will be sufficient to help sustain operations during the complete development and build-out of this project, there is no guarantee that the Company will raise all the funds needed to adequately fund development Operations. The Company has determined that $3,000,000, in addition to traditional bank financing or alternative funding, will be needed to fund planned operations for the first twelve months, though the construction timeline for the completion of the entire development may be much greater.
pg. 24
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND SIGNIFICANT EMPLOYEES
(a) Directors and Executive Officers.
A. Directors and Executive Officers. The current officer and director will serve for one year or until his respective successor(s) are elected and qualified.
Name
Position
Mr. Joe Orlandini
Managing Member & Chief Financial Officer
Age: 43
Orlandini Development, LLC. was founded by Joseph Orlandini. Mr. Orlandini comes from a strong background of finance, construction, and development and has been a hands on in the field participant for over 20 years.
Mr. Orlandini has construction and development experience most recently on Ft. Myers Beach were he has been a leader in high end residential real estate construction, development, and sales.
Mr. Orlandini also has been involved in several ground up multi-family projects and several renovations. His experience with land planning, relationship building with the city of Ft. Myers Beach and Lee County has made him an authority on construction and development in the Ft. Myers Beach Area.
Mr. Orlandini is also a forward thinker and he employs the services of the most informed highly educated attorneys, surveyors, land planners, and general contractors available in Southwest Florida.
B. Significant Employees. All Members of San Carlos Resort, LLC as listed above are each considered "Significant Employees", and are each "Managers" of the Company. The Company would be materially adversely affected if it were to lose the services of any member of San Carlos Resort, LLC listed above as each he has provided significant leadership and direction to the Company.
C. Family Relationships. None
D. Involvement in Certain Legal Proceedings. There have been no events under any bankruptcy act, any criminal proceedings and any judgments, injunctions, orders or decrees material to the evaluation of the ability and integrity of any director, executive officer, promoter or control person of Registrant during the past three years.
E. Legal proceedings. There are not presently any material pending legal proceedings to which the Registrant is a party or as to which any of its property is subject, and no such proceedings are known to the Registrant to be threatened or contemplated against it.
pg. 25
ITEM 11. EXECUTIVE COMPENSATION.
In November of 2015, the Company adopted a compensation program for Company Management. Accordingly, Management of San Carlos Resort, LLC. will be entitled to receive an annual salary of:
Mr. Joe Orlandini
Senior Managing Member & CFO
$0.00
Officer Compensation
The Company does not currently pay any cash fees to any Officer of the Company beyond those listed above.
Directors and Advisors Compensation
The Company does not currently pay any cash fees to any Director or Advisor of the Company or any member or employee of the Company beyond those listed above.
Significant Employees
The Company has no significant employees other than the Company Managers named in this prospectus.
pg. 26
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
(a) Security ownership of certain beneficial owners.
The following table sets forth, as of the date of this Registration Statement, the number of Equity Membership Units owned of record and beneficially by executive officers, directors and persons who hold 5% or more of the outstanding Equity Membership Units of the Company. Also included are the shares held by all executive officers and directors as a group.
The Company was formed as a Florida Limited Liability Company in November of 2015. Upon its formation, the Company has issued ONE THOUSAND Equity Membership Units as illustrated below:
Name and Address of Record Owner | Prior to Offering: | After Offering: |
Mr. Joe Orlandini Managing Member & Chief Financial Officer 1710 Estero Blvd., Unit #6 Fort Myers, Florida 33932 |
Equity Membership Units: 1,000 (100%) | Equity Membership Units: 1,000 (100%) |
(1)
Mr. Joe Orlandini is the Managing Member and Chief Financial Officer of “San Carlos Resort, LLC”
ITEM 13. INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS.
Related Party Transactions
Mr. Joe Orlandini, the Company’s Managing Member and Chief Financial Officer, is also the sole owner and Managing Member of the Company. Consequently, Mr. Orlandini controls the operations of the Company and will have the ability to control all matters submitted to members for approval, including:
·
Election of the board of directors;
·
Removal of any directors;
·
Amendment of the Company’s certificate of formation or operating agreement; and
·
Adoption of measures that could delay or prevent a change in control or impede a merger, takeover or other business combination
Mr. Orlandini will thus have complete control over the Company’s management and affairs. Accordingly, this ownership may have the effect of impeding a merger, consolidation, takeover or other business consolidation, or discouraging a potential acquirer from making a tender offer for the Equity Membership Units. This registration statement contains forward-looking statements and information relating to us, our industry and to other businesses.
Except as otherwise indicated herein, there have been no related party transactions, or any other transactions or relationships required to be disclosed pursuant to Item 11 of Form 1-A, Model B.
pg. 27
ITEM 14. SECURITIES BEING OFFERED.
Secure Debt Notes
The Offering will commence promptly after the date of this Offering Circular and will close (terminate) upon the earlier of (1) the sale of 200,000 Secured Debt Notes, (2) One Year from the date this Offering begins, or (3) a date prior to one year from the date this Offering begins that is so determined by the Company’s Management (the “Offering Period”).
A minimum of $3,000,000 must be invested prior to the Company having access to the Investment Proceeds. A maximum of $20,000,000 will be received from the offering. No Secured Debt Notes are being offered by any selling Noteholders. The Company will receive all proceeds from the sale of Secured Debt Notes after the minimum of $3,000,000 has been reached. All Secured Debt Note Proceeds will be administered by AltaVista Capital Markets, LLC. The proceeds of the Secured Debt notes will remain in an account maintained by FundAmerica “for the benefit of SAN CARLOS RESORT, LLC” until disbursed pursuant to the terms and conditions of this Registration Statement. If the Offering terminates before the offering minimum is achieved, or if any prospective Investor’s subscription is rejected, all funds received from such Investors will be Promptly Refunded without interest or deduction. The Company will have 180 days to reach an investment minimum of $3,000,000. If the Offering terminates before the offering minimum is achieved, or if any prospective Investor’s subscription is rejected, all funds received from such Investors will be returned without interest or deduction. Any investor who purchases Secured Debt Notes after the investment minimum of this Offering has been achieved will have no assurance that other purchases of the Company’s Secured Debt Notes will occur. Accordingly, if the Company should file for bankruptcy protection or a petition for insolvency is filed by creditors against the Company, Investor funds may become part of the bankruptcy estate and administered according to the bankruptcy laws.
The Secured Debt Notes are being offered by the Company on a “Best Efforts” basis without the benefit of a Placement Agent. The Company can provide no assurance that this Offering will be completely sold out. If less than the maximum proceeds are available, the Company’s business plans and prospects for the current fiscal year could be adversely affected.
The Secured Debt Notes to be offered with this proposed offering shall be initially offered by Company, mainly by Mr. Joe Orlandini, the Managing Member and Chief Financial Officer of the Company. The Company anticipates engaging members of the Financial Regulatory Authority (“FINRA”) to sell the Secured Debt Notes for the Company, though the Company has not yet engaged the Services of any FINRA Broker Dealers. The Company intends to engage a FINRA Broker Dealer to offer the Secured Debt Notes to prospective investors on a “best efforts” basis, and the Company’s Broker Dealers will have the right to engage such other FINRA Broker Dealer member firms as it determines to assist in the Offering. The Company will update this Registration Statement via an amendment to this Registration Statement upon any engagement of a FINRA Broker Dealer to offer the Secured Debt Notes.
The Company anticipates that any FINRA Broker Dealer Manager will receive selling commissions of up to FIVE PERCENT of the Offering Proceeds, which it may re-allow and pay to participating FINRA Broker Dealers who sell the Company’s Secured Debt Notes. The Company’s FINRA Broker Dealer Manager may also sell the Securities as part of a selling group, thereby becoming entitled to retain a greater portion of the selling commissions. Any portion of the selling commissions retained by the FINRA Broker Dealer Manager would be included within the amount of selling commissions payable by the Company and not in addition to.
The Company anticipates that that its FINRA Broker Dealer Manager may enter into an agreement with the Company to purchase “Underwriter Warrants”. Should the Company enter into an Underwriter Warrants Agreement with its FINRA Broker Dealer Manager, a copy of the agreement will be filed with the United States Securities and Exchange Commission as an Exhibit to an amended Registration Statement of which this Offering is part.
The Company anticipates that the Company and any FINRA Broker Dealer will each enter into a Broker Dealer Manager Agreement, which will be filed with the United States Securities and Exchange Commission as an Exhibit to an amended Registration Statement of which this Offering is part, for the sale of the Company’s Secured Debt Notes. FINRA Broker Dealers desiring to become members of a Selling Group will be required to execute a Participating Broker Dealer Agreement with the Company’s FINRA Broker Dealer, either before or after the date of this Registration Statement.
Except as expressly provided in this Offering, any dispute, claim or controversy between or among any of the Investors or between any Investor or his/her/its Affiliates and the Company arising out of or relating to this Offering, or any subscription by any Investor to purchase Securities, or any termination, alleged breach, enforcement, interpretation or validity of any of those agreements (including the determination of the scope or applicability of this agreement to arbitrate), or otherwise involving the Company, will be submitted to arbitration in the county and state in which the Company maintains its principal office at the time the request for arbitration is made, before a sole arbitrator, in accordance with the laws of the state of Florida for agreements made in and to be performed in the state of Florida. Such arbitration will be administered by the Judicial Arbitration and Mediation Services (“JAMS”) and conducted under the provisions of its Comprehensive Arbitration Rules and Procedures. Arbitration must be commenced by service upon the other party of a written demand for arbitration or a written notice of intention to arbitrate, therein electing the arbitration tribunal. Judgment upon any award rendered by the arbitrator shall be final and may be entered in any court having jurisdiction thereof. No party to any such controversy will be entitled to any punitive damages. Notwithstanding the rules of JAMS, no arbitration proceeding will be consolidated with any other arbitration proceeding without all parties’ consent. The arbitrator shall, in the award, allocate all of the costs of the arbitration, including the fees of the arbitrator and the reasonable attorneys’ fees of the prevailing party, against the party who did not prevail.
pg. 28
NOTICE: By executing a Subscription Agreement for this Offering, Subscriber is agreeing to have all disputes, claims, or controversies arising out of or relating to this Agreement decided by neutral binding arbitration, and Subscriber is giving up any rights he, she or it may possess to have those matters litigated in a court or jury trial. By executing this Subscription Agreement, Subscriber is giving up his, her or its judicial rights to discovery and appeal except to the extent that they are specifically provided for in this Subscription Agreement. If Subscriber refuses to submit to arbitration after agreeing to this provision, Subscriber may be compelled to arbitrate under federal or state law. Subscriber confirms that his, her or its agreement to this arbitration provision is voluntary.
Principal, Maturity and Interest:
This Offering Circular relates to the offer and sale of up to $20,000,000 in principal amount (the “Offering”) of Series A Secured Debt Notes of SAN CARLOS RESORT, LLC, a Florida Limited Liability Company (the “Company”). The Company’s principal office is located at 1710 ESTERO BLVD, SUITE #6, FORT MYERS BEACH, FLORIDA 33931.
The Secured Debt Notes will be issued in the minimum amount of $100.00 USD, and in multiples of $100.00 USD. The Secured Debt Notes will be offered with a maturity of 60 months from the date issued, with a fixed interest rate depending on the terms of the Secured Debt Note(s) as defined below. The Company will typically issue Secured Debt Notes on the same or next day, after deposit by the Company of the Subscriber’s payment check and the check is collected by the Company’s Bank. See “Description of Secured Debt Notes” on Page 28 of this Registration Statement. The Interest Rate for each Secured Debt Note will be based on the formula set forth below and varies according to the terms of the Secured Debt Note as defined below. See “Description of Notes – Principal, Maturity and Interest” on Page 29 of this Registration Statement. The Minimum and the Maximum Fixed Interest Rates which are offered will change from time to time in response to changes in the current “Wall Street Journal’s Prime Rate” data obtained from the Wall Street Journal, or a similar credible source. The “Prime Rate”, as reported by the Wall Street Journal’s Bank Survey, is among the most widely used benchmark in setting home equity lines of credit and credit card rates. It is in turn based on the Federal Funds Rate, which is set by the Federal Reserve. The Interest Rates for new Secured Debt Notes are set on the First Monday of each month at the start of business based on the Wall Street Journal’s Prime Rate on that day. Such rates are paid on all Secured Debt Notes issued between the start of business on that Monday and the close of business on the last day prior to the First Monday of the next month. The following table sets forth the formula for determining the Interest Rates for the Secured Debt Notes and the Initial Interest Rate based on the most recent Wall Street Journal’s Prime Rate as of MONDAY, JANUARY 4th, 2016.
Notes Number | Sales Price / Face Value | Note Class | Priority in Liquidation | Loan to Value | Annual Rate of Interest | Note Term | Interest Payments to Investors |
1 to 20,000 | $100 | A Class | First | 6.6% | Prime + 4% (3.50% + 4% = 7.50%) (2.5% Risk Discount) Realized Rate: 5.00% | 5 years | Annually |
20,001 to 40,000 | $100 | A Class | Second | 13.3% | Prime + 4% (3.50% + 4% = 7.50%) (2.0% Risk Discount) Realized Rate: 5.50% | 5 years | Annually |
40,001 to 60,000 | $100 | A Class | Third | 20% | Prime + 4% (3.50% + 4% = 7.50%) (1.5% Risk Discount) Realized Rate: 6.00% | 5 years | Annually |
60,001 to 80,000 | $100 | A Class | Fourth | 26.6% | Prime + 4% (3.50% + 4% = 7.50%) (1.0% Risk Discount) Realized Rate: 6.50% | 5 years | Annually |
80,001 to 100,000 | $100 | A Class | Fifth | 33.3% | Prime + 4% (3.50% + 4% = 7.50%) (0.5% Risk Discount) Realized Rate: 7.00% | 5 years | Annually |
100,001 to 120,000 | $100 | A Class | Sixth | 40% | Prime + 4% (3.50% + 4% = 7.50%) - PAR - Realized Rate: 7.50% | 5 years | Annually |
120,001 to 140,000 | $100 | A Glass | Seventh | 46.6% | Prime + 4% (3.50% + 4% = 7.50%) (0.5% Risk Premium) Realized Rate: 8.00% | 5 years | Annually |
140,001 to 160,000 | $100 | A Class | Eighth | 53.3% | Prime + 4% (3.50% + 4% = 7.50%) (1.0% Risk Premium) Realized Rate: 8.50% | 5 years | Annually |
160,001 to 180,000 | $100 | A Class | Ninth | 60% | Prime + 4% (3.50% + 4% = 7.50%) (1.5% Risk Premium) Realized Rate: 9.00% | 5 years | Annually |
180,001 to 200,000 | $100 | A Class | Tenth | 66.6% | Prime + 4% (3.50% + 4% = 7.50%) (2.0% Risk Premium) Realized Rate: 9.50% | 5 years | Annually |
pg. 30
Optional Prepayment:
The Secured Debt Notes maybe prepaid in whole at any time prior to their respective Maturity dates with the below premium paid to the Noteholder.
·
All Secured Debt Notes repurchased by the Company in Months 1-12 shall be repurchased for the full Face Value, all accrued interest due up to the date of repurchase, plus an additional six months of interest. No fractional Secured Debt Notes shall be repurchased.
·
All Secured Debt Notes repurchased by the Company in Months 13-24 shall be repurchased for the full Face Value, all accrued interest due up to the date of repurchase, plus an additional five months of interest. No fractional Secured Debt Notes shall be repurchased.
·
All Secured Debt Notes repurchased by the Company in Months 25-36 shall be repurchased for the full Face Value, all accrued interest due up to the date of repurchase, plus an additional four months of interest. No fractional Secured Debt Notes shall be repurchased.
·
All Secured Debt Notes repurchased by the Company in Months 37-48 shall be repurchased for the full Face Value, all accrued interest due up to the date of repurchase, plus an additional three months of interest. No fractional Secured Debt Notes shall be repurchased.
·
All Secured Debt Notes repurchased by the Company in Months 49-54 shall be repurchased for the full Face Value, all accrued interest due up to the date of repurchase, plus an additional two months of interest. No fractional Secured Debt Notes shall be repurchased.
·
All Secured Debt Notes repurchased by the Company in Months 55-59 shall be repurchased for the full Face Value, all accrued interest due up to the date of repurchase, plus an additional one month of interest. No fractional Secured Debt Notes shall be repurchased.
Events of Default:
The Secured Debt Notes provide that each of the following constitutes an “Event of Default” with respect to the Secured Debt Notes:
1.
The failure to make a payment when due under the Secured Debt Notes (i) of any interest payment within five (5) business days of when the interest payment is due, or (ii) of the entire outstanding balance of principal and interest on the maturity date; or
2.
If the Company voluntarily files a petition under the Federal Bankruptcy Code, or under any similar or successor Federal Statute relating to Bankruptcy, Insolvency Arrangements, or Reorganizations; of if the Company fails to obtain a vacation or stay of Involuntary Proceedings brought for the Reorganization, Dissolution or Liquidation of the Company; or if the Company is adjudged a Bankrupt, or upon the Company’s Dissolution, Business Failure or Discontinuance as a going concern business; or if a trustee or receive shall be appointed for the Company’s property; or if there is an attachment, execution or other judicial seizure of any portion of the Company’s assets, and such seizure is not discharged within ten (10) days.
In any Event of Default occurs and is continuing, at the option of the Noteholders, the entire outstanding principal balance due under the Secured Debt Notes and all accrued and unpaid Interest on the Secured Debt Notes will become immediately due and payable by the Company without further action or notice at the option of the Noteholders.
Form of Secured Debt Notes:
All Secured Debt Notes will be issued in fully registered form. The Company is entitled to treat the Registered Noteholder shown on its records as the owner of the Secured Debt Note for all purposes. Ownership of a Secured Debt Note may be registered in the name of any two or more named persons as joint tenants with right of survivorship, as tenants in common or as tenants by the entireties, and payment of principal and interest on any Secured Debt Note so registered will be made to the person or persons entitled to receive such payment as their interests may appear.
Payment at Maturity, No Rollover:
The Secured Debt Notes will NOT be subject to automatic rollover. Due to the fact automatic rollovers do not apply to the Secured Debt Notes, Investors will receive full payment of principal at Maturity or Redemption by the Company.
pg. 31
Lost, Stolen or Destroyed Secured Debt Notes: Issuance of New Secured Debt Notes:
If a Noteholder loses his or her Secured Debt Note(s) is stolen or destroyed, the Company will issue a new Secured Debt Notes in the place of the lost, stolen or destroyed Secured Debt Note(s) if the Noteholder gives the Company a bond sufficient to indemnify the Company against any claim that may be made against it on account of the alleged loss, theft or destruction of any Secured Debt Note(s) or the issuance of a new Secured Debt Note(s).
Lack of Public Market
There is no public market for the Secured Debt Notes, and none is expected to develop for their purchase or sale.
Financial Information Provided to Investors:
Beginning with the 2016 fiscal year end, in addition to the financial information provided in this Offering Circular, the Company will provide a copy of its financial statements to all Holders of Secured Debt Notes within 120 days after the end of each fiscal year.
MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following summary describes the material U.S. Federal Income Tax considerations relating to the acquisition, ownership and disposition of the Secured Debt Notes. The summary is based on the Internal Revenue Code (the “Code”), and Treasury regulations, rulings and judicial decisions as of the date hereof, all of which may be repealed, revoked or modified with possible retroactive effect. This summary applies to you only if you acquire the Secured Debt Notes for cash in this Offering at the initial Offering price and hold the Secured Debt Notes as capital assets within the meaning of Section 1221 of the Code. This summary is for general information only and does not address all aspects of the U.S. Federal Income Taxation that may be important to you in light of your particular circumstances, and it does not address state, local, foreign, alternative minimum or non-income tax considerations that may be applicable to you. Further, this summary does not deal with Noteholders that may be subject to special tax rules, including, but not limited to, insurance companies, tax-exempt organizations, financial institutions, dealers in securities or currencies, U.S. Noteholders (as described below) whose functional currency is not the U.S. Dollar, certain U.S. expatriates or Holders who hold the Secured Debt Notes as a hedge against currency risks or as part of a straddle, synthetic security, conversion transaction or other integrated transaction for U.S. Federal Tax purposes. You should consult your own tax advisor as to the particular tax consequences to your of acquiring, holding or disposing of the Secured Debt Notes.
For purposes of this summary, a “U.S. Noteholder” is a beneficial owner of a Secured Debt Notes that, for U.S. Federal Income Tax purposes, is: (a) an individual citizen or resident of the United States; (b) a corporation (or other business entity treated as a corporation) created or organized in or under the Laws of the United States or any State thereof (including the District of Columbia); (c) an estate the income of which is subject to U.S. Federal Income Taxation regardless of its source; or (d) a trust if (i) such trust has a valid election in effect under applicable Treasury regulations to be treated as a United States person, or (ii) a court within the United States is able to exercise primary supervision over the trust’s administration and one or more United States persons have the authority to control all substantial decisions of the trust.
For purposes of this summary, a “Non-U.S. Noteholder” is a beneficial owner of a Secured Debt Notes that is neither a U.S. Noteholder nor a partnership or any entity or arrangement treated as a partnership for U.S. Federal Income Tax purposes. If a partnership (or other entity or arrangement treated as a partnership for U.S. Federal Income Tax purposes) holds Secured Debt Notes, then the U.S. Federal Income Tax treatment of a partner in such partnership will generally depend on the status of the partner and the activities of the partnership. If you are a partnership that holds Secured Debt Notes of a partner in such a partnership, you should consult your own tax advisor as to the particular U.S. Federal Income Tax consequences applicable to you.
Except as expressly provided in this Offering, any dispute, claim or controversy between or among any of the Investors or between any Investor or his/her/its Affiliates and the Company arising out of or relating to this Offering, or any subscription by any Investor to purchase Securities, or any termination, alleged breach, enforcement, interpretation or validity of any of those agreements (including the determination of the scope or applicability of this agreement to arbitrate), or otherwise involving the Company, will be submitted to arbitration in the county and state in which the Company maintains its principal office at the time the request for arbitration is made, before a sole arbitrator, in accordance with the laws of the state of Florida for agreements made in and to be performed in the state of Florida. Such arbitration will be administered by the Judicial Arbitration and Mediation Services (“JAMS”) and conducted under the provisions of its Comprehensive Arbitration Rules and Procedures. Arbitration must be commenced by service upon the other party of a written demand for arbitration or a written notice of intention to arbitrate, therein electing the arbitration tribunal. Judgment upon any award rendered by the arbitrator shall be final and may be entered in any court having jurisdiction thereof. No party to any such controversy will be entitled to any punitive damages. Notwithstanding the rules of JAMS, no arbitration proceeding will be consolidated with any other arbitration proceeding without all parties’ consent. The arbitrator shall, in the award, allocate all of the costs of the arbitration, including the fees of the arbitrator and the reasonable attorneys’ fees of the prevailing party, against the party who did not prevail.
pg. 32
NOTICE: By executing a Subscription Agreement for this Offering, Subscriber is agreeing to have all disputes, claims, or controversies arising out of or relating to this Agreement decided by neutral binding arbitration, and Subscriber is giving up any rights he, she or it may possess to have those matters litigated in a court or jury trial. By executing this Subscription Agreement, Subscriber is giving up his, her or its judicial rights to discovery and appeal except to the extent that they are specifically provided for in this Subscription Agreement. If Subscriber refuses to submit to arbitration after agreeing to this provision, Subscriber may be compelled to arbitrate under federal or state law. Subscriber confirms that his, her or its agreement to this arbitration provision is voluntary.
U.S. Holders
Interest
We anticipate that the Secured Debt Notes will not be issued with original discount for U.S. Federal Income Tax purposes. In such case, if you are a U.S. Noteholder, interest on a Secured Debt Notes will generally be taxable to you as ordinary interest income as it accrues or is received by you in accordance with your usual method of accounting for U.S. Federal Income Tax purposes.
Sale, Exchange or Other Taxable Dispositions of Secured Debt Notes
If you are a U.S. Noteholder, upon the sale, exchange, redemption, retirement or other taxable disposition of a Secured Debt Note, you will generally recognize gain or loss for U.S. Federal Income Tax purposes in an amount equal to the difference, if any, between (i) the amount of the cash and the fair market value of any property you receive on the sale or other taxable disposition (less an amount attributable to any accrued but unpaid interest, which will be taxable as ordinary interest income to the extent not previously taken into income), and (ii) your adjusted tax basis in the Secured Debt Note. Your adjusted tax basis in a Secured Debt Note will generally be equal to your cost of the Secured Debt Note, reduced by any principal payments you have previously received in respect of the Secured Debt Note. Such gain or loss will generally be treated as capital gain or loss and will be treated as long-term capital gain or loss if your holding period in the Secured Debt Note(s) exceeds on year at the time of the disposition. Long-term capital gains of non-corporate taxpayers are subject to reduced rates of taxation. The deductibility of capital losses is subject to limitation.
Backup Withholding and Information Reporting
U.S. Federal Backup Withholding may apply to payments on the Secured Debt Notes and proceeds from the sale or other disposition of the Secured Debt Notes if you are a non-corporate U.S. Noteholder and fail to provide a correct taxpayer identification number or otherwise comply with applicable requirements of the backup withholding rules. Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be allowed as a credit against a U.S. Noteholder’s U.S. Federal Income Tax liability and may entitle such Noteholder to a refund, provided the required information is timely furnished to the Internal Revenue Service (the “IRS”).
A U.S. Noteholder will also be subject to information reporting with respect to payments on the Secured Debt Notes and proceeds from the sale or other disposition of the Secured Debt Notes, unless such U.S. Noteholder is an exempt recipient and appropriately establishes that exemption.
pg. 33
Non-U.S. Holders
Interest
Subject to the discussion of Backup Withholding and information reporting below, if you are a Non-U.S. Noteholder, payments of interest on the Secured Debt Notes to you will not be subject to U.S. Federal Income Tax (including branch profits or withholding tax), provided that:
·
You do not, directly or indirectly, actually or constructively, own 10% or more of the voting power of the stock of SAN CARLOS RESORT, LLC;
·
You are not a bank receiving interest on an extension of credit pursuant to a loan agreement entered into in the ordinary course of your trade or business;
·
You are not a controlled foreign corporation for U.S. Federal Income Tax purposes that is, actually or constructively, related to the Company (as provided in the Code);
·
The interest payments are not effectively connected with your conduct of a trade or business within the United States; and
·
You meet certification requirements.
You will satisfy these certification requirements if you certify on IRS Form W-8BEN, or a substantially similar substitute form, under penalties of perjury, that you are not a United States person with the meaning of the Code, provide your name and address and file such form with the withholding agent. If you hold the Secured Debt Notes through a foreign partnership or intermediary must satisfy certification requirements of applicable Treasury regulations.
Even if the requirements listed above are not satisfied, you will be entitled to an exemption from or reduction in U.S. Withholding Tax provided that:
·
You are entitled to an exemption from or reduction in Withholding Tax or interest under a tax treaty between the United States and your country of residence. To claim this exemption or reduction, you must generally complete IRS Form W-8BEN and claim this exemption or reduction on the form. In some cases, you must instead be permitted to provide documentary evidence of your claim to the intermediary, or a qualified intermediary may already have some or all of the necessary evidence in its files; or
·
The interest income on the Secured Debt Notes is effectively connected with the conduct of your trade or business in the United States. To claim this exemption, you must complete IRS Form W-8ECI.
You may obtain a refund of any excess amounts withheld by timely filing an appropriate claim for refund with the IRS.
Sale, Exchange or Other Taxable Dispositions of Secured Debt Notes
Subject to the discussion below regarding Backup Withholding and information reporting, if you are a Non-U.S. Holder, you will not be subject to U.S. Federal Income Tax (including branch profits tax) on the gain you realize on any sale, exchange, redemption, retirement or other taxable disposition of a Secured Debt Notes.
·
The gain is effectively connected with your conduct of a trade or business within the United States and, if required by an applicable treaty (and you comply with a applicable certification and other requirements to claim treaty benefits), is generally attributable to a U.S. “permanent establishment”;
·
You are an individual and have been present in the United States for 183 days or more in the taxable year of disposition and certain other requirements are met; or
·
A portion of the gain represents accrued but unpaid interest, in which case the U.S. Federal Income Tax rules for interest would apply to such portion.
pg. 34
U.S. Trade or Business
If interest on a Secured Debt Note or gain from a disposition of the Secured Debt Note if effectively connected with your conduct of a U.S. trade or business, and, if required by an applicable treaty, you maintain a U.S. “permanent establishment” to which the interest or gain is attributable, you will generally be subject to U.S. Federal Income Tax on the interest or gain on a net basis in the same manner as if you were a U.S. Noteholder. If you are a foreign corporation, you may also be subject to a branch profits tax of 30% of your effectively connected earnings and profits for the taxable year, subject to certain adjustments, unless you qualify for a lower rate under an applicable income tax treaty.
Backup Withholding and Information Reporting
Under current U.S. Federal Income Tax, Backup Withholding and information reporting may apply to payments made by the Company (including the Company’s paying agents) to you in respect of the Secured Debt Notes, unless you provide an IRS Form W-8BEN or otherwise meet documentary evidence requirements for establishing that you are a Non-U.S. Noteholder or otherwise establish an exemption. The Company (or its paying agents) may, however, report payments of interest on the Secured Debt Notes.
The gross proceeds from the disposition of your Secured Debt Notes may be subject to information reporting and Backup Withholding Tax at the applicable rate. If you sell your Secured Debt Notes outside the United States through a foreign office of a foreign broker and the sales proceeds are paid to you outside the United States, then the Backup Withholding and information reporting requirements will generally not apply to that payment. However, information reporting, but not Backup Withholding, will apply to a payment of sales proceeds, even if that payment is made outside the United States, if you sell your Secured Debt Notes through the foreign office of a foreign broker that is, for U.S. Federal Income Tax purposes:
·
A United States person (within the meaning of the Code);
·
A controlled foreign corporation;
·
A foreign person 50% of more of whose gross income is effectively connected with a U.S. trade or business for a specified three-year period; or
·
A foreign partnership with certain connections to the United States
Unless such broker has in its records documentary evidence that you are not a United States person and certain other conditions are met, or you otherwise establish an exemption. In addition, Backup Withholding may apply to any payment that the broker is required to report if the broker has actual knowledge that you are a United States person.
You should consult your own tax advisor regarding the application of information reporting and Backup Withholding in your particular situation, the availability of an exemption from Backup Withholding and the procedure for obtaining such an exemption, if available. Backup Withholding is not an additional tax. Any amounts withheld under the Backup Withholding rules may be allowed as a credit against your U.S. Federal Income Tax liability and may entitle you to a refund, provided the required information is timely furnished to the IRS.
The U.S. Federal Tax discussion set forth above is included for general information only and may not be applicable depending on the Noteholder’s particular situation. Noteholders should consult their tax advisors with respect to the tax consequences to them of the beneficial ownership and disposition of the Secured Debt Notes, including the tax consequences under State, Local, Foreign, and other tax laws and the possible effects of changes in U.S. Federal and other Tax Laws.
pg. 35
(a) Description of Company Equity Membership Units
The Company is authorized by its Certificate of Formation to issue an aggregate of 10,000 shares of Equity Membership Units, $0.001 par value per share (the "Membership Unit"). As of January 1st, 2016 – 1,000 Equity Membership Units were issued and outstanding.
All outstanding shares of Equity Membership Units are of the same class and have equal rights and attributes. The holders of Equity Membership Units are entitled to one vote per share on all matters submitted to a vote of Shareholders of the Company. All Shareholders are entitled to share equally in dividends, if any, as may be declared from time to time by the Board of Directors out of funds legally available. In the event of liquidation, the holders of Equity Membership Units are entitled to share ratably in all assets remaining after payment of all liabilities.
(b) Background Information on other Equity Membership Unit Classes. None
(c) Other Debt Securities. None.
(d) Other Securities to Be Registered. None.
Security Holders
As of January 1st, 2016, there were ONE THOUSAND shares of our Equity Membership Units outstanding, which were held of record by ONE shareholder, not including persons or entities that hold the membership units in nominee or "street" name through various brokerage firms.
Indemnification of Directors and Officers:
The Company is formed under the laws of Florida. Florida General Corporation Law provides that a company may indemnify directors and officers as well as other employees and individuals against expenses including attorneys’ fees, judgments, fines and amounts paid in settlement in connection with various actions, suits or proceedings, whether civil, criminal, administrative or investigative other than an action by or in the right of the company, a derivative action, if they acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of the company, and, with respect to any criminal action or proceeding, if they had no reasonable cause to believe their conduct was unlawful. A similar standard is applicable in the case of derivative actions, except that indemnification only extends to expenses including attorneys’ fees incurred in connection with the defense or settlement of such actions and the statute requires court approval before there can be any indemnification where the person seeking indemnification has been found liable to the corporation. The statute provides that it is not exclusive of other indemnification that may be granted by a company’s certificate of formation, bylaws, agreement, and a vote of shareholders or disinterested directors or otherwise.
The Company's Certificate of formation provides that it will indemnify and hold harmless, to the fullest extent permitted by Florida’s General Corporation Law, as amended from time to time, each person that such section grants us the power to indemnify.
Florida's General Corporation Law permits a company to provide in its certificate of formation that a director of the company shall not be personally liable to the company or its shareholders for monetary damages for breach of fiduciary duty as a director, except for liability for:
·
any breach of the director’s duty of loyalty to the company or its shareholders;
·
acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law;
·
payments of unlawful dividends or unlawful stock repurchases or redemptions; or
·
any transaction from which the director derived an improper personal benefit.
The Company’s Certificate of Formation provides that, to the fullest extent permitted by applicable law, none of our directors will be personally liable to us or our shareholders for monetary damages for breach of fiduciary duty as a director. Any repeal or modification of this provision will be prospective only and will not adversely affect any limitation, right or protection of a director of our company existing at the time of such repeal or modification.
pg. 36
FINANCIAL STATEMENTS SECTION:
TITLE | PAGE |
Company Balance Sheet | 38 |
Company Statement of Revenue and Expense | 39 |
Statement of Shareholders Equity | 40 |
Statement of Cash Flows | 41 |
Notes to Financial Statements | 42 |
pg. 37
SAN CARLOS RESORT, LLC
(A Development Stage Company)
BALANCE SHEET - Unaudited
January 1st, 2016
ASSETS | ||
Current Assets | ||
· Cash | $1,000 | |
· Accounts Receivable (Capitalization Commitment) | $0.00 | |
· Inventory | $0.00 | |
· Prepaid Expenses | $0.00 | |
· Short-term Investments | $0.00 | |
Total Current Assets | $1,000 | |
Fixed (Long-Term)Assets | ||
· Long-Term Investments | $0.00 | |
· Property & Equipment | $0.00 | |
(Less Accumulated Depreciation) | $0.00 | |
· Intangible Assets | ||
Total Fixed Assets | $0.00 | |
Other Assets | ||
· Deferred Income Tax | $0.00 | |
· Other | $0.00 | |
Total Fixed Assets | $0.00 | |
TOTAL ASSETS | $1,000 | |
LIABILITIES & OWNER’S EQUITY | ||
Current Liabilities | $0.00 | |
· Accounts Payable | $0.00 | |
· Short-term Loans | $0.00 | |
· Income Taxes Payable | $0.00 | |
· Accrued Salaries & Wages | $0.00 | |
· Unearned Revenue | $0.00 | |
· Current Portion of Long-term Debt | $0.00 | |
Total Current Liabilities | $0.00 | |
Long-Term Liabilities | ||
· Long-Term Debt | $0.00 | |
· Deferred Income Tax | $0.00 | |
· Other | $0.00 | |
Total Long-term Liabilities | $0.00 | |
Owner’s Equity | ||
· Owner’s Investment | $1,000 | |
· Accounts Receivable | $0.00 | |
Total Owner’s Equity | $0.00 | |
TOTAL LIABILITIES & OWNER’S EQUITY | $1,000 |
SEE NOTES TO FINANCIAL STATEMENTS
pg. 38
SAN CARLOS RESORT, LLC
(A Development Stage Company)
STATEMENTS OF REVENUE AND EXPENSES - Unaudited
November 13th, 2015 to January 1st, 2016
REVENUE | November 13th 2015 to January 1st,2016 |
· Total Revenues | $0.00 |
TOTAL REVENUES | $0.00 |
EXPENSES | |
· Accounting | $0.00 |
· Legal | $0.00 |
· Taxes, other | $0.00 |
· Organization Costs | $0.00 |
TOTAL EXPENSES | $0.00 |
NET LOSS | ($0.00) |
SEE NOTES TO FINANCIAL STATEMENTS
pg. 39
SAN CARLOS RESORT, LLC
(A Development Stage Company)
STATEMENT OF SHAREHOLDERS’ EQUITY - Unaudited
For the period for
November 13th, 2015 to January 1st, 2016
Founding Shareholder | Total | |
Founding Contribution | $1,000 | $1,000 |
All Costs | $0.00 | $0.00 |
Net Loss | ($0.00) | ($0.00) |
BALANCE, January 1st, 2016 | $1,000 | $1,000 |
SEE NOTES TO FINANCIAL STATEMENTS
pg. 40
SAN CARLOS RESORT, LLC
(A Development Stage Company)
STATEMENT OF CASH FLOWS
For the period for
November 13th, 2015 to January 1st, 2016
CASH FLOWS FROM OPERATING ACTIVITIES | November 13th, 2015 to January 1st, 2016 |
· Net Loss | ($0.00) |
· Other | $0.00 |
CASH FLOWS FROM INVESTING ACTIVITIES | November 13th, 2015 to January 1st, 2016 |
· All Investing Activities | $0.00 |
CASH FLOWS FROM FINANCING ACTIVITIES | November 13th, 2015 to January 1st, 2016 |
· All Financing Activities | $0.00 |
NET INCREASE IN CASH | $0.00 |
Cash, Beginning of year | $1,000 |
Cash, End of Year | $1,000 |
SEE NOTES TO FINANCIAL STATEMENTS
pg. 41
SAN CARLOS RESORT, LLC
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 1. ORGANIZATION
SAN CARLOS RESORT, LLC, a Florida Limited Liability Company was formed in November of 2015.
Upon its organization as a Florida Limited Liability Company, the Company issued 100% of its Outstanding Membership Units to Mr. Joe Orlandini.
Mr. Joe Orlandini initially capitalized the Company an opening deposit and balance of $1,000 USD.
NOTE 2. BASIS OF ACCOUNTING:
The Financial Statements of the Company have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP).
pg. 42
SIGNATURES
The Issuer has duly caused this Offering Statement to be signed on its behalf by the undersigned, thereunto duly authorized.
SAN CARLOS RESORT, LLC
By: Mr. Joe Orlandini
By: /s/ Joe Orlandini_________
Name: Mr. Joe Orlandini
Title: Senior Managing Member & Chief Financial Officer
_____________________________________________________________________________
![[offeringsancarlosresort002.gif]](offeringsancarlosresort002.gif)
pg. 43
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