UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 1-A
REGULATION A OFFERING CIRCULAR
UNDER THE SECURITIES ACT OF 1933
MARTELINVEST 1 LLC
(Exact name of registrant as specified in its
charter)
| Wyoming |
88-0824387 |
| |
|
| (State of Organization) |
(Federal EIN) |
ICC# 6500
Primary Standard Industrial Classification Code
Number
(Address, including zip code, and telephone
number, including area code, of registrant’s principal executive offices)
Eric Martel
1887 Whitney Mesa Drive #9656
Henderson, NV, 89014
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
InCorp Services, Inc.
1910 Thomes Ave
Cheyenne, WY 82001
With a copy to:
Andrew Bull, Esq.
Bull Blockchain Law, LLP
21 S. 11th Street, Floor 2
Philadelphia, PA 19107
Andrew@bullblockchainlaw.com
(215) 695-5860
PRELIMINARY OFFERING CIRCULAR
An offering statement
pursuant to Regulation A relating to these tokenized securities has been filed with the Securities and Exchange Commission (the “SEC”).
Information contained in this Preliminary Offering Circular (“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 SEC 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 any such
state. We may elect to satisfy our obligation to deliver a Final Offering Circular by sending you a notice within two business days after
the completion of our 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.
As filed with the Securities and Exchange Commission
on October 18, 2022
Offering Circular
MARTELINVEST 1 LLC
1887 Whitney Mesa Drive #9656
Henderson, NV, 89014
Up to 400,000 Limited Liability Company Units
Represented by Digital Tokens
MartelInvest 1 LLC, a Wyoming limited liability
company (“we” or the “Company”), is offering (the “Offering”) up to 400,000 limited
liability company units of the Company (the “Units”). The Offering is being made pursuant to Tier 1 of Regulation A,
promulgated under the Securities Act of 1933. The offering price per unit is $50, for an aggregate offering amount of up to $20,000,000
(“Maximum Offering Amount”). The minimum investment amount for any investor is one (1) Unit or $50. There is no required
minimum number of Tokens or amount of proceeds that must be sold as a condition to completion of this Offering. See "Securities
Being Offered" beginning on page 36.
Each limited liability company unit of the Company
will be represented by a digital token, hereinafter referred to as the MartelInvest 1 Token (the “Tokens”), with token
symbol MIFT1. Should we make the Tokens available, we reserve the right to discontinue the usage of the Tokens and revert to traditional
or other methods of certification of the Units.
In connection with this Offering, the Company
shall provide an online portal to the subscriber for the transfer of funds from the subscriber for the investment, in accordance with
the terms of the Subscription Agreement (the “Subscription Agreement”). To register, investors must provide certain
personal information and representations to verify the identity of each prospective investor, and indicate their country and state of
residence. Prospective investors must also indicate and provide information supporting their accreditation status and complete anti-money
laundering and know-your-customer processes. Prospective investors who provide incomplete or inaccurate information will not be permitted
to purchase the securities of the Company, and the Company has the authority, in its sole discretion, to prohibit or refund purchases
by prospective investors for any reason. Once you complete the onboarding process, you will be added to the “whitelist” and
have the opportunity to subscribe for the Tokens by (i) executing the Subscription Agreement; (ii) executing the signature page to the
Company’s Amended and Restated Limited Liability Company Operating Agreement, dated May 2, 2022, as amended from time to time (the
“Operating Agreement”); and (iii) delivering payment to the Company via online portal per the instructions provided
in the Subscription Agreement. Potential purchasers must pay the purchase price for the Tokens in USD, USDC, USDT, or Matic.
This Offering will commence within two (2) calendar
days following the qualification of the Offering by the Securities and Exchange Commission (“SEC”). The Offering will
terminate on the sooner of the sale of the maximum number of Units being sold, twelve months from the effective date of this Offering
Statement or the decision by Company management to deem the offering closed. The Units offered hereby are offered on a "best efforts"
basis, and there is no minimum offering.
We have made no arrangements to place subscription
proceeds or funds in an escrow, trust, or similar account, which means that the proceeds or funds from the sale of the Units will be immediately
available to us for use in our operations and once received and accepted are irrevocable.
| |
Price to Public (3) |
Underwriting
discount and
commissions (1) |
Proceeds to
issuer (2) |
Proceeds to other
persons |
| Per share/unit: |
$50 |
$0 |
$50 |
$0 |
| Total Minimum: |
$50 |
$0 |
$50 |
$0 |
| Total Maximum: |
$20,000,000 |
$0 |
$20,000,000 |
$0 |
| (1) | We do not intend to use commissioned sales agents or underwriters. |
| (2) | The amounts shown are before deducting organization and offering costs to us, which include legal, accounting, printing, due diligence,
marketing, consulting, finders fees, selling, and other costs incurred in this Offering. |
| (3) | The Units are offered at $50 each, with a minimum purchase of 1 Unit. |
The United States 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 solicitation materials. These securities are offered pursuant to an exemption
from registration with the Commission; however, the Commission has not made an independent determination that the securities offered are
exempt from registration.
We are following the “Offering Circular”
disclosure format under Regulation A.
The date of this offering circular is October 18,
2022.
IMPORTANT INFORMATION ABOUT
THIS
OFFERING CIRCULAR
Please carefully read the information in this
Offering Circular and any accompanying Offering Circular supplements, which we refer to collectively as the “Offering Circular.”
You should rely only on the information contained in this Offering Circular. We have not authorized anyone to provide you with different
information. This Offering Circular may only be used where it is legal to sell these securities. You should not assume that the information
contained in this Offering Circular is accurate as of any date later than the date hereof or such other dates as are stated herein or
as of the respective dates of any documents or other information incorporated herein by reference.
This Offering Circular is part of an offering
statement that we filed with the SEC, using a continuous offering process. Periodically, as we make material developments, we will provide
an offering circular supplement that may add, update, or change information contained in this Offering Circular. Any statement that we
make in this Offering Circular will be modified or superseded by any inconsistent statement made by us in a subsequent Offering Circular
supplement. The offering statement we filed with the SEC includes exhibits that provide more detailed descriptions of the matters discussed
in this Offering Circular. You should read this Offering Circular and the related exhibits filed with the SEC and any Offering Circular
supplement, together with additional information contained in our annual reports, semi-annual reports, and other reports and information
statements that we will file periodically with the SEC. See the section entitled “Where You Can Find Additional Information”
below for more details.
The offering statement and all supplements and
reports that we have filed or will file in the future can be read at the SEC website, www.sec.gov.
FORWARD-LOOKING STATEMENTS
THIS OFFERING CIRCULAR MAY CONTAIN FORWARD-LOOKING
STATEMENTS AND INFORMATION RELATING TO, AMONG OTHER THINGS, THE COMPANY, ITS BUSINESS PLAN AND STRATEGY, AND ITS INDUSTRY. THESE FORWARD-LOOKING
STATEMENTS ARE BASED ON THE BELIEFS OF, ASSUMPTIONS MADE BY, AND INFORMATION CURRENTLY AVAILABLE TO THE MANAGEMENT. WHEN USED IN THE OFFERING
MATERIALS, THE WORDS "ESTIMATE, PROJECT, BELIEVE, ANTICIPATE, INTEND, EXPECT" AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY
FORWARD-LOOKING STATEMENTS. THESE STATEMENTS REFLECT MANAGEMENT'S CURRENT VIEWS WITH RESPECT TO FUTURE EVENTS AND ARE SUBJECT TO RISKS
AND UNCERTAINTIES THAT COULD CAUSE THE COMPANY'S ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTAINED IN THE FORWARD-LOOKING STATEMENTS.
INVESTORS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE ON WHICH THEY
ARE MADE.
TABLE OF CONTENTS
| OFFERING SUMMARY |
1 |
| RISK FACTORS |
6 |
| Risks Related to Our Structure and Operations |
6 |
| Risks Related to this Offering and Ownership of our Units |
8 |
| Risks Related to Conflicts of Interest |
12 |
| Risks Related to Real Estate Investments |
13 |
| Risks Related to Blockchain Technology and the Ethereum Network |
19 |
| DILUTION |
23 |
| PLAN OF DISTRIBUTION |
24 |
| USE OF PROCEEDS |
25 |
| DESCRIPTION OF BUSINESS |
26 |
| DESCRIPTION OF PROPERTY |
28 |
| MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION |
|
| AND RESULTS OF OPERATIONS |
29 |
| DIRECTOR, EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES |
30 |
| COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS |
32 |
| SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITYHOLDERS |
33 |
| INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS |
34 |
| SECURITIES BEING OFFERED |
36 |
| FINANCIAL STATEMENTS |
38 |
| PART III EXHIBITS |
43 |
| SIGNATURES |
44 |
_________
We have not authorized anyone to provide
any information or to make any representations other than those contained in this Offering Circular or in any “test the waters”
materials we have prepared. We take no responsibility for and can provide no assurance as to the reliability of any other information
that others may give you. This Offering Circular is an offer to sell only the Tokens offered hereby, but only under circumstances and
in jurisdictions where it is lawful to do so. The information contained in this Offering Circular is current only as of its date.
To the extent the information
in this Offering Circular, without regard to any ‘‘testing the waters’’ materials, conflicts with, or differs
from, the information provided in any ‘‘testing the waters’’ materials, the information in this Offering Circular,
again without regard to any ‘‘testing the waters’’ materials, supersedes and replaces any such conflicting or
differing information.
OFFERING SUMMARY
This
summary highlights some of the information in this Offering Circular. It is not complete and may not contain all of the information that
you may want to consider. To understand this offering fully, you should carefully read the entire circular, including the section entitled
“Risk Factors,” before deciding to invest in our securities. Unless the context requires otherwise, in this offering the terms
“we,” “us” and “our” refer to MartelInvest 1 LLC, the issuer of the MartelInvest 1 Tokens.
Our
Company
MartelInvest 1 LLC is a limited liability company
organized under the laws of the State of Wyoming on October 19, 2021.
The Company is an emerging growth company that
plans to engage in real estate development within the United States. The investment objective of the Company is long-term cash flow and
risk-adjusted yield for investors through acquiring, renovating, holding, leasing, operating, marketing, and selling residential real
estate properties (each an “Investment”). The Company expects to use substantially all of the net proceeds from this
Offering to engage in property acquisition and real estate development business described herein. The Company will aim to maximize profits,
with a view toward increasing the value of its portfolio via capital preservation, capital appreciation, and portfolio diversification.
Prior to this Offering, the Company has conducted
a private offering under Rule 506(c) of Regulation D (“Reg D Offering”), where up to 800,000 Limited Liability Company
Units of the Company at $50 per Unit are being offered. The Reg D Offering is still ongoing.
Our Company’s principal
address is 1887 Whitney Mesa Drive #9656, Henderson, NV, 89014.
Management
Our Company is managed by Eric Martel and Antoine
Martel (each a “Managing Member”). Under the Operating Agreement, the Managing Members are primarily responsible for
making all investment decisions on behalf of the Company and will manage the day-to-day affairs of the Company.
The Managing Members hold 200,000 Units of the
Company, issued for their services.
The Managing Members receive no fixed cash compensation.
Instead, the Company shall pay the Managing Members acquisition fee, asset management fee, and disposition fee at a certain percentage
of the values of investments acquired, held, or sold by the Company. Further, the Managing Members will receive a perpetual royalty at
ten percent (10%) of the resale value of the Tokens.
You may refer to the sections titled “Directors,
Executive Officers and Significant Employees” and “Compensation of Directors and Executive Officers” for
detailed information.
Offering
| Issuer: |
MARTELINVEST 1 LLC, a limited liability company
organized under the laws of the State of Wyoming on October 19, 2021 (the “Company”). |
| |
|
| Offering: |
The Company is offering up to 400,000 limited
liability company units for sale pursuant to this Offering Circular. The Units will be represented by ERC-20 standard digital tokens
referred to as MartelInvest 1 Tokens with token symbol MIFT1. Each purchase of Tokens will become a member of the Company (each a “Member”)
having the rights and obligations as provided under the Operating Agreement. |
| |
|
| Pricing: |
$50 per Unit/Token. |
| |
|
| Term: |
The Offering will terminate on the sooner
of the sale of the maximum number of Units being sold, twelve months from the effective date of this Offering Statement or the decision
by Company management to deem the offering closed. |
| |
|
Maximum Offering
Amount: |
$20,000,000. |
| |
|
Minimum Investment
Amount: |
$50, or one Unit/Token. |
| |
|
Currencies and
Cryptocurrencies
Accepted: |
USD, USDC, USDT, Matic |
| |
|
| Use of Proceeds: |
The Company intends to use the net proceeds
of this Offering to: (1) purchase residential real estate properties; (2) renovate real estate properties; (3) lease and manage real
estate properties; (4) pay for professional legal, development, and other fees in the ordinary course of business. |
| |
|
Management and
Transaction Fees: |
The Company shall pay the Managing Members the
following fees:
Acquisition Fee: A fee of one percent (1%)
of the purchase price of each Investment acquired by the Company
Asset Management Fee: A fee of one percent
(1%) per annum of the total value of the Investments under management of the Company, calculated pursuant to the “Valuations and
Appraisals” section below and payable when a distribution to the Members is made.
Disposition Fee: A fee of one percent
(1%) of the sale price of each Investment sold by the Company |
| |
|
| Valuations and Appraisals |
The assets of the Company will generally
be valued by the Managing Members as of the end of each quarter as determined by the Managing Member or required by the Operating Agreement,
including immediately before any subsequent investment if the Managing Member determines that there has been a material change or significant
event relating specifically to an investment. The Managing Member may from time to time obtain a third-party valuation, appraisal or
broker opinion of one or more of the Company’s investments when determined to be appropriate, in its discretion; provided, however,
that the Managing Member is under no obligation to do so and the cost of such valuation shall be an expense of the Company. |
| |
|
| Royalty Fee: |
The Investor shall pay the Managing Members
a royalty fee of ten percent (10%) of the transaction value of the Tokens resold by the Investor. |
| Voting Rights: |
The Tokens have no voting, management, or
control rights. |
| |
|
| Report: |
The Managing Members intend for the Company
to send each Member an unaudited quarterly financial statement of the Company. |
| |
|
| Escrow Account: |
None. We have made no arrangements to place
subscription proceeds or funds in an escrow, trust or similar account, which means that the proceeds or funds from the sale of the Units
will be immediately available to us for use in our operations and once received and accepted are irrevocable. |
| |
|
| Best Efforts Offering: |
We are offering the Units on a best-efforts
basis. There is no minimum number of Units that must be sold in order to close this Offering. |
| |
|
Subscription
Procedure: |
Persons interested in subscribing
for Tokens will be furnished, and will be required to complete and return to the Managing Members, a Subscription Agreement and certain
other subscription documents that may be necessary to confirm eligibility to purchase Tokens in this Offering.
Investor onboarding and subscription process
will be completed on an online portal designated by the Company and as provided in the Subscription Agreement. |
Distribution
All items of income, gain, loss, and
deduction will be allocated to the Members’ capital accounts in proportion to their respective ownership of Units, as represented
by Tokens.
Distributions from the Company may be
made at any time as determined by the Managing Members in its sole discretion. The Managing Members currently intend to distribute the
net profits of the Company every quarter in the form of USDC/USDT but may distribute net profits in a fiat currency at the sole discretion
of the Managing Members.
Managing Members may elect
to reinvest proceeds from capital transactions rather than distribute them to our members.
Transfer Restrictions
Our operating
agreement contains significant restrictions on the transfer of the Units. Our Managing Members may refuse a transfer for any number of
reasons.
The Tokens
distributed in this offering will not be restricted securities under federal securities laws. However, there is no assurance that any
exchange or alternative trading system will approve our Tokens for listing. There is no current public market for the Tokens and one may
never develop. As such, it is possible that the tokens may have limited liquidity as a result.
Going
Concern
The consolidated
financial statements included in this Offering Circular have been prepared on a going concern basis which assumes our Company will be
able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future.
The ability
to continue as a going concern is dependent upon our Company generating profitable operations in the future and/or obtaining the necessary
financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Our Company’s
ability to raise additional capital through the future issuances of debt or equity is unknown. The obtainment of additional financing,
the successful development of our Company’s contemplated plan of operations, or its attainment of profitable operations are necessary
for our Company to continue operations. The ability to successfully resolve these factors raise substantial doubt about our Company’s
ability to continue as a going concern. The consolidated financial statements of our Company do not include any adjustments that may result
from the outcome of these aforementioned uncertainties.
Risk
Factors
This Offering is highly speculative and these
securities involve a high degree of risk and should be considered only by persons who can afford the loss of their entire investment.
See the section titled “Risk Factors” beginning on page 6 to read about factors you should consider before buying the
Tokens. These risks include, but are not limited to, the following:
| · | Global economic, political, and market conditions and economic uncertainty may adversely affect our business,
results of operations, and financial condition. |
| · | We have a limited operating history, which makes it difficult to evaluate our business and prospects and
may increase the risk associated with your investment. |
| · | Investors will not have the opportunity to evaluate or approve any investments prior to our acquisition
or financing thereof. |
| · | Investors will rely solely on our Managing Members to manage the Company and our investments. Our Managing
Members will have broad discretion to invest our capital and make decisions regarding investments. |
| · | Investors will have limited control over changes in our policies and day-to-day operations, which increases
the uncertainty and risks you face as an investor. |
| · | An investor could lose all or a substantial portion of any investment made in us. |
| · | There is no public trading market for the Units or Tokens. There are also transfer restrictions contained
in our operating agreement. It will thus be difficult for an investor to sell the Units purchased from us. |
| · | The offering prices of our Units were not established based upon any appraisals of assets we own or may
own. Thus, the initial offering price may not accurately reflect the value of our assets at the time an investor’s investment is
made. |
| · | Substantial actual and potential conflicts of interest may exist between our investors and our interests
or the interests of our Managing Members, and our respective affiliates. |
| · | There are substantial risks associated with owning, financing, operating, leasing, and managing real estate. |
| · | The market in which we participate is intensely competitive, and we may not be able to compete successfully
with our current or future competitors. |
| · | The amount of distributions we will make is uncertain. |
| · | Our Managing Members and/or their affiliates may own interests in or manage other entities engaged in
similar investments and operations as our Company. |
| · | Crypto assets such as Tokens are a new and relatively untested product. There is considerable uncertainty
about the asset class’s long-term viability, which could be affected by a variety of factors, including many market-based factors
such as economic growth, inflation, and others. In addition, the success of the tokens and other types of crypto assets will depend on
whether blockchains and other new technologies related to the tokens turn out to be useful and economically viable. |
| · | Transactions in crypto assets such as tokens and certain other virtual currencies may be irreversible.
Failure to provide us with the correct wallet address under the control of the purchaser, loss of access to your wallet, or compromise
of your wallet’s private keys will, in most cases, result in the loss of your tokens.
|
RISK FACTORS
The
Units and Tokens offered hereby are highly speculative in nature, involve a high degree of risk, and should be purchased only by persons
who can afford to lose their entire investment. There can be no assurance that our investment objectives will be achieved or that a secondary
market will ever develop for the Units or Tokens. The risks described in this section should not be considered an exhaustive list of the
risks that prospective investors should consider before investing in the interests. Prospective investors should obtain their own legal
and tax advice prior to investing in the interests and should be aware that an investment in the interests may be exposed to other risks
of an exceptional nature from time to time. The following considerations are among those that should be carefully evaluated before investing
in the interests.
Risks Related to Our Structure and Operations
The Company is a newly formed entity with
no prior operating history, which makes our future performance difficult to predict.
Our Company
was recently formed and has not generated any revenues and has no operating history upon which prospective investors may evaluate their
performance. No guarantee can be given that our Company will achieve its investment objectives, the value of the underlying assets will
increase or the underlying assets will be successfully monetized.
Our financial
condition, results of operations, and ability to make or sustain distributions to our stockholders will depend on many factors, including:
| · | our ability to identify attractive properties
and other real estate opportunities that are consistent with our investment strategy; |
| · | our ability to consummate financing on favorable
terms; |
| · | our ability to contain restoration, maintenance,
marketing, and other operating costs; |
| · | real estate appreciation or depreciation in our
markets; |
| · | our ability to absorb costs that are beyond our
control, such as real estate taxes, insurance premiums, litigation costs, and compliance costs; |
| · | our ability to respond to changes in population,
employment, or homeownership trends in our markets; and |
| · | economic conditions in our markets, as well as
the condition of the financial and real estate markets and the economy generally. |
Given
our start-up nature, investors may not be interested in investing and we may not be able to raise all of the capital we seek and this
could have a material adverse effect on our Company and the value of your Units.
Due to
the start-up nature of our Company, there can be no guarantee that we will reach our funding target from potential investors. In the event
we do not reach a funding target, we may not be able to achieve our investment objectives.
Control is vested in the Managing Members,
and no investor should purchase the Tokens unless the investor is comfortable with the Company’s judgment and experience in running
its affairs.
Control over all decisions affecting the Company,
including decisions regarding the use of the proceeds from the sale of Tokens, is vested in the Managing Members, without separate concurrence
from the Members. With regards to the proceeds of the sale of the Tokens, the Company shall determine the timing and amount of contributions
required to be made to fund purchases of real estate and expenses of operations. Material decisions, with respect to real estate assets
held by the Company, such as the purchasing, renovation, sale, refinancing assets, and leasing of assets will not be made by the Company
but instead will be made by the Managing Members without separate concurrence from the Members. No assurance can be given that sufficient
investments will be presented to the Company to deploy all of the capital available for investment.
When you subscribe for Tokens that subscription
is binding upon you, and you will not have the right to revoke that subscription even if you do not approve of the investments that the
Company subsequently identifies. You should not invest in the Company unless you are prepared to rely upon the judgment of the Managing
Members to make investments consistent with the general guidelines described in this Memorandum.
Members will have limited ability to analyze
the Company’s investing strategy.
The specific details of the Managing Members’
investment strategy and the techniques it will employ to attempt to reach the Company’s goals are proprietary and will not be disclosed
to potential investors or Members. As a result, a potential investor’s decision to invest in the Company must be made without the
benefit of being able to fully review and analyze the Managing Members’ strategy and techniques.
An investment in the Offering constitutes
only an investment in the Tokens and not directly in any property purchased by the Company.
An investor in the Offering will acquire an ownership
interest in the Company and not, for the avoidance of doubt, directly in any property owned by the Company. As a result, the value of
the Tokens will be derived from and subject to fluctuations in the values of all properties purchased by the Company, which may be impacted
by national and local economic cycles and conditions, financial markets and the economy, competition from existing properties as well
as future properties and government regulation (such as tax and building code charges).
We depend on certain key persons, the loss
of whom could materially harm our business.
We rely upon the accumulated knowledge, skills,
and experience of the Managing Members. The Managing Members will have significant discretion as to the implementation of our investment
and operating policies and strategies. If they were to leave the Company or become incapacitated, we might suffer in the planning and
execution of its business strategy and operations, impacting financial results. Neither the Company nor the Managing Members is not required
to maintain any “key man” life insurance policies for any such persons.
The Managing Members may retain and reinvest
all or a portion of the revenue generated by, or proceeds of a sale of, an investment.
The Managing Members have the discretion to sell
the investments or related properties the Company acquires and to use the cash proceeds from such sale (or cash proceeds from rental income)
to, among other things, enter into new investments. The Managing Members intend to make new investments over the life of the Company.
This will place investment returns at the risk of new investment opportunities and may delay distributions to investors.
Non-compliance
with certain securities regulations may result in the liquidation and winding up of our Company.
We are
not registered and will not be registered as an investment company under the Investment Company Act of 1940, as amended (“Investment
Company Act”), and our Managing Members are not and will not be registered as an investment adviser under the Investment Advisers
Act of 1940, as amended (“Investment Advisers Act”), and thus the interests do not have the benefit of the protections
of the Investment Company Act or the Investment Advisers Act. We and our Managing Members have taken the position that the underlying
assets are not “securities” within the meaning of the Investment Company Act or the Investment Advisers Act, and thus our
assets will comprise less than 40% investment securities under the Investment Company Act and our Manager and our asset managers will
not be advising with respect to securities under the Investment Advisers Act. This position, however, is based upon applicable case law
that is inherently subject to judgments and interpretation. If we were to be required to register under the Investment Company Act
or our Manager was to be required to register under the Investment Advisers Act, it could have a material and adverse impact on the results
of operations and expenses of our Company and our Managing Members may be forced to liquidate and wind up our Company or rescind the offering
of interests.
A
potential breach of the security measures of our investment platform could have a material adverse effect on our Company.
The highly
automated nature of the investment platform through which potential investors acquire interests may make it an attractive target and potentially
vulnerable to cyber-attacks, computer viruses, physical or electronic break-ins, or similar disruptions. While we intend to take commercially
reasonable measures to protect our confidential information and maintain appropriate cybersecurity, the security measures of the investment
platform, our Company, or our service providers could be breached. Any accidental or willful security breaches or other unauthorized access
could cause confidential information to be stolen and used for criminal purposes or have other harmful effects. Security breaches or unauthorized
access to confidential information could also expose us to liability related to the loss of the information, time-consuming and expensive
litigation, and negative publicity.
Risks Related to this Offering and Ownership of our Units
There
is currently no public trading market for our Units.
There
is currently no public trading market for our Units, and none is expected to be developed or sustained. If an active public trading
market for our interests does not develop or is not sustained, it may be difficult or impossible for you to resell your Units at any price.
Even if a public market does develop, the market price could decline below the amount you paid for your Units.
If
a market ever develops for our Units, the market price and trading volume may be volatile.
If a
market develops for our Units, the market price of our Units could fluctuate significantly for many reasons, including reasons unrelated
to our performance, the underlying assets, or the series, such as reports by industry analysts, investor perceptions, or announcements
by our competitors regarding their own performance, as well as general economic and industry conditions. For example, to the extent that
other companies, whether large or small, within our industry experience declines in their share price, the value of our Units may decline
as well.
In addition,
fluctuations in our operating results to meet the expectations of investors may negatively impact the price of our securities. Operating
results may fluctuate in the future due to a variety of factors that could negatively affect revenues or expenses in any particular reporting
period, including the vulnerability of our business to a general economic downturn; changes in the laws that affect our operations; competition;
compensation related expenses; application of accounting standards; seasonality; and our ability to obtain and maintain all necessary
government certifications or licenses to conduct our business.
There
are restrictions on an investor’s ability to sell its Units making it difficult to transfer, sell or otherwise dispose of our Units.
Each
state has its own securities laws, often called “blue sky” laws, which limit sales of securities to a state’s residents
unless the securities are registered in that state or qualify for an exemption from registration. Before a security is sold in a state,
there must be a registration in place to cover the transaction, or it must be exempt from registration.
Our Units
will not be registered under the laws of any state. There may be significant state blue sky law restrictions on the ability of investors
to sell, and on purchasers to buy, our interests. Investors should consider the resale market for our Units to be limited. Investors may
be unable to resell their interests, or they may be unable to resell them without the significant expense of state registration or qualification.
In addition,
there are significant transfer restrictions contained in our operating agreement that prohibit transfers unless approved by our Managing
Members, in its sole discretion, and the transferee and transferor have met other conditions established by our operating agreement.
The Managing Members have significant power to prevent transfers
of the Units or admission of new Members.
The Managing Member may withhold its consent to
the admission of any person as a Member for any reason, or for no reason, including when it determines in its reasonable discretion that
such admission could: (i) result in there being 2,000 or more beneficial owners (as such term is used under the Exchange Act) or 500 or
more beneficial owners that are not accredited investors (as defined under the Securities Act), as specified in Section 12(g)(1)(A)(ii)
of the Exchange Act, (ii) could adversely affect the Company or subject the Company, or the Managing Members or any of their respective
affiliates to any additional regulatory or governmental requirements or cause the Company to be disqualified as a limited liability company,
or subject the Company, the Managing Member or any of their respective affiliates to any tax to which it would not otherwise be subject,
(iii) cause the Company to be required to register as an investment company under the Investment Company Act, (iv) cause the Managing
Members or any of its affiliates being required to register under the Investment Advisers Act, (v) cause the assets of the Company to
be treated as plan assets as defined in Section 3(42) of ERISA, or (viii) result in a loss of partnership status by the Company for US
federal income tax purposes or the termination of the Company for US federal income tax purposes.
Investors
lack voting rights and our Managing Members may take actions that are not in the best interests of investors.
The Managing Members have a unilateral ability
to amend the Operating Agreement in certain circumstances without the consent of the Members. The Members have limited voting rights,
if any, spelled out in the Operating Agreement. Members will therefore be subject to any amendments the Managing Member makes (if any)
to the Operating Agreement and any decision it takes in respect of the Company. Members may not necessarily agree with such amendments
or decisions and such amendments or decisions may not be in the best interests of all of the Members as a whole but only a limited number.
Furthermore, the Managing Members can only be
removed as Managing Members of the Company for cause in very limited circumstances following an affirmative vote of the Company’s
Members owning 51% of the Tokens, and unsatisfactory financial performance does not constitute a cause. Members would therefore not be
able to remove a Managing Member merely because they did not agree, for example, with how the Managing Member was operating the assets
and liabilities of the Company.
The
offering prices of the Units may not accurately represent the current value of our Company or our assets at any particular time. Therefore,
the purchase price you pay for the Units may not be supported by the value of our assets at the time of your purchase.
This
is a fixed-price offering, which means that the offering price for the Units is fixed and will not vary based on the underlying value
of our assets at any time. Our Managing Members have determined the offering price at their sole discretion without the input of
an investment bank or other third party. The fixed offering price for the Units has not been based on appraisals of any assets we own
or may own, or of our Company as a whole, nor do we intend to obtain such appraisals. Therefore, the fixed offering price established
for the Units may not be supported by the current value of our Company or our assets at any particular time.
This
offering is being conducted on a “best efforts” basis and we may not be able to execute our growth strategy if we are unable
to raise this capital.
We are
offering the interests on a “best efforts” basis, and we can give no assurance that all of the offered interests will be sold.
If you invest in our Units and more than the minimum number of offered interests are sold, but less than all of the offered Units are
sold, the risk of losing your entire investment will be increased. If substantially less than the maximum amount of Units offered are
sold, we may be unable to fund all the intended uses described in this offering circular from the net proceeds anticipated from this offering
without obtaining funds from alternative sources or using the working capital that we generate. Alternative sources of funding may not
be available to us at what we consider to be a reasonable cost, and the working capital generated by us may not be sufficient to fund
any uses not financed by offering net proceeds.
We
cannot assure our ability to pay distributions in the future.
The Managing Members intend to cause the Company
to pay distributions to holders of the Tokens, but we have not established a minimum distribution payment level, and all future distributions
will be made at the discretion of our Managing Members. Our ability to make distributions will depend upon, among other factors:
| • | capital expenditures with respect to the Company; |
| • | general and administrative expenses associated with our operation; |
| • | the amount of, and the interest rates on, our debt and the ability to refinance our debt; |
| • | the absence of significant expenditures relating to environmental and other regulatory matters; and |
| • | other risk factors described in this Memorandum. |
Certain matters are beyond our control and any
significant difference between our expectations and actual results could have a material adverse effect on our cash flow.
The Company will accept subscriptions from
prospective investors by way of deposits of cryptocurrencies.
Such in-kind subscriptions will be subject to
a thorough legal review, may be subject to additional non-refundable fees, could take an extended period of time to process, may decrease
in value between the date that such in-kind subscription was transferred to the Company and the date of such investor’s admission
to the Company as a Member, and may be rejected by the Company for any reason or no reason with no refund of the costs or depreciation
experienced by the prospective investor. Any refund of in-kind contributions may be paid (i) in the same form of cryptocurrencies as they
were received by the Company, and (ii) to the same wallet address or account from which such cryptocurrencies were received by the Company.
The Company may, in the Managing Members’ sole discretion, refund an in-kind subscription, in whole or in part, by a prospective
investor to a different wallet address, provided such wallet address has been designated in writing by such prospective investor and the
Company provides to such Member a written notice confirming the new wallet address. The Managing Member may send one or more test transactions
to the wallet address designated by a prospective investor prior to sending the full amount to be refunded, and the costs of such test
transaction shall be deducted from the total amount to be refunded to such prospective investor.
The value of an in-kind contribution of cryptocurrency
by a Member shall equal the total value in U.S. dollars received by the Company upon exchange for U.S. dollars. If, upon exchange of a
Member’s in-kind contribution of cryptocurrency for U.S. dollars, the Company receives an amount in U.S. dollars that is less than
the amount subscribed for according to such Member’s subscription, the Company may demand such Member to pay the deficient amount
or reject such Member’s subscription in whole or in part.
The Company and the Managing Members use the same
theories of due diligence as to the origin of deposits of cryptocurrencies as for fiat currencies. Although the Company and the Managing
Members maintain strict policies and procedures in connection with their obligations under the various anti-money laundering laws, there
is currently no governmental or regulatory guidance regarding accepting cryptocurrencies from investors.
For example, there is no direct guidance related
to the following:
| • | whether it is legal for the Company to accept cryptocurrency directly rather than accepting fiat currency
and exchanging it for cryptocurrency; |
| • | under what circumstances, if any, the Company may accept cryptocurrency directly; |
| • | whether current anti-money laundering regulations will apply to cryptocurrencies or whether there will
be additional or different rules regarding the acceptance of cryptocurrency into investment vehicles like the Company; |
| • | whether using the same due diligence theories for anti-money laundering processes applicable to fiat currencies
will meet with regulatory approval; |
| • | if additional or different rules regarding the acceptance of cryptocurrency are adopted, whether these
rules will be applied retroactively to the Company; and |
| • | whether the Company will be able to remediate any failures to comply with any new rules if those new rules
are applied retroactively. |
If the Company fails to comply with anti-money
laundering regulations, investors in the Company could lose all or a significant part of their investment. Additionally, there could be
materially adverse effects suffered by the investors in the Company, including having bank accounts or other assets frozen by governmental
entities for extended periods of time; forfeiture of profits or principal; extended governmental proceedings involving the principals
of the Company, and difficulty engaging banks, other depositaries or custodians to work with the Company in connection with the acceptance
of cryptocurrencies.
The Subscription
Agreement has a forum selection provision that requires disputes to be resolved in state or federal courts in the State of Wyoming, regardless
of convenience or cost to you, the investor.
As
part of this investment, each investor will be required to agree to the terms of the subscription agreement included as Exhibit 4.1
to the offering statement of which this offering circular is part. In the agreement, investors agree to resolve disputes arising under
the subscription agreement in state or federal courts located in the State of Wyoming, for the purpose of any suit, action, or other proceeding
arising out of or based upon the agreement. Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts
over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. Our Company
believes that the exclusive forum provision applies to claims arising under the Securities Act, but there is uncertainty as to whether
a court would enforce such a provision in this context. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all
suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. As a result, the exclusive
forum provision will not apply to suits brought to enforce any duty or liability created by the Exchange Act or any other claim for which
the federal courts have exclusive jurisdiction. You will not be deemed to have waived our Company’s compliance with the federal
securities laws and the rules and regulations thereunder. This forum selection provision may limit your ability to obtain a favorable
judicial forum for disputes with us. Although we believe the provision benefits us by providing increased consistency in the application
of Wyoming law in the types of lawsuits to which it applies and in limiting our litigation costs, to the extent it is enforceable, the
forum selection provision may limit investors’ ability to bring claims in judicial forums that they find favorable to such disputes,
may increase investors’ costs of bringing suit and may discourage lawsuits with respect to such claims. Alternatively, if a court
were to find the provision inapplicable to, or unenforceable in an action, our Company may incur additional costs associated with resolving
such matters in other jurisdictions, which could adversely affect its business, financial condition, or results of operations.
Without obtaining advice from your personal advisors, you may
not be aware of the legal, tax, or economic consequences of an investment in this Offering.
The Company has not arranged for investors to
be separately represented by independent counsel. The legal counsel who has performed services for the Company has performed such services
for the Company only and has not acted as if it had been retained by the potential investors. You are not to construe the contents of
this Offering Circular or any prior or subsequent communication from the Company, its affiliates, subsidiaries, or any professional associated
with this Offering, as legal or tax advice. You should consult your own personal counsel, accountant, and other advisors as to legal,
tax, economic and related matters concerning the investment described herein and its suitability for you.
Risks Related to Conflicts of Interest
The Operating Agreement contains provisions
that reduce or eliminate duties (including fiduciary duties) of the Managing Member.
The Operating Agreement provides the Managing
Member with broad powers and authority which may exacerbate the existing conflicts of interest between your interests and those of the
Managing Member. Potential conflicts of interest include, but are not limited to, the following:
| • | Other than business opportunities arising out of or in connection with a real estate property the Company
owns, no Managing Member or its affiliates shall be obligated to present any particular investment opportunity to the Company or a Member
even if such opportunity is of a character which, if presented to the Company, could be taken by the Company; |
| • | the Managing Member may continue to offer other real estate investment opportunities, including other
blind pool equity offerings similar to this offering, and may make investments in real estate assets for its own respective accounts,
whether or not competitive with our business; |
| • | the Managing Member will not be required to disgorge any profits or fees or other compensation they may
receive from any other business they own separately from the Company, and you will not be entitled to receive or share in any of the profits
or fees or other compensation from any other business owned and operated by the Managing Member or the Principal for their own benefit; |
| • | we may engage the Managing Member to perform services at prevailing market rates; |
| • | the Managing Members may serve as officers or employees of other companies, and these other business activities
may reduce the time these persons spend managing the Company’s business; and |
| • | the Managing Members may face conflicts of interest in allocating sale, financing, leasing, and other
business opportunities among the real properties owned by our Company and other business activities |
We
do not have a conflicts of interest policy.
Our Company
will try to balance our interests with their own. However, to the extent that such parties take actions that are more favorable
to other entities than our Company, these actions could have a negative impact on our financial performance and, consequently, on distributions
to investors and the value of each series of interests. We have not adopted, and do not intend to adopt in the future, either a conflicts
of interest policy or a conflicts resolution policy.
Risks Related to Real Estate Investments
Competition
with third parties in acquiring and operating properties may reduce our profitability and the return on your investment.
Over time the Company may compete with other entities
seeking to undertake similar activities. These same potential competitors may have significantly greater capital resources, research and
development, regulatory compliance, and marketing capabilities. This competition could adversely affect our business. The number of competitive
properties could have a material effect on our ability to rent space at our properties and the amount of rent charged. We could be adversely
affected if additional competitive properties are built in locations competitive with our properties, causing increased competition for
residential renters. In addition, our ability to charge premium rental rates to tenants may be negatively impacted. This increased competition
may increase our costs of acquisitions or lower the occupancies and the rent we may charge tenants. This could result in decreased cash
flow from tenants and may require us to make capital improvements to properties that we would not have otherwise made, thus affecting
cash available for distributions to you. The Company cannot assure investors that it will be able to invest in or develop resources that
are required to successfully compete with these competitors.
The real estate market may be subject to
a high degree of volatility and, therefore, the Company’s performance may be volatile.
Real estate investment and renovation projects
are subject to a variety of risks that will be outside of the Company’s control, including delays in obtaining entitlements, permits,
and other governmental approvals.
A residential
property's income and value may be adversely affected by national and regional economic conditions, local real estate conditions such
as an oversupply of properties or a reduction in demand for properties, availability of "for sale" properties, competition from
other similar properties, our ability to provide adequate maintenance, insurance, and management services, increased operating costs (including
real estate taxes), the attractiveness and location of the property and changes in market rental rates. Our income will be adversely affected
if a significant number of tenants are unable to pay rent or if our properties cannot be rented on favorable terms. Our performance is
linked to economic conditions in the regions where our properties will be located and in the market for multifamily space generally. Therefore,
to the extent that there are adverse economic conditions in those regions, and in these markets generally, that impact the applicable
market rents, such conditions could result in a reduction of our income and cash available for distributions and thus affect the number
of distributions we can make to you.
Renovation projects may also take longer than
anticipated, reducing the time that the commercial property is available for lease or sale, and lowering the property’s cash flow
or another income potential. Strong demand for skilled laborers and contractors may result in labor shortages and contractor unavailability,
delaying project schedules and/or increasing costs. The costs of construction have increased dramatically following the Covid-19 Pandemic
and may continue to increase. Although the Company will not undertake such projects without reviewing detailed budgets, such budgets may
understate the expenses.
Furthermore,
single family residential properties we invest in compete, or will compete, with numerous housing alternatives in attracting residents,
including owner-occupied single and multi-family homes available to rent or purchase an apartment building for rent. The number of competitive
properties and/or condominiums in a particular area, or any increased affordability of owner-occupied single and multifamily homes caused
by declining housing prices, mortgage interest rates, and government programs to promote home ownership, could adversely affect our ability
to retain our residents, lease properties and maintain or increase rental rates. These factors could materially and adversely affect us.
Numerous factors could affect a Company’s ability to generate
net income from the Company’s assets.
Factors
which could affect our Company’s ownership of income-producing property might include, but are not limited to any or all of the
following; changing environmental regulations, adverse use of adjacent or neighboring real estate, changes in the demand for or supply
of competing property, local economic factors which could result in the reduction of the fair market value of a property, uninsured losses,
significant unforeseen changes in general or local economic conditions, inability of our Company to obtain any required permits or entitlements
for a reasonable cost or on reasonable conditions or within a reasonable time frame or at all, inability of our Company to obtain the
services of appropriate consultants at the proposed cost, changes in legal requirements for any needed permits or entitlements, problems
caused by the presence of environmental hazards on a property, changes in federal or state regulations applicable to real property, failure
of a lender to approve a loan on terms and conditions acceptable to our Company, lack of adequate availability of liability insurance
or all-risk or other types of required insurance at a commercially-reasonable price, shortages or reductions in available energy, acts
of God or other calamities. Furthermore, there could be a loss of liquidity in the capital markets such that a refinance or sale of a
property may be hindered.
Our Company’s
investment in the properties will be additionally subject to the risks and other factors generally incident to the ownership of real property,
including such things as the effects of inflation or deflation, inability to control future operating costs, inability to attract tenants,
vandalism, rent strikes, collection difficulties, the uncertainty of cash flow, the availability and costs of borrowed funds, the general
level of real estate values, competition from other properties, residential patterns and uses, general economic conditions (national,
regional, and local), the general suitability of a property to its market area, governmental rules and fiscal policies, acts of God, and
other factors beyond the control of our Company.
The profitability of
the properties is uncertain.
We intend
to invest in properties selectively. Investment in properties entails risks that the investments will fail to perform to expectations.
In undertaking these investments, we will incur certain risks, including the expenditure of funds, and the devotion of management’s
time to, transactions that may not come to fruition. Additional risks inherent in investments include risks that the properties will not
achieve anticipated sales price, rents, or occupancy levels and that estimated operating expenses and costs of improvements to bring an
acquired property up to standards established for the market position intended for that property may prove inaccurate.
Rising
expenses could reduce cash flow and funds available for future investments.
Our properties
will be subject to increases in real estate tax rates, utility costs, operating expenses, insurance costs, repairs and maintenance, administrative
and other expenses. If we are unable to increase rents at an equal or higher rate or lease properties on a basis requiring the tenants
to pay all or some of the expenses, we would be required to pay those costs, which could adversely affect funds available for future cash
distributions.
The
ongoing COVID-19 pandemic, and government restrictions adopted in response thereto, could significantly impact the ability of our tenants
to pay rent, impede the performance of our properties, and harm our financial condition.
The United
States, like the rest of the world, has been adversely affected by the breakout of the COVID-19 virus. The United States government, many
states, and cities have periodically instituted "shelter in place" orders and adopted other restrictions which have caused the
shuttering of many businesses and multiple layoffs, which may affect the income and, ultimately, the ability of tenants to pay rent. In
addition, property owners have become subject to certain restrictions, such as a temporary moratorium on evictions, which may limit our
Company’s ability to respond to tenant defaults. Further, materials and service providers required for our properties may be difficult
to obtain. These factors, and any other effects of the Pandemic, may impede the operations of our properties and could significantly harm
our financial condition and operating results.
We
may not make a profit if we sell a property.
The prices
that we can obtain when we determine to sell a property will depend on many factors that are presently unknown, including the operating
history, tax treatment of real estate investments, demographic trends in the area, and available financing. There is a risk that we will
not realize any significant appreciation for our investment in a property. Accordingly, your ability to recover all or any portion of
your investment under such circumstances will depend on the number of funds so realized and claims to be satisfied therefrom.
Our
properties may not be diversified.
Our potential
profitability and our ability to diversify our investments may be limited, both geographically and by the type of properties we invest
in. We will be able to invest in additional properties only as additional funds are raised. Given the limited number of assets we are
targeting, our properties will not be well diversified, and their economic performance could be affected by changes in local economic
conditions or changes uniquely affecting one or more particular asset classes.
Our
Company may purchase properties in one specific geographic area, and therefore will be dependent upon the continued demand for housing
and residential property in that region. Our Company’s revenue and the value of its property portfolio may be disproportionately
affected if the area’s economy and real estate markets suffer greater adverse impacts than the economies and real estate markets
in other states or nationally due to local industry slowdowns and layoffs, changing demographics and other factors that result in an oversupply
of, or reduced demand for, commercial or residential properties in the region.
The
illiquidity of real estate investments could significantly impede our ability to respond to adverse changes in the performance of our
properties and harm our financial condition.
Because
real estate investments are relatively illiquid, our ability to promptly sell one or more properties or investments in our portfolio in
response to changing economic, financial, and investment conditions may be limited. In particular, these risks could arise from weakness
in or even the lack of an established market for a property, changes in the financial condition or prospects of prospective purchasers,
changes in national or international economic conditions, and changes in laws, regulations, or fiscal policies of jurisdictions in which
the property is located. We may be unable to realize our investment objectives by sale, other disposition, or refinance at attractive
prices within any given period of time or may otherwise be unable to complete any exit strategy. An exit event is not guaranteed and is
subject to our Managing Members’ discretion.
We will depend on tenants for our revenue,
and lease defaults or terminations could reduce our net income and limit our ability to make distributions to our Members.
The success of our investments materially depends
on the financial stability of our tenants. A default or termination by a tenant on its lease payments to us would cause us to lose the
revenue associated with such a lease and require us to find an alternative source of revenue to meet mortgage payments and prevent foreclosure
if the property is subject to a mortgage. If a tenant defaults, we may experience delays in enforcing our rights as landlord and may incur
substantial costs in protecting our investment and re-leasing our property. If a tenant defaults on or terminates a lease, we may be unable
to lease the property for the rent previously received or sell the property without incurring a loss. These events could cause us to reduce
the distributions to our Members and will negatively impact the value of the Tokens
We may be unable to renew leases or re-lease
space as leases expire.
If tenants do not renew their leases upon expiration,
we may be unable to re-lease the vacated space. Even if the tenants do re-lease the lease or we can re-lease to a new tenant, the terms
and conditions of the new lease may not be as favorable as the terms and conditions of the expired lease. If the rental rates for our
properties decrease or we are not able to release a significant portion of our available and soon-to-be-available properties, our financial
condition, results of operations, cash flow, the market value of the Tokens and our ability to satisfy our debt obligations and to make
distributions to Members could be adversely affected.
Properties that have significant vacancies
could be difficult to sell, which could diminish the return on these properties.
Our real estate properties may incur vacancies
either by the expiration of tenant leases or the continued default of tenants under their leases. If vacancies continue for a long period
of time, we may suffer reduced revenues resulting in less cash available for distribution to Members. In addition, the resale value of
the property could be diminished because the market value of our properties may depend in part upon the value of the cash flow generated
by the leases associated with that property. Such a reduction in the resale value of a property could also reduce the value of the Tokens.
Further, a decline in general economic conditions could lead to an increase in tenant defaults, lower rental rates, and less demand for
commercial real estate space in that market. As a result of these trends, we may be more inclined to provide leasing incentives to our
tenants to compete in a more competitive leasing environment. Such trends may result in reduced revenue and lower resale value of properties,
which may reduce the distributions available for Members.
Uninsured losses on the investments could
materially reduce investment returns, which may impact the ability to return principal balances.
The properties
will be located throughout the United States. Depending on the location of a specific property, that geographic area may be at risk for
damage to property due to certain weather-related and environmental events, including hurricanes, severe thunderstorms, wildfires, tornados,
earthquakes, and flooding. To the extent possible, our Managing Members will attempt to acquire insurance against fire or environmental
hazards. However, such insurance may not be available in all areas, nor are all hazards insurable as some may be deemed acts of God or
be subject to other policy exclusions.
The Company may obtain insurance policies for
real estate investments that are commercially prudent given the local market and circumstances of the real estate investment (typically,
including liability, fire, and extended coverage). However, certain losses are either uninsurable or may be insured only upon payment
of prohibitively high insurance premiums. If any such loss should occur and the real estate property(s) is partially or totally destroyed,
the Company may suffer a substantial loss of its principal. Even if the Company has coverage for the loss, the deductible for such a policy
may be so large that the Company will sustain a substantial uninsured loss as a result of the casualty.
Title
insurance may not cover all title defects
Our Managing
Members will acquire title insurance on each property, but it is possible that uninsured title defects could arise in the future, which
our Company may have to defend or otherwise resolve, the cost of which may impact the profitability of each property and/or our Company
as a whole.
Renovation and
Development costs may exceed the projections of the Managing Member.
A decision to invest
in buildings for renovation will be made based upon certain assumptions about the cost of renovation, time periods for completion of various
phases of renovation, and the market value of the renovated product. While there may be a past renovation or operating history on which
to base these assumptions, many factors may change, resulting in such assumptions being inaccurate. Such conditions may contribute to
reduced demand for the finished product due to competition, economic factors, or changes in the capital markets such as interest rates
or the availability of capital. To the extent renovation costs are financed, an investment will be subject to real estate financing risks.
Renovation construction entails risks related to materials and labor costs increases, work stoppages or delays, regulatory delays, failure
of performance or defective materials or workmanship by contractors and suppliers, unforeseen weather, and unforeseen land and building
conditions. Such risks can be mitigated to some extent by obtaining performance bonds, construction and development guarantees, letters
of credit, and/or liens on assets under construction. No assurance can be given, however, that any of the foregoing will be obtained or,
if obtained, will be adequate to cover any loss resulting from any such risks.
The Company and its Members are dependent
on the Managing Members to conduct due diligence in the selection of investments, and there is no assurance that this due diligence will
be effective in identifying all material issues and defects.
Before the Company purchases any real estate property,
the Managing Members will follow certain limited due diligence procedures. The due diligence procedures for the purchase of such properties
will generally include finding available properties for sale by using publicly available information and search engines and evaluating
current comparisons of rental and sales prices of similar properties in the surrounding geographic area. An employee or officer of the
Company, the Managing Members, or an agent appointed by the Managing Member will visit and inspect each investment prior to closing on
the purchase. It is possible, however, that our Managing Members will not discover
certain material facts about a property, because the information presented by the sellers may have been prepared incompletely or misleadingly,
and material facts related to such property may not yet have been discovered.
We may experience liability
for environmental issues
Under
various federal, state, and local environmental and public health laws, regulations, and ordinances, our Company may be required, regardless
of knowledge or responsibility, to investigate and remediate the effects of hazardous or toxic substances or petroleum product releases
(including in some cases natural substances such as methane or radon gas) and may be held liable under these laws or common law to a governmental
entity or third-parties for property, personal injury or natural resources damages and for investigation and remediation costs incurred
as a result of the real or suspected presence of these substances in soil or groundwater beneath a property. These damages and costs may
be substantial and may exceed the insurance coverage our Company has for such events.
Buildings
and structures on a property may have contained hazardous or toxic substances or have released pollutants into the environment; or may
have known or suspected asbestos-containing building lead-based paint, mold, or insect infestations (such as roaches or bed bugs), that
our Company may be required to mitigate. Undetected or unmitigated conditions such as these may cause (or be suspected to cause) personal
injury and/or property damage, which could subject the properties, our Managing Member, and/or our Company to litigation with and liability
to third parties.
Our Managing
Member will attempt to limit exposure to such conditions by conducting due diligence on a property, however, all or some of these conditions
may not be discovered or occur until after that Property has been acquired by our Company.
Federal,
state, and local regulations may change
There
is a risk of a change in the current federal, state, and local regulations as it may relate to the operations of a property in the area
of fuel or energy requirements or regulations, construction and building code regulations, approved property use, zoning, and environmental
regulations, or property taxes, among other regulations.
A property acquired by the Company could
become subject to a government taking by condemnation or eminent domain, and the compensation given for that taking may not be adequate
to cover the Company’s costs to purchase and renovate such property.
There can be no assurance that a property acquired
by the Company will not be taken for a public or quasi-public purpose by condemnation or eminent domain. In the event of a condemnation
proceeding, the relevant authority may have the power and discretion to determine the value of the properties and such value may be less
than the price the Company paid to buy and renovate such property. In such a case, the Company could lose some or all of its investment
in the property.
Climate change may adversely affect our
business.
To the extent that climate change does occur and
affects the markets that we invest in, we may experience extreme weather and changes in precipitation and temperature, all of which may
result in physical damage or a decrease in demand for a property that we acquire. Should the impact of climate change be material in nature
or occur for lengthy periods of time, the financial condition or results of operations for a property would be adversely affected. In
addition, changes in federal and state legislation and regulation on climate change could result in increased capital expenditures to
improve the energy efficiency of a property that we acquire to comply with such regulations.
Risks Related to Blockchain Technology and the Ethereum Network
The potential application of existing regulatory
regimes governing blockchain technologies, cryptocurrencies, tokens, and token offerings such as the Tokens is not fully developed and
so remains uncertain in many respects.
Regulations with respect to digital securities
such as the Tokens, cryptocurrencies (such as Bitcoin or Ether that may be used by the Company to make distributions to our Token holders),
financial intermediaries such as spot cryptocurrency exchanges, and blockchain networks (such as the Ethereum Network on which the Tokens
is intended to be issued), currently is relatively undeveloped and is likely to rapidly evolve. Such regulation may vary and may conflict
among international, federal, state, and local jurisdictions and the potential applications of existing regulations remain subject to
significant uncertainty in many respects. In addition, various legislative and executive bodies in the United States and other countries
may in the future adopt new laws, regulations, guidance, or other actions (including applying existing laws and regulations in adverse
ways), which may severely impact the ability to access marketplaces or exchanges on which to trade the Tokens, and the structure, rights,
value and transferability of the Tokens. In addition, failure by us to comply with any laws, rules, and regulations, some of which may
not exist yet or are subject to interpretation and may be subject to change, could result in a variety of adverse consequences, including
civil penalties and fines.
The Ethereum Blockchain the Tokens rely
upon and the Tokens themselves may be the target of malicious cyberattacks.
The structural foundations of the Ethereum Blockchain,
the Tokens, and the software applications and other interfaces we anticipate using to develop our immersive art experiences, are nascent
technology and unproven, and there can be no assurances that the blockchain and the creation, transfer, or storage of the Tokens will
be uninterrupted or fully secure, which may result in impermissible transfers of Tokens, a complete loss of users’ Tokens or an
unwillingness of users to access, adopt and utilize Tokens and/or the Ethereum Blockchain. Moreover, the Tokens and the Ethereum Blockchain
(and any technology, including blockchain technology, on which they rely) may also be the target of malicious attacks seeking to identify
and exploit weaknesses in the software, the Tokens, or the blockchain network, which may result in the loss or theft of the Tokens. If
these attacks occur or security is compromised, this could expose us to liability and reputational harm and could seriously curtail the
utilization of the Tokens and cause a decline in the market price of the tokens.
Adverse events affecting the development
or security of the Ethereum blockchain, as well as other blockchains, could have a negative impact on a Member’s ability to hold
and trade the Tokens.
The development and acceptance of blockchain networks,
which are part of a new and rapidly changing industry, as well as blockchain-based assets such as BTC and ETH are subject to a variety
of factors that are difficult to evaluate. The slowing or stopping of the development or acceptance of blockchain networks and blockchain
assets would have an adverse material effect on the successful development and adoption of the Tokens. The utilization and growth of the
blockchain industry are subject to a high degree of uncertainty. The factors affecting the continuing utilization and further development
of the cryptocurrency industry, as well as blockchain networks, include, without limitation:
| • | Worldwide growth, or a decline, in the adoption and use of BTC or ETH and other blockchain assets as well
as the decreasing use of blockchain technology; |
| • | Government and quasi-government regulation of BTC or ETH and other blockchain assets and their use, or
restrictions on, or regulation of access to and operation of blockchain networks (such as the Ethereum Network) or similar systems, including
in jurisdictions outside the United States; |
| • | The maintenance and development of the open-source software protocol of the Ethereum Network; |
| • | The availability and popularity of other forms or methods of buying and selling goods and services, or trading assets including new
means of using sovereign currencies (such as the U.S. dollar) or existing networks; or |
| • | General economic conditions and the regulatory environment relating to cryptocurrencies. |
The slowing or stopping of the development, general
acceptance, adoption, and usage of blockchain networks (such as the Ethereum Network) and blockchain assets may deter or delay the acceptance
and adoption of the Tokens.
The prices of blockchain assets are extremely
volatile. Fluctuations in the price of digital assets could materially and adversely affect our business, and the Tokens may also be subject
to significant price volatility.
The prices of blockchain assets such as BTC and
ETH have historically been subject to dramatic fluctuations and are highly volatile, and the market price of the Tokens may also be highly
volatile. Several factors may influence the market price of the Tokens, including, but not limited to:
| • | Global blockchain asset supply; |
| • | Global blockchain asset demand, which can be influenced by the growth of retail merchants' and commercial
businesses' acceptance of blockchain assets like cryptocurrencies as payment for goods and services, the security of online blockchain
asset exchanges, and digital wallets that hold blockchain assets, the perception that the use and holding of blockchain assets are safe
and secure, and the regulatory restrictions on their use; |
| • | Investors' expectations with respect to the rate of inflation; |
| • | Currency exchange rates, including the rates at which digital assets may be exchanged for fiat currencies; |
| • | Fiat currency withdrawal and deposit policies of exchanges, such as an ATS or other exchange, on which
the Tokens may be traded and liquidity on such exchanges; |
| • | Interruptions in service from or failures of exchanges on which the Tokens may be traded; |
| • | Investment and trading activities of large investors, including private and registered funds, that may
directly or indirectly invest in the Tokens or other blockchain assets; |
| • | Monetary policies of governments, trade restrictions, currency devaluations, and revaluations; |
| • | Regulatory measures, if any, that affect the use of blockchain assets such as the Tokens; |
| • | The maintenance and development of the open-source software protocol of the Ethereum Network; |
| • | Global or regional political, economic or financial events and situations; or |
| • | Expectations among blockchain asset participants that the value of the Tokens or other blockchain assets
will soon change. |
A decrease in the price of a single blockchain
asset may cause volatility in the entire blockchain asset industry and may affect other blockchain assets including the Tokens.
Blockchain networks utilize code that is
subject to change at any time. These changes may have unintended consequences for the Tokens.
The Tokens are intended to be issued as ERC-20
tokens on the Ethereum blockchain. Changes, such as upgrades to Ethereum's blockchain, may have unintended, adverse effects on all blockchains
utilizing the ERC-20 tokens. Also, the Ethereum Network operates based on an open-source protocol maintained by contributors, and contributors
are generally not compensated for maintaining and updating the Ethereum Network protocol. The lack of guaranteed financial incentive for
contributors to maintain or develop the Ethereum Network and the lack of guaranteed resources to adequately address emerging issues with
the Ethereum Network may reduce incentives to address the issues adequately or promptly. This may adversely affect either the market value
or the operational status of the Tokens
Additionally, the Company, in its sole discretion
may determine to issue the Tokens on a blockchain other than Ethereum, which may adversely impact an investment in the Tokens.
Few SEC-registered ATSs currently exist
to trade blockchain-based securities; we may be unsuccessful in listing the Tokens on any ATS or, once listed, maintaining such listing.
Currently, only a small number of SEC-registered
ATSs with technological capabilities to permit the trading of securities tokens exist, such as the Tokens. Because the Tokens are intended
to be issued as ERC-20 tokens on the Ethereum blockchain, they currently cannot be traded using a conventional securities trading platform.
However, because the Tokens are securities, they are not permitted to be traded on most spot cryptocurrency exchanges that are capable
of handling blockchain assets (e.g., Coinbase), because most spot cryptocurrency exchanges are not registered with the SEC to offer
trading securities.
Banks and financial institutions may refuse
banking services to businesses that provide cryptocurrency-related services or that accept cryptocurrencies as payment, including cryptocurrency
exchanges on which the Company may rely.
Some companies that provide services relating
to cryptocurrency or blockchain tokens (like the Tokens described herein) have been unable to find banks or financial institutions that
are willing to provide them with bank accounts and other services. Similarly, some companies and individuals or businesses associated
with cryptocurrencies and blockchain tokens may have had and may continue to have their existing bank accounts suspended or closed. The
Company also may be unable to obtain or maintain these services, as may any cryptocurrency exchange that may be relied upon by the Company
to convert contributions of cryptocurrency received from us into BTC, ETH, or other cryptocurrencies to be paid out to our Token holders.
Banks and other established financial institutions may refuse to process funds for cryptocurrency or blockchain transactions, process
wire transfers to or from cryptocurrency exchanges, cryptocurrency-related companies, or service providers, or maintain accounts for persons
or entities transacting in cryptocurrency. The Company’s inability to obtain or maintain a bank account may impact the Company’s
ability to process distributions to our Token holders and otherwise impact the function and value of the Tokens.
Cyber security threats could result in misappropriation,
hacking, infection by malware, or other damage to the Tokens or the blockchain network on which it is issued which could adversely affect
an investment in the Tokens.
Security breaches, computer malware, and computer
hacking attacks have been prevalent concerns since the launch of blockchain networks. Any security breach caused by hacking, which involves
efforts to gain unauthorized access to information or systems, or to cause intentional malfunctions or loss or corruption of data, software,
hardware, or other computer equipment, and inadvertent or intentional infection by computer viruses, could harm or damage the software
behind the Tokens, which are intended to use the Ethereum blockchain, resulting in a loss of functionality, value, possession, or other
damage to the holders of such the Tokens. Any breach of the software infrastructure supporting the Tokens could adversely affect an investment
therein.
The occurrence of a cyber incident, or a
deficiency in our cyber security, could negatively impact our business by causing a disruption to our operations, a compromise or corruption
of our confidential information, or damage to our business relationships, all of which could negatively impact our financial results.
We collect and retain certain personal information
provided by our Members and tenants in the properties owned by the Company. While expected to implement a variety of security measures
to protect the confidentiality of this information and periodically review and improve our security measures, we cannot assure that we
will be able to prevent unauthorized access to this information. A cyber incident is considered to be any adverse event that threatens
the confidentiality, integrity, or availability of our information resources. More specifically, a cyber incident is an intentional attack
or an unintentional event that can include gaining unauthorized access to systems to disrupt operations, corrupt data, or steal confidential
information. As our reliance on technology has increased, so have the risks that could directly result from the occurrence of a cyber
incident including operational interruption, damage to our relationship with our tenants, and private data exposure, any of which could
negatively impact our reputation and financial results.
DILUTION
Dilution means a reduction in value, control,
or earnings of the interests an investor owns. Our Managing Members have been granted 200,000 Units of the Company for $0 cash contribution
in exchange for their services, as compared to the contribution of $50 per Unit paid by investors pursuant to Reg D Offering and this
Offering. As a result, investors will experience economic dilution.
The investor’s stake in a company could
also be diluted due to the company issuing additional stock or securities. In other words, when the Company issues more Units, the percentage
of the Company that you own will go down, even though the value of the Company may go up, which means you will own a smaller piece of
a larger company. If the Company decides to issue more Units, an investor could experience value dilution, with each share being worth
less than before, and control dilution, with the total percentage an investor owns being less than before.
PLAN OF DISTRIBUTION
We are offering up to 400,000 Limited Liability
Company Units on a no-minimum, best-efforts basis. We will sell the Units ourselves and do not plan to use underwriters or pay any commissions.
We will be selling our Units using our best efforts and no one has agreed to buy any of our Units. There is currently no plan or arrangement
to enter into any contracts or agreements to sell the Units with a broker or dealer. The Managing Members will deliver this Offering Statement,
as amended or supplemented, to those persons whom they believe might have an interest in participating in this Offering. We may generally
solicit investors, including, but not limited to, the use of social media, newscasts, advertisements, roadshows, and the like.
There is no minimum number of Units we must sell.
No money raised from this Offering will go into escrow, trust, or another similar arrangement. The Offering will terminate on the sooner
of the sale of the maximum number of Units being sold, twelve months from the effective date of this Offering Statement or the decision
by Company management to deem the offering closed.
No securities are being offered by existing securityholders.
All net proceeds of this Offering will go to the Company.
USE OF PROCEEDS
MartelInvest Tokens provide prospective investors
with an opportunity to be a partial owner of an entire portfolio of real estate rental properties with an investment of as little as $50.
All or substantially all of the proceeds received by the Company from the issuance of Tokens shall be used to make real estate-based investments.
The Company intends to assist first-time and veteran real estate investors to purchase cash flowing rental properties in a wide range
of markets across the U.S. The target investment properties include single family homes and apartment building units which present opportunities
for passive rental incomes and steady cash flow in the long term. These properties may be either currently occupied or in need of renovation
for a significant increase in lease rates. The Company will focus on investing in various markets across the U.S., starting from the states
of Tennessee, Ohio, Michigan, Missouri, and Indiana.
The Company may retain such amounts as it considers
appropriate to maintain a liquid portfolio of cash, including deposits and government securities, to pay its anticipated expenses and
to meet any other cash needs.
Accordingly, we expect to use the net proceeds as follows, if we raise
the maximum offering amount:
| Gross Offering Proceeds |
$20,000,000 |
| Offering Costs (1) |
$200,000 |
| Use of Net Proceeds |
|
| Acquisition of Properties (2) |
$18,700,000 |
| Property Improvement |
$600,000 |
Ongoing Legal and Accounting
Fees |
$100,000 |
| Marketing |
$200,000 |
| Working Capital Reserves |
$200,000 |
| (1) | “Offering Costs” include legal, accounting, compliance, travel, marketing, printing, and other
miscellaneous fees. |
| (2) | "Acquisition Costs" are costs related to the selection and acquisition of properties,
including financing and closing costs. These expenses include but are not limited to travel and communications expenses, non-refundable
option payments on property not acquired, accounting fees and expenses, and miscellaneous expenses. This will also include acquisition
expenses, including, without limitation, legal fees associated with the purchase and sale agreement, title insurance, appraisal costs,
closing costs, mortgage closing costs, and inspection costs |
The
allocation of the use of proceeds among the categories of anticipated expenditures represents management’s best estimates based
on the current status of our Company’s proposed operations, plans, investment objectives, capital requirements, and financial conditions.
Future events, including changes in economic or competitive conditions of our business plan or the completion of less than the total offering,
may cause our Company to modify the above-described allocation of proceeds
The company reserves the right to change the above use of proceeds
if management believes it is in the best interests of the company.
DESCRIPTION OF BUSINESS
Our
Company
MartelInvest 1 LLC is a limited liability company
organized under the laws of the State of Wyoming on October 19, 2021.
The Company is an emerging growth company that
plans to engage in real estate development within the United States. The Company expects to use substantially all of the net proceeds
from this Offering to engage in property acquisition and real estate development business described herein. Specifically, the Company
would acquire residential real estate properties, and make cosmetic changes, repairs, and other enhancements to increase the value for
rental. Once those properties increase in value, the Company can sell them at a profit and use those proceeds
to buy more properties or distribute that profit to investors.
The Company was formed with the
intent to help those who don’t have enough capital to go out and buy their own rental properties to finally be able to have those
same advantages of owning real estate. The Managing Members of the Company, Antoine Martel and Eric Martel, have helped hundreds of real
estate investors across the world buy their first, or tenth, rental property in the United States.
Prior to this Offering, the Company has conducted
a private offering under Rule 506(c) of Regulation D (“Reg D Offering”), where up to 800,000 Limited Liability Company
Units of the Company at $50 per Unit are being offered. The Reg D Offering is still ongoing.
Our Company’s principal
address is 1887 Whitney Mesa Drive #9656, Henderson, NV, 89014.
Investment
Objectives
The investment objective of the Company is long-term
cash flow and risk-adjusted yield for investors through acquiring, renovating, holding, leasing, operating, marketing, and selling residential
real estate properties (each an “Investment”). The Company will aim to maximize profits, with a view toward increasing
the value of its portfolio via capital preservation, capital appreciation, and portfolio diversification.
Investment
Process
Our Managing Members have full authority to make
all the decisions regarding our Investments. They have discretion with respect to the selection of specific investments and the purchase
and sale of our properties.
Factors considered when evaluating a prospective
investment include, without limitation:
| • | macroeconomic conditions that may influence operating performance; |
| • | real estate market factors that may influence real estate valuations, real estate financing, or the economic
performance of real estate generally; |
| • | fundamental analysis of the real estate, including tenant rosters, lease terms, zoning, operating costs,
and the asset’s overall competitive position in its market; |
| • | real estate and leasing market conditions affecting real estate; |
| • | the cash flow in place and projected to be in place over the expected hold period of the real estate; |
| • | the appropriateness of estimated costs and timing associated with capital improvements of the real estate; |
| • | a valuation of the investment, the investment basis relative to its value, and the ability to liquidate
an investment through a sale or refinancing of the real estate; |
| • | review of third-party reports, including appraisals, engineering, and environmental reports; |
| • | physical inspections of the real estate and analysis of markets; and |
| • | the overall structure of the investment and rights in the transaction documentation. |
Our obligation to close on the purchase of any
investment generally will be conditioned upon the delivery and verification of certain documents from the seller, including, where available
and appropriate: plans and specifications; environmental reports; surveys; evidence of marketable title subject to any liens and encumbrances
as are acceptable to the Company; and title and liability insurance policies.
Competition
The real
estate market is highly competitive. We will compete in all of our markets with other owners and operators of single and multifamily properties.
We will compete based on several factors that include location, rental rates, security, suitability of the property’s design to
tenants' needs, and how the property is operated and marketed. The number of competing properties in a particular market could have a
material effect on a property’s occupancy levels, rental rates, and operating expenses.
Over time the Company may compete with other entities
seeking to undertake similar activities. These same potential competitors may have significantly greater capital resources, research and
development, regulatory compliance, and marketing capabilities. This competition could adversely affect our business. The number of competitive
properties could have a material effect on our ability to rent space at our properties and the amount of rent charged. We could be adversely
affected if additional competitive properties are built in locations competitive with our properties, causing increased competition for
residential renters. In addition, our ability to charge premium rental rates to tenants may be negatively impacted. This increased competition
may increase our costs of acquisitions or lower the occupancies and the rent we may charge tenants. This could result in decreased cash
flow from tenants and may require us to make capital improvements to properties that we would not have otherwise made, thus affecting
cash available for distributions to you.
Government
Regulation
Our business is subject to many laws and governmental
regulations. Changes in these laws and regulations, or their interpretation by agencies and courts, occur frequently.
Employees
We do not expect
our Managing Members to devote full time to our operations at all times. We do not have any full-time employees but may engage some in
the future. We also expect to engage contracts to provide us with professional services.
Legal
Proceedings
None
of our Company or any Managing Members is presently subject to any material legal proceedings.
DESCRIPTION OF PROPERTY
Our principal
office is located at 1887 Whitney Mesa Drive #9656, Henderson, NV, 89014. This office is provided at no charge by our Managing Members.
We currently own one real property at 5333 Von Phul St, St Louis, MO 63107.
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Overview
Our Company was organized in October 2021. We
are an internally managed real estate development company engaged in locating, developing, and leasing real estate properties. Since our
inception, we have been engaged primarily in formulating a business plan and developing financial, offering, and other materials to begin
fundraising. We are devoting substantially all of our efforts to establishing our business and planned principal operations have not commenced.
Being a development stage company, we have a very limited operating history.
Once we locate a suitable property, we will determine
the funds required to complete the project. The number of funds allocated for this may vary and will depend on the specific location,
property size, and improvement costs. These are the costs of making a building ready for occupation and then producing revenue.
Long-term financing and commitments will be required
to fully implement our business plan. The Company will always be dependent on outside funding for the full implementation of our business
plan.
Operating Results
As of September 20, 2022, we have not generated
any revenues and incurred expenses of $5,985. Our operating expenses consist of the costs incurred in organizing the company and this
offering. As a result, our net loss for the period from inception through September 20, 2022, was $5,985.
Liquidity and Capital Resources
As of September 20, 2022, our Company had $11,442
in cash and $36,179 in intercompany loans. In management's opinion, the Company's cash position is insufficient to maintain its operations
at the current level for the next 12 months. We are attempting to raise funds to proceed with our plan of operation. The Company hopes
to raise up to $20,000,000 in this Offering and up to $40,000,000 in the Reg D Offering.
We do not currently have any significant capital
commitments. Our sole source of capital until we acquire properties that generate revenues will be monies raised through this Offering
and the Reg D Offering.
Plan of Operations
Over the next twelve months, we intend to focus
on acquiring residential real estate properties for development and leasing using the proceeds from this Offering and the Reg D Offering.
Our Managing Members will meet with property owners, brokers, consultants, and advisors to locate desirable properties which meet our
investment strategy. The target investment properties include single family homes and apartment building units which present opportunities
for passive rental incomes and steady cash flow in the long term. These properties may be either currently occupied or in need of renovation
for a significant increase in lease rates. The Company will focus on investing in various markets across the U.S., starting from the states
of Tennessee, Ohio, Michigan, Missouri, and Indiana. We have started operations by acquiring the first property in St Louis, MO.
We believe that the proceeds from this offering
will satisfy our cash requirements for the next 12 months to implement the foregoing plan of operations.
DIRECTOR, EXECUTIVE OFFICERS AND SIGNIFICANT
EMPLOYEES
| NAME |
POSITION |
AGE |
TERM OF OFFICE |
| Eric Martel |
Managing Member |
58 |
Since inception |
| Antoine Martel |
Managing Member |
27 |
Since inception |
Eric Martel, Managing Member
Eric Martel is a real estate
investor and entrepreneur. In 2017, he founded MartelTurnkey, a turnkey real estate investment company with assets in Memphis, Cleveland,
and St. Louis. In 2019, MartelTurnkey has bought and sold single family rentals. MartelTurnkey’s mission is to enable clients to
achieve financial freedom through cash flow-positive residential turnkey rentals and joint ventures.
Eric Martel has long been
involved in real estate both in his home country of Canada and in the United States. Eric purchased his first multi-family property in
Canada while still in college. After graduating in Actuarial Mathematics, Mr. Martel built a long and successful career in management
and business consulting. In his position as an actuary, Eric was dismayed by the hundreds of corporate pension plans that were being rolled
over to 401k and shifting the retirement risk to the employees. Mr. Martel is transforming the way people think about retirement and passive
income opportunities. Mr. Martel is looking to connect with Real Estate investors interested in the rental market.
Eric Martel is the author
of the book “Stop Trading Your Time for Money” and the popular “Break Away From the Rat Race” YouTube channel.
Antoine Martel, Managing Member
Antoine Martel is a real estate
entrepreneur from San Mateo, California. His proven real estate investment strategies have enabled countless clients to realize passive
income and financial freedom through out-of-state turnkey rental properties. MartelTurnkey specializes in assisting first-time and veteran
real estate investors to purchase cash flowing rental properties in a wide range of markets across the U.S. Since its founding, MartelTurnkey,
with Antoine Martel at the helm, has sold well over $11 million worth of cash flowing real estate.
While still a student at Loyola
Marymount University, Antoine had already begun immersing himself in learning the real estate industry, absorbing everything he could
about real estate investing; how to set up a team, network, calculate the numbers, recognizing good deals, and much more.
Before he’d even graduated
with a degree in Entrepreneurship, Antoine had already secured multiple cash flowing properties for the new family business, Martel Family
Realty, which evolved into what is now Martel Turnkey. Antoine Martel is now a nationally recognized real estate expert with tens of thousands
of followers. He is an inspiration to both millennials and generations from every decade.
Antoine Martel is the author
of the popular real estate investing book, “A Millennial’s Guide to Investing in Cash Flowing Rental Properties." Antoine’s
highly popular podcast, “A Millennial’s Guide to Real Estate Investing,” can be accessed through iTunes, Spotify, and
various other podcast outlets.
Family Relationship
Eric Martel is the father of Antoine Martel.
Legal Proceedings
To the best of our knowledge, none of our managing
members has, during the past five years:
| · | been convicted in a criminal proceeding (excluding
traffic violations and other minor offenses); or |
| · | had any petition under the federal bankruptcy
laws or any state insolvency law was filed by or against, or a receiver, fiscal agent, or similar officer was appointed by a court for
the business or property of such person, or any partnership in which he was the general partner at or within two years before the time
of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time
of such filing
|
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
| Name |
Capacity |
Cash compensation |
Other Compensation |
| Eric Martel |
Managing Member |
$0 |
100,000 Units of the Company, and fees paid by the Company |
| Antoine Martel |
Managing Member |
$0 |
100,000 Units of the Company, and fees paid by the Company |
The Managing Members receive no fixed cash compensation.
Instead, the Company shall pay the Managing Members acquisition fee, asset management fee, and disposition fee at a certain percentage
of the values of investments acquired, held, or sold by the Company. Specifically, the Company shall pay the Managing Members the following
fees:
| · | Acquisition Fee: A fee of one percent
(1%) of the purchase price of each Investment acquired by the Company; |
| · | Asset Management Fee: A fee of one percent
(1%) per annum of the total value of the Investments under the management of the Company |
| · | Disposition Fee: A fee of one percent
(1%) of the sale price of each Investment sold by the Company |
Further, the Managing Members will receive a perpetual
royalty at ten percent (10%) of the resale value of the Tokens.
The Managing Members each hold 100,000 Units of
the Company, which were issued prior to this Offering for their services.
SECURITY OWNERSHIP OF MANAGEMENT AND
CERTAIN SECURITYHOLDERS
The following tables set forth the ownership,
as of the date of this offering circular, of our Limited Liability Company Units by each person known by us to be the beneficial owner
of more than 10% of our outstanding Units. To the best of our knowledge, the persons named have sole voting and investment power with
respect to such Units, except as otherwise noted. There are not any pending or anticipated arrangements that may cause a change in control.
Name and address of
beneficial owner (1) |
Amount and nature of
beneficial ownership |
Amount and nature of
beneficial ownership
acquirable |
Percent of Class |
| Managing Members |
200,000 Units |
0 |
100% |
| (1) | Eric Martel and Antoine Martel each own 100,000 Units of the Company. |
The information presented above regarding beneficial
ownership of our voting securities has been presented in accordance with the rules of the Securities and Exchange Commission and is not
necessarily indicative of ownership for any other purpose. Under these rules, a person is deemed to be a "beneficial owner"
of a security if that person has or shares the power to vote or direct the voting of the security or the power to dispose or direct the
disposition of the security. A person is deemed to own beneficially any security as to which such person has the right to acquire sole
or shared voting or investment power within 60 days through the conversion or exercise of any convertible security, warrant, option, or
other right. More than one person may be deemed to be a beneficial owner of the same securities. The percentage of beneficial ownership
by any person as of a particular date is calculated by dividing the number of Units beneficially owned by such person, which includes
the number of Units as to which such person has the right to acquire voting or investment power within 60 days, by the sum of the number
of Units outstanding as of such date plus the number of Units as to which such person has the right to acquire voting or investment power
within 60 days. Consequently, the denominator used for calculating such a percentage may be different for each beneficial owner. Except
as otherwise indicated below and under applicable community property laws, we believe that the beneficial owners of our Limited Liability
Company Units listed above have sole voting and investment power with respect to the Units shown.
INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN
TRANSACTIONS
Since inception,
there have been no transactions, or proposed transactions, which have materially affected or will materially affect us in which any director,
executive officer, or beneficial holder of more than 10% of the outstanding common, or any of their respective relatives, spouses, associates
or affiliates, has had or will have any direct or material indirect interest.
Conflicts of Interest
The Managing Members, their family members, other
companies of which the Managing Member is an officer or an employee, and affiliates, members, partners, directors, officers, and employees
of those companies (collectively the “Affiliated Persons”) may engage in activities that may conflict with the interests
of the Members or the Company. The following discussion enumerates certain potential divergences and conflicts of interest.
Other Activities
The Managing Members will only devote so much
time to the affairs of the Company as is reasonably required in their judgment. They also serve or may serve as officers or employees
of other companies affiliated or unaffiliated with the Company. If and when there are turbulent conditions in the real estate markets
or distress in the credit markets or other times when the Company needs their focused support and assistance, the attention of the Managing
Members may also be required by other companies. In addition, the Managing Members may have obligations to those entities, the fulfillment
of which might not be in the best interests of the Members or the Company. The Managing Members may face conflicts of interest in allocating
sale, financing, leasing, and other business opportunities among the real estate properties owned by other entities.
The Managing Members and Affiliated Persons will
not be precluded from engaging directly or indirectly in any other business or other activity, including exercising investment advisory
and management responsibility and buying, selling, leasing or otherwise dealing with real estate investments and other investments for
their own accounts, for the accounts of other companies and the accounts of individual and institutional clients (collectively, “Other
Accounts”). The Other Accounts may have investment objectives or may implement investment strategies similar to those of the
Company. The Managing Members and Affiliated Persons may also have investments in certain of the Other Accounts. Each of them may give
advice and take action in the performance of their duties to their Other Accounts that could differ from the timing and nature of action
taken with respect to the Company. The Managing Members and Affiliated Persons will have no obligation to purchase, lease, or sell for
the Company any investment that they purchase, lease, or sell, or recommend for purchase, leasing, or sale, for their own accounts or
any of the Other Accounts. The Company will not have any rights of first refusal, co-investment, or other rights in respect of the investments
made by the Managing Members and Affiliated Persons for the Other Accounts, or in any fees, profits, or other income earned or otherwise
derived from them. If a determination is made that the Company and one or more Other Accounts should purchase, lease or sell the same
investments at the same time, the Managing Members and Affiliated Person will allocate these investments as is considered fair and equitable
to each. No Member will, by reason of being a Member of the Company, have any right to participate in any manner in any profits or income
earned or derived by or accruing to the Managing Members and Affiliated Person from the conduct of any business or from any transaction
in investments affected by them for any account other than that of the Company.
There can be no assurance that all or any part
of an investment opportunity that comes to the attention of any of the Managing Members and Affiliated Persons will be allocated to the
Company. In addition, there may be investment opportunities the Managing Member elects to pursue for the Company even though the Affiliated
Persons elect not to pursue such opportunities for the Other Accounts. Because investment considerations may differ for the Company and
the Other Accounts in the context of any particular investment opportunity, investment activities of the Company and the Other Accounts
are likely to differ considerably from time to time.
As a result of the foregoing, the Managing Members
and Affiliated Persons may have conflicts of interest in allocating their time and activity between the Company and the Other Accounts,
in allocating investments among the Company and the Other Accounts, and in effecting transactions for the Company and the Other Accounts,
including those in which one or more Managing Members and Affiliated Persons may have a greater financial interest.
SECURITIES BEING OFFERED
The following is a summary of the principal
terms of, and is qualified by reference to, our operating agreement and the subscription agreement relating to the purchase of the securities
offered hereby, which are attached as exhibits to the offering statement of which this offering circular forms a part. This summary is
qualified in its entirety by reference to the detailed provisions of those documents which should be reviewed in their entirety by each
prospective investor. In the event that the provisions of this summary differ from those of the operating agreement or the subscription
agreement, as applicable, the provisions of the operating agreement or the subscription agreement, as applicable, shall apply. Capitalized
terms used in this summary (and elsewhere in this offering circular) that are not defined herein shall have the meaning ascribed thereto
in the operating agreement.
Our Company is a limited liability company formed
pursuant to the Wyoming limited liability company act. Interests in our company consist of limited liability company units (“Units”)
only. We are offering up to 400,000 Units under this Offering. The offering price per unit is $50, for an aggregate offering amount of
up to $20,000,000. As of the date of this offering circular, we have 200,031 Units issued and outstanding. Each limited liability company
unit of the Company will be represented by a digital token referred to as the MartelInvest 1 Token, with the token symbol MIFT1.
Distribution
All items of income, gain, loss, and deduction
will be allocated to the Members’ capital accounts in proportion to their respective ownership of Units, as represented by Tokens.
Distributions from the Company may be made at any time as determined by the Managing Members in its sole discretion. The Managing Members
will be entitled to withhold from any distributions, at its discretion, appropriate reserves for expenses and liabilities of the Company
as well as for any required tax withholdings.
The Managing Members currently intend to distribute
net profits of the Company every quarter in the form of USDC/USDT but may distribute net profits in a fiat currency at the sole discretion
of the Managing Members.
There is no guarantee that the Company will achieve
profitability or distribute profits with any certain frequency.
Voting Rights
The Members have limited voting rights, if any,
spelled out in the Operating Agreement. The Managing Members have a unilateral ability to amend the Operating Agreement in certain circumstances
without the consent of the Members. Members will therefore be subject to any amendments the Managing Member makes, if any, to the Operating
Agreement and any decision it takes in respect of the Company.
Removal of a Managing Member
The Managing Members can only be removed for cause
in very limited circumstances following an affirmative vote of the Company’s Members owning 51% of the Units, and unsatisfactory
financial performance does not constitute a cause. Members would therefore not be able to remove a Managing Member merely because they
did not agree, for example, with how the Managing Member was operating the assets and liabilities of the Company.
Liquidation Rights
Members have no liquidation preference over the
Managing Members.
Preemptive Rights
No preemptive rights.
Redemption Rights
The Units are not redeemable.
Restriction on Transfer
There are significant transfer
restrictions contained in our operating agreement that prohibit transfers unless approved by our Managing Members, in its sole discretion,
and the transferee and transferor have met other conditions established by our operating agreement.
The Managing Member may withhold its consent to
the admission of any person as a Member for any reason, or for no reason, including when it determines in its reasonable discretion that
such admission could: (i) result in there being 2,000 or more beneficial owners (as such term is used under the Exchange Act) or 500 or
more beneficial owners that are not accredited investors (as defined under the Securities Act), as specified in Section 12(g)(1)(A)(ii)
of the Exchange Act, (ii) could adversely affect the Company or subject the Company, or the Managing Members or any of their respective
affiliates to any additional regulatory or governmental requirements or cause the Company to be disqualified as a limited liability company,
or subject the Company, the Managing Member or any of their respective affiliates to any tax to which it would not otherwise be subject,
(iii) cause the Company to be required to register as an investment company under the Investment Company Act, (iv) cause the Managing
Members or any of its affiliates being required to register under the Investment Advisers Act, (v) cause the assets of the Company to
be treated as plan assets as defined in Section 3(42) of ERISA, or (viii) result in a loss of partnership status by the Company for US
federal income tax purposes or the termination of the Company for US federal income tax purposes.
The Tokens
distributed in this offering will not be restricted securities under federal securities laws. However, there is no assurance that any
exchange or alternative trading system will approve our Tokens for listing. There is no current public market for the Tokens and one may
never develop. As such, it is possible that the tokens may have limited liquidity as a result.
Forum Selection
As part of this investment, each investor will
be required to agree to the terms of the subscription agreement included as Exhibit 4.1 to the offering statement of which this
offering circular is part. In the agreement, investors agree to resolve disputes arising under the subscription agreement in state or
federal courts located in the State of Wyoming, for the purpose of any suit, action, or other proceeding arising out of or based upon
the agreement.
FINANCIAL STATEMENTS
MARTELINVEST 1 LLC
FINANCIAL STATEMENTS – UNAUDITED
From October 19, 2021 (Inception) to September
20, 2022
| CONTENTS: |
|
| |
|
| Balance Sheet – From October 19, 2021 (Inception) to September 20, 2022 |
39 |
| |
|
| Statement of Operations – From January 1, 2022, to September 20, 2022 |
40 |
| |
|
| Statement of Cash Flows – From January 1, 2022, to September 20, 2022 |
41 |
| |
|
| Statement of Change in Equity - From October 19, 2021 (Inception) to September 20, 2022 |
42 |
MartelInvest 1 LLC
Balance Sheet
As of September 20, 2022
| | |
TOTAL | |
| ASSETS | |
| | |
| Current Assets | |
| | |
| Bank Accounts | |
| | |
| MartelInvest X LLC 6427 - 1 | |
$ | 9,886.28 | |
| USDC | |
$ | 1,556.20 | |
| Total Bank Accounts | |
$ | 11,442.48 | |
| Total Current Assets | |
$ | 11,442.48 | |
| Fixed Assets | |
| | |
| 5333 Von Phul St | |
$ | 20,778.28 | |
| Total Fixed Assets | |
$ | 20,778.28 | |
| TOTAL ASSETS | |
$ | 32,220.76 | |
| | |
| | |
| LIABILITIES AND EQUITY | |
| | |
| Liabilities | |
| | |
| Current Liabilities | |
| | |
| Other Current Liabilities | |
| | |
| MFR LLC | |
$ | 15,871.00 | |
| MRE LLC | |
$ | 20,308.28 | |
| Security Deposit Payable | |
$ | 470.00 | |
| Total Other Current Liabilities | |
$ | 36,649.28 | |
| Total Current Liabilities | |
$ | 36,649.28 | |
| Total Liabilities | |
$ | 36,649.28 | |
| Equity | |
| | |
| Opening Balance Equity | |
$ | 1,556.20 | |
| Retained Earnings | |
$ | - | |
| Net Income | |
$ | (5,984.72 | ) |
| Total Equity | |
$ | (4,428.52 | ) |
| TOTAL LIABILITIES AND EQUITY | |
$ | 32,220.76 | |
MartelInvest 1 LLC
Profit and Loss
January 1 – September 20, 2022
| | |
TOTAL | |
| Income | |
| | |
| Total Income | |
| | |
| GROSS PROFIT | |
$ | - | |
| Expenses | |
| | |
| Legal & Accounting Services | |
$ | 5,871.00 | |
| Office Expenses | |
| | |
| Software & Apps | |
$ | 113.72 | |
| Total Office Expenses | |
$ | 113.72 | |
| Total Expenses | |
$ | 5,984.72 | |
| NET OPERATING INCOME | |
$ | (5,984.72 | ) |
| NET INCOME | |
$ | (5,984.72 | ) |
MartelInvest 1 LLC
Statement of Cash Flows
January 1 – September 20, 2022
| | |
TOTAL | |
| OPERATING ACTIVITIES | |
| | |
| Net Income | |
$ | (5,984.72 | ) |
| Adjustments to reconcile Net Income to Net Cash provided by operations: | |
| | |
| MFR LLC | |
$ | 15,871.00 | |
| MRE LLC | |
$ | 20,308.28 | |
| Security Deposit Payable | |
$ | 470.00 | |
| Total Adjustments to reconcile Net Income to Net Cash provided by operations: | |
$ | 36,649.28 | |
| Net cash provided by operating activities | |
$ | 30,664.56 | |
| INVESTING ACTIVITIES | |
| | |
| 5333 Von Phul St | |
$ | (20,778.28 | ) |
| Net cash provided by investing activities | |
$ | (20,778.28 | ) |
| FINANCING ACTIVITIES | |
| | |
| Opening balance equity | |
$ | 1,556.20 | |
| Net cash provided by financing activities | |
$ | 1,556.20 | |
| NET CASH INCREASE FOR PERIOD | |
$ | 11,442.48 | |
| CASH AT END OF PERIOD | |
$ | 11,442.48 | |
MartelInvest 1 LLC
Statement of Change in Equity
As of September 20, 2022
| | |
Tokens | | |
Additional Paid-in Capital | | |
Retained Earnings
(Accumulated Deficit) | | |
TOTAL | |
| Beginning Balance | |
$ | - | | |
| | | |
| | | |
| | |
| Issuance of Token | |
$ | 1,556 | | |
| | | |
| | | |
$ | 1,556 | |
| Net income (net loss) | |
$ | (5,985 | ) | |
| | | |
| | | |
$ | (5,985 | ) |
| Dividends | |
$ | - | | |
| | | |
| | | |
$ | - | |
| ENDING BALANCE | |
$ | (4,429 | ) | |
| | | |
| | | |
$ | (4,429 | ) |
PART III EXHIBITS
| Exhibit No. |
Description |
| 2.1 |
Limited Liability Company Articles of Organization |
| 2.2 |
Amended and Restated Operating Agreement |
| 4.1 |
Subscription Agreement |
| 12.1 |
Opinion of Counsel |
SIGNATURES
Pursuant to the requirements of Regulation A,
the issuer certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form 1-A and has duly
caused this offering statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Henderson, State
of Nevada, on October 18, 2022.
MARTELINVEST 1 LLC
Eric Martel, Managing Member
This offering statement has been signed by the following persons in
the capacities and on the dates indicated.
| SIGNATURE |
|
TITLE |
|
DATE |
| |
|
|
|
|
| /s/ Eric Martel |
|
Managing Member |
|
October 18, 2022 |
| Eric Martel |
|
|
|
|
| |
|
|
|
|
| /s/ Antoine Martel |
|
Managing Member |
|
October 18, 2022 |
| Antoine Martel |
|
|
|
|
44
