Form 1-A Issuer Information UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 1-A
REGULATION A OFFERING STATEMENT
UNDER THE SECURITIES ACT OF 1933
OMB APPROVAL

FORM 1-A

OMB Number: 3235-0286


Estimated average burden hours per response: 608.0

1-A: Filer Information

Issuer CIK
0001923734
Issuer CCC
XXXXXXXX
DOS File Number
Offering File Number
024-11869
Is this a LIVE or TEST Filing? LIVE TEST
Would you like a Return Copy?
Notify via Filing Website only?
Since Last Filing?

Submission Contact Information

Name
Phone
E-Mail Address

1-A: Item 1. Issuer Information

Issuer Infomation

Exact name of issuer as specified in the issuer's charter
Ark7 Properties Plus LLC
Jurisdiction of Incorporation / Organization
DELAWARE
Year of Incorporation
2022
CIK
0001923734
Primary Standard Industrial Classification Code
REAL ESTATE OPERATORS (NO DEVELOPERS) & LESSORS
I.R.S. Employer Identification Number
88-1359905
Total number of full-time employees
0
Total number of part-time employees
0

Contact Infomation

Address of Principal Executive Offices

Address 1
1 FERRY BUILDING
Address 2
STE 201
City
SAN FRANCISCO
State/Country
CALIFORNIA
Mailing Zip/ Postal Code
94111
Phone
415-275-0701

Provide the following information for the person the Securities and Exchange Commission's staff should call in connection with any pre-qualification review of the offering statement.

Name
Andrew Stephenson
Address 1
Address 2
City
State/Country
Mailing Zip/ Postal Code
Phone

Provide up to two e-mail addresses to which the Securities and Exchange Commission's staff may send any comment letters relating to the offering statement. After qualification of the offering statement, such e-mail addresses are not required to remain active.

Financial Statements

Industry Group (select one) Banking Insurance Other

Use the financial statements for the most recent period contained in this offering statement to provide the following information about the issuer. The following table does not include all of the line items from the financial statements. Long Term Debt would include notes payable, bonds, mortgages, and similar obligations. To determine "Total Revenues" for all companies selecting "Other" for their industry group, refer to Article 5-03(b)(1) of Regulation S-X. For companies selecting "Insurance", refer to Article 7-04 of Regulation S-X for calculation of "Total Revenues" and paragraphs 5 and 7 of Article 7-04 for "Costs and Expenses Applicable to Revenues".

Balance Sheet Information

Cash and Cash Equivalents
$ 24261.00
Investment Securities
$ 0.00
Total Investments
$
Accounts and Notes Receivable
$ 0.00
Loans
$
Property, Plant and Equipment (PP&E):
$ 3398255.00
Property and Equipment
$
Total Assets
$ 4010466.00
Accounts Payable and Accrued Liabilities
$ 107423.00
Policy Liabilities and Accruals
$
Deposits
$
Long Term Debt
$ 0.00
Total Liabilities
$ 593478.00
Total Stockholders' Equity
$ 3878867.00
Total Liabilities and Equity
$ 4010466.00

Statement of Comprehensive Income Information

Total Revenues
$ 239016.00
Total Interest Income
$
Costs and Expenses Applicable to Revenues
$ 500151.00
Total Interest Expenses
$
Depreciation and Amortization
$ 85812.00
Net Income
$ -354744.00
Earnings Per Share - Basic
$ 0.00
Earnings Per Share - Diluted
$ 0.00
Name of Auditor (if any)
Flex Tax and Consulting Group

Outstanding Securities

Common Equity

Name of Class (if any) Common Equity
Series Membership Interests
Common Equity Units Outstanding
154950
Common Equity CUSIP (if any):
n/a
Common Equity Units Name of Trading Center or Quotation Medium (if any)
n/a

Preferred Equity

Preferred Equity Name of Class (if any)
n/a
Preferred Equity Units Outstanding
0
Preferred Equity CUSIP (if any)
n/a
Preferred Equity Name of Trading Center or Quotation Medium (if any)
n/a

Debt Securities

Debt Securities Name of Class (if any)
n/a
Debt Securities Units Outstanding
0
Debt Securities CUSIP (if any):
n/a
Debt Securities Name of Trading Center or Quotation Medium (if any)

1-A: Item 2. Issuer Eligibility

Issuer Eligibility

Check this box to certify that all of the following statements are true for the issuer(s)

1-A: Item 3. Application of Rule 262

Application Rule 262

Check this box to certify that, as of the time of this filing, each person described in Rule 262 of Regulation A is either not disqualified under that rule or is disqualified but has received a waiver of such disqualification.

Check this box if "bad actor" disclosure under Rule 262(d) is provided in Part II of the offering statement.

1-A: Item 4. Summary Information Regarding the Offering and Other Current or Proposed Offerings

Summary Infomation

Check the appropriate box to indicate whether you are conducting a Tier 1 or Tier 2 offering Tier1 Tier2
Check the appropriate box to indicate whether the financial statements have been audited Unaudited Audited
Types of Securities Offered in this Offering Statement (select all that apply)
Equity (common or preferred stock)
Does the issuer intend to offer the securities on a delayed or continuous basis pursuant to Rule 251(d)(3)? Yes No
Does the issuer intend this offering to last more than one year? Yes No
Does the issuer intend to price this offering after qualification pursuant to Rule 253(b)? Yes No
Will the issuer be conducting a best efforts offering? Yes No
Has the issuer used solicitation of interest communications in connection with the proposed offering? Yes No
Does the proposed offering involve the resale of securities by affiliates of the issuer? Yes No
Number of securities offered
2600
Number of securities of that class outstanding
10

The information called for by this item below may be omitted if undetermined at the time of filing or submission, except that if a price range has been included in the offering statement, the midpoint of that range must be used to respond. Please refer to Rule 251(a) for the definition of "aggregate offering price" or "aggregate sales" as used in this item. Please leave the field blank if undetermined at this time and include a zero if a particular item is not applicable to the offering.

Price per security
$ 100.0000
The portion of the aggregate offering price attributable to securities being offered on behalf of the issuer
$ 1615000.00
The portion of the aggregate offering price attributable to securities being offered on behalf of selling securityholders
$ 0.00
The portion of the aggregate offering price attributable to all the securities of the issuer sold pursuant to a qualified offering statement within the 12 months before the qualification of this offering statement
$ 4618200.00
The estimated portion of aggregate sales attributable to securities that may be sold pursuant to any other qualified offering statement concurrently with securities being sold under this offering statement
$ 0.00
Total (the sum of the aggregate offering price and aggregate sales in the four preceding paragraphs)
$ 6233200.00

Anticipated fees in connection with this offering and names of service providers

Underwriters - Name of Service Provider
Underwriters - Fees
$
Sales Commissions - Name of Service Provider
Dalmore Group, LLC
Sales Commissions - Fee
$ 16150.00
Finders' Fees - Name of Service Provider
Finders' Fees - Fees
$
Audit - Name of Service Provider
Flex Tax and Consulting Group
Audit - Fees
$ 31000.00
Legal - Name of Service Provider
CrowdCheck Law LLP
Legal - Fees
$ 60000.00
Promoters - Name of Service Provider
Promoters - Fees
$
Blue Sky Compliance - Name of Service Provider
State notice filing fees
Blue Sky Compliance - Fees
$ 12000.00
CRD Number of any broker or dealer listed:
136352
Estimated net proceeds to the issuer
$ 660929.00
Clarification of responses (if necessary)
Reflects the value of series included in this amendment.

1-A: Item 5. Jurisdictions in Which Securities are to be Offered

Jurisdictions in Which Securities are to be Offered

Using the list below, select the jurisdictions in which the issuer intends to offer the securities

Selected States and Jurisdictions
ALABAMA
ALASKA
ARIZONA
ARKANSAS
CALIFORNIA
COLORADO
CONNECTICUT
DELAWARE
DISTRICT OF COLUMBIA
FLORIDA
GEORGIA
HAWAII
IDAHO
ILLINOIS
INDIANA
IOWA
KANSAS
KENTUCKY
LOUISIANA
MAINE
MARYLAND
MASSACHUSETTS
MICHIGAN
MINNESOTA
MISSISSIPPI
MISSOURI
MONTANA
NEBRASKA
NEVADA
NEW HAMPSHIRE
NEW JERSEY
NEW MEXICO
NEW YORK
NORTH CAROLINA
NORTH DAKOTA
OHIO
OKLAHOMA
OREGON
PENNSYLVANIA
PUERTO RICO
RHODE ISLAND
SOUTH CAROLINA
SOUTH DAKOTA
TENNESSEE
TEXAS
UTAH
VERMONT
VIRGINIA
WASHINGTON
WEST VIRGINIA
WISCONSIN
WYOMING
ALBERTA, CANADA
BRITISH COLUMBIA, CANADA
MANITOBA, CANADA
NEW BRUNSWICK, CANADA
NEWFOUNDLAND, CANADA
NOVA SCOTIA, CANADA
ONTARIO, CANADA
PRINCE EDWARD ISLAND, CANADA
QUEBEC, CANADA
SASKATCHEWAN, CANADA
YUKON, CANADA
CANADA (FEDERAL LEVEL)

Using the list below, select the jurisdictions in which the securities are to be offered by underwriters, dealers or sales persons or check the appropriate box

None
Same as the jurisdictions in which the issuer intends to offer the securities
Selected States and Jurisdictions

ALABAMA
ALASKA
ARIZONA
ARKANSAS
CALIFORNIA
COLORADO
CONNECTICUT
DELAWARE
DISTRICT OF COLUMBIA
FLORIDA
GEORGIA
HAWAII
IDAHO
ILLINOIS
INDIANA
IOWA
KANSAS
KENTUCKY
LOUISIANA
MAINE
MARYLAND
MASSACHUSETTS
MICHIGAN
MINNESOTA
MISSISSIPPI
MISSOURI
MONTANA
NEBRASKA
NEVADA
NEW HAMPSHIRE
NEW JERSEY
NEW MEXICO
NEW YORK
NORTH CAROLINA
NORTH DAKOTA
OHIO
OKLAHOMA
OREGON
PENNSYLVANIA
PUERTO RICO
RHODE ISLAND
SOUTH CAROLINA
SOUTH DAKOTA
TENNESSEE
TEXAS
UTAH
VERMONT
VIRGINIA
WASHINGTON
WEST VIRGINIA
WISCONSIN
WYOMING
ALBERTA, CANADA
BRITISH COLUMBIA, CANADA
MANITOBA, CANADA
NEW BRUNSWICK, CANADA
NEWFOUNDLAND, CANADA
NOVA SCOTIA, CANADA
ONTARIO, CANADA
PRINCE EDWARD ISLAND, CANADA
QUEBEC, CANADA
SASKATCHEWAN, CANADA
YUKON, CANADA
CANADA (FEDERAL LEVEL)

1-A: Item 6. Unregistered Securities Issued or Sold Within One Year

Unregistered Securities Issued or Sold Within One Year

None

Unregistered Securities Issued

As to any unregistered securities issued by the issuer of any of its predecessors or affiliated issuers within one year before the filing of this Form 1-A, state:

(a)Name of such issuer
Ark7 Properties Plus LLC
(b)(1) Title of securities issued
Series #WGI3Z
(2) Total Amount of such securities issued
11350
(3) Amount of such securities sold by or for the account of any person who at the time was a director, officer, promoter or principal securityholder of the issuer of such securities, or was an underwriter of any securities of such issuer.
0
(c)(1) Aggregate consideration for which the securities were issued and basis for computing the amount thereof.
11,350 x $32.00 = $363,200
(2) Aggregate consideration for which the securities listed in (b)(3) of this item (if any) were issued and the basis for computing the amount thereof (if different from the basis described in (c)(1)).

Unregistered Securities Issued

As to any unregistered securities issued by the issuer of any of its predecessors or affiliated issuers within one year before the filing of this Form 1-A, state:

(a)Name of such issuer
Ark7 Properties Plus LLC
(b)(1) Title of securities issued
Series #0XYT6
(2) Total Amount of such securities issued
23750
(3) Amount of such securities sold by or for the account of any person who at the time was a director, officer, promoter or principal securityholder of the issuer of such securities, or was an underwriter of any securities of such issuer.
0
(c)(1) Aggregate consideration for which the securities were issued and basis for computing the amount thereof.
23,750 x $20.00 = $475,000
(2) Aggregate consideration for which the securities listed in (b)(3) of this item (if any) were issued and the basis for computing the amount thereof (if different from the basis described in (c)(1)).

Unregistered Securities Issued

As to any unregistered securities issued by the issuer of any of its predecessors or affiliated issuers within one year before the filing of this Form 1-A, state:

(a)Name of such issuer
Ark7 Properties Plus LLC
(b)(1) Title of securities issued
Series #ZIE3T Interest
(2) Total Amount of such securities issued
22750
(3) Amount of such securities sold by or for the account of any person who at the time was a director, officer, promoter or principal securityholder of the issuer of such securities, or was an underwriter of any securities of such issuer.
0
(c)(1) Aggregate consideration for which the securities were issued and basis for computing the amount thereof.
22,750 x $20.00 = $455,000
(2) Aggregate consideration for which the securities listed in (b)(3) of this item (if any) were issued and the basis for computing the amount thereof (if different from the basis described in (c)(1)).

Unregistered Securities Issued

As to any unregistered securities issued by the issuer of any of its predecessors or affiliated issuers within one year before the filing of this Form 1-A, state:

(a)Name of such issuer
Ark7 Properties Plus LLC
(b)(1) Title of securities issued
Series #JTDXY Interest
(2) Total Amount of such securities issued
22500
(3) Amount of such securities sold by or for the account of any person who at the time was a director, officer, promoter or principal securityholder of the issuer of such securities, or was an underwriter of any securities of such issuer.
0
(c)(1) Aggregate consideration for which the securities were issued and basis for computing the amount thereof.
$22,500 x $20.00 = $450,000
(2) Aggregate consideration for which the securities listed in (b)(3) of this item (if any) were issued and the basis for computing the amount thereof (if different from the basis described in (c)(1)).

Unregistered Securities Issued

As to any unregistered securities issued by the issuer of any of its predecessors or affiliated issuers within one year before the filing of this Form 1-A, state:

(a)Name of such issuer
Ark7 Properties Plus LLC
(b)(1) Title of securities issued
Series #FTWD Interest
(2) Total Amount of such securities issued
13250
(3) Amount of such securities sold by or for the account of any person who at the time was a director, officer, promoter or principal securityholder of the issuer of such securities, or was an underwriter of any securities of such issuer.
0
(c)(1) Aggregate consideration for which the securities were issued and basis for computing the amount thereof.
13,250 x $20.00 = $265,000
(2) Aggregate consideration for which the securities listed in (b)(3) of this item (if any) were issued and the basis for computing the amount thereof (if different from the basis described in (c)(1)).

Unregistered Securities Issued

As to any unregistered securities issued by the issuer of any of its predecessors or affiliated issuers within one year before the filing of this Form 1-A, state:

(a)Name of such issuer
Ark7 Properties Plus LLC
(b)(1) Title of securities issued
Series #P7FJ5 Interest
(2) Total Amount of such securities issued
13250
(3) Amount of such securities sold by or for the account of any person who at the time was a director, officer, promoter or principal securityholder of the issuer of such securities, or was an underwriter of any securities of such issuer.
0
(c)(1) Aggregate consideration for which the securities were issued and basis for computing the amount thereof.
13250 x $20 =$265,000
(2) Aggregate consideration for which the securities listed in (b)(3) of this item (if any) were issued and the basis for computing the amount thereof (if different from the basis described in (c)(1)).

Unregistered Securities Issued

As to any unregistered securities issued by the issuer of any of its predecessors or affiliated issuers within one year before the filing of this Form 1-A, state:

(a)Name of such issuer
Ark7 Properties Plus LLC
(b)(1) Title of securities issued
Series # WRA7O Interest
(2) Total Amount of such securities issued
30750
(3) Amount of such securities sold by or for the account of any person who at the time was a director, officer, promoter or principal securityholder of the issuer of such securities, or was an underwriter of any securities of such issuer.
0
(c)(1) Aggregate consideration for which the securities were issued and basis for computing the amount thereof.
30,750 x $20.00 = $615,000
(2) Aggregate consideration for which the securities listed in (b)(3) of this item (if any) were issued and the basis for computing the amount thereof (if different from the basis described in (c)(1)).

Unregistered Securities Issued

As to any unregistered securities issued by the issuer of any of its predecessors or affiliated issuers within one year before the filing of this Form 1-A, state:

(a)Name of such issuer
Ark7 Properties Plus LLC
(b)(1) Title of securities issued
Series #SOV9W
(2) Total Amount of such securities issued
2600
(3) Amount of such securities sold by or for the account of any person who at the time was a director, officer, promoter or principal securityholder of the issuer of such securities, or was an underwriter of any securities of such issuer.
0
(c)(1) Aggregate consideration for which the securities were issued and basis for computing the amount thereof.
2600 x $100 = $260,000
(2) Aggregate consideration for which the securities listed in (b)(3) of this item (if any) were issued and the basis for computing the amount thereof (if different from the basis described in (c)(1)).

Unregistered Securities Issued

As to any unregistered securities issued by the issuer of any of its predecessors or affiliated issuers within one year before the filing of this Form 1-A, state:

(a)Name of such issuer
Ark7 Properties Plus LLC
(b)(1) Title of securities issued
Series #QGXF0
(2) Total Amount of such securities issued
4100
(3) Amount of such securities sold by or for the account of any person who at the time was a director, officer, promoter or principal securityholder of the issuer of such securities, or was an underwriter of any securities of such issuer.
0
(c)(1) Aggregate consideration for which the securities were issued and basis for computing the amount thereof.
4100 x $100 = $410,000
(2) Aggregate consideration for which the securities listed in (b)(3) of this item (if any) were issued and the basis for computing the amount thereof (if different from the basis described in (c)(1)).

Unregistered Securities Issued

As to any unregistered securities issued by the issuer of any of its predecessors or affiliated issuers within one year before the filing of this Form 1-A, state:

(a)Name of such issuer
Ark7 Properties Plus LLC
(b)(1) Title of securities issued
Series #NHMOP
(2) Total Amount of such securities issued
2080
(3) Amount of such securities sold by or for the account of any person who at the time was a director, officer, promoter or principal securityholder of the issuer of such securities, or was an underwriter of any securities of such issuer.
0
(c)(1) Aggregate consideration for which the securities were issued and basis for computing the amount thereof.
2,080 x $100 = $208,000
(2) Aggregate consideration for which the securities listed in (b)(3) of this item (if any) were issued and the basis for computing the amount thereof (if different from the basis described in (c)(1)).

Unregistered Securities Issued

As to any unregistered securities issued by the issuer of any of its predecessors or affiliated issuers within one year before the filing of this Form 1-A, state:

(a)Name of such issuer
Ark7 Properties Plus LLC
(b)(1) Title of securities issued
Series #RPFUV
(2) Total Amount of such securities issued
2900
(3) Amount of such securities sold by or for the account of any person who at the time was a director, officer, promoter or principal securityholder of the issuer of such securities, or was an underwriter of any securities of such issuer.
0
(c)(1) Aggregate consideration for which the securities were issued and basis for computing the amount thereof.
2,900x $100 = $290,000
(2) Aggregate consideration for which the securities listed in (b)(3) of this item (if any) were issued and the basis for computing the amount thereof (if different from the basis described in (c)(1)).

Unregistered Securities Issued

As to any unregistered securities issued by the issuer of any of its predecessors or affiliated issuers within one year before the filing of this Form 1-A, state:

(a)Name of such issuer
Ark7 Properties Plus LLC
(b)(1) Title of securities issued
Series #ORHOF
(2) Total Amount of such securities issued
2500
(3) Amount of such securities sold by or for the account of any person who at the time was a director, officer, promoter or principal securityholder of the issuer of such securities, or was an underwriter of any securities of such issuer.
0
(c)(1) Aggregate consideration for which the securities were issued and basis for computing the amount thereof.
2,500x $100 = $250,000
(2) Aggregate consideration for which the securities listed in (b)(3) of this item (if any) were issued and the basis for computing the amount thereof (if different from the basis described in (c)(1)).

Unregistered Securities Issued

As to any unregistered securities issued by the issuer of any of its predecessors or affiliated issuers within one year before the filing of this Form 1-A, state:

(a)Name of such issuer
Ark7 Properties Plus LLC
(b)(1) Title of securities issued
Series #DIVTU
(2) Total Amount of such securities issued
3040
(3) Amount of such securities sold by or for the account of any person who at the time was a director, officer, promoter or principal securityholder of the issuer of such securities, or was an underwriter of any securities of such issuer.
0
(c)(1) Aggregate consideration for which the securities were issued and basis for computing the amount thereof.
3,040 x $100 = $304,000
(2) Aggregate consideration for which the securities listed in (b)(3) of this item (if any) were issued and the basis for computing the amount thereof (if different from the basis described in (c)(1)).

Unregistered Securities Act

(e) Indicate the section of the Securities Act or Commission rule or regulation relied upon for exemption from the registration requirements of such Act and state briefly the facts relied upon for such exemption
Regulation A

Post-Qualification Amendment No. 9

File No. 024-11869

 

This Post-Qualification Amendment No. 9 amends the Offering Statement of Ark7 Properties Plus LLC originally qualified on July 27, 2022, as previously amended and supplemented, to add, update and/or replace information contained in the Offering Statement.

 

AN OFFERING STATEMENT PURSUANT TO REGULATION A RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. INFORMATION CONTAINED IN THIS PRELIMINARY OFFERING CIRCULAR IS SUBJECT TO COMPLETION OR AMENDMENT. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED BEFORE THE OFFERING STATEMENT FILED WITH THE COMMISSION IS QUALIFIED. THIS PRELIMINARY OFFERING CIRCULAR SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR MAY THERE BE ANY SALES OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL BEFORE REGISTRATION OR QUALIFICATION UNDER THE LAWS OF 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 OFFERING CIRCULAR WAS FILED MAY BE OBTAINED.

 

OFFERING CIRCULAR DATED JUNE 3, 2024

 

 

Ark7 Properties Plus LLC

(A DELAWARE SERIES LIMITED LIABILITY COMPANY)

1 Ferry Building, Ste 201

San Francisco, CA 94111

www.ark7.com

 

Series

 

Price to Public

 

Underwriting Discounts and Commissions (1)

 

Proceeds to Issuer (2)

Series #DIVTU Interest

 

 

 

 

 

 

Per Share

 

$
100.00

 

$
1.00

 

$
99.00

Total Minimum

 

N/A

 

N/A

 

N/A

Total Maximum

 

$
305,000.00

 

$
3,050.00

 

$
301,950.00

 

 

 

 

 

 

 

Series #OJXLW Interest*

 

 

 

 

 

 

Per Share

 

$
100.00

 

$
1.00

 

$
99.00

Total Minimum

 

N/A

 

N/A

 

N/A

Total Maximum

 

$
260,000.00

 

$
2,600.00

 

$
257,400.00

 

 

 

 

 

 

 

Series #ZAUH4 Interest*

 

 

 

 

 

 

Per Share

 

$
100.00

 

$
1.00

 

$
99.00

Total Minimum

 

N/A

 

N/A

 

N/A

Total Maximum

 

$
240,000.00

 

$
2,400.00

 

$
237,600.00

 

 

 

 

 

 

 

Series #EYPIR Interest*

 

 

 

 

 

 

Per Share

 

$
100.00

 

$
1.00

 

$
99.00

Total Minimum

 

N/A

 

N/A

 

N/A

Total Maximum

 

$
260,000.00

 

$
2,600.00

 

$
257,400.00

 

 

 

 

 

 

 

Series #5VCTK Interest*

 

 

 

 

 

 

Per Share

 

$
100.00

 

$
1.00

 

$
99.00

Total Minimum

 

N/A

 

N/A

 

N/A

Total Maximum

 

$
275,000.00

 

$
2,750.00

 

$
272,250.00

 

 

 

 

 

 

 

Series #ET8BV Interest*

 

 

 

 

 

 

Per Share

 

$
100.00

 

$
1.00

 

$
99.00

Total Minimum

 

N/A

 

N/A

 

N/A

Total Maximum

 

$
275,000.00

 

$
2,750.00

 

$
272,250.00

____________________

* Denotes series submitted for qualification by the Commission in this Post-Qualification Amendment No. 9.

 

  1. The company has engaged Dalmore Group, LLC, member FINRA/SIPC ("Dalmore"), to perform administrative and compliance related functions in connection with this offering, but not for underwriting or placement agent services. This includes the 1% commission, approximately the following amounts for each Series:

 

SERIES

 

AMOUNT*

Series #DIVTU

 

$
3,050.00

Series #OJXLW

 

$
2,600.00

Series #ZAUH4

 

$
2,400.00

Series #EYPIR

 

$
2,600.00

Series #5VCTK

 

$
2,750.00

Series #ET8BV

 

$
2,750.00

 

However, it does not include the one-time expense allowance of $5,000, or consulting fees of $20,000 payable by the company to Dalmore. See "Plan of Distribution" for details. The company intends to distribute all offerings of the Series #DIVTU, Series #OJXLW, Series #ZAUH4, Series #EYPIR, Series #5VCTK, and Series #ET8BV Interests and other Series Interests (individually a Series Interest and collectively, the "Series Interests") in any series of the company principally through Ark7 Properties Plus LLC as described in greater detail under "Plan of Distribution and Subscription Procedure."

  1. The company anticipates approximately $16,150 of the proceeds from the Series Interests purchased will be used for offering expenses in fees to Dalmore. These numbers do not include state filing fees.

 

There is no minimum subscription per investor.

 

This offering will terminate at the earlier of (i) the date at which the maximum offering amount has been sold, (ii) the date at which the offering is earlier terminated by the company, in its sole discretion or (iii) the date that is three years from this offering being qualified by the United States Securities and Exchange Commission (the "Commission" or "SEC"). At least every 12 months after this offering has been qualified by the SEC the company will file a post-qualification amendment to include the company's recent financial statements. In addition, the company may periodically file a post-qualification amendment to include additional Series Interests to this offering. No escrow agent has been engaged for this offering and hold funds tendered by investors will be held in a segregated account controlled by the company.

 

See Plan of Distribution. No escrow account administered by an escrow agent has been established for this offering. Funds tendered by investors will be held in a segregated account controlled by the company. The company may undertake one or more closings on a rolling basis, regardless of the amount of funds, and intends to affect a close every 7 business days, after each closing, funds tendered by investors will be available to the company, and interests will be issued to investors. The initial closing will occur as soon as funds clear. We expect to hold subsequent closings every 7 business days. Assuming additional information does not need to be provided for due diligence (AML/KYC) and the investment has been funded it will take up to 3 business days to determine whether a subscription agreement has been accepted or rejected. In the event additional information is required from the subscriber, within 3 business days, the company will reach out to the subscriber for that information.

 

THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION DOES NOT PASS UPON THE MERITS OR GIVE ITS APPROVAL OF 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

 

GENERALLY, NO SALE MAY BE MADE TO YOU IN THIS OFFERING IF THE AGGREGATE PURCHASE PRICE YOU PAY IS MORE THAN 10% OF THE GREATER OF YOUR ANNUAL INCOME OR NET WORTH. DIFFERENT RULES APPLY TO ACCREDITED INVESTORS AND NON-NATURAL PERSONS. BEFORE MAKING ANY REPRESENTATION THAT YOUR INVESTMENT DOES NOT EXCEED APPLICABLE THRESHOLDS, THE COMPANY ENCOURAGES YOU TO REVIEW RULE 251(d)(2)(i)(C) OF REGULATION A. FOR GENERAL INFORMATION ON INVESTING, THE COMPANY ENCOURAGES YOU TO REFER TO www.investor.gov.

 

This offering is inherently risky. See "Risk Factors" on page 11.

 

The company is following the "Offering Circular" format of disclosure under Regulation A.

 

In the event that the company becomes a reporting company under the Securities Exchange Act of 1934, the company intends to take advantage of the provisions that relate to "Emerging Growth Companies" under the JOBS Act of 2012. See "Summary - Implications of Being an Emerging Growth Company."

 

 

TABLE OF CONTENTS

 

Summary

 1

Risk Factors

 11

Dilution

 24

Plan of Distribution

 25

Use of Proceeds to Issuer

 30

The Company's Business

 36

Series Properties Being Offered

 43

The Company's Properties

 49

Management's Discussion and Analysis of Financial Condition and Results of Operations

 50

Directors, Executive Officers and Significant Employees

 55

Compensation of Directors and Officers

 57

Security Ownership of Management and Certain Securityholders

 60

Interest of Management and Others in Certain Transactions

 61

Securities Being Offered

 84

U.S. Federal Income Tax Considerations

 89

Ongoing Reporting

 93

Financial Statements

 94

 

In this Offering Circular, the terms "Ark7 Properties Plus LLC" "APPL" "we," "us, "our," the "company" and similar terms refer to Ark7 Properties Plus LLC, a Delaware series limited liability company.

 

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 COMPANY'S 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, WHICH CONSTITUTE 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. THE COMPANY DOES NOT UNDERTAKE ANY OBLIGATION TO REVISE OR UPDATE THESE FORWARD-LOOKING STATEMENTS TO REFLECT EVENTS OR CIRCUMSTANCES AFTER SUCH DATE OR TO REFLECT THE OCCURRENCE OF UNANTICIPATED EVENTS.

I

 

Implications of Being an Emerging Growth Company

 

The company is not subject to the ongoing reporting requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act") because the company is not registering its securities under the Exchange Act. Rather, the company will be subject to the more limited reporting requirements under Regulation A, including the obligation to electronically file:

 

 

In addition, at any time after completing reporting for the fiscal year in which the company's offering statement was qualified, if the securities of each class to which this offering statement relates are held of record by fewer than 300 persons and offers or sales are not ongoing, the company may immediately suspend its ongoing reporting obligations under Regulation A.

 

If the company becomes subject to the ongoing reporting requirements of the Exchange Act, as an issuer with less than $1.07 billion in total annual gross revenues during its last fiscal year, it will qualify as an "emerging growth company" under the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act") and this status will be significant. An emerging growth company may take advantage of certain reduced reporting requirements and is relieved of certain other significant requirements that are otherwise generally applicable to public companies. In particular, as an emerging growth company, the company:

 

 

If the company becomes subject to the ongoing reporting requirements of the Exchange Act, the company intends to take advantage of all of these reduced reporting requirements and exemptions, including the longer phase-in periods for the adoption of new or revised financial accounting standards under Section 107 of the JOBS Act. The company's election to use the phase-in periods may make it difficult to compare its financial statements to those of non-emerging growth companies and other emerging growth companies that have opted out of the phase-in periods under Section 107 of the JOBS Act.

II

 

Under the JOBS Act, the company may take advantage of the above-described reduced reporting requirements and exemptions for up to five years after its initial sale of common equity pursuant to a registration statement declared effective under the Securities Act of 1933, as amended, or such earlier time that the company no longer meets the definition of an emerging growth company. Note that this offering, while a public offering, is not a sale of common equity pursuant to a registration statement, since the offering is conducted pursuant to an exemption from the registration requirements. In this regard, the JOBS Act provides that the company would cease to be an "emerging growth company" if it has more than $1.07 billion in annual revenues, have more than $700 million in market value of its common stock held by non-affiliates, or issue more than $1 billion in principal amount of non-convertible debt over a three-year period.

 

Certain of these reduced reporting requirements and exemptions are also available to us due to the fact that the company may also qualify, once listed, as a "smaller reporting company" under the Commission's rules. For instance, smaller reporting companies are not required to obtain an auditor attestation on their assessment of internal control over financial reporting; are not required to provide a compensation discussion and analysis; are not required to provide a pay-for-performance graph or CEO pay ratio disclosure; and may present only two years of audited financial statements and related MD&A disclosure.

III

 

SERIES OFFERING TABLE

 

The table below shows key information related to the offering of each Series, as of June 3, 2024. Please also refer to "The Company's Business - Property Overview" and "Use of Proceeds" for further details.

 

Series Name

 

Underlying Assets

 

Offering Price per Interest

 

Maximum Offering Size

 

Minimum/Maximum Subscribed Series Interests (1)

 

Initial Qualification Date (2)

 

Open Date (3)

 

Closing Date

 

Status

Series #WGI3Z

 

11679 W Madero Dr, Arizona City, AZ 85123

 

$
32.00

 

$
363,200.00

 

0 = Minimum

11,350 = Maximum

 

July 27, 2022

 

July 27, 2022

 

December 29, 2022

 

Closed

Series #0XYT6

 

2105 Silver Leaf Dr, Mesquite, TX 75181

 

$
20.00

 

$
475,000.00

 

0 = Minimum

23,750 = Maximum

 

September 16, 2022

 

September 16, 2022

 

April 8, 2023

 

Closed

Series #ZIE3T

 

2507 Decoy Dr, Mesquite, TX 75181

 

$
20.00

 

$
455,000.00

 

0 = Minimum

22,750 = Maximum

 

September 16, 2022

 

September 16, 2022

 

August 16, 2023

 

Closed

Series #JTDXY

 

2300 Homestead Dr, Mesquite, TX 75181

 

$
20.00

 

$
450,000.00

 

0 = Minimum

22,500 = Maximum

 

September 16, 2022

 

September 16, 2022

 

September 20, 2023

 

Closed

Series #FTWDS

 

1527 Iris Walk, Jonesboro, GA 30238

 

$
20.00

 

$
265,000.00

 

0 = Minimum

13,250 = Maximum

 

December 22, 2022

 

December 22, 2022

 

June 9, 2023

 

Closed

Series #P7FJ5

 

1541 Iris Walk, Jonesboro, GA 30238

 

$
20.00

 

$
265,000.00

 

0 = Minimum

13,250 = Maximum

 

December 22, 2022

 

December 22, 2022

 

September 23, 2023

 

Closed

Series #WRA7O

 

4263 Cadence Loop, LAND O LAKES, FL 34638

 

$
20.00

 

$
615,000.00

 

0 = Minimum

30,750 = Maximum

 

December 22, 2022

 

December 22, 2022

 

June 13, 2023

 

Closed

Series #SOV9W

 

2113 W Gladys Ave, Unit 3S, Chicago, IL 60612

 

$
100.00

 

$
260,000.00

 

0 = Minimum

2,600 = Maximum

 

September 21, 2023

 

September 21, 2023

 

September 28, 2023

 

Closed

Series #QGXF0

 

704 S Lincoln Ave, Urbana, IL 61801

 

$
100.00

 

$
410,000.00

 

0 = Minimum

4,100 = Maximum

 

September 21, 2023

 

September 21, 2023

 

November 1, 2023

 

Closed

Series #RPFUV

 

3405 Commonwealth Ave, Unit C, Alexandria, VA 22305

 

$
100.00

 

$
290,000.00

 

0 = Minimum

2,900 = Maximum

 

November 20, 2023

 

November 20, 2023

 

December 26, 2023

 

Closed

Series #NHMOP

 

215 Piedmont Ave NE, Unit 205, Atlanta, GA 30308

 

$
100.00

 

$
216,000.00

 

0 = Minimum

2,160 = Maximum

 

November 20, 2023

 

November 20, 2023

 

May 15, 2024

 

Closed

Series #ORHOF

 

215 Piedmont Ave NE, Unit 407, Atlanta, GA 30308

 

$
100.00

 

$
250,000.00

 

0 = Minimum

2,500 = Maximum

 

May 7, 2024

 

May 7, 2024

 

May 21, 2024

 

Closed

Series #DIVTU

 

215 Piedmont Ave NE, Unit 406, Atlanta, GA 30308

 

$
100.00

 

$
305,000.00

 

0 = Minimum

3,050 = Maximum

 

May 7, 2024

 

May 7, 2024

 

[__________]

 

Open

Series #OJXLW*

 

228 W Norway St, Walnut Springs, TX 76690

 

$
100.00

 

$
260,000.00

 

0 = Minimum

2,600 = Maximum

 

[__________]

 

[__________]

 

[__________]

 

Pending

Series #ZAUH4*

 

516 W Live Oak St, Dublin, TX 76446

 

$
100.00

 

$
240,000.00

 

0 = Minimum

2,400 = Maximum

 

[__________]

 

[__________]

 

[__________]

 

Pending

Series #EYPIR*

 

655 E Live Oak St, Dublin, TX 76446

 

$
100.00

 

$
260,000.00

 

0 = Minimum

2,600 = Maximum

 

[__________]

 

[__________]

 

[__________]

 

Pending

Series #5VCTK*

 

3616 Redbird St, Waco, TX 76705

 

$
100.00

 

$
275,000.00

 

0 = Minimum

2,750 = Maximum

 

[__________]

 

[__________]

 

[__________]

 

Pending

Series #ET8BV*

 

215 Piedmont Ave NE, Unit 909, Atlanta, GA 30308

 

$
100.00

 

$
275,000.00

 

0 = Minimum

2,750 = Maximum

 

[__________]

 

[__________]

 

[__________]

 

Pending

 

Asterisks (*) denote series submitted for qualification by the SEC in this Post-Qualification Amendment No. 9 to the offering statement of which this Offering Circular forms a part.

 

____________________

  1. For open offerings, each row states, with respect to the given offering, the minimum and maximum number of Series Interests offered and the number of subscriptions for Series Interests received as of the date of this Offering Circular, but the closing of such offering has not yet taken place. For any closed offerings, each row would state the actual number of Series Interests sold.
  2. For each offering, each row states, with respect to the given offering, the date on which the offering was initially qualified by the Commission.
  3. For each offering, each row states, with respect to the given offering, the date on which offers and sales for such offering commenced.

 

IV

 

SUMMARY

 

 

This Offering Circular Summary highlights information contained elsewhere and does not contain all of the information that you should consider in making your investment decision. Before investing in the company's Series Interests, you should carefully read this entire Offering Circular, including the company's financial statements and related notes. You should also consider, among other information, the matters described under "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations."

 

The Company

 

Ark7 Properties Plus LLC, a Delaware series limited liability company formed on March 17, 2022 ("APPL"). Ark7 Inc., a Delaware corporation ("Ark7") is the managing member of APPL (the "Managing Member"). The purpose of the company is to establish separate series for the holding of properties to be acquired by the company.

 

Ark7 is a real estate investment platform that allows individual investors to have direct access to quality real estate investment opportunities and invest in the units of each property.

 

Investors in this offering will acquire Series Interests in a Series of the company, each of which is a separate registered series of the company for purposes of assets and liabilities.

 

The core asset of each series will be the specific property associated with that series, and the liabilities will be those incurred during the operation of that asset. Owners of interests in a series will only have an interest in the assets, liabilities, profits and losses pertaining to the specific property owned by that series. For example, an investor who acquired Series Interests in Series #WGI3Z will only have assets, liabilities, profits, leverage-related debts, and losses pertaining to the property located at 11679 W Madero Dr, Arizona City, AZ 85123.

 

Ark7 will serve as the asset manager responsible for managing each Series' Underlying Asset (the "Asset Manager") as described in the Asset Management Agreement between Ark7 Inc. and each series of Ark7 Properties Plus LLC.

 

Ark7 will serve as the Managing Member responsible for the day-to-day management of the company and each registered series.

1

 

Organizational Chart

 

For ease of understanding the company's business structure, it has included the organizational chart below.

 

 

Each property that we acquire will be owned by a separate series of our company that we will establish to acquire that series. Our Managing Member will source the property to be acquired by the series.

 

In most instances, we intend for the Managing Member to provide a loan to the series to acquire the property directly from the seller. Once the property is acquired by the series, we intend to make ownership of the series available to investors through an offer and sale of securities under Tier 2 of Regulation A. Proceeds of each offering will be used to repay the loan from our Managing Member, offering expenses, securities brokerage expenses, and the Sourcing Fee to the Managing Member, along with building a reserve for property improvements and working capital.

 

Alternatively, our Managing Member may acquire the property from the seller, and the proceeds of the offering will be used for the series to purchase the property from the Managing Member, along with offering expenses, securities brokerage expenses, and the Sourcing Fee to the Managing Member, and building a reserve for property improvements and working capital.

2

 

Investment Approach and Strategy Overview

 

 

By adhering to these principles and strategically focusing on dynamic urban environments exhibiting growth and resilience, Ark7 Properties Plus LLC aims to build a portfolio of properties that not only generate consistent income but also appreciate in value over time. However, it's important to acknowledge that despite our diligence, investment outcomes are subject to market fluctuations and inherent risks within the real estate sector.

3

 

Offering Summary

 

The Series #DIVTU Offering

 

Maximum Offering Amount

 

Up to $ 305,000.00 of Series #DIVTU Interests to be acquired pursuant to a Subscription Agreement are being offered on a "best efforts" basis.

 

Minimum Offering Amount

 

None.

 

Price Per Security

 

$ 100.00 per Series #DIVTU Interest

 

Minimum Investment

 

One Series Interest per investor.

 

Use of Proceeds

 

The proceeds from the sale of Series #DIVTU will be used for general working capital, repayment of loans to the company's Managing Member, create a maintenance reserve for the applicable Underlying Asset, pay brokerage commissions to Dalmore, pay offering expenses, and pay the Sourcing Fee.

 

Series Interests outstanding before the offering

 

Series #DIVTU Interest: 10

 

Series Interests outstanding after the offering

 

Series #DIVTU Interest: 3,050

 

 

Broker Fees and Related Party Fees

 

Payment

 

Description

 

Amount

 

Payor

 

Payee

Sourcing Fee

 

No greater than 3% of the maximum offering size.

 

$
9,150.00

 

Series #DIVTU

 

Ark7 Inc.

Asset Management Fee (1)

 

Equal to 15 % of any Free Cash Flows available for distribution pursuant to Article VII of the Operating Agreement.

 

TBD

 

Series #DIVTU

 

Ark7 Inc.

Dalmore Commission

 

1% commission (assuming a fully subscribed offering).

 

$
3,050.00

 

Series #DIVTU

 

Dalmore

Dalmore Fees (2)

 

One-time expense allowance of $5,000, Consulting fees of $20,000

 

$
25,000

 

Ark7 Properties Plus LLC

 

Dalmore

 

____________________

  1. The company notes that this fee may be up to 15% of any Free Cash Flows available for distribution pursuant to Article VII of the Operating Agreement. Whether it is 15% or less will be determined for each Series by the Managing Member in its sole discretion. The Managing Member, Ark7, has determined the Asset Management Fee is 15% for Series #DIVTU.
  2. The company notes that the cumulative fee of $25,000 was paid to Dalmore by Ark7 Properties Plus LLC. The company intends for each current and future Series to pay it a share of $25,000, determined by the Managing Member. Series #DIVTU is responsible for $1,389. Series #DIVTU intends to reimburse Ark7 Properties Plus LLC $1,389 with proceeds from this Offering. In the event that Series #DIVTU does not raise the maximum offering amount, Ark7 Properties Plus LLC will waive the remaining amount owed by Series #DIVTU.

4

 

The Series #OJXLW Offering

 

Maximum Offering Amount

 

Up to $ 260,000.00 of Series #OJXLW Interests to be acquired pursuant to a Subscription Agreement are being offered on a "best efforts" basis.

 

Minimum Offering Amount

 

None.

 

Price Per Security

 

$ 100.00 per Series #OJXLW Interest

 

Minimum Investment

 

One Series Interest per investor.

 

Use of Proceeds

 

The proceeds from the sale of Series #OJXLW will be used for general working capital, repayment of loans to the company's Managing Member, create a maintenance reserve for the applicable Underlying Asset, pay brokerage commissions to Dalmore, pay offering expenses, and pay the Sourcing Fee.

 

Series Interests outstanding before the offering

 

Series #OJXLW Interest: 10

 

Series Interests outstanding after the offering

 

Series #OJXLW Interest: 2,600

 

 

Broker Fees and Related Party Fees

 

Payment

 

Description

 

Amount

 

Payor

 

Payee

Sourcing Fee

 

No greater than 3% of the maximum offering size.

 

$
7,800.00

 

Series #OJXLW

 

Ark7 Inc.

Asset Management Fee (1)

 

Equal to 15 % of any Free Cash Flows available for distribution pursuant to Article VII of the Operating Agreement.

 

TBD

 

Series #OJXLW

 

Ark7 Inc.

Dalmore Commission

 

1% commission (assuming a fully subscribed offering).

 

$
2,600.00

 

Series #OJXLW

 

Dalmore

Dalmore Fees (2)

 

One-time expense allowance of $5,000, Consulting fees of $20,000

 

$
25,000

 

Ark7 Properties Plus LLC

 

Dalmore

 

____________________

  1. The company notes that this fee may be up to 15% of any Free Cash Flows available for distribution pursuant to Article VII of the Operating Agreement. Whether it is 15% or less will be determined for each Series by the Managing Member in its sole discretion. The Managing Member, Ark7, has determined the Asset Management Fee is 15% for Series #OJXLW.
  2. The company notes that the cumulative fee of $25,000 was paid to Dalmore by Ark7 Properties Plus LLC. The company intends for each current and future Series to pay it a share of $25,000, determined by the Managing Member. Series #OJXLW is responsible for $1,389. Series #OJXLW intends to reimburse Ark7 Properties Plus LLC $1,389 with proceeds from this Offering. In the event that Series #OJXLW does not raise the maximum offering amount, Ark7 Properties Plus LLC will waive the remaining amount owed by Series #OJXLW.

5

 

The Series #ZAUH4 Offering

 

Maximum Offering Amount

 

Up to $ 240,000.00 of Series #ZAUH4 Interests to be acquired pursuant to a Subscription Agreement are being offered on a "best efforts" basis.

 

Minimum Offering Amount

 

None.

 

Price Per Security

 

$ 100.00 per Series #ZAUH4 Interest

 

Minimum Investment

 

One Series Interest per investor.

 

Use of Proceeds

 

The proceeds from the sale of Series #ZAUH4 will be used for general working capital, repayment of loans to the company's Managing Member, create a maintenance reserve for the applicable Underlying Asset, pay brokerage commissions to Dalmore, pay offering expenses, and pay the Sourcing Fee.

 

Series Interests outstanding before the offering

 

Series #ZAUH4 Interest: 10

 

Series Interests outstanding after the offering

 

Series #ZAUH4 Interest: 2,400

 

 

Broker Fees and Related Party Fees

 

Payment

 

Description

 

Amount

 

Payor

 

Payee

Sourcing Fee

 

No greater than 3% of the maximum offering size.

 

$
7,200.00

 

Series #ZAUH4

 

Ark7 Inc.

Asset Management Fee (1)

 

Equal to 15 % of any Free Cash Flows available for distribution pursuant to Article VII of the Operating Agreement.

 

TBD

 

Series #ZAUH4

 

Ark7 Inc.

Dalmore Commission

 

1% commission (assuming a fully subscribed offering).

 

$
2,400.00

 

Series #ZAUH4

 

Dalmore

Dalmore Fees (2)

 

One-time expense allowance of $5,000, Consulting fees of $20,000

 

$
25,000

 

Ark7 Properties Plus LLC

 

Dalmore

 

____________________

  1. The company notes that this fee may be up to 15% of any Free Cash Flows available for distribution pursuant to Article VII of the Operating Agreement. Whether it is 15% or less will be determined for each Series by the Managing Member in its sole discretion. The Managing Member, Ark7, has determined the Asset Management Fee is 15% for Series #ZAUH4.
  2. The company notes that the cumulative fee of $25,000 was paid to Dalmore by Ark7 Properties Plus LLC. The company intends for each current and future Series to pay it a share of $25,000, determined by the Managing Member. Series #ZAUH4 is responsible for $1,389. Series #ZAUH4 intends to reimburse Ark7 Properties Plus LLC $1,389 with proceeds from this Offering. In the event that Series #ZAUH4 does not raise the maximum offering amount, Ark7 Properties Plus LLC will waive the remaining amount owed by Series #ZAUH4.

6

 

The Series #EYPIR Offering

 

Maximum Offering Amount

 

Up to $ 260,000.00 of Series #EYPIR Interests to be acquired pursuant to a Subscription Agreement are being offered on a "best efforts" basis.

 

Minimum Offering Amount

 

None.

 

Price Per Security

 

$ 100.00 per Series #EYPIR Interest

 

Minimum Investment

 

One Series Interest per investor.

 

Use of Proceeds

 

The proceeds from the sale of Series #EYPIR will be used for general working capital, repayment of loans to the company's Managing Member, create a maintenance reserve for the applicable Underlying Asset, pay brokerage commissions to Dalmore, pay offering expenses, and pay the Sourcing Fee.

 

Series Interests outstanding before the offering

 

Series #EYPIR Interest: 10

 

Series Interests outstanding after the offering

 

Series #EYPIR Interest: 2,600

 

 

Broker Fees and Related Party Fees

 

Payment

 

Description

 

Amount

 

Payor

 

Payee

Sourcing Fee

 

No greater than 3% of the maximum offering size.

 

$
7,800.00

 

Series #EYPIR

 

Ark7 Inc.

Asset Management Fee (1)

 

Equal to 15 % of any Free Cash Flows available for distribution pursuant to Article VII of the Operating Agreement.

 

TBD

 

Series #EYPIR

 

Ark7 Inc.

Dalmore Commission

 

1% commission (assuming a fully subscribed offering).

 

$
2,600.00

 

Series #EYPIR

 

Dalmore

Dalmore Fees (2)

 

One-time expense allowance of $5,000, Consulting fees of $20,000

 

$
25,000

 

Ark7 Properties Plus LLC

 

Dalmore

 

____________________

  1. The company notes that this fee may be up to 15% of any Free Cash Flows available for distribution pursuant to Article VII of the Operating Agreement. Whether it is 15% or less will be determined for each Series by the Managing Member in its sole discretion. The Managing Member, Ark7, has determined the Asset Management Fee is 15% for Series #EYPIR.
  2. The company notes that the cumulative fee of $25,000 was paid to Dalmore by Ark7 Properties Plus LLC. The company intends for each current and future Series to pay it a share of $25,000, determined by the Managing Member. Series #EYPIR is responsible for $1,389. Series #EYPIR intends to reimburse Ark7 Properties Plus LLC $1,389 with proceeds from this Offering. In the event that Series #EYPIR does not raise the maximum offering amount, Ark7 Properties Plus LLC will waive the remaining amount owed by Series #EYPIR.

7

 

The Series #5VCTK Offering

 

Maximum Offering Amount

 

Up to $ 275,000.00 of Series #5VCTK Interests to be acquired pursuant to a Subscription Agreement are being offered on a "best efforts" basis.

 

Minimum Offering Amount

 

None.

 

Price Per Security

 

$ 100.00 per Series #5VCTK Interest

 

Minimum Investment

 

One Series Interest per investor.

 

Use of Proceeds

 

The proceeds from the sale of Series #5VCTK will be used for general working capital, repayment of loans to the company's Managing Member, create a maintenance reserve for the applicable Underlying Asset, pay brokerage commissions to Dalmore, pay offering expenses, and pay the Sourcing Fee.

 

Series Interests outstanding before the offering

 

Series #5VCTK Interest: 10

 

Series Interests outstanding after the offering

 

Series #5VCTK Interest: 2,750

 

 

Broker Fees and Related Party Fees

 

Payment

 

Description

 

Amount

 

Payor

 

Payee

Sourcing Fee

 

No greater than 3% of the maximum offering size.

 

$
8,250.00

 

Series #5VCTK

 

Ark7 Inc.

Asset Management Fee (1)

 

Equal to 15 % of any Free Cash Flows available for distribution pursuant to Article VII of the Operating Agreement.

 

TBD

 

Series #5VCTK

 

Ark7 Inc.

Dalmore Commission

 

1% commission (assuming a fully subscribed offering).

 

$
2,750.00

 

Series #5VCTK

 

Dalmore

Dalmore Fees (2)

 

One-time expense allowance of $5,000, Consulting fees of $20,000

 

$
25,000

 

Ark7 Properties Plus LLC

 

Dalmore

 

____________________

  1. The company notes that this fee may be up to 15% of any Free Cash Flows available for distribution pursuant to Article VII of the Operating Agreement. Whether it is 15% or less will be determined for each Series by the Managing Member in its sole discretion. The Managing Member, Ark7, has determined the Asset Management Fee is 15% for Series #5VCTK.
  2. The company notes that the cumulative fee of $25,000 was paid to Dalmore by Ark7 Properties Plus LLC. The company intends for each current and future Series to pay it a share of $25,000, determined by the Managing Member. Series #5VCTK is responsible for $1,389. Series #5VCTK intends to reimburse Ark7 Properties Plus LLC $1,389 with proceeds from this Offering. In the event that Series #5VCTK does not raise the maximum offering amount, Ark7 Properties Plus LLC will waive the remaining amount owed by Series #5VCTK.

8

 

The Series #ET8BV Offering

 

Maximum Offering Amount

 

Up to $ 275,000.00 of Series #ET8BV Interests to be acquired pursuant to a Subscription Agreement are being offered on a "best efforts" basis.

 

Minimum Offering Amount

 

None.

 

Price Per Security

 

$ 100.00 per Series #ET8BV Interest

 

Minimum Investment

 

One Series Interest per investor.

 

Use of Proceeds

 

The proceeds from the sale of Series #ET8BV will be used for general working capital, repayment of loans to the company's Managing Member, create a maintenance reserve for the applicable Underlying Asset, pay brokerage commissions to Dalmore, pay offering expenses, and pay the Sourcing Fee.

 

Series Interests outstanding before the offering

 

Series #ET8BV Interest: 10

 

Series Interests outstanding after the offering

 

Series #ET8BV Interest: 2,750

 

 

Broker Fees and Related Party Fees

 

Payment

 

Description

 

Amount

 

Payor

 

Payee

Sourcing Fee

 

No greater than 3% of the maximum offering size.

 

$
8,250.00

 

Series #ET8BV

 

Ark7 Inc.

Asset Management Fee (1)

 

Equal to 15 % of any Free Cash Flows available for distribution pursuant to Article VII of the Operating Agreement.

 

TBD

 

Series #ET8BV

 

Ark7 Inc.

Dalmore Commission

 

1% commission (assuming a fully subscribed offering).

 

$
2,750.00

 

Series #ET8BV

 

Dalmore

Dalmore Fees (2)

 

One-time expense allowance of $5,000, Consulting fees of $20,000

 

$
25,000

 

Ark7 Properties Plus LLC

 

Dalmore

 

____________________

  1. The company notes that this fee may be up to 15% of any Free Cash Flows available for distribution pursuant to Article VII of the Operating Agreement. Whether it is 15% or less will be determined for each Series by the Managing Member in its sole discretion. The Managing Member, Ark7, has determined the Asset Management Fee is 15% for Series #ET8BV.
  2. The company notes that the cumulative fee of $25,000 was paid to Dalmore by Ark7 Properties Plus LLC. The company intends for each current and future Series to pay it a share of $25,000, determined by the Managing Member. Series #ET8BV is responsible for $1,389. Series #ET8BV intends to reimburse Ark7 Properties Plus LLC $1,389 with proceeds from this Offering. In the event that Series #ET8BV does not raise the maximum offering amount, Ark7 Properties Plus LLC will waive the remaining amount owed by Series #ET8BV.

9

 

Selected Risks

 

The company's business is subject to a number of risks and uncertainties, including those highlighted in the section titled "Risk Factors" immediately following this summary. These risks include, but are not limited to, the following:

 

10

 

RISK FACTORS

 

 

The SEC requires the company to identify risks that are specific to its business and its financial condition. The company is still subject to all the same risks that all companies in its business, and all companies in the economy, are exposed to. These include risks relating to economic downturns, political and economic events and technological developments (such as cyber-attacks and the ability to prevent those attacks). Additionally, early-stage companies are inherently more risky than more developed companies. You should consider general risks as well as specific risks when deciding whether to invest.

 

Risks Relating to the Structure, Operation and Performance of the Company

 

An investment in an offering constitutes only an investment in that Series and not in the company or any Underlying Asset. A purchase of Series Interests in a Series does not constitute an investment in either the company or an Underlying Asset directly, or in any other Series Interest. This results in limited voting rights of the investor, which are solely related to a particular Series, and are further limited by the Series Limited Liability Company Agreement of Ark7 Properties dated March 17, 2022, (the "Operating Agreement") of the company, described further herein. Investors will have limited voting rights. Thus, the Managing Member and the Asset Manager retain significant control over the management of the company, each Series and the Underlying Assets.

 

Furthermore, because the Interests in a Series do not constitute an investment in the company as a whole, holders of the Interests in a Series are not expected to receive any economic benefit from, or be subject to the liabilities of, the assets of any other Series. In addition, the economic interest of a holder in a Series will not be identical to owning a direct undivided interest in an Underlying Asset because, among other things, before distributions are made to the holders, the Asset Manager will receive a fee in respect of its management of the Underlying Asset.

 

Liability of investors between series of interests. The company is structured as a Delaware series limited liability company that issues a separate series of interests for each Underlying Asset. Each series of interests will merely be a separate series and not a separate legal entity. Under the Delaware Limited Liability Company Act (the "LLC Act"), if certain conditions (as set forth in Section 18-215(b) of the LLC Act) are met, the liability of investors holding one series of interests is segregated from the liability of investors holding another series of interests and the assets of one series of interests are not available to satisfy the liabilities of other series of interests.

 

Although this limitation of liability is recognized by the courts of Delaware, there is no guarantee that if challenged in the courts of another U.S. State or a foreign jurisdiction, such courts will uphold a similar interpretation of Delaware corporation law, and in the past certain jurisdictions have not honored such interpretation.

 

If the company's series limited liability company structure is not respected, then investors may have to share any liabilities of the company with all investors and not just those who hold the same series of interests as them. Furthermore, while the company intends to maintain separate and distinct records for each series of interests and account for them separately and otherwise meet the requirements of the LLC Act, it is possible a court could conclude that the methods used did not satisfy Section 18-215(b) of the LLC Act and thus potentially expose the assets of a series to the liabilities of another series of interests. The consequence of this is that investors may have to bear higher than anticipated expenses which would adversely affect the value of their Series Interests, or the likelihood of any distributions being made by a particular Series to its investors.

11

 

In addition, the company is not aware of any court case that has tested the limitations on inter-series liability provided by Section 18-215(b) in federal bankruptcy courts and it is possible that a bankruptcy court could determine that the assets of one series of interests should be applied to meet the liabilities of the other series of interests or the liabilities of the company generally where the assets of such other series of interests or of the company generally are insufficient to meet its liabilities.

 

Each Series Interest will rely on its Managing Member, Ark7 to manage each property. Following the acquisition of any Underlying Asset, the Underlying Asset will be managed by Ark7. In addition, Ark7 will be entitled to certain fees in exchange for its day-to-day operations of each Underlying Asset. Any compensation arrangements will be determined by Ark7 sitting on both sides of the table and will not be an arm's length transaction.

 

If Ark7, the company's Asset Manager, fails to retain its key personnel, the company may not be able to achieve its anticipated level of growth and its business could suffer. The company's future depends, in part, on Ark7's ability to attract and retain key personnel. Its future also depends on the continued contributions of the executive officers and other key personnel of Ark7, each of whom would be difficult to replace.

 

In particular, Yizhen Zhao, who is the Chief Executive Officer of Ark7, is critical to the management of the company's business and operations and the development of its strategic direction. The loss of the services of Mr. Zhao or other executive officers or key personnel of Ark7 and the process to replace any of those key personnel would involve significant time and expense and may significantly delay or prevent the achievement of the company's business objectives.

 

Ark7 Inc. is both the Asset Manager and the Managing Member. Ark7 Inc. is both the Asset Manager and the Managing Member. The Managing Member has appointed the Asset Manager. On balance, Ark7 Inc. controls all of the decisions related to each Series:

 

 

None of the responsibilities and determinations listed above will be made at arm's length and all of these decisions may unjustly financially reward Ark7 to the detriment of each Series and the investors. These conflicts may inhibit or interfere with the sound and profitable operation of the company and much smaller, if any, distributions made to the investors.

 

Further, the fees to be paid to the Managing Member and Asset Manager were determined internally, by the company and Ark7 and the company did not rely on any independent assessment of market rates. Accordingly, the determination of fees was not made at arm's length and may result in (i) smaller distributions made to investors, if any at all, (ii) the interference with the sound and profitable operation of the company and (iii) the fees paid to the Managing Member and Asset Manager may be higher than the fees that would be paid to an unaffiliated third party given the lack of an independent assessment as to the determination of the fees.

12

 

There may be competition for time among the various entities sharing the same management team. Currently, Ark7 is the Managing Member of Ark7 Properties and each series identified under "Series Offering Table" above. Ark7 intends to also be the Managing Member of future Series. It is foreseeable that at certain times the various entities will be competing for time from the management team.

 

There is currently no trading market for the company's securities. There is currently no public trading market for any Series Interests, and an active market may not develop or be sustained. If an active public or private trading market for the Securities does not develop or is not sustained, it may be difficult or impossible for you to resell your Series Interests at any price. Even if a public or private market does develop, the market price could decline below the amount you paid for your Interests.

 

The company has limited operating history for investors to evaluate. The company was recently formed and the Series formed have generated limited revenues and have limited operating history upon which prospective investors may evaluate their performance. Further, the Series included as part of this post-qualification amendment have no operating history at all. No guarantee can be given that the company or any Series Interest will achieve their investment objectives, the value of any Underlying Asset will increase or that any Underlying Asset will be successfully monetized.

 

The company's consolidated financial statements include a going concern opinion. The company's financial statements were prepared on a "going concern" basis. Certain matters, as described in the accompanying financial statements, indicate there may be substantial doubt about the company's ability to continue as a going concern. Specifically, the company is newly formed and has not generated revenue from operations. The company will require additional capital until revenue from operations are sufficient to cover operational costs. Successful development of the company and ultimately the attainment of profitable operations is dependent upon future events including adequate financing, continuous support from Ark7, general and economic conditions on the real estate market and achieving a level of income adequate to support the company's cost structure. Therefore, there is substantial doubt about the ability of the company to continue as a going concern.

 

We may face challenges in securing mortgage financing, particularly in states or with lenders that do not fully recognize or respect the series limited liability company structure, potentially increasing risks to our properties. A series limited liability company structure may not be universally recognized or respected, especially in certain states or by certain lenders. As a result, when seeking mortgage financing, a series within our company may encounter obstacles or limitations due to the lack of recognition of this unique legal framework. In instances where our series LLC structure is not acknowledged, there are potential implications for mortgage transactions. For example, lenders may require our company, rather than the specific series, to act as the borrower and hold title to the property on behalf of the series. This arrangement could complicate matters in the event of default on a loan. If we default on a mortgage secured by a property, there's a risk that the lender may seek to foreclose on other properties held by different series within our company, for which we hold title. This scenario could expose investors to unforeseen liabilities and risks beyond those associated with the specific series in which they have invested.

13

 

A series may encounter difficulties in securing financing on favorable terms or even securing financing at all, potentially hindering its ability to pursue growth opportunities and meet financial obligations. In the pursuit of growth and expansion, a series may seek additional capital through debt financing from various sources. However, securing financing may prove challenging, especially if favorable terms cannot be negotiated or if financing options are limited or unavailable. Should financing be obtained, it may come with unfavorable terms, including high interest rates, stringent repayment terms, or restrictive covenants. These covenants may limit a series' ability to take certain actions, such as incurring additional debt, making capital expenditures, or paying dividends to investors. Such restrictions could potentially constrain the series' operational flexibility and hinder its ability to execute its business strategies effectively. Furthermore, the availability of additional debt financing may be subject to market conditions, timing constraints, and the financial health of the series. In cases where financing is not readily accessible, a series may face challenges in pursuing growth initiatives, acquiring new properties, or meeting existing financial obligations. This could have adverse implications for the series' ability to generate returns for investors and distribute dividends.

 

A series that initially purchases a property outright but later decides to finance it may face increased risks related to its ability to meet debt service obligations, potentially impacting its financial condition, cash flow, and ability to distribute dividends to investors. Additionally, properties acquired without financing have a different risk profile compared to those acquired with mortgage financing. Properties with financing must meet debt service obligations, and any inability to do so could adversely affect a series' financial condition, results of operations, cash flow, market value of its interests, and its ability to make distributions to investors.

 

Under our leverage policy, a series may extend loans to the asset manager, either directly or indirectly secured by other real estate properties. However, changes in the market or operational failures by the asset manager may pose risks for the series in collecting these debt assets. In the event of market fluctuations or operational failures by the asset manager, there's a risk that the series may encounter difficulties in collecting these debt assets. Market changes, such as declines in property values or shifts in rental demand, could impact the asset manager's ability to fulfill its obligations under the loan agreements. Similarly, operational failures or mismanagement by the asset manager could further exacerbate these risks, potentially leading to delays or defaults in loan repayments.

14

 

Risks Relating to the Offering

 

The company may not raise sufficient funds to achieve its business objectives. There is no minimum amount required to be raised before the company can accept your subscription for the Series Interests, and it can access the funds immediately. The company may not raise an amount sufficient for it to meet all of its objectives. Once the company accepts your investment funds, there will be no obligation to return your funds. Even if other Series Interests are sold, there may be insufficient funds raised through this offering to cover the expenses associated with the offering or complete development and implementation of the company's operations. The lack of sufficient funds to pay expenses and for working capital will negatively impact the company's ability to implement and complete its planned use of proceeds.

 

The company's management has full discretion as to the use of proceeds from the offering. The company presently anticipates that the net proceeds from the offering will be used by us as general working capital, repayment of outstanding loans, loans to the company's Managing Member and the creation of a maintenance reserve account for the applicable Underlying Asset. The company reserves the right, however, to use the funds from the offering for other purposes not presently contemplated herein but which are related directly to growing its current business. As a result of the foregoing, purchasers of the Series Interests hereby will be entrusting their funds to the company's management, upon whose judgment and discretion the investors must depend, with only limited information concerning management's specific intentions.

 

If the company does not raise the maximum offering amount, the Series will have to service the debt to a related party, Ark7, pursuant to the intercompany loan agreement and Asset Management Agreement. The company presently anticipates that the net proceeds from the offering will be used first to repay the intercompany loan to Ark7 before making improvements to the property of funding an operating reserve account for future maintenance of the applicable Underlying Asset. The company reserves the right, however, to use the funds from the offering for other purposes not presently contemplated herein but which are related directly to growing its current business. As a result of the foregoing, purchasers of the Series Interests hereby will be entrusting their funds to the company's management, upon whose judgment and discretion the investors must depend, with only limited information concerning management's specific intentions.

 

If the company does not raise the maximum offering amount, the Series will not be able to fund the operating reserve or fund planned renovations. In the event that the company does not raise the maximum offering amount, the Series will not be able to fund the operating reserve or fund the planned renovations. Without an operating reserve or funds for planned renovations, the company may not have cash available on hand to make required repairs or renovations. This could negatively impact our ability to lease the property, thereby harming the financial position of the Series.

 

The purchase prices for the Series Interests have been arbitrarily determined. The purchase price for the Series Interests has been arbitrarily determined by the company and bears no relationship to the company's assets, book value, earnings or other generally accepted criteria of value. In determining pricing, the company considered factors such as the company's limited financial resources, the nature of its assets, estimates of its business potential, the degree of equity or control desired to be retained by the existing interest holders and general economic conditions.

15

 

If the company does not successfully dispose of real estate assets, you may have to hold your investment for an indefinite period. The determination of whether to dispose of the Underlying Asset is entirely at the discretion of the company. Even if the company decides to dispose of an Underlying Asset, the company cannot guarantee that it will be able to dispose of the Underlying Asset at a favorable price to investors.

Competition with other parties entering real estate investment business may reduce the company's profitability. There are and will be other entities engaged in real estate investment, including financial institutions, many of which have greater resources than the company does. Larger entities may enjoy significant competitive advantages that result from, among other things, a lower cost of capital and built-in client base. Such competition could make it more difficult to obtain future funding, which could affect the company's growth as a company.

 

The company does not intend to hire an escrow agent and there will be no escrow account, therefore there is no independent third-party holding investors funds until they are released to the company. Typically, the escrow agent retains custody of the assets such as cash, until certain conditions are met, at which time those assets are released to the company. In this offering the company has not retained an escrow agent and there will be no escrow account, therefore investors may be subject to increased administrative risk as additional administrative burdens will be placed on the company who may or may not have the expertise to administer the escrow seamlessly.

16

 

Risks Related to Taxation

 

Changes in Federal tax laws may have adverse or unexpected effects on our investors. The Internal Revenue Code (the "Code") is subject to change by Congress, and interpretations of the Code may be modified or affected by judicial decisions, by the Treasury Department through changes in regulations and by the Internal Revenue Service through its audit policy, announcements, and published and private rulings. Although significant changes to the tax laws historically have been given prospective application, no assurance can be given that any changes made in the tax law affecting an investment in any Series of the Company would be limited to prospective effect. For instance, prior to effectiveness of the Tax Cuts and Jobs Act of 2017, an exchange of the Shares of one Series for another might have been a non-taxable 'like-kind exchange' transaction, while transactions now only qualify for that treatment with respect to real property. Accordingly, the ultimate effect on an Investor's tax situation may be governed by laws, regulations or interpretations of laws or regulations which have not yet been proposed, passed or made, as the case may be.

 

Each series within Ark7 Properties Plus LLC will strive to qualify as Real Estate Investment Trusts (REITs). However, in the event of failure to qualify as REITs, investors may face increased tax liabilities. As part of our investment strategy, each series endeavors to qualify as a Real Estate Investment Trust (REIT). REIT status offers significant tax advantages, including exemption from corporate income taxes at the entity level, provided certain criteria are met. These criteria typically include distributing at least 90% of taxable income to shareholders as dividends, investing primarily in real estate assets, and adhering to other regulatory requirements outlined in the Internal Revenue Code. However, failure to qualify as a REIT could have adverse tax implications for investors. Without REIT status, the series would be subject to corporate income taxes at the entity level, potentially reducing overall returns for investors. Additionally, investors may face taxation on dividends received from the series at higher ordinary income tax rates, rather than the favorable tax treatment typically afforded to REIT dividends.

17

 

Risk Factors Related to the Real Estate Market

 

The company's real estate and real estate-related assets will be subject to the risks typically associated with real estate. The properties the company acquires will be subject to the risks typically associated with real estate. The value of real estate may be adversely affected by a number of risks, including:

 

 

The value of each property is directly related to its ability to generate cash flow and net income, which in turn depends on the amount of rental or other income that can be generated net of expenses required to be incurred with respect to the property. Many expenditures associated with properties (such as operating expenses and capital expenditures) cannot be reduced when there is a reduction in income from the properties.

 

The underlying value and performance of any real estate asset will fluctuate with general and local economic conditions. The successful operation of any real estate asset is significantly related to general and local economic conditions. Periods of economic slowdown or recession, significantly rising interest rates, declining employment levels, decreasing demand for real estate, declining real estate values, or the public perception that any of these events may occur, can result in reductions in the underlying value of any asset and result in poor economic performance. In such cases, investors may lose the full value of their investment, or may not experience any distributions from the real estate asset.

 

The market in which the company participates is competitive and, if it does not compete effectively, its operating results could be harmed. The company competes with many other entities engaged in real estate acquisition and operating activities, including but not limited to individuals, corporations, bank and insurance company investment accounts, real estate investment trusts, and private real estate funds. This market is competitive and rapidly changing. The company expects competition to persist and intensify in the future, which could harm its ability to acquire properties on terms that investors find to be reasonable.

 

An Underlying Asset that has significant vacancies could be difficult to sell, which could diminish the return on the Underlying Asset. An Underlying Asset 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, the company may suffer reduced revenues resulting in less cash available for distribution to its investors. In addition, the resale value of the Underlying Asset could be diminished because the market value of each Underlying Asset will depend principally upon the value of the cash flow generated by the leases associated with that Underlying Asset. Such a reduction in the resale value of a property could also reduce the value of investor interests.

18

 

The company may decide to sell an Underlying Asset which could conflict with an investor's interests. Ark7, the Managing Member, may determine when to sell any Underlying Asset at any time in accordance with the management rights afforded to the Managing Member. Investors will not have a say in this decision. The timing and decision to sell an Underlying Asset may conflict with investors personal interests, beliefs or theories regarding the real estate market. Further, it is possible the sale was not done at an optimal time. In any case, investors would not have any cause of action against the company or Managing Member for such sales.

 

Property taxes could increase due to property tax rate changes or reassessment, which could impact our financial condition, results of operations and cash flow. Each series will be required to pay state and local taxes on its property. The real property taxes on our properties may increase as property tax rates change or as our properties are assessed or reassessed by taxing authorities. If the property taxes we pay increase, our financial condition, results of operations, cash flow, the value of our interests and our ability to satisfy our principal and interest obligations and to make distributions to our investors could be adversely affected.

 

A decline in general economic conditions in the markets in which each Underlying Asset is located or in the United States generally could lead to an increase in tenant defaults, lower rental rates and less demand for commercial real estate space in those markets. As a result of these trends, the company may be more inclined to provide leasing incentives to its tenants in order to compete in a more competitive leasing environment. Such trends may result in reduced revenue and lower resale value of properties, which may reduce your return.

 

Lawsuits may arise between the company and its tenants resulting in lower cash distributions to investors. Disputes between landlords and tenants are common. These disputes may escalate into legal action from time to time. In the event a lawsuit arises between the company and a tenant it is likely that the company will see an increase in costs. Accordingly, cash distributions to investors may be affected.

 

Costs imposed pursuant to governmental laws and regulations may reduce the company's net income and the cash available for distributions to its investors. Real property and the operations conducted on real property are subject to federal, state and local laws and regulations relating to protection of the environment and human health. The company could be subject to liability in the form of fines, penalties, or damages for noncompliance with these laws and regulations. These laws and regulations generally govern wastewater discharges, air emissions, the operation and removal of underground and above-ground storage tanks, the use, storage, treatment, transportation and disposal of solid and hazardous materials, the remediation of contamination associated with the release or disposal of solid and hazardous materials, the presence of toxic building materials and other health and safety-related concerns. Some of these laws and regulations may impose joint and several liability on the tenants, owners, or operators of real property for the costs to investigate or remediate contaminated properties, regardless of fault, whether the contamination occurred prior to purchase, or whether the acts causing the contamination were legal. Activities of the company's tenants, the condition of properties at the time the company buys them, operations in the vicinity of its properties, such as the presence of underground storage tanks, or activities of unrelated third parties may affect its properties. The presence of hazardous substances, or the failure to properly manage or remediate these substances, may hinder the company's ability to sell, rent or pledge such property as collateral for future borrowings. Any material expenditures, fines, penalties or damages the company must pay will reduce its ability to make distributions and may reduce the value of your investment.

19

 

The costs of defending against claims of environmental liability, of complying with environmental regulatory requirements, of remediating any contaminated property or of paying personal injury or other damage claims could reduce the amounts available for distribution to the company's investors. Under various federal, state and local environmental laws, ordinances and regulations, a current or previous real property owner or operator may be liable for the cost of removing or remediating hazardous or toxic substances on, under or in such property. These costs could be substantial. Such laws often impose liability whether the owner or operator knew of, or was responsible for, the presence of such hazardous or toxic substances. Environmental laws also may impose liens on property or restrictions on the manner in which property may be used or businesses may be operated, and these restrictions may require substantial expenditures or prevent us from entering into leases with prospective tenants that may be impacted by such laws. Environmental laws provide for sanctions for noncompliance and may be enforced by governmental agencies or, in certain circumstances, by private parties. Certain environmental laws and common law principles could be used to impose liability for the release of and exposure to hazardous substances, including asbestos-containing materials and lead-based paint. Third parties may seek recovery from real property owners or operators for personal injury or property damage associated with exposure to released hazardous substances and governments may seek recovery for natural resource damage. The costs of defending against claims of environmental liability, of complying with environmental regulatory requirements, of remediating any contaminated property, or of paying personal injury, property damage or natural resource damage claims could reduce the amounts available for distribution to you.

 

Costs associated with complying with the Americans with Disabilities Act may decrease cash available for distributions. Each Underlying Asset may be subject to the Americans with Disabilities Act of 1990, as amended, or the ADA. Under the ADA, all places of public accommodation are required to comply with federal requirements related to access and use by disabled persons. The ADA has separate compliance requirements for "public accommodations" and "commercial facilities" that generally require that buildings and services be made accessible and available to people with disabilities. The ADA's requirements could require removal of access barriers and could result in the imposition of injunctive relief, monetary penalties or, in some cases, an award of damages. Any funds used for ADA compliance will reduce the company's net income and the amount of cash available for distributions to investors.

 

Uninsured losses relating to real property or excessively expensive premiums for insurance coverage could reduce the company's cash flows and the return on investment. There are types of losses, generally catastrophic in nature, such as losses due to wars, acts of terrorism, earthquakes, floods, hurricanes, pollution, or environmental matters, that are uninsurable or not economically insurable, or may be insured subject to limitations, such as large deductibles or co-payments. Insurance risks associated with potential acts of terrorism could sharply increase the premiums the company pays for coverage against property and casualty claims. Additionally, to the extent the company finances the acquisition of an Underlying Asset, mortgage lenders in some cases insist that commercial property owners purchase coverage against terrorism as a condition for providing mortgage loans. Such insurance policies may not be available at reasonable costs, if at all, which could inhibit the company's ability to finance or refinance its properties if so required. In such instances, the company may be required to provide other financial support, either through financial assurances or self-insurance, to cover potential losses. The company may not have adequate coverage for such losses. If any of the properties incur a casualty loss that is not fully insured, the value of the assets will be reduced by any such uninsured loss, which may reduce the value of investor interests. In addition, other than any working capital reserve or other reserves the company may establish, the company has no additional sources of funding to repair or reconstruct any uninsured property. Also, to the extent the company must pay unexpectedly large amounts for insurance, it could suffer reduced earnings that would result in lower distributions to investors.

20

 

Risks Related to Forum Selection and Jury Waivers

 

The company's Operating Agreement and applicable Series Interest Subscription Agreement each include a forum selection provision, that requires disputes be resolved in state or federal courts in the State of California, under Delaware law, regardless of convenience or cost to you, the investor, which could result in less favorable outcomes to the plaintiff(s) in any action against our company.

 

Operating Agreement: Our Series Limited Liability Company Agreement of Ark7 Properties Plus LLC (the "Operating Agreement") includes a forum selection provision that requires any suit, action, or proceeding seeking to enforce any provision of or based on any matter arising out of or in connection with the Operating Agreement, or the transactions contemplated thereby be brought in state or federal court of competent jurisdiction located within the State of California.

 

This forum selection provision may limit investors' ability to bring claims in judicial forums that they find favorable to such disputes and may discourage lawsuits with respect to such claims. 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. We believe 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 may not be used to bring actions in state courts for 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. Investors will not be deemed to have waived the company's compliance with the federal securities laws and the rules and regulations thereunder.

 

Subscription Agreement: Our applicable Series Interest Subscription Agreement for each manner of investing and class of security includes a forum selection provision that requires any suit, action, or proceeding arising from the applicable Series Interest Subscription agreement be brought in a state of federal court of competent jurisdiction located within the State of California. This forum selection provision may limit investors' ability to bring claims in judicial forums that they find favorable to such disputes and may discourage lawsuits with respect to such claims. 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. We believe 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 may not be used to bring actions in state courts for 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. Investors will not be deemed to have waived the company's compliance with the federal securities laws and the rules and regulations thereunder.

 

Investors in this offering may not be entitled to a jury trial with respect to claims arising under the applicable Series Interest Subscription Agreement, or Operating Agreement which could result in less favorable outcomes to the plaintiff(s) in any action under these Agreements. Investors in this offering will be bound by the applicable Series Interest Subscription Agreement and the Operating Agreement, both of which include a provision under which investors waive the right to a jury trial of any claim they may have against the company arising out of or relating to this agreement. By signing these agreements, the investor warrants that the investor has reviewed this waiver with his or her legal counsel, and knowingly and voluntarily waives the investor's jury trial rights following consultation with the investor's legal counsel.

21

 

If the company opposed a jury trial demand based on the waiver, a court would determine whether the waiver was enforceable based on the facts and circumstances of that case in accordance with the applicable state and federal law. To the company's knowledge, the enforceability of a contractual pre-dispute jury trial waiver in connection with claims arising under the federal securities laws has not been finally adjudicated by a federal court. However, the company believes that a contractual pre-dispute jury trial waiver provision is generally enforceable, including under the laws of the State of Delaware, which governs the applicable Series Interest Subscription Agreement. In determining whether to enforce a contractual pre-dispute jury trial waiver provision, courts will generally consider whether the visibility of the jury trial waiver provision within an agreement is sufficiently prominent such that a party knowingly, intelligently, and voluntarily waived the right to a jury trial. The company believes that this is the case with respect to the applicable Series Interest Subscription Agreement. You should consult legal counsel regarding the jury waiver provision before entering into the applicable Series Interest Subscription Agreement.

 

If you bring a claim against the company in connection with matters arising under the applicable Series Interest Subscription Agreement or Operating Agreement, including claims under the federal securities laws, you may not be entitled to a jury trial with respect to those claims, which may have the effect of limiting and discouraging lawsuits against the company. If a lawsuit is brought against the company under one of those agreements, it may be heard only by a judge or justice of the applicable trial court, which would be conducted according to different civil procedures and may result in different outcomes than a trial by jury would have had, including results that could be less favorable to the plaintiff(s) in such an action.

 

Nevertheless, if the jury trial waiver provision is not permitted by applicable law, an action could proceed under the terms of the applicable Series Interest Subscription Agreement or Operating Agreement with a jury trial. No condition, stipulation or provision of the applicable Series Interest Subscription Agreement or Operating Agreement serves as a waiver by any holder of the company's securities or by the company of compliance with any substantive provision of the federal securities laws and the rules and regulations promulgated under those laws.

 

In addition, when the units are transferred, the transferee is required to agree to all the same conditions, obligations, and restrictions applicable to the units or to the transferor with regard to ownership of the units, that were in effect immediately prior to the transfer of the units, including the applicable Series Interest Subscription Agreement and the Operating Agreement.

22

 

Risks Related to Covid-19

 

Actual or threatened epidemics, pandemics, outbreaks, or other public health crises may adversely affect the company's business. The company's business could be materially and adversely affected by the risks, or the public perception of the risks, related to an epidemic, pandemic, outbreak, or other public health crisis, such as the recent outbreak of novel coronavirus, or COVID-19. The risk, or public perception of the risk, of a pandemic or media coverage of infectious diseases could adversely affect the value of the Common Stock and the financial condition of the company's investors or prospective investors, resulting in reduced demand for the Common Stock generally. "Shelter-in-place" or other such orders by governmental entities could also disrupt the company's operations, if employees, who cannot perform their responsibilities from home, are not able to report to work.

23

 

DILUTION

 

 

Dilution means a reduction in value, control, or earnings of the units the investor owns.

 

As of the date of this Offering Circular, Ark7 owns 100% of the company's membership interests. Those membership interests are not connected to any specific Series Interest. Investors in this offering will be acquiring Series interests for the Series included on the cover page to this offering circular. The economic rights of each Series Interest will be based on the corresponding Underlying Asset. As such, investors will not experience dilution except as a result of the sale of additional interests of the Series to which they have subscribed.

24

 

PLAN OF DISTRIBUTION

 

 

As described below the company is offering up to a certain amount of units of each series at a price described below per series interest. There is no minimum investment amount, however each investor much purchase at least one series interest.

 

Series

 

Maximum Number of Units Offered per Series

 

Price per Interest

 

Minimum Investment

Series #DIVTU

 

3,050

 

$
100

 

One Series Interest per investor.

Series #OJXLW

 

2,600

 

$
100

 

One Series Interest per investor.

Series #ZAUH4

 

2,400

 

$
100

 

One Series Interest per investor.

Series #EYPIR

 

2,600

 

$
100

 

One Series Interest per investor.

Series #5VCTK

 

2,750

 

$
100

 

One Series Interest per investor.

Series #ET8BV

 

2,750

 

$
100

 

One Series Interest per investor.

 

The company plans to market the securities directly on a "best efforts" basis. The company intends to use its website and apps to offer the Series Interests to eligible investors. The company's officers, directors, employees, and advisors may participate in the offering. When applicable, the company intends to prepare written materials and respond to investors after the investors initiate contact with the company, however the company's officers, directors, employees and advisors will not orally solicit investors. As of the date of this Offering Circular the company has not prepared any written materials.

 

The Offering Circular will be furnished to prospective investors in this offering via download 24 hours a day, 7 days a week on the company's website www.ark7.com. Prospective investors may subscribe for the company units in this offering only through the website. In order to subscribe to purchase our interests, a prospective investor must electronically complete, sign and deliver to us an executed subscription agreement like the one attached to this Offering Statement, of which this Offering Circular is part, as Exhibit 4.1 and wire funds for its subscription amount in accordance with the instructions provided therein.

 

We reserve the right to reject any investor's subscription in whole or in part for any reason, including if we determine in our sole and absolute discretion that such investor is not a "qualified purchaser" for purposes of Section 18(b)(4)(D)(ii) of the Securities Act, or for other factors such as, but not limited to, investors providing incorrect payment information, or the investor not satisfying AML/KYC screening criteria of the Broker. If the offering terminates or if any prospective investor's subscription is rejected, all funds received from such investors will be returned without interest or deduction.

 

Further, pursuant to section 6 in the applicable Series Interest Subscription Agreement, the subscriptions are irrevocable by the investor.

 

After each closing, funds tendered by investors will be available to the company for its use.

 

The offering will terminate at the earlier of (i) the date at which the maximum offering amount has been sold, (ii) the date at which the offering is earlier terminated by the company, in its sole discretion or (iii) the date that is three years from this offering being qualified by the SEC.

 

The company is conducting a continuous offering, in which it intends to accept investor funds until the offering is terminated. As there is no minimum, the company may, in its sole discretion, undertake one or more closings on a rolling basis, regardless of the amount of funds, and intends to affect a close every 7 business days and, after each closing, funds tendered by investors will be available to the company, and interests will be issued to investors. The initial closing will occur as soon as funds clear. We expect to hold subsequent closings every 7 business days. Assuming additional information does not need to be provided for due diligence (AML/KYC) and the investment has been funded it will take up to 3 business days to determine whether a subscription agreement has been accepted or rejected. In the event additional information is required from the subscriber, within 3 business days, the company will reach out to the subscriber for that information.

 

Each closing involves administrative burden to the company, and so the company intends to use periodic closings to reduce that burden, allowing the company to place more focus on its real estate operations.

25

 

As noted above, the company intends to effect closings every 7 days, but may undertake additional closings upon considering certain factors, such as:

 

 

The company has also engaged Dalmore Group, LLC ("Dalmore") a broker-dealer registered with the SEC and a member of FINRA, to perform the following administrative and compliance related functions in connection with this offering, but not for underwriting or placement agent services:

 

 

As compensation for the services listed above, the company has agreed to pay Dalmore a commission equal to 1% of the amount raised in the offering, $5,060, to support the offering on all newly invested funds after the issuance of a No Objection Letter by FINRA.

 

Series

 

Offering Amount

 

1% Owed to Dalmore

Series #DIVTU

 

$
305,000

 

$
3,050

Series #OJXLW

 

$
260,000

 

$
2,600

Series #ZAUH4

 

$
240,000

 

$
2,400

Series #EYPIR

 

$
260,000

 

$
2,600

Series #5VCTK

 

$
275,000

 

$
2,750

Series #ET8BV

 

$
275,000

 

$
2,750

Total Amount Owed to Dalmore

 

 

 

$
16,150

 

In addition, the company has paid Dalmore a $5,000 one-time advance expense allowance to cover reasonable out-of-pocket accountable expenses anticipated to be incurred by Dalmore in connection with this offering. Dalmore will refund any amount related to this expense allowance to the extent it is not used, incurred, or provided to the company. The company has also agreed to pay Dalmore a one-time consulting fee of $20,000 to provide ongoing general consulting services relating to this offering such as coordination with third party vendors and general guidance with respect to the offering, which will be due and payable within 30 days after this offering is qualified by the SEC and the receipt of a No Objection Letter from FINRA. Assuming the offering is fully subscribed, the company estimates that total fees due to pay Dalmore, including the one-time advance expense allowance fee of $5,000 and consulting fee of $20,000, would be $41,150.

26

 

Selling Security holders

 

No securities are being sold for the account of security holders; all net proceeds of this offering will go to the company.

 

Transfer Agent

 

The company has engaged Vertalo as its transfer agent.

 

Process of Subscribing

 

After the offering Statement has been qualified by the Commission, the company will accept tenders of funds to purchase the Series Interests.

 

Investors will be required to complete an applicable Series Interest Subscription Agreement in order to invest. The applicable Series Interest Subscription Agreement includes a representation by the investor to the effect that, if the investor is not an "accredited investor" as defined under securities law, the investor is investing an amount that does not exceed the greater of 10% of their annual income or 10% of their net worth (excluding the investor's principal residence).

 

To subscribe for the Series Interests, each prospective investor must:

 

  1. Go to https://www.ark7.com, complete user registration;
  2. Complete profile setup and link a bank account;
  3. Navigate to open prospective offering page, click on the "Buy" button; that will open the subscribe panel;
  4. Complete subscribe information and review and sign the applicable Series Interest Subscription Agreement;
  5. Based on your account status, the company may ask an Investor to provide identification or accreditation proof documents before accepting the subscription.

 

Any potential investor will have ample time and is advised to review the applicable Series Interest Subscription Agreement, along with their counsel, prior to making any final investment decision.

 

The company may close on investments on a "rolling" basis (so not all investors will receive their Series Interests on the same date). Investors may subscribe by tendering funds by check, wire transfer, or ACH transfer to the segregated account controlled by the company until the company has accepted the investor's subscription. Assuming additional information does not need to be provided for due diligence (AML/KYC) and the investment has been funded it will take up to 3 business days to determine whether a subscription agreement has been accepted or rejected. In the event additional information is required from the subscriber, within 3 business days, the company will reach out to the subscriber for that information.

 

Upon closing, funds tendered by investors will be made available to the company for its use. The company has the right to refuse to sell the Series Interests to any prospective investor or for any reason in its sole discretion, including, without limitation, if such prospective investor does not promptly supply all information requested by the company in connection with such prospective investor subscription.

27

 

In addition, in the company's sole discretion, it may establish a limit on the purchase of Series Interests by particular prospective investors. The following limits have been established for the Series Interests as set forth in their respective Series Designations:

 

Series

 

Limit (A prospective investor may not purchase more than the amount set forth below).

 

Application of the Purchase Limit

Series #WGI3Z

 

19.9%

 

All investors are subject to this limit

Series #0XYT6

 

19.9%

 

All investors are subject to this limit

Series #ZIE3T

 

19.9%

 

All investors are subject to this limit

Series #JTDXY

 

19.9%

 

All investors are subject to this limit

Series #FTWDS

 

19.9%

 

All investors are subject to this limit

Series #P7FJ5

 

19.9%

 

All investors are subject to this limit

Series #WRA7O

 

19.9%

 

All investors are subject to this limit

Series #SOV9W

 

19.9%

 

All investors are subject to this limit

Series #QGXF0

 

19.9%

 

All investors are subject to this limit

Series #RPFUV

 

19.9%

 

All investors are subject to this limit

Series #NHMOP

 

19.9%

 

All investors are subject to this limit

Series #ORHOF

 

19.9%

 

All investors are subject to this limit

Series #DIVTU

 

19.9%

 

All investors are subject to this limit

Series #OJXLW

 

19.9%

 

All investors are subject to this limit

Series #ZAUH4

 

19.9%

 

All investors are subject to this limit

Series #EYPIR

 

19.9%

 

All investors are subject to this limit

Series #5VCTK

 

19.9%

 

All investors are subject to this limit

Series #ET8BV

 

19.9%

 

All investors are subject to this limit

 

No Escrow

 

The company has not established an escrow account or hired an escrow agent to hold funds tendered by investors. Funds will be held in a segregated account controlled by the company until the company has accepted the investor's subscription. At that time, those funds will be available to the company.

28

 

Forum Selection Provision

 

The applicable Series Interest Subscription Agreement that investors will execute in connection with the offering includes a forum selection provision that requires any claims against the company based on the Agreement to be brought in a state or federal court of competent jurisdiction in the State of California for the purpose of any suit, action or other proceeding arising out of or based upon the Agreement. Although the company believes the provision benefits us by providing increased consistency in the application of Delaware law in the types of lawsuits to which it applies and in limiting the company's 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 and may discourage lawsuits with respect to such claims. The company has adopted the provision to limit the time and expense incurred by its management to challenge any such claims. As a company with a small management team, this provision allows its officers to not lose a significant amount of time traveling to any particular forum so they may continue to focus on operations of the company. 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. The 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 may not be used to bring actions in state courts for 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. Investors will not be deemed to have waived the company's compliance with the federal securities laws and the rules and regulations thereunder.

 

Jury Trial Waiver

 

The applicable Series Interest Subscription Agreement that investors will execute in connection with the offering provides that subscribers waive the right to a jury trial of any claim they may have against us arising out of or relating to the Agreement, including any claim under federal securities laws. By signing the applicable Series Interest Subscription Agreement, an investor will warrant that the investor has reviewed this waiver with the investor's legal counsel, and knowingly and voluntarily waives his or her jury trial rights following consultation with the investor's legal counsel. If the company opposed a jury trial demand based on the waiver, a court would determine whether the waiver was enforceable given the facts and circumstances of that case in accordance with applicable case law. In addition, by agreeing to the provision, subscribers will not be deemed to have waived the company's compliance with the federal securities laws and the rules and regulations promulgated thereunder.

29

 

USE OF PROCEEDS TO ISSUER

 

 

Series #DIVTU

 

Assuming a maximum raise of $305,000.00 and after deducting the estimated offering expenses of $18,750.00 in fees to Dalmore, auditor fees, legal fees, Edgarization fees and blue-sky filing fees, the net proceeds of this Series #DIVTU Interests offering would be approximately $289,300.00. The table below sets forth the uses of proceeds of the company's Series #DIVTU Interests.

 

Uses

 

Amount Funded from the Offering

 

Percent of Gross Proceeds

Brokerage Commissions

 

$
3,050.00

 

1.0%

Purchase Price of Property (1)

 

$
210,000.00

 

68.9%

Property Purchase Expenses (1)

 

$
12,660.42

 

4.2%

Offering Expenses (2)

 

$
15,700.00

 

5.1%

Sourcing Fee (3)

 

$
9,150.00

 

3.0%

Property Improvements/Capital Expenditures

 

$
50,000.00

 

16.4%

Operating Reserve

 

$
4,439.58

 

1.5%

Total Proceeds

 

$
305,000.00

 

100.0%

_________________________________________

  1. Series #DIVTU acquired the property from a third-party seller on January 8, 2024, for $210,000.00, also incurring purchase expenses in the amount of $12,660.42 covering title fees, inspection fees, agent fees, interests, property transfer tax, notarization fees, and recording fees. The Managing Member made an intercompany loan to Series #DIVTU in the amount of $222,660.42. These funds were used for acquisition of the property and expenses related to that purchase. The intercompany loan accrues interest on the unpaid principal at a rate of 10.0% per annum, calculated semi-annually, beginning December 1, 2023, and is to be repaid in full by November 30, 2024. Series #DIVTU may prepay the loan but will be obligated to pay at least 3.0% in interest payments on the principal, which would be paid out of revenues generated by the property and not out of proceeds of the offering.
  2. Offering expenses, other than brokerage commissions, include the following: (i) $25,000 in fees payable to Dalmore, (ii) $59,800 in audit fees, (iii) $43,000 in legal fees, (iv) $13,000 in Edgarization fees and (v) $12,000 in blue sky filing fees. The company notes that this total amount equals $127,800. The company intends for Series #DIVTU to be responsible for only up to $15,700.00 of offering expenses, with the Managing Member responsible for the remainder, without reimbursement by Series #DIVTU.
  3. Represents a fee payable to the Asset Manager in connection with the search and negotiation of the property purchase as set forth in the Certificate of Designations for the Series (the "Sourcing Fee").

 

Assuming a maximum raise of $305,000.00 and after deducting the estimated offering expenses of $15,700.00, together with the remaining balance of $0.00, the net proceeds of this Series #DIVTU Interests offering would be approximately $289,300.00. The company intends to use the remaining $289,300.00 as follows, in order of priority:

 

 

In the event the proceeds from this Offering are insufficient to repay the intercompany loan, pay brokerage commissions, or fund the Sourcing Fee, the Managing Member, Ark7 intends to be responsible for the remainder, without reimbursement by Series #DIVTU.

 

However, in the event that the company does not raise the maximum offering amount, the Series will not be able to fund the operating reserve or fund the planned renovations. Without an operating reserve or funds for planned renovations, the company may not have cash available on hand to make required repairs or renovations. This could negatively impact our ability to lease the property, thereby harming the financial position of the Series.

 

The company reserves the right to change the above use of proceeds if management believes it is in the best interests of the company.

 

For further discussion, see the section entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations-Plan of Operations."

 

In addition, no payments will be used to pay directors. In the company's sole discretion, management fees may be incurred.

30

 

Series #OJXLW

 

Assuming a maximum raise of $260,000.00 and after deducting the estimated offering expenses of $16,800.00 in fees to Dalmore, auditor fees, legal fees, Edgarization fees and blue-sky filing fees, the net proceeds of this Series #OJXLW Interests offering would be approximately $249,287.50. The table below sets forth the uses of proceeds of the company's Series #OJXLW Interests.

 

Uses

 

Amount Funded from the Offering

 

Percent of Gross Proceeds

Brokerage Commissions

 

$
2,600.00

 

1.0%

Purchase Price of Property (1)

 

$
217,334.00

 

83.6%

Property Purchase Expenses (1)

 

$
9,178.50

 

3.5%

Offering Expenses (2)

 

$
14,200.00

 

5.5%

Sourcing Fee (3)

 

$
7,800.00

 

3.0%

Property Improvements/Capital Expenditures

 

$
5,000.00

 

1.9%

Operating Reserve

 

$
3,887.19

 

1.5%

Total Proceeds

 

$
260,000.00

 

100.0%

_________________________________________

  1. Series #OJXLW acquired the property from a third-party seller on April 18, 2024, for $217,334.00, also incurring purchase expenses in the amount of $9,178.50 covering title fees, inspection fees, agent fees, interests, property transfer tax, notarization fees, and recording fees. The Managing Member made an intercompany loan to Series #OJXLW in the amount of $230,000.00. These funds were used for acquisition of the property and expenses related to that purchase. The intercompany loan accrues interest on the unpaid principal at a rate of 10.0% per annum, calculated semi-annually, beginning April 18, 2024, and is to be repaid in full by April 17, 2025. Series #OJXLW may prepay the loan but will be obligated to pay at least 3.0% in interest payments on the principal, which would be paid out of revenues generated by the property and not out of proceeds of the offering.
  2. Offering expenses, other than brokerage commissions, include the following: (i) $25,000 in fees payable to Dalmore, (ii) $59,800 in audit fees, (iii) $43,000 in legal fees, (iv) $13,000 in Edgarization fees and (v) $12,000 in blue sky filing fees. The company notes that this total amount equals $127,800. The company intends for Series #OJXLW to be responsible for only up to $14,200.00 of offering expenses, with the Managing Member responsible for the remainder, without reimbursement by Series #OJXLW.
  3. Represents a fee payable to the Asset Manager in connection with the search and negotiation of the property purchase as set forth in the Certificate of Designations for the Series (the "Sourcing Fee").

 

Assuming a maximum raise of $260,000.00 and after deducting the estimated offering expenses of $14,200.00, together with the remaining balance of $3,487.50, the net proceeds of this Series #OJXLW Interests offering would be approximately $249,287.50. The company intends to use the remaining $249,287.50 as follows, in order of priority:

 

 

In the event the proceeds from this Offering are insufficient to repay the intercompany loan, pay brokerage commissions, or fund the Sourcing Fee, the Managing Member, Ark7 intends to be responsible for the remainder, without reimbursement by Series #OJXLW.

 

However, in the event that the company does not raise the maximum offering amount, the Series will not be able to fund the operating reserve or fund the planned renovations. Without an operating reserve or funds for planned renovations, the company may not have cash available on hand to make required repairs or renovations. This could negatively impact our ability to lease the property, thereby harming the financial position of the Series.

 

The company reserves the right to change the above use of proceeds if management believes it is in the best interests of the company.

 

For further discussion, see the section entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations-Plan of Operations."

 

In addition, no payments will be used to pay directors. In the company's sole discretion, management fees may be incurred.

31

 

Series #ZAUH4

 

Assuming a maximum raise of $240,000.00 and after deducting the estimated offering expenses of $16,000.00 in fees to Dalmore, auditor fees, legal fees, Edgarization fees and blue-sky filing fees, the net proceeds of this Series #ZAUH4 Interests offering would be approximately $226,844.84. The table below sets forth the uses of proceeds of the company's Series #ZAUH4 Interests.

 

Uses

 

Amount Funded from the Offering

 

Percent of Gross Proceeds

Brokerage Commissions

 

$
2,400.00

 

1.0%

Purchase Price of Property (1)

 

$
201,111.00

 

83.8%

Property Purchase Expenses (1)

 

$
8,444.16

 

3.5%

Offering Expenses (2)

 

$
13,600.00

 

5.7%

Sourcing Fee (3)

 

$
7,200.00

 

3.0%

Property Improvements/Capital Expenditures

 

$
5,000.00

 

2.1%

Operating Reserve

 

$
2,245.26

 

0.9%

Total Proceeds

 

$
240,000.00

 

100.0%

_________________________________________

  1. Series #ZAUH4 acquired the property from a third-party seller on May 20, 2024, for $201,111.00, also incurring purchase expenses in the amount of $8,444.16 covering title fees, inspection fees, agent fees, interests, property transfer tax, notarization fees, and recording fees. The Managing Member made an intercompany loan to Series #ZAUH4 in the amount of $210,000.00. These funds were used for acquisition of the property and expenses related to that purchase. The intercompany loan accrues interest on the unpaid principal at a rate of 10.0% per annum, calculated semi-annually, beginning May 20, 2024, and is to be repaid in full by May 19, 2025. Series #ZAUH4 may prepay the loan but will be obligated to pay at least 3.0% in interest payments on the principal, which would be paid out of revenues generated by the property and not out of proceeds of the offering.
  2. Offering expenses, other than brokerage commissions, include the following: (i) $25,000 in fees payable to Dalmore, (ii) $59,800 in audit fees, (iii) $43,000 in legal fees, (iv) $13,000 in Edgarization fees and (v) $12,000 in blue sky filing fees. The company notes that this total amount equals $127,800. The company intends for Series #ZAUH4 to be responsible for only up to $13,600.00 of offering expenses, with the Managing Member responsible for the remainder, without reimbursement by Series #ZAUH4.
  3. Represents a fee payable to the Asset Manager in connection with the search and negotiation of the property purchase as set forth in the Certificate of Designations for the Series (the "Sourcing Fee").

 

Assuming a maximum raise of $240,000.00 and after deducting the estimated offering expenses of $13,600.00, together with the remaining balance of $444.84, the net proceeds of this Series #ZAUH4 Interests offering would be approximately $226,844.84. The company intends to use the remaining $226,844.84 as follows, in order of priority:

 

 

In the event the proceeds from this Offering are insufficient to repay the intercompany loan, pay brokerage commissions, or fund the Sourcing Fee, the Managing Member, Ark7 intends to be responsible for the remainder, without reimbursement by Series #ZAUH4.

 

However, in the event that the company does not raise the maximum offering amount, the Series will not be able to fund the operating reserve or fund the planned renovations. Without an operating reserve or funds for planned renovations, the company may not have cash available on hand to make required repairs or renovations. This could negatively impact our ability to lease the property, thereby harming the financial position of the Series.

 

The company reserves the right to change the above use of proceeds if management believes it is in the best interests of the company.

 

For further discussion, see the section entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations-Plan of Operations."

 

In addition, no payments will be used to pay directors. In the company's sole discretion, management fees may be incurred.

32

 

Series #EYPIR

 

Assuming a maximum raise of $260,000.00 and after deducting the estimated offering expenses of $16,800.00 in fees to Dalmore, auditor fees, legal fees, Edgarization fees and blue-sky filing fees, the net proceeds of this Series #EYPIR Interests offering would be approximately $250,741.84. The table below sets forth the uses of proceeds of the company's Series #EYPIR Interests.

 

Uses

 

Amount Funded from the Offering

 

Percent of Gross Proceeds

Brokerage Commissions

 

$
2,600.00

 

1.0%

Purchase Price of Property (1)

 

$
196,200.00

 

75.5%

Property Purchase Expenses (1)

 

$
8,858.16

 

3.4%

Offering Expenses (2)

 

$
14,200.00

 

5.5%

Sourcing Fee (3)

 

$
7,800.00

 

3.0%

Property Improvements/Capital Expenditures

 

$
15,000.00

 

5.8%

Operating Reserve

 

$
15,341.84

 

5.9%

Total Proceeds

 

$
260,000.00

 

100.0%

_________________________________________

  1. Series #EYPIR acquired the property from a third-party seller on May 20, 2024, for $196,200.00, also incurring purchase expenses in the amount of $8,858.16 covering title fees, inspection fees, agent fees, interests, property transfer tax, notarization fees, and recording fees. The Managing Member made an intercompany loan to Series #EYPIR in the amount of $210,000.00. These funds were used for acquisition of the property and expenses related to that purchase. The intercompany loan accrues interest on the unpaid principal at a rate of 10.0% per annum, calculated semi-annually, beginning May 20, 2024, and is to be repaid in full by May 19, 2025. Series #EYPIR may prepay the loan but will be obligated to pay at least 3.0% in interest payments on the principal, which would be paid out of revenues generated by the property and not out of proceeds of the offering.
  2. Offering expenses, other than brokerage commissions, include the following: (i) $25,000 in fees payable to Dalmore, (ii) $59,800 in audit fees, (iii) $43,000 in legal fees, (iv) $13,000 in Edgarization fees and (v) $12,000 in blue sky filing fees. The company notes that this total amount equals $127,800. The company intends for Series #EYPIR to be responsible for only up to $14,200.00 of offering expenses, with the Managing Member responsible for the remainder, without reimbursement by Series #EYPIR.
  3. Represents a fee payable to the Asset Manager in connection with the search and negotiation of the property purchase as set forth in the Certificate of Designations for the Series (the "Sourcing Fee").

 

Assuming a maximum raise of $260,000.00 and after deducting the estimated offering expenses of $14,200.00, together with the remaining balance of $4,941.84, the net proceeds of this Series #EYPIR Interests offering would be approximately $250,741.84. The company intends to use the remaining $250,741.84 as follows, in order of priority:

 

 

In the event the proceeds from this Offering are insufficient to repay the intercompany loan, pay brokerage commissions, or fund the Sourcing Fee, the Managing Member, Ark7 intends to be responsible for the remainder, without reimbursement by Series #EYPIR.

 

However, in the event that the company does not raise the maximum offering amount, the Series will not be able to fund the operating reserve or fund the planned renovations. Without an operating reserve or funds for planned renovations, the company may not have cash available on hand to make required repairs or renovations. This could negatively impact our ability to lease the property, thereby harming the financial position of the Series.

 

The company reserves the right to change the above use of proceeds if management believes it is in the best interests of the company.

 

For further discussion, see the section entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations-Plan of Operations."

 

In addition, no payments will be used to pay directors. In the company's sole discretion, management fees may be incurred.

33

 

Series #5VCTK

 

Assuming a maximum raise of $275,000.00 and after deducting the estimated offering expenses of $17,400.00 in fees to Dalmore, auditor fees, legal fees, Edgarization fees and blue-sky filing fees, the net proceeds of this Series #5VCTK Interests offering would be approximately $261,598.84. The table below sets forth the uses of proceeds of the company's Series #5VCTK Interests.

 

Uses

 

Amount Funded from the Offering

 

Percent of Gross Proceeds

Brokerage Commissions

 

$
2,750.00

 

1.0%

Purchase Price of Property (1)

 

$
228,900.00

 

83.2%

Property Purchase Expenses (1)

 

$
9,851.16

 

3.6%

Offering Expenses (2)

 

$
14,650.00

 

5.3%

Sourcing Fee (3)

 

$
8,250.00

 

3.0%

Property Improvements/Capital Expenditures

 

$
5,000.00

 

1.8%

Operating Reserve

 

$
5,598.84

 

2.0%

Total Proceeds

 

$
275,000.00

 

100.0%

_________________________________________

  1. Series #5VCTK acquired the property from a third-party seller on May 20, 2024, for $228,900.00, also incurring purchase expenses in the amount of $9,851.16 covering title fees, inspection fees, agent fees, interests, property transfer tax, notarization fees, and recording fees. The Managing Member made an intercompany loan to Series #5VCTK in the amount of $240,000.00. These funds were used for acquisition of the property and expenses related to that purchase. The intercompany loan accrues interest on the unpaid principal at a rate of 10.0% per annum, calculated semi-annually, beginning May 20, 2024, and is to be repaid in full by May 19, 2025. Series #5VCTK may prepay the loan but will be obligated to pay at least 3.0% in interest payments on the principal, which would be paid out of revenues generated by the property and not out of proceeds of the offering.
  2. Offering expenses, other than brokerage commissions, include the following: (i) $25,000 in fees payable to Dalmore, (ii) $59,800 in audit fees, (iii) $43,000 in legal fees, (iv) $13,000 in Edgarization fees and (v) $12,000 in blue sky filing fees. The company notes that this total amount equals $127,800. The company intends for Series #5VCTK to be responsible for only up to $14,650.00 of offering expenses, with the Managing Member responsible for the remainder, without reimbursement by Series #5VCTK.
  3. Represents a fee payable to the Asset Manager in connection with the search and negotiation of the property purchase as set forth in the Certificate of Designations for the Series (the "Sourcing Fee").

 

Assuming a maximum raise of $275,000.00 and after deducting the estimated offering expenses of $14,650.00, together with the remaining balance of $1,248.84, the net proceeds of this Series #5VCTK Interests offering would be approximately $261,598.84. The company intends to use the remaining $261,598.84 as follows, in order of priority:

 

 

In the event the proceeds from this Offering are insufficient to repay the intercompany loan, pay brokerage commissions, or fund the Sourcing Fee, the Managing Member, Ark7 intends to be responsible for the remainder, without reimbursement by Series #5VCTK.

 

However, in the event that the company does not raise the maximum offering amount, the Series will not be able to fund the operating reserve or fund the planned renovations. Without an operating reserve or funds for planned renovations, the company may not have cash available on hand to make required repairs or renovations. This could negatively impact our ability to lease the property, thereby harming the financial position of the Series.

 

The company reserves the right to change the above use of proceeds if management believes it is in the best interests of the company.

 

For further discussion, see the section entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations-Plan of Operations."

 

In addition, no payments will be used to pay directors. In the company's sole discretion, management fees may be incurred.

34

 

Series #ET8BV

 

Assuming a maximum raise of $275,000.00 and after deducting the estimated offering expenses of $17,400.00 in fees to Dalmore, auditor fees, legal fees, Edgarization fees and blue-sky filing fees, the net proceeds of this Series #ET8BV Interests offering would be approximately $258,037.20. The table below sets forth the uses of proceeds of the company's Series #ET8BV Interests.

 

Uses

 

Amount Funded from the Offering

 

Percent of Gross Proceeds

Brokerage Commissions

 

$
2,750.00

 

1.0%

Purchase Price of Property (1)

 

$
193,000.00

 

70.2%

Property Purchase Expenses (1)

 

$
9,312.80

 

3.4%

Offering Expenses (2)

 

$
14,650.00

 

5.3%

Sourcing Fee (3)

 

$
8,250.00

 

3.0%

Property Improvements/Capital Expenditures

 

$
40,000.00

 

14.5%

Operating Reserve

 

$
7,037.20

 

2.6%

Total Proceeds

 

$
275,000.00

 

100.0%

_________________________________________

  1. Series #ET8BV acquired the property from a third-party seller on May 24, 2024, for $193,000.00, also incurring purchase expenses in the amount of $9,312.80 covering title fees, inspection fees, agent fees, interests, property transfer tax, notarization fees, and recording fees. The Managing Member made an intercompany loan to Series #ET8BV in the amount of $200,000.00. These funds were used for acquisition of the property and expenses related to that purchase. The intercompany loan accrues interest on the unpaid principal at a rate of 10.0% per annum, calculated semi-annually, beginning May 24, 2024, and is to be repaid in full by May 23, 2025. Series #ET8BV may prepay the loan but will be obligated to pay at least 3.0% in interest payments on the principal, which would be paid out of revenues generated by the property and not out of proceeds of the offering.
  2. Offering expenses, other than brokerage commissions, include the following: (i) $25,000 in fees payable to Dalmore, (ii) $59,800 in audit fees, (iii) $43,000 in legal fees, (iv) $13,000 in Edgarization fees and (v) $12,000 in blue sky filing fees. The company notes that this total amount equals $127,800. The company intends for Series #ET8BV to be responsible for only up to $14,650.00 of offering expenses, with the Managing Member responsible for the remainder, without reimbursement by Series #ET8BV.
  3. Represents a fee payable to the Asset Manager in connection with the search and negotiation of the property purchase as set forth in the Certificate of Designations for the Series (the "Sourcing Fee").

 

Assuming a maximum raise of $275,000.00 and after deducting the estimated offering expenses of $14,650.00, together with the remaining balance of $-2,312.80, the net proceeds of this Series #ET8BV Interests offering would be approximately $258,037.20. The company intends to use the remaining $258,037.20 as follows, in order of priority:

 

 

In the event the proceeds from this Offering are insufficient to repay the intercompany loan, pay brokerage commissions, or fund the Sourcing Fee, the Managing Member, Ark7 intends to be responsible for the remainder, without reimbursement by Series #ET8BV.

 

However, in the event that the company does not raise the maximum offering amount, the Series will not be able to fund the operating reserve or fund the planned renovations. Without an operating reserve or funds for planned renovations, the company may not have cash available on hand to make required repairs or renovations. This could negatively impact our ability to lease the property, thereby harming the financial position of the Series.

 

The company reserves the right to change the above use of proceeds if management believes it is in the best interests of the company.

 

For further discussion, see the section entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations-Plan of Operations."

 

In addition, no payments will be used to pay directors. In the company's sole discretion, management fees may be incurred.

35

 

THE COMPANY'S BUSINESS

 

Company Overview - Our Mission

 

Ark7 Properties Plus LLC, a Delaware series limited liability company, was established on March 17, 2022 to expand access to real estate investment opportunities, allowing a broader audience to participate in the financial benefits of property ownership. Our mission is to build a reliable and accessible platform that democratizes real estate investment.

 

Ark7 Properties Plus LLC is managed and fully controlled by Ark7. As discussed further in the Series Limited Liability Company Agreement of Ark7 Properties Plus LLC dated March 17, 2022 (the "Operating Agreement"), Ark7 is the Managing Member of Ark7 Properties Plus LLC. Ark7 was incorporated in the State of Delaware on June 26, 2018. Ark7 operates a digital platform for real estate investment, making it simpler for investors to engage in property ownership. Ark7 acquires residential properties and conveys them to a Series of the Company to be offered to investors through the Ark7 platform. Ark7 believes this model enables investors to diversify their investment across various properties, helping to manage risk without the need for direct property management or mortgage commitments.

 

Ark7 performs all aspects of sourcing, analyzing, maintaining, and managing the properties we acquire. The Ark7 team conducts comprehensive evaluations of each potential property investment, examining a variety of financial, market, and demographic characteristics to inform our acquisition strategies. Each investment we make represents not only a financial opportunity but also a commitment to the communities where Ark7 properties are located. By investing in these areas, we contribute alongside our investors to community development and growth. As our network of engaged, like-minded investors expands, so too does our ability to access new investment and residential opportunities, enhancing value for our stakeholders and the communities we serve.

 

Series LLC Structure

 

Each property that Ark7 Properties Plus LLC acquires is held within a distinct series of our Delaware series limited liability company structure, created specifically to acquire and manage that residential property. Each series may own its specific property through a wholly-owned subsidiary, which is structured as a limited liability company under the laws of the state where the property is located.

 

As a Delaware series limited liability company, Ark7 Properties Plus LLC structures its operations so that the debts, liabilities, obligations, and expenses associated with a particular series are segregated and only enforceable against the assets of that series, as provided under Delaware law. This setup allows for financial and legal separation across different investments within our portfolio.

 

Ark7 Properties Plus LLC plans for each series to initially be treated as a corporation for U.S. federal income tax purposes, aiming for tax efficiency. However, if a series' real estate and potential income streams suggest that REIT status would be beneficial, we may elect to have that series taxed as a separate REIT. This approach allows us to consider the tax advantages specific to REITs, which may include benefits for our investors.

 

Should REIT status not be suitable, we may opt for the series to be taxed as a partnership. This alternative would involve using Schedule K-1 for tax reporting, which allows income, losses, deductions, and credits to pass through directly to investors, facilitating transparency in their personal tax obligations.

 

Our company focuses on the identification, acquisition, marketing, and management of individual residential properties, with each managed within its own series. This dedicated structure supports our efforts to manage the value of every single property for our investors effectively.

36

 

Investment Objectives

 

Ark7 Properties Plus LLC aims to offer its investors a range of carefully considered investment objectives, including:

 

 

While we strive to meet these objectives, it is important for investors to understand that the achievement of these goals cannot be guaranteed. The value of assets may fluctuate, and Ark7 Properties Plus LLC does not assure that the investment objectives will be achieved.

 

Investment Criteria

 

Ark7 Properties Plus LLC is committed to a strategic acquisition approach, focusing on properties that meet the following well-defined criteria as determined by Ark7:

 

 

These criteria are designed to identify properties that are well-positioned to generate value for our investors through both steady rental income and potential for long-term appreciation. As we refine our acquisition strategy and respond to market conditions, these criteria may evolve to better align with our investment objectives and market opportunities.

37

 

Investment Strategy - Market Opportunities

 

Ark7 Properties Plus LLC's investment strategy is centered around the acquisition, management, and strategic operation of residential properties situated in vibrant and growing cities across the United States as determined by Ark7. Our approach is to identify and invest in markets that possess strong potential for long-term property value appreciation.

 

 

By focusing on dynamic urban environments where demographic trends indicate growth and resilience, Ark7 Properties Plus LLC aims to secure a portfolio of properties that are not only profitable but also benefit from the broader economic and social vibrancy of their respective locales. This strategic market focus is intended to maximize opportunities for our investors, though as with any investment, there are inherent risks and returns are not guaranteed.

38

 

Investment Process

 

Ark7 Properties Plus LLC utilizes a structured investment process to ensure that each property we consider aligns with our strategic objectives and investment criteria:

 

 

Our Managing Member maintains comprehensive control over all investment decisions, guided by our overarching investment objectives and leverage policies.

39

 

Operating Policies

 

Credit Risk Management: Each Series is exposed to varying levels of credit and special hazard risk. The Managing Member assesses and monitors credit risk and other loss-related risks associated with each investment. The Managing Member will oversee the overall credit risk and provision for loss levels.

 

Additional Borrowings: Each series may explore financing or refinancing existing debt, including mortgages, with additional debt financing, either from an affiliate or a third party. Any third-party mortgages or debt instruments entered into by a series, or the company on behalf of a series, will likely be secured directly or indirectly by a security interest in the title of the property and other assets of the series.

40

 

Asset Management Fee

 

The Asset Manager will be entitled to an annual asset management fee from each series, calculated as 15% of any Free Cash Flows available for distribution pursuant to Article VII of the Operating Agreement.

 

Operating Expenses

 

Each series within Ark7 Properties Plus LLC will bear the costs and expenses associated with its activities, including but not limited to:

 

 

The Managing Member will cover its own ordinary expenses. If Operating Expenses exceed the series property's revenues and cannot be covered by reserves, the Managing Member may either pay the expenses without seeking reimbursement, loan the amount to the series with reasonable interest, or issue additional interests in the series to cover the shortfall.

41

 

Conflicts of Interest

 

Conflicts of interest may exist now or arise in the future involving the manager, its affiliates, and our officers and/or directors who also hold positions with the Managing Member. These conflicts could include:

 

42

 

SERIES PROPERTIES BEING OFFERED

 

 

Property Overview - Series #DIVTU

 

Timeline

 

 

The above information is preliminary and should not be considered indicative of future performance.

 

Property Summary

 

Address of Property

 

215 Piedmont Ave NE, Unit 406, Atlanta, GA 30308

 

Type of Property

 

Condominium

 

Property History

 

The Condominium located at

215 Piedmont Ave NE, Unit 406, Atlanta, GA 30308, was previously owner occupied.

 

Square Foot

 

1,256 square feet

 

HOA

 

The total annual assessments paid to the community association are $10,476 per year, paid monthly.

 

Acreage

 

N/A

 

Number of Units

 

N/A

 

Configuration

 

2 bedrooms and 2 bathrooms

 

Capital improvements intended to be made by Ark7

 

Capital improvements may include new appliances and cosmetic improvements as well as various punch list items throughout the property.

 

Total amount intended to be spent on capital improvements by Ark7

 

$
50,000.00

 

Total spent by Ark7 on furnishings and other expenses to prepare the property for booking

 

$
0.00

 

Debt on property

 

$222,660.42 due and payable to Ark7.

 

Property Listing

 

The property is managed as a single-family home rental and is listed on the following rental sites:

- Zillow

- Apartments.com

 

Sale of Property

 

In the event the company decides to sell the property, approval from the Series #DIVTU holders will not be sought.

 

 

Property History

 

The condominium located at 215 Piedmont Ave NE, Unit 406, Atlanta, GA 30308, was previously owner occupied. The Piedmont Property 406 was built in 1963. The Piedmont Property 406 expects to incur approximately $50,000.00 of costs related to certain improvement projects to the property.

 

Prior to the acquisition of the Piedmont Property 406, the property was owner occupied.

 

Acquisition of the Piedmont Property 406

 

Series #DIVTU completed the acquisition of the Piedmont Property 406 on January 8, 2024. The acquisition of the Piedmont Property 406 was funded via a cash payment in the amount of $210,000.00. The Piedmont Property 406 is being held by Series #DIVTU. See the "Use of Proceeds" section below for additional information regarding anticipated expenses and uses of offering proceeds.

 

Property Components & Capital Expenditures

 

The Piedmont Property 406 was inspected by a licensed professional, and the inspection report indicated that the major property components are inacceptable, functional condition, with no obvious signs of defect.

 

With the current expected level and quality of the property components we will not recognize any deferred maintenance items and we expect that the major property components will remain in working order during the anticipated hold period for this property. In our operating estimates, we forecast a potential cost of maintenance and capital expenses as a percentage of rental income. In the case of unforeseen maintenance expenses, we could make use of our cash reserves, if necessary.

 

We anticipate that the final renovation cost, a capital expenditure, for this property will total approximately $50,000.00. These renovations may include new appliances and cosmetic improvements as well as various punch list items throughout the property. This renovation expense is listed in the use of proceeds for Series #DIVTU.

 

Property Manager

 

The Managing Member appointed the Asset Manager to manage the Piedmont Property 406. Ark7 has entered into an Asset Management Agreement with the Asset Manager. Pursuant to the terms of the Asset Management Agreement, the Series will pay the Asset Manager an annual fee (in respect of each fiscal year, 15% of any Free Cash Flows available for distribution pursuant to Article VII of the Operating Agreement) for managing the Homestead Property.

 

Property Operations and Hold Period

 

The Piedmont Property 406 was previously owner occupied. The Managing Member intends to list the property for rent at a rate of $2,502 per month, or $30,024 per year, which is consistent with other single-family homes in the same area of Atlanta, GA.

 

The Managing Member anticipates that this property's Operating Expenses, which include real estate taxes, property insurance and repairs and maintenance costs, will be in the range of $1,500 per month. This estimate is based on the Managing Members due diligence calculations and does not include the $50,000.00 that the company anticipates will be needed for final renovations and will be deemed a capital expenditure. For information relating to our capital expenditure expectations, see "Property Components & Capital Expenditures" above.

 

We intend to hold the Piedmont Property 406 for 10 or more years during which time, we will operate the Piedmont Property 406 as a rental property. During this period, we intend to distribute any Free Cash Flow (as defined in the Operating Agreement) to Series #DIVTU interest holders. The determination as to when the Piedmont Property 406 should be sold or otherwise disposed of will be made after consideration of relevant factors, including prevailing and projected economic conditions, whether the value of the property is anticipated to appreciate or decline substantially, and how any existing lease may impact the sales price we may realize. The Managing Member may determine that it is in the best interests of shareholders to sell the Piedmont Property 406 earlier than 10 years or to hold the property for more than 10 years.

 

Market Overview

 

As of December 2023, the Atlanta, GA 30308 housing market continues to exhibit robust growth, with key indicators pointing towards positive trends. Insights from various sources, including Redfin, Zillow, realtor.com, Rocket Homes, and Zumper, provide a comprehensive overview:

 

 

In conclusion, the Piedmont Property 406 is positioned within a housing market that has demonstrated substantial growth. Rising median home sale prices, persistent seller's market conditions, rapid property turnover, and an upward trajectory in rental rates provide valuable context for understanding the property's standing within the dynamic Atlanta, GA 30308 real estate landscape as of December 2023, based on the latest Rocket Homes' Housing Market Report.

 

43

 

Property Overview - Series #OJXLW

 

Timeline

 

 

The above information is preliminary and should not be considered indicative of future performance.

 

Property Summary

 

Address of Property

 

228 W Norway St, Walnut Springs, TX 76690

 

Type of Property

 

Single Family Home

 

Property History

 

The Single Family Home located at

228 W Norway St, Walnut Springs, TX 76690, was previously owner occupied.

 

Square Foot

 

1,582 square feet

 

HOA

 

The total annual assessments paid to the community association are $0 per year, paid monthly.

 

Acreage

 

N/A

 

Number of Units

 

N/A

 

Configuration

 

3 bedrooms and 2 bathrooms

 

Capital improvements intended to be made by Ark7

 

Capital improvements may include new appliances and cosmetic improvements as well as various punch list items throughout the property.

 

Total amount intended to be spent on capital improvements by Ark7

 

$
5,000.00

 

Total spent by Ark7 on furnishings and other expenses to prepare the property for booking

 

$
0.00

 

Debt on property

 

$230,000.00 due and payable to Ark7.

 

Property Listing

 

The property is managed as a single-family home rental and is listed on the following rental sites:

- Zillow

- Apartments.com

 

Sale of Property

 

In the event the company decides to sell the property, approval from the Series #OJXLW holders will not be sought.

 

 

Property History

 

The single family home located at 228 W Norway St, Walnut Springs, TX 76690, was previously owner occupied. The Norway Property was built in 2022. The Norway Property expects to incur approximately $5,000.00 of costs related to certain improvement projects to the property.

 

Prior to the acquisition of the Norway Property, the property was owner occupied.

 

Acquisition of the Norway Property

 

Series #OJXLW completed the acquisition of the Norway Property on April 18, 2024. The acquisition of the Norway Property was funded via a cash payment in the amount of $217,334.00. The Norway Property is being held by Series #OJXLW. See the "Use of Proceeds" section below for additional information regarding anticipated expenses and uses of offering proceeds.

 

Property Components & Capital Expenditures

 

The Norway Property was inspected by a licensed professional, and the inspection report indicated that the major property components are inacceptable, functional condition, with no obvious signs of defect.

 

With the current expected level and quality of the property components we will not recognize any deferred maintenance items and we expect that the major property components will remain in working order during the anticipated hold period for this property. In our operating estimates, we forecast a potential cost of maintenance and capital expenses as a percentage of rental income. In the case of unforeseen maintenance expenses, we could make use of our cash reserves, if necessary.

 

We anticipate that the final renovation cost, a capital expenditure, for this property will total approximately $5,000.00. These renovations may include new appliances and cosmetic improvements as well as various punch list items throughout the property. This renovation expense is listed in the use of proceeds for Series #OJXLW.

 

Property Manager

 

The Managing Member appointed the Asset Manager to manage the Norway Property. Ark7 has entered into an Asset Management Agreement with the Asset Manager. Pursuant to the terms of the Asset Management Agreement, the Series will pay the Asset Manager an annual fee (in respect of each fiscal year, 15% of any Free Cash Flows available for distribution pursuant to Article VII of the Operating Agreement) for managing the Homestead Property.

 

Property Operations and Hold Period

 

The Norway Property was previously owner occupied. The Managing Member intends to list the property for rent at a rate of $1,784 per month, or $21,408 per year, which is consistent with other single-family homes in the same area of Walnut Springs, TX.

 

The Managing Member anticipates that this property's Operating Expenses, which include real estate taxes, property insurance and repairs and maintenance costs, will be in the range of $1,000 per month. This estimate is based on the Managing Members due diligence calculations and does not include the $5,000.00 that the company anticipates will be needed for final renovations and will be deemed a capital expenditure. For information relating to our capital expenditure expectations, see "Property Components & Capital Expenditures" above.

 

We intend to hold the Norway Property for 10 or more years during which time, we will operate the Norway Property as a rental property. During this period, we intend to distribute any Free Cash Flow (as defined in the Operating Agreement) to Series #OJXLW interest holders. The determination as to when the Norway Property should be sold or otherwise disposed of will be made after consideration of relevant factors, including prevailing and projected economic conditions, whether the value of the property is anticipated to appreciate or decline substantially, and how any existing lease may impact the sales price we may realize. The Managing Member may determine that it is in the best interests of shareholders to sell the Norway Property earlier than 10 years or to hold the property for more than 10 years.

 

Market Overview

 

As of March 2024, the latest data from various sources indicates a stable housing market in Walnut Springs, TX 76690. While not specific to this property, insights from Redfin, Zillow, realtor.com, Rocket Homes, and Zumper provide an overview of the market trends relevant to this 3-bedroom, 2-bathroom single-family house.

 

44

 

Property Overview - Series #ZAUH4

 

Timeline

 

 

The above information is preliminary and should not be considered indicative of future performance.

 

Property Summary

 

Address of Property

 

516 W Live Oak St, Dublin, TX 76446

 

Type of Property

 

Single Family Home

 

Property History

 

The Single Family Home located at

516 W Live Oak St, Dublin, TX 76446, was previously owner occupied.

 

Square Foot

 

1,620 square feet

 

HOA

 

The total annual assessments paid to the community association are $0 per year, paid monthly.

 

Acreage

 

N/A

 

Number of Units

 

N/A

 

Configuration

 

4 bedrooms and 2 bathrooms

 

Capital improvements intended to be made by Ark7

 

Capital improvements may include new appliances and cosmetic improvements as well as various punch list items throughout the property.

 

Total amount intended to be spent on capital improvements by Ark7

 

$
5,000.00

 

Total spent by Ark7 on furnishings and other expenses to prepare the property for booking

 

$
0.00

 

Debt on property

 

$210,000.00 due and payable to Ark7.

 

Property Listing

 

The property is managed as a single-family home rental and is listed on the following rental sites:

- Zillow

- Apartments.com

 

Sale of Property

 

In the event the company decides to sell the property, approval from the Series #ZAUH4 holders will not be sought.

 

 

Property History

 

The single family home located at 516 W Live Oak St, Dublin, TX 76446, was previously owner occupied. The Oak Property 516 was built in 1920. The Oak Property 516 expects to incur approximately $5,000.00 of costs related to certain improvement projects to the property.

 

Prior to the acquisition of the Oak Property 516, the property was owner occupied.

 

Acquisition of the Oak Property 516

 

Series #ZAUH4 completed the acquisition of the Oak Property 516 on May 20, 2024. The acquisition of the Oak Property 516 was funded via a cash payment in the amount of $201,111.00. The Oak Property 516 is being held by Series #ZAUH4. See the "Use of Proceeds" section below for additional information regarding anticipated expenses and uses of offering proceeds.

 

Property Components & Capital Expenditures

 

The Oak Property 516 was inspected by a licensed professional, and the inspection report indicated that the major property components are inacceptable, functional condition, with no obvious signs of defect.

 

With the current expected level and quality of the property components we will not recognize any deferred maintenance items and we expect that the major property components will remain in working order during the anticipated hold period for this property. In our operating estimates, we forecast a potential cost of maintenance and capital expenses as a percentage of rental income. In the case of unforeseen maintenance expenses, we could make use of our cash reserves, if necessary.

 

We anticipate that the final renovation cost, a capital expenditure, for this property will total approximately $5,000.00. These renovations may include new appliances and cosmetic improvements as well as various punch list items throughout the property. This renovation expense is listed in the use of proceeds for Series #ZAUH4.

 

Property Manager

 

The Managing Member appointed the Asset Manager to manage the Oak Property 516. Ark7 has entered into an Asset Management Agreement with the Asset Manager. Pursuant to the terms of the Asset Management Agreement, the Series will pay the Asset Manager an annual fee (in respect of each fiscal year, 15% of any Free Cash Flows available for distribution pursuant to Article VII of the Operating Agreement) for managing the Homestead Property.

 

Property Operations and Hold Period

 

The Oak Property 516 was previously owner occupied. The Managing Member intends to list the property for rent at a rate of $1,600 per month, or $19,200 per year, which is consistent with other single-family homes in the same area of Dublin, TX.

 

The Managing Member anticipates that this property's Operating Expenses, which include real estate taxes, property insurance and repairs and maintenance costs, will be in the range of $1,000 per month. This estimate is based on the Managing Members due diligence calculations and does not include the $5,000.00 that the company anticipates will be needed for final renovations and will be deemed a capital expenditure. For information relating to our capital expenditure expectations, see "Property Components & Capital Expenditures" above.

 

We intend to hold the Oak Property 516 for 10 or more years during which time, we will operate the Oak Property 516 as a rental property. During this period, we intend to distribute any Free Cash Flow (as defined in the Operating Agreement) to Series #ZAUH4 interest holders. The determination as to when the Oak Property 516 should be sold or otherwise disposed of will be made after consideration of relevant factors, including prevailing and projected economic conditions, whether the value of the property is anticipated to appreciate or decline substantially, and how any existing lease may impact the sales price we may realize. The Managing Member may determine that it is in the best interests of shareholders to sell the Oak Property 516 earlier than 10 years or to hold the property for more than 10 years.

 

Market Overview

 

As of March 2024, the latest data from various sources indicates a robust housing market in Dublin, TX 76446. While not specific to property at 516 W Live Oak St , insights from Redfin, Zillow, realtor.com, Rocket Homes, and Zumper provide an overview of the market trends relevant to this 4-bedroom, 2-bathroom single-family house.

 

45

 

Property Overview - Series #EYPIR

 

Timeline

 

 

The above information is preliminary and should not be considered indicative of future performance.

 

Property Summary

 

Address of Property

 

655 E Live Oak St, Dublin, TX 76446

 

Type of Property

 

Single Family Home

 

Property History

 

The Single Family Home located at

655 E Live Oak St, Dublin, TX 76446, was previously owner occupied.

 

Square Foot

 

1,100 square feet

 

HOA

 

The total annual assessments paid to the community association are $0 per year, paid monthly.

 

Acreage

 

N/A

 

Number of Units

 

N/A

 

Configuration

 

3 bedrooms and 2 bathrooms

 

Capital improvements intended to be made by Ark7

 

Capital improvements may include new appliances and cosmetic improvements as well as various punch list items throughout the property.

 

Total amount intended to be spent on capital improvements by Ark7

 

$
15,000.00

 

Total spent by Ark7 on furnishings and other expenses to prepare the property for booking

 

$
0.00

 

Debt on property

 

$210,000.00 due and payable to Ark7.

 

Property Listing

 

The property is managed as a single-family home rental and is listed on the following rental sites:

- Zillow

- Apartments.com

 

Sale of Property

 

In the event the company decides to sell the property, approval from the Series #EYPIR holders will not be sought.

 

 

Property History

 

The single family home located at 655 E Live Oak St, Dublin, TX 76446, was previously owner occupied. The Oak Property 655 was built in 1928. The Oak Property 655 expects to incur approximately $15,000.00 of costs related to certain improvement projects to the property.

 

Prior to the acquisition of the Oak Property 655, the property was owner occupied.

 

Acquisition of the Oak Property 655

 

Series #EYPIR completed the acquisition of the Oak Property 655 on May 20, 2024. The acquisition of the Oak Property 655 was funded via a cash payment in the amount of $196,200.00. The Oak Property 655 is being held by Series #EYPIR. See the "Use of Proceeds" section below for additional information regarding anticipated expenses and uses of offering proceeds.

 

Property Components & Capital Expenditures

 

The Oak Property 655 was inspected by a licensed professional, and the inspection report indicated that the major property components are inacceptable, functional condition, with no obvious signs of defect.

 

With the current expected level and quality of the property components we will not recognize any deferred maintenance items and we expect that the major property components will remain in working order during the anticipated hold period for this property. In our operating estimates, we forecast a potential cost of maintenance and capital expenses as a percentage of rental income. In the case of unforeseen maintenance expenses, we could make use of our cash reserves, if necessary.

 

We anticipate that the final renovation cost, a capital expenditure, for this property will total approximately $15,000.00. These renovations may include new appliances and cosmetic improvements as well as various punch list items throughout the property. This renovation expense is listed in the use of proceeds for Series #EYPIR.

 

Property Manager

 

The Managing Member appointed the Asset Manager to manage the Oak Property 655. Ark7 has entered into an Asset Management Agreement with the Asset Manager. Pursuant to the terms of the Asset Management Agreement, the Series will pay the Asset Manager an annual fee (in respect of each fiscal year, 15% of any Free Cash Flows available for distribution pursuant to Article VII of the Operating Agreement) for managing the Homestead Property.

 

Property Operations and Hold Period

 

The Oak Property 655 was previously owner occupied. The Managing Member intends to list the property for rent at a rate of $1,650 per month, or $19,800 per year, which is consistent with other single-family homes in the same area of Dublin, TX.

 

The Managing Member anticipates that this property's Operating Expenses, which include real estate taxes, property insurance and repairs and maintenance costs, will be in the range of $1,000 per month. This estimate is based on the Managing Members due diligence calculations and does not include the $15,000.00 that the company anticipates will be needed for final renovations and will be deemed a capital expenditure. For information relating to our capital expenditure expectations, see "Property Components & Capital Expenditures" above.

 

We intend to hold the Oak Property 655 for 10 or more years during which time, we will operate the Oak Property 655 as a rental property. During this period, we intend to distribute any Free Cash Flow (as defined in the Operating Agreement) to Series #EYPIR interest holders. The determination as to when the Oak Property 655 should be sold or otherwise disposed of will be made after consideration of relevant factors, including prevailing and projected economic conditions, whether the value of the property is anticipated to appreciate or decline substantially, and how any existing lease may impact the sales price we may realize. The Managing Member may determine that it is in the best interests of shareholders to sell the Oak Property 655 earlier than 10 years or to hold the property for more than 10 years.

 

Market Overview

 

As of March 2024, the latest data from various sources indicates a robust housing market in Dublin, TX 76446. While not specific to the property at 655 E Live Oak St , insights from Redfin, Zillow, realtor.com, Rocket Homes, and Zumper provide an overview of the market trends relevant to this 3-bedroom, 2-bathroom single-family house.

 

46

 

Property Overview - Series #5VCTK

 

Timeline

 

 

The above information is preliminary and should not be considered indicative of future performance.

 

Property Summary

 

Address of Property

 

3616 Redbird St, Waco, TX 76705

 

Type of Property

 

Single Family Home

 

Property History

 

The Single Family Home located at

3616 Redbird St, Waco, TX 76705, was previously owner occupied.

 

Square Foot

 

1,563 square feet

 

HOA

 

The total annual assessments paid to the community association are $0 per year, paid monthly.

 

Acreage

 

N/A

 

Number of Units

 

N/A

 

Configuration

 

3 bedrooms and 2 bathrooms

 

Capital improvements intended to be made by Ark7

 

Capital improvements may include new appliances and cosmetic improvements as well as various punch list items throughout the property.

 

Total amount intended to be spent on capital improvements by Ark7

 

$
5,000.00

 

Total spent by Ark7 on furnishings and other expenses to prepare the property for booking

 

$
0.00

 

Debt on property

 

$240,000.00 due and payable to Ark7.

 

Property Listing

 

The property is managed as a single-family home rental and is listed on the following rental sites:

- Zillow

- Apartments.com

 

Sale of Property

 

In the event the company decides to sell the property, approval from the Series #5VCTK holders will not be sought.

 

 

Property History

 

The single family home located at 3616 Redbird St, Waco, TX 76705, was previously owner occupied. The Redbird Property was built in 1949. The Redbird Property expects to incur approximately $5,000.00 of costs related to certain improvement projects to the property.

 

Prior to the acquisition of the Redbird Property, the property was owner occupied.

 

Acquisition of the Redbird Property

 

Series #5VCTK completed the acquisition of the Redbird Property on May 20, 2024. The acquisition of the Redbird Property was funded via a cash payment in the amount of $228,900.00. The Redbird Property is being held by Series #5VCTK. See the "Use of Proceeds" section below for additional information regarding anticipated expenses and uses of offering proceeds.

 

Property Components & Capital Expenditures

 

The Redbird Property was inspected by a licensed professional, and the inspection report indicated that the major property components are inacceptable, functional condition, with no obvious signs of defect.

 

With the current expected level and quality of the property components we will not recognize any deferred maintenance items and we expect that the major property components will remain in working order during the anticipated hold period for this property. In our operating estimates, we forecast a potential cost of maintenance and capital expenses as a percentage of rental income. In the case of unforeseen maintenance expenses, we could make use of our cash reserves, if necessary.

 

We anticipate that the final renovation cost, a capital expenditure, for this property will total approximately $5,000.00. These renovations may include new appliances and cosmetic improvements as well as various punch list items throughout the property. This renovation expense is listed in the use of proceeds for Series #5VCTK.

 

Property Manager

 

The Managing Member appointed the Asset Manager to manage the Redbird Property. Ark7 has entered into an Asset Management Agreement with the Asset Manager. Pursuant to the terms of the Asset Management Agreement, the Series will pay the Asset Manager an annual fee (in respect of each fiscal year, 15% of any Free Cash Flows available for distribution pursuant to Article VII of the Operating Agreement) for managing the Homestead Property.

 

Property Operations and Hold Period

 

The Redbird Property was previously owner occupied. The Managing Member intends to list the property for rent at a rate of $1,800 per month, or $21,600 per year, which is consistent with other single-family homes in the same area of Waco, TX.

 

The Managing Member anticipates that this property's Operating Expenses, which include real estate taxes, property insurance and repairs and maintenance costs, will be in the range of $500 per month. This estimate is based on the Managing Members due diligence calculations and does not include the $5,000.00 that the company anticipates will be needed for final renovations and will be deemed a capital expenditure. For information relating to our capital expenditure expectations, see "Property Components & Capital Expenditures" above.

 

We intend to hold the Redbird Property for 10 or more years during which time, we will operate the Redbird Property as a rental property. During this period, we intend to distribute any Free Cash Flow (as defined in the Operating Agreement) to Series #5VCTK interest holders. The determination as to when the Redbird Property should be sold or otherwise disposed of will be made after consideration of relevant factors, including prevailing and projected economic conditions, whether the value of the property is anticipated to appreciate or decline substantially, and how any existing lease may impact the sales price we may realize. The Managing Member may determine that it is in the best interests of shareholders to sell the Redbird Property earlier than 10 years or to hold the property for more than 10 years.

 

Market Overview

 

As of March 2024, the latest data from various sources indicates a thriving housing market in Waco, TX 76705. While not specific to the property at 3616 Redbird St, insights from Redfin, Zillow, realtor.com, Rocket Homes, and Zumper provide an overview of the market trends relevant to this 3-bedroom, 2-bathroom single-family house.

 

47

 

Property Overview - Series #ET8BV

 

Timeline

 

 

The above information is preliminary and should not be considered indicative of future performance.

 

Property Summary

 

Address of Property

 

215 Piedmont Ave NE, Unit 909, Atlanta, GA 30308

 

Type of Property

 

Condominium

 

Property History

 

The Condominium located at

215 Piedmont Ave NE, Unit 909, Atlanta, GA 30308, was previously owner occupied.

 

Square Foot

 

1,256 square feet

 

HOA

 

The total annual assessments paid to the community association are $8,835 per year, paid monthly.

 

Acreage

 

N/A

 

Number of Units

 

N/A

 

Configuration

 

2 bedrooms and 2 bathrooms

 

Capital improvements intended to be made by Ark7

 

Capital improvements may include new appliances and cosmetic improvements as well as various punch list items throughout the property.

 

Total amount intended to be spent on capital improvements by Ark7

 

$
40,000.00

 

Total spent by Ark7 on furnishings and other expenses to prepare the property for booking

 

$
0.00

 

Debt on property

 

$200,000.00 due and payable to Ark7.

 

Property Listing

 

The property is managed as a single-family home rental and is listed on the following rental sites:

- Zillow

- Apartments.com

 

Sale of Property

 

In the event the company decides to sell the property, approval from the Series #ET8BV holders will not be sought.

 

 

Property History

 

The condominium located at 215 Piedmont Ave NE, Unit 909, Atlanta, GA 30308, was previously owner occupied. The Piedmont Property 909 was built in 1963. The Piedmont Property 909 expects to incur approximately $40,000.00 of costs related to certain improvement projects to the property.

 

Prior to the acquisition of the Piedmont Property 909, the property was owner occupied.

 

Acquisition of the Piedmont Property 909

 

Series #ET8BV completed the acquisition of the Piedmont Property 909 on May 24, 2024. The acquisition of the Piedmont Property 909 was funded via a cash payment in the amount of $193,000.00. The Piedmont Property 909 is being held by Series #ET8BV. See the "Use of Proceeds" section below for additional information regarding anticipated expenses and uses of offering proceeds.

 

Property Components & Capital Expenditures

 

The Piedmont Property 909 was inspected by a licensed professional, and the inspection report indicated that the major property components are inacceptable, functional condition, with no obvious signs of defect.

 

With the current expected level and quality of the property components we will not recognize any deferred maintenance items and we expect that the major property components will remain in working order during the anticipated hold period for this property. In our operating estimates, we forecast a potential cost of maintenance and capital expenses as a percentage of rental income. In the case of unforeseen maintenance expenses, we could make use of our cash reserves, if necessary.

 

We anticipate that the final renovation cost, a capital expenditure, for this property will total approximately $40,000.00. These renovations may include new appliances and cosmetic improvements as well as various punch list items throughout the property. This renovation expense is listed in the use of proceeds for Series #ET8BV.

 

Property Manager

 

The Managing Member appointed the Asset Manager to manage the Piedmont Property 909. Ark7 has entered into an Asset Management Agreement with the Asset Manager. Pursuant to the terms of the Asset Management Agreement, the Series will pay the Asset Manager an annual fee (in respect of each fiscal year, 15% of any Free Cash Flows available for distribution pursuant to Article VII of the Operating Agreement) for managing the Homestead Property.

 

Property Operations and Hold Period

 

The Piedmont Property 909 was previously owner occupied. The Managing Member intends to list the property for rent at a rate of $2,242 per month, or $26,904 per year, which is consistent with other single-family homes in the same area of Atlanta, GA.

 

The Managing Member anticipates that this property's Operating Expenses, which include real estate taxes, property insurance and repairs and maintenance costs, will be in the range of $1,500 per month. This estimate is based on the Managing Members due diligence calculations and does not include the $40,000.00 that the company anticipates will be needed for final renovations and will be deemed a capital expenditure. For information relating to our capital expenditure expectations, see "Property Components & Capital Expenditures" above.

 

We intend to hold the Piedmont Property 909 for 10 or more years during which time, we will operate the Piedmont Property 909 as a rental property. During this period, we intend to distribute any Free Cash Flow (as defined in the Operating Agreement) to Series #ET8BV interest holders. The determination as to when the Piedmont Property 909 should be sold or otherwise disposed of will be made after consideration of relevant factors, including prevailing and projected economic conditions, whether the value of the property is anticipated to appreciate or decline substantially, and how any existing lease may impact the sales price we may realize. The Managing Member may determine that it is in the best interests of shareholders to sell the Piedmont Property 909 earlier than 10 years or to hold the property for more than 10 years.

 

Market Overview

 

As of March 2024, the latest data from various sources indicates a dynamic housing market in Atlanta, GA 30308. While not specific to the property at 215 Piedmont Ave NE, #909, insights from Redfin, Zillow, realtor.com, Rocket Homes, and Zumper provide an overview of the market trends relevant to this 1-bedroom, 1-bathroom condo.

 

 

48

 

THE COMPANY'S PROPERTIES

 

 

 

As of the date of this Offering Circular, Ark7 Inc., the company's Asset Manager and Managing Member, does not own any additional properties and does not intend to acquire additional properties for the acquisition of company or any future series of the company.

49

 

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

 

You should read the following discussion and analysis of the financial statements and financial condition of Ark7 Properties Plus LLC and results of its operations together with: (i) its financial statements and related notes appearing at the end of this Offering Circular and (ii) the pro forma consolidated financial statements appearing at the end of this Offering Circular. This discussion contains forward-looking statements reflecting the company's current expectations that involve risks and uncertainties. Actual results and the timing of events may differ materially from those contained in these forward-looking statements due to a number of factors, including those discussed in the section entitled "Risk Factors" and elsewhere in this Offering Circular.

 

Overview

 

Ark7 Properties Plus LLC was formed on March 17, 2022 ("Inception") in the State of Delaware. Ark7 Properties Plus LLC is an investment vehicle which intends to enable investors to own fractional ownership of a specific real estate property. This lowers the cost-of-entry and minimizes the time commitment for real estate investing. An investment in the company entitles the investor to the potential economic benefits normally associated with direct property ownership, while requiring no investor involvement in asset or property management.

 

Ark7 is the company's Managing Member. As the company's Managing Member, it will manage the company's day-to-day operations. Ark7 is also the Managing Member of each Series and the Asset Manager of each Series and will manage each property that a Series acquires.

 

Emerging Growth Company

 

If the company becomes subject to the ongoing reporting requirements of the Exchange Act, we will qualify as an "emerging growth company" under the JOBS Act. As a result, we will be permitted to, and intend to, rely on exemptions from certain disclosure requirements. For so long as we are an emerging growth company, we will not be required to:

 

 

In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.

 

We will remain an "emerging growth company" for up to five years, or until the earliest of (i) the last day of the first fiscal year in which our total annual gross revenues exceed $1.07 billion, (ii) the date that we become a "large accelerated filer" as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our interests that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter or (iii) the date on which we have issued more than $1.07 billion in non-convertible debt during the preceding three year period.

50

 

Operating Results - year ended December 31, 2023 and 2022

 

Revenues are generated at the series level. For the year ended December 31, 2023 and 2022, the Series aggregated together generated $239,273 and $63,106, respectively, in revenues.

 

These revenues were generated by rental income across each Series as set out below:

 

Series

 

Gross Rental Income as of December 31, 2023

 

Gross Rental Income as of December 31, 2022

#0XYT6

 

$
39,967

 

$
16,870

#FTWDS

 

$
18,618

 

$
5,275

#JTDXY

 

$
39,600

 

$
9,900

#NHMOP

 

$
1,021

 

$
0

#ORHOF

 

$
0

 

$
0

#P7FJ5

 

$
18,600

 

$
4,636

#QGXF0

 

$
15,129

 

$
0

#RPFUV

 

$
0

 

$
0

#SOV9W

 

$
6,788

 

$
0

#WGI3Z

 

$
20,155

 

$
10,845

#WRA7O

 

$
39,794

 

$
3,300

#ZIE3T

 

$
39,600

 

$
11,660

 

Over this same period, each series incurred expenses from operations of the series, as well as professional expenses related to undertaking the Series offering. Expenses from operations of the properties, such as utilities, repairs and maintenance, insurance, and property tax amounted to:

 

Series

 

Expenses Relating to Operating of the Property as of December 31, 2023

 

Expenses Relating to Operating of the Property as of December 31, 2022

#0XYT6

 

$
10,919

 

$
4,238

#FTWDS

 

$
5,051

 

$
1,690

#JTDXY

 

$
12,633

 

$
2,258

#NHMOP

 

$
1,424

 

$
0

#ORHOF

 

$
1,187

 

$
0

#P7FJ5

 

$
5,161

 

$
1,396

#QGXF0

 

$
5,060

 

$
0

#RPFUV

 

$
2,456

 

$
0

#SOV9W

 

$
2,854

 

$
0

#WGI3Z

 

$
3,142

 

$
2,779

#WRA7O

 

$
14,047

 

$
3,395

#ZIE3T

 

$
12,775

 

$
(1,900)

 

When including all expenses, such as legal and professional fees, general and administrative expenses, depreciation, and interest expense to Ark7, against revenues during this period, resulted in net income of the following:

 

Series

 

Net Income (Loss) as of December 31, 2023

 

Net Income (Loss) as of December 31, 2022

#0XYT6

 

$
(30,929)

 

$
(13,485)

#FTWDS

 

$
(29,310)

 

$
(6,624)

#JTDXY

 

$
(46,371)

 

$
(12,839)

#NHMOP

 

$
(7,043)

 

$
0

#ORHOF

 

$
(5,018)

 

$
0

#P7FJ5

 

$
(36,522)

 

$
(6,985)

#QGXF0

 

$
(9,428)

 

$
0

#RPFUV

 

$
(33,241)

 

$
0

#SOV9W

 

$
(32,542)

 

$
0

#WGI3Z

 

$
(2,922)

 

$
(43,377)

#WRA7O

 

$
(62,501)

 

$
(17,233)

#ZIE3T

 

$
(39,664)

 

$
(6,564)

51

 

Liquidity and Capital Resources

 

Each Series has allocated funds to establish property management reserves. These funds are designed to mitigate future financial uncertainties associated with property-related expenses, including maintenance, repairs, enhancements, or unanticipated costs. The aim is to maintain the properties in satisfactory condition, prevent financial strain, and preclude the necessity for immediate supplementary contributions from investors or owners due to substantial, unexpected expenses. As of December 31, 2023, the balance of the property management reserve by Series was:

 

Series

 

Cash and Property Management Reserve as of December 31, 2023

#0XYT6

 

$
814

#FTWDS

 

$
0

#JTDXY

 

$
(362)

#NHMOP

 

$
0

#ORHOF

 

$
0

#P7FJ5

 

$
0

#QGXF0

 

$
0

#RPFUV

 

$
0

#SOV9W

 

$
0

#WGI3Z

 

$
200

#WRA7O

 

$
0

#ZIE3T

 

$
652

 

An additional $0 of cash is held by Ark7 Properties Plus LLC that is not assigned to a specific series.

52

 

Down Payment Loan Payables

 

The Parent Company provide initial funding required for property acquisitions and structured this as a down payment loan to APPL and its series. Borrowers are authorized to use the Parent Company's bank checking account for property acquisition purpose.

 

Series #0XYT6

 

On July 1, 2022, the APPL - Series #0XYT6 executed a Loan Agreement from the Parent Company. According to the Loan Agreement, the APPL - Series #0XYT6 borrowed $378,478 at 9% interest with a maturity of June 30, 2023. The loan was paid off in 2023, and the outstanding balance of the Loan Payable - Down Payment Loan as of December 31, 2023 and 2022 was $0 and $258,478, respectively, and is included in related party debt, current on the accompanying balance sheet. The interest expenses incurred in the year ended December 31, 2022 was $4,841 and $17,032, respectively.

 

Series #5VCTK

 

On May 20, 2024, the APPL - Series #5VCTK executed a Loan Agreement from the Parent Company. According to the Loan Agreement, the APPL - Series #5VCTK borrowed $240,000 at 10% interest with a maturity of May 19, 2025. The outstanding balance of the Loan Payable - Down Payment Loan as of December 31, 2023 and 2022 was $0 and $0, respectively, and is included in related party debt, current on the accompanying balance sheet. The interest expenses incurred in the year ended December 31, 2022 was $0 and $0, respectively.

 

Series #DIVTU

 

On December 1, 2023, the APPL - Series #DIVTU executed a Loan Agreement from the Parent Company. According to the Loan Agreement, the APPL - Series #DIVTU borrowed $222,660 at 10% interest with a maturity of November 30, 2024. The outstanding balance of the Loan Payable - Down Payment Loan as of December 31, 2023 and 2022 was $222,660 and $0, respectively, and is included in related party debt, current on the accompanying balance sheet. The interest expenses incurred in the year ended December 31, 2022 was $1,891 and $0, respectively.

 

Series #ET8BV

 

On May 24, 2024, the APPL - Series #ET8BV executed a Loan Agreement from the Parent Company. According to the Loan Agreement, the APPL - Series #ET8BV borrowed $200,000 at 10% interest with a maturity of May 23, 2025. The outstanding balance of the Loan Payable - Down Payment Loan as of December 31, 2023 and 2022 was $0 and $0, respectively, and is included in related party debt, current on the accompanying balance sheet. The interest expenses incurred in the year ended December 31, 2022 was $0 and $0, respectively.

 

Series #EYPIR

 

On May 20, 2024, the APPL - Series #EYPIR executed a Loan Agreement from the Parent Company. According to the Loan Agreement, the APPL - Series #EYPIR borrowed $210,000 at 10% interest with a maturity of May 19, 2025. The outstanding balance of the Loan Payable - Down Payment Loan as of December 31, 2023 and 2022 was $0 and $0, respectively, and is included in related party debt, current on the accompanying balance sheet. The interest expenses incurred in the year ended December 31, 2022 was $0 and $0, respectively.

 

Series #FTWDS

 

On September 1, 2022, the APPL - Series #FTWDS executed a Loan Agreement from the Parent Company. According to the Loan Agreement, the APPL - Series #FTWDS borrowed $228,015 at 9% interest with a maturity of August 31, 2023. The loan was paid off in 2023, and the outstanding balance of the Loan Payable - Down Payment Loan as of December 31, 2023 and 2022 was $0 and $178,015, respectively, and is included in related party debt, current on the accompanying balance sheet. The interest expenses incurred in the year ended December 31, 2022 was $4,920 and $6,840, respectively.

 

Series #JTDXY

 

On August 1, 2022, the APPL - Series #JTDXY executed a Loan Agreement from the Parent Company. According to the Loan Agreement, the APPL - Series #JTDXY borrowed $356,203 at 9% interest with a maturity of July 31, 2024. The loan was paid off in 2023, and the outstanding balance of the Loan Payable - Down Payment Loan as of December 31, 2023 and 2022 was $0 and $291,203, respectively, and is included in related party debt, current on the accompanying balance sheet. The interest expenses incurred in the year ended December 31, 2022 was $14,663 and $13,358, respectively.

 

Series #NHMOP

 

On October 1, 2023, the APPL - Series #NHMOP executed a Loan Agreement from the Parent Company. According to the Loan Agreement, the APPL - Series #NHMOP borrowed $165,100 at 10% interest with a maturity of September 30, 2024. The loan was paid off in 2024, and the outstanding balance of the Loan Payable - Down Payment Loan as of December 31, 2023 and 2022 was $66,000 and $0, respectively, and is included in related party debt, current on the accompanying balance sheet. The interest expenses incurred in the year ended December 31, 2022 was $2,958 and $0, respectively.

 

Series #OJXLW

 

On April 18, 2024, the APPL - Series #OJXLW executed a Loan Agreement from the Parent Company. According to the Loan Agreement, the APPL - Series #OJXLW borrowed $230,000 at 10% interest with a maturity of April 17, 2025. The outstanding balance of the Loan Payable - Down Payment Loan as of December 31, 2023 and 2022 was $0 and $0, respectively, and is included in related party debt, current on the accompanying balance sheet. The interest expenses incurred in the year ended December 31, 2022 was $0 and $0, respectively.

 

Series #ORHOF

 

On November 1, 2023, the APPL - Series #ORHOF executed a Loan Agreement from the Parent Company. According to the Loan Agreement, the APPL - Series #ORHOF borrowed $175,587 at 10% interest with a maturity of October 31, 2024. The outstanding balance of the Loan Payable - Down Payment Loan as of December 31, 2023 and 2022 was $175,587 and $0, respectively, and is included in related party debt, current on the accompanying balance sheet. The interest expenses incurred in the year ended December 31, 2022 was $2,934 and $0, respectively.

 

Series #P7FJ5

 

On September 1, 2022, the APPL - Series #P7FJ5 executed a Loan Agreement from the Parent Company. According to the Loan Agreement, the APPL - Series #P7FJ5 borrowed $227,985 at 9% interest with a maturity of August 31, 2024. The loan was paid off in 2023, and the outstanding balance of the Loan Payable - Down Payment Loan as of December 31, 2023 and 2022 was $0 and $222,985, respectively, and is included in related party debt, current on the accompanying balance sheet. The interest expenses incurred in the year ended December 31, 2022 was $11,587 and $6,840, respectively.

 

Series #QGXF0

 

On August 1, 2023, the APPL - Series #QGXF0 executed a Loan Agreement from the Parent Company. According to the Loan Agreement, the APPL - Series #QGXF0 borrowed $344,051 at 10% interest with a maturity of July 31, 2024. The loan was paid off in 2023, and the outstanding balance of the Loan Payable - Down Payment Loan as of December 31, 2023 and 2022 was $0 and $0, respectively, and is included in related party debt, current on the accompanying balance sheet. The interest expenses incurred in the year ended December 31, 2022 was $11,835 and $0, respectively.

 

Series #RPFUV

 

On October 18, 2023, the APPL - Series #RPFUV executed a Loan Agreement from the Parent Company. According to the Loan Agreement, the APPL - Series #RPFUV borrowed $250,963 at 10% interest with a maturity of October 17, 2024. The loan was paid off in 2023, and the outstanding balance of the Loan Payable - Down Payment Loan as of December 31, 2023 and 2022 was $0 and $0, respectively, and is included in related party debt, current on the accompanying balance sheet. The interest expenses incurred in the year ended December 31, 2022 was $2,956 and $0, respectively.

 

Series #SOV9W

 

On August 1, 2023, the APPL - Series #SOV9W executed a Loan Agreement from the Parent Company. According to the Loan Agreement, the APPL - Series #SOV9W borrowed $212,919 at 10% interest with a maturity of July 31, 2024. The loan was paid off in 2023, and the outstanding balance of the Loan Payable - Down Payment Loan as of December 31, 2023 and 2022 was $0 and $0, respectively, and is included in related party debt, current on the accompanying balance sheet. The interest expenses incurred in the year ended December 31, 2022 was $8,944 and $0, respectively.

 

Series #WGI3Z

 

On April 5, 2022, the APPL - Series #WGI3Z executed a Loan Agreement from the Parent Company. According to the Loan Agreement, the APPL - Series #WGI3Z borrowed $299,120 at 9% interest with a maturity of April 4, 2023. The loan was paid off in 2022, and the outstanding balance of the Loan Payable - Down Payment Loan as of December 31, 2023 and 2022 was $0 and $0, respectively, and is included in related party debt, current on the accompanying balance sheet. The interest expenses incurred in the year ended December 31, 2022 was $0 and $12,697, respectively.

 

Series #WRA7O

 

On October 1, 2022, the APPL - Series #WRA7O executed a Loan Agreement from the Parent Company. According to the Loan Agreement, the APPL - Series #WRA7O borrowed $542,610 at 9% interest with a maturity of September 30, 2023. The loan was paid off in 2023, and the outstanding balance of the Loan Payable - Down Payment Loan as of December 31, 2023 and 2022 was $0 and $522,610, respectively, and is included in related party debt, current on the accompanying balance sheet. The interest expenses incurred in the year ended December 31, 2022 was $15,647 and $12,209, respectively.

 

Series #ZAUH4

 

On May 20, 2024, the APPL - Series #ZAUH4 executed a Loan Agreement from the Parent Company. According to the Loan Agreement, the APPL - Series #ZAUH4 borrowed $210,000 at 10% interest with a maturity of May 19, 2025. The outstanding balance of the Loan Payable - Down Payment Loan as of December 31, 2023 and 2022 was $0 and $0, respectively, and is included in related party debt, current on the accompanying balance sheet. The interest expenses incurred in the year ended December 31, 2022 was $0 and $0, respectively.

 

Series #ZIE3T

 

On August 1, 2022, the APPL - Series #ZIE3T executed a Loan Agreement from the Parent Company. According to the Loan Agreement, the APPL - Series #ZIE3T borrowed $360,205 at 9% interest with a maturity of July 31, 2024. The loan was paid off in 2023, and the outstanding balance of the Loan Payable - Down Payment Loan as of December 31, 2023 and 2022 was $0 and $260,205, respectively, and is included in related party debt, current on the accompanying balance sheet. The interest expenses incurred in the year ended December 31, 2022 was $8,700 and $13,508, respectively.

53

 

Trend Information

 

Our results of operations are affected by a variety of factors, including conditions in the financial markets and the economic and political environments, particularly in the United States. Global economic conditions, including political environments, financial market performance, interest rates, credit spreads or other conditions beyond our control are unpredictable and could negatively affect the value of the series properties, our ability to acquire and manage single family rentals and the success of our current and future offerings. In addition to the aforementioned macroeconomic trends, we believe the following factors will influence our future performance:

 

54

 

DIRECTORS, EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES

 

 

In accordance with the Operating Agreement and the Series Designation, Ark7 Inc. serves as the initial member, the Managing Member of Ark7 Properties Plus LLC, and the Asset Manager for each Series.

 

Issuer

 

Managing Member

 

Asset Manager

Ark7 Properties Plus LLC - Series #WGI3Z

 

Ark7 Inc.

 

Ark7 Inc.

Ark7 Properties Plus LLC - Series #0XYT6

 

Ark7 Inc.

 

Ark7 Inc.

Ark7 Properties Plus LLC - Series #ZIE3T

 

Ark7 Inc.

 

Ark7 Inc.

Ark7 Properties Plus LLC - Series #JTDXY

 

Ark7 Inc.

 

Ark7 Inc.

Ark7 Properties Plus LLC - Series #FTWDS

 

Ark7 Inc.

 

Ark7 Inc.

Ark7 Properties Plus LLC - Series #P7FJ5

 

Ark7 Inc.

 

Ark7 Inc.

Ark7 Properties Plus LLC - Series #WRA7O

 

Ark7 Inc.

 

Ark7 Inc.

Ark7 Properties Plus LLC - Series #SOV9W

 

Ark7 Inc.

 

Ark7 Inc.

Ark7 Properties Plus LLC - Series #QGXF0

 

Ark7 Inc.

 

Ark7 Inc.

Ark7 Properties Plus LLC - Series #RPFUV

 

Ark7 Inc.

 

Ark7 Inc.

Ark7 Properties Plus LLC - Series #NHMOP

 

Ark7 Inc.

 

Ark7 Inc.

Ark7 Properties Plus LLC - Series #ORHOF

 

Ark7 Inc.

 

Ark7 Inc.

Ark7 Properties Plus LLC - Series #DIVTU

 

Ark7 Inc.

 

Ark7 Inc.

Ark7 Properties Plus LLC - Series #OJXLW

 

Ark7 Inc.

 

Ark7 Inc.

Ark7 Properties Plus LLC - Series #ZAUH4

 

Ark7 Inc.

 

Ark7 Inc.

Ark7 Properties Plus LLC - Series #EYPIR

 

Ark7 Inc.

 

Ark7 Inc.

Ark7 Properties Plus LLC - Series #5VCTK

 

Ark7 Inc.

 

Ark7 Inc.

Ark7 Properties Plus LLC - Series #ET8BV

 

Ark7 Inc.

 

Ark7 Inc.

 

Executives and Directors

 

Ark7 Inc. is operated by the following executives and directors all work for the company on a full-time basis.

 

Name (Board of Directors & Executive Officers)

 

Position

 

Age

 

Term of Office (If indefinite, give date appointed)

 

Full Time/Part Time

Yizhen Zhao

 

CEO

 

35

 

October 2018 - Present

 

Full Time

Yujian Weng

 

CTO

 

37

 

December 2020 - Present

 

Full Time

Ling Yang

 

CCO

 

31

 

December 2020 - Present

 

Full Time

 

Yizhen Zhao, CEO and Co-Founder

 

Yizhen Zhao is currently the co-founder and Chief Executive Officer of Ark7. He has served in this position since October 2018. Prior to that, he worked as Software Engineers/Architecture Leads at Uber from 2017 to 2019, LinkedIn from 2014 to 2017, Twitter from 2013 to 2014, and Google from 2010 to 2013. He studied Computer Science at Shanghai Jiaotong University from 2006 to 2010 and received multiple Champion rewards for participating in international computer programming contests.

 

Yujian Weng, CTO and Co-Founder

 

Yujian Weng is currently the co-founder and Chief Technology Officer of Ark7. He has served in this position since December 2020. Prior to that, he was Senior Director, Connected Vehicle Services at NIO from 2016 to 2019. In this position, he was responsible for lead design and development of NIO Connected Car Platform. Previously, he led an ads & content personalization team at Cheetah Mobile from 2015 to 2016, he was a software engineer at Yahoo! from 2010 to 2015.

 

Ling Yang, CCO and Co-Founder

 

Ling Yang is currently the co-founder and Chief Compliance Officer of Ark7. She has served in this position since December 2020. Prior to that, she was the senior attorney at King & Wood Mallesons LLP from 2017 to 2021. Ms. Yang has extensive experience representing Asian, US, and multinational investors and companies in their cross-border business activities. Previously, Ms. Yang worked at a well-known Los Angeles law firm and also served as a legal consultant in a listed company in China. Ms. Yang graduated from Indiana University Maurer School of Law.

55

 

Indemnification of the Manager

 

The operating agreement stipulates that none of our manager, current or former directors, officers, employees, partners, shareholders, members, controlling individuals, agents, or independent contractors of our manager, nor individuals acting on behalf of our company in specific roles concerning other entities, will be held accountable to our company, any series, or any stakeholders for any actions or failures to act unless conclusively determined by a final, non-appealable decision of a court, arbitrator, or other competent tribunal to constitute fraud, willful misconduct, or gross negligence. Each series will indemnify these individuals using its assets against all liabilities and losses, including payments for judgments, fines, penalties, or litigation settlements, along with legal fees and expenses, incurred as a result of their service to our company or that particular series, unless conclusively determined otherwise by a final, non-appealable decision of a court, arbitrator, or other competent tribunal to constitute fraud, willful misconduct, or gross negligence.

 

56

 

COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS

 

 

For the year ended December 31, 2023, the company did not compensate any director or executive officer for their services to Ark7 Properties Plus LLC. We do not currently have any employees, nor do we currently intend to hire any employees who will be compensated directly by our company.

 

Our Managing Member and Asset Manager will be compensated as follows:

 

Asset Management Fee

 

For services performed, the Series will pay an annual Asset Management Fee to the Asset Manager in respect of each fiscal year, 15% of any Free Cash Flows available for distribution pursuant to Article VII of the Operating Agreement. Any such amount will be paid at the same time as, and only if, a distribution is made from the Series to its Members. For the year ended December 31, 2023 each Series paid the following Asset Manager Fees to the Asset Manager:

 

Series

 

Asset Management Fees Paid for the Year Ended December 31, 2023

Series #WGI3Z

 

$
-

Series #0XYT6

 

$
-

Series #ZIE3T

 

$
-

Series #JTDXY

 

$
-

Series #FTWDS

 

$
-

Series #P7FJ5

 

$
-

Series #WRA7O

 

$
-

Series #SOV9W

 

$
-

Series #QGXF0

 

$
-

Series #RPFUV

 

$
-

Series #NHMOP

 

$
-

Series #ORHOF

 

$
-

Series #DIVTU

 

$
-

Series #OJXLW

 

N/A

Series #ZAUH4

 

N/A

Series #EYPIR

 

N/A

Series #5VCTK

 

N/A

Series #ET8BV

 

N/A

57

 

Sourcing Fee

 

Pursuant to the Operating Agreement the Asset Manager, as consideration for assisting in the sourcing of the Underlying Asset of a Series, to the extent not waived by the Managing Member in its sole discretion, will receive a 3.0% (of the maximum offering amount) Sourcing Fee. For the year ended December 31, 2023 each Series paid the following Sourcing Fees to the Asset Manager:

 

Series

 

Sourcing Fees Paid for the Year Ended December 31, 2023

Series #WGI3Z

 

$
-

Series #0XYT6

 

$
14,250

Series #ZIE3T

 

$
13,650

Series #JTDXY

 

$
13,500

Series #FTWDS

 

$
7,950

Series #P7FJ5

 

$
7,950

Series #WRA7O

 

$
18,450

Series #SOV9W

 

$
7,800

Series #QGXF0

 

$
-

Series #RPFUV

 

$
8,700

Series #NHMOP

 

$
-

Series #ORHOF

 

$
-

Series #DIVTU

 

$
-

Series #OJXLW

 

N/A

Series #ZAUH4

 

N/A

Series #EYPIR

 

N/A

Series #5VCTK

 

N/A

Series #ET8BV

 

N/A

58

 

Liquidation Fee

 

Subject to Section 7.3 and ARTICLE XI and any Interest Designation, any amounts available for distribution following the liquidation of a Series, net of any fees, costs and liabilities (as determined by the Managing Member in its sole discretion), shall be applied and distributed 100% to the Members (pro rata to their Interests and which, for the avoidance of doubt, may include the Managing Member and its Affiliates).

 

Free Cash Flow

 

Distributions will be paid out of Free Cash Flow. Free Cash Flow means any available cash for distribution generated from the net income received by a Series, as determined by the Managing Member to be in the nature of income as defined by U.S. GAAP, plus (i) any change in the net working capital (as shown on the balance sheet of such Series) (ii) any amortization to the relevant Series Asset (as shown on the income statement of such Series) and (iii) any depreciation to the relevant Series Asset (as shown on the income statement of such Series) and (iv) any other non-cash Operating Expenses less (a) any capital expenditure related to the Series Asset (as shown on the cash flow statement of such Series) (b) any other liabilities or obligations of the Series, including interest payments on debt obligations, in each case to the extent not already paid or provided for and (c) upon the termination and winding up of a Series or the Company, all costs and expenses incidental to such termination and winding as allocated to the relevant Series in accordance with Section 6.4 of the Operating Agreement.

 

To the extent there is "Free Cash Flow" for any Series and as described in the Series Designation for such Series, our Managing Member intends to declare and pay distributions as follows:

 

 

Our Managing Member has sole discretion in determining what distributions of Free Cash Flow, if any, are made to holders of each Series of shares except as otherwise limited by law or the Operating Agreement.

 

Intercompany Loan(s)

 

Intercompany Loans that allow for prepayment: In addition to the above compensation to the Managing Member and Asset Manager (which are both Ark7 at of the date of this report), under the terms of the intercompany loan, a Series will be required to pay interest to Ark7 of at least 3.0% of the loan amount, and potentially up to 9.0%, depending on how much is prepaid.

 

Intercompany loans that do not allow for prepayment: In addition to the above compensation to the Managing Member and Asset Manager (which are both Ark7 at of the date of this report), under the terms of the intercompany loan, a Series will be required to pay interest to Ark7 of up to 10.0%, Prepayment of the loans is not permitted.

59

 

SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITYHOLDERS

 

 

The following table displays, on a post Conversion basis, the voting securities beneficially owned by (1) any individual director or officer who beneficially owns more than 10% of any class of the company's capital stock, (2) all executive officers and directors as a group and (3) any other holder who beneficially owns more than 10% of any class of the company's capital stock on a post-conversion basis.

 

Title of Class

 

Name and Address of Beneficial Owner

 

Amount and Nature of Beneficial Ownership

 

Amount and Nature of Beneficial Ownership Acquirable

 

Percent of Class (1)

 

Percent of Voting Power

Membership Interest

 

Ark7 Inc., 1 Ferry Building, Ste 201 San Francisco, CA 94111

 

100% of Membership Interests of Ark7 Properties Plus LLC

 

n/a

 

100%

 

100%

 

The column "Percent of Class" includes a calculation of the amount the person owns now, plus the amount that person is entitled to acquire. That amount is then shown as a percentage of the outstanding amount of securities in that class if no other people exercised their rights to acquire those securities. The result is a calculation of the maximum amount that person could ever own based on their current and acquirable ownership, which is why the amounts in this column will not add up to 100%.

 

As of June 3, 2024, Series #WGI3Z had 11,350 Series Interests issued and outstanding and 11,350 Series Interests have been authorized.

 

As of June 3, 2024, Series #0XYT6 had 23,750 Series Interests issued and outstanding and 23,750 Series Interests have been authorized.

 

As of June 3, 2024, Series #ZIE3T had 22,750 Series Interests issued and outstanding and 22,750 Series Interests have been authorized.

 

As of June 3, 2024, Series #JTDXY had 22,500 Series Interests issued and outstanding and 22,500 Series Interests have been authorized.

 

As of June 3, 2024, Series #FTWDS had 13,250 Series Interests issued and outstanding and 13,250 Series Interests have been authorized.

 

As of June 3, 2024, Series #P7FJ5 had 13,250 Series Interests issued and outstanding and 13,250 Series Interests have been authorized.

 

As of June 3, 2024, Series #WRA7O had 30,750 Series Interests issued and outstanding and 30,750 Series Interests have been authorized.

 

As of June 3, 2024, Series #SOV9W had 2,600 Series Interests issued and outstanding and 2,600 Series Interests have been authorized.

 

As of June 3, 2024, Series #QGXF0 had 4,100 Series Interests issued and outstanding and 4,100 Series Interests have been authorized.

 

As of June 3, 2024, Series #RPFUV had 2,900 Series Interests issued and outstanding and 2,900 Series Interests have been authorized.

 

As of June 3, 2024, Series #NHMOP had 2,160 Series Interests issued and outstanding and 2,160 Series Interests have been authorized.

 

As of June 3, 2024, Series #ORHOF had 2,500 Series Interests issued and outstanding and 2,500 Series Interests have been authorized.

 

As of June 3, 2024, Series #DIVTU had 3,040 Series Interests issued and outstanding and 3,050 Series Interests have been authorized.

 

As of June 3, 2024, Series #OJXLW had 10 Series Interests issued and outstanding and 2,600 Series Interests have been authorized.

 

As of June 3, 2024, Series #ZAUH4 had 10 Series Interests issued and outstanding and 2,400 Series Interests have been authorized.

 

As of June 3, 2024, Series #EYPIR had 10 Series Interests issued and outstanding and 2,600 Series Interests have been authorized.

 

As of June 3, 2024, Series #5VCTK had 10 Series Interests issued and outstanding and 2,750 Series Interests have been authorized.

 

As of June 3, 2024, Series #ET8BV had 10 Series Interests issued and outstanding and 2,750 Series Interests have been authorized.

 

Yizhen Zhao is currently the majority owner of Ark7 Inc..

60

 

INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS

 

 

The company is subject to various conflicts of interest arising out of its relationship with Ark7, the company's Managing Member, Asset Manager and its affiliates. These conflicts are discussed below.

 

Ark7 Inc. is both the Asset Manager and the Managing Member

 

Ark7 Inc. is both the Asset Manager and the Managing Member. The Managing Member has appointed the Asset Manager. On balance, Ark7 Inc. controls all of the decisions related to each Series:

 

 

None of the responsibilities and determinations listed above will be made at arm's length and all of these decisions may unjustly financially reward Ark7 to the detriment of each Series and the investors. These conflicts may inhibit or interfere with the sound and profitable operation of the company. See "Risk Factors - Ark7 Inc. is both the Asset Manager and the Managing Member.

61

 

Intercompany Loan Agreement between Ark7 Inc. and Series #WGI3Z

 

On April 5, 2022, Series #WGI3Z (the "Borrower") and Ark7 (the "Lender") entered into the Intercompany Loan Agreement (the "Loan Agreement"). The Loan Agreement has the following terms:

 

 

Asset Management Agreement between Ark7 Inc. and Series #WGI3Z

 

On April 15, 2022, Series #WGI3Z and Ark7 (the "Asset Manager") entered into an Asset Management Agreement. The Asset Management Agreement has the following terms:

 

62

 

Intercompany Loan Agreement between Ark7 Inc. and Series #0XYT6

 

On July 1, 2022, Series #0XYT6 (the "Borrower") and Ark7 (the "Lender") entered into the Intercompany Loan Agreement (the "Loan Agreement"). The Loan Agreement has the following terms:

 

 

Asset Management Agreement between Ark7 Inc. and Series #0XYT6

 

On July 1, 2022, Series #0XYT6 and Ark7 (the "Asset Manager") entered into an Asset Management Agreement. The Asset Management Agreement has the following terms:

 

63

 

Intercompany Loan Agreement between Ark7 Inc. and Series #ZIE3T

 

On August 1, 2022, Series #ZIE3T (the "Borrower") and Ark7 (the "Lender") entered into the Intercompany Loan Agreement (the "Loan Agreement"). The Loan Agreement has the following terms:

 

 

Asset Management Agreement between Ark7 Inc. and Series #ZIE3T

 

On August 1, 2022, Series #ZIE3T and Ark7 (the "Asset Manager") entered into an Asset Management Agreement. The Asset Management Agreement has the following terms:

 

64

 

Intercompany Loan Agreement between Ark7 Inc. and Series #JTDXY

 

On August 1, 2022, Series #JTDXY (the "Borrower") and Ark7 (the "Lender") entered into the Intercompany Loan Agreement (the "Loan Agreement"). The Loan Agreement has the following terms:

 

 

Asset Management Agreement between Ark7 Inc. and Series #JTDXY

 

On August 1, 2022, Series #JTDXY and Ark7 (the "Asset Manager") entered into an Asset Management Agreement. The Asset Management Agreement has the following terms:

 

65

 

Intercompany Loan Agreement between Ark7 Inc. and Series #FTWDS

 

On September 1, 2022, Series #FTWDS (the "Borrower") and Ark7 (the "Lender") entered into the Intercompany Loan Agreement (the "Loan Agreement"). The Loan Agreement has the following terms:

 

 

Asset Management Agreement between Ark7 Inc. and Series #FTWDS

 

On September 10, 2022, Series #FTWDS and Ark7 (the "Asset Manager") entered into an Asset Management Agreement. The Asset Management Agreement has the following terms:

 

66

 

Intercompany Loan Agreement between Ark7 Inc. and Series #P7FJ5

 

On September 1, 2022, Series #P7FJ5 (the "Borrower") and Ark7 (the "Lender") entered into the Intercompany Loan Agreement (the "Loan Agreement"). The Loan Agreement has the following terms:

 

 

Asset Management Agreement between Ark7 Inc. and Series #P7FJ5

 

On September 10, 2022, Series #P7FJ5 and Ark7 (the "Asset Manager") entered into an Asset Management Agreement. The Asset Management Agreement has the following terms:

 

67

 

Intercompany Loan Agreement between Ark7 Inc. and Series #WRA7O

 

On October 1, 2022, Series #WRA7O (the "Borrower") and Ark7 (the "Lender") entered into the Intercompany Loan Agreement (the "Loan Agreement"). The Loan Agreement has the following terms:

 

 

Asset Management Agreement between Ark7 Inc. and Series #WRA7O

 

On October 1, 2022, Series #WRA7O and Ark7 (the "Asset Manager") entered into an Asset Management Agreement. The Asset Management Agreement has the following terms:

 

68

 

Intercompany Loan Agreement between Ark7 Inc. and Series #SOV9W

 

On August 1, 2023, Series #SOV9W (the "Borrower") and Ark7 (the "Lender") entered into the Intercompany Loan Agreement (the "Loan Agreement"). The Loan Agreement has the following terms:

 

 

Asset Management Agreement between Ark7 Inc. and Series #SOV9W

 

On August 1, 2023, Series #SOV9W and Ark7 (the "Asset Manager") entered into an Asset Management Agreement. The Asset Management Agreement has the following terms:

 

69

 

Intercompany Loan Agreement between Ark7 Inc. and Series #QGXF0

 

On August 1, 2023, Series #QGXF0 (the "Borrower") and Ark7 (the "Lender") entered into the Intercompany Loan Agreement (the "Loan Agreement"). The Loan Agreement has the following terms:

 

 

Asset Management Agreement between Ark7 Inc. and Series #QGXF0

 

On August 1, 2023, Series #QGXF0 and Ark7 (the "Asset Manager") entered into an Asset Management Agreement. The Asset Management Agreement has the following terms:

 

70

 

Intercompany Loan Agreement between Ark7 Inc. and Series #RPFUV

 

On October 18, 2023, Series #RPFUV (the "Borrower") and Ark7 (the "Lender") entered into the Intercompany Loan Agreement (the "Loan Agreement"). The Loan Agreement has the following terms:

 

 

Asset Management Agreement between Ark7 Inc. and Series #RPFUV

 

On October 1, 2023, Series #RPFUV and Ark7 (the "Asset Manager") entered into an Asset Management Agreement. The Asset Management Agreement has the following terms:

 

71

 

Intercompany Loan Agreement between Ark7 Inc. and Series #NHMOP

 

On October 1, 2023, Series #NHMOP (the "Borrower") and Ark7 (the "Lender") entered into the Intercompany Loan Agreement (the "Loan Agreement"). The Loan Agreement has the following terms:

 

 

Asset Management Agreement between Ark7 Inc. and Series #NHMOP

 

On October 1, 2023, Series #NHMOP and Ark7 (the "Asset Manager") entered into an Asset Management Agreement. The Asset Management Agreement has the following terms:

 

72

 

Intercompany Loan Agreement between Ark7 Inc. and Series #ORHOF

 

On November 1, 2023, Series #ORHOF (the "Borrower") and Ark7 (the "Lender") entered into the Intercompany Loan Agreement (the "Loan Agreement"). The Loan Agreement has the following terms:

 

 

Asset Management Agreement between Ark7 Inc. and Series #ORHOF

 

On November 1, 2023, Series #ORHOF and Ark7 (the "Asset Manager") entered into an Asset Management Agreement. The Asset Management Agreement has the following terms:

 

73

 

Intercompany Loan Agreement between Ark7 Inc. and Series #DIVTU

 

On December 1, 2023, Series #DIVTU (the "Borrower") and Ark7 (the "Lender") entered into the Intercompany Loan Agreement (the "Loan Agreement"). The Loan Agreement has the following terms:

 

 

Asset Management Agreement between Ark7 Inc. and Series #DIVTU

 

On December 1, 2023, Series #DIVTU and Ark7 (the "Asset Manager") entered into an Asset Management Agreement. The Asset Management Agreement has the following terms:

 

74

 

Intercompany Loan Agreement between Ark7 Inc. and Series #OJXLW

 

On April 18, 2024, Series #OJXLW (the "Borrower") and Ark7 (the "Lender") entered into the Intercompany Loan Agreement (the "Loan Agreement"). The Loan Agreement has the following terms:

 

 

Asset Management Agreement between Ark7 Inc. and Series #OJXLW

 

On April 18, 2024, Series #OJXLW and Ark7 (the "Asset Manager") entered into an Asset Management Agreement. The Asset Management Agreement has the following terms:

 

75

 

Intercompany Loan Agreement between Ark7 Inc. and Series #ZAUH4

 

On May 20, 2024, Series #ZAUH4 (the "Borrower") and Ark7 (the "Lender") entered into the Intercompany Loan Agreement (the "Loan Agreement"). The Loan Agreement has the following terms:

 

 

Asset Management Agreement between Ark7 Inc. and Series #ZAUH4

 

On May 20, 2024, Series #ZAUH4 and Ark7 (the "Asset Manager") entered into an Asset Management Agreement. The Asset Management Agreement has the following terms:

 

76

 

Intercompany Loan Agreement between Ark7 Inc. and Series #EYPIR

 

On May 20, 2024, Series #EYPIR (the "Borrower") and Ark7 (the "Lender") entered into the Intercompany Loan Agreement (the "Loan Agreement"). The Loan Agreement has the following terms:

 

 

Asset Management Agreement between Ark7 Inc. and Series #EYPIR

 

On May 20, 2024, Series #EYPIR and Ark7 (the "Asset Manager") entered into an Asset Management Agreement. The Asset Management Agreement has the following terms:

 

77

 

Intercompany Loan Agreement between Ark7 Inc. and Series #5VCTK

 

On May 20, 2024, Series #5VCTK (the "Borrower") and Ark7 (the "Lender") entered into the Intercompany Loan Agreement (the "Loan Agreement"). The Loan Agreement has the following terms:

 

 

Asset Management Agreement between Ark7 Inc. and Series #5VCTK

 

On May 20, 2024, Series #5VCTK and Ark7 (the "Asset Manager") entered into an Asset Management Agreement. The Asset Management Agreement has the following terms:

 

78

 

Intercompany Loan Agreement between Ark7 Inc. and Series #ET8BV

 

On May 24, 2024, Series #ET8BV (the "Borrower") and Ark7 (the "Lender") entered into the Intercompany Loan Agreement (the "Loan Agreement"). The Loan Agreement has the following terms:

 

 

Asset Management Agreement between Ark7 Inc. and Series #ET8BV

 

On May 24, 2024, Series #ET8BV and Ark7 (the "Asset Manager") entered into an Asset Management Agreement. The Asset Management Agreement has the following terms:

 

79

 

For the years ended December 31, 2022 and December 31, 2023 each Series paid the following Asset Management Fees to the Asset Manager:

 

Series

 

Asset Management Fees Paid for the Year Ended December 31, 2022

 

Asset Management Fees Paid for the Year Ended December 31, 2023

Series #WGI3Z

 

$
0

 

$
0

Series #0XYT6

 

$
0

 

$
0

Series #ZIE3T

 

$
0

 

$
0

Series #JTDXY

 

$
0

 

$
0

Series #FTWDS

 

$
0

 

$
0

Series #P7FJ5

 

$
0

 

$
0

Series #WRA7O

 

$
0

 

$
0

Series #SOV9W

 

$
0

 

$
0

Series #QGXF0

 

$
0

 

$
0

Series #RPFUV

 

$
0

 

$
0

Series #NHMOP

 

$
0

 

$
0

Series #ORHOF

 

$
0

 

$
0

Series #DIVTU

 

$
0

 

$
0

Series #OJXLW

 

N/A

 

N/A

Series #ZAUH4

 

N/A

 

N/A

Series #EYPIR

 

N/A

 

N/A

Series #5VCTK

 

N/A

 

N/A

Series #ET8BV

 

N/A

 

N/A

80

 

Series Designation: Sourcing Fee paid to the Asset Manager, Ark7

 

The Asset Manager, as consideration for assisting in the sourcing of the Series #WGI3Z Underlying Asset, to the extent not waived by the Managing Member in its sole discretion, will receive a 3.0% Sourcing Fee.

 

The Asset Manager, as consideration for assisting in the sourcing of the Series #0XYT6 Underlying Asset, to the extent not waived by the Managing Member in its sole discretion, will receive a 3.0% Sourcing Fee.

 

The Asset Manager, as consideration for assisting in the sourcing of the Series #ZIE3T Underlying Asset, to the extent not waived by the Managing Member in its sole discretion, will receive a 3.0% Sourcing Fee.

 

The Asset Manager, as consideration for assisting in the sourcing of the Series #JTDXY Underlying Asset, to the extent not waived by the Managing Member in its sole discretion, will receive a 3.0% Sourcing Fee.

 

The Asset Manager, as consideration for assisting in the sourcing of the Series #FTWDS Underlying Asset, to the extent not waived by the Managing Member in its sole discretion, will receive a 3.0% Sourcing Fee.

 

The Asset Manager, as consideration for assisting in the sourcing of the Series #P7FJ5 Underlying Asset, to the extent not waived by the Managing Member in its sole discretion, will receive a 3.0% Sourcing Fee.

 

The Asset Manager, as consideration for assisting in the sourcing of the Series #WRA7O Underlying Asset, to the extent not waived by the Managing Member in its sole discretion, will receive a 3.0% Sourcing Fee.

 

The Asset Manager, as consideration for assisting in the sourcing of the Series #SOV9W Underlying Asset, to the extent not waived by the Managing Member in its sole discretion, will receive a 3.0% Sourcing Fee.

 

The Asset Manager, as consideration for assisting in the sourcing of the Series #QGXF0 Underlying Asset, to the extent not waived by the Managing Member in its sole discretion, will receive a 3.0% Sourcing Fee.

 

The Asset Manager, as consideration for assisting in the sourcing of the Series #RPFUV Underlying Asset, to the extent not waived by the Managing Member in its sole discretion, will receive a 3.0% Sourcing Fee.

 

The Asset Manager, as consideration for assisting in the sourcing of the Series #NHMOP Underlying Asset, to the extent not waived by the Managing Member in its sole discretion, will receive a 3.0% Sourcing Fee.

 

The Asset Manager, as consideration for assisting in the sourcing of the Series #ORHOF Underlying Asset, to the extent not waived by the Managing Member in its sole discretion, will receive a 3.0% Sourcing Fee.

 

The Asset Manager, as consideration for assisting in the sourcing of the Series #DIVTU Underlying Asset, to the extent not waived by the Managing Member in its sole discretion, will receive a 3.0% Sourcing Fee.

 

The Asset Manager, as consideration for assisting in the sourcing of the Series #OJXLW Underlying Asset, to the extent not waived by the Managing Member in its sole discretion, will receive a 3.0% Sourcing Fee.

 

The Asset Manager, as consideration for assisting in the sourcing of the Series #ZAUH4 Underlying Asset, to the extent not waived by the Managing Member in its sole discretion, will receive a 3.0% Sourcing Fee.

 

The Asset Manager, as consideration for assisting in the sourcing of the Series #EYPIR Underlying Asset, to the extent not waived by the Managing Member in its sole discretion, will receive a 3.0% Sourcing Fee.

 

The Asset Manager, as consideration for assisting in the sourcing of the Series #5VCTK Underlying Asset, to the extent not waived by the Managing Member in its sole discretion, will receive a 3.0% Sourcing Fee.

 

The Asset Manager, as consideration for assisting in the sourcing of the Series #ET8BV Underlying Asset, to the extent not waived by the Managing Member in its sole discretion, will receive a 3.0% Sourcing Fee.

81

 

For the years ended December 31, 2022 and December 31, 2023 each Series paid the following Sourcing Fees to the Asset Manager:

 

Series

 

Sourcing Fees Paid for the Year Ended December 31, 2022

 

Sourcing Fees Paid for the Year Ended December 31, 2023

Series #WGI3Z

 

$
10,896

 

$
-

Series #0XYT6

 

$
-

 

$
14,250

Series #ZIE3T

 

$
-

 

$
13,650

Series #JTDXY

 

$
-

 

$
13,500

Series #FTWDS

 

$
-

 

$
7,950

Series #P7FJ5

 

$
-

 

$
7,950

Series #WRA7O

 

$
-

 

$
18,450

Series #SOV9W

 

$
-

 

$
7,800

Series #QGXF0

 

$
-

 

$
-

Series #RPFUV

 

$
-

 

$
8,700

Series #NHMOP

 

$
-

 

$
-

Series #ORHOF

 

$
-

 

$
-

Series #DIVTU

 

$
-

 

$
-

Series #OJXLW

 

N/A

 

N/A

Series #ZAUH4

 

N/A

 

N/A

Series #EYPIR

 

N/A

 

N/A

Series #5VCTK

 

N/A

 

N/A

Series #ET8BV

 

N/A

 

N/A

82

 

Affiliates' Interests in Other Ark7 Entities

 

General

 

The officers and directors of Ark7 are also key professionals of APPL. These persons have legal obligations with respect to those entities that are similar to their obligations to the company. In addition, in the future, these persons and other affiliates of Ark7 may organize other real estate-related entities.

 

Allocation of Acquisition Opportunities

 

From time to time, Ark7 may create new entities that will acquire real estate assets and make offers of securities to accredited investors, foreign investors, and under Regulation D or Regulation A. Ark7 will, in its sole discretion, determine which entity will be responsible for acquiring a specific asset.

 

Allocation of the Company's Affiliates' Time

 

The company relies on Ark7's real estate professionals who act on behalf of its company, including Mr. Zhao, for the day-to-day operation of the business. Mr. Zhao is also the Chief Executive Officer of Ark7. As a result of his interests in other Ark7 entities, his obligations to other investors and the fact that he engages in and will continue to engage in other business activities on behalf of himself and others, Mr. Zhao will face conflicts of interest in allocating his time among the company, Ark7, other related entities and other business activities in which he is involved. However, the company believes that Ark7 and its affiliates have sufficient real estate professionals to fully discharge their responsibilities to the Ark7 entities for which they work.

83

 

SECURITIES BEING OFFERED

 

 

The following descriptions of the company's Series Interests, certain provisions of Delaware law and certain provisions of the following:

 

 

are summaries and are qualified by reference to Delaware law, and the aforementioned designations and Operating Agreement.

84

 

General

 

The Offering

 

The company is offering membership interests of Series #DIVTU, a registered series of a Delaware series limited liability company at a purchase price of $100.00 per Series Interest. The company has authorized, the issuance of up to 3,050 Series #DIVTU Interests. 10 Series #DIVTU Interests were issued to the Managing Member prior to this Offering.

 

The company is offering membership interests of Series #OJXLW, a registered series of a Delaware series limited liability company at a purchase price of $100.00 per Series Interest. The company has authorized, the issuance of up to 2,600 Series #OJXLW Interests. 10 Series #OJXLW Interests were issued to the Managing Member prior to this Offering.

 

The company is offering membership interests of Series #ZAUH4, a registered series of a Delaware series limited liability company at a purchase price of $100.00 per Series Interest. The company has authorized, the issuance of up to 2,400 Series #ZAUH4 Interests. 10 Series #ZAUH4 Interests were issued to the Managing Member prior to this Offering.

 

The company is offering membership interests of Series #EYPIR, a registered series of a Delaware series limited liability company at a purchase price of $100.00 per Series Interest. The company has authorized, the issuance of up to 2,600 Series #EYPIR Interests. 10 Series #EYPIR Interests were issued to the Managing Member prior to this Offering.

 

The company is offering membership interests of Series #5VCTK, a registered series of a Delaware series limited liability company at a purchase price of $100.00 per Series Interest. The company has authorized, the issuance of up to 2,750 Series #5VCTK Interests. 10 Series #5VCTK Interests were issued to the Managing Member prior to this Offering.

 

The company is offering membership interests of Series #ET8BV, a registered series of a Delaware series limited liability company at a purchase price of $100.00 per Series Interest. The company has authorized, the issuance of up to 2,750 Series #ET8BV Interests. 10 Series #ET8BV Interests were issued to the Managing Member prior to this Offering.

 

Title to each Underlying Asset

 

Title to each Underlying Asset will be held by each Series.

 

Managing Member, Ark7

 

The Managing Member, Ark7, may amend any of the terms of the Operating Agreement of Ark7 Properties or any Series Designation as it determines in its sole discretion. However, no amendment to the Operating Agreement of Ark7 Properties shall be made without the consent of the holders holding a majority of the outstanding interests, that: (i) decreases the percentage of outstanding interests required to take any action hereunder; (ii) materially adversely affects the rights of any of the economic members (including adversely affecting the holders of any particular Series Interests as compared to holders of other Series Interests); (iii) modifies Section 11.1(a) of the Operating Agreement or gives any person the right to dissolve the company; or (iv) modifies the term of the company.

85

 

Distribution Rights

 

Distributions will be paid out of Free Cash Flow. Free Cash Flow means any available cash for distribution generated from the net income received by a Series, as determined by the Managing Member to be in the nature of income as defined by U.S. GAAP, plus (i) any change in the net working capital (as shown on the balance sheet of such Series) (ii) any amortization to the relevant Series Asset (as shown on the income statement of such Series) and (iii) any depreciation to the relevant Series Asset (as shown on the income statement of such Series) and (iv) any other non-cash Operating Expenses less (a) any capital expenditure related to the Series Asset (as shown on the cash flow statement of such Series) (b) any other liabilities or obligations of the Series, including interest payments on debt obligations, in each case to the extent not already paid or provided for and (c) upon the termination and winding up of a Series or the Company, all costs and expenses incidental to such termination and winding as allocated to the relevant Series in accordance with Section 6.4 of the Operating Agreement.

 

To the extent there is "Free Cash Flow" for any Series and as described in the Series Designation for such Series, our Managing Member intends to declare and pay distributions as follows:

 

 

For more information on fees applicable to a specific series, see the "Compensation of our Directors and Executive Officers" section of this Offering Circular. Our Managing Member has sole discretion in determining what distributions of Free Cash Flow, if any, are made to holders of each Series of shares except as otherwise limited by law or the Operating Agreement.

 

Restrictions on Transfer

 

There is currently no public trading market for any Series Interests, and an active market may not develop or be sustained. In the event a transfer of any Series Interest does occur, pursuant to Section 4.2 of the Operating Agreement, it must (i) have been held for a period of 12 months and (ii) written consent, consenting to the transfer, must be obtained from the Managing Member, prior to the transfer.

 

Voting Rights

 

Investors have limited voting rights, and substantial powers are delegated to our Managing Member under Section 5.1 of the company's Operating Agreement for which a vote of the Series Interest holders is not required.

 

When submitting a matter of vote, a holder of a Series Interest, is entitled to one vote per Series Interest on any and all matters submitted to the consent or approval of members generally. No separate vote or consent of the holders of Series Interests shall be required for the approval of any matter, except for matters which only pertain to the Series Designation of a specific series, for which only the holders of that Series Interest will vote.

86

 

Confidential Information

 

The purpose of Article XIV of the Operating Agreement is to protect confidential information of the company that would be available to Series Interest holders but not subject to disclosure under federal securities laws. Such information would include personal information of other investors held by the company, personal information included on leases, and other information in the books and records of the company that is not ready for public dissemination for which an interest holder requests and receives access to. Note, this confidentiality obligation does not extend to matters which are public knowledge, has been publicly filed with the Commission, or as required by law for that interest holder.

 

Reports to Members

 

The Managing Member shall keep appropriate books of the business at our principal offices. The books will be maintained for both tax and financial reporting purposes on a basis that permits the preparation of financial statements in accordance with GAAP. For financial reporting purposes and tax purposes, the fiscal year and the tax year are the calendar year, unless otherwise determined by our Managing Member in accordance with the Internal Revenue Code. Our Managing Member will file with the Commission periodic reports as required by applicable securities laws.

 

Under the Securities Act, the company must update this Offering Circular upon the occurrence of certain events, such as asset acquisitions. The company will file updated offering circulars and offering circular supplements with the Commission. The company is also subject to the informational reporting requirements of the Exchange Act that are applicable to Tier 2 companies whose securities are qualified pursuant to Regulation A, and accordingly, the company will file annual reports, semi-annual reports and other information with the Commission. In addition, the company plans to provide Series Interest holders with periodic updates, including offering circulars, offering circular supplements, pricing supplements, information statements and other information.

 

The company will provide such documents and periodic updates electronically by email or made available through the company's platform.

 

Distribution Upon Liquidation of a Series

 

Subject to the terms of a Series Interest any amounts available for distribution following the liquidation of a Series, net of any fees, costs and liabilities (as determined by the Managing Member in its sole discretion), shall be applied and distributed 100% to the members (pro rata to their Interests and which, for the avoidance of doubt, may include the and its affiliates).

 

Other Rights

 

Holders of Series Interests shall have no conversion, exchange, sinking fund, appraisal rights, no preemptive rights to subscribe for any securities of the company and no preferential rights to distributions of Series Interests.

87

 

Forum Selection Provisions

 

The company's Operating Agreement includes a forum selection provision that requires any suit, action, or proceeding seeking to enforce any provision of or based on any matter arising out of or in connection with the Operating Agreement, or the transactions contemplated thereby be brought in state or federal court of competent jurisdiction located within the State of California.

 

This forum selection provision may limit investors' ability to bring claims in judicial forums that they find favorable to such disputes and may discourage lawsuits with respect to such claims. 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. We believe 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 may not be used to bring actions in state courts for 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. Investors will not be deemed to have waived the company's compliance with the federal securities laws and the rules and regulations thereunder.

88

 

U.S. FEDERAL INCOME TAX CONSIDERATIONS

 

 

Independent Tax Advice

 

The following is a summary of certain U.S. federal income tax considerations for U.S. investors. You should consult your own professional advisers to obtain advice on the tax consequences that apply to you.

 

A detailed analysis of the federal, state and local tax consequences of an investment in our series interests is beyond the scope of this discussion. Prospective Investors are advised to consult their own tax counsel regarding these consequences and the preparation of any federal, state or local tax returns that a series interest holder may be required to file.

 

THE U.S. FEDERAL INCOME TAX TREATMENT OF HOLDERS OF OUR SERIES INTERESTS DEPENDS IN SOME INSTANCES ON DETERMINATIONS OF FACT AND INTERPRETATIONS OF COMPLEX PROVISIONS OF U.S. FEDERAL INCOME TAX LAW FOR WHICH NO CLEAR PRECEDENT OR AUTHORITY MAY BE AVAILABLE. IN ADDITION, THE TAX CONSEQUENCES OF HOLDING OUR SERIES INTERESTS TO ANY PARTICULAR INVESTOR WILL DEPEND ON THE INVESTOR'S PARTICULAR TAX CIRCUMSTANCES. YOU ARE URGED TO CONSULT YOUR TAX ADVISOR REGARDING THE U.S. FEDERAL, STATE, LOCAL, AND NON-U.S. INCOME AND OTHER TAX CONSEQUENCES TO YOU, IN LIGHT OF YOUR PARTICULAR INVESTMENT OR TAX CIRCUMSTANCES, OF ACQUIRING, HOLDING, AND DISPOSING OF OUR INTERESTS.

 

Taxpayer Identification Number ("TIN")

 

To ensure proper crediting of the withholding tax when reporting to the IRS, the Company must obtain a U.S. TIN from each of its investors.

 

Investors may provide the Company with either (i) a social security number (SSN), (ii) an individual taxpayer identification number (ITIN), or (iii) a U.S. employer identification number (EIN).

 

Certain investors who don't have and aren't eligible to get a social security number can apply for an individual taxpayer identification number on IRS Form W-7. The application is also available in Spanish.

 

Taxation of Each Series as a Separate Business Entity

 

The company intends to treat each Series as a separate business entity for U.S. federal income tax purposes and the company as a non-entity for U.S. federal income tax purposes. The IRS has issued proposed Treasury Regulations that provide that each individual series of a domestic series LLC organization will generally be treated as a separate entity formed under local law, with each such individual series' classification for U.S. federal income tax purposes determined under general tax principles and the entity classification rules.

 

Taxation of Each Series of Interests as a "C" Corporation

 

Although formed as a Delaware series limited liability company eligible for tax treatment as a "partnership," we have affirmatively elected for each series of interests, to be taxed as a "C" corporation under Subchapter C of the Code for all federal and state tax purposes and the discussion below assumes that each series will be so treated. Thus, each series of interests will be taxed at regular corporate rates on its income before making any distributions to interest holders as described below.

 

The rule that a separate series of a series LLC is an eligible entity that may elect to be treated as a corporation for federal income tax purposes is contained in proposed Treasury Regulations not yet technically in force (Prop. Treas. Reg. Section 301.7701- 1(a)(5)) and could be subject to change if and when those Proposed Treasury Regulations are issued in final form. If such a change were to occur, investors in the series would likely be treated as partners in a partnership and would be subject to current federal income tax on their proportional share of the income of the series.

89

 

Taxation of Distributions to Investors

 

Distributions to U.S. investors out of a series' current or accumulated earnings and profits will be taxable as dividends. A non-corporate U.S. investor who receives a distribution constituting "qualified dividend income" may be eligible for reduced federal income tax rates. U.S. investors are urged to consult their tax advisors regarding the characterization of corporate distributions as "qualified dividend income." Dividends received by a corporate U.S. investor may be eligible for the corporate dividends-received deduction if certain holding periods are satisfied.

 

Distributions in excess of a series' current and accumulated earnings and profits will not be taxable to a U.S. investor to the extent that the distributions do not exceed the adjusted tax basis of the U.S. investor's interests. Rather, such distributions will reduce the adjusted basis of such U.S. investor's interests. Distributions in excess of current and accumulated earnings and profits that exceed the U.S. investor's adjusted basis in its interests will be taxable as capital gain in the amount of such excess if the interests are held as a capital asset.

 

Net Investment Income Tax

 

Section 1411 of the Code imposes on individuals, trusts and estates a 3.8% tax on certain investment income. In general, in the case of an individual, this tax is equal to 3.8% of the lesser of (i) the taxpayer's "net investment income" or (ii) the excess of the taxpayer's adjusted gross income over the applicable threshold amount ($250,000 for taxpayers filing a joint return, $125,000 for married individuals filing separate returns and $200,000 for other taxpayers). In the case of an estate or trust, the 3.8% tax will be imposed on the lesser of (x) the undistributed net investment income of the estate or trust for the taxable year, or (y) the excess of the adjusted gross income of the estate or trust for such taxable year over a beginning dollar amount of the highest tax bracket for such year.

 

Taxation of Dispositions of Interests

 

Upon any taxable sale or other disposition of our interests, a U.S. investor will recognize gain or loss for federal income tax purposes on the disposition in an amount equal to the difference between (i) the amount of cash and the fair market value of any property received on such disposition, and (ii) the U.S. investor's adjusted tax basis in the interests. A U.S. investor's adjusted tax basis in the interests generally equals his or her initial amount paid for the interests and decreased by the amount of any distributions to the investor in excess of the series' current or accumulated earnings and profits. In computing gain or loss, the proceeds that U.S. investors receive will include the amount of any cash and the fair market value of any other property received for their interests, and the amount of any actual or deemed relief from indebtedness encumbering their interests. The gain or loss will be long-term capital gain or loss if the interests are held for more than one year before disposition. Long-term capital gains of individuals, estates and trusts currently are taxed at a maximum rate of 20% (plus any applicable state income taxes) plus the 3.8% net investment income tax.

 

The deductibility of capital losses may be subject to limitation and depends on the circumstances of a particular U.S. investor. The effect of such limitation may be to defer or to eliminate any tax benefit that might otherwise be available from a loss on a disposition of the interests. Capital losses are first deducted against capital gains, and, in the case of non-corporate taxpayers, any remaining such losses are deductible against salaries or other income from services or income from portfolio investments only to the extent of $3,000 per year.

90

 

Tax Withholding and Information Reporting

 

Generally, a series must report annually to the IRS the amount of dividends paid to you, your name and address, and the amount of tax withheld, if any. A similar report will be sent to you.

 

Dividends paid by a series to a non-U.S. investor are generally subject to federal income tax withholding at the rate of 30% (or a lower rate determined under a tax treaty). A non-U.S. investor that is entitled to a reduced rate of withholding will need to provide an IRS Form W-8BEN or similar form to certify its entitlement to tax treaty benefits.

 

Payments of dividends or of proceeds on the disposition of the interests made to you may be subject to additional information reporting and backup withholding at a current rate of 24% unless you establish an exemption. Notwithstanding the foregoing, backup withholding and information reporting may apply if either we or our paying agent has actual knowledge, or reason to know, that you are a United States person.

 

Backup withholding is not an additional tax; rather, the United States income tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund or credit may generally be obtained from the IRS, provided that the required information is furnished to the IRS in a timely manner.

 

Under legislation commonly known as "FATCA," each series will be required to withhold U.S. federal income tax at the rate of 30% on distributions treated as dividends for tax purposes unless the recipient timely provides proper certifications on a valid U.S. Form W-8 or W-9. Withholding under FATCA generally applies to certain "foreign financial institutions" and "non-financial foreign entities." Withholding will not apply to a U.S. investor that timely provides a valid U.S. Form W-9.

 

If we determine withholding is required with respect to a distribution or payment, we will withhold tax at the applicable statutory rate, and we will not pay any additional amounts in respect of such withholding.

 

REIT Election

 

As previously discussed, the management team may seek to qualify certain series as a REIT, based on the circumstances of the respective underlying asset, including the nature of the underlying asset, the size and concentration of the investor group and how the manager intends to manage and monetize the underlying asset.

 

As long as any series qualifies as a REIT, it generally will not be subject to federal income tax on the portion of its REIT taxable income or capital gain that it distributes to its shareholders. Losses incurred by a REIT will not flow through to investors, nor will items of expense such as foreign taxes. A REIT's qualification and taxation as a REIT will depend on its ability to satisfy annual income tests, quarterly asset tests, and other requirements under the Code on a continuing basis. Accordingly, there can be no assurance that a REIT will be able to continue to operate in a manner so as to remain qualified as a REIT. Failure to meet certain tests under the Code or to remain qualified as a REIT may subject any REIT to substantial tax liability under the Code that would adversely impact the dividends received by the investors from such REIT.

 

The manager has the right to structure the acquisition and operation of assets as it deems appropriate and, because of the complexity and cost of a REIT structure, may decide (in its sole and absolute discretion) not to qualify any series as REITs.

91

 

Acquisition of Series Interests

 

The value of initial acquisition of Series Interests will become the tax basis for the determination of gains or losses.

 

Possible Tax Law Changes

 

The foregoing discussion is only a summary and is based upon existing federal income tax law. Investors should recognize that the federal income tax treatment of an investment may be modified at any time by legislative, judicial or administrative action. Any such changes may have a retroactive effect with respect to existing transactions and investments and may modify the statements made above. In particular, the Tax Act includes sweeping changes to U.S. tax laws and represents the most significant changes to the Internal Revenue Code since 1986. Investors are urged to consult with their own tax advisor with respect to the impact of recent legislation, including the Tax Act, on their investment in the Interests.

 

THE FOREGOING DISCUSSION SHOULD NOT BE CONSIDERED TO DESCRIBE FULLY THE FEDERAL INCOME TAX CONSEQUENCES OF AN INVESTMENT IN A SERIES. INVESTORS ARE STRONGLY ADVISED TO CONSULT WITH THEIR TAX ADVISORS WITH RESPECT TO THE FEDERAL, STATE, LOCAL AND FOREIGN INCOME TAX CONSEQUENCES OF AN INVESTMENT IN A SERIES.

92

 

ONGOING REPORTING AND SUPPLEMENTS TO THIS OFFERING CIRCULAR

 

 

The company will be required to make annual and semi-annual filings with the SEC. The company will make annual filings on Form 1-K, which will be due by the end of April each year and will include audited financial statements for the previous fiscal year. The company will make semi-annual filings on Form 1-SA, which will be due by September 28 each year, which will include unaudited financial statements for the six months to June 30. The company will also file a Form 1-U to announce important events such as the loss of a senior officer, a change in auditors, or certain types of capital-raising. The company will be required to keep making these reports unless it files a Form 1-Z to exit the reporting system, which it will only be able to do if it has less than 300 unitholders of record and have filed at least one Form 1-K.

 

At least every 12 months, the company will file a post-qualification amendment to the offering Statement of which this Offering Circular forms a part, to include the company's recent financial statements.

 

The company may supplement the information in this Offering Circular by filing a Supplement with the SEC.

 

All these filings will be available on the SEC's EDGAR filing system. You should read all the available information before investing.

 

Relaxed Ongoing Reporting Requirements

 

If the company becomes a public reporting company in the future, it will be required to publicly report on an ongoing basis as an "emerging growth company" (as defined in the Jumpstart Our Business Startups Act of 2012, which the company refers to as the JOBS Act) under the reporting rules set forth under the Exchange Act. For so long as the company remains an "emerging growth company," the company may take advantage of certain exemptions from various reporting requirements that are applicable to other Exchange Act reporting companies that are not "emerging growth companies," including but not limited to:

 

 

If the company becomes a public reporting company under the Exchange Act in the future, the company expects to take advantage of these reporting exemptions until it is no longer an emerging growth company. The company would remain an "emerging growth company" for up to five years, although if the market value of its Common Stock that is held by non-affiliates exceeds $700 million as of any June 30 before that time, the company would cease to be an "emerging growth company" as of the following December 31.

 

If the company does not become a public reporting company under the Exchange Act for any reason, the company will be required to publicly report on an ongoing basis under the reporting rules set forth in Regulation A for Tier 2 issuers. The ongoing reporting requirements under Regulation A are more relaxed than for "emerging growth companies" under the Exchange Act. The differences include, but are not limited to, being required to file only annual and semi-annual reports, rather than annual and quarterly reports. Annual reports are due within 120 calendar days after the end of the issuer's fiscal year, and semi-annual reports are due within 90 calendar days after the end of the first six months of the issuer's fiscal year.

 

In either case, the company will be subject to ongoing public reporting requirements that are less rigorous than Exchange Act rules for companies that are not "emerging growth companies," and its unitholders could receive less information than they might expect to receive from more mature public companies.

93

 

FINANCIAL STATEMENTS

 

Audited Consolidated and consolidating Financial Statements for the Year Ended December 31, 2023 and December 31, 2022

 F-1

Unaudited Pro Forma Consolidated and consolidating Financial Statements and Report for the Year Ended December 31, 2023

 F-1

94

 

ARK7 PROPERTIES PLUS LLC

AUDITED CONSOLIDATED AND CONSOLIDATING FINANCIAL STATEMENTS

For the year ended December 31, 2023 and December 31, 2022

F-1

 

Table of Contents

 

Independent Auditor's Report

 F-3

Consolidated Balance Sheet As of December 31, 2023 and 2022

 F-4

Consolidated Statement of Income For the year ended December 31, 2023 and 2022

 F-5

Consolidated Statement of Members' Equity For the year ended December 31, 2023 and 2022

 F-6

Consolidated Statement of Cash Flows For the year ended December 31, 2023 and 2022

 F-7

Consolidated and consolidating Balance Sheet As of December 31, 2023 and 2022

 F-8

Consolidated and consolidating Statement of Income For the year ended December 31, 2023 and 2022

 F-10

Consolidated and consolidating Statement of Members' Equity For the year ended December 31, 2023 and 2022

 F-12

Consolidated and consolidating Statement of Cash Flows For the year ended December 31, 2023 and 2022

 F-14

Notes to the Consolidated and consolidating Financial Statements

 F-16

F-2

 

Independent Auditor's Report

 

 

Yizhen Zhao

Ark7 Properties Plus LLC

San Francisco, CA, United States of America

 

Report on the Audit of the Financial Statements

 

Opinion

 

We have audited the consolidated and consolidating financial statements of Ark7 Properties Plus LLC (the "APPL") and its Series, which comprise the balance sheets as of December 31, 2022 and 2023, and the related statements of income, members' equity, and cash flows for the periods from March 17, 2022 (inception date) to December 31, 2022, and for the year ended December 31, 2023, together with the related notes (collectively referred to as the consolidated and consolidating financial statements).

 

In our opinion, the accompanying consolidated and consolidating financial statements present fairly, in all material respects, the financial position of the APPL as of December 31, 2022 and 2023, the results of its operations, and its cash flows for the period from March 17, 2022, to December 31, 2022, and for the year ended December 31, 2023, in accordance with accounting principles generally accepted in the United States of America.

 

Basis for Opinion

 

We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the APPL and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

 

Responsibilities of Management for the Financial Statements

 

Management is responsible for the preparation and fair presentation of the Consolidated and consolidating financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated and consolidating financial statements that are free from material misstatement, whether due to fraud or error.

 

In preparing the consolidated and consolidating financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the APPL's ability to continue as a going concern within one year after the date that the financial statements are available to be issued.

 

Auditor's Responsibilities for the Audit of the Financial Statements

 

Our objectives are to obtain reasonable assurance about whether the consolidated and consolidating financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the consolidated and consolidating financial statements.

 

In performing an audit in accordance with GAAS, we:

 

 

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.

 

Emphasis of Matter

 

The accompanying financial statements have been prepared assuming that the APPL will continue as a going concern. As discussed in Note 1 to the financial statements, the APPL has suffered recurring losses from operations, has a net capital deficiency, and has stated that substantial doubt exists about the APPL's ability to continue as a going concern. Management's evaluation of the events and conditions and management's plans regarding these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Our opinion is not modified with respect to this matter.

 

____________________

Flex-Tax, Inc.

San Francisco, CA

 

March 18, 2024

F-3

 

Ark7 Properties Plus LLC

Consolidated Balance Sheet

As of December 31, 2023 and 2022

 

Description

 Note December 31, 2023 December 31, 2022

Assets

   

Current Assets

   

Cash and cash equivalents

 2 
$
24,261
 
$
96,124

Receivables

  5,167 -

Related party receivables

 3 562,367 1,344

Prepaid expenses

  20,416 16,532

Total Current Assets

  612,211 114,000

Noncurrent Assets

   

Property, plant, and equipment

   

Property, plant, and equipment - Cost

  3,513,143 2,322,937

Property, plant, and equipment - Accumulated Depreciation

  (114,888) (29,076)

Total Property, plant, and equipment

 1 3,398,255 2,293,861

Total Noncurrent Assets

  3,398,255 2,293,861

Total Assets

  4,010,466 2,407,861

 

   

Liabilities & Members' Equity

   

Liabilities

   

Current Liabilities

   

Accounts payable and accrued liabilities

  107,423 9,424

Related party payable

  2 28,493

Related party debt, current

 3 464,247 1,733,496

Other liabilities, current

  21,807 11,350

Total Current Liabilities

  593,478 1,782,763

Total Liabilities

  593,478 1,782,763

 

   

Member's Equity

   

Equity Capital

   

Members' Equity

  3,878,867 732,234

Retained Earnings (Accumulated Deficit)

  (461,879) (107,135)

Total Equity Capital

  3,416,987 625,098

Total Member's Equity

  3,416,987 625,098

Total Liabilities & Members' Equity

  
$
4,010,466
 
$
2,407,861

 

See accompanying notes to the Consolidated and Consolidating financial statements

F-4

 

Ark7 Properties Plus LLC

Consolidated Statement of Income

For the year ended December 31, 2023 and 2022

 

Description

 Note December 31, 2023 December 31, 2022

Net Income (Loss)

   

Gross Profit (Loss)

   

Rental Income

  
$
239,016
 
$
62,738

Other rental fees

  257 368

Total Gross Profit (Loss)

 1 239,273 63,106

Operating Expenses

   

General and administrative expenses

  369,772 54,026

Depreciation and amortization expenses

  85,812 29,076

Property tax and state fee

  44,557 4,657

Total Operating Expenses

  500,141 87,759

Operating Income (Loss)

  (260,868) (24,653)

Other Income (Loss)

   

Interest expense

 3 - -

Interest expense, related party

 4 (91,876) (82,482)

Other income (expense)

  (2,000) -

Total Other Income (Loss)

  (93,876) (82,482)

Total Net Income (Loss)

  
$
(354,744)
 
$
(107,135)

 

See accompanying notes to the Consolidated and Consolidating financial statements

F-5

 

Ark7 Properties Plus LLC

Consolidated Statement of Members' Equity

For the year ended December 31, 2023 and 2022

 

Description

 December 31, 2023 December 31, 2022

Balance at the beginning of the period

 
$
625,098
 
$
-

Equity Contribution

 3,301,401 762,080

Net Income (Loss)

 (354,744) (107,135)

Distribution

 (154,768) (29,846)

Balance at the end of the period

 
$
3,416,987
 
$
625,098

 

See accompanying notes to the Consolidated and Consolidating financial statements

F-6

 

Ark7 Properties Plus LLC

Consolidated Statement of Cash Flows

For the year ended December 31, 2023 and 2022

 

Description

 December 31, 2023 December 31, 2022

Cash Flows From Operating Activities

  

Net Income (Loss)

 
$
(354,744)
 
$
(107,135)

Adjustments to Reconcile Net Income (Loss) to Net Cash Provided by (Used in) Operating Activities

  

Depreciation, other operating

 85,812 29,076

Amortization of debt issuance costs

 - -

Total Adjustments to Reconcile Net Income (Loss) to Net Cash Provided by (Used in) Operating Activities

 85,812 29,076

(Increase) decrease in operating assets, net of effects of businesses acquired

  

Accounts receivable

 (5,167) -

Related party receivables

 (562,367) (0)

Prepaid expenses

 (3,883) (16,532)

Increase (decrease) in operating liabilities, net of effects of businesses acquired

  

Accounts payable and accrued expenses

 102,071 5,352

Related party payable

 (19,229) 19,230

Other liabilities

 10,457 11,350

Net Cash Provided by (Used in) Operating Activities

 (747,050) (58,660)

Cash Flows from Investing Activities

  

Purchase of property, plant, and equipment

 (1,190,206) (2,322,937)

Net Cash Provided by (Used in) Investing Activities

 (1,190,206) (2,322,937)

Cash Flows from Financing Activities

  

Proceeds from issuance of related party debt

 1,422,181 1,733,496

Repayment of related party debt

 (2,691,429) -

Proceeds from private offerings

 3,301,401 762,080

Distributions to partners

 (154,768) (29,846)

Net Cash Provided by (Used in) Financing Activities

 1,877,384 2,465,730

Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash

 (59,872) 84,133

Cash, Cash Equivalents, and Restricted Cash at the beginning of the period

 84,133 -

Cash, Cash Equivalents, and Restricted Cash at the end of the period

 24,261 84,133

 

  

Supplemental Cash Flow information

  

Cash Paid During the Year for

  

Interest

 
$
91,876
 
$
82,482

 

See accompanying notes to the Consolidated and Consolidating financial statements

F-7

 

Ark7 Properties Plus LLC

Consolidated and consolidating Balance Sheet

As of December 31, 2023 and 2022

 

Ark7 Properties Plus LLC

Consolidated and consolidating Balance Sheet

As of December 31, 2023

 

Description

 Ark7 Properties Plus LLC Ark7 Properties Plus LLC - Series #0XYT6 Ark7 Properties Plus LLC - Series #DIVTU Ark7 Properties Plus LLC - Series #FTWDS Ark7 Properties Plus LLC - Series #JTDXY Ark7 Properties Plus LLC - Series #NHMOP Ark7 Properties Plus LLC - Series #ORHOF Ark7 Properties Plus LLC - Series #P7FJ5 Ark7 Properties Plus LLC - Series #QGXF0 Ark7 Properties Plus LLC - Series #RPFUV

Assets

          

Current Assets

          

Cash and cash equivalents

 
$
22,957
 
$
814
 
$
-
 
$
-
 
$
(362)
 
$
-
 
$
-
 
$
-
 
$
-
 
$
-

Receivables

 5,167 - - - - - - - - -

Related party receivables

 562,367 48,147 220,540 (3,374) 34,632 100,652 (39,633) (5,216) 68,331 3,592

Prepaid expenses

 - 684 - 4,100 25 5 766 3,961 3,720 1,185

Total Current Assets

 590,491 49,645 220,540 726 34,295 100,657 (38,867) (1,256) 72,051 4,777

Noncurrent Assets

          

Property, plant, and equipment

          

Property, plant, and equipment - Cost

 100 364,461 - 223,490 347,368 172,535 210,104 223,460 326,767 253,643

Property, plant, and equipment - Accumulated Depreciation

 - (17,696) - (9,164) (15,539) (936) (667) (9,162) (4,192) (1,460)

Total Property, plant, and equipment

 100 346,765 - 214,327 331,829 171,600 209,437 214,298 322,575 252,183

Related party loans and note receivable, noncurrent

 - - - - - - - - - -

Total Noncurrent Assets

 100 346,765 - 214,327 331,829 171,600 209,437 214,298 322,575 252,183

Total Assets

 590,591 396,409 220,540 215,052 366,125 272,257 170,569 213,042 394,626 256,959

 

          

Liabilities & Members' Equity

          

Liabilities

          

Current Liabilities

          

Accounts payable and accrued liabilities

 107,423 - - - - - - - - -

Related party payable

 500,330 - - - - - - - - -

Related party debt, current

 (0) - 222,660 - - 66,000 175,587 - - -

Other liabilities, current

 - 1,800 - 1,450 1,800 - - 4,550 693 -

Total Current Liabilities

 607,753 1,800 222,660 1,450 1,800 66,000 175,587 4,550 693 -

Noncurrent Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage payable

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Related party debt, noncurrent

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Noncurrent Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Liabilities

 607,753 1,800 222,660 1,450 1,800 66,000 175,587 4,550 693 -

 

          

Member's Equity

          

Equity Capital

          

Members' Equity

 - 439,023 - 249,536 423,535 213,300 - 251,999 403,361 290,200

Retained Earnings (Accumulated Deficit)

 (17,162) (44,414) (2,120) (35,934) (59,210) (7,043) (5,018) (43,507) (9,428) (33,241)

Total Equity Capital

 (17,162) 394,609 (2,120) 213,602 364,325 206,257 (5,018) 208,492 393,933 256,959

Total Member's Equity

 (17,162) 394,609 (2,120) 213,602 364,325 206,257 (5,018) 208,492 393,933 256,959

Total Liabilities & Members' Equity

 
$
590,591
 
$
396,409
 
$
220,540
 
$
215,052
 
$
366,125
 
$
272,257
 
$
170,569
 
$
213,042
 
$
394,626
 
$
256,959

 

Description

 Ark7 Properties Plus LLC - Series #SOV9W Ark7 Properties Plus LLC - Series #WGI3Z Ark7 Properties Plus LLC - Series #WRA7O Ark7 Properties Plus LLC - Series #ZIE3T Eliminating Total 

 

 

 

 

 

 

 

Assets

       

 

 

 

 

 

 

 

Current Assets

       

 

 

 

 

 

 

 

Cash and cash equivalents

 
$
-
 
$
200
 
$
-
 
$
652
 
$
-
 
$
24,261
 

 

 

 

 

 

 

 

Receivables

 - - - - - 5,167 

 

 

 

 

 

 

 

Related party receivables

 12,015 26,415 (2,295) 36,525 (500,329) 562,367 

 

 

 

 

 

 

 

Prepaid expenses

 355 1,656 2,466 1,493 - 20,416 

 

 

 

 

 

 

 

Total Current Assets

 12,369 28,271 171 38,670 (500,329) 612,211 

 

 

 

 

 

 

 

Noncurrent Assets

       

 

 

 

 

 

 

 

Property, plant, and equipment

       

 

 

 

 

 

 

 

Property, plant, and equipment - Cost

 212,918 287,530 531,255 359,511 - 3,513,143 

 

 

 

 

 

 

 

Property, plant, and equipment - Accumulated Depreciation

 (2,496) (17,829) (20,724) (15,022) - (114,888) 

 

 

 

 

 

 

 

Total Property, plant, and equipment

 210,422 269,701 510,531 344,488 - 3,398,255 

 

 

 

 

 

 

 

Related party loans and note receivable, noncurrent

 - - - - - - 

 

 

 

 

 

 

 

Total Noncurrent Assets

 210,422 269,701 510,531 344,488 - 3,398,255 

 

 

 

 

 

 

 

Total Assets

 222,791 297,972 510,702 383,158 (500,329) 4,010,466 

 

 

 

 

 

 

 

 

       

 

 

 

 

 

 

 

Liabilities & Members' Equity

       

 

 

 

 

 

 

 

Liabilities

       

 

 

 

 

 

 

 

Current Liabilities

       

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 - - - - - 107,423 

 

 

 

 

 

 

 

Related party payable

 - - - - (500,329) 2 

 

 

 

 

 

 

 

Related party debt, current

 - - - - - 464,247 

 

 

 

 

 

 

 

Other liabilities, current

 1,139 1,675 6,900 1,800 - 21,807 

 

 

 

 

 

 

 

Total Current Liabilities

 1,139 1,675 6,900 1,800 (500,329) 593,478 

 

 

 

 

 

 

 

Noncurrent Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage payable

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Related party debt, noncurrent

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Noncurrent Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Liabilities

 1,139 1,675 6,900 1,800 (500,329) 593,478 

 

 

 

 

 

 

 

 

       

 

 

 

 

 

 

 

Member's Equity

       

 

 

 

 

 

 

 

Equity Capital

       

 

 

 

 

 

 

 

Members' Equity

 254,194 342,595 583,537 427,586 - 3,878,867 

 

 

 

 

 

 

 

Retained Earnings (Accumulated Deficit)

 (32,542) (46,299) (79,735) (46,227) - (461,879) 

 

 

 

 

 

 

 

Total Equity Capital

 221,652 296,297 503,802 381,358 - 3,416,987 

 

 

 

 

 

 

 

Total Member's Equity

 221,652 296,297 503,802 381,358 - 3,416,987 

 

 

 

 

 

 

 

Total Liabilities & Members' Equity

 
$
222,791
 
$
297,972
 
$
510,702
 
$
383,158
 
$
(500,329)
 
$
4,010,466
 

 

 

 

 

 

 

 

 

See accompanying notes to the Consolidated and Consolidating financial statements

F-8

 

Ark7 Properties Plus LLC

Consolidated and consolidating Balance Sheet

As of December 31, 2022

 

Description

 Ark7 Properties Plus LLC Ark7 Properties Plus LLC - Series #0XYT6 Ark7 Properties Plus LLC - Series #FTWDS Ark7 Properties Plus LLC - Series #JTDXY Ark7 Properties Plus LLC - Series #NHMOP Ark7 Properties Plus LLC - Series #P7FJ5 Ark7 Properties Plus LLC - Series #QGXF0 Ark7 Properties Plus LLC - Series #SOV9W Ark7 Properties Plus LLC - Series #WGI3Z Ark7 Properties Plus LLC - Series #WRA7O

Assets

          

Current Assets

          

Cash and cash equivalents

 
$
37,888
 
$
3,282
 
$
3,619
 
$
2,947
 
$
-
 
$
3,928
 
$
-
 
$
-
 
$
40,132
 
$
1,571

Receivables

 - - - - - - - - - -

Related party loans and notes receivable, current

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prepaid expenses

 - 3,738 743 6,222 - 794 - (1,719) 928 1,488

Total Current Assets

 37,888 7,021 3,834 10,188 - 4,689 - (0) 41,061 2,803

Noncurrent Assets

          

Property, plant, and equipment

          

Property, plant, and equipment - Cost

 - 364,461 223,490 347,368 - 223,460 - - 286,740 531,255

Property, plant, and equipment - Accumulated Depreciation

 - (5,716) (1,986) (4,297) - (1,986) - - (7,384) (3,802)

Total Property, plant, and equipment

 - 358,745 221,504 343,071 - 221,474 - - 279,356 527,453

Related party loans and note receivable, noncurrent

 - - - - - - - - - -

Total Noncurrent Assets

 - 358,745 221,504 343,071 - 221,474 - - 279,356 527,453

Total Assets

 37,888 365,765 225,338 353,259 - 226,163 - (0) 320,417 530,257

 

          

Liabilities & Members' Equity

          

Liabilities

          

Current Liabilities

          

Accounts payable and accrued liabilities

 9,424 - - - - - - - - -

Related Party Payable

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Related party debt, current

 - 258,478 178,015 291,203 - 222,985 - - - 522,610

Other liabilities, current

 - - 1,450 - - 3,000 - - - 6,900

Total Current Liabilities

 37,917 258,478 179,465 291,203 - 225,985 - - - 529,510

Noncurrent Liabilities

          

Related party payable

 28,493 - - - - - - - - -

Related party debt, noncurrent

 - - - - - - - - - -

Total Noncurrent Liabilities

 - - - - - - - - - -

Total Liabilities

 37,917 258,478 179,465 291,203 - 225,985 - - - 529,510

 

          

Member's Equity

          

Equity Capital

          

Members' Equity

 - 120,773 52,497 74,895 - 7,163 - - 363,794 17,980

Retained Earnings (Accumulated Deficit)

 (29) (13,485) (6,624) (12,839) - (6,985) - (0) (43,377) (17,233)

Total Equity Capital

 (29) 107,287 45,873 62,056 - 178 - (0) 320,417 747

Total Member's Equity

 (29) 107,287 45,873 62,056 - 178 - (0) 320,417 747

Total Liabilities & Members' Equity

 
$
37,888
 
$
365,765
 
$
225,338
 
$
353,259
 
$
-
 
$
226,163
 
$
-
 
$
(0)
 
$
320,417
 
$
530,257

 

Description

 Ark7 Properties Plus LLC - Series #ZIE3T Eliminating Total 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets

    

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Assets

    

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 
$
2,756
 
$
-
 
$
96,124
 

 

 

 

 

 

 

 

 

 

 

 

 

 

Receivables

 - - - 

 

 

 

 

 

 

 

 

 

 

 

 

 

Related party loans and notes receivable, current

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prepaid expenses

 4,337 - 16,532 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Current Assets

 6,516 - 114,000 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noncurrent Assets

    

 

 

 

 

 

 

 

 

 

 

 

 

 

Property, plant, and equipment

    

 

 

 

 

 

 

 

 

 

 

 

 

 

Property, plant, and equipment - Cost

 346,162 - 2,322,937 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property, plant, and equipment - Accumulated Depreciation

 (3,905) - (29,076) 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Property, plant, and equipment

 342,257 - 2,293,861 

 

 

 

 

 

 

 

 

 

 

 

 

 

Related party loans and note receivable, noncurrent

 - - - 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Noncurrent Assets

 342,257 - 2,293,861 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Assets

 348,774 - 2,407,861 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities & Members' Equity

    

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

    

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities

    

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 - - 9,424 

 

 

 

 

 

 

 

 

 

 

 

 

 

Related Party Payable

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Related party debt, current

 260,205 - 1,733,496 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other liabilities, current

 - - 11,350 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Current Liabilities

 260,205 - 1,782,763 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noncurrent Liabilities

    

 

 

 

 

 

 

 

 

 

 

 

 

 

Related party payable

 - - 28,493 

 

 

 

 

 

 

 

 

 

 

 

 

 

Related party debt, noncurrent

 - - - 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Noncurrent Liabilities

 - - - 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Liabilities

 260,205 - 1,782,763 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

 

 

 

 

 

 

 

 

 

 

 

Member's Equity

    

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity Capital

    

 

 

 

 

 

 

 

 

 

 

 

 

 

Members' Equity

 95,132 - 732,234 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retained Earnings (Accumulated Deficit)

 (6,564) - (107,135) 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Equity Capital

 88,569 - 625,098 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Member's Equity

 88,569 - 625,098 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Liabilities & Members' Equity

 
$
348,774
 
$
-
 
$
2,407,861
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying notes to the Consolidated and Consolidating financial statements

F-9

 

Ark7 Properties Plus LLC

Consolidated and consolidating Statement of Income

For the year ended December 31, 2023 and 2022

 

Ark7 Properties Plus LLC

Consolidated and consolidating Statement of Income

For the year ended December 31, 2023

 

Description

 Ark7 Properties Plus LLC Ark7 Properties Plus LLC - Series #0XYT6 Ark7 Properties Plus LLC - Series #DIVTU Ark7 Properties Plus LLC - Series #FTWDS Ark7 Properties Plus LLC - Series #JTDXY Ark7 Properties Plus LLC - Series #NHMOP Ark7 Properties Plus LLC - Series #ORHOF Ark7 Properties Plus LLC - Series #P7FJ5 Ark7 Properties Plus LLC - Series #QGXF0 Ark7 Properties Plus LLC - Series #RPFUV

Net Income (Loss)

          

Gross Profit (Loss)

          

Rental Income

 
$
-
 
$
39,967
 
$
-
 
$
18,618
 
$
39,600
 
$
1,021
 
$
-
 
$
18,600
 
$
15,129
 
$
-

Other rental fees

 - - - - - - - - - -

Total Gross Profit (Loss)

 - 39,967 - 18,618 39,600 1,021 - 18,600 15,129 -

Operating Expenses

          

General and administrative expenses

 15,392 50,844 229 32,535 51,372 3,413 1,141 33,128 4,963 28,291

Depreciation and amortization expenses

 - 11,980 - 7,178 11,242 936 667 7,177 4,192 1,460

Property tax and state fee

 - 6,450 - 3,295 7,329 430 275 3,230 3,238 534

Total Operating Expenses

 15,392 69,274 229 43,008 69,943 4,778 2,083 43,535 12,392 30,285

Operating Income (Loss)

 (15,392) (29,307) (229) (24,390) (30,343) (3,757) (2,083) (24,935) 2,737 (30,285)

Other Income (Loss)

          

Interest income, related party

 - - - - - - - - - -

Interest expense

 - - - - - - - - - -

Interest expense, related party

 - (4,841) (1,891) (4,920) (14,663) (2,958) (2,934) (11,587) (11,835) (2,956)

Other income (expense)

 (1,741) 3,219 - - (1,365) (329) - - (329) -

Total Other Income (Loss)

 (1,741) (1,622) (1,891) (4,920) (16,028) (3,287) (2,934) (11,587) (12,164) (2,956)

Total Net Income (Loss)

 
$
(17,133)
 
$
(30,929)
 
$
(2,120)
 
$
(29,310)
 
$
(46,371)
 
$
(7,043)
 
$
(5,018)
 
$
(36,522)
 
$
(9,428)
 
$
(33,241)

 

Description

 Ark7 Properties Plus LLC - Series #SOV9W Ark7 Properties Plus LLC - Series #WGI3Z Ark7 Properties Plus LLC - Series #WRA7O Ark7 Properties Plus LLC - Series #ZIE3T Eliminating Total 

 

 

 

 

 

 

 

Net Income (Loss)

       

 

 

 

 

 

 

 

Gross Profit (Loss)

       

 

 

 

 

 

 

 

Rental Income

 
$
6,788
 
$
20,010
 
$
39,683
 
$
39,600
 
$
-
 
$
239,016
 

 

 

 

 

 

 

 

Other rental fees

 - 145 112 - - 257 

 

 

 

 

 

 

 

Total Gross Profit (Loss)

 6,788 20,155 39,794 39,600 - 239,273 

 

 

 

 

 

 

 

Operating Expenses

       

 

 

 

 

 

 

 

General and administrative expenses

 26,214 11,101 59,600 51,549 - 369,772 

 

 

 

 

 

 

 

Depreciation and amortization expenses

 2,496 10,445 16,922 11,117 - 85,812 

 

 

 

 

 

 

 

Property tax and state fee

 1,486 1,531 10,126 6,633 - 44,557 

 

 

 

 

 

 

 

Total Operating Expenses

 30,196 23,077 86,649 69,299 - 500,141 

 

 

 

 

 

 

 

Operating Income (Loss)

 (23,408) (2,922) (46,854) (29,699) - (260,868) 

 

 

 

 

 

 

 

Other Income (Loss)

       

 

 

 

 

 

 

 

Interest income, related party

 - - - - - - 

 

 

 

 

 

 

 

Interest expense

 - - - - - - 

 

 

 

 

 

 

 

Interest expense, related party

 (8,944) - (15,647) (8,700) - (91,876) 

 

 

 

 

 

 

 

Other income (expense)

 (190) - - (1,265) - (2,000) 

 

 

 

 

 

 

 

Total Other Income (Loss)

 (9,134) - (15,647) (9,965) - (93,876) 

 

 

 

 

 

 

 

Total Net Income (Loss)

 
$
(32,542)
 
$
(2,922)
 
$
(62,501)
 
$
(39,664)
 
$
-
 
$
(354,744)
 

 

 

 

 

 

 

 

 

See accompanying notes to the Consolidated and Consolidating financial statements

F-10

 

Ark7 Properties Plus LLC

Consolidated and consolidating Statement of Income

For the year ended December 31, 2022

 

Description

 Ark7 Properties Plus LLC Ark7 Properties Plus LLC - Series #0XYT6 Ark7 Properties Plus LLC - Series #FTWDS Ark7 Properties Plus LLC - Series #JTDXY Ark7 Properties Plus LLC - Series #NHMOP Ark7 Properties Plus LLC - Series #P7FJ5 Ark7 Properties Plus LLC - Series #QGXF0 Ark7 Properties Plus LLC - Series #SOV9W Ark7 Properties Plus LLC - Series #WGI3Z Ark7 Properties Plus LLC - Series #WRA7O

Net Income (Loss)

          

Gross Profit (Loss)

          

Rental Income

 
$
620
 
$
16,870
 
$
5,120
 
$
9,900
 
$
-
 
$
4,636
 
$
-
 
$
-
 
$
10,632
 
$
3,300

Other rental fees

 - - 155 - - - - - 213 -

Total Gross Profit (Loss)

 620 16,870 5,275 9,900 - 4,636 - - 10,845 3,300

Operating Expenses

          

General and administrative expenses

 649 5,034 1,784 4,742 - 1,829 - - 33,386 1,944

Depreciation and amortization expenses

 - 5,716 1,986 4,297 - 1,986 - - 7,384 3,802

Property tax and state fee

 - 2,574 1,289 342 - 966 - 0 754 2,578

Total Operating Expenses

 649 13,323 5,059 9,381 - 4,781 - 0 41,525 8,325

Operating Income (Loss)

 (29) 3,546 216 519 - (145) - (0) (30,680) (5,025)

Other Income (Loss)

          

Interest income, related party

 82,482 - - - - - - - - -

Interest expense

 - - - - - - - - - -

Interest expense, related party

 (82,482) (17,032) (6,840) (13,358) - (6,840) - - (12,697) (12,209)

Total Other Income (Loss)

 - (17,032) (6,840) (13,358) - (6,840) - - (12,697) (12,209)

Total Net Income (Loss)

 
$
(29)
 
$
(13,485)
 
$
(6,624)
 
$
(12,839)
 
$
-
 
$
(6,985)
 
$
-
 
$
(0)
 
$
(43,377)
 
$
(17,233)

 

Description

 Ark7 Properties Plus LLC - Series #ZIE3T Eliminating Total 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (Loss)

    

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit (Loss)

    

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental Income

 
$
11,660
 
$
-
 
$
62,738
 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other rental fees

 - - 368 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Gross Profit (Loss)

 11,660 - 63,106 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses

    

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative expenses

 4,657 - 54,026 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization expenses

 3,905 - 29,076 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property tax and state fee

 (3,846) - 4,657 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Operating Expenses

 4,716 - 87,759 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income (Loss)

 6,944 - (24,653) 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Income (Loss)

    

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income, related party

 - (82,482) - 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 - - - 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, related party

 (13,508) 82,482 (82,482) 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Other Income (Loss)

 (13,508) - (82,482) 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Net Income (Loss)

 
$
(6,564)
 
$
-
 
$
(107,135)
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying notes to the Consolidated and Consolidating financial statements

F-11

 

Ark7 Properties Plus LLC

Consolidated and consolidating Statement of Members' Equity

For the year ended December 31, 2023 and 2022

 

Ark7 Properties Plus LLC

Consolidated and consolidating Statement of Members' Equity

For the year ended December 31, 2023

 

Description

 Ark7 Properties Plus LLC Ark7 Properties Plus LLC - Series #0XYT6 Ark7 Properties Plus LLC - Series #DIVTU Ark7 Properties Plus LLC - Series #FTWDS Ark7 Properties Plus LLC - Series #JTDXY Ark7 Properties Plus LLC - Series #NHMOP Ark7 Properties Plus LLC - Series #ORHOF Ark7 Properties Plus LLC - Series #P7FJ5 Ark7 Properties Plus LLC - Series #QGXF0 Ark7 Properties Plus LLC - Series #RPFUV

Balance at January 01, 2023

 
$
(29)
 
$
107,287
 
$
-
 
$
45,873
 
$
62,056
 
$
-
 
$
-
 
$
178
 
$
-
 
$
-

Equity Contribution

 - 345,912 - 209,300 370,362 213,300 - 256,920 411,400 290,200

Net Income (Loss)

 (17,133) (30,929) (2,120) (29,310) (46,371) (7,043) (5,018) (36,522) (9,428) (33,241)

Distribution

 - (27,661) - (12,261) (21,722) - - (12,084) (8,039) -

Balance at December 31, 2023

 
$
(17,162)
 
$
394,609
 
$
(2,120)
 
$
213,602
 
$
364,325
 
$
206,257
 
$
(5,018)
 
$
208,492
 
$
393,933
 
$
256,959

 

Description

 Ark7 Properties Plus LLC - Series #SOV9W Ark7 Properties Plus LLC - Series #WGI3Z Ark7 Properties Plus LLC - Series #WRA7O Ark7 Properties Plus LLC - Series #ZIE3T Eliminating Total 

 

 

 

 

 

 

 

Balance at January 01, 2023

 
$
(0)
 
$
320,417
 
$
747
 
$
88,569
 
$
-
 
$
625,098
 

 

 

 

 

 

 

 

Equity Contribution

 260,200 (6,776) 597,020 353,563 - 3,301,401 

 

 

 

 

 

 

 

Net Income (Loss)

 (32,542) (2,922) (62,501) (39,664) - (354,744) 

 

 

 

 

 

 

 

Distribution

 (6,006) (14,422) (31,463) (21,110) - (154,768) 

 

 

 

 

 

 

 

Balance at December 31, 2023

 
$
221,652
 
$
296,297
 
$
503,802
 
$
381,358
 
$
-
 
$
3,416,987
 

 

 

 

 

 

 

 

 

See accompanying notes to the Consolidated and Consolidating financial statements

F-12

 

Ark7 Properties Plus LLC

Consolidated and consolidating Statement of Members' Equity

For the year ended December 31, 2022

 

Description

 Ark7 Properties Plus LLC Ark7 Properties Plus LLC - Series #0XYT6 Ark7 Properties Plus LLC - Series #FTWDS Ark7 Properties Plus LLC - Series #JTDXY Ark7 Properties Plus LLC - Series #NHMOP Ark7 Properties Plus LLC - Series #P7FJ5 Ark7 Properties Plus LLC - Series #QGXF0 Ark7 Properties Plus LLC - Series #SOV9W Ark7 Properties Plus LLC - Series #WGI3Z Ark7 Properties Plus LLC - Series #WRA7O

Balance at January 01, 2022

 
$
-
 
$
-
 
$
-
 
$
-
 
$
-
 
$
-
 
$
-
 
$
-
 
$
-
 
$
-

Equity Contribution

 - 129,260 55,780 79,740 - 8,080 - - 369,920 17,980

Net Income (Loss)

 (29) (13,485) (6,624) (12,839) - (6,985) - (0) (43,377) (17,233)

Distribution

 - (8,487) (3,283) (4,845) - (917) - - (6,126) -

Balance at December 31, 2022

 
$
(29)
 
$
107,287
 
$
45,873
 
$
62,056
 
$
-
 
$
178
 
$
-
 
$
(0)
 
$
320,417
 
$
747

 

Description

 Ark7 Properties Plus LLC - Series #ZIE3T Eliminating Total 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at January 01, 2022

 
$
-
 
$
-
 
$
-
 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity Contribution

 101,320 - 762,080 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (Loss)

 (6,564) - (107,135) 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distribution

 (6,188) - (29,846) 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2022

 
$
88,569
 
$
-
 
$
625,098
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying notes to the Consolidated and Consolidating financial statements

F-13

 

Ark7 Properties Plus LLC

Consolidated and consolidating Statement of Cash Flows

For the year ended December 31, 2023 and 2022

 

Ark7 Properties Plus LLC

Consolidated and consolidating Statement of Cash Flows

For the year ended December 31, 2023

 

Description

 Ark7 Properties Plus LLC Ark7 Properties Plus LLC - Series #0XYT6 Ark7 Properties Plus LLC - Series #DIVTU Ark7 Properties Plus LLC - Series #FTWDS Ark7 Properties Plus LLC - Series #JTDXY Ark7 Properties Plus LLC - Series #NHMOP Ark7 Properties Plus LLC - Series #ORHOF Ark7 Properties Plus LLC - Series #P7FJ5 Ark7 Properties Plus LLC - Series #QGXF0 Ark7 Properties Plus LLC - Series #RPFUV

Cash Flows From Operating Activities

          

Net Income (Loss)

 
$
(17,133)
 
$
(30,929)
 
$
(2,120)
 
$
(29,310)
 
$
(46,371)
 
$
(7,043)
 
$
(5,018)
 
$
(36,522)
 
$
(9,428)
 
$
(33,241)

Adjustments to Reconcile Net Income (Loss) to Net Cash Provided by (Used in) Operating Activities

          

Depreciation, other operating

 - 11,980 - 7,178 11,242 936 667 7,177 4,192 1,460

Amortization of debt issuance costs

 - - - - - - - - - -

Total Adjustments to Reconcile Net Income (Loss) to Net Cash Provided by (Used in) Operating Activities

 - 11,980 - 7,178 11,242 936 667 7,177 4,192 1,460

(Increase) decrease in operating assets, net of effects of businesses acquired

          

Accounts receivable

 (5,167) - - - - - - - - -

Related party receivables

 (562,367) (48,146) (220,540) 2,845 (33,613) (100,652) 39,633 5,183 (68,331) (3,592)

Prepaid expenses

 - 3,054 - (3,356) 6,197 (5) (766) (3,167) (3,720) (1,185)

Increase (decrease) in operating liabilities, net of effects of businesses acquired

          

Accounts payable and accrued expenses

 102,071 - - - - - - - - -

Related party payable

 479,756 - - - - - - - - -

Other liabilities

 - 1,800 - - 1,800 - - 1,550 693 -

Net Cash Provided by (Used in) Operating Activities

 (2,840) (62,241) (222,660) (22,644) (60,745) (106,765) 34,517 (25,779) (76,594) (36,557)

Cash Flows from Investing Activities

          

Payments received from related party loans and notes receivable

 - - - - - - - - - -

Related party loans and notes receivable issued

 - - - - - - - - - -

Purchase of property, plant, and equipment

 (100) - - - - (172,535) (210,104) - (326,767) (253,643)

Net Cash Provided by (Used in) Investing Activities

 (100) - - - - (172,535) (210,104) - (326,767) (253,643)

Cash Flows from Financing Activities

          

Proceeds from issuance of debt

          

Payments for debt issuance costs

 - - - - - - - - - -

Repayment of debt

 - - - - - - - - - -

Proceeds from issuance of related party debt

 - - 222,660 - - 216,000 175,587 - 344,051 250,963

Repayment of related party debt

 - (258,478) - (178,015) (291,203) (150,000) - (222,985) (344,051) (250,963)

Proceeds from private offerings

 - 345,912 - 209,300 370,362 213,300 - 256,920 411,400 290,200

Distributions to partners

 - (27,661) - (12,261) (21,722) - - (12,084) (8,039) -

Net Cash Provided by (Used in) Financing Activities

 - 59,773 222,660 19,024 57,437 279,300 175,587 21,851 403,361 290,200

Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash

 (2,940) (2,468) - (3,619) (3,309) - - (3,928) (0) -

Cash, Cash Equivalents, and Restricted Cash at January 01, 2023

 25,897 3,282 - 3,619 2,947 - - 3,928 - -

Cash, Cash Equivalents, and Restricted Cash at December 31, 2023

 22,957 814 - - (362) - - - - -

 

          

Supplemental Cash Flow information

          

Cash Paid During the Year for

          

Interest

 
$
-
 
$
4,841
 
$
1,891
 
$
4,920
 
$
14,663
 
$
2,958
 
$
2,934
 
$
11,587
 
$
11,835
 
$
2,956

 

Description

 Ark7 Properties Plus LLC - Series #SOV9W Ark7 Properties Plus LLC - Series #WGI3Z Ark7 Properties Plus LLC - Series #WRA7O Ark7 Properties Plus LLC - Series #ZIE3T Eliminating Total 

 

 

 

 

 

 

 

Cash Flows From Operating Activities

       

 

 

 

 

 

 

 

Net Income (Loss)

 
$
(32,542)
 
$
(2,922)
 
$
(62,501)
 
$
(39,664)
 
$
-
 
$
(354,744)
 

 

 

 

 

 

 

 

Adjustments to Reconcile Net Income (Loss) to Net Cash Provided by (Used in) Operating Activities

       

 

 

 

 

 

 

 

Depreciation, other operating

 2,496 10,445 16,922 11,117 - 85,812 

 

 

 

 

 

 

 

Amortization of debt issuance costs

 - - - - - - 

 

 

 

 

 

 

 

Total Adjustments to Reconcile Net Income (Loss) to Net Cash Provided by (Used in) Operating Activities

 2,496 10,445 16,922 11,117 - 85,812 

 

 

 

 

 

 

 

(Increase) decrease in operating assets, net of effects of businesses acquired

       

 

 

 

 

 

 

 

Accounts receivable

 - - - - - (5,167) 

 

 

 

 

 

 

 

Related party receivables

 (10,295) (26,415) 2,039 (37,102) 498,985 (562,367) 

 

 

 

 

 

 

 

Prepaid expenses

 (2,074) (728) (978) 2,844 - (3,883) 

 

 

 

 

 

 

 

Increase (decrease) in operating liabilities, net of effects of businesses acquired

       

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 - - - - - 102,071 

 

 

 

 

 

 

 

Related party payable

 - - - - (498,985) (19,229) 

 

 

 

 

 

 

 

Other liabilities

 1,139 1,675 - 1,800 - 10,457 

 

 

 

 

 

 

 

Net Cash Provided by (Used in) Operating Activities

 (41,276) (17,944) (44,518) (61,004)  (747,050) 

 

 

 

 

 

 

 

Cash Flows from Investing Activities

       

 

 

 

 

 

 

 

Payments received from related party loans and notes receivable

 - - - - - - 

 

 

 

 

 

 

 

Related party loans and notes receivable issued

 - - - - - - 

 

 

 

 

 

 

 

Purchase of property, plant, and equipment

 (212,918) (790) - (13,348) - (1,190,206) 

 

 

 

 

 

 

 

Net Cash Provided by (Used in) Investing Activities

 (212,918) (790) - (13,348) - (1,190,206) 

 

 

 

 

 

 

 

Cash Flows from Financing Activities

       

 

 

 

 

 

 

 

Proceeds from issuance of debt

       

 

 

 

 

 

 

 

Payments for debt issuance costs

 - - - - - - 

 

 

 

 

 

 

 

Repayment of debt

 - - - - - - 

 

 

 

 

 

 

 

Proceeds from issuance of related party debt

 212,919 - - - - 1,422,181 

 

 

 

 

 

 

 

Repayment of related party debt

 (212,919) - (522,610) (260,205) - (2,691,429) 

 

 

 

 

 

 

 

Proceeds from private offerings

 260,200 (6,776) 597,020 353,563 - 3,301,401 

 

 

 

 

 

 

 

Distributions to partners

 (6,006) (14,422) (31,463) (21,110) - (154,768) 

 

 

 

 

 

 

 

Net Cash Provided by (Used in) Financing Activities

 254,194 (21,198) 42,947 72,248 - 1,877,384 

 

 

 

 

 

 

 

Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash

 0 (39,932) (1,571) (2,104)  (59,872) 

 

 

 

 

 

 

 

Cash, Cash Equivalents, and Restricted Cash at January 01, 2023

 - 40,132 1,571 2,756 - 84,133 

 

 

 

 

 

 

 

Cash, Cash Equivalents, and Restricted Cash at December 31, 2023

 - 200 - 652 - 24,261 

 

 

 

 

 

 

 

 

       

 

 

 

 

 

 

 

Supplemental Cash Flow information

       

 

 

 

 

 

 

 

Cash Paid During the Year for

       

 

 

 

 

 

 

 

Interest

 
$
8,944
 
$
-
 
$
15,647
 
$
8,700
 
$
-
 
$
91,876
 

 

 

 

 

 

 

 

 

See accompanying notes to the Consolidated and Consolidating financial statements

F-14

 

Ark7 Properties Plus LLC

Consolidated and consolidating Statement of Cash Flows

For the year ended December 31, 2022

 

Description

 Ark7 Properties Plus LLC Ark7 Properties Plus LLC - Series #0XYT6 Ark7 Properties Plus LLC - Series #FTWDS Ark7 Properties Plus LLC - Series #JTDXY Ark7 Properties Plus LLC - Series #NHMOP Ark7 Properties Plus LLC - Series #P7FJ5 Ark7 Properties Plus LLC - Series #QGXF0 Ark7 Properties Plus LLC - Series #SOV9W Ark7 Properties Plus LLC - Series #WGI3Z Ark7 Properties Plus LLC - Series #WRA7O

Cash Flows From Operating Activities

          

Net Income (Loss)

 
$
(29)
 
$
(13,485)
 
$
(6,624)
 
$
(12,839)
 
$
-
 
$
(6,985)
 
$
-
 
$
(0)
 
$
(43,377)
 
$
(17,233)

Adjustments to Reconcile Net Income (Loss) to Net Cash Provided by (Used in) Operating Activities

          

Depreciation, other operating

 - 5,716 1,986 4,297 - 1,986 - - 7,384 3,802

Amortization of debt issuance costs

 - - - - - - - - - -

Total Adjustments to Reconcile Net Income (Loss) to Net Cash Provided by (Used in) Operating Activities

 - 5,716 1,986 4,297 - 1,986 - - 7,384 3,802

(Increase) decrease in operating assets, net of effects of businesses acquired

          

Accounts receivable

 - - - - - - - - - -

Related party receivables

 - (1) 529 (1,019) - 33 - (1,719) - 256

Prepaid expenses

 - (3,738) (743) (6,222) - (794) - 1,719 (928) (1,488)

Increase (decrease) in operating liabilities, net of effects of businesses acquired

          

Accounts payable and accrued expenses

 5,352 - - - - - - - - -

Related party payable

 20,574 - - - - - - - - -

Other liabilities

 - - 1,450 - - 3,000 - - - 6,900

Net Cash Provided by (Used in) Operating Activities

 25,897 (11,508) (3,402) (15,783) - (2,760) - - (36,921) (7,764)

Cash Flows from Investing Activities

          

Payments received from related party loans and notes receivable

 659,120 - - - - - - - - -

Related party loans and notes receivable issued

 (2,392,616) - - - - - - - - -

Purchase of property, plant, and equipment

 - (364,461) (223,490) (347,368) - (223,460) - - (286,740) (531,255)

Net Cash Provided by (Used in) Investing Activities

 (1,733,496) (364,461) (223,490) (347,368) - (223,460) - - (286,740) (531,255)

Cash Flows from Financing Activities

          

Proceeds from issuance of debt

 - - - - - - - - - -

Payments for debt issuance costs

 - - - - - - - - - -

Repayment of debt

 - - - - - - - - - -

Proceeds from issuance of related party debt

 1,733,496 378,478 228,015 356,203 - 227,985 - - 299,120 542,610

Repayment of related party debt

 - (120,000) (50,000) (65,000) - (5,000) - - (299,120) (20,000)

Proceeds from private offerings

 - 129,260 55,780 79,740 - 8,080 - - 369,920 17,980

Distributions to partners

 - (8,487) (3,283) (4,845) - (917) - - (6,126) -

Net Cash Provided by (Used in) Financing Activities

 1,733,496 379,251 230,512 366,098 - 230,148 - - 363,794 540,590

Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash

 25,897 3,282 3,619 2,947 - 3,928 - - 40,132 1,571

Cash, Cash Equivalents, and Restricted Cash at January 01, 2022

 - - - - - - - - - -

Cash, Cash Equivalents, and Restricted Cash at December 31, 2022

 25,897 3,282 3,619 2,947 - 3,928 - - 40,132 1,571

 

          

Supplemental Cash Flow information

          

Cash Paid During the Year for

          

Interest

 
$
-
 
$
17,032
 
$
6,840
 
$
13,358
 
$
-
 
$
6,840
 
$
-
 
$
-
 
$
12,697
 
$
12,209

 

Description

 Ark7 Properties Plus LLC - Series #ZIE3T Eliminating Total 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Flows From Operating Activities

    

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (Loss)

 
$
(6,564)
 
$
-
 
$
(107,135)
 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments to Reconcile Net Income (Loss) to Net Cash Provided by (Used in) Operating Activities

    

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation, other operating

 3,905 - 29,076 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of debt issuance costs

 - - - 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Adjustments to Reconcile Net Income (Loss) to Net Cash Provided by (Used in) Operating Activities

 3,905 - 29,076 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Increase) decrease in operating assets, net of effects of businesses acquired

    

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable

 - - - 

 

 

 

 

 

 

 

 

 

 

 

 

 

Related party receivables

 577 1,344 (0) 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prepaid expenses

 (4,337) - (16,532) 

 

 

 

 

 

 

 

 

 

 

 

 

 

Increase (decrease) in operating liabilities, net of effects of businesses acquired

    

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 - - 5,352 

 

 

 

 

 

 

 

 

 

 

 

 

 

Related party payable

 - (1,344) 19,230 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other liabilities

 - - 11,350 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Cash Provided by (Used in) Operating Activities

 (6,419)  (58,660) 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Flows from Investing Activities

    

 

 

 

 

 

 

 

 

 

 

 

 

 

Payments received from related party loans and notes receivable

 - (659,120) - 

 

 

 

 

 

 

 

 

 

 

 

 

 

Related party loans and notes receivable issued

 - 2,392,616 - 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchase of property, plant, and equipment

 (346,162) - (2,322,937) 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Cash Provided by (Used in) Investing Activities

 (346,162)  (2,322,937) 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Flows from Financing Activities

    

 

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds from issuance of debt

 - - - 

 

 

 

 

 

 

 

 

 

 

 

 

 

Payments for debt issuance costs

 - - - 

 

 

 

 

 

 

 

 

 

 

 

 

 

Repayment of debt

 - - - 

 

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds from issuance of related party debt

 360,205 (2,392,616) 1,733,496 

 

 

 

 

 

 

 

 

 

 

 

 

 

Repayment of related party debt

 (100,000) 659,120 - 

 

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds from private offerings

 101,320 - 762,080 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distributions to partners

 (6,188) - (29,846) 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Cash Provided by (Used in) Financing Activities

 355,337  2,465,730 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash

 2,756  84,133 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash, Cash Equivalents, and Restricted Cash at January 01, 2022

 - - - 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash, Cash Equivalents, and Restricted Cash at December 31, 2022

 2,756 - 84,133 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Cash Flow information

    

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Paid During the Year for

    

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest

 
$
13,508
 
$
-
 
$
82,482
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying notes to the Consolidated and Consolidating financial statements

F-15

 

ARK7 PROPERTIES PLUS LLC

NOTES TO THE CONSOLIDATED AND CONSOLIDATING FINANCIAL STATEMENTS

 

NOTE 1: ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

General Information

 

Ark7 Properties Plus LLC (the "APPL") is a single-member Delaware limited liability company wholly owned by Ark7 Inc. (the "Parent Company"). The APPL was formed on March 17, 2022, in accordance with the Limited Liability Company Act (LLCA) of the state of Delaware. The APPL has registered 13 Series Delaware limited liability companies (the "Series Companies"), each of which will be used as an investment vehicle that intends to enable investors to own fractional ownership of a specific rental property. This lowers the cost of entry and minimizes the time commitment for real estate investing. An investment in the APPL entitles the investor to the potential economic benefits normally associated with direct property ownership while requiring no investor involvement in asset or property management.

 

Series

 

Carrier

 

Property Address

 

Registration Date

0XYT6

 

Dallas-S7

 

2105 Silver Leaf Dr, Mesquite, TX 75181

 

June 30, 2022

DIVTU

 

N/A

 

N/A

 

September 27, 2023

FTWDS

 

Atlanta-T3

 

1527 Iris Walk, Jonesboro, GA 30238

 

November 21, 2022

JTDXY

 

Dallas-S9

 

2300 Homestead Dr, Mesquite, TX 75181

 

June 30, 2022

NHMOP

 

Atlanta-C3

 

215 Piedmont Ave NE, Unit 205, Atlanta, GA 30308

 

August 10, 2022

ORHOF

 

Atlanta-C5

 

215 Piedmont Ave NE, Unit 407, Atlanta, GA 30308

 

September 27, 2023

P7FJ5

 

Atlanta-T4

 

1541 Iris Walk, Jonesboro, GA 30238

 

November 21, 2022

QGXF0

 

Urbana-S11

 

704 S Lincoln Ave, Urbana, IL 61801

 

August 10, 2022

RPFUV

 

Alexandria-C2

 

3405 Commonwealth Ave, Unit C, Alexandria, VA 22305

 

September 27, 2023

SOV9W

 

Chicago-C1

 

2113 W Gladys Ave, Unit 3S, Chicago, IL 60612

 

August 10, 2022

WGI3Z

 

Arizona City-S6

 

11679 W Madero Dr, Arizona City, AZ 85123

 

March 21, 2022

WRA7O

 

Tampa-S10

 

4263 Cadence Loop, LAND O LAKES, FL 34638

 

August 10, 2022

ZIE3T

 

Dallas-S8

 

2507 Decoy Dr, Mesquite, TX 75181

 

August 1, 2022

 

Management's Plan and Going Concerns

 

The accompanying consolidated financial statements have been prepared to assume the APPL will continue as a going concern. The APPL is newly formed and has not generated sufficient revenue from operations. The APPL will require additional capital until revenue from operations is sufficient to cover operational costs. These matters raise substantial doubt about the company's ability to continue as a going concern. During the next 12 months, the APPL intends to fund operations through member advances and debt or equity financing. There are no assurances that management will be able to raise capital on terms acceptable to the APPL. If it is unable to obtain sufficient amounts of additional capital, it may be required to reduce the scope of its planned development and operations, which could harm its business, financial condition, and operating results. The accompanying financial statements do not include any adjustments that might result from these uncertainties. As of December 31, 2023 and 2022, the APPL's accumulated deficit amounted to $461,879 and $107,135, respectively.

 

These conditions indicate the existence of uncertainty which may cast doubt about the APPL's ability to continue as a going concern. These financial statements do not include any adjustments that might result from the outcome of these uncertainties.

F-16

 

Statement of compliance

 

The accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America. The consolidated financial statements include the accounts of the APPL and its Series Companies. All intercompany balances and transactions are eliminated in consolidation.

 

These consolidated financial statements have been prepared under the historical cost convention, except for evaluating specific financial instruments carried at fair value.

 

Method of accounting

 

The consolidated financial statement of the APPL is prepared on the accrual basis of accounting. It includes only those assets, liabilities, and results of operations that relate to the business of the APPL.

 

Use of estimates and assumptions

 

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. To the extent that there are material differences between these estimates and actual results, the APPL's financial condition or operating results will be materially affected. The APPL bases its estimates on past experience and other assumptions that the APPL believes are reasonable under the circumstances, and the APPL evaluates those estimates on an ongoing basis.

 

Functional and presentation currency

 

Items included in the APPL's consolidated financial statements are estimated using the currency that best reflects the economic substance of the underlying events and circumstances related to the APPL (the "functional currency"). The functional and presentation currency of the accompanying financial statements is US Dollars (the "USD").

 

Revenue recognition

 

Rental income is reported on a straight-line basis over the terms of the respective leases. The property rental income for the period ended December 31, 2023 and 2022 was $239,273 and $63,106, respectively.

 

The concentration of credit risk

 

Financial instruments potentially subject the APPL to the concentration of credit risk, primarily cash and tenant receivables. The APPL places its cash with financial institutions, and its balances are insured by the Federal Deposit Insurance Corporation up to $250,000. At various times, the APPL had a cash balance over the insured amount.

 

Fair value measurements

 

FASB ASC 820, "Fair Value Measurements" defines fair value for certain financial and nonfinancial assets and liabilities that are recorded at fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. It requires that an entity measure its financial instruments to base fair value on the exit price, maximize the use of observable units and minimize the use of unobservable inputs to determine the exit price. It establishes a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. This hierarchy increases the consistency and comparability of fair value measurements and related disclosures by maximizing the use of observable inputs and minimizing the use of unobservable inputs by requiring that observable inputs be used when available.

Observable inputs are inputs that reflect the assumptions market participants would use in pricing the assets or liabilities based on market data obtained from sources independent of the APPL. Unobservable inputs are inputs that reflect the APPL's own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy prioritizes the inputs into three broad levels based on the reliability of the inputs as follows:

 

Level 1 - Inputs are quoted prices in active markets for identical assets or liabilities that the APPL has the ability to access at the measurement date. Valuation of these instruments does not require a high degree of judgment as the valuations are based on quoted prices in active markets that are readily and regularly available.

 

Level 2 - Inputs other than quoted prices in active markets that are either directly or indirectly observable as of the measurement date, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

 

Level 3 - Valuations based on inputs that are unobservable and not corroborated by market data. The fair value for such assets and liabilities is generally determined using pricing models, discounted cash flow methodologies, or similar techniques that incorporate the assumptions a market participant would use in pricing the asset or liability.

 

The carrying values of certain assets and liabilities of the APPL approximate fair value due to their either relatively short maturities and/or consistency with current market rates.

F-17

 

Property, plant, and equipment

 

Land is carried at cost. Building, leasehold improvements, furniture, fixtures, and equipment are carried at cost, less accumulated depreciation and amortization. The building, furniture, fixtures, and equipment are depreciated using the straight-line method over the estimated useful lives of the assets. The cost of leasehold improvements is amortized using the straight-line method over the terms of the related leases. Repairs and maintenance are expensed when incurred.

 

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The recoverability of long-lived assets is assessed by a comparison of the carrying amount of the asset to the estimated future undiscounted net cash flows expected to be generated by the asset or group of assets. If estimated future undiscounted net cash flows are less than the carrying amount of the asset or group of assets, the asset is considered impaired and an expense is recorded in an amount required to reduce the carrying amount of the asset to its then fair value. Fair value is generally determined from estimated discounted future net cash flows (for assets held for use) or net realizable value (for assets held for sale). As of and for the year ended December 31, 2023 and 2022, the APPL has not recognized any impairment losses.

 

Property, plant and equipment consist of the following as of December 31, 2023 and 2022:

 

 

 December 31, 2023 December 31, 2022

Buildings and improvements

 
$
323,236
 
$
323,236

Furniture and fixtures

 
$
1,225
 
$
1,225

Land

 
$
487,550
 
$
270,150

Property, plant, and equipment, gross

 3,513,143 2,322,937

Less: Buildings and improvements - Accumulated Depreciation

 (112,792) (28,592)

Furniture and fixtures - Accumulated Depreciation

 (2,096) (484)

Property, plant, and equipment

 
$
3,398,255
 
$
2,293,861

 

Estimated useful life for buildings and improvements is 27.5 years.

 

Depreciation expenses for the year ended December 31, 2023 and 2022 was $85,812 and $29,076, respectively.

 

Lease accounting

 

According to the recently adopted Accounting Standards Updated ("ASU") No. 2016-02, Leases (Topic 842) ("ASU 2016- 02" or "ASC 842"), the APPL determines whether the arrangement is or contains a lease based on the unique facts and circumstances present in the arrangement. Leases with a term greater than one year are recognized on the balance sheet as right-of-use assets and current and non-current lease liabilities, as applicable. As of December 31, 2023, the APPL had no long-term leases.

 

Income taxes

 

The APPL is taxed as a Limited Liability Company (LLC). Under these provisions, the APPL does not pay federal corporate income taxes on its taxable income. Instead, the shareholders are liable for individual federal and state income taxes on their respective shares of the APPL's taxable income.

 

Each series will be taxed as a partnership, with the profits and losses of the Series flowing to investors regardless of whether there is cash available for distributions. For this offering of series interests to investors, each series will be taxed as a partnership, rather than as a corporation. This means that the Series will itself not owe or report any profits and losses for tax purposes, but will instead provide investors with a Schedule K-1 tax statement identifying the investor's pro rata share of any profits and losses of the Series. The calculation of net profits for the purposes of taxation is determined prior to our Managing Member assessing whether to hold back funds for future working capital purposes. As such, there may be times when the Series is reporting a net profit to investors but does not have funds available for distribution to investors to cover their personal tax liability.

F-18

 

NOTE 2: PROPERTY MANAGEMENT RESERVES

 

Each Series Company has allocated funds to establish property management reserves. These funds are designed to mitigate future financial uncertainties associated with property-related expenses, including maintenance, repairs, enhancements, or unanticipated costs. The aim is to maintain the properties in satisfactory condition, prevent financial strain, and preclude the necessity for immediate supplementary contributions from investors or owners due to substantial, unexpected expenses.

 

As of December 31, 2023 and 2022, the balance of the property management reserve was $1,304 and $58,236, and is included in cash and cash equivalents on the accompanying balance sheet.

F-19

 

NOTE 3: TRANSACTIONS WITH RELATED PARTIES

 

Down Payment Loan Payables

 

The Parent Company provide initial funding required for property acquisitions and structured this as a down payment loan to APPL and its series. Borrowers are authorized to use the Parent Company's bank checking account for property acquisition purpose.

 

Series #0XYT6

 

On July 1, 2022, the APPL - Series #0XYT6 executed a Loan Agreement from the Parent Company. According to the Loan Agreement, the APPL - Series #0XYT6 borrowed $378,478 at 9% interest with a maturity of June 30, 2023. The outstanding balance of the Loan Payable - Down Payment Loan as of December 31, 2023 and 2022 was $0 and $258,478, respectively, and is included in related party debt, current on the accompanying balance sheet. The interest expenses incurred in the year ended at December 31, 2023 and 2022 was $4,841 and $17,032, respectively. Ark7 Properties Plus LLC - Series #0XYT6.

 

Series #DIVTU

 

On December 1, 2023, the APPL - Series #DIVTU executed a Loan Agreement from the Parent Company. According to the Loan Agreement, the APPL - Series #DIVTU borrowed $222,660 at 10% interest with a maturity of November 30, 2024. The outstanding balance of the Loan Payable - Down Payment Loan as of December 31, 2023 and 2022 was $222,660 and $0, respectively, and is included in related party debt, current on the accompanying balance sheet. The interest expenses incurred in the year ended at December 31, 2023 and 2022 was $1,891 and $0, respectively. Ark7 Properties Plus LLC - Series #DIVTU.

 

Series #FTWDS

 

On September 1, 2022, the APPL - Series #FTWDS executed a Loan Agreement from the Parent Company. According to the Loan Agreement, the APPL - Series #FTWDS borrowed $228,015 at 9% interest with a maturity of August 31, 2023. The loan was paid off in 2024, and the outstanding balance of the Loan Payable - Down Payment Loan as of December 31, 2023 and 2022 was $0 and $178,015, respectively, and is included in related party debt, current on the accompanying balance sheet. The interest expenses incurred in the year ended at December 31, 2023 and 2022 was $4,920 and $6,840, respectively. Ark7 Properties Plus LLC - Series #FTWDS.

 

Series #JTDXY

 

On August 1, 2022, the APPL - Series #JTDXY executed a Loan Agreement from the Parent Company. According to the Loan Agreement, the APPL - Series #JTDXY borrowed $356,203 at 9% interest with a maturity of July 31, 2024. The outstanding balance of the Loan Payable - Down Payment Loan as of December 31, 2023 and 2022 was $0 and $291,203, respectively, and is included in related party debt, current on the accompanying balance sheet. The interest expenses incurred in the year ended at December 31, 2023 and 2022 was $14,663 and $13,358, respectively. Ark7 Properties Plus LLC - Series #JTDXY.

 

Series #NHMOP

 

On October 20, 2023, the APPL - Series #NHMOP executed a Loan Agreement from the Parent Company. According to the Loan Agreement, the APPL - Series #NHMOP borrowed $216,000 at 10% interest with a maturity of October 19, 2024. The outstanding balance of the Loan Payable - Down Payment Loan as of December 31, 2023 and 2022 was $66,000 and $0, respectively, and is included in related party debt, current on the accompanying balance sheet. The interest expenses incurred in the year ended at December 31, 2023 and 2022 was $2,958 and $0, respectively. Ark7 Properties Plus LLC - Series #NHMOP.

 

Series #ORHOF

 

On November 1, 2023, the APPL - Series #ORHOF executed a Loan Agreement from the Parent Company. According to the Loan Agreement, the APPL - Series #ORHOF borrowed $175,587 at 10% interest with a maturity of October 31, 2024. The outstanding balance of the Loan Payable - Down Payment Loan as of December 31, 2023 and 2022 was $175,587 and $0, respectively, and is included in related party debt, current on the accompanying balance sheet. The interest expenses incurred in the year ended at December 31, 2023 and 2022 was $2,934 and $0, respectively. Ark7 Properties Plus LLC - Series #ORHOF.

 

Series #P7FJ5

 

On September 1, 2022, the APPL - Series #P7FJ5 executed a Loan Agreement from the Parent Company. According to the Loan Agreement, the APPL - Series #P7FJ5 borrowed $227,985 at 9% interest with a maturity of August 31, 2024. The loan was paid off in 2024, and the outstanding balance of the Loan Payable - Down Payment Loan as of December 31, 2023 and 2022 was $0 and $222,985, respectively, and is included in related party debt, current on the accompanying balance sheet. The interest expenses incurred in the year ended at December 31, 2023 and 2022 was $11,587 and $6,840, respectively. Ark7 Properties Plus LLC - Series #P7FJ5.

 

Series #QGXF0

 

On August 1, 2023, the APPL - Series #QGXF0 executed a Loan Agreement from the Parent Company. According to the Loan Agreement, the APPL - Series #QGXF0 borrowed $344,051 at 10% interest with a maturity of July 31, 2024. The outstanding balance of the Loan Payable - Down Payment Loan as of December 31, 2023 and 2022 was $0 and $0, respectively, and is included in related party debt, current on the accompanying balance sheet. The interest expenses incurred in the year ended at December 31, 2023 and 2022 was $11,835 and $0, respectively. Ark7 Properties Plus LLC - Series #QGXF0.

 

Series #RPFUV

 

On October 18, 2023, the APPL - Series #RPFUV executed a Loan Agreement from the Parent Company. According to the Loan Agreement, the APPL - Series #RPFUV borrowed $250,963 at 10% interest with a maturity of October 17, 2024. The outstanding balance of the Loan Payable - Down Payment Loan as of December 31, 2023 and 2022 was $0 and $0, respectively, and is included in related party debt, current on the accompanying balance sheet. The interest expenses incurred in the year ended at December 31, 2023 and 2022 was $2,956 and $0, respectively. Ark7 Properties Plus LLC - Series #RPFUV.

 

Series #SOV9W

 

On August 1, 2023, the APPL - Series #SOV9W executed a Loan Agreement from the Parent Company. According to the Loan Agreement, the APPL - Series #SOV9W borrowed $212,919 at 10% interest with a maturity of July 31, 2024. The loan was paid off in 2024, and the outstanding balance of the Loan Payable - Down Payment Loan as of December 31, 2023 and 2022 was $0 and $0, respectively, and is included in related party debt, current on the accompanying balance sheet. The interest expenses incurred in the year ended at December 31, 2023 and 2022 was $8,944 and $0, respectively. Ark7 Properties Plus LLC - Series #SOV9W.

 

Series #WGI3Z

 

On April 5, 2022, the APPL - Series #WGI3Z executed a Loan Agreement from the Parent Company. According to the Loan Agreement, the APPL - Series #WGI3Z borrowed $299,120 at 9% interest with a maturity of April 4, 2023. The outstanding balance of the Loan Payable - Down Payment Loan as of December 31, 2023 and 2022 was $0 and $0, respectively, and is included in related party debt, current on the accompanying balance sheet. The interest expenses incurred in the year ended at December 31, 2023 and 2022 was $0 and $12,697, respectively. Ark7 Properties Plus LLC - Series #WGI3Z.

 

Series #WRA7O

 

On October 1, 2022, the APPL - Series #WRA7O executed a Loan Agreement from the Parent Company. According to the Loan Agreement, the APPL - Series #WRA7O borrowed $542,610 at 9% interest with a maturity of September 30, 2023. The loan was paid off in 2022, and the outstanding balance of the Loan Payable - Down Payment Loan as of December 31, 2023 and 2022 was $0 and $522,610, respectively, and is included in related party debt, current on the accompanying balance sheet. The interest expenses incurred in the year ended at December 31, 2023 and 2022 was $15,647 and $12,209, respectively. Ark7 Properties Plus LLC - Series #WRA7O.

 

Series #ZIE3T

 

On August 1, 2022, the APPL - Series #ZIE3T executed a Loan Agreement from the Parent Company. According to the Loan Agreement, the APPL - Series #ZIE3T borrowed $360,205 at 9% interest with a maturity of July 31, 2024. The outstanding balance of the Loan Payable - Down Payment Loan as of December 31, 2023 and 2022 was $0 and $260,205, respectively, and is included in related party debt, current on the accompanying balance sheet. The interest expenses incurred in the year ended at December 31, 2023 and 2022 was $8,700 and $13,508, respectively. Ark7 Properties Plus LLC - Series #ZIE3T.

F-20

 

Due from affiliates

 

The APPL occasionally pays for the Parent Company for covering administrative costs. The loan has been structured as receivable from the Parent Company to the APPL. The outstanding balance due from the affiliate as of December 31, 2023 and 2022 was $0 and $0, and is included in the related party receivable section on the accompanying balance sheet.

 

Property sourcing fee and offering expenses reimbursement

 

Pursuant to the Operating Agreement the Asset Manager, as consideration for assisting in the sourcing of the Underlying Asset of a Series, to the extent not waived by the Managing Member in its sole discretion, will receive a 3.0% (of the maximum offering amount) Sourcing Fee. The sourcing fee is in connection with the search and negotiation of the property purchase as set forth in the Certificate of Designations for the Series.

 

The Parent Company assigns offering expenses to each series, which are then set as part of each series' intended Use of Proceeds. The parent company will be reimbursed a fixed amount for each series for offering expenses.

 

Series #0XYT6

 

The property sourcing fee and offering expenses incurred in the year ended December 31, 2023 was $14,250 and $21,450, respectively, and in December 31, 2022 was $0 and $303, respectively.

 

Series #FTWDS

 

The property sourcing fee and offering expenses incurred in the year ended December 31, 2023 was $7,950 and $15,150, respectively, and in December 31, 2022 was $0 and $450, respectively.

 

Series #JTDXY

 

The property sourcing fee and offering expenses incurred in the year ended December 31, 2023 was $13,500 and $20,700, respectively, and in December 31, 2022 was $0 and $453, respectively.

 

Series #P7FJ5

 

The property sourcing fee and offering expenses incurred in the year ended December 31, 2023 was $7,950 and $15,150, respectively, and in December 31, 2022 was $0 and $500, respectively.

 

Series #QGXF0

 

The property sourcing fee and offering expenses incurred in the year ended December 31, 2023 was $0 and $18, respectively, and in December 31, 2022 was $0 and $0, respectively.

 

Series #RPFUV

 

The property sourcing fee and offering expenses incurred in the year ended December 31, 2023 was $8,700 and $14,929, respectively, and in December 31, 2022 was $0 and $0, respectively.

 

Series #SOV9W

 

The property sourcing fee and offering expenses incurred in the year ended December 31, 2023 was $7,800 and $13,818, respectively, and in December 31, 2022 was $0 and $0, respectively.

 

Series #WGI3Z

 

The property sourcing fee and offering expenses incurred in the year ended December 31, 2023 was $0 and $11, respectively, and in December 31, 2022 was $10,896 and $18,898, respectively.

 

Series #WRA7O

 

The property sourcing fee and offering expenses incurred in the year ended December 31, 2023 was $18,450 and $25,650, respectively, and in December 31, 2022 was $0 and $329, respectively.

 

Series #ZIE3T

 

The property sourcing fee and offering expenses incurred in the year ended December 31, 2023 was $13,650 and $20,850, respectively, and in December 31, 2022 was $0 and $329, respectively.

F-21

 

Asset management fee

 

For services performed, the Series will pay an annual Asset Management Fee to the Asset Manager in respect of each fiscal year, 15% of any Free Cash Flows available for distribution pursuant to Article VII of the Operating Agreement. Any such amount will be paid at the same time as, and only if, a distribution is made from the Series to its Members.

 

Series #0XYT6

 

The Series #0XYT6 has entered into an Asset Management Agreement with the Parent Company (the Asset Manager), the managing member of the Series #0XYT6 and shall reimburse the Asset Manager for any such expenses paid by the Asset Manager on behalf of the Series #0XYT6 together with a reasonable rate of interest (a rate no less than the Applicable Federal Rate (as defined in the Internal Revenue Code)) as may be imposed by the Asset Manager in its sole discretion ("Operating Expenses Reimbursement Obligation"). As of December 31, 2023 and 2022, the prepaid Asset Management Fee was $0 and $0, respectively. Asset Management Fee for the year ended December 31, 2023 and December 31, 2022, was $0 and $0, respectively.

 

Series #DIVTU

 

The Series #DIVTU has entered into an Asset Management Agreement with the Parent Company (the Asset Manager), the managing member of the Series #DIVTU and shall reimburse the Asset Manager for any such expenses paid by the Asset Manager on behalf of the Series #DIVTU together with a reasonable rate of interest (a rate no less than the Applicable Federal Rate (as defined in the Internal Revenue Code)) as may be imposed by the Asset Manager in its sole discretion ("Operating Expenses Reimbursement Obligation"). As of December 31, 2023 and 2022, the prepaid Asset Management Fee was $0 and $0, respectively. Asset Management Fee for the year ended December 31, 2023 and December 31, 2022, was $0 and $0, respectively.

 

Series #FTWDS

 

The Series #FTWDS has entered into an Asset Management Agreement with the Parent Company (the Asset Manager), the managing member of the Series #FTWDS and shall reimburse the Asset Manager for any such expenses paid by the Asset Manager on behalf of the Series #FTWDS together with a reasonable rate of interest (a rate no less than the Applicable Federal Rate (as defined in the Internal Revenue Code)) as may be imposed by the Asset Manager in its sole discretion ("Operating Expenses Reimbursement Obligation"). As of December 31, 2023 and 2022, the prepaid Asset Management Fee was $0 and $0, respectively. Asset Management Fee for the year ended December 31, 2023 and December 31, 2022, was $0 and $0, respectively.

 

Series #JTDXY

 

The Series #JTDXY has entered into an Asset Management Agreement with the Parent Company (the Asset Manager), the managing member of the Series #JTDXY and shall reimburse the Asset Manager for any such expenses paid by the Asset Manager on behalf of the Series #JTDXY together with a reasonable rate of interest (a rate no less than the Applicable Federal Rate (as defined in the Internal Revenue Code)) as may be imposed by the Asset Manager in its sole discretion ("Operating Expenses Reimbursement Obligation"). As of December 31, 2023 and 2022, the prepaid Asset Management Fee was $0 and $0, respectively. Asset Management Fee for the year ended December 31, 2023 and December 31, 2022, was $0 and $0, respectively.

 

Series #NHMOP

 

The Series #NHMOP has entered into an Asset Management Agreement with the Parent Company (the Asset Manager), the managing member of the Series #NHMOP and shall reimburse the Asset Manager for any such expenses paid by the Asset Manager on behalf of the Series #NHMOP together with a reasonable rate of interest (a rate no less than the Applicable Federal Rate (as defined in the Internal Revenue Code)) as may be imposed by the Asset Manager in its sole discretion ("Operating Expenses Reimbursement Obligation"). As of December 31, 2023 and 2022, the prepaid Asset Management Fee was $0 and $0, respectively. Asset Management Fee for the year ended December 31, 2023 and December 31, 2022, was $0 and $0, respectively.

 

Series #ORHOF

 

The Series #ORHOF has entered into an Asset Management Agreement with the Parent Company (the Asset Manager), the managing member of the Series #ORHOF and shall reimburse the Asset Manager for any such expenses paid by the Asset Manager on behalf of the Series #ORHOF together with a reasonable rate of interest (a rate no less than the Applicable Federal Rate (as defined in the Internal Revenue Code)) as may be imposed by the Asset Manager in its sole discretion ("Operating Expenses Reimbursement Obligation"). As of December 31, 2023 and 2022, the prepaid Asset Management Fee was $0 and $0, respectively. Asset Management Fee for the year ended December 31, 2023 and December 31, 2022, was $0 and $0, respectively.

 

Series #P7FJ5

 

The Series #P7FJ5 has entered into an Asset Management Agreement with the Parent Company (the Asset Manager), the managing member of the Series #P7FJ5 and shall reimburse the Asset Manager for any such expenses paid by the Asset Manager on behalf of the Series #P7FJ5 together with a reasonable rate of interest (a rate no less than the Applicable Federal Rate (as defined in the Internal Revenue Code)) as may be imposed by the Asset Manager in its sole discretion ("Operating Expenses Reimbursement Obligation"). As of December 31, 2023 and 2022, the prepaid Asset Management Fee was $0 and $0, respectively. Asset Management Fee for the year ended December 31, 2023 and December 31, 2022, was $0 and $0, respectively.

 

Series #QGXF0

 

The Series #QGXF0 has entered into an Asset Management Agreement with the Parent Company (the Asset Manager), the managing member of the Series #QGXF0 and shall reimburse the Asset Manager for any such expenses paid by the Asset Manager on behalf of the Series #QGXF0 together with a reasonable rate of interest (a rate no less than the Applicable Federal Rate (as defined in the Internal Revenue Code)) as may be imposed by the Asset Manager in its sole discretion ("Operating Expenses Reimbursement Obligation"). As of December 31, 2023 and 2022, the prepaid Asset Management Fee was $0 and $0, respectively. Asset Management Fee for the year ended December 31, 2023 and December 31, 2022, was $0 and $0, respectively.

 

Series #RPFUV

 

The Series #RPFUV has entered into an Asset Management Agreement with the Parent Company (the Asset Manager), the managing member of the Series #RPFUV and shall reimburse the Asset Manager for any such expenses paid by the Asset Manager on behalf of the Series #RPFUV together with a reasonable rate of interest (a rate no less than the Applicable Federal Rate (as defined in the Internal Revenue Code)) as may be imposed by the Asset Manager in its sole discretion ("Operating Expenses Reimbursement Obligation"). As of December 31, 2023 and 2022, the prepaid Asset Management Fee was $0 and $0, respectively. Asset Management Fee for the year ended December 31, 2023 and December 31, 2022, was $0 and $0, respectively.

 

Series #SOV9W

 

The Series #SOV9W has entered into an Asset Management Agreement with the Parent Company (the Asset Manager), the managing member of the Series #SOV9W and shall reimburse the Asset Manager for any such expenses paid by the Asset Manager on behalf of the Series #SOV9W together with a reasonable rate of interest (a rate no less than the Applicable Federal Rate (as defined in the Internal Revenue Code)) as may be imposed by the Asset Manager in its sole discretion ("Operating Expenses Reimbursement Obligation"). As of December 31, 2023 and 2022, the prepaid Asset Management Fee was $0 and $0, respectively. Asset Management Fee for the year ended December 31, 2023 and December 31, 2022, was $0 and $0, respectively.

 

Series #WGI3Z

 

The Series #WGI3Z has entered into an Asset Management Agreement with the Parent Company (the Asset Manager), the managing member of the Series #WGI3Z and shall reimburse the Asset Manager for any such expenses paid by the Asset Manager on behalf of the Series #WGI3Z together with a reasonable rate of interest (a rate no less than the Applicable Federal Rate (as defined in the Internal Revenue Code)) as may be imposed by the Asset Manager in its sole discretion ("Operating Expenses Reimbursement Obligation"). As of December 31, 2023 and 2022, the prepaid Asset Management Fee was $0 and $0, respectively. Asset Management Fee for the year ended December 31, 2023 and December 31, 2022, was $0 and $0, respectively.

 

Series #WRA7O

 

The Series #WRA7O has entered into an Asset Management Agreement with the Parent Company (the Asset Manager), the managing member of the Series #WRA7O and shall reimburse the Asset Manager for any such expenses paid by the Asset Manager on behalf of the Series #WRA7O together with a reasonable rate of interest (a rate no less than the Applicable Federal Rate (as defined in the Internal Revenue Code)) as may be imposed by the Asset Manager in its sole discretion ("Operating Expenses Reimbursement Obligation"). As of December 31, 2023 and 2022, the prepaid Asset Management Fee was $0 and $0, respectively. Asset Management Fee for the year ended December 31, 2023 and December 31, 2022, was $0 and $0, respectively.

 

Series #ZIE3T

 

The Series #ZIE3T has entered into an Asset Management Agreement with the Parent Company (the Asset Manager), the managing member of the Series #ZIE3T and shall reimburse the Asset Manager for any such expenses paid by the Asset Manager on behalf of the Series #ZIE3T together with a reasonable rate of interest (a rate no less than the Applicable Federal Rate (as defined in the Internal Revenue Code)) as may be imposed by the Asset Manager in its sole discretion ("Operating Expenses Reimbursement Obligation"). As of December 31, 2023 and 2022, the prepaid Asset Management Fee was $0 and $0, respectively. Asset Management Fee for the year ended December 31, 2023 and December 31, 2022, was $0 and $0, respectively.

F-22

 

NOTE 4: SUBSEQUENT EVENTS

 

Following are the material subsequent events that took place between January 1, 2024 through March 18, 2024 (date of report):

 

Property Acquisition

 

 

NOTE 5: APPROVAL OF CONSOLIDATED FINANCIAL STATEMENTS

 

The consolidated and consolidating financial statements have been approved by the management of the APPL and authorized for issue on March 16, 2024.

F-23

 

Ark7 Properties Plus LLC

 

Unaudited Pro Forma Consolidated and consolidating Financial Statements and Report

 

For the Year ended December 31, 2023

F-1

 

Table of Contents

 

Unaudited Pro Forma Consolidated and consolidating Balance Sheet As of December 31, 2023

 F-3

Unaudited Pro Forma Consolidated and consolidating Statement of Income For the Year ended December 31, 2023

 F-4

Notes to the Unaudited Pro Forma Consolidated and consolidating Financial Statements

 F-5

F-2

 

The following unaudited pro forma consolidated and consolidating financial information presents the unaudited pro forma consolidated and consolidating balance sheet and statement of income based upon the historical financial statements of Ark7 Properties Plus LLC, and all subsequent Series, after giving effect to the business combination between Ark7 Properties Plus LLC and all subsequent Series.

 

The unaudited pro forma consolidated and consolidating balance sheet of Ark7 Properties Plus LLC and all subsequent Series as of December 31, 2023, has been prepared to reflect the effects of the subsequent Series acquisitions as if each occurred on December 31, 2023. The unaudited pro forma consolidated and consolidating statement of income for the year ended December 31, 2023 combine the historical results and operations of all subsequent Series and the Company giving effect to the transaction as if it occurred on January 01, 2023.

 

The unaudited pro forma consolidated and consolidating financial information should be read in conjunction with the audited and unaudited historical financial statements of each of Ark7 Properties Plus LLC and all subsequent Series and the notes thereto.

 

The unaudited pro forma consolidated and consolidating financial information was prepared in accordance with Article 11 of Regulation S-X. The unaudited pro forma adjustments reflecting the transaction have been prepared in accordance with business combination accounting guidance as provided in Accounting Standards Codification Topic 805, Business Combinations and reflect the preliminary allocation of the purchase price to the acquired assets and liabilities based upon the preliminary estimate of fair values, using the assumptions set forth in the notes to the unaudited pro forma consolidated and consolidating financial information.

 

The unaudited pro forma consolidated and consolidating financial information is provided for informational purposes only and is not necessarily indicative of the operating results or financial position that would have occurred if the transaction had been completed as of the dates set forth above, nor is it indicative of the future results or financial position of the combined company. In connection with the pro forma financial information, the Company allocated the purchase price using its best estimates of fair value. Accordingly, the pro forma acquisition price adjustments are preliminary and subject to further adjustments as additional information becomes available and as additional analyses are performed. The unaudited pro forma consolidated and consolidating financial information also does not give effect to the potential impact of current financial conditions, any anticipated synergies, operating efficiencies or cost savings that may result from the transaction or any integration costs. Furthermore, the unaudited pro forma consolidated and consolidating statements of income do not include certain nonrecurring charges and the related tax effects that result directly from the transaction as described in the notes to the unaudited pro forma consolidated and consolidating financial information.

 

Ark7 Properties Plus LLC

Unaudited Pro Forma Consolidated and consolidating Balance Sheet

As of December 31, 2023

 

Description

 Ark7 Properties Plus LLC Ark7 Properties Plus LLC - Series #WGI3Z Ark7 Properties Plus LLC - Series #0XYT6 Ark7 Properties Plus LLC - Series #ZIE3T Ark7 Properties Plus LLC - Series #JTDXY Ark7 Properties Plus LLC - Series #FTWDS Ark7 Properties Plus LLC - Series #P7FJ5 Ark7 Properties Plus LLC - Series #WRA7O Ark7 Properties Plus LLC - Series #SOV9W Ark7 Properties Plus LLC - Series #QGXF0

Assets

          

Current Assets

          

Cash and cash equivalents

 
$
22,957
 
$
200
 
$
814
 
$
652
 
$
(362)
 
$
-
 
$
-
 
$
-
 
$
-
 
$
-

Receivables

 5,167 - - - - - - - - -

Related party receivables

 562,367 26,415 48,147 36,525 34,632 (154) (5,216) (2,295) 12,015 68,331

Prepaid expenses

 - 1,656 684 1,493 25 879 3,961 2,466 355 3,720

Total Current Assets

 590,491 28,271 49,645 38,670 34,295 726 (1,256) 171 12,369 72,051

Noncurrent Assets

 -         

Property, plant, and equipment

 -         

Property, plant, and equipment - Cost

 100 287,530 364,461 359,511 347,368 223,490 223,460 531,255 212,918 326,767

Property, plant, and equipment - Accumulated Depreciation

 - (17,829) (17,696) (15,022) (15,539) (9,164) (9,162) (20,724) (2,496) (4,192)

Total Property, plant, and equipment

 100 269,701 346,765 344,488 331,829 214,327 214,298 510,531 210,422 322,575

Related party loans and note receivable, noncurrent

 - - - - - - - - - -

Total Noncurrent Assets

 100 269,701 346,765 344,488 331,829 214,327 214,298 510,531 210,422 322,575

Total Assets

 590,591 297,972 396,409 383,158 366,125 215,052 213,042 510,702 222,791 394,626

 

          

Liabilities & Members' Equity

 -         

Liabilities

 -         

Current Liabilities

 -         

Accounts payable and accrued liabilities

 104,202 - - - - - - - - -

Related party payable

 503,551 - - - - - - - - -

Related party debt, current

 (0) - - - - - - - - -

Other liabilities, current

 - 1,675 1,800 1,800 1,800 1,450 4,550 6,900 1,139 693

Total Current Liabilities

 607,753 1,675 1,800 1,800 1,800 1,450 4,550 6,900 1,139 693

Noncurrent Liabilities

 -         

Mortgage payable

 - - - - - - - - - -

Related party debt, noncurrent

 - - - - - - - - - -

Total Noncurrent Liabilities

 - - - - - - - - - -

Total Liabilities

 607,753 1,675 1,800 1,800 1,800 1,450 4,550 6,900 1,139 693

 

          

Member's Equity

 -         

Equity Capital

 -         

Members' Equity

 - 342,595 439,023 427,586 423,535 249,536 251,999 583,537 254,194 403,361

Retained Earnings (Accumulated Deficit)

 (17,162) (46,299) (44,414) (46,227) (59,210) (35,934) (43,507) (79,735) (32,542) (9,428)

Total Equity Capital

 (17,162) 296,297 394,609 381,358 364,325 213,602 208,492 503,802 221,652 393,933

Total Member's Equity

 (17,162) 296,297 394,609 381,358 364,325 213,602 208,492 503,802 221,652 393,933

Total Liabilities & Members' Equity

 
$
590,591
 
$
297,972
 
$
396,409
 
$
383,158
 
$
366,125
 
$
215,052
 
$
213,042
 
$
510,702
 
$
222,791
 
$
394,626

 

Description

 Ark7 Properties Plus LLC - Series #RPFUV Ark7 Properties Plus LLC - Series #NHMOP Ark7 Properties Plus LLC - Series #ORHOF Ark7 Properties Plus LLC - Series #DIVTU (Historical) Ark7 Properties Plus LLC - Series #DIVTU (Pro Forma Adjustments) Ark7 Properties Plus LLC - Series #DIVTU (Pro Forma Results) Ark7 Properties Plus LLC - Series #OJXLW (Historical) Ark7 Properties Plus LLC - Series #OJXLW (Pro Forma Adjustments) Ark7 Properties Plus LLC - Series #OJXLW (Pro Forma Results) Ark7 Properties Plus LLC - Series #ZAUH4 (Historical)

Assets

          

Current Assets

          

Cash and cash equivalents

 
$
-
 
$
-
 
$
-
 
$
-
 
$
6,477
 
$
6,477
 
$
-
 
$
6,589
 
$
6,589
 
$
-

Receivables

 - - - - - - - - - -

Related party receivables

 3,592 100,652 (39,633) 220,540 (220,540) - - - - -

Prepaid expenses

 1,185 5 766 - - - - - - -

Total Current Assets

 4,777 100,657 (38,867) 220,540 (214,063) 6,477 - 6,589 6,589 -

Noncurrent Assets

          

Property, plant, and equipment

          

Property, plant, and equipment - Cost

 253,643 172,535 210,104 - 222,660 222,660 - 226,513 226,513 -

Property, plant, and equipment - Accumulated Depreciation

 (1,460) (936) (667) - (6,477) (6,477) - (6,589) (6,589) -

Total Property, plant, and equipment

 252,183 171,600 209,437 - 216,183 216,183 - 219,923 219,923 -

Related party loans and note receivable, noncurrent

 - - - - - - - - - -

Total Noncurrent Assets

 252,183 171,600 209,437 - 216,183 216,183 - 219,923 219,923 -

Total Assets

 256,959 272,257 170,569 220,540 2,120 222,660 - 226,513 226,513 -

 

          

Liabilities & Members' Equity

          

Liabilities

          

Current Liabilities

          

Accounts payable and accrued liabilities

 - - - - - - - - - -

Related party payable

 - - - - - - - - - -

Related party debt, current

 - 66,000 175,587 222,660 2,120 224,781 - 226,513 226,513 -

Other liabilities, current

 - - - - - - - - - -

Total Current Liabilities

 - 66,000 175,587 222,660 2,120 224,781 - 226,513 226,513 -

Noncurrent Liabilities

          

Mortgage payable

 - - - - - - - - - -

Related party debt, noncurrent

 - - - - - - - - - -

Total Noncurrent Liabilities

 - - - - - - - - - -

Total Liabilities

 - 66,000 175,587 222,660 2,120 224,781 - 226,513 226,513 -

 

          

Member's Equity

          

Equity Capital

          

Members' Equity

 290,200 213,300 - - - - - - - -

Retained Earnings (Accumulated Deficit)

 (33,241) (7,043) (5,018) (2,120) - (2,120) - - - -

Total Equity Capital

 256,959 206,257 (5,018) (2,120) - (2,120) - - - -

Total Member's Equity

 256,959 206,257 (5,018) (2,120) - (2,120) - - - -

Total Liabilities & Members' Equity

 
$
256,959
 
$
272,257
 
$
170,569
 
$
220,540
 
$
2,120
 
$
222,660
 
$
-
 
$
226,513
 
$
226,513
 
$
-

 

Description

 Ark7 Properties Plus LLC - Series #ZAUH4 (Pro Forma Adjustments) Ark7 Properties Plus LLC - Series #ZAUH4 (Pro Forma Results) Ark7 Properties Plus LLC - Series #EYPIR (Historical) Ark7 Properties Plus LLC - Series #EYPIR (Pro Forma Adjustments) Ark7 Properties Plus LLC - Series #EYPIR (Pro Forma Results) Ark7 Properties Plus LLC - Series #5VCTK (Historical) Ark7 Properties Plus LLC - Series #5VCTK (Pro Forma Adjustments) Ark7 Properties Plus LLC - Series #5VCTK (Pro Forma Results) Ark7 Properties Plus LLC - Series #ET8BV (Historical) Ark7 Properties Plus LLC - Series #ET8BV (Pro Forma Adjustments)

Assets

          

Current Assets

          

Cash and cash equivalents

 
$
6,096
 
$
6,096
 
$
-
 
$
5,965
 
$
5,965
 
$
-
 
$
6,945
 
$
6,945
 
$
-
 
$
5,885

Receivables

 - - - - - - - - - -

Related party receivables

 - - - - - - - - - -

Prepaid expenses

 - - - - - - - - - -

Total Current Assets

 6,096 6,096 - 5,965 5,965 - 6,945 6,945 - 5,885

Noncurrent Assets

          

Property, plant, and equipment

          

Property, plant, and equipment - Cost

 209,555 209,555 - 205,058 205,058 - 238,751 238,751 - 202,313

Property, plant, and equipment - Accumulated Depreciation

 (6,096) (6,096) - (5,965) (5,965) - (6,945) (6,945) - (5,885)

Total Property, plant, and equipment

 203,459 203,459 - 199,093 199,093 - 231,806 231,806 - 196,427

Related party loans and note receivable, noncurrent

 - - - - - - - - - -

Total Noncurrent Assets

 203,459 203,459 - 199,093 199,093 - 231,806 231,806 - 196,427

Total Assets

 209,555 209,555 - 205,058 205,058 - 238,751 238,751 - 202,313

 

          

Liabilities & Members' Equity

          

Liabilities

          

Current Liabilities

          

Accounts payable and accrued liabilities

 - - - - - - - - - -

Related party payable

 - - - - - - - - - -

Related party debt, current

 209,555 209,555 - 205,058 205,058 - 238,751 238,751 - 202,313

Other liabilities, current

 - - - - - - - - - -

Total Current Liabilities

 209,555 209,555 - 205,058 205,058 - 238,751 238,751 - 202,313

Noncurrent Liabilities

          

Mortgage payable

 - - - - - - - - - -

Related party debt, noncurrent

 - - - - - - - - - -

Total Noncurrent Liabilities

 - - - - - - - - - -

Total Liabilities

 209,555 209,555 - 205,058 205,058 - 238,751 238,751 - 202,313

 

          

Member's Equity

          

Equity Capital

          

Members' Equity

 - - - - - - - - - -

Retained Earnings (Accumulated Deficit)

 - - - - - - - - - -

Total Equity Capital

 - - - - - - - - - -

Total Member's Equity

 - - - - - - - - - -

Total Liabilities & Members' Equity

 
$
209,555
 
$
209,555
 
$
-
 
$
205,058
 
$
205,058
 
$
-
 
$
238,751
 
$
238,751
 
$
-
 
$
202,313

 

Description

 Ark7 Properties Plus LLC - Series #ET8BV (Pro Forma Results) Eliminating Total 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets

    

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Assets

    

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 
$
5,885
 
$
-
 
$
62,221
 

 

 

 

 

 

 

 

 

 

 

 

 

 

Receivables

 - - 5,167 

 

 

 

 

 

 

 

 

 

 

 

 

 

Related party receivables

 - (503,549) 341,826 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prepaid expenses

 - - 17,195 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Current Assets

 5,885 (503,549) 426,409 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noncurrent Assets

   - 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property, plant, and equipment

   - 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property, plant, and equipment - Cost

 202,313 - 4,817,993 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property, plant, and equipment - Accumulated Depreciation

 (5,885) - (152,847) 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Property, plant, and equipment

 196,427 - 4,665,146 

 

 

 

 

 

 

 

 

 

 

 

 

 

Related party loans and note receivable, noncurrent

 - - - 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Noncurrent Assets

 196,427 - 4,665,146 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Assets

 202,313 (503,549) 5,091,555 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities & Members' Equity

   - 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

   - 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities

   - 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 - - 104,202 

 

 

 

 

 

 

 

 

 

 

 

 

 

Related party payable

 - (503,549) 2 

 

 

 

 

 

 

 

 

 

 

 

 

 

Related party debt, current

 202,313 - 1,548,557 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other liabilities, current

 - - 21,807 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Current Liabilities

 202,313 (503,549) 1,674,568 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noncurrent Liabilities

   - 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage payable

 - - - 

 

 

 

 

 

 

 

 

 

 

 

 

 

Related party debt, noncurrent

 - - - 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Noncurrent Liabilities

 - - - 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Liabilities

 202,313 (503,549) 1,674,568 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

 

 

 

 

 

 

 

 

 

 

 

Member's Equity

   - 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity Capital

   - 

 

 

 

 

 

 

 

 

 

 

 

 

 

Members' Equity

 - - 3,878,867 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retained Earnings (Accumulated Deficit)

 - - (461,879) 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Equity Capital

 - - 3,416,987 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Member's Equity

 - - 3,416,987 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Liabilities & Members' Equity

 
$
202,313
 
$
(503,549)
 
$
5,091,555
 

 

 

 

 

 

 

 

 

 

 

 

 

 

F-3

 

Ark7 Properties Plus LLC

Unaudited Pro Forma Consolidated and consolidating Statement of Income

For the Year ended December 31, 2023

 

Description

 Ark7 Properties Plus LLC Ark7 Properties Plus LLC - Series #WGI3Z Ark7 Properties Plus LLC - Series #0XYT6 Ark7 Properties Plus LLC - Series #ZIE3T Ark7 Properties Plus LLC - Series #JTDXY Ark7 Properties Plus LLC - Series #FTWDS Ark7 Properties Plus LLC - Series #P7FJ5 Ark7 Properties Plus LLC - Series #WRA7O Ark7 Properties Plus LLC - Series #SOV9W (Historical) Ark7 Properties Plus LLC - Series #SOV9W (Pro Forma Adjustments)

Revenue

 
$
(1,741)
 
$
20,155
 
$
39,967
 
$
39,600
 
$
39,600
 
$
18,618
 
$
18,600
 
$
39,794
 
$
6,788
 
$
-

 

          

Expenses

          

Depreciation expenses

 - 10,445 11,980 11,117 11,242 7,178 7,177 16,922 2,496 3,818

Interest expenses

 - - 4,841 8,700 14,663 4,920 11,587 15,647 8,944 -

Property taxes

 - 1,531 6,450 6,633 7,329 3,295 3,230 10,126 1,486 (75)

Property management

 - 3,061 4,275 4,507 5,469 1,280 1,697 5,180 678 -

Repair & maintenance

 - 451 927 3,064 2,129 64 149 1,382 58 -

Insurance

 - 665 3,066 2,810 2,916 631 684 1,666 - -

Utilities

 - 416 182 - - - - - 1,311 -

HOA fee

 - - 206 - - 602 602 705 - -

Other operating expenses

 15,392 6,509 38,968 42,432 42,223 29,958 29,995 50,668 24,358 -

Total Expenses

 15,392 23,077 70,896 79,264 85,971 47,928 55,122 102,296 39,330 3,743

 

          

Net loss

 (17,133) (2,922) (30,929) (39,664) (46,371) (29,310) (36,522) (62,501) (32,542) (3,743)

 

          

Beginning accumulated deficit

 (29) (43,377) (13,485) (6,564) (12,839) (6,624) (6,985) (17,233) (0) -

Ending accumulated deficit

 
$
(17,162)
 
$
(46,299)
 
$
(44,414)
 
$
(46,227)
 
$
(59,210)
 
$
(35,934)
 
$
(43,507)
 
$
(79,735)
 
$
(32,542)
 
$
(3,743)

 

Description

 Ark7 Properties Plus LLC - Series #SOV9W (Pro Forma Results) Ark7 Properties Plus LLC - Series #QGXF0 (Historical) Ark7 Properties Plus LLC - Series #QGXF0 (Pro Forma Adjustments) Ark7 Properties Plus LLC - Series #QGXF0 (Pro Forma Results) Ark7 Properties Plus LLC - Series #RPFUV (Historical) Ark7 Properties Plus LLC - Series #RPFUV (Pro Forma Adjustments) Ark7 Properties Plus LLC - Series #RPFUV (Pro Forma Results) Ark7 Properties Plus LLC - Series #NHMOP (Historical) Ark7 Properties Plus LLC - Series #NHMOP (Pro Forma Adjustments) Ark7 Properties Plus LLC - Series #NHMOP (Pro Forma Results)

Revenue

 
$
6,788
 
$
15,129
 
$
-
 
$
15,129
 
$
-
 
$
-
 
$
-
 
$
1,021
 
$
-
 
$
1,021

 

          

Expenses

          

Depreciation expenses

 6,314 4,192 5,817 10,009 1,460 5,840 7,301 936 3,867 4,803

Interest expenses

 8,944 11,835 - 11,835 2,956 - 2,956 2,958 5,005 7,963

Property taxes

 1,411 3,238 7,276 10,514 534 2,032 2,566 430 1,414 1,844

Property management

 678 723 - 723 - - - - - -

Repair & maintenance

 58 661 - 661 7 - 7 - - -

Insurance

 - 697 1,503 2,200 84 316 400 - 1,000 1,000

Utilities

 1,311 355 - 355 - - - - - -

HOA fee

 - - - - 1,499 3,661 5,160 995 4,045 5,040

Other operating expenses

 24,358 2,856 - 2,856 26,702 - 26,702 2,747 - 2,747

Total Expenses

 43,073 24,557 14,596 39,152 33,241 11,851 45,091 8,064 15,332 23,396

 

          

Net loss

 (36,285) (9,428) (14,596) (24,023) (33,241) (11,851) (45,091) (7,043) (15,332) (22,375)

 

          

Beginning accumulated deficit

 (0) - - - - - - - - -

Ending accumulated deficit

 
$
(36,285)
 
$
(9,428)
 
$
(14,596)
 
$
(24,023)
 
$
(33,241)
 
$
(11,851)
 
$
(45,091)
 
$
(7,043)
 
$
(15,332)
 
$
(22,375)

 

Description

 Ark7 Properties Plus LLC - Series #ORHOF (Historical) Ark7 Properties Plus LLC - Series #ORHOF (Pro Forma Adjustments) Ark7 Properties Plus LLC - Series #ORHOF (Pro Forma Results) Ark7 Properties Plus LLC - Series #DIVTU (Historical) Ark7 Properties Plus LLC - Series #DIVTU (Pro Forma Adjustments) Ark7 Properties Plus LLC - Series #DIVTU (Pro Forma Results) Ark7 Properties Plus LLC - Series #OJXLW (Historical) Ark7 Properties Plus LLC - Series #OJXLW (Pro Forma Adjustments) Ark7 Properties Plus LLC - Series #OJXLW (Pro Forma Results) Ark7 Properties Plus LLC - Series #ZAUH4 (Historical)

Revenue

 
$
-
 
$
-
 
$
-
 
$
-
 
$
-
 
$
-
 
$
-
 
$
-
 
$
-
 
$
-

 

          

Expenses

          

Depreciation expenses

 667 4,441 5,108 - 6,477 6,477 - 6,589 6,589 -

Interest expenses

 2,934 14,827 17,762 1,891 20,658 22,549 - 30,219 30,219 -

Property taxes

 275 2,296 2,571 - 1,293 1,293 - 3,668 3,668 -

Property management

 - - - - - - - - - -

Repair & maintenance

 - - - - - - - - - -

Insurance

 - 1,000 1,000 - 1,300 1,300 - 1,770 1,770 -

Utilities

 71 - 71 - - - - - - -

HOA fee

 831 6,808 7,639 - 10,476 10,476 - - - -

Other operating expenses

 239 - 239 229 - 229 - - - -

Total Expenses

 5,018 29,372 34,390 2,120 40,204 42,324 - 42,247 42,247 -

 

          

Net loss

 (5,018) (29,372) (34,390) (2,120) (40,204) (42,324) - (42,247) (42,247) -

 

          

Beginning accumulated deficit

 - - - - - - - - - -

Ending accumulated deficit

 
$
(5,018)
 
$
(29,372)
 
$
(34,390)
 
$
(2,120)
 
$
(40,204)
 
$
(42,324)
 
$
-
 
$
(42,247)
 
$
(42,247)
 
$
-

 

Description

 Ark7 Properties Plus LLC - Series #ZAUH4 (Pro Forma Adjustments) Ark7 Properties Plus LLC - Series #ZAUH4 (Pro Forma Results) Ark7 Properties Plus LLC - Series #EYPIR (Historical) Ark7 Properties Plus LLC - Series #EYPIR (Pro Forma Adjustments) Ark7 Properties Plus LLC - Series #EYPIR (Pro Forma Results) Ark7 Properties Plus LLC - Series #5VCTK (Historical) Ark7 Properties Plus LLC - Series #5VCTK (Pro Forma Adjustments) Ark7 Properties Plus LLC - Series #5VCTK (Pro Forma Results) Ark7 Properties Plus LLC - Series #ET8BV (Historical) Ark7 Properties Plus LLC - Series #ET8BV (Pro Forma Adjustments)

Revenue

 
$
-
 
$
-
 
$
-
 
$
-
 
$
-
 
$
-
 
$
-
 
$
-
 
$
-
 
$
-

 

          

Expenses

          

Depreciation expenses

 6,096 6,096 - 5,965 5,965 - 6,945 6,945 - 5,885

Interest expenses

 29,458 29,458 - 29,458 29,458 - 33,667 33,667 - 28,278

Property taxes

 2,598 2,598 - 1,703 1,703 - 3,717 3,717 - 2,675

Property management

 - - - - - - - - - -

Repair & maintenance

 - - - - - - - - - -

Insurance

 2,031 2,031 - 1,347 1,347 - 2,030 2,030 - 1,300

Utilities

 - - - - - - - - - -

HOA fee

 - - - - - - - - - 8,835

Other operating expenses

 - - - - - - - - - -

Total Expenses

 40,183 40,183 - 38,474 38,474 - 46,359 46,359 - 46,973

 

          

Net loss

 (40,183) (40,183) - (38,474) (38,474) - (46,359) (46,359) - (46,973)

 

          

Beginning accumulated deficit

 - - - - - - - - - -

Ending accumulated deficit

 
$
(40,183)
 
$
(40,183)
 
$
-
 
$
(38,474)
 
$
(38,474)
 
$
-
 
$
(46,359)
 
$
(46,359)
 
$
-
 
$
(46,973)

 

Description

 Ark7 Properties Plus LLC - Series #ET8BV (Pro Forma Results) Eliminating Total 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 
$
-
 
$
-
 
$
237,532
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses

    

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation expenses

 5,885  147,554 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expenses

 28,278 - 283,447 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property taxes

 2,675 - 73,155 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property management

 - - 26,869 

 

 

 

 

 

 

 

 

 

 

 

 

 

Repair & maintenance

 - - 8,891 

 

 

 

 

 

 

 

 

 

 

 

 

 

Insurance

 1,300 - 26,816 

 

 

 

 

 

 

 

 

 

 

 

 

 

Utilities

 - - 2,335 

 

 

 

 

 

 

 

 

 

 

 

 

 

HOA fee

 8,835 - 39,267 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other operating expenses

 - - 313,277 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Expenses

 46,973 - 921,609 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 (46,973) - (684,078) 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning accumulated deficit

 -  (107,135) 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending accumulated deficit

 
$
(46,973)
  
$
(791,213)
 

 

 

 

 

 

 

 

 

 

 

 

 

 

F-4

 

Ark7 Properties Plus LLC

Notes to the Unaudited Pro Forma Consolidated and consolidating Financial Statements

 

1. Description of Transaction

 

Acquisition Mechanics

 

Typically, each series will acquire its series property prior to the commencement or closing of that series' offering. Each series property will be fully described in a post-qualification offering statement amendment relating to the relevant series. In each such offering circular that is included in any such amendment, information relating to the series property such as the description and specifications of the series property, the purchase price of the series property and the relevant terms of purchase shall be disclosed.

 

It is not anticipated that a series will own any assets other than the series property, plus cash reserves for maintenance, insurance and other expenses pertaining to the series property and amounts earned by the series from the monetization of the series property, if any. Each series may hold the specific property that it acquires in a wholly-owned subsidiary which would be a limited liability company organized under laws of the state in which the series property is located.

 

The manager will enter into a purchase and sale agreement with the third-party seller to acquire the property on behalf of the new series. The manager will negotiate with the third-party seller on behalf of the to-be-organized series the purchase price for the new property and related purchase terms and conditions which will be specified in an offer to purchase real estate agreement, or purchase and sale agreement, by and between the manager and the property seller, a form of which has been filed as an exhibit to the offering statement of which this offering circular is a part. Once the new series is established, the manager will either assign the purchase and sale agreement to that series or the purchase and sale agreement will be re-executed with the new series as the buying party.

 

Typically, a series will hold its property in a wholly owned limited liability company subsidiary organized in the state where the property is located.

 

Purchase price funds to acquire a new property from a third party will either be all cash be provided from the proceeds of an offering or some combination of mortgage proceeds and cash. If a property is purchased entirely with cash without any financing, the series may later obtain mortgage financing for the property, to the extent such financing is available at favorable rates, and the manager in its discretion may determine to distribute certain proceeds from such financing to investors. The funding and closing of the property acquisition may take place prior to the beginning of the series offering, during the offering or at the time of closing of the offering. If the property acquisition closing takes place prior to the closing of the series offering, the cash component of the property purchase price will be provided by the manager as a loan to the series for payment to the third-party seller. In turn, the series will issue to the manager a promissory note in the amount of the manager's loan. In addition, if a mortgage is not able to be obtained, or obtained at favorable rates, from a third-party lender, the manager or an affiliate may provide such financing at a reasonable market interest rate. The proceeds of the new series offering, net of sales commissions, if any, will be used to repay the outstanding balance, plus accrued but unpaid interest, on the promissory note (and, if applicable, mortgage loan) issued to the manager. The series will also pay the manager a sourcing fee as indicated below in the use of proceeds table for the series. If by the termination date of the offering the series does not raise sufficient funds in the offering to repay the manager the outstanding principal balance on the promissory note (and, if applicable, mortgage loan), (i) the available net proceeds of the offering will be used to pay down the promissory note and/or the mortgage loan to the extent possible and (ii) any outstanding balance on the promissory note will be converted into interests in the series and issued to the manager. Such interests will be valued at the same price as offered to investors in the series offering.

 

The manager reserves the right to adjust the acquisition mechanics described above in its sole discretion. To the extent that the manager does so adjust the acquisition mechanics in any material way, we will file a supplement to this offering circular to reflect such material adjustment.

 

2. Basis of Presentation

 

The historical financial information has been adjusted to give pro forma effect to events that are (i) directly attributable to the transaction, (ii) factually supportable, and (iii) with respect to the unaudited pro forma consolidated and consolidating balance sheets and unaudited pro forma consolidated and consolidating statements of income, expected to have a continuing impact on the consolidated and consolidating results.

 

Each of the Series properties were owner-occupied properties prior to their acquisition by each Series and there is no historical rental or operating history for basis of inclusion in the above proforma consolidated and consolidating statement.

 

The assumptions used to prepare the pro forma financial statements are as follows:

 

  1. Balance sheet
    1. Property and equipment, net represents either the actual purchase price of the property plus capitalized title fees and capitalized acquisition expenses, net of accumulated depreciation or the anticipated purchase price plus estimated capitalized title fees and capitalized acquisition expenses, net of estimated accumulated depreciation for any property purchases that have not yet closed. The Company allocates 20% of the purchase price to land and 80% of the purchase price to building.
    2. Due to related party represents advances from Manager for the acquisition of the property, capitalized acquisition expenses and title fees, acquisition expenses, insurance and taxes.
  2. Statement of Income
    1. Depreciation expense is based on depreciable life of the building of 27.5 years prorated for the year ended December 31, 2023.
    2. Other operating expenses represent estimated acquisition expense fees associated with the acquisition of each property.
    3. Insurance is the estimated annual insurance costs prorated during the year ended December 31, 2023.
    4. Taxes is the estimated annual real estate tax expense prorated during the year ended December 31, 2023.

F-5

 

PART III

INDEX TO EXHIBITS

 

 

The documents listed in the Exhibit Index of this report are incorporated by reference or are filed with this report, in each case as indicated below.

 

2.1

 

Certificate of Formation of Ark7 Properties Plus LLC*

2.2

 

Operating Agreement of Ark7 Properties Plus LLC*

3.1

 

Series #WGI3Z Series Designation*

3.2

 

Series #0XYT6 Series Designation*

3.3

 

Series # ZIE3T Series Designation*

3.4

 

Series #JTDXY Series Designation*

3.5

 

Series #FTWDS Series Designation*

3.6

 

Series #P7FJ5 Series Designation*

3.7

 

Series #WRA7O Series Designation*

3.8

 

Series #SOV9W Series Designation*

3.9

 

Series #QGXF0 Series Designation*

3.10

 

Series #NHMOP Series Designation*

3.11

 

Series #RPFUV Series Designation*

3.12

 

Series #ORHOF Series Designation*

3.13

 

Series #DIVTU Series Designation*

3.14

 

Series #OJXLW Series Designation

3.15

 

Series #ZAUH4 Series Designation

3.16

 

Series #EYPIR Series Designation

3.17

 

Series #5VCTK Series Designation

3.18

 

Series #ET8BV Series Designation

4.1

 

Form of Series #[______] Subscription Agreement*

6.1

 

Real Estate Purchase Agreement dated April 15, 2022, between Seller and Series #WGI3Z, as amended*

6.2

 

Real Estate Purchase Agreement dated July 7, 2022 between Seller and Series #0XYT6, as amended*

6.3

 

Real Estate Purchase Agreement dated August 2, 2022 between Seller and Series #ZIE3T*

6.4

 

Real Estate Purchase Agreement dated August 15, 2022 between Seller and Series #JTDXY*

6.5

 

Real Estate Purchase Agreement between Seller and Ark7 for the property located at 1527 Iris Walk, Jonesboro, GA 30238*

6.6

 

Real Estate Purchase Agreement between Seller and Ark7 for the property located at 1541 Iris Walk Jonesboro, GA 30238*

6.7

 

Real Estate Purchase Agreement between Seller and Ark7 Properties Plus LLC - Series #WRA7O*

6.8

 

Assignment and Sale and Purchase Agreement between Ark7 and Ark7 Properties Plus LLC - Series #FTWDS LLC*

6.9

 

Assignment of Sale and Purchase Agreement between Ark7 and Ark7 Properties Plus LLC - Series #P7FJ5 LLC*

6.10

 

Real Estate Purchase Agreement between Seller and Series #SOV9W*

6.11

 

Real Estate Purchase Agreement between Seller and Series #QGXF0*

6.12

 

Asset Management Agreement between Ark7 Properties Plus LLC - Series #WGI3Z and Ark7 Inc. dated April 15, 2022*

6.13

 

Asset Management Agreement between Ark7 Properties Plus LLC - Series #0XYT6 dated July 1, 2022*

6.14

 

Asset Management Agreement between Ark7 Properties Plus LLC - Series #ZIE3T dated August 1, 2022*

6.15

 

Asset Management Agreement between Ark7 Properties Plus LLC - Series #JTDXY dated August 1, 2022*

6.16

 

Asset Management Agreement between Ark7 and Ark7 Properties Plus LLC - Series #FTWDS LLC*

6.17

 

Asset Management Agreement between Ark7 and Ark7 Properties Plus LLC - Series #P7FJ5 LLC*

6.18

 

Asset Management Agreement between Ark7 and Ark7 Properties Plus LLC - Series #WRA7O*

6.19

 

Asset Management Agreement between Ark7 and Ark7 Properties Plus LLC - Series #SOV9W*

6.20

 

Asset Management Agreement between Ark7 and Ark7 Properties Plus LLC - Series #QGXF0*

6.21

 

Inter-company Loan Agreement between Ark7 Inc. and Series #WGI3Z*

6.22

 

Inter-company Loan Agreement between Ark7 Inc. and Series #0XYT6*

6.23

 

Inter-company Loan Agreement between Ark7 Inc. and Series # ZIE3T*

6.24

 

Inter-company Loan Agreement between Ark7 Inc. and Series #JTDXY*

6.25

 

Inter-company Loan Agreement between Ark7 Properties Plus LLC and Ark7 Properties Plus LLC - Series #FTWDS LLC*

6.26

 

Inter-company Loan Agreement between Ark7 Properties Plus LLC and Ark7 Properties Plus LLC - Series #P7FJ5 LLC*

6.27

 

Inter-company Loan Agreement between Ark7 Properties Plus LLC and Series #WRA7O*

6.28

 

Inter-company Loan Agreement between Ark7 Properties Plus LLC and Series #SOV9W*

6.29

 

Inter-company Loan Agreement between Ark7 Properties Plus LLC and Series QGXF0*

6.30

 

Form of Lease Agreement*

6.31

 

Real Estate Purchase Agreement dated August 2, 2022 between Seller and Series #NHMOP*

6.32

 

Real Estate Purchase Agreement dated August 15, 2022 between Seller and Series #RPFUV*

6.33

 

Asset Management Agreement between Ark7 and Ark7 Properties Plus LLC - Series #NHMOP*

6.34

 

Asset Management Agreement between Ark7 and Ark7 Properties Plus LLC - Series #RPFUV*

6.35

 

Inter-company Loan Agreement between Ark7 Properties Plus and Series #NHMOP*

6.36

 

Inter-company Loan Agreement between Ark7 Properties Plus and Series #RPFUV*

6.37

 

Real Estate Purchase Agreement dated October 30, 2023 between Seller and Series #ORHOF*

6.38

 

Real Estate Purchase Agreement dated December 20, 2023 between Seller and Series #DIVTU*

6.39

 

Asset Management Agreement between Ark7 and Ark7 Properties Plus LLC - Series #ORHOF*

6.40

 

Asset Management Agreement between Ark7 and Ark7 Properties Plus LLC - Series #DIVTU*

6.41

 

Inter-company Loan Agreement between Ark7 Properties Plus and Series #ORHOF*

6.42

 

Inter-company Loan Agreement between Ark7 Properties Plus and Series #DIVTU*

6.43

 

Real Estate Purchase Agreement dated April 18, 2024 between Seller and Series #OJXLW

6.44

 

Real Estate Purchase Agreement dated May 20, 2024 between Seller and Series #ZAUH4

6.45

 

Real Estate Purchase Agreement dated May 20, 2024 between Seller and Series #EYPIR

6.46

 

Real Estate Purchase Agreement dated May 20, 2024 between Seller and Series #5VCTK

6.47

 

Real Estate Purchase Agreement dated May 24, 2024 between Seller and Series #ET8BV

6.48

 

Asset Management Agreement between Ark7 and Ark7 Properties Plus LLC - Series #OJXLW

6.49

 

Asset Management Agreement between Ark7 and Ark7 Properties Plus LLC - Series #ZAUH4

6.50

 

Asset Management Agreement between Ark7 and Ark7 Properties Plus LLC - Series #EYPIR

6.51

 

Asset Management Agreement between Ark7 and Ark7 Properties Plus LLC - Series #5VCTK

6.52

 

Asset Management Agreement between Ark7 and Ark7 Properties Plus LLC - Series #ET8BV

6.53

 

Inter-company Loan Agreement between Ark7 Properties Plus LLC and Series #OJXLW

6.54

 

Inter-company Loan Agreement between Ark7 Properties Plus LLC and Series #ZAUH4

6.55

 

Inter-company Loan Agreement between Ark7 Properties Plus LLC and Series #EYPIR

6.56

 

Inter-company Loan Agreement between Ark7 Properties Plus LLC and Series #5VCTK

6.57

 

Inter-company Loan Agreement between Ark7 Properties Plus LLC and Series #ET8BV

9.1

 

Letter regarding change in accountant from George Dimov CPA dated April 30, 2023*

11.1

 

Accountants Consent

12.1

 

CrowdCheck Opinion

____________________

* Previously Filed

 

III-1

 

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 State of California, on June 3, 2024.

 

Ark7 Properties Plus LLC a Delaware series limited liability company

 

 

By

/s/ Ark7 Inc., a Delaware corporation

 

Its: Managing Member

 

 

 

 

By:

/s/ Yizhen Zhao

 

Name:

Yizhen Zhao

 

Title:

President

 

 

This Offering Statement has been signed by the following persons in the capacities and on the dates indicated.

 

Ark7 Properties Plus LLC a Delaware series liability company

 

 

By

/s/ Ark7 Inc., a Delaware corporation

 

Its: Managing Member

 

 

 

 

By:

/s/ Yizhen Zhao

 

Name:

Yizhen Zhao

 

Title:

Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer of Ark7 Inc., Managing Member of Ark7 Properties Plus LLC

 

Date:

June 3, 2024

 

III-2

 

SERIES #OJXLW DESIGNATION

 

In accordance with the Limited Liability Company Agreement (the "Operating Agreement") of Ark7 Properties Plus LLC (the "Company") dated March 17, 2022 (the "Agreement") and upon the execution of this designation by the Company and Ark7 Inc. in its capacity as Managing Member of the Company and Initial Member of Ark7 Properties Plus LLC - Series #OJXLW ("#OJXLW"), this exhibit shall be attached to, and deemed incorporated in its entirety into, the Agreement.

 

References to Sections and Articles set forth herein are references to Sections and Articles of the Agreement, as in effect as of the effective date of establishment set forth below.

 

 

Name of Series

 

Ark7 Properties Plus LLC - Series #OJXLW

 

Effective date of establishment

 

March 18, 2024

 

Managing Member

 

Ark7 Inc. was appointed as the Managing Member of #OJXLW with effect from the date of the Agreement and shall continue to act as the Managing Member of #OJXLW until dissolution of #OJXLW pursuant to Section 11.1(b) or its removal and replacement pursuant to Section 4.3 or ARTICLE X.

 

Initial Member

 

Ark7 Inc.

 

Series Asset

 

The Series Assets of #OJXLW shall comprise 228 W Norway St, Walnut Springs, TX 76690 which will be acquired by #OJXLW upon the close of the Initial Offering and any assets and liabilities associated with such asset and such other assets and liabilities acquired by #OJXLW from time to time, as determined by the Managing Member in its sole discretion

 

Asset Manager

 

Ark7 Inc.

 

Management Fee

 

As stated in Section 6.5 of the Operating Agreement.

 

Purpose

 

As stated in Section 2.4 of the Operating Agreement.

 

Issuance

 

Subject to Section 6.3(a)(i) of the Operating Agreement, the maximum number of #OJXLW Interests the Company can issue is 2,600.

 

Number of #OJXLW Interests held by the Managing Member and its Affiliates

 

The Managing Member must purchase a minimum of 10 #OJXLW Interests and may purchase a maximum of 19.9% of #OJXLW Interests through the Offering.

 

Broker

 

Dalmore Group, LLC

 

Brokerage Fee

 

Up to 1% of the purchase price of the Interests from #OJXLW sold at the Initial Offering of the #OJXLW Interests (excluding the #OJXLW Interests acquired by any Person other than Investor Members)

 

Interest Designation

 

No Interest Designation shall be required in connection with the issuance of #OJXLW Interests.

 

Voting

 

Subject to Section 3.5 of the Operating Agreement, the #OJXLW Interests shall entitle the Record Holders thereof to one vote per

Interest on any and all matters submitted to the consent or approval of Members generally. No separate vote or consent of the Record Holders of #OJXLW Interests shall be required for the approval of any matter, except as required by the Delaware Act or except as provided elsewhere in this Agreement.

 

The affirmative vote of the holders of not less than a majority of the #OJXLW Interests then Outstanding shall be required for:

  1. any amendment to this Agreement (including this Series Designation) that would adversely change the rights of the #OJXLW Interests;
  2. mergers, consolidations or conversions of #OJXLW or the Company; and
  3. all such other matters as the Managing Member, in its sole discretion, determines shall require the approval of the holders of the Outstanding #OJXLW Interests voting as a separate class.

Notwithstanding the foregoing, the separate approval of the holders of Series #OJXLW Interests shall not be required for any of the other matters specified under Section 12.1 of the Operating Agreement.

 

Splits

 

There shall be no subdivision of the #OJXLW Interests other than in accordance with Section 3.7 of the Operating Agreement.

 

Sourcing Fee

 

No greater than 3% of the maximum offering size, which may be waived by the Managing Member in its sole discretion.

 

Other rights

 

Holders of #OJXLW Interests shall have no conversion, exchange, sinking fund, appraisal rights, no preemptive rights to subscribe for any securities of the Company and no preferential rights to distributions of #OJXLW Interests.

 

Officers

 

There shall initially be no specific officers associated with #OJXLW, although, the Managing Member may appoint Officers of #OJXLW from time to time, in its sole discretion.

 

Aggregate Ownership Limit

 

As stated in Section 1.1 of the Operating Agreement.

 

Minimum Interests

 

One (1) Interest per Member

 

Fiscal Year

 

As stated in Section 8.2 of the Operating Agreement.

 

 

Information Reporting

 

 

As stated in Section 8.1(c) of the Operating Agreement.

 

Termination

 

As stated in Section 11.1(b) of the Operating Agreement.

 

Liquidation

 

As stated in Section 11.3 of the Operating Agreement.

 

Amendments to this Exhibit

 

As stated in Article XII of the Operating Agreement.

 

 

 

SERIES #ZAUH4 DESIGNATION

 

In accordance with the Limited Liability Company Agreement (the "Operating Agreement") of Ark7 Properties Plus LLC (the "Company") dated March 17, 2022 (the "Agreement") and upon the execution of this designation by the Company and Ark7 Inc. in its capacity as Managing Member of the Company and Initial Member of Ark7 Properties Plus LLC - Series #ZAUH4 ("#ZAUH4"), this exhibit shall be attached to, and deemed incorporated in its entirety into, the Agreement.

 

References to Sections and Articles set forth herein are references to Sections and Articles of the Agreement, as in effect as of the effective date of establishment set forth below.

 

 

Name of Series

 

Ark7 Properties Plus LLC - Series #ZAUH4

 

Effective date of establishment

 

March 18, 2024

 

Managing Member

 

Ark7 Inc. was appointed as the Managing Member of #ZAUH4 with effect from the date of the Agreement and shall continue to act as the Managing Member of #ZAUH4 until dissolution of #ZAUH4 pursuant to Section 11.1(b) or its removal and replacement pursuant to Section 4.3 or ARTICLE X.

 

Initial Member

 

Ark7 Inc.

 

Series Asset

 

The Series Assets of #ZAUH4 shall comprise 516 W Live Oak St, Dublin, TX 76446 which will be acquired by #ZAUH4 upon the close of the Initial Offering and any assets and liabilities associated with such asset and such other assets and liabilities acquired by #ZAUH4 from time to time, as determined by the Managing Member in its sole discretion

 

Asset Manager

 

Ark7 Inc.

 

Management Fee

 

As stated in Section 6.5 of the Operating Agreement.

 

Purpose

 

As stated in Section 2.4 of the Operating Agreement.

 

Issuance

 

Subject to Section 6.3(a)(i) of the Operating Agreement, the maximum number of #ZAUH4 Interests the Company can issue is 2,400.

 

Number of #ZAUH4 Interests held by the Managing Member and its Affiliates

 

The Managing Member must purchase a minimum of 10 #ZAUH4 Interests and may purchase a maximum of 19.9% of #ZAUH4 Interests through the Offering.

 

Broker

 

Dalmore Group, LLC

 

Brokerage Fee

 

Up to 1% of the purchase price of the Interests from #ZAUH4 sold at the Initial Offering of the #ZAUH4 Interests (excluding the #ZAUH4 Interests acquired by any Person other than Investor Members)

 

Interest Designation

 

No Interest Designation shall be required in connection with the issuance of #ZAUH4 Interests.

 

Voting

 

Subject to Section 3.5 of the Operating Agreement, the #ZAUH4 Interests shall entitle the Record Holders thereof to one vote per

Interest on any and all matters submitted to the consent or approval of Members generally. No separate vote or consent of the Record Holders of #ZAUH4 Interests shall be required for the approval of any matter, except as required by the Delaware Act or except as provided elsewhere in this Agreement.

 

The affirmative vote of the holders of not less than a majority of the #ZAUH4 Interests then Outstanding shall be required for:

  1. any amendment to this Agreement (including this Series Designation) that would adversely change the rights of the #ZAUH4 Interests;
  2. mergers, consolidations or conversions of #ZAUH4 or the Company; and
  3. all such other matters as the Managing Member, in its sole discretion, determines shall require the approval of the holders of the Outstanding #ZAUH4 Interests voting as a separate class.

Notwithstanding the foregoing, the separate approval of the holders of Series #ZAUH4 Interests shall not be required for any of the other matters specified under Section 12.1 of the Operating Agreement.

 

Splits

 

There shall be no subdivision of the #ZAUH4 Interests other than in accordance with Section 3.7 of the Operating Agreement.

 

Sourcing Fee

 

No greater than 3% of the maximum offering size, which may be waived by the Managing Member in its sole discretion.

 

Other rights

 

Holders of #ZAUH4 Interests shall have no conversion, exchange, sinking fund, appraisal rights, no preemptive rights to subscribe for any securities of the Company and no preferential rights to distributions of #ZAUH4 Interests.

 

Officers

 

There shall initially be no specific officers associated with #ZAUH4, although, the Managing Member may appoint Officers of #ZAUH4 from time to time, in its sole discretion.

 

Aggregate Ownership Limit

 

As stated in Section 1.1 of the Operating Agreement.

 

Minimum Interests

 

One (1) Interest per Member

 

Fiscal Year

 

As stated in Section 8.2 of the Operating Agreement.

 

 

Information Reporting

 

 

As stated in Section 8.1(c) of the Operating Agreement.

 

Termination

 

As stated in Section 11.1(b) of the Operating Agreement.

 

Liquidation

 

As stated in Section 11.3 of the Operating Agreement.

 

Amendments to this Exhibit

 

As stated in Article XII of the Operating Agreement.

 

 

 

SERIES #EYPIR DESIGNATION

 

In accordance with the Limited Liability Company Agreement (the "Operating Agreement") of Ark7 Properties Plus LLC (the "Company") dated March 17, 2022 (the "Agreement") and upon the execution of this designation by the Company and Ark7 Inc. in its capacity as Managing Member of the Company and Initial Member of Ark7 Properties Plus LLC - Series #EYPIR ("#EYPIR"), this exhibit shall be attached to, and deemed incorporated in its entirety into, the Agreement.

 

References to Sections and Articles set forth herein are references to Sections and Articles of the Agreement, as in effect as of the effective date of establishment set forth below.

 

 

Name of Series

 

Ark7 Properties Plus LLC - Series #EYPIR

 

Effective date of establishment

 

March 18, 2024

 

Managing Member

 

Ark7 Inc. was appointed as the Managing Member of #EYPIR with effect from the date of the Agreement and shall continue to act as the Managing Member of #EYPIR until dissolution of #EYPIR pursuant to Section 11.1(b) or its removal and replacement pursuant to Section 4.3 or ARTICLE X.

 

Initial Member

 

Ark7 Inc.

 

Series Asset

 

The Series Assets of #EYPIR shall comprise 655 E Live Oak St, Dublin, TX 76446 which will be acquired by #EYPIR upon the close of the Initial Offering and any assets and liabilities associated with such asset and such other assets and liabilities acquired by #EYPIR from time to time, as determined by the Managing Member in its sole discretion

 

Asset Manager

 

Ark7 Inc.

 

Management Fee

 

As stated in Section 6.5 of the Operating Agreement.

 

Purpose

 

As stated in Section 2.4 of the Operating Agreement.

 

Issuance

 

Subject to Section 6.3(a)(i) of the Operating Agreement, the maximum number of #EYPIR Interests the Company can issue is 2,600.

 

Number of #EYPIR Interests held by the Managing Member and its Affiliates

 

The Managing Member must purchase a minimum of 10 #EYPIR Interests and may purchase a maximum of 19.9% of #EYPIR Interests through the Offering.

 

Broker

 

Dalmore Group, LLC

 

Brokerage Fee

 

Up to 1% of the purchase price of the Interests from #EYPIR sold at the Initial Offering of the #EYPIR Interests (excluding the #EYPIR Interests acquired by any Person other than Investor Members)

 

Interest Designation

 

No Interest Designation shall be required in connection with the issuance of #EYPIR Interests.

 

Voting

 

Subject to Section 3.5 of the Operating Agreement, the #EYPIR Interests shall entitle the Record Holders thereof to one vote per

Interest on any and all matters submitted to the consent or approval of Members generally. No separate vote or consent of the Record Holders of #EYPIR Interests shall be required for the approval of any matter, except as required by the Delaware Act or except as provided elsewhere in this Agreement.

 

The affirmative vote of the holders of not less than a majority of the #EYPIR Interests then Outstanding shall be required for:

  1. any amendment to this Agreement (including this Series Designation) that would adversely change the rights of the #EYPIR Interests;
  2. mergers, consolidations or conversions of #EYPIR or the Company; and
  3. all such other matters as the Managing Member, in its sole discretion, determines shall require the approval of the holders of the Outstanding #EYPIR Interests voting as a separate class.

Notwithstanding the foregoing, the separate approval of the holders of Series #EYPIR Interests shall not be required for any of the other matters specified under Section 12.1 of the Operating Agreement.

 

Splits

 

There shall be no subdivision of the #EYPIR Interests other than in accordance with Section 3.7 of the Operating Agreement.

 

Sourcing Fee

 

No greater than 3% of the maximum offering size, which may be waived by the Managing Member in its sole discretion.

 

Other rights

 

Holders of #EYPIR Interests shall have no conversion, exchange, sinking fund, appraisal rights, no preemptive rights to subscribe for any securities of the Company and no preferential rights to distributions of #EYPIR Interests.

 

Officers

 

There shall initially be no specific officers associated with #EYPIR, although, the Managing Member may appoint Officers of #EYPIR from time to time, in its sole discretion.

 

Aggregate Ownership Limit

 

As stated in Section 1.1 of the Operating Agreement.

 

Minimum Interests

 

One (1) Interest per Member

 

Fiscal Year

 

As stated in Section 8.2 of the Operating Agreement.

 

 

Information Reporting

 

 

As stated in Section 8.1(c) of the Operating Agreement.

 

Termination

 

As stated in Section 11.1(b) of the Operating Agreement.

 

Liquidation

 

As stated in Section 11.3 of the Operating Agreement.

 

Amendments to this Exhibit

 

As stated in Article XII of the Operating Agreement.

 

 

 

SERIES #5VCTK DESIGNATION

 

In accordance with the Limited Liability Company Agreement (the "Operating Agreement") of Ark7 Properties Plus LLC (the "Company") dated March 17, 2022 (the "Agreement") and upon the execution of this designation by the Company and Ark7 Inc. in its capacity as Managing Member of the Company and Initial Member of Ark7 Properties Plus LLC - Series #5VCTK ("#5VCTK"), this exhibit shall be attached to, and deemed incorporated in its entirety into, the Agreement.

 

References to Sections and Articles set forth herein are references to Sections and Articles of the Agreement, as in effect as of the effective date of establishment set forth below.

 

 

Name of Series

 

Ark7 Properties Plus LLC - Series #5VCTK

 

Effective date of establishment

 

April 25, 2024

 

Managing Member

 

Ark7 Inc. was appointed as the Managing Member of #5VCTK with effect from the date of the Agreement and shall continue to act as the Managing Member of #5VCTK until dissolution of #5VCTK pursuant to Section 11.1(b) or its removal and replacement pursuant to Section 4.3 or ARTICLE X.

 

Initial Member

 

Ark7 Inc.

 

Series Asset

 

The Series Assets of #5VCTK shall comprise 3616 Redbird St, Waco, TX 76705 which will be acquired by #5VCTK upon the close of the Initial Offering and any assets and liabilities associated with such asset and such other assets and liabilities acquired by #5VCTK from time to time, as determined by the Managing Member in its sole discretion

 

Asset Manager

 

Ark7 Inc.

 

Management Fee

 

As stated in Section 6.5 of the Operating Agreement.

 

Purpose

 

As stated in Section 2.4 of the Operating Agreement.

 

Issuance

 

Subject to Section 6.3(a)(i) of the Operating Agreement, the maximum number of #5VCTK Interests the Company can issue is 2,750.

 

Number of #5VCTK Interests held by the Managing Member and its Affiliates

 

The Managing Member must purchase a minimum of 10 #5VCTK Interests and may purchase a maximum of 19.9% of #5VCTK Interests through the Offering.

 

Broker

 

Dalmore Group, LLC

 

Brokerage Fee

 

Up to 1% of the purchase price of the Interests from #5VCTK sold at the Initial Offering of the #5VCTK Interests (excluding the #5VCTK Interests acquired by any Person other than Investor Members)

 

Interest Designation

 

No Interest Designation shall be required in connection with the issuance of #5VCTK Interests.

 

Voting

 

Subject to Section 3.5 of the Operating Agreement, the #5VCTK Interests shall entitle the Record Holders thereof to one vote per

Interest on any and all matters submitted to the consent or approval of Members generally. No separate vote or consent of the Record Holders of #5VCTK Interests shall be required for the approval of any matter, except as required by the Delaware Act or except as provided elsewhere in this Agreement.

 

The affirmative vote of the holders of not less than a majority of the #5VCTK Interests then Outstanding shall be required for:

  1. any amendment to this Agreement (including this Series Designation) that would adversely change the rights of the #5VCTK Interests;
  2. mergers, consolidations or conversions of #5VCTK or the Company; and
  3. all such other matters as the Managing Member, in its sole discretion, determines shall require the approval of the holders of the Outstanding #5VCTK Interests voting as a separate class.

Notwithstanding the foregoing, the separate approval of the holders of Series #5VCTK Interests shall not be required for any of the other matters specified under Section 12.1 of the Operating Agreement.

 

Splits

 

There shall be no subdivision of the #5VCTK Interests other than in accordance with Section 3.7 of the Operating Agreement.

 

Sourcing Fee

 

No greater than 3% of the maximum offering size, which may be waived by the Managing Member in its sole discretion.

 

Other rights

 

Holders of #5VCTK Interests shall have no conversion, exchange, sinking fund, appraisal rights, no preemptive rights to subscribe for any securities of the Company and no preferential rights to distributions of #5VCTK Interests.

 

Officers

 

There shall initially be no specific officers associated with #5VCTK, although, the Managing Member may appoint Officers of #5VCTK from time to time, in its sole discretion.

 

Aggregate Ownership Limit

 

As stated in Section 1.1 of the Operating Agreement.

 

Minimum Interests

 

One (1) Interest per Member

 

Fiscal Year

 

As stated in Section 8.2 of the Operating Agreement.

 

 

Information Reporting

 

 

As stated in Section 8.1(c) of the Operating Agreement.

 

Termination

 

As stated in Section 11.1(b) of the Operating Agreement.

 

Liquidation

 

As stated in Section 11.3 of the Operating Agreement.

 

Amendments to this Exhibit

 

As stated in Article XII of the Operating Agreement.

 

 

 

SERIES #ET8BV DESIGNATION

 

In accordance with the Limited Liability Company Agreement (the "Operating Agreement") of Ark7 Properties Plus LLC (the "Company") dated March 17, 2022 (the "Agreement") and upon the execution of this designation by the Company and Ark7 Inc. in its capacity as Managing Member of the Company and Initial Member of Ark7 Properties Plus LLC - Series #ET8BV ("#ET8BV"), this exhibit shall be attached to, and deemed incorporated in its entirety into, the Agreement.

 

References to Sections and Articles set forth herein are references to Sections and Articles of the Agreement, as in effect as of the effective date of establishment set forth below.

 

 

Name of Series

 

Ark7 Properties Plus LLC - Series #ET8BV

 

Effective date of establishment

 

May 16, 2024

 

Managing Member

 

Ark7 Inc. was appointed as the Managing Member of #ET8BV with effect from the date of the Agreement and shall continue to act as the Managing Member of #ET8BV until dissolution of #ET8BV pursuant to Section 11.1(b) or its removal and replacement pursuant to Section 4.3 or ARTICLE X.

 

Initial Member

 

Ark7 Inc.

 

Series Asset

 

The Series Assets of #ET8BV shall comprise 215 Piedmont Ave NE, Unit 909, Atlanta, GA 30308 which will be acquired by #ET8BV upon the close of the Initial Offering and any assets and liabilities associated with such asset and such other assets and liabilities acquired by #ET8BV from time to time, as determined by the Managing Member in its sole discretion

 

Asset Manager

 

Ark7 Inc.

 

Management Fee

 

As stated in Section 6.5 of the Operating Agreement.

 

Purpose

 

As stated in Section 2.4 of the Operating Agreement.

 

Issuance

 

Subject to Section 6.3(a)(i) of the Operating Agreement, the maximum number of #ET8BV Interests the Company can issue is 2,750.

 

Number of #ET8BV Interests held by the Managing Member and its Affiliates

 

The Managing Member must purchase a minimum of 10 #ET8BV Interests and may purchase a maximum of 19.9% of #ET8BV Interests through the Offering.

 

Broker

 

Dalmore Group, LLC

 

Brokerage Fee

 

Up to 1% of the purchase price of the Interests from #ET8BV sold at the Initial Offering of the #ET8BV Interests (excluding the #ET8BV Interests acquired by any Person other than Investor Members)

 

Interest Designation

 

No Interest Designation shall be required in connection with the issuance of #ET8BV Interests.

 

Voting

 

Subject to Section 3.5 of the Operating Agreement, the #ET8BV Interests shall entitle the Record Holders thereof to one vote per

Interest on any and all matters submitted to the consent or approval of Members generally. No separate vote or consent of the Record Holders of #ET8BV Interests shall be required for the approval of any matter, except as required by the Delaware Act or except as provided elsewhere in this Agreement.

 

The affirmative vote of the holders of not less than a majority of the #ET8BV Interests then Outstanding shall be required for:

  1. any amendment to this Agreement (including this Series Designation) that would adversely change the rights of the #ET8BV Interests;
  2. mergers, consolidations or conversions of #ET8BV or the Company; and
  3. all such other matters as the Managing Member, in its sole discretion, determines shall require the approval of the holders of the Outstanding #ET8BV Interests voting as a separate class.

Notwithstanding the foregoing, the separate approval of the holders of Series #ET8BV Interests shall not be required for any of the other matters specified under Section 12.1 of the Operating Agreement.

 

Splits

 

There shall be no subdivision of the #ET8BV Interests other than in accordance with Section 3.7 of the Operating Agreement.

 

Sourcing Fee

 

No greater than 3% of the maximum offering size, which may be waived by the Managing Member in its sole discretion.

 

Other rights

 

Holders of #ET8BV Interests shall have no conversion, exchange, sinking fund, appraisal rights, no preemptive rights to subscribe for any securities of the Company and no preferential rights to distributions of #ET8BV Interests.

 

Officers

 

There shall initially be no specific officers associated with #ET8BV, although, the Managing Member may appoint Officers of #ET8BV from time to time, in its sole discretion.

 

Aggregate Ownership Limit

 

As stated in Section 1.1 of the Operating Agreement.

 

Minimum Interests

 

One (1) Interest per Member

 

Fiscal Year

 

As stated in Section 8.2 of the Operating Agreement.

 

 

Information Reporting

 

 

As stated in Section 8.1(c) of the Operating Agreement.

 

Termination

 

As stated in Section 11.1(b) of the Operating Agreement.

 

Liquidation

 

As stated in Section 11.3 of the Operating Agreement.

 

Amendments to this Exhibit

 

As stated in Article XII of the Operating Agreement.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ASSET MANAGEMENT AGREEMENT

 

BETWEEN

 

ARK7 INC.

 

AND

 

ARK7 PROPERTIES PLUS LLC - SERIES #OJXLW

 

This ASSET MANAGEMENT AGREEMENT (this "Agreement") dated as of April 18, 2024 is entered into between Ark7 Inc., a corporation organized under the laws of the State of Delaware (the "Asset Manager"), and Ark7 Properties Plus LLC - Series #OJXLW (the "Series").

 

WHEREAS, the Series seeks to invest in the #OJXLW Asset (as defined in the Appendix) in accordance with the terms and conditions of the Operating Agreement, dated [object Object], of Ark7 Properties Plus LLC, a series limited liability company organized under the laws of the State of Delaware (the "Company") together with Exhibit B setting forth the terms of the Series, in each case as amended and restated from time to time (the "Operating Agreement");

 

WHEREAS, pursuant to the Operating Agreement, the managing member of the Series shall be responsible for the acquisition, management and disposition of the #OJXLW Asset as well as the business of the Series;

 

WHEREAS, the Series desires to avail itself of the advice and assistance of the Asset Manager and to appoint and retain the Asset Manager as the asset manager to the Series with respect to the #OJXLW Asset;

 

WHEREAS, the Asset Manager wishes to accept such appointment; and

 

NOW THEREFORE, in consideration of the mutual agreements herein contained, the parties hereby covenant and agree as follows:

 

  1. Appointment of Asset Manager; Acceptance of Appointment. The Series hereby appoints the Asset Manager as asset manager to the Series for the purpose of managing the #OJXLW Asset. The Asset Manager hereby accepts such appointment.
  2. Authority of the Asset Manager.
    1. Except as set forth in Section 2(e) below and any guidance as may be established from time to time by the Managing Member of the Series, the Asset Manager shall have sole authority and complete discretion over the care, custody, maintenance and management of the #OJXLW Asset and to take any action that it deems necessary or desirable in connection therewith.
    2. The Asset Manager shall devote such time to its duties under this Agreement as may be deemed reasonably necessary by the Asset Manager in light of the understanding that such duties are expected to be performed only at occasional or irregular intervals.
    3. The Asset Manager may delegate all or any of its duties under this Agreement to any Person who shall perform such delegated duties under the supervision of the Asset Manager on such terms as the Asset Manager shall determine.
    4. Notwithstanding any other provision of this Agreement to the contrary, the Asset Manager shall not have the authority to:
      1. acquire any asset or service for an amount equal to or greater than 1% of the value of the #OJXLW Asset as of such date, individually, or 3% of the value of the #OJXLW Asset as of such date, in the aggregate without the prior consent of the Managing Member of the Series; or
      2. sell, transfer, encumber or convey the #OJXLW Asset, provided, however, that the Asset Manager may deliver to the Managing Member of the Company any offers received by the Asset Manager to purchase the #OJXLW Asset and any research or analysis prepared by the Asset Manager regarding the potential sale of the #OJXLW Asset, including market analysis, survey results or information regarding any inquiries received and information regarding potential purchasers.
  3. Cooperation. The Asset Manager agrees to use reasonable efforts to make appropriate personnel available for consultation with the Series on matters pertaining to the #OJXLW Asset and to consult with the Managing Member of the Series regarding asset management decisions with respect to the #OJXLW Asset prior to execution. The Managing Member of the Series may make any reasonable request for the provision of information or for other cooperation from the Asset Manager with respect to its duties under this Agreement, and the Asset Manager shall use reasonable efforts to comply with such request, including without limitation, furnishing the Series with such documents, reports, data and other information as the Managing Member of the Series may reasonably request regarding the #OJXLW Asset and the Asset Manager's performance hereunder or compliance with the terms hereof.
  4. Representations and Warranties. Each party hereto represents and warrants that this Agreement has been duly authorized, executed and delivered by such party and constitutes the legal, valid and binding obligation of such party.
  5. Limitation of Liability; Indemnification with respect to #OJXLW Asset.
    1. None of the Asset Manager, its affiliates, or any of their respective directors, members, stockholders, partners, officers, employees or controlling persons (collectively, "Managing Parties") shall be liable to the applicable Series or the Company for (i) any act or omission performed or failed to be performed by any Managing Party (other than any criminal wrongdoing) arising from the exercise of such Managing Party's rights or obligations hereunder, or for any losses, claims, costs, damages, or liabilities arising therefrom, in the absence of criminal wrongdoing, willful misfeasance or gross negligence on the part of such Managing Party, with respect to #OJXLW Asset, (ii) any tax liability imposed on the Series or the #OJXLW Asset, or (iii) any losses due to the actions or omissions of the Series or any brokers or other current or former agents or advisers of the Series.
    2. To the fullest extent permitted by applicable law, the Series will indemnify the Asset Manager and its Managing Parties against any and all losses, damages, liabilities, judgments, costs and expenses (including, without limitation, reasonable attorneys' fees and disbursements) and amounts paid in settlement (collectively, "Losses") to which such person may become subject in connection with any matter arising out of or in connection with this Agreement, except to the extent that any such Loss results solely from the acts or omissions of a Managing Party that have been determined in a final, non-appealable decision of a court, arbitrator or other tribunal of competent jurisdiction to have resulted primarily from such Managing Party's fraud, willful misconduct or gross negligence. If this Section 5 or any portion hereof shall be invalidated on any ground by a court of competent jurisdiction, the Series shall nevertheless indemnify the Managing Party for any Losses incurred to the full extent permitted by any applicable portion of this Section that shall not have been invalidated.
    3. The Asset Manager gives no warranty as to the performance or profitability of the #OJXLW Asset or as to the performance of any third party engaged by the Asset Manager hereunder.
    4. The Asset Manager may rely upon and shall be protected in acting or refraining from action upon any instruction from, or document signed by, any authorized person of the Series or other person reasonably believed by the Asset Manager to be authorized to give or sign the same whether or not the authority of such person is then effective.
  6. Assignments. This Agreement may not be assigned by either party without the consent of the other party. In performing its obligations under this Agreement, the Asset Manager may, at its discretion, delegate any or all of its rights, powers and functions under this Agreement to any Person in accordance with section 2(d) without the need for the consent of the Series, provided that the Asset Manager's liability to the Series for all matters so delegated shall not be affected by such delegation.
  7. Compensation and Expenses.
    1. As compensation for services performed by the Asset Manager under this Agreement, and in consideration therefor, the Series will pay an annual asset management fee (the "Asset Management Fee") to the Asset Manager in respect of each fiscal year, equal to 15% of any Free Cash Flows available for distribution pursuant to Article VII of the Operating Agreement. Any such amount will be paid at the same time as, and only if, a distribution is made from the Series to its Members.
    2. Except as set forth in Section 5, the Series will bear all expenses of the #OJXLW Asset and shall reimburse the Asset Manager for any such expenses paid by the Asset Manager on behalf of the Series together with a reasonable rate of interest (a rate no less than the Applicable Federal Rate (as defined in the Internal Revenue Code)) as may be imposed by the Asset Manager in its sole discretion ("Operating Expenses Reimbursement Obligation").
    3. Each party will bear its own costs relating to the negotiation, preparation, execution and implementation of this Agreement.
  8. Services to Other Clients; Certain Affiliated Activities.
    1. The relationship between the Asset Manager and the Series is as described in this Agreement and nothing in this Agreement, none of the services to be provided pursuant to this Agreement, nor any other matter, shall oblige the Asset Manager to accept responsibilities that are more extensive than those set forth in this Agreement.
    2. The Asset Manager's services to the Series are not exclusive. The Asset Manager may engage in other activities on behalf of itself, any other Managing Party and other clients (which, for the avoidance of doubt, may include other series of the Company). The Series acknowledges and agrees that the Asset Manager may, without prior notice to the Series, give advice to such other clients. The Asset Manager shall not be liable to account to the Series for any profits, commission or remuneration made or received in respect of transactions effected pursuant to the Asset Manager's advice to another client and nor will the Asset Manager's fees be abated as a result.
  9. Duration and Termination. Unless terminated as set forth below, this Agreement shall continue in full force and effect until one year after the date on which the #OJXLW Asset has been liquidated and the obligations connected to such #OJXLW Asset (including, without limitation, contingent obligations) have terminated or, if earlier, the removal of Ark7 Inc. as Managing Member of the Series. Either party may terminate this Agreement immediately upon a material breach of the Agreement by the other party, without penalty or other additional payment, except that the Series shall pay the Asset Management Fee of the Asset Manager referred to in section 7, pro-rated to the date of termination, together with all amounts outstanding under any Operating Expenses Reimbursement Obligation. Termination shall not affect accrued rights, and the provisions of Sections 4, 5, 7 (with respect to any accrued but unpaid fees and expenses), 8, 9, 11, 14 and 16 hereof shall survive the termination of this Agreement.
  10. Power of Attorney. For so long as this Agreement is in effect, the Series constitutes and appoints the Asset Manager, with full power of substitution, its true and lawful attorney-in-fact and in its name, place and stead to carry out the Asset Manager's obligations and responsibilities to the Series under this Agreement, solely with respect to the #OJXLW Asset.
  11. Notices. Except as otherwise specifically provided herein, all notices shall be deemed duly given when sent in writing by registered mail, overnight courier or email to the appropriate party at the following addresses, or to such other address as shall be notified in writing by that party to the other party from time to time:

If to the Series:

Ark7 Properties Plus LLC - Series #OJXLW

1 Ferry Building, Ste 201 San Francisco, CA 94111

Attention: President Email: support@ark7.com

 

If to the Asset Manager:

Ark7 Inc.

1 Ferry Building, Ste 201 San Francisco, CA 94111

Attention: President

Email: support@ark7.com

  1. Independent Contractor. For all purposes of this Agreement, the Asset Manager shall be an independent contractor and not an employee or dependent agent of the Series nor shall anything herein be construed as making the Series a partner or co-venturer with the Asset Manager, any other Managing Party or any of its other clients. Except as expressly provided in this Agreement or as otherwise authorized in writing by the Series, the Asset Manager shall have no authority to bind, obligate or represent the Series.
  2. Entire Agreement; Amendment; Severability. This Agreement states the entire agreement of the parties with respect to the subject matter hereof and supersedes any prior agreements relating to the subject matter hereof, and may not be supplemented or amended except in writing signed by the parties. If any provision or any part of a provision of this Agreement shall be found to be void or unenforceable, it shall not affect the remaining part, which shall remain in full force and effect.
  3. Confidentiality. All information furnished or made available by the Series or the Company to the Asset Manager hereunder, or by the Asset Manager to the Series or the Company hereunder, shall be treated as confidential by the Asset Manager, or the Series and the Company, as applicable, and shall not be disclosed to third parties except as required by law or as required in connection with the execution of transactions with respect to the #OJXLW Asset and except for disclosure to counsel, accountants and other advisors.
  4. Definitions. Words and expressions which are used but not defined in this Agreement shall have the meanings given to them in the Operating Agreement.
  5. Governing Law; Jurisdiction.
    1. This Agreement and the rights of the parties shall be governed by and construed in accordance with the laws of the State of Delaware.
    2. The parties irrevocably agree that the Court of Chancery of the State of Delaware is to have the exclusive jurisdiction to settle any disputes which may arise out of in connection with this Agreement and accordingly any suit, action or proceeding arising out of or in connection with this Agreement shall be brought in such courts.
  6. Counterparts. This Agreement may be executed in one or more counterparts with the same force and effect as if each of the signatories had executed the same instrument.

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly appointed agents so as to be effective on the day, month and year first above written.

 

 

 

ASSET MANAGER

 

 

ARK7 INC.

 

 

By: /s/Yizhen Zhao Name: Yizhen Zhao Title: CEO

 

 

 

 

 

 

Ark7 Properties Plus LLC - SERIES #OJXLW

 

 

By: ARK7 INC., as managing member

 

 

By: /s/Yizhen Zhao Name: Yizhen Zhao Title: CEO

 

 

 

 

APPENDIX

 

THE #OJXLW ASSET

 

Property Address: 228 W Norway St, Walnut Springs, TX 76690

 

 

ASSET MANAGEMENT AGREEMENT

 

BETWEEN

 

ARK7 INC.

 

AND

 

ARK7 PROPERTIES PLUS LLC - SERIES #ZAUH4

 

This ASSET MANAGEMENT AGREEMENT (this "Agreement") dated as of May 20, 2024 is entered into between Ark7 Inc., a corporation organized under the laws of the State of Delaware (the "Asset Manager"), and Ark7 Properties Plus LLC - Series #ZAUH4 (the "Series").

 

WHEREAS, the Series seeks to invest in the #ZAUH4 Asset (as defined in the Appendix) in accordance with the terms and conditions of the Operating Agreement, dated [object Object], of Ark7 Properties Plus LLC, a series limited liability company organized under the laws of the State of Delaware (the "Company") together with Exhibit B setting forth the terms of the Series, in each case as amended and restated from time to time (the "Operating Agreement");

 

WHEREAS, pursuant to the Operating Agreement, the managing member of the Series shall be responsible for the acquisition, management and disposition of the #ZAUH4 Asset as well as the business of the Series;

 

WHEREAS, the Series desires to avail itself of the advice and assistance of the Asset Manager and to appoint and retain the Asset Manager as the asset manager to the Series with respect to the #ZAUH4 Asset;

 

WHEREAS, the Asset Manager wishes to accept such appointment; and

 

NOW THEREFORE, in consideration of the mutual agreements herein contained, the parties hereby covenant and agree as follows:

 

  1. Appointment of Asset Manager; Acceptance of Appointment. The Series hereby appoints the Asset Manager as asset manager to the Series for the purpose of managing the #ZAUH4 Asset. The Asset Manager hereby accepts such appointment.
  2. Authority of the Asset Manager.
    1. Except as set forth in Section 2(e) below and any guidance as may be established from time to time by the Managing Member of the Series, the Asset Manager shall have sole authority and complete discretion over the care, custody, maintenance and management of the #ZAUH4 Asset and to take any action that it deems necessary or desirable in connection therewith.
    2. The Asset Manager shall devote such time to its duties under this Agreement as may be deemed reasonably necessary by the Asset Manager in light of the understanding that such duties are expected to be performed only at occasional or irregular intervals.
    3. The Asset Manager may delegate all or any of its duties under this Agreement to any Person who shall perform such delegated duties under the supervision of the Asset Manager on such terms as the Asset Manager shall determine.
    4. Notwithstanding any other provision of this Agreement to the contrary, the Asset Manager shall not have the authority to:
      1. acquire any asset or service for an amount equal to or greater than 1% of the value of the #ZAUH4 Asset as of such date, individually, or 3% of the value of the #ZAUH4 Asset as of such date, in the aggregate without the prior consent of the Managing Member of the Series; or
      2. sell, transfer, encumber or convey the #ZAUH4 Asset, provided, however, that the Asset Manager may deliver to the Managing Member of the Company any offers received by the Asset Manager to purchase the #ZAUH4 Asset and any research or analysis prepared by the Asset Manager regarding the potential sale of the #ZAUH4 Asset, including market analysis, survey results or information regarding any inquiries received and information regarding potential purchasers.
  3. Cooperation. The Asset Manager agrees to use reasonable efforts to make appropriate personnel available for consultation with the Series on matters pertaining to the #ZAUH4 Asset and to consult with the Managing Member of the Series regarding asset management decisions with respect to the #ZAUH4 Asset prior to execution. The Managing Member of the Series may make any reasonable request for the provision of information or for other cooperation from the Asset Manager with respect to its duties under this Agreement, and the Asset Manager shall use reasonable efforts to comply with such request, including without limitation, furnishing the Series with such documents, reports, data and other information as the Managing Member of the Series may reasonably request regarding the #ZAUH4 Asset and the Asset Manager's performance hereunder or compliance with the terms hereof.
  4. Representations and Warranties. Each party hereto represents and warrants that this Agreement has been duly authorized, executed and delivered by such party and constitutes the legal, valid and binding obligation of such party.
  5. Limitation of Liability; Indemnification with respect to #ZAUH4 Asset.
    1. None of the Asset Manager, its affiliates, or any of their respective directors, members, stockholders, partners, officers, employees or controlling persons (collectively, "Managing Parties") shall be liable to the applicable Series or the Company for (i) any act or omission performed or failed to be performed by any Managing Party (other than any criminal wrongdoing) arising from the exercise of such Managing Party's rights or obligations hereunder, or for any losses, claims, costs, damages, or liabilities arising therefrom, in the absence of criminal wrongdoing, willful misfeasance or gross negligence on the part of such Managing Party, with respect to #ZAUH4 Asset, (ii) any tax liability imposed on the Series or the #ZAUH4 Asset, or (iii) any losses due to the actions or omissions of the Series or any brokers or other current or former agents or advisers of the Series.
    2. To the fullest extent permitted by applicable law, the Series will indemnify the Asset Manager and its Managing Parties against any and all losses, damages, liabilities, judgments, costs and expenses (including, without limitation, reasonable attorneys' fees and disbursements) and amounts paid in settlement (collectively, "Losses") to which such person may become subject in connection with any matter arising out of or in connection with this Agreement, except to the extent that any such Loss results solely from the acts or omissions of a Managing Party that have been determined in a final, non-appealable decision of a court, arbitrator or other tribunal of competent jurisdiction to have resulted primarily from such Managing Party's fraud, willful misconduct or gross negligence. If this Section 5 or any portion hereof shall be invalidated on any ground by a court of competent jurisdiction, the Series shall nevertheless indemnify the Managing Party for any Losses incurred to the full extent permitted by any applicable portion of this Section that shall not have been invalidated.
    3. The Asset Manager gives no warranty as to the performance or profitability of the #ZAUH4 Asset or as to the performance of any third party engaged by the Asset Manager hereunder.
    4. The Asset Manager may rely upon and shall be protected in acting or refraining from action upon any instruction from, or document signed by, any authorized person of the Series or other person reasonably believed by the Asset Manager to be authorized to give or sign the same whether or not the authority of such person is then effective.
  6. Assignments. This Agreement may not be assigned by either party without the consent of the other party. In performing its obligations under this Agreement, the Asset Manager may, at its discretion, delegate any or all of its rights, powers and functions under this Agreement to any Person in accordance with section 2(d) without the need for the consent of the Series, provided that the Asset Manager's liability to the Series for all matters so delegated shall not be affected by such delegation.
  7. Compensation and Expenses.
    1. As compensation for services performed by the Asset Manager under this Agreement, and in consideration therefor, the Series will pay an annual asset management fee (the "Asset Management Fee") to the Asset Manager in respect of each fiscal year, equal to 15% of any Free Cash Flows available for distribution pursuant to Article VII of the Operating Agreement. Any such amount will be paid at the same time as, and only if, a distribution is made from the Series to its Members.
    2. Except as set forth in Section 5, the Series will bear all expenses of the #ZAUH4 Asset and shall reimburse the Asset Manager for any such expenses paid by the Asset Manager on behalf of the Series together with a reasonable rate of interest (a rate no less than the Applicable Federal Rate (as defined in the Internal Revenue Code)) as may be imposed by the Asset Manager in its sole discretion ("Operating Expenses Reimbursement Obligation").
    3. Each party will bear its own costs relating to the negotiation, preparation, execution and implementation of this Agreement.
  8. Services to Other Clients; Certain Affiliated Activities.
    1. The relationship between the Asset Manager and the Series is as described in this Agreement and nothing in this Agreement, none of the services to be provided pursuant to this Agreement, nor any other matter, shall oblige the Asset Manager to accept responsibilities that are more extensive than those set forth in this Agreement.
    2. The Asset Manager's services to the Series are not exclusive. The Asset Manager may engage in other activities on behalf of itself, any other Managing Party and other clients (which, for the avoidance of doubt, may include other series of the Company). The Series acknowledges and agrees that the Asset Manager may, without prior notice to the Series, give advice to such other clients. The Asset Manager shall not be liable to account to the Series for any profits, commission or remuneration made or received in respect of transactions effected pursuant to the Asset Manager's advice to another client and nor will the Asset Manager's fees be abated as a result.
  9. Duration and Termination. Unless terminated as set forth below, this Agreement shall continue in full force and effect until one year after the date on which the #ZAUH4 Asset has been liquidated and the obligations connected to such #ZAUH4 Asset (including, without limitation, contingent obligations) have terminated or, if earlier, the removal of Ark7 Inc. as Managing Member of the Series. Either party may terminate this Agreement immediately upon a material breach of the Agreement by the other party, without penalty or other additional payment, except that the Series shall pay the Asset Management Fee of the Asset Manager referred to in section 7, pro-rated to the date of termination, together with all amounts outstanding under any Operating Expenses Reimbursement Obligation. Termination shall not affect accrued rights, and the provisions of Sections 4, 5, 7 (with respect to any accrued but unpaid fees and expenses), 8, 9, 11, 14 and 16 hereof shall survive the termination of this Agreement.
  10. Power of Attorney. For so long as this Agreement is in effect, the Series constitutes and appoints the Asset Manager, with full power of substitution, its true and lawful attorney-in-fact and in its name, place and stead to carry out the Asset Manager's obligations and responsibilities to the Series under this Agreement, solely with respect to the #ZAUH4 Asset.
  11. Notices. Except as otherwise specifically provided herein, all notices shall be deemed duly given when sent in writing by registered mail, overnight courier or email to the appropriate party at the following addresses, or to such other address as shall be notified in writing by that party to the other party from time to time:

If to the Series:

Ark7 Properties Plus LLC - Series #ZAUH4

1 Ferry Building, Ste 201 San Francisco, CA 94111

Attention: President Email: support@ark7.com

 

If to the Asset Manager:

Ark7 Inc.

1 Ferry Building, Ste 201 San Francisco, CA 94111

Attention: President

Email: support@ark7.com

  1. Independent Contractor. For all purposes of this Agreement, the Asset Manager shall be an independent contractor and not an employee or dependent agent of the Series nor shall anything herein be construed as making the Series a partner or co-venturer with the Asset Manager, any other Managing Party or any of its other clients. Except as expressly provided in this Agreement or as otherwise authorized in writing by the Series, the Asset Manager shall have no authority to bind, obligate or represent the Series.
  2. Entire Agreement; Amendment; Severability. This Agreement states the entire agreement of the parties with respect to the subject matter hereof and supersedes any prior agreements relating to the subject matter hereof, and may not be supplemented or amended except in writing signed by the parties. If any provision or any part of a provision of this Agreement shall be found to be void or unenforceable, it shall not affect the remaining part, which shall remain in full force and effect.
  3. Confidentiality. All information furnished or made available by the Series or the Company to the Asset Manager hereunder, or by the Asset Manager to the Series or the Company hereunder, shall be treated as confidential by the Asset Manager, or the Series and the Company, as applicable, and shall not be disclosed to third parties except as required by law or as required in connection with the execution of transactions with respect to the #ZAUH4 Asset and except for disclosure to counsel, accountants and other advisors.
  4. Definitions. Words and expressions which are used but not defined in this Agreement shall have the meanings given to them in the Operating Agreement.
  5. Governing Law; Jurisdiction.
    1. This Agreement and the rights of the parties shall be governed by and construed in accordance with the laws of the State of Delaware.
    2. The parties irrevocably agree that the Court of Chancery of the State of Delaware is to have the exclusive jurisdiction to settle any disputes which may arise out of in connection with this Agreement and accordingly any suit, action or proceeding arising out of or in connection with this Agreement shall be brought in such courts.
  6. Counterparts. This Agreement may be executed in one or more counterparts with the same force and effect as if each of the signatories had executed the same instrument.

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly appointed agents so as to be effective on the day, month and year first above written.

 

 

 

ASSET MANAGER

 

 

ARK7 INC.

 

 

By: /s/Yizhen Zhao Name: Yizhen Zhao Title: CEO

 

 

 

 

 

 

Ark7 Properties Plus LLC - SERIES #ZAUH4

 

 

By: ARK7 INC., as managing member

 

 

By: /s/Yizhen Zhao Name: Yizhen Zhao Title: CEO

 

 

 

 

APPENDIX

 

THE #ZAUH4 ASSET

 

Property Address: 516 W Live Oak St, Dublin, TX 76446

 

 

ASSET MANAGEMENT AGREEMENT

 

BETWEEN

 

ARK7 INC.

 

AND

 

ARK7 PROPERTIES PLUS LLC - SERIES #EYPIR

 

This ASSET MANAGEMENT AGREEMENT (this "Agreement") dated as of May 20, 2024 is entered into between Ark7 Inc., a corporation organized under the laws of the State of Delaware (the "Asset Manager"), and Ark7 Properties Plus LLC - Series #EYPIR (the "Series").

 

WHEREAS, the Series seeks to invest in the #EYPIR Asset (as defined in the Appendix) in accordance with the terms and conditions of the Operating Agreement, dated [object Object], of Ark7 Properties Plus LLC, a series limited liability company organized under the laws of the State of Delaware (the "Company") together with Exhibit B setting forth the terms of the Series, in each case as amended and restated from time to time (the "Operating Agreement");

 

WHEREAS, pursuant to the Operating Agreement, the managing member of the Series shall be responsible for the acquisition, management and disposition of the #EYPIR Asset as well as the business of the Series;

 

WHEREAS, the Series desires to avail itself of the advice and assistance of the Asset Manager and to appoint and retain the Asset Manager as the asset manager to the Series with respect to the #EYPIR Asset;

 

WHEREAS, the Asset Manager wishes to accept such appointment; and

 

NOW THEREFORE, in consideration of the mutual agreements herein contained, the parties hereby covenant and agree as follows:

 

  1. Appointment of Asset Manager; Acceptance of Appointment. The Series hereby appoints the Asset Manager as asset manager to the Series for the purpose of managing the #EYPIR Asset. The Asset Manager hereby accepts such appointment.
  2. Authority of the Asset Manager.
    1. Except as set forth in Section 2(e) below and any guidance as may be established from time to time by the Managing Member of the Series, the Asset Manager shall have sole authority and complete discretion over the care, custody, maintenance and management of the #EYPIR Asset and to take any action that it deems necessary or desirable in connection therewith.
    2. The Asset Manager shall devote such time to its duties under this Agreement as may be deemed reasonably necessary by the Asset Manager in light of the understanding that such duties are expected to be performed only at occasional or irregular intervals.
    3. The Asset Manager may delegate all or any of its duties under this Agreement to any Person who shall perform such delegated duties under the supervision of the Asset Manager on such terms as the Asset Manager shall determine.
    4. Notwithstanding any other provision of this Agreement to the contrary, the Asset Manager shall not have the authority to:
      1. acquire any asset or service for an amount equal to or greater than 1% of the value of the #EYPIR Asset as of such date, individually, or 3% of the value of the #EYPIR Asset as of such date, in the aggregate without the prior consent of the Managing Member of the Series; or
      2. sell, transfer, encumber or convey the #EYPIR Asset, provided, however, that the Asset Manager may deliver to the Managing Member of the Company any offers received by the Asset Manager to purchase the #EYPIR Asset and any research or analysis prepared by the Asset Manager regarding the potential sale of the #EYPIR Asset, including market analysis, survey results or information regarding any inquiries received and information regarding potential purchasers.
  3. Cooperation. The Asset Manager agrees to use reasonable efforts to make appropriate personnel available for consultation with the Series on matters pertaining to the #EYPIR Asset and to consult with the Managing Member of the Series regarding asset management decisions with respect to the #EYPIR Asset prior to execution. The Managing Member of the Series may make any reasonable request for the provision of information or for other cooperation from the Asset Manager with respect to its duties under this Agreement, and the Asset Manager shall use reasonable efforts to comply with such request, including without limitation, furnishing the Series with such documents, reports, data and other information as the Managing Member of the Series may reasonably request regarding the #EYPIR Asset and the Asset Manager's performance hereunder or compliance with the terms hereof.
  4. Representations and Warranties. Each party hereto represents and warrants that this Agreement has been duly authorized, executed and delivered by such party and constitutes the legal, valid and binding obligation of such party.
  5. Limitation of Liability; Indemnification with respect to #EYPIR Asset.
    1. None of the Asset Manager, its affiliates, or any of their respective directors, members, stockholders, partners, officers, employees or controlling persons (collectively, "Managing Parties") shall be liable to the applicable Series or the Company for (i) any act or omission performed or failed to be performed by any Managing Party (other than any criminal wrongdoing) arising from the exercise of such Managing Party's rights or obligations hereunder, or for any losses, claims, costs, damages, or liabilities arising therefrom, in the absence of criminal wrongdoing, willful misfeasance or gross negligence on the part of such Managing Party, with respect to #EYPIR Asset, (ii) any tax liability imposed on the Series or the #EYPIR Asset, or (iii) any losses due to the actions or omissions of the Series or any brokers or other current or former agents or advisers of the Series.
    2. To the fullest extent permitted by applicable law, the Series will indemnify the Asset Manager and its Managing Parties against any and all losses, damages, liabilities, judgments, costs and expenses (including, without limitation, reasonable attorneys' fees and disbursements) and amounts paid in settlement (collectively, "Losses") to which such person may become subject in connection with any matter arising out of or in connection with this Agreement, except to the extent that any such Loss results solely from the acts or omissions of a Managing Party that have been determined in a final, non-appealable decision of a court, arbitrator or other tribunal of competent jurisdiction to have resulted primarily from such Managing Party's fraud, willful misconduct or gross negligence. If this Section 5 or any portion hereof shall be invalidated on any ground by a court of competent jurisdiction, the Series shall nevertheless indemnify the Managing Party for any Losses incurred to the full extent permitted by any applicable portion of this Section that shall not have been invalidated.
    3. The Asset Manager gives no warranty as to the performance or profitability of the #EYPIR Asset or as to the performance of any third party engaged by the Asset Manager hereunder.
    4. The Asset Manager may rely upon and shall be protected in acting or refraining from action upon any instruction from, or document signed by, any authorized person of the Series or other person reasonably believed by the Asset Manager to be authorized to give or sign the same whether or not the authority of such person is then effective.
  6. Assignments. This Agreement may not be assigned by either party without the consent of the other party. In performing its obligations under this Agreement, the Asset Manager may, at its discretion, delegate any or all of its rights, powers and functions under this Agreement to any Person in accordance with section 2(d) without the need for the consent of the Series, provided that the Asset Manager's liability to the Series for all matters so delegated shall not be affected by such delegation.
  7. Compensation and Expenses.
    1. As compensation for services performed by the Asset Manager under this Agreement, and in consideration therefor, the Series will pay an annual asset management fee (the "Asset Management Fee") to the Asset Manager in respect of each fiscal year, equal to 15% of any Free Cash Flows available for distribution pursuant to Article VII of the Operating Agreement. Any such amount will be paid at the same time as, and only if, a distribution is made from the Series to its Members.
    2. Except as set forth in Section 5, the Series will bear all expenses of the #EYPIR Asset and shall reimburse the Asset Manager for any such expenses paid by the Asset Manager on behalf of the Series together with a reasonable rate of interest (a rate no less than the Applicable Federal Rate (as defined in the Internal Revenue Code)) as may be imposed by the Asset Manager in its sole discretion ("Operating Expenses Reimbursement Obligation").
    3. Each party will bear its own costs relating to the negotiation, preparation, execution and implementation of this Agreement.
  8. Services to Other Clients; Certain Affiliated Activities.
    1. The relationship between the Asset Manager and the Series is as described in this Agreement and nothing in this Agreement, none of the services to be provided pursuant to this Agreement, nor any other matter, shall oblige the Asset Manager to accept responsibilities that are more extensive than those set forth in this Agreement.
    2. The Asset Manager's services to the Series are not exclusive. The Asset Manager may engage in other activities on behalf of itself, any other Managing Party and other clients (which, for the avoidance of doubt, may include other series of the Company). The Series acknowledges and agrees that the Asset Manager may, without prior notice to the Series, give advice to such other clients. The Asset Manager shall not be liable to account to the Series for any profits, commission or remuneration made or received in respect of transactions effected pursuant to the Asset Manager's advice to another client and nor will the Asset Manager's fees be abated as a result.
  9. Duration and Termination. Unless terminated as set forth below, this Agreement shall continue in full force and effect until one year after the date on which the #EYPIR Asset has been liquidated and the obligations connected to such #EYPIR Asset (including, without limitation, contingent obligations) have terminated or, if earlier, the removal of Ark7 Inc. as Managing Member of the Series. Either party may terminate this Agreement immediately upon a material breach of the Agreement by the other party, without penalty or other additional payment, except that the Series shall pay the Asset Management Fee of the Asset Manager referred to in section 7, pro-rated to the date of termination, together with all amounts outstanding under any Operating Expenses Reimbursement Obligation. Termination shall not affect accrued rights, and the provisions of Sections 4, 5, 7 (with respect to any accrued but unpaid fees and expenses), 8, 9, 11, 14 and 16 hereof shall survive the termination of this Agreement.
  10. Power of Attorney. For so long as this Agreement is in effect, the Series constitutes and appoints the Asset Manager, with full power of substitution, its true and lawful attorney-in-fact and in its name, place and stead to carry out the Asset Manager's obligations and responsibilities to the Series under this Agreement, solely with respect to the #EYPIR Asset.
  11. Notices. Except as otherwise specifically provided herein, all notices shall be deemed duly given when sent in writing by registered mail, overnight courier or email to the appropriate party at the following addresses, or to such other address as shall be notified in writing by that party to the other party from time to time:

If to the Series:

Ark7 Properties Plus LLC - Series #EYPIR

1 Ferry Building, Ste 201 San Francisco, CA 94111

Attention: President Email: support@ark7.com

 

If to the Asset Manager:

Ark7 Inc.

1 Ferry Building, Ste 201 San Francisco, CA 94111

Attention: President

Email: support@ark7.com

  1. Independent Contractor. For all purposes of this Agreement, the Asset Manager shall be an independent contractor and not an employee or dependent agent of the Series nor shall anything herein be construed as making the Series a partner or co-venturer with the Asset Manager, any other Managing Party or any of its other clients. Except as expressly provided in this Agreement or as otherwise authorized in writing by the Series, the Asset Manager shall have no authority to bind, obligate or represent the Series.
  2. Entire Agreement; Amendment; Severability. This Agreement states the entire agreement of the parties with respect to the subject matter hereof and supersedes any prior agreements relating to the subject matter hereof, and may not be supplemented or amended except in writing signed by the parties. If any provision or any part of a provision of this Agreement shall be found to be void or unenforceable, it shall not affect the remaining part, which shall remain in full force and effect.
  3. Confidentiality. All information furnished or made available by the Series or the Company to the Asset Manager hereunder, or by the Asset Manager to the Series or the Company hereunder, shall be treated as confidential by the Asset Manager, or the Series and the Company, as applicable, and shall not be disclosed to third parties except as required by law or as required in connection with the execution of transactions with respect to the #EYPIR Asset and except for disclosure to counsel, accountants and other advisors.
  4. Definitions. Words and expressions which are used but not defined in this Agreement shall have the meanings given to them in the Operating Agreement.
  5. Governing Law; Jurisdiction.
    1. This Agreement and the rights of the parties shall be governed by and construed in accordance with the laws of the State of Delaware.
    2. The parties irrevocably agree that the Court of Chancery of the State of Delaware is to have the exclusive jurisdiction to settle any disputes which may arise out of in connection with this Agreement and accordingly any suit, action or proceeding arising out of or in connection with this Agreement shall be brought in such courts.
  6. Counterparts. This Agreement may be executed in one or more counterparts with the same force and effect as if each of the signatories had executed the same instrument.

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly appointed agents so as to be effective on the day, month and year first above written.

 

 

 

ASSET MANAGER

 

 

ARK7 INC.

 

 

By: /s/Yizhen Zhao Name: Yizhen Zhao Title: CEO

 

 

 

 

 

 

Ark7 Properties Plus LLC - SERIES #EYPIR

 

 

By: ARK7 INC., as managing member

 

 

By: /s/Yizhen Zhao Name: Yizhen Zhao Title: CEO

 

 

 

 

APPENDIX

 

THE #EYPIR ASSET

 

Property Address: 655 E Live Oak St, Dublin, TX 76446

 

 

ASSET MANAGEMENT AGREEMENT

 

BETWEEN

 

ARK7 INC.

 

AND

 

ARK7 PROPERTIES PLUS LLC - SERIES #5VCTK

 

This ASSET MANAGEMENT AGREEMENT (this "Agreement") dated as of May 20, 2024 is entered into between Ark7 Inc., a corporation organized under the laws of the State of Delaware (the "Asset Manager"), and Ark7 Properties Plus LLC - Series #5VCTK (the "Series").

 

WHEREAS, the Series seeks to invest in the #5VCTK Asset (as defined in the Appendix) in accordance with the terms and conditions of the Operating Agreement, dated [object Object], of Ark7 Properties Plus LLC, a series limited liability company organized under the laws of the State of Delaware (the "Company") together with Exhibit B setting forth the terms of the Series, in each case as amended and restated from time to time (the "Operating Agreement");

 

WHEREAS, pursuant to the Operating Agreement, the managing member of the Series shall be responsible for the acquisition, management and disposition of the #5VCTK Asset as well as the business of the Series;

 

WHEREAS, the Series desires to avail itself of the advice and assistance of the Asset Manager and to appoint and retain the Asset Manager as the asset manager to the Series with respect to the #5VCTK Asset;

 

WHEREAS, the Asset Manager wishes to accept such appointment; and

 

NOW THEREFORE, in consideration of the mutual agreements herein contained, the parties hereby covenant and agree as follows:

 

  1. Appointment of Asset Manager; Acceptance of Appointment. The Series hereby appoints the Asset Manager as asset manager to the Series for the purpose of managing the #5VCTK Asset. The Asset Manager hereby accepts such appointment.
  2. Authority of the Asset Manager.
    1. Except as set forth in Section 2(e) below and any guidance as may be established from time to time by the Managing Member of the Series, the Asset Manager shall have sole authority and complete discretion over the care, custody, maintenance and management of the #5VCTK Asset and to take any action that it deems necessary or desirable in connection therewith.
    2. The Asset Manager shall devote such time to its duties under this Agreement as may be deemed reasonably necessary by the Asset Manager in light of the understanding that such duties are expected to be performed only at occasional or irregular intervals.
    3. The Asset Manager may delegate all or any of its duties under this Agreement to any Person who shall perform such delegated duties under the supervision of the Asset Manager on such terms as the Asset Manager shall determine.
    4. Notwithstanding any other provision of this Agreement to the contrary, the Asset Manager shall not have the authority to:
      1. acquire any asset or service for an amount equal to or greater than 1% of the value of the #5VCTK Asset as of such date, individually, or 3% of the value of the #5VCTK Asset as of such date, in the aggregate without the prior consent of the Managing Member of the Series; or
      2. sell, transfer, encumber or convey the #5VCTK Asset, provided, however, that the Asset Manager may deliver to the Managing Member of the Company any offers received by the Asset Manager to purchase the #5VCTK Asset and any research or analysis prepared by the Asset Manager regarding the potential sale of the #5VCTK Asset, including market analysis, survey results or information regarding any inquiries received and information regarding potential purchasers.
  3. Cooperation. The Asset Manager agrees to use reasonable efforts to make appropriate personnel available for consultation with the Series on matters pertaining to the #5VCTK Asset and to consult with the Managing Member of the Series regarding asset management decisions with respect to the #5VCTK Asset prior to execution. The Managing Member of the Series may make any reasonable request for the provision of information or for other cooperation from the Asset Manager with respect to its duties under this Agreement, and the Asset Manager shall use reasonable efforts to comply with such request, including without limitation, furnishing the Series with such documents, reports, data and other information as the Managing Member of the Series may reasonably request regarding the #5VCTK Asset and the Asset Manager's performance hereunder or compliance with the terms hereof.
  4. Representations and Warranties. Each party hereto represents and warrants that this Agreement has been duly authorized, executed and delivered by such party and constitutes the legal, valid and binding obligation of such party.
  5. Limitation of Liability; Indemnification with respect to #5VCTK Asset.
    1. None of the Asset Manager, its affiliates, or any of their respective directors, members, stockholders, partners, officers, employees or controlling persons (collectively, "Managing Parties") shall be liable to the applicable Series or the Company for (i) any act or omission performed or failed to be performed by any Managing Party (other than any criminal wrongdoing) arising from the exercise of such Managing Party's rights or obligations hereunder, or for any losses, claims, costs, damages, or liabilities arising therefrom, in the absence of criminal wrongdoing, willful misfeasance or gross negligence on the part of such Managing Party, with respect to #5VCTK Asset, (ii) any tax liability imposed on the Series or the #5VCTK Asset, or (iii) any losses due to the actions or omissions of the Series or any brokers or other current or former agents or advisers of the Series.
    2. To the fullest extent permitted by applicable law, the Series will indemnify the Asset Manager and its Managing Parties against any and all losses, damages, liabilities, judgments, costs and expenses (including, without limitation, reasonable attorneys' fees and disbursements) and amounts paid in settlement (collectively, "Losses") to which such person may become subject in connection with any matter arising out of or in connection with this Agreement, except to the extent that any such Loss results solely from the acts or omissions of a Managing Party that have been determined in a final, non-appealable decision of a court, arbitrator or other tribunal of competent jurisdiction to have resulted primarily from such Managing Party's fraud, willful misconduct or gross negligence. If this Section 5 or any portion hereof shall be invalidated on any ground by a court of competent jurisdiction, the Series shall nevertheless indemnify the Managing Party for any Losses incurred to the full extent permitted by any applicable portion of this Section that shall not have been invalidated.
    3. The Asset Manager gives no warranty as to the performance or profitability of the #5VCTK Asset or as to the performance of any third party engaged by the Asset Manager hereunder.
    4. The Asset Manager may rely upon and shall be protected in acting or refraining from action upon any instruction from, or document signed by, any authorized person of the Series or other person reasonably believed by the Asset Manager to be authorized to give or sign the same whether or not the authority of such person is then effective.
  6. Assignments. This Agreement may not be assigned by either party without the consent of the other party. In performing its obligations under this Agreement, the Asset Manager may, at its discretion, delegate any or all of its rights, powers and functions under this Agreement to any Person in accordance with section 2(d) without the need for the consent of the Series, provided that the Asset Manager's liability to the Series for all matters so delegated shall not be affected by such delegation.
  7. Compensation and Expenses.
    1. As compensation for services performed by the Asset Manager under this Agreement, and in consideration therefor, the Series will pay an annual asset management fee (the "Asset Management Fee") to the Asset Manager in respect of each fiscal year, equal to 15% of any Free Cash Flows available for distribution pursuant to Article VII of the Operating Agreement. Any such amount will be paid at the same time as, and only if, a distribution is made from the Series to its Members.
    2. Except as set forth in Section 5, the Series will bear all expenses of the #5VCTK Asset and shall reimburse the Asset Manager for any such expenses paid by the Asset Manager on behalf of the Series together with a reasonable rate of interest (a rate no less than the Applicable Federal Rate (as defined in the Internal Revenue Code)) as may be imposed by the Asset Manager in its sole discretion ("Operating Expenses Reimbursement Obligation").
    3. Each party will bear its own costs relating to the negotiation, preparation, execution and implementation of this Agreement.
  8. Services to Other Clients; Certain Affiliated Activities.
    1. The relationship between the Asset Manager and the Series is as described in this Agreement and nothing in this Agreement, none of the services to be provided pursuant to this Agreement, nor any other matter, shall oblige the Asset Manager to accept responsibilities that are more extensive than those set forth in this Agreement.
    2. The Asset Manager's services to the Series are not exclusive. The Asset Manager may engage in other activities on behalf of itself, any other Managing Party and other clients (which, for the avoidance of doubt, may include other series of the Company). The Series acknowledges and agrees that the Asset Manager may, without prior notice to the Series, give advice to such other clients. The Asset Manager shall not be liable to account to the Series for any profits, commission or remuneration made or received in respect of transactions effected pursuant to the Asset Manager's advice to another client and nor will the Asset Manager's fees be abated as a result.
  9. Duration and Termination. Unless terminated as set forth below, this Agreement shall continue in full force and effect until one year after the date on which the #5VCTK Asset has been liquidated and the obligations connected to such #5VCTK Asset (including, without limitation, contingent obligations) have terminated or, if earlier, the removal of Ark7 Inc. as Managing Member of the Series. Either party may terminate this Agreement immediately upon a material breach of the Agreement by the other party, without penalty or other additional payment, except that the Series shall pay the Asset Management Fee of the Asset Manager referred to in section 7, pro-rated to the date of termination, together with all amounts outstanding under any Operating Expenses Reimbursement Obligation. Termination shall not affect accrued rights, and the provisions of Sections 4, 5, 7 (with respect to any accrued but unpaid fees and expenses), 8, 9, 11, 14 and 16 hereof shall survive the termination of this Agreement.
  10. Power of Attorney. For so long as this Agreement is in effect, the Series constitutes and appoints the Asset Manager, with full power of substitution, its true and lawful attorney-in-fact and in its name, place and stead to carry out the Asset Manager's obligations and responsibilities to the Series under this Agreement, solely with respect to the #5VCTK Asset.
  11. Notices. Except as otherwise specifically provided herein, all notices shall be deemed duly given when sent in writing by registered mail, overnight courier or email to the appropriate party at the following addresses, or to such other address as shall be notified in writing by that party to the other party from time to time:

If to the Series:

Ark7 Properties Plus LLC - Series #5VCTK

1 Ferry Building, Ste 201 San Francisco, CA 94111

Attention: President Email: support@ark7.com

 

If to the Asset Manager:

Ark7 Inc.

1 Ferry Building, Ste 201 San Francisco, CA 94111

Attention: President

Email: support@ark7.com

  1. Independent Contractor. For all purposes of this Agreement, the Asset Manager shall be an independent contractor and not an employee or dependent agent of the Series nor shall anything herein be construed as making the Series a partner or co-venturer with the Asset Manager, any other Managing Party or any of its other clients. Except as expressly provided in this Agreement or as otherwise authorized in writing by the Series, the Asset Manager shall have no authority to bind, obligate or represent the Series.
  2. Entire Agreement; Amendment; Severability. This Agreement states the entire agreement of the parties with respect to the subject matter hereof and supersedes any prior agreements relating to the subject matter hereof, and may not be supplemented or amended except in writing signed by the parties. If any provision or any part of a provision of this Agreement shall be found to be void or unenforceable, it shall not affect the remaining part, which shall remain in full force and effect.
  3. Confidentiality. All information furnished or made available by the Series or the Company to the Asset Manager hereunder, or by the Asset Manager to the Series or the Company hereunder, shall be treated as confidential by the Asset Manager, or the Series and the Company, as applicable, and shall not be disclosed to third parties except as required by law or as required in connection with the execution of transactions with respect to the #5VCTK Asset and except for disclosure to counsel, accountants and other advisors.
  4. Definitions. Words and expressions which are used but not defined in this Agreement shall have the meanings given to them in the Operating Agreement.
  5. Governing Law; Jurisdiction.
    1. This Agreement and the rights of the parties shall be governed by and construed in accordance with the laws of the State of Delaware.
    2. The parties irrevocably agree that the Court of Chancery of the State of Delaware is to have the exclusive jurisdiction to settle any disputes which may arise out of in connection with this Agreement and accordingly any suit, action or proceeding arising out of or in connection with this Agreement shall be brought in such courts.
  6. Counterparts. This Agreement may be executed in one or more counterparts with the same force and effect as if each of the signatories had executed the same instrument.

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly appointed agents so as to be effective on the day, month and year first above written.

 

 

 

ASSET MANAGER

 

 

ARK7 INC.

 

 

By: /s/Yizhen Zhao Name: Yizhen Zhao Title: CEO

 

 

 

 

 

 

Ark7 Properties Plus LLC - SERIES #5VCTK

 

 

By: ARK7 INC., as managing member

 

 

By: /s/Yizhen Zhao Name: Yizhen Zhao Title: CEO

 

 

 

 

APPENDIX

 

THE #5VCTK ASSET

 

Property Address: 3616 Redbird St, Waco, TX 76705

 

 

ASSET MANAGEMENT AGREEMENT

 

BETWEEN

 

ARK7 INC.

 

AND

 

ARK7 PROPERTIES PLUS LLC - SERIES #ET8BV

 

This ASSET MANAGEMENT AGREEMENT (this "Agreement") dated as of May 24, 2024 is entered into between Ark7 Inc., a corporation organized under the laws of the State of Delaware (the "Asset Manager"), and Ark7 Properties Plus LLC - Series #ET8BV (the "Series").

 

WHEREAS, the Series seeks to invest in the #ET8BV Asset (as defined in the Appendix) in accordance with the terms and conditions of the Operating Agreement, dated [object Object], of Ark7 Properties Plus LLC, a series limited liability company organized under the laws of the State of Delaware (the "Company") together with Exhibit B setting forth the terms of the Series, in each case as amended and restated from time to time (the "Operating Agreement");

 

WHEREAS, pursuant to the Operating Agreement, the managing member of the Series shall be responsible for the acquisition, management and disposition of the #ET8BV Asset as well as the business of the Series;

 

WHEREAS, the Series desires to avail itself of the advice and assistance of the Asset Manager and to appoint and retain the Asset Manager as the asset manager to the Series with respect to the #ET8BV Asset;

 

WHEREAS, the Asset Manager wishes to accept such appointment; and

 

NOW THEREFORE, in consideration of the mutual agreements herein contained, the parties hereby covenant and agree as follows:

 

  1. Appointment of Asset Manager; Acceptance of Appointment. The Series hereby appoints the Asset Manager as asset manager to the Series for the purpose of managing the #ET8BV Asset. The Asset Manager hereby accepts such appointment.
  2. Authority of the Asset Manager.
    1. Except as set forth in Section 2(e) below and any guidance as may be established from time to time by the Managing Member of the Series, the Asset Manager shall have sole authority and complete discretion over the care, custody, maintenance and management of the #ET8BV Asset and to take any action that it deems necessary or desirable in connection therewith.
    2. The Asset Manager shall devote such time to its duties under this Agreement as may be deemed reasonably necessary by the Asset Manager in light of the understanding that such duties are expected to be performed only at occasional or irregular intervals.
    3. The Asset Manager may delegate all or any of its duties under this Agreement to any Person who shall perform such delegated duties under the supervision of the Asset Manager on such terms as the Asset Manager shall determine.
    4. Notwithstanding any other provision of this Agreement to the contrary, the Asset Manager shall not have the authority to:
      1. acquire any asset or service for an amount equal to or greater than 1% of the value of the #ET8BV Asset as of such date, individually, or 3% of the value of the #ET8BV Asset as of such date, in the aggregate without the prior consent of the Managing Member of the Series; or
      2. sell, transfer, encumber or convey the #ET8BV Asset, provided, however, that the Asset Manager may deliver to the Managing Member of the Company any offers received by the Asset Manager to purchase the #ET8BV Asset and any research or analysis prepared by the Asset Manager regarding the potential sale of the #ET8BV Asset, including market analysis, survey results or information regarding any inquiries received and information regarding potential purchasers.
  3. Cooperation. The Asset Manager agrees to use reasonable efforts to make appropriate personnel available for consultation with the Series on matters pertaining to the #ET8BV Asset and to consult with the Managing Member of the Series regarding asset management decisions with respect to the #ET8BV Asset prior to execution. The Managing Member of the Series may make any reasonable request for the provision of information or for other cooperation from the Asset Manager with respect to its duties under this Agreement, and the Asset Manager shall use reasonable efforts to comply with such request, including without limitation, furnishing the Series with such documents, reports, data and other information as the Managing Member of the Series may reasonably request regarding the #ET8BV Asset and the Asset Manager's performance hereunder or compliance with the terms hereof.
  4. Representations and Warranties. Each party hereto represents and warrants that this Agreement has been duly authorized, executed and delivered by such party and constitutes the legal, valid and binding obligation of such party.
  5. Limitation of Liability; Indemnification with respect to #ET8BV Asset.
    1. None of the Asset Manager, its affiliates, or any of their respective directors, members, stockholders, partners, officers, employees or controlling persons (collectively, "Managing Parties") shall be liable to the applicable Series or the Company for (i) any act or omission performed or failed to be performed by any Managing Party (other than any criminal wrongdoing) arising from the exercise of such Managing Party's rights or obligations hereunder, or for any losses, claims, costs, damages, or liabilities arising therefrom, in the absence of criminal wrongdoing, willful misfeasance or gross negligence on the part of such Managing Party, with respect to #ET8BV Asset, (ii) any tax liability imposed on the Series or the #ET8BV Asset, or (iii) any losses due to the actions or omissions of the Series or any brokers or other current or former agents or advisers of the Series.
    2. To the fullest extent permitted by applicable law, the Series will indemnify the Asset Manager and its Managing Parties against any and all losses, damages, liabilities, judgments, costs and expenses (including, without limitation, reasonable attorneys' fees and disbursements) and amounts paid in settlement (collectively, "Losses") to which such person may become subject in connection with any matter arising out of or in connection with this Agreement, except to the extent that any such Loss results solely from the acts or omissions of a Managing Party that have been determined in a final, non-appealable decision of a court, arbitrator or other tribunal of competent jurisdiction to have resulted primarily from such Managing Party's fraud, willful misconduct or gross negligence. If this Section 5 or any portion hereof shall be invalidated on any ground by a court of competent jurisdiction, the Series shall nevertheless indemnify the Managing Party for any Losses incurred to the full extent permitted by any applicable portion of this Section that shall not have been invalidated.
    3. The Asset Manager gives no warranty as to the performance or profitability of the #ET8BV Asset or as to the performance of any third party engaged by the Asset Manager hereunder.
    4. The Asset Manager may rely upon and shall be protected in acting or refraining from action upon any instruction from, or document signed by, any authorized person of the Series or other person reasonably believed by the Asset Manager to be authorized to give or sign the same whether or not the authority of such person is then effective.
  6. Assignments. This Agreement may not be assigned by either party without the consent of the other party. In performing its obligations under this Agreement, the Asset Manager may, at its discretion, delegate any or all of its rights, powers and functions under this Agreement to any Person in accordance with section 2(d) without the need for the consent of the Series, provided that the Asset Manager's liability to the Series for all matters so delegated shall not be affected by such delegation.
  7. Compensation and Expenses.
    1. As compensation for services performed by the Asset Manager under this Agreement, and in consideration therefor, the Series will pay an annual asset management fee (the "Asset Management Fee") to the Asset Manager in respect of each fiscal year, equal to 15% of any Free Cash Flows available for distribution pursuant to Article VII of the Operating Agreement. Any such amount will be paid at the same time as, and only if, a distribution is made from the Series to its Members.
    2. Except as set forth in Section 5, the Series will bear all expenses of the #ET8BV Asset and shall reimburse the Asset Manager for any such expenses paid by the Asset Manager on behalf of the Series together with a reasonable rate of interest (a rate no less than the Applicable Federal Rate (as defined in the Internal Revenue Code)) as may be imposed by the Asset Manager in its sole discretion ("Operating Expenses Reimbursement Obligation").
    3. Each party will bear its own costs relating to the negotiation, preparation, execution and implementation of this Agreement.
  8. Services to Other Clients; Certain Affiliated Activities.
    1. The relationship between the Asset Manager and the Series is as described in this Agreement and nothing in this Agreement, none of the services to be provided pursuant to this Agreement, nor any other matter, shall oblige the Asset Manager to accept responsibilities that are more extensive than those set forth in this Agreement.
    2. The Asset Manager's services to the Series are not exclusive. The Asset Manager may engage in other activities on behalf of itself, any other Managing Party and other clients (which, for the avoidance of doubt, may include other series of the Company). The Series acknowledges and agrees that the Asset Manager may, without prior notice to the Series, give advice to such other clients. The Asset Manager shall not be liable to account to the Series for any profits, commission or remuneration made or received in respect of transactions effected pursuant to the Asset Manager's advice to another client and nor will the Asset Manager's fees be abated as a result.
  9. Duration and Termination. Unless terminated as set forth below, this Agreement shall continue in full force and effect until one year after the date on which the #ET8BV Asset has been liquidated and the obligations connected to such #ET8BV Asset (including, without limitation, contingent obligations) have terminated or, if earlier, the removal of Ark7 Inc. as Managing Member of the Series. Either party may terminate this Agreement immediately upon a material breach of the Agreement by the other party, without penalty or other additional payment, except that the Series shall pay the Asset Management Fee of the Asset Manager referred to in section 7, pro-rated to the date of termination, together with all amounts outstanding under any Operating Expenses Reimbursement Obligation. Termination shall not affect accrued rights, and the provisions of Sections 4, 5, 7 (with respect to any accrued but unpaid fees and expenses), 8, 9, 11, 14 and 16 hereof shall survive the termination of this Agreement.
  10. Power of Attorney. For so long as this Agreement is in effect, the Series constitutes and appoints the Asset Manager, with full power of substitution, its true and lawful attorney-in-fact and in its name, place and stead to carry out the Asset Manager's obligations and responsibilities to the Series under this Agreement, solely with respect to the #ET8BV Asset.
  11. Notices. Except as otherwise specifically provided herein, all notices shall be deemed duly given when sent in writing by registered mail, overnight courier or email to the appropriate party at the following addresses, or to such other address as shall be notified in writing by that party to the other party from time to time:

If to the Series:

Ark7 Properties Plus LLC - Series #ET8BV

1 Ferry Building, Ste 201 San Francisco, CA 94111

Attention: President Email: support@ark7.com

 

If to the Asset Manager:

Ark7 Inc.

1 Ferry Building, Ste 201 San Francisco, CA 94111

Attention: President

Email: support@ark7.com

  1. Independent Contractor. For all purposes of this Agreement, the Asset Manager shall be an independent contractor and not an employee or dependent agent of the Series nor shall anything herein be construed as making the Series a partner or co-venturer with the Asset Manager, any other Managing Party or any of its other clients. Except as expressly provided in this Agreement or as otherwise authorized in writing by the Series, the Asset Manager shall have no authority to bind, obligate or represent the Series.
  2. Entire Agreement; Amendment; Severability. This Agreement states the entire agreement of the parties with respect to the subject matter hereof and supersedes any prior agreements relating to the subject matter hereof, and may not be supplemented or amended except in writing signed by the parties. If any provision or any part of a provision of this Agreement shall be found to be void or unenforceable, it shall not affect the remaining part, which shall remain in full force and effect.
  3. Confidentiality. All information furnished or made available by the Series or the Company to the Asset Manager hereunder, or by the Asset Manager to the Series or the Company hereunder, shall be treated as confidential by the Asset Manager, or the Series and the Company, as applicable, and shall not be disclosed to third parties except as required by law or as required in connection with the execution of transactions with respect to the #ET8BV Asset and except for disclosure to counsel, accountants and other advisors.
  4. Definitions. Words and expressions which are used but not defined in this Agreement shall have the meanings given to them in the Operating Agreement.
  5. Governing Law; Jurisdiction.
    1. This Agreement and the rights of the parties shall be governed by and construed in accordance with the laws of the State of Delaware.
    2. The parties irrevocably agree that the Court of Chancery of the State of Delaware is to have the exclusive jurisdiction to settle any disputes which may arise out of in connection with this Agreement and accordingly any suit, action or proceeding arising out of or in connection with this Agreement shall be brought in such courts.
  6. Counterparts. This Agreement may be executed in one or more counterparts with the same force and effect as if each of the signatories had executed the same instrument.

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly appointed agents so as to be effective on the day, month and year first above written.

 

 

 

ASSET MANAGER

 

 

ARK7 INC.

 

 

By: /s/Yizhen Zhao Name: Yizhen Zhao Title: CEO

 

 

 

 

 

 

Ark7 Properties Plus LLC - SERIES #ET8BV

 

 

By: ARK7 INC., as managing member

 

 

By: /s/Yizhen Zhao Name: Yizhen Zhao Title: CEO

 

 

 

 

APPENDIX

 

THE #ET8BV ASSET

 

Property Address: 215 Piedmont Ave NE, Unit 909, Atlanta, GA 30308

 

 

LOAN AGREEMENT

 

THIS LOAN AGREEMENT (this "Agreement") dated on April 18, 2024.

 

BETWEEN:

 

Ark7 Properties Plus LLC

1 Ferry Building, Ste 201

San Francisco, CA 94111

(the "Lender")

 

AND

 

Ark7 Properties Plus LLC - Series #OJXLW

1 Ferry Building, Ste 201

San Francisco, CA 94111

(the "Borrower")

 

IN CONSIDERATION OF the Lender loaning certain amount of the loan (the "Loan") to the Borrower, and the Borrower repaying the loan to the Lender, both parties agree to keep, perform and fulfill the promises and conditions set out in this Agreement:

 

Loan Amount & Interest

 

  1. The Lender promises to loan $230,000.00 to the Borrower and the Borrower promises to repay this principal amount to the Lender, with interest payable on the unpaid principal at the rate of 10.00% per annum, calculated semi-annually not in advance, beginning on April 18, 2024. The Borrower may prepay the Loan but in no event shall the interest rate chargeable hereinabove for any day be less than 3.00% per annum.

 

Payment

 

  1. This Loan will be repaid in full on April 17, 2025.

 

Bank Account Authorization

 

  1. Lender will authorize Borrower to use Bank of America checking account ending with 6974 for property acquisition purpose.

 

Default

 

  1. Notwithstanding anything to the contrary in this Agreement, if the Borrower defaults in the performance of any obligation under this Agreement, then the Lender may declare the principal amount owing and interest due under this Agreement at that time to be immediately due and payable.

 

Governing Law

 

  1. This Agreement will be construed in accordance with and governed by the laws of the State of California.

 

Costs

 

  1. All costs, expenses and expenditures including, without limitation, the complete legal costs incurred by enforcing this Agreement as a result of any default by the Borrower, will be added to the principal then outstanding and will immediately be paid by the Borrower.

 

Binding Effect

 

  1. This Agreement will pass to the benefit of and be binding upon the respective heirs, executors, administrators, successors and permitted assigns of the Borrower and Lender. The Borrower waives presentment for payment, notice of non-payment, protest, and notice of protest.

 

Amendments

 

  1. This Agreement may only be amended or modified by a written instrument executed by both the Borrower and the Lender.

 

Severability

 

  1. The clauses and paragraphs contained in this Agreement are intended to be read and construed independently of each other. If any term, covenant, condition or provision of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, it is the parties' intent that such provision be reduced in scope by the court only to the extent deemed necessary by that court to render the provision reasonable and enforceable and the remainder of the provisions of this Agreement will in no way be affected, impaired or invalidated as a result.

 

General Provisions

 

  1. Headings are inserted for the convenience of the parties only and are not to be considered when interpreting this Agreement. Words in the singular mean and include the plural and vice versa. Words in the masculine mean and include the feminine and vice versa.

 

Entire Agreement

 

  1. This Agreement constitutes the entire agreement between the parties and there are no further items or provisions, either oral or otherwise.

 

IN WITNESS WHEREOF, the parties have duly affixed their signatures under hand and seal on the date first above written.

 

 

SIGNED, SEALED, AND DELIVERED

 

ARK7 PROPERTIES PLUS LLC

 

By

/s/ ARK7 INC., as managing member

 

 

 

 

 

 

By:

/s/ Yizhen Zhao

 

Name:

Yizhen Zhao

 

Title:

CEO

 

 

SIGNED, SEALED, AND DELIVERED

 

ARK7 PROPERTIES PLUS LLC - SERIES #OJXLW

 

By

/s/ ARK7 INC., as managing member

 

 

 

 

 

 

By:

/s/ Yizhen Zhao

 

Name:

Yizhen Zhao

 

Title:

CEO

 

 

 

LOAN AGREEMENT

 

THIS LOAN AGREEMENT (this "Agreement") dated on May 20, 2024.

 

BETWEEN:

 

Ark7 Properties Plus LLC

1 Ferry Building, Ste 201

San Francisco, CA 94111

(the "Lender")

 

AND

 

Ark7 Properties Plus LLC - Series #ZAUH4

1 Ferry Building, Ste 201

San Francisco, CA 94111

(the "Borrower")

 

IN CONSIDERATION OF the Lender loaning certain amount of the loan (the "Loan") to the Borrower, and the Borrower repaying the loan to the Lender, both parties agree to keep, perform and fulfill the promises and conditions set out in this Agreement:

 

Loan Amount & Interest

 

  1. The Lender promises to loan $210,000.00 to the Borrower and the Borrower promises to repay this principal amount to the Lender, with interest payable on the unpaid principal at the rate of 10.00% per annum, calculated semi-annually not in advance, beginning on May 20, 2024. The Borrower may prepay the Loan but in no event shall the interest rate chargeable hereinabove for any day be less than 3.00% per annum.

 

Payment

 

  1. This Loan will be repaid in full on May 19, 2025.

 

Bank Account Authorization

 

  1. Lender will authorize Borrower to use Bank of America checking account ending with 6974 for property acquisition purpose.

 

Default

 

  1. Notwithstanding anything to the contrary in this Agreement, if the Borrower defaults in the performance of any obligation under this Agreement, then the Lender may declare the principal amount owing and interest due under this Agreement at that time to be immediately due and payable.

 

Governing Law

 

  1. This Agreement will be construed in accordance with and governed by the laws of the State of California.

 

Costs

 

  1. All costs, expenses and expenditures including, without limitation, the complete legal costs incurred by enforcing this Agreement as a result of any default by the Borrower, will be added to the principal then outstanding and will immediately be paid by the Borrower.

 

Binding Effect

 

  1. This Agreement will pass to the benefit of and be binding upon the respective heirs, executors, administrators, successors and permitted assigns of the Borrower and Lender. The Borrower waives presentment for payment, notice of non-payment, protest, and notice of protest.

 

Amendments

 

  1. This Agreement may only be amended or modified by a written instrument executed by both the Borrower and the Lender.

 

Severability

 

  1. The clauses and paragraphs contained in this Agreement are intended to be read and construed independently of each other. If any term, covenant, condition or provision of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, it is the parties' intent that such provision be reduced in scope by the court only to the extent deemed necessary by that court to render the provision reasonable and enforceable and the remainder of the provisions of this Agreement will in no way be affected, impaired or invalidated as a result.

 

General Provisions

 

  1. Headings are inserted for the convenience of the parties only and are not to be considered when interpreting this Agreement. Words in the singular mean and include the plural and vice versa. Words in the masculine mean and include the feminine and vice versa.

 

Entire Agreement

 

  1. This Agreement constitutes the entire agreement between the parties and there are no further items or provisions, either oral or otherwise.

 

IN WITNESS WHEREOF, the parties have duly affixed their signatures under hand and seal on the date first above written.

 

 

SIGNED, SEALED, AND DELIVERED

 

ARK7 PROPERTIES PLUS LLC

 

By

/s/ ARK7 INC., as managing member

 

 

 

 

 

 

By:

/s/ Yizhen Zhao

 

Name:

Yizhen Zhao

 

Title:

CEO

 

 

SIGNED, SEALED, AND DELIVERED

 

ARK7 PROPERTIES PLUS LLC - SERIES #ZAUH4

 

By

/s/ ARK7 INC., as managing member

 

 

 

 

 

 

By:

/s/ Yizhen Zhao

 

Name:

Yizhen Zhao

 

Title:

CEO

 

 

 

LOAN AGREEMENT

 

THIS LOAN AGREEMENT (this "Agreement") dated on May 20, 2024.

 

BETWEEN:

 

Ark7 Properties Plus LLC

1 Ferry Building, Ste 201

San Francisco, CA 94111

(the "Lender")

 

AND

 

Ark7 Properties Plus LLC - Series #EYPIR

1 Ferry Building, Ste 201

San Francisco, CA 94111

(the "Borrower")

 

IN CONSIDERATION OF the Lender loaning certain amount of the loan (the "Loan") to the Borrower, and the Borrower repaying the loan to the Lender, both parties agree to keep, perform and fulfill the promises and conditions set out in this Agreement:

 

Loan Amount & Interest

 

  1. The Lender promises to loan $210,000.00 to the Borrower and the Borrower promises to repay this principal amount to the Lender, with interest payable on the unpaid principal at the rate of 10.00% per annum, calculated semi-annually not in advance, beginning on May 20, 2024. The Borrower may prepay the Loan but in no event shall the interest rate chargeable hereinabove for any day be less than 3.00% per annum.

 

Payment

 

  1. This Loan will be repaid in full on May 19, 2025.

 

Bank Account Authorization

 

  1. Lender will authorize Borrower to use Bank of America checking account ending with 6974 for property acquisition purpose.

 

Default

 

  1. Notwithstanding anything to the contrary in this Agreement, if the Borrower defaults in the performance of any obligation under this Agreement, then the Lender may declare the principal amount owing and interest due under this Agreement at that time to be immediately due and payable.

 

Governing Law

 

  1. This Agreement will be construed in accordance with and governed by the laws of the State of California.

 

Costs

 

  1. All costs, expenses and expenditures including, without limitation, the complete legal costs incurred by enforcing this Agreement as a result of any default by the Borrower, will be added to the principal then outstanding and will immediately be paid by the Borrower.

 

Binding Effect

 

  1. This Agreement will pass to the benefit of and be binding upon the respective heirs, executors, administrators, successors and permitted assigns of the Borrower and Lender. The Borrower waives presentment for payment, notice of non-payment, protest, and notice of protest.

 

Amendments

 

  1. This Agreement may only be amended or modified by a written instrument executed by both the Borrower and the Lender.

 

Severability

 

  1. The clauses and paragraphs contained in this Agreement are intended to be read and construed independently of each other. If any term, covenant, condition or provision of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, it is the parties' intent that such provision be reduced in scope by the court only to the extent deemed necessary by that court to render the provision reasonable and enforceable and the remainder of the provisions of this Agreement will in no way be affected, impaired or invalidated as a result.

 

General Provisions

 

  1. Headings are inserted for the convenience of the parties only and are not to be considered when interpreting this Agreement. Words in the singular mean and include the plural and vice versa. Words in the masculine mean and include the feminine and vice versa.

 

Entire Agreement

 

  1. This Agreement constitutes the entire agreement between the parties and there are no further items or provisions, either oral or otherwise.

 

IN WITNESS WHEREOF, the parties have duly affixed their signatures under hand and seal on the date first above written.

 

 

SIGNED, SEALED, AND DELIVERED

 

ARK7 PROPERTIES PLUS LLC

 

By

/s/ ARK7 INC., as managing member

 

 

 

 

 

 

By:

/s/ Yizhen Zhao

 

Name:

Yizhen Zhao

 

Title:

CEO

 

 

SIGNED, SEALED, AND DELIVERED

 

ARK7 PROPERTIES PLUS LLC - SERIES #EYPIR

 

By

/s/ ARK7 INC., as managing member

 

 

 

 

 

 

By:

/s/ Yizhen Zhao

 

Name:

Yizhen Zhao

 

Title:

CEO

 

 

 

LOAN AGREEMENT

 

THIS LOAN AGREEMENT (this "Agreement") dated on May 20, 2024.

 

BETWEEN:

 

Ark7 Properties Plus LLC

1 Ferry Building, Ste 201

San Francisco, CA 94111

(the "Lender")

 

AND

 

Ark7 Properties Plus LLC - Series #5VCTK

1 Ferry Building, Ste 201

San Francisco, CA 94111

(the "Borrower")

 

IN CONSIDERATION OF the Lender loaning certain amount of the loan (the "Loan") to the Borrower, and the Borrower repaying the loan to the Lender, both parties agree to keep, perform and fulfill the promises and conditions set out in this Agreement:

 

Loan Amount & Interest

 

  1. The Lender promises to loan $240,000.00 to the Borrower and the Borrower promises to repay this principal amount to the Lender, with interest payable on the unpaid principal at the rate of 10.00% per annum, calculated semi-annually not in advance, beginning on May 20, 2024. The Borrower may prepay the Loan but in no event shall the interest rate chargeable hereinabove for any day be less than 3.00% per annum.

 

Payment

 

  1. This Loan will be repaid in full on May 19, 2025.

 

Bank Account Authorization

 

  1. Lender will authorize Borrower to use Bank of America checking account ending with 6974 for property acquisition purpose.

 

Default

 

  1. Notwithstanding anything to the contrary in this Agreement, if the Borrower defaults in the performance of any obligation under this Agreement, then the Lender may declare the principal amount owing and interest due under this Agreement at that time to be immediately due and payable.

 

Governing Law

 

  1. This Agreement will be construed in accordance with and governed by the laws of the State of California.

 

Costs

 

  1. All costs, expenses and expenditures including, without limitation, the complete legal costs incurred by enforcing this Agreement as a result of any default by the Borrower, will be added to the principal then outstanding and will immediately be paid by the Borrower.

 

Binding Effect

 

  1. This Agreement will pass to the benefit of and be binding upon the respective heirs, executors, administrators, successors and permitted assigns of the Borrower and Lender. The Borrower waives presentment for payment, notice of non-payment, protest, and notice of protest.

 

Amendments

 

  1. This Agreement may only be amended or modified by a written instrument executed by both the Borrower and the Lender.

 

Severability

 

  1. The clauses and paragraphs contained in this Agreement are intended to be read and construed independently of each other. If any term, covenant, condition or provision of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, it is the parties' intent that such provision be reduced in scope by the court only to the extent deemed necessary by that court to render the provision reasonable and enforceable and the remainder of the provisions of this Agreement will in no way be affected, impaired or invalidated as a result.

 

General Provisions

 

  1. Headings are inserted for the convenience of the parties only and are not to be considered when interpreting this Agreement. Words in the singular mean and include the plural and vice versa. Words in the masculine mean and include the feminine and vice versa.

 

Entire Agreement

 

  1. This Agreement constitutes the entire agreement between the parties and there are no further items or provisions, either oral or otherwise.

 

IN WITNESS WHEREOF, the parties have duly affixed their signatures under hand and seal on the date first above written.

 

 

SIGNED, SEALED, AND DELIVERED

 

ARK7 PROPERTIES PLUS LLC

 

By

/s/ ARK7 INC., as managing member

 

 

 

 

 

 

By:

/s/ Yizhen Zhao

 

Name:

Yizhen Zhao

 

Title:

CEO

 

 

SIGNED, SEALED, AND DELIVERED

 

ARK7 PROPERTIES PLUS LLC - SERIES #5VCTK

 

By

/s/ ARK7 INC., as managing member

 

 

 

 

 

 

By:

/s/ Yizhen Zhao

 

Name:

Yizhen Zhao

 

Title:

CEO

 

 

 

LOAN AGREEMENT

 

THIS LOAN AGREEMENT (this "Agreement") dated on May 24, 2024.

 

BETWEEN:

 

Ark7 Properties Plus LLC

1 Ferry Building, Ste 201

San Francisco, CA 94111

(the "Lender")

 

AND

 

Ark7 Properties Plus LLC - Series #ET8BV

1 Ferry Building, Ste 201

San Francisco, CA 94111

(the "Borrower")

 

IN CONSIDERATION OF the Lender loaning certain amount of the loan (the "Loan") to the Borrower, and the Borrower repaying the loan to the Lender, both parties agree to keep, perform and fulfill the promises and conditions set out in this Agreement:

 

Loan Amount & Interest

 

  1. The Lender promises to loan $200,000.00 to the Borrower and the Borrower promises to repay this principal amount to the Lender, with interest payable on the unpaid principal at the rate of 10.00% per annum, calculated semi-annually not in advance, beginning on May 24, 2024. The Borrower may prepay the Loan but in no event shall the interest rate chargeable hereinabove for any day be less than 3.00% per annum.

 

Payment

 

  1. This Loan will be repaid in full on May 23, 2025.

 

Bank Account Authorization

 

  1. Lender will authorize Borrower to use Bank of America checking account ending with 6974 for property acquisition purpose.

 

Default

 

  1. Notwithstanding anything to the contrary in this Agreement, if the Borrower defaults in the performance of any obligation under this Agreement, then the Lender may declare the principal amount owing and interest due under this Agreement at that time to be immediately due and payable.

 

Governing Law

 

  1. This Agreement will be construed in accordance with and governed by the laws of the State of California.

 

Costs

 

  1. All costs, expenses and expenditures including, without limitation, the complete legal costs incurred by enforcing this Agreement as a result of any default by the Borrower, will be added to the principal then outstanding and will immediately be paid by the Borrower.

 

Binding Effect

 

  1. This Agreement will pass to the benefit of and be binding upon the respective heirs, executors, administrators, successors and permitted assigns of the Borrower and Lender. The Borrower waives presentment for payment, notice of non-payment, protest, and notice of protest.

 

Amendments

 

  1. This Agreement may only be amended or modified by a written instrument executed by both the Borrower and the Lender.

 

Severability

 

  1. The clauses and paragraphs contained in this Agreement are intended to be read and construed independently of each other. If any term, covenant, condition or provision of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, it is the parties' intent that such provision be reduced in scope by the court only to the extent deemed necessary by that court to render the provision reasonable and enforceable and the remainder of the provisions of this Agreement will in no way be affected, impaired or invalidated as a result.

 

General Provisions

 

  1. Headings are inserted for the convenience of the parties only and are not to be considered when interpreting this Agreement. Words in the singular mean and include the plural and vice versa. Words in the masculine mean and include the feminine and vice versa.

 

Entire Agreement

 

  1. This Agreement constitutes the entire agreement between the parties and there are no further items or provisions, either oral or otherwise.

 

IN WITNESS WHEREOF, the parties have duly affixed their signatures under hand and seal on the date first above written.

 

 

SIGNED, SEALED, AND DELIVERED

 

ARK7 PROPERTIES PLUS LLC

 

By

/s/ ARK7 INC., as managing member

 

 

 

 

 

 

By:

/s/ Yizhen Zhao

 

Name:

Yizhen Zhao

 

Title:

CEO

 

 

SIGNED, SEALED, AND DELIVERED

 

ARK7 PROPERTIES PLUS LLC - SERIES #ET8BV

 

By

/s/ ARK7 INC., as managing member

 

 

 

 

 

 

By:

/s/ Yizhen Zhao

 

Name:

Yizhen Zhao

 

Title:

CEO

 

 

 

Flex Tax and Consulting Group (Flex-Tax, Inc.) P: (415) 860-6288 | F: (415) 688-2297 |E: info@flextcg.com

1160 Battery Street, East Building, Suite 100, San Francisco, CA 94111

 

CONSENT OF INDEPENDENT AUDITOR

 

We consent to the use in the Offering Circular constituting a part of this Offering Statement on Form 1-A, as it may be amended, of our Independent Auditor's Report dated March 18, 2024 relating to the consolidated balance sheet of Ark7 Properties Plus LLC and its wholly owned series LLC subsidiaries: Series #0XYT6, Series #DIVTU, Series #FTWDS, Series #JTDXY, Series #NHMOP, Series #ORHOF, Series #P7FJ5, Series #QGXF0, Series #RPFUV, Series #SOV9W, Series #WGI3Z, Series #WRA7O and Series #ZIE3T for the year ended December 31, 2022 and 2023, and the related consolidated statement of income, consolidated statement of Member's equity, and consolidated statement of cash flows as a whole for the periods from March 17, 2022 (inception date) to December 31, 2022, and for the year ended December 31, 2023, and the related notes to the consolidated financial statements.

 

 

/s/ Flex-Tax, Inc.

San Francisco, CA

 

May 31, 2024

 

 

Ark7 Properties Plus LLC

1 Ferry Building, Ste 201

San Francisco, CA 94111

 

June 3, 2024

 

To the Manager Member of Ark7 Properties Plus LLC:

 

We are acting as counsel to Ark7 Properties Plus LLC, a Delaware series limited liability company (the "Company") with respect to the preparation and filing of an offering statement on Form 1-A. The offering statement and the pre-qualification amendments cover the contemplated sale of membership interest (the "Interests") in each of the applicable series of the Company (each, a "Series") as set forth on Schedule 1 hereto (each, an "Offering").

 

In connection with the opinion contained herein, we have examined the offering statement, as well as pre-qualification amendments, the certificate of formation of the Company, its Limited Liability Company Agreement, and the Series Designation of each Series undertaking an Offering, as well as all other documents necessary to render an opinion. In our examination, we have assumed the legal capacity of all natural persons, the genuineness of all signatures, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as certified or photostatic copies and the authenticity of the originals of such copies.

 

Based upon the foregoing, we are of the opinion that the Interests being sold pursuant to the offering statement have been authorized by all necessary series limited liability company actions of the Company and, when issued in the manner described in the offering statement, validly issued, fully paid and non-assessable.

 

No opinion is being rendered hereby with respect to the truth and accuracy, or completeness of the offering statement or any portion thereof.

 

We further consent to the use of this opinion as an exhibit to the offering statement.

 

Yours truly,

 

/s/ CrowdCheck Law LLP

 

CrowdCheck Law LLP

 

 

SCHEDULE 1

 

SERIES NAME

OFFERING PRICE PER INTEREST

MAXIMUM OFFERING SIZE

SERIES #DIVTU

$100

$305,000

SERIES #OJXLW

$100

$260,000

SERIES #ZAUH4

$100

$240,000

SERIES #EYPIR

$100

$260,000

SERIES #5VCTK

$100

$275,000

SERIES #ET8BV

$100

$275,000