UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 1-SA
SEMI-ANNUAL REPORT
PURSUANT TO REGULATION A OF THE SECURITIES ACT OF 1933
For the fiscal semiannual period ended June 30, 2021
The Emancipation Fund Initiative LLC
(Exact name of registrant as specified in its charter)
Commission File Number: 024-11399
| Texas | 85-0866286 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | |
|
5330 Griggs Road #D107 Houston, TX |
77021 | |
| (Address of principal executive offices) | (Zip Code) |
| (832) 974 – 0024 | ||
| Registrant’s telephone number, including area code |
| Promissory Notes |
| (Title of each class of securities issued pursuant to Regulation A) |
SEMI-ANNUAL REPORT DATED SEPTEMBER 30, 2021
THE EMANCIPATION FUND INITIATIVE LLC
5330 GRIGGS ROAD #D107
HOUSTON, TX 77021
REPLACINGTHEBANK.COM
In this Semi-Annual Report, the terms “we” or “the Company” refer to The Emancipation Fund Initiative LLC.
THIS SEMI-ANNUAL REPORT 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. 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.
ITEM 1. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes. Some of the information contained in this discussion and analysis, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties.
The financial statements included in this filing are unaudited, and may not include year-end adjustments necessary to make those financial statements comparable to audited results.
Operating Results
During the first 6 months of raising capital substantial progress has been made and all current projects/properties are on track with minimal delays. Due to the nature of the Company’s business, it is normal for minimal revenue to have been generated at this time. Most projects take 6-8 months to complete and sell or refinance. The expenses incurred thus far are standard and consist of property acquisition, construction cost, renovation cost, professional services, and utilities.
As of June 30, 2021, the Company had not finished constructing any projects. Two new construction multi-family projects were 80% complete as of this date. As of June 30, 2021, three other new construction multi-family projects were in the permitting phase. Construction on these latter projects began after the reporting period.
In addition to the Company’s new construction projects, the Company also acquired several existing properties: a 5 unit multi-family property that is undergoing renovation (renovation 90% complete as of June 30, 2021), a 12 unit apartment building that is undergoing renovation (renovation 25% complete as of June 30, 2021), and approximately 1.5 acres of land which the Company plans to develop into 8-10 new construction units. The land is currently in the planning and replatting phase.
Liquidity and Capital Resources – For the Six Months Ending June 30, 2021
As of December 31, 2020, the Company’s had cash and cash equivalents of $16,877
As of June 30, 2021, the Company has sold approximately $2.16 million in principal amount of promissory notes (“Notes”).
We are continuing to raise capital through the sale of Notes. If we are able to sell Notes at the same pace as in the first six months of 2021, we believe that the capital provided through such Notes plus our current cash balance will be sufficient for the Company to continue its business of acquiring land, building houses, and renting or leasing those houses.
At the end of this reporting period, the Company has $346,002 in cash reserves which is enough to continue construction of current projects without having to pause construction or planned improvements. At this time there are no deficiencies in liquidity.
Trend Information
The current housing market in Houston has increased the demand for housing in our area. Inventory has remained low which has improved sales prices and home values year over year. Properties like the ones that the Company is currently constructing and have in our pipeline sold for $275,000 last year. This year that same property could sell for $320,000 based on current comparable sales. Some of our construction costs have increased but not enough to absorb the contingencies that are already in place in our budget.
ITEM 2. OTHER INFORMATION
Not applicable.
ITEM 3. FINANCIAL STATEMENTS
Emancipation Fund Initiative
SEMI-ANNUAL CONSOLIDATED BALANCE SHEET
June 30, 2021
| Assets | |
| Cash and cash equivalents | 346,002 |
| Total current assets | 346,002 |
| Real estate owned, net (1) | 2,005,000 |
| Total fixed assets | 2,005,000 |
| Total assets | 2,351,002 |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |
| Total current liabilities | (1) |
| Note Payable (2) | 2,503,662 |
| Total current other liabilities | 2,503,662 |
| Total liabilities | 2,503,661 |
| Total shareholders’ equity | (152,659) |
| Total liabilities and shareholders’ equity | 2,351,002 |
| (1) | Real estate owned, net represent residential property purchased by Emancipation Fund Initiative and renovations currently in the works. |
| (2) | Note Payables are current investors contribution to Emancipation Fund Initiative and monthly earned interest due 1 year from original investment to investors. |
Emancipation Fund Initiative
SEMI-ANNUAL CONSOLIDATED STATEMENTS OF OPERATION
June 30, 2021
| INVESTMENT INCOME | |
| Interest | - |
| Total investment income | - |
| EXPENSES | |
| Advertising and marketing | 53 |
| Bank charges & fees | 990 |
| Insurance | 2,474 |
| Interest (1) | (135) |
| Legal & professional services | 2,999 |
| Office supplies & software | 1,231 |
| Postage & delivery | 370 |
| Total expenses | 7,982 |
| REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENTS | |
| Net unrealized loss from investment (2) | (170,729) |
| Net unrealized gain from rental property (3) | 475 |
| Net loss from investments | (170,254) |
| NET LOSS | (178,235) |
| (1) | Emancipation Initiative Fund received rewards from American Express for purchases which is reflected in Interest expense has a negative amount. |
| (2) | Net unrealized loss from investment is the calculation of earned interest expected to be paid 1 year after initial investment. |
| (3) | Net unrealized gain from rental property is paid rental expense deducted from received rental income. |
Emancipation Fund Initiative
SEMI-ANNUAL CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
June 30, 2021
| Shareholder equity, beginning of period | - |
| Capital contribution | 25,576 |
| Capital distribution | - |
| Allocation of net loss | |
Net unrealized loss from investment |
(170,729) |
| Net unrealized gain from rental property | 475 |
| Net loss from investments | (170,254) |
| Net loss | (178,235) |
| Shareholder equity, end of period | (152,659) |
Emancipation Fund Initiative
SEMI-ANNUAL CONSOLIDATED STATEMENTS OF CASH FLLOWS
June 30, 2021
| CASH FLOWS FROM OPERATING ACTIVITIES | |
| Net loss | (178,235) |
| Adjustments to reconcile net income to net cash flows from operating activities | |
| Credit cards: | (1) |
| Note payables | 2,503,662 |
| Total adjustments to reconcile net loss to net cash flows from operating activities | 2,503,661 |
| Net cash provided by (used in) operating activities | 2,325,426 |
| CASH FLOWS FROM INVESTMENT ACTIVITIES | |
| Purchase of real estate | (2,005,000) |
| Net cash provided by (used in) investing activities | (2,005,000) |
| CASH FLOWS FROM FINANCING ACTIVITIES | |
| Dividend paid | - |
| Shareholder contribution | 25,576 |
| Net proceeds from issuance of shares | - |
| Repayment of debt | - |
| Net cash provided by (used in) financing activities | 25,576 |
| Net cash flows | 346,002 |
| Cash and cash equivalents at beginning of period | - |
| Cash and cash equivalents at end of the period | 346,002 |
INDEX TO EXHIBITS
| 2.1 | Certificate of Formation (1) |
| 2.3 | Limited Liability Company Agreement (1) |
| 4.1 | Subscription Agreement and Investor Questionnaire (1) |
| 4.2 | Form of Promissory Note (1) |
(1) Filed as an exhibit to the Company’s Offering Statement on Form 1-A (Commission File No. 024-11399) and incorporated herein by reference.
SIGNATURES
Pursuant to the requirements of Regulation A, the issuer has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
THE EMANCIPATION FUND INITIATIVE LLC
| By: | /s/ Brittney Rogers | |
|
Brittney Rogers Managing Member | ||
| Date: September 30, 2021 | ||
Pursuant to the requirements of Regulation A, this report has been signed below by the following persons on behalf of the issuer and in the capacities and on the dates indicated.
| By: | /s/ Brittney Rogers | |
| Brittney Rogers | ||
| Managing Member | ||
| Date: September 30, 2021 | ||