UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 1-K
ANNUAL REPORT PURSUANT TO REGULATION A
For the fiscal year ended:
December 31, 2023
ARRIVED STR, LLC
(Exact name of issuer as specified in its charter)
Delaware | 88- 3444701 | |
State of other jurisdiction of incorporation or Organization |
(I.R.S. Employer Identification No.) |
1700 Westlake Ave North, Suite 200
Seattle, WA 98109
(Full mailing address of principal executive offices)
(814)-277-4833
(Issuer’s telephone number, including area code)
www.arrived.com
(Issuer’s website)
Arrived Series Oasis; Arrived Series Pointbreak; Arrived Series Hammock; Arrived Series Ace; Arrived Series Cardinal; Arrived Series Orchard; Arrived Series Mirage; Arrived Series Cactus; Arrived Series Opry; Arrived Series Lakeridge; Arrived Series Serenity; Arrived Series Sugarcreek; Arrived Series Palm; Arrived Series Havasu; Arrived Series Regal; Arrived Series Lodge; Arrived Series Myrtle; Arrived Series Kinlani; Arrived Series Hickorybear; Arrived Series Pasquin; Arrived Series Koi; Arrived Series Longbranch; Arrived Series Coolbaugh; Arrived Series Loop; Arrived Series Pickler; Arrived Series Billingswood; Arrived Series Smokey; Arrived Series Solstice; Arrived Series SuiteSpot
(Title of each class of securities issued pursuant to Regulation A)
TABLE OF CONTENTS
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CAUTIONARY STATEMENT REGARDING Forward-Looking StatementS
The information contained in this Annual Report on Form 1-K (this “Form 1-K”) includes some statements that are not historical and that are considered “forward-looking statements.” Such forward-looking statements include, but are not limited to, statements regarding our development plans for our business; our strategies and business outlook; anticipated development of our company, the manager, each series of our company and the Arrived platform (defined below); and various other matters (including contingent liabilities and obligations and changes in accounting policies, standards and interpretations). These forward-looking statements express the manager’s expectations, hopes, beliefs, and intentions regarding the future. In addition, without limiting the foregoing, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipates,” “believes,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “might,” “plans,” “possible,” “potential,” “predicts,” “projects,” “seeks,” “should,” “will,” “would” and similar expressions and variations, or comparable terminology, or the negatives of any of the foregoing, may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.
The forward-looking statements contained in this Form 1-K are based on current expectations and beliefs concerning future developments that are difficult to predict. Neither our company nor the manager can guarantee future performance, or that future developments affecting our company, the manager or the Arrived platform will be as currently anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements.
All forward-looking statements attributable to us are expressly qualified in their entirety by these risks and uncertainties. These risks and uncertainties, along with others, are detailed under the headings “Summary – Summary Risk Factors” and “Risk Factors” in Post-Qualification Amendment No. 15 to our Offering Statement on Form 1-A filed by the company with the Securities and Exchange Commission (the “Commission”), as may be amended, and in our subsequent reports and offering statements filed from time to time with the Commission. Should one or more of these risks or uncertainties materialize, or should any of the parties’ assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. You should not place undue reliance on any forward-looking statements and should not make an investment decision based solely on these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
MARKET AND OTHER INDUSTRY DATA
This Form 1-K includes market and other industry data and estimates that are based on our management’s knowledge and experience in the markets in which we operate. The sources of such data generally state that the information they provide has been obtained from sources they believe to be reliable, but we have not investigated or verified the accuracy and completeness of such information. Our own estimates are based on information obtained from our and our affiliates’ experience in the markets in which we operate and from other contacts in these markets. We are responsible for all of the disclosure in this Form 1-K, and we believe our estimates to be accurate as of the date of this Form 1-K or such other date stated herein. However, this information may prove to be inaccurate because of the method by which we obtained some of the data for the estimates or because this information cannot always be verified with complete certainty due to the limits on the availability and reliability of raw data, the voluntary nature of the data gathering process and other limitations and uncertainties. As a result, you should be aware that market and other industry data included in this Form 1-K, and estimates and beliefs based on that data, may not be reliable.
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Item 1. Description of Business
Company Overview – Our Mission
Arrived STR, LLC, a Delaware series limited liability company, was formed in July 2022 to permit public investment in individual residential properties. We believe people should have access to the wealth creation that real estate investment can provide. To support this idea, we are building what we believe to be a new model for real estate investment. We believe in passive income, conservative debt, diversification, and aligned incentives.
Arrived is a marketplace for investing in real estate. We buy residential properties, divide them into multiple interests, and offer them as investments on a per interest basis through our web-based platform. Investors can manage their risk by spreading their investments across a portfolio of homes and they can invest in real estate without needing to apply for mortgages or take on personal debt.
Arrived does all of the work of sourcing, analyzing, maintaining, and managing all of the homes that we acquire. We analyze every home investment across several financial, market, and demographic characteristics to support our acquisition decision-making. Every investment we make is an investment in the communities in which Arrived operates, alongside other like-minded individuals. As our community network grows, so does our access to investment and housing opportunities.
Arrived arranges for a property manager to operate the properties as short-term rentals for guests who can also invest through the same process as any other member of the Arrived platform, becoming part owners of the homes they’re staying in at that time. By investing together, we align incentives towards creating value for everyone involved.
Our Series LLC Structure
Each short-term rental that we acquire will be owned by a separate series of our company that we will establish to acquire that residential property. Each series may hold the specific property that it acquires directly or 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.
As a Delaware series limited liability company, the debts, liabilities, obligations and expenses incurred, contracted for or otherwise existing with respect to a particular series are segregated and enforceable only against the assets of such series, as provided under Delaware law.
We intend for each series to elect to be treated as a corporation for U.S. federal income tax purposes; however, if we determine that the real property and potential income from such real property selected for a specific series are suitable for a REIT and it would be beneficial to us and our investors to be taxed as a REIT, then the investment entity for such series may elect to be taxed as a separate REIT for U.S. federal income tax purposes.
Our company’s core business is the identification, acquisition, marketing and management of individual residential properties for the benefit of our investors. Each series is intended to own a single property.
Investment Objectives
Our investment objectives are:
● | Consistent cash flow; |
● | Long term capital appreciation with moderate to no leverage; |
● | Favorable tax treatment of REIT income and long term capital gains, if available; and |
● | Capital preservation. |
We cannot assure you that we will attain these objectives or that the value of our assets will not decrease.
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Our Investment Criteria
Our home acquisition investments are evaluated against the following primary characteristics:
● | Capitalization rates, including set-up fees and furniture, fixtures and equipment as part of the initial purchase price, greater than five percent (5%). For this purpose, the capitalization rate reflects a series property’s annual short-term rental income minus property management fees, local real estate taxes and permitting fees, property insurance, maintenance expenses, and marketing incentives, divided by the purchase price of the property; |
● | Homes with a minimum of four (4) bedrooms and two (2) bathrooms; |
● | Homes with a price range of $300,000 to $1,500,000 and a repair/improvement budget requirement of less than 20% of the home purchase price; and |
● | Locations that are highly desirable travel and short-term rental locations. |
Our Investment Process
Our investment process leverages our network of renter demand, experienced team members, and data analysis to make our investment decisions:
● | Sourcing: Arrived will use an in-house acquisition team (using industry leading analysis and screening tools) in collaboration with local real estate professionals to find and source investment opportunities. The opportunities may include individual homes listed on the MLS, bulk rental home portfolios, BFR (built-for-rent) communities, and off-market deals sourced by our staff and from leads generated from our member network. |
● | Due Diligence: Arrived evaluates potential investments against our stated investment criteria. Once a geographic market is selected, our due diligence will focus on the sub-market and the property itself, including the particularities of the rental activity within such sub-market and its effect on the value of the property. Value analysis will include projected short-term rental rates and home values, relying on a combination of first-party data, automated valuation models, or AVMs, and third party independent appraisals. Property level analysis will look at standard risk factors including condition of title, structural defects in the home, environmental issues, and other hazards such as floods and earthquakes. |
● | Investment Committee: Once our acquisition team recommends a home purchase, the investment committee will convene to review due diligence materials and issue a go/no-go decision. |
● | Property Purchase: A property will be purchased either by the manager or an affiliate of the manager and then resold to a particular series or a wholly-owned subsidiary of the series, or purchased directly by a series from a third-party seller, in accordance with the acquisition mechanics set forth below. Following acquisition of a property by a series, the property will be renovated, to the extent necessary, and then listed for guests to book for short-term stays through a third-party site, such as Airbnb or Vrbo. If a series property is renovated prior to the closing of the relevant series offering, the funds required for renovations will be forwarded to the series by the manager and repaid out of offering proceeds. |
● | Ongoing Management: Arrived will partner with one or more third party independent property management firms in each of our markets. The property management firm will maintain books and records, coordinate the listing of the property on various short-term rental sites, inspect each home and ensure that it is properly maintained, handle maintenance requests, and be responsible for guest payment and compliance. We intend that our preferred property management firms will utilize modern tech-enabled property management platforms with digital payment and communication features. |
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Our Manager
We are managed by Arrived Holdings, Inc., a Delaware corporation. Pursuant to the terms of our operating agreement, the manager will provide certain management and advisory services to us and to each of our series and their subsidiaries, if any, as well as a management team and appropriate support personnel. The manager is a technology-enabled asset management company that operates a web-based investment platform, the Arrived platform, used by our company for the offer and sale of interests in the series of our company.
Investment Strategy – Our Market Opportunity
Our investment strategy is to acquire, invest in, manage, operate, selectively leverage and sell residential properties located in vibrant, growing cities across America. We believe that these markets offer investors a blend of attractive capitalization rates and a strong prospect for long term property value appreciation.
Market Selection
We intend to focus our business efforts on lucrative destination markets and areas with core urban markets that command high short-term rental rates and strong occupancy and exhibit the following characteristics:
● | Popular with millennials; |
● | Favorable competitive landscape with respect to barriers to entry and supply/demand dynamics; |
● | Less than an hour drive from a large population center; |
● | Unique attractions, geographic features and desirable experiences; and |
● | Strong short-term rental revenue production abilities relative to the cost of real estate. |
For a brief overview of the particular geographic market in which a series property is located, see the individual series property listings in the section titled “The Series Properties Being Offered” below.
We focus on acquiring properties we believe (1) are likely to generate stable cash flows in the long term and (2) have significant possibilities for long-term capital appreciation, such as those located in neighborhoods with what we see as high growth potential and those available from sellers who are distressed or face time-sensitive deadlines.
We may enter into one or more joint ventures, tenant-in-common investments or other co-ownership arrangements for the acquisition, development or improvement of properties with third parties or affiliates of the manager, including present and future real estate investment offerings sponsored by affiliates of the manager.
Investment Decisions and Asset Management
Within our investment policies and objectives, the manager will have discretion with respect to the selection of specific investments and the purchase and sale of our properties. We believe that successful real estate investment requires the implementation of strategies that permit favorable purchases, effective asset management and timely disposition of those assets. As such, we have developed a disciplined investment approach that combines the experience of our manager with a structure that emphasizes thorough market research, stringent underwriting standards and an extensive down-side analysis of the risks of each investment. The approach also includes active and aggressive management of each asset acquired.
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To execute our disciplined investment approach, the manager will take responsibility for the business plan of each investment. The following practices summarize our investment approach:
● | Local Market Research – Our manager will extensively research the acquisition and underwriting of each transaction, utilizing both real time market data and the transactional knowledge and experience of our network of professionals and in market relationships. |
● | Underwriting Discipline – Our manager will follow a tightly controlled and managed process to examine all elements of a potential investment, including, with respect to real property, its location, income-producing capacity, prospects for long-range appreciation, tax considerations and liquidity. |
● | Risk Management – Risk management will be a fundamental principle in the management of each of our properties. Operating or performance risks arise at the investment level and often require real estate operating experience to cure. Our manager will review the operating performance of investments against projections and provide the oversight necessary to detect and resolve issues as they arise. |
● | Asset Management – Prior to the purchase of a property, our manager will develop a property business strategy which will be customized based on the acquisition and underwriting data. This is a forecast of the action items to be taken and the capital needed to achieve the anticipated returns. The manager will review asset business strategies regularly to anticipate changes or opportunities in the market during a given phase of a real estate cycle. |
Investments in Real Property
Our investment in real estate generally will take the form of holding fee title or a long-term leasehold estate. We will acquire such interests either directly or indirectly through limited liability companies or through investments in joint ventures, partnerships or other co-ownership arrangements with third parties, including developers of the properties, or with affiliates of the manager.
Our obligation to purchase any property generally will be conditioned upon the delivery and verification of certain documents from the seller or developer, including, where appropriate:
● | plans and specifications; |
● | evidence of marketable title subject to such liens and encumbrances as are acceptable to the manager; |
● | auditable financial statements covering recent operations of properties having operating histories; and |
● | title and liability insurance policies. |
We may seek to enter into arrangements with the seller or developer of a property whereby the seller or developer agrees that, if during a stated period the property does not generate a specified cash flow, the seller or developer will pay in cash to us a sum necessary to reach the specified cash flow level, subject in some cases to negotiated dollar limitations. In determining whether to purchase a particular property, we may, in accordance with customary practices, obtain an option on such property. The amount paid for an option, if any, is normally surrendered if the property is not purchased and is normally credited against the purchase price if the property is purchased. The terms and conditions of any rental agreement that we enter into with our guests may vary substantially; however, we represent that all of our rental agreements will be standardized agreements customarily used under the terms of service of the applicable short-term rental platform on which we list the property for short-term rental. Such standardized rental agreements generally have terms of fewer than thirty (30) days.
In purchasing, developing and renting properties, we will be subject to risks generally incident to the ownership of real estate.
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Investment Process
The manager has the authority to make all the decisions regarding our investments consistent with the investment objectives and leverage policies approved by the manager and subject to the limitations in the operating agreement.
The manager will focus on the sourcing, acquisition and management of residential properties. It will source our investments from former and current financing and investment partners, third-party intermediaries, competitors looking to share risk and investment, and securitization or lending departments of major financial institutions.
In selecting investments for us, the manager will utilize the manager’s investment and underwriting process, which focuses on ensuring that each prospective investment is being evaluated appropriately. In addition to the specific investment criteria listed above, our manager will consider the following factors when evaluating prospective investment opportunities:
● | macroeconomic conditions that may influence operating performance; |
● | real estate market factors that may influence real estate valuations, real estate financing or the economic performance of real estate generally; |
● | fundamental analysis of the real estate, including the local short-term rental market, regulations related to short-term rentals, zoning, operating costs and the asset’s overall competitive position in its market; |
● | real estate and short-term rental market conditions affecting the real estate; |
● | the cash flow in place and projected to be in place over the expected hold period of the real estate; |
● | the appropriateness of estimated costs and timing associated with capital improvements of the real estate; |
● | a valuation of the investment, investment basis relative to its value and the ability to liquidate an investment through a sale or refinancing of the real estate; |
● | review of third-party reports, including appraisals, engineering and environmental reports; |
● | physical inspections of the real estate and analysis of markets; and |
● | the overall structure of the investment and rights in the transaction documentation. |
If a potential investment meets the manager’s underwriting criteria, the manager will review the proposed transaction structure, including, with respect to joint ventures, distribution and waterfall criteria, governance and control rights, buy-sell provisions and recourse provisions. The manager will evaluate our position within the overall capital structure and our rights in relation to other partners or capital tranches. The manager will analyze each potential investment’s risk-return profile and review financing sources, if applicable, to ensure that the investment fits within the parameters of financing facilities and to ensure performance of the real estate asset.
Leverage Policy
We may employ leverage to enhance total returns to our investors through a combination of senior financing on our real estate acquisitions, secured facilities, and capital markets financing transactions. We will seek to secure conservatively structured leverage that is long-term, non-recourse, non-mark-to-market financing to the extent obtainable on a cost effective basis. To the extent leverage is employed it may come either in the form of government-sponsored programs or other long-term, non-recourse, non-mark-to-market financing. The manager may from time to time modify our leverage policy in its discretion. However, it is our policy to not borrow more than 70% of the greater of cost (before deducting depreciation or other non-cash reserves) or fair market value of our assets. We cannot exceed the leverage limit of our leverage policy unless any excess in borrowing over such level is approved by the manager. To the extent a series does not employ leverage to fund the initial purchase of an asset, the series may subsequently determine to obtain financing for the asset in accordance with this leverage policy. In such case, unless the financing (or any other refinancing) proceeds are needed, in the manager’s discretion, to fund the operations of an asset or reserves, the manager may determine to distribute all or a portion of such proceeds to investors.
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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 the offering circular as it may be amended to include new series offerings. In each such offering circular, information relating to the series property being offered, such as the description and specifications of the series property, the purchase price of the series property and the relevant terms of purchase, will be disclosed.
It is not anticipated that a series will own any assets other than its 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.
A series may acquire its property either from an unaffiliated third party or from an affiliate. For a detailed description of our acquisition methods, please refer to Post-Qualification Amendment No. 15 to our Offering Statement on Form 1-A, filed with the Securities and Exchange Commission on August 3, 2023.
Operating Policies
Credit Risk Management. We may be exposed to various levels of credit and special hazard risk depending on the nature of our assets. The manager and its executive officers will review and monitor credit risk and other risks of loss associated with each investment. The manager will monitor the overall credit risk and levels of provision for loss.
Interest Rate Risk Management. We will follow an interest rate risk management policy intended to mitigate the negative effects of major interest rate changes. We intend to minimize our interest rate risk from borrowings by attempting to “match-fund,” which means the manager will seek to structure the key terms of our borrowings to generally correspond with the expected holding period of our assets.
Equity Capital Policies. Under the operating agreement, we have the authority to issue an unlimited number of additional interests or other securities. After your purchase in any series offering, the manager may elect to: (i) sell additional securities in future private offerings, or (ii) issue additional securities in public offerings. To the extent we issue additional equity interests after your purchase in an offering, your percentage ownership interest in us will be diluted. In addition, depending upon the terms and pricing of any additional offerings and the value of our investments, you may also experience dilution in the book value and fair value of your interests.
Additional Borrowings. We expect each series may seek, as applicable, to finance or refinance any outstanding indebtedness with an additional mortgage or other debt financing, including with either an affiliate or a third party. We expect that any third-party mortgage and/or other debt instruments that a series, or the Company on behalf of a series, enters into in connection with a financing or refinancing of a property will be secured by a security interest in the title of such property and any other assets of the series.
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Disposition Policies
We intend to hold and manage the properties we acquire for a period of five to fifteen years. As each of our properties reaches what we believe to be its optimum value, we will consider disposing of the property. The determination of when a particular 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, local regulatory changes, environmental and other factors that may reduce the desirability of short-term rentals in a particular market, and how operating history may impact the potential sales price. The manager may determine that it is in the best interests of interest holders to sell a property earlier than five years or to hold a property for more than fifteen years.
When we determine to sell a particular property, we will seek to achieve a selling price that maximizes the capital appreciation for investors based on then-current market conditions. We cannot assure you that this objective will be realized.
Following the sale of a property, the manager will distribute the proceeds of such sale, net of the property disposition fee as described below, to the interest holders of the applicable series (after payment of any accrued liabilities or debt on the property or of the series at that time).
Property Disposition Fee
Upon the disposition and sale of a series property, each series will be charged a market rate property disposition fee that will cover property sale expenses such as brokerage commissions, and title, escrow and closing costs. It is expected that this disposition fee charged to a series will range from six to seven percent of the property sale price. To the extent that the actual property disposition fees are less than the amount charged to the series, the manager will receive the difference as income.
Description of the Property Management Agreement
The Company will appoint an affiliate of the manager or a third-party property management company to serve as property manager to manage the underlying property of each series pursuant to a series specific property management agreement.
The services provided by the property manager will include:
● | facilitating rentals via listing on third-party sites, such as Airbnb and Vrbo; | |
● | creating policies for the collection of rental income; | |
● | managing inventory, cleaning and maintenance for rental property furnishings and supplies; | |
● | investigating, selecting, and, on behalf of the applicable series, engaging and conducting business with such persons as the property manager deems necessary to ensure the proper performance of its obligations under the property management agreement, including, but not limited to, consultants, insurers, insurance agents, maintenance providers, bookkeepers and accountants and any and all persons acting in any other capacity deemed by the property manager necessary or desirable for the performance of any of the services under the property management agreement; and |
● | developing standards for the care of the underlying properties. |
The property manager will have sole authority and complete discretion over the care, custody, maintenance and management of the series property for each series and may take any action that it deems necessary or desirable in connection with each series property, subject to the limits set for in the applicable property management agreement. The property manager may delegate all or any of its duties under the applicable property management agreement to a third-party property manager. The property manager will not have the authority to sell, transfer, encumber or convey any series property.
Each property management agreement will terminate on the earlier of: (i) the manager’s discretion to terminate a property management agreement at pre-determined renewal periods or by paying a termination fee, (ii) after the date on which the relevant series property has been liquidated and the obligations connected to the series property (including contingent obligations) have been terminated, (iii) the removal of the manager as managing member of our company and thus of all series (if the property manager is the manager), (iv) upon notice by one party to the other party of a party’s material breach of a property management agreement or (v) such other date as agreed between the parties to the property management agreement.
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Each series may indemnify the property manager out of its assets against all liabilities and losses (including amounts paid in respect of judgments, fines, penalties or settlement of litigation, including legal fees and expenses) to which it becomes subject by virtue of serving as property manager under the respective property management agreements with respect to any act or omission that has not been determined by a final, non-appealable decision of a court, arbitrator or other tribunal of competent jurisdiction to constitute fraud, willful misconduct or gross negligence. Such obligation will be set forth in the relevant property management agreement.
Property Management Fee
The company will appoint an affiliate of the manager or a third-party property management company to serve as property manager to manage the property of each series pursuant to a property management agreement. The fee arrangements for each property management company are set forth below:
Misfit Homes LLC
Initially, as compensation for the services provided by the property manager, each series will be charged a property management fee equal to fifteen percent (15%) of all rents and fees as remitted to the series on a monthly basis. Following stabilization, as compensation for the services provided by the property manager, each series will be charged a property management fee equal to fifteen percent (15%) of all rents and fees as remitted to the series on a monthly basis and paid to the property manager pursuant to the property management agreement. Such property management fee will increase to twenty percent (20%) of all rents and fees immediately following the time at which the net operating income of the series in a calendar year exceeds eight percent (8%) of the sum of the purchase price of the series property, the related furniture, fixtures and equipment and any setup costs for such series, each as disclosed below under “Use of Proceeds to the Issuer” for such series.
Old Town Rentals LLC
Initially, as compensation for the services provided by the property manager, each series will be charged a property management fee equal to fifteen percent (15%) of all rents and fees as remitted to the series on a monthly basis. Following stabilization, as compensation for the services provided by the property manager, each series will be charged a property management fee equal to fifteen percent (15%) of all rents and fees as remitted to the series on a monthly basis and paid to the property manager pursuant to the property management agreement. Such property management fee will increase to twenty percent (20%) of all rents and fees immediately following the time at which the net operating income of the series in a calendar year exceeds nine percent (9%) of the sum of the purchase price of the series property, the related furniture, fixtures and equipment and any setup costs for such series, each as disclosed below under “Use of Proceeds to the Issuer” for such series.
Roseus Hospitality Group LLC
Initially, as compensation for the services provided by the property manager, each series will be charged a property management fee equal to fifteen percent (15%) of all rents and fees as remitted to the series on a monthly basis. Following stabilization, as compensation for the services provided by the property manager, each series will be charged a property management fee equal to fifteen percent (15%) of all rents and fees as remitted to the series on a monthly basis and paid to the property manager pursuant to the property management agreement. Such property management fee will increase to twenty percent (20%) of all rents and fees immediately following the time at which the net operating income of the series in a calendar year exceeds ten percent (10%) of the sum of the purchase price of the series property, the related furniture, fixtures and equipment and any setup costs for such series, each as disclosed below under “Use of Proceeds to the Issuer” for such series.
Alpha Geek Capital 2 LLC
As compensation for the services provided by the property manager, each series will be charged a property management fee equal to twenty percent (20%) of all rents and fees as remitted to the series on a monthly basis and paid to the property manager pursuant to the property management agreement.
Southern Comfort Cabin Rentals, LLC
As compensation for the services provided by the property manager, each series will be charged a property management fee equal to twenty-five percent (25%) of all rents and fees as remitted to the series on a monthly basis and paid to the property manager pursuant to the property management agreement.
AvantStay, Inc.
As compensation for the services provided by the property manager, each series will be charged a property management fee equal to twenty percent (20%) of all rents and fees as remitted to the series on a monthly basis and paid to the property manager pursuant to the property management agreement.
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Cabins in Broken Bow
As compensation for the services provided by the property manager, each series will be charged a property management fee equal to twenty-five percent (25%) of all rents and fees as remitted to the series on a monthly basis and paid to the property manager pursuant to the property management agreement.
Arrived Property Manager, LLC
As compensation for the services provided by the affiliated property manager, each series will be charged a property management fee equal to twenty percent (20%) of all rents and fees as remitted to the series on a monthly basis and paid to the property manager pursuant to the property management agreement.
The property manager for each Series is specified in the latest Offering Circular under "The Series Properties Being Offered.”
Asset Management Fee
The manager will receive from a series an annual asset management fee equal to five percent (5%) of the gross revenues, less maintenance and restocking expenses, applicable to that series, paid out of the series’ net operating rental income.
Operating Expenses
Each series of our company will be responsible for the costs and expenses attributable to the activities of our company related to such series including, but not limited to:
● | any and all fees, costs and expenses incurred in connection with the management of a series property and preparing any reports and accounts of each series, including, but not limited to, audits of a series’ annual financial statements, tax filings and the circulation of reports to investors; |
● | any and all insurance premiums or expenses; |
● | any withholding or transfer taxes imposed on our company or a series or any of the members; |
● | any governmental fees imposed on the capital of our company or a series; |
● | any legal fees and costs (including settlement costs) arising in connection with any litigation or regulatory investigation instituted against our company, a series or a property manager in connection with the affairs of our company or a series, or relating to legal advice directly relating to our company’s or a series’ legal affairs; |
● | any fees, costs and expenses of a third-party registrar and transfer agent appointed by the manager in connection with a series; |
● | any indemnification payments; |
● | any costs, fees, or payments related to interest or financing expenses for a given series; |
● | any potential HOA or association fees related to a given series; |
● | any ongoing regulatory or permitting fees related to operating a short-term rental business; |
● | the costs of any third parties engaged by the manager in connection with the operations of our company or a series; and |
● | any similar expenses that may be determined to be Operating Expenses, as determined by the manager in its reasonable discretion. |
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The manager will bear its own expenses of an ordinary nature.
If the Operating Expenses exceed the amount of revenues generated from a series property and cannot be covered by any Operating Expense reserves on the balance sheet of such series property, the manager may (a) pay such Operating Expenses and not seek reimbursement, (b) loan the amount of the Operating Expenses to the applicable series, on which the manager may impose a reasonable rate of interest, and be entitled to reimbursement of such amount from future revenues generated by such series property (which we refer to as Operating Expenses Reimbursement Obligation(s)), and/or (c) cause additional interests to be issued in such series in order to cover such additional amounts.
Allocations of Expenses
To the extent relevant, Offering Expenses, Acquisition Expenses, Operating Expenses, revenue generated from series properties and any indemnification payments made by the manager will be allocated among the various series interests in accordance with the manager’s allocation policy set forth below. The allocation policy requires the manager to allocate items that are allocable to a specific series to be borne by, or distributed to (as applicable), the applicable series. If, however, an item is not allocable to a specific series but to our company in general, it will be allocated pro rata based on the value of the series properties or the number of properties, as reasonably determined by the manager or as otherwise set forth in the allocation policy. By way of example, as of the date hereof it is anticipated that revenues and expenses will be allocated as follows:
Revenue or Expense Item | Details | Allocation Policy (if revenue or expense is not clearly allocable to a specific series property) | ||
Revenue | Each of the series will receive revenue in the form of payments from guests staying in the series property. | Allocable directly to the applicable series property | ||
Acquisition Expenses | Appraisal and valuation fees (whether incurred pre- or post-closing) | Allocable directly to the applicable series property | ||
Pre-purchase inspection | Allocable directly to the applicable series property | |||
Closing costs | Allocable directly to the applicable series property | |||
Interest expense, if any, when an underlying series property is purchased by a series through a loan prior to the closing of a series offering | Allocable directly to the applicable series property | |||
Offering Expenses | Legal expenses related to the preparation of regulatory paperwork (offering materials) for a series | Not allocable; to be borne by the manager | ||
Audit and accounting work related to the regulatory paperwork or a series | Allocable directly to the applicable series property | |||
Compliance work including diligence related to the preparation of a series | Not allocable; to be borne by the manager | |||
Insurance of a series property as at time of acquisition | Allocable directly to the applicable series property | |||
Broker fees other than cash commissions (e.g., expense reimbursement) Brokerage fee payable per filing of a Form 1-A Post-Qualification Amendment ($1,000 per 1-A POS) |
Not allocable; to be borne by the manager Allocable directly to the applicable series | |||
Preparation of marketing materials | Not allocable; to be borne by the manager | |||
Operating Expense | Property management fees | Allocable directly to the applicable series property | ||
Asset management fees | Allocable directly to the applicable series property | |||
Audit and accounting work related to the regulatory paperwork of a series | Allocable pro rata to the number of series properties | |||
Security (e.g., surveillance and patrols) | Allocable pro rata to the value of each series property | |||
Insurance | Allocable directly to the applicable series property | |||
Maintenance | Allocable directly to the applicable series property | |||
Property marketing concessions, including special offers and terms | Allocable directly to the applicable series property | |||
Property disposition fee | Allocable directly to the applicable series property | |||
Interest expense, if any, when a series property holds any type of term loan or line of credit | Allocable directly to the applicable series property | |||
Audit, accounting and bookkeeping related to the reporting requirements of a series | Allocable pro rata to the number of series properties | |||
Indemnification Payments | Indemnification payments under the operating agreement | Allocable pro rata to the value of each series property |
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Notwithstanding the foregoing, the manager may revise and update the allocation policy from time to time in its reasonable discretion without further notice to the investors.
The Arrived Platform
Arrived Holdings, Inc., the manager, owns and operates a web-based and mobile accessible investment platform, the Arrived platform. Through the use of the Arrived platform, investors can browse and screen the investments offered by each of our series and electronically sign legal documents to purchase series interests.
Competition
There are a number of established and emerging competitors in the real estate investment platform market. The market is fragmented, rapidly evolving, competitive, and with relatively low barriers to entry. We consider our competitive differentiators in our market to be:
● | our focus on the residential short-term rental market; |
● | the ability for users to select which rental properties they would like to invest in; |
● | consistent rental income with use of moderate amounts of leverage; |
● | our unique investment strategy and approach to market selection; and |
● | lower minimum investment amounts; and |
We face competition primarily from other real estate investment platform companies such as Here Collection, LLC and Fundrise LLC, as well as a range of emerging new entrants. In order to compete, we work tirelessly to innovate and improve our products, while at the same time preserving our unique culture and approach.
Conflicts of Interest
Conflicts of interest may exist or could arise in the future with the manager and its affiliates and our officers and/or directors who are also officers and/or directors of the manager. Conflicts may include, without limitation:
● | Each of our executive officers will also serve as an officer of other the manager and its affiliated entities. As a result, these persons will have a conflict of interest with respect to our agreements and arrangements with the manager and/or affiliates of the manager, which were not negotiated at arm’s length, and their terms may not have been as favorable to us as if they had been negotiated at arm’s length with an unaffiliated third party. The manager is not required to make available any particular individual personnel to us. |
● | Our executive officers will not be required to devote a specific amount of time to our affairs. As a result, we cannot provide any assurances regarding the amount of time the manager will dedicate to the management of our business. Accordingly, we may compete with the manager and any of its current and future programs, funds, vehicles, managed accounts, ventures or other entities owned and/or managed by the manager or one of its affiliates, which we refer to collectively as the manager-sponsored vehicles, for the time and attention of these officers in connection with our business. We may not receive the level of support and assistance that we might otherwise receive if we were internally managed. |
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● | Some or all of the series will acquire their properties from the manager or from an affiliate of the manager. Prior to a sale to a series, the manager will acquire a property, repair and improve the property, and cause the property manager to list the property on a third-party short-term rental platform, such as Airbnb or Vrbo. The manager will then resell the property to a series at a value determined by the manager or affiliate of the manager, which may reflect a premium over the manager’s investment in the property. Accordingly, because the manager will be an interested party with respect to a sale of a property that it owns to a series, the manager’s interests in such a sale may not be aligned with the interests of the series or its investors. There can be no assurance that a property purchase price that a series will pay to the manager will be comparable to that which a series might pay to an unaffiliated third party property seller. |
● | The manager may in the future form or sponsor additional manager-sponsored vehicles, which could have overlapping investment objectives. To the extent we have sufficient capital to acquire a property that the manager has determined to be suitable for us, that property will be allocated to us. |
● | The manager may conduct promotions allowing investors in a series to rent such series property for a reduced rate in an effort to market our company. As a result, rental income earned by the property would decrease and the property could experience decreased performance. |
● | The manager does not assume any responsibility beyond the duties specified in the operating agreement and will not be responsible for any action of our board of directors in following or declining to follow the manager’s advice or recommendations. The manager’s liability is limited under the operating agreement and we have agreed to reimburse, indemnify and hold harmless the manager and its affiliates, with respect to all expenses, losses, damages, liabilities, demands, charges and claims in respect of, or arising from acts or omissions of, such indemnified parties not constituting bad faith, willful misconduct, gross negligence or reckless disregard of the manager’s duties under the operating agreement which has a material adverse effect on us. As a result, we could experience poor performance or losses for which the manager would not be liable. |
Employees
Our company does not have any employees. All of the officers and directors of our company are employees of the manager.
Legal Proceedings
None of our company, any series, the manager, or any director or executive officer of our company or the manager is presently subject to any material legal proceedings.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operation
Overview
Arrived STR, LLC, a Delaware series limited liability company, was formed in July 2022 to permit public investment in individual residential properties. We believe people should have access to the wealth creation that real estate investment can provide. We believe in passive income, conservative debt, diversification, and aligned incentives.
Arrived is a marketplace for investing indirectly in real estate. We buy residential properties, divide them into multiple interests, and offer them as investments on a per interest basis through our web-based platform. Investors can manage their risk by spreading their investments across a portfolio of homes and they can invest in real estate without needing to apply for mortgages or take on personal debt.
Arrived does all of the work of sourcing, analyzing, maintaining, and managing all of the residential properties that we acquire. We analyze every property investment across several financial, market, and demographic characteristics to support our acquisition decision-making. Every investment we make is an investment in the communities in which Arrived operates, alongside other like-minded individuals. As our community network grows, so does our access to investment and housing opportunities.
Arrived arranges for a property manager to operate the properties as short-term rentals for guests who can also invest through the same process as any other member of the Arrived Platform, becoming part owners of the homes they’re staying in at that time. By investing together, we align incentives towards creating value for everyone.
Since its formation in July 2022, our company has been engaged primarily in acquiring properties for its series offerings, developing the financial, offering and other materials to facilitate fundraising, and taking the steps necessary to effectuate the series offerings and management of the associated series properties. As of December 31, 2023, our company has acquired 29 properties.
Emerging Growth Company
We may elect to become a public reporting company under the Exchange Act. If we elect to do so, we will be required to publicly report on an ongoing basis as an emerging growth company, as defined in the JOBS Act, under the reporting rules set forth under the Exchange Act. For so long as we remain an emerging growth company, we 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:
● | not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act; |
● | being permitted to comply with reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements; and |
● | being exempt from the requirement to hold a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. |
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 may elect 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 would expect to take advantage of these reporting exemptions until we are no longer an emerging growth company. We would 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 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 series 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 billion in non-convertible debt during the preceding three-year period.
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Distributions
The manager has sole discretion in determining what distributions of Free Cash Flow, if any, are made to interest holders except as otherwise limited by law or the operating agreement. Our company expects the manager to make distributions of any free cash flow on a monthly or other periodic basis as determined by the manager. However, the manager may change the timing of distributions in its sole discretion. Investors will be required to update their personal information on a regular basis to make sure they receive all allocated distributions.
Critical Accounting Policies
Our accounting policies will conform with GAAP. The preparation of financial statements in conformity with GAAP will require us to use judgment in the application of accounting policies, including making estimates and assumptions. These judgments may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. We intend to make these estimates and assumptions in an appropriate manner and in a way that accurately reflects our financial condition. We will continually test and evaluate our estimates and assumptions using our historical knowledge of the business, as well as other factors, to ensure that they are reasonable for reporting purposes. However, actual results may differ from our estimates and assumptions.
We believe our critical accounting policies govern the significant judgments and estimates used in the preparation of our financial statements. Please refer to Note 2, Summary of Significant Accounting Policies, included in the financial statements, for a more thorough discussion of our accounting policies and procedures.
Operating Results
Revenues
Revenues are generated at the series level and are derived from leases on the series property. All revenues generated by each series for the year ended December 31, 2023 and for the period July 11, 2022 (date of inception) through December 31, 2022 are listed in the table below. Such amounts are based on the audited financial statements of the company and each series included in this Annual Report on Form 1-K:
Series Name | December 31, 2023 | December 31, 2022 | ||||||
Ace | $ | 100,643 | 4,370 | |||||
Billingswood | 2,078 | - | ||||||
Cactus | 103,996 | 4,812 | ||||||
Cardinal | 167,397 | 2,792 | ||||||
Coolbaugh | 21,319 | - | ||||||
Hammock | 71,582 | 2,331 | ||||||
Havasu | 54,417 | - | ||||||
Hickorybear | 31,130 | - | ||||||
Kinlani | 54,125 | - | ||||||
Koi | 7,773 | - | ||||||
Lakeridge | 32,167 | - | ||||||
Lodge | 53,948 | - | ||||||
Longbranch | 42,510 | - | ||||||
Loop | 13,555 | - | ||||||
Mirage | 43,141 | - | ||||||
Myrtle | 22,604 | - | ||||||
Oasis | 80,161 | 13,235 | ||||||
Opry | 62,687 | - | ||||||
Orchard | 25,927 | 1,109 | ||||||
Palm | 58,730 | - | ||||||
Pasquin | 19,016 | - | ||||||
Pickler | 45,636 | - | ||||||
Pointbreak | 30,904 | - | ||||||
Regal | 77,665 | - | ||||||
Serenity | 119,354 | - | ||||||
Smokey | 24,222 | - | ||||||
Solstice | 3,099 | - | ||||||
Sugarcreek | 11,780 | - | ||||||
SuiteSpot | 34,081 | - | ||||||
$ | 1,415,647 | $ | 28,649 |
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Operating Expenses
The operating expenses incurred prior to the closing of an offering related to any of the series are being paid by our manager and are reimbursed by such series out of the gross offering proceeds upon closing of the relevant series offering. Such operating expenses include real estate taxes, property insurance, Home Ownership Association (HOA) fees, repair and maintenance costs, and FF&E not capitalized. Upon closing, each series becomes responsible to fund its own operating expenses.
For the years ended December 31, 2023 and for the period July 11, 2022 (date of inception) through December 31, 2022, at the close of the respective offerings for the series, each individual series became responsible to fund its own operating expenses. The following table summarizes the total operating expenses incurred by each series for the years ended December 31, 2023 and for the period July 11, 2022 (date of inception) through December 31, 2022. Such amounts are based on the audited financial statements of the company and each series included in this Annual Report on Form 1-K:
Operating Expenses | ||||||||||||||||||||||||
December 31, 2023 | December 31, 2022 | |||||||||||||||||||||||
Series Name | Operating Expenses | Depreciation | Total Expenses | Operating Expenses | Depreciation | Total Expenses | ||||||||||||||||||
Ace | $ | 58,263 | $ | 40,493 | $ | 98,756 | $ | 63,214 | $ | 5,911 | $ | 69,126 | ||||||||||||
Billingswood | 137,985 | 18,241 | 156,226 | - | - | - | ||||||||||||||||||
Cactus | 57,904 | 37,923 | 95,827 | 61,823 | 6,815 | 68,638 | ||||||||||||||||||
Cardinal | 93,000 | 41,689 | 134,689 | 54,868 | 3,385 | 58,253 | ||||||||||||||||||
Coolbaugh | 99,589 | 20,700 | 120,289 | - | - | - | ||||||||||||||||||
Hammock | 94,250 | 25,027 | 119,277 | 129,411 | 4,228 | 133,639 | ||||||||||||||||||
Havasu | 51,903 | 40,787 | 92,690 | 48,009 | 789 | 48,799 | ||||||||||||||||||
Hickorybear | 110,097 | 22,056 | 132,154 | - | - | - | ||||||||||||||||||
Kinlani | 59,776 | 24,237 | 84,014 | - | - | - | ||||||||||||||||||
Koi | 77,036 | 19,140 | 96,176 | - | - | - | ||||||||||||||||||
Lakeridge | 43,881 | 26,628 | 70,509 | 20,766 | 263 | 21,029 | ||||||||||||||||||
Lodge | 108,409 | 46,001 | 154,410 | 28,990 | 1,302 | 30,292 | ||||||||||||||||||
Longbranch | 86,761 | 24,965 | 111,726 | - | - | - | ||||||||||||||||||
Loop | 72,138 | 18,435 | 90,573 | - | - | - | ||||||||||||||||||
Mirage | 58,907 | 20,142 | 79,048 | 150,371 | 2,870 | 153,241 | ||||||||||||||||||
Myrtle | 90,708 | 19,096 | 109,804 | 2,850 | - | 2,850 | ||||||||||||||||||
Oasis | 43,787 | 41,027 | 84,815 | 25,575 | 9,175 | 34,750 | ||||||||||||||||||
Opry | 100,047 | 26,046 | 126,093 | 2,850 | - | 2,850 | ||||||||||||||||||
Orchard | 23,837 | 31,571 | 55,408 | 68,021 | 7,476 | 75,497 | ||||||||||||||||||
Palm | 97,966 | 30,177 | 128,143 | 82,344 | 145 | 82,489 | ||||||||||||||||||
Pasquin | 103,478 | 20,732 | 124,210 | - | - | - | ||||||||||||||||||
Pickler | 59,405 | 29,398 | 88,803 | - | - | - | ||||||||||||||||||
Pointbreak | 66,246 | 20,491 | 86,737 | 97,062 | 2,687 | 99,748 | ||||||||||||||||||
Regal | 45,593 | 28,008 | 73,600 | 23,241 | - | 23,241 | ||||||||||||||||||
Serenity | 81,738 | 50,494 | 132,231 | 26,530 | 3,985 | 30,515 | ||||||||||||||||||
Smokey | 68,689 | 20,415 | 89,104 | - | - | - | ||||||||||||||||||
Solstice | 11,909 | 11,783 | 23,692 | - | - | - | ||||||||||||||||||
Sugarcreek | 54,967 | 18,663 | 73,630 | 4,722 | 355 | 5,077 | ||||||||||||||||||
SuiteSpot | 136,713 | 19,963 | 156,676 | - | - | - | ||||||||||||||||||
$ | 2,194,983 | $ | 794,326 | $ | 2,989,309 | $ | 890,648 | $ | 49,387 | $ | 940,035 |
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Other Expenses (Income)
During the years ended December 31, 2023 and during the period July 11, 2022 (date of inception) through December 31, 2022, each series incurred interest expenses. The following table summarizes the total of such expenses incurred by each series during the years ended December 31, 2023 and for the period July 11, 2022 (date of inception) through December 31, 2022. Such amounts are based on the audited financial statements of the company and each series included in this Annual Report on Form 1-K:
OTHER EXPENSES
Series Name | December 31, 2023 | December 31, 2022 | ||||||
Ace | $ | 27,101 | $ | 8,682 | ||||
Billingswood | - | - | ||||||
Cactus | 31,927 | 7,456 | ||||||
Cardinal | 19,210 | 6,211 | ||||||
Coolbaugh | - | - | ||||||
Hammock | 17,573 | 2,748 | ||||||
Havasu | 30,672 | 3,436 | ||||||
Hickorybear | 7,880 | - | ||||||
Kinlani | 14,213 | - | ||||||
Koi | - | - | ||||||
Lakeridge | 19,059 | 2,661 | ||||||
Lodge | - | - | ||||||
Longbranch | - | - | ||||||
Loop | - | - | ||||||
Mirage | - | - | ||||||
Myrtle | - | - | ||||||
Oasis | 32,297 | 8,613 | ||||||
Opry | 32,710 | - | ||||||
Orchard | - | - | ||||||
Palm | 20,210 | 2,273 | ||||||
Pasquin | - | - | ||||||
Pickler | - | - | ||||||
Pointbreak | 12,319 | 355 | ||||||
Regal | 35,488 | 1,107 | ||||||
Serenity | 32,193 | 5,864 | ||||||
Smokey | - | - | ||||||
Solstice | 7,844 | - | ||||||
Sugarcreek | 13,633 | 2,048 | ||||||
SuiteSpot | 29,731 | - | ||||||
$ | 384,059 | $ | 51,453 |
Liquidity and Capital Resources
From inception, our manager has financed the business activities of each series. Upon the first closing of a particular series offering, the manager is reimbursed out of the proceeds of the relevant offering. Until such time as the series have the capacity to generate cash flows from operations, our manager may cover any deficits through capital contributions, which may be reimbursed upon closing of the relevant offering.
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Cash and Cash Equivalent Balances
Cash is held at the series level. The following table summarizes the cash and cash equivalents held by each series as of December 31, 2023 and December 31, 2022. Such amounts are based on the audited financial statements of the company and each series included in this Annual Report on Form 1-K:
Series Name | December 31, 2023 | December 31, 2022 | ||||||
Ace | $ | 12,762 | $ | 100,279 | ||||
Billingswood | 5,522 | - | ||||||
Cactus | 35,462 | 190,955 | ||||||
Cardinal | 26,945 | 98,524 | ||||||
Coolbaugh | 10,324 | - | ||||||
Hammock | 1,561 | 190,006 | ||||||
Havasu | 15,342 | 189,143 | ||||||
Hickorybear | 28,072 | - | ||||||
Kinlani | 59,888 | - | ||||||
Koi | - | - | ||||||
Lakeridge | 20,120 | 122,770 | ||||||
Lodge | 43,291 | 866 | ||||||
Longbranch | 53,534 | - | ||||||
Loop | 9,253 | - | ||||||
Mirage | 18,754 | 133,427 | ||||||
Myrtle | 25,351 | - | ||||||
Oasis | 6,434 | 619 | ||||||
Opry | 79,528 | 187,186 | ||||||
Orchard | 26,625 | 225,298 | ||||||
Palm | 5,917 | 228,689 | ||||||
Pasquin | 18,902 | - | ||||||
Pickler | 81,534 | - | ||||||
Pointbreak | 88,877 | 137,269 | ||||||
Regal | 55,625 | 1,000 | ||||||
Serenity | 78,386 | 260,066 | ||||||
Smokey | 33,755 | - | ||||||
Solstice | 126,133 | - | ||||||
Sugarcreek | 5,117 | 96,948 | ||||||
SuiteSpot | 26,062 | - | ||||||
$ | 999,076 | $ | 2,163,045 |
Plan of Operations
We intend to hold and manage the series properties for five to fifteen years during which time we will operate the series properties as short-term rental income properties. During this period, we intend to distribute any Free Cash Flow to investors.
As each of our properties reaches what we believe to be its optimum value, we will consider disposing of the property. The determination of when a particular 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, local regulatory changes, environmental and other factors that may reduce the desirability of short-term rentals in a particular market, and how operating history may impact the potential sales price. The manager may determine that it is in the best interests of members to sell a property earlier than five years or to hold a property for more than fifteen years.
We plan to launch a number of additional series and related offerings in the next twelve months. As of the current date, we do not know how many series we will be offering, however, in any case, the aggregate dollar amount of all of the series interests that we will sell within the 12-month period following qualification of our Form 1-A by the Commission will not exceed the maximum amount allowed under Regulation A. It is anticipated that the proceeds from any offerings closed during the next twelve months will be used to acquire additional properties.
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Our Policies for Approving Short Term Rentals
We intend to partner with various Short Term Rental Property Managers to align our vacation rental properties with vacationing tenants via their own platform, AirBnB, VBRO, and or similar. The applicants will provide payment for the short term rental upfront via the platforms listed, plus any additional deposits required, and the Property Manager will pay the net proceeds less of total rental revenue less operating expenses.
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:
- | Recent increases in interest rates may have a negative effect on the demand for our offerings due to the attractiveness of alternative investments. |
- | The continuing increase in prices in the United States housing market may result in difficulties in sourcing properties and meeting demand for our offerings. |
- | Continued increases in remote work arrangements may lead to greater rental activity in our target markets. |
Recent Developments
Revenues
Revenues are generated at the series level and are derived from short term rentals on the series property. All revenues generated by any series during the period January 1, 2024 through March 31, 2024 are listed below. For the avoidance of doubt, the below amounts are unaudited.
Series Name | March 31, 2024 | |||
Ace | $ | 52,604 | ||
Billingswood | 7,318 | |||
Cactus | 44,443 | |||
Cardinal | 45,954 | |||
Coolbaugh | 10,251 | |||
Hammock | 12,682 | |||
Havasu | 4,640 | |||
Hickorybear | 11,494 | |||
Kinlani | 21,580 | |||
Koi | 41,025 | |||
Lakeridge | 8,183 | |||
Lodge | 22,262 | |||
Longbranch | 13,892 | |||
Loop | 8,330 | |||
Mirage | 14,560 | |||
Myrtle | 8,465 | |||
Oasis | 12,078 | |||
Opry | 8,698 | |||
Orchard | 5,465 | |||
Palm | 24,567 | |||
Pasquin | 10,162 | |||
Pickler | 54,411 | |||
Pointbreak | 13,771 | |||
Regal | 13,852 | |||
Serenity | 30,778 | |||
Smokey | 8,704 | |||
Solstice | 2,675 | |||
Sugarcreek | 4,277 | |||
SuiteSpot | 45,386 | |||
Subtotal | $ | 562,506 |
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Operating Expenses
The operating expenses incurred prior to the closing of an offering related to any of the series are being paid by our manager and are reimbursed by such series out of the gross offering proceeds upon closing of the relevant series offering. Such operating expenses include real estate taxes, property insurance, Home Ownership Association (HOA) fees, repair and maintenance costs, and other FF&E expenses. Upon closing, each series becomes responsible to fund its own operating expenses.
The following table summarizes the total operating expenses incurred by each series during the period January 1, 2024 through March 31, 2024. For the avoidance of doubt, the below amounts are unaudited.
March 31, 2024 | ||||||||||||
Series Name | Operating Expenses | Depreciation | Total Expenses | |||||||||
Ace | $ | 28,794 | $ | 10,129 | $ | 38,923 | ||||||
Billingswood | 35,395 | 14,440 | 49,834 | |||||||||
Cactus | 26,202 | 10,380 | 36,583 | |||||||||
Cardinal | 24,750 | 10,641 | 35,390 | |||||||||
Coolbaugh | 14,352 | 9,268 | 23,620 | |||||||||
Hammock | 30,924 | 6,256 | 37,179 | |||||||||
Havasu | 15,110 | 10,632 | 25,742 | |||||||||
Hickorybear | 16,383 | 8,616 | 24,999 | |||||||||
Kinlani | 12,955 | 8,576 | 21,531 | |||||||||
Koi | 18,565 | 15,310 | 33,874 | |||||||||
Lakeridge | 18,482 | 7,585 | 26,067 | |||||||||
Lodge | 20,963 | 12,647 | 33,610 | |||||||||
Longbranch | 8,638 | 10,524 | 19,162 | |||||||||
Loop | 17,396 | 10,120 | 27,517 | |||||||||
Mirage | 14,076 | 5,077 | 19,153 | |||||||||
Myrtle | 19,395 | 7,239 | 26,634 | |||||||||
Oasis | 25,815 | 10,257 | 36,072 | |||||||||
Opry | 20,179 | 7,886 | 28,065 | |||||||||
Orchard | 13,752 | 8,345 | 22,097 | |||||||||
Palm | 40,443 | 8,161 | 48,604 | |||||||||
Pasquin | 21,428 | 8,972 | 30,399 | |||||||||
Pickler | 26,078 | 14,764 | 40,842 | |||||||||
Pointbreak | 15,512 | 5,351 | 20,863 | |||||||||
Regal | 23,265 | 8,969 | 32,234 | |||||||||
Serenity | 24,987 | 13,247 | 38,233 | |||||||||
Smokey | 23,854 | 8,749 | 32,603 | |||||||||
Solstice | 6,278 | 9,435 | 15,714 | |||||||||
Sugarcreek | 15,350 | 5,804 | 21,154 | |||||||||
SuiteSpot | 23,490 | 10,808 | 34,298 | |||||||||
Subtotal | $ | 602,808 | $ | 278,187 | $ | 880,994 |
19
Other Expenses
The following table summarizes the total of such expenses incurred by each series during the period between January 1, 2024 and March 31, 2024. For the avoidance of doubt, the below amounts are unaudited.
Series Name | March 31, 2024 | |||
Ace | $ | 7,304 | ||
Billingswood | - | |||
Cactus | 7,844 | |||
Cardinal | 5,175 | |||
Coolbaugh | - | |||
Hammock | 4,049 | |||
Havasu | 7,619 | |||
Hickorybear | - | |||
Kinlani | - | |||
Koi | - | |||
Lakeridge | 4,555 | |||
Lodge | - | |||
Longbranch | - | |||
Loop | - | |||
Mirage | - | |||
Myrtle | - | |||
Oasis | 8,074 | |||
Opry | 8,229 | |||
Orchard | - | |||
Palm | 5,039 | |||
Pasquin | - | |||
Pickler | - | |||
Pointbreak | 2,609 | |||
Regal | 8,894 | |||
Serenity | 7,946 | |||
Smokey | - | |||
Solstice | - | |||
Sugarcreek | 3,386 | |||
SuiteSpot | - | |||
Subtotal | $ | 80,724 |
20
Cash and Cash Equivalent Balances
Cash is held at the series level. The following table summarizes the cash and cash equivalents held by series as of March 31, 2024. For the avoidance of doubt, the below amounts are unaudited.
Series Name | March 31, 2024 | |||
Ace | $ | 19,012 | ||
Billingswood | 25 | |||
Cactus | 57,667 | |||
Cardinal | 34,341 | |||
Coolbaugh | 3,221 | |||
Hammock | 5,076 | |||
Havasu | 3,029 | |||
Hickorybear | 19,262 | |||
Kinlani | 64,502 | |||
Koi | 16,931 | |||
Lakeridge | 10,624 | |||
Lodge | 32,328 | |||
Longbranch | 57,467 | |||
Loop | 5,724 | |||
Mirage | 16,519 | |||
Myrtle | 15,955 | |||
Oasis | 2,375 | |||
Opry | 52,635 | |||
Orchard | 18,484 | |||
Palm | 3,210 | |||
Pasquin | 4,130 | |||
Pickler | 86,635 | |||
Pointbreak | 80,127 | |||
Regal | 42,504 | |||
Serenity | 62,333 | |||
Smokey | 17,230 | |||
Solstice | 98,926 | |||
Sugarcreek | 346 | |||
SuiteSpot | 215,616 | |||
Subtotal | $ | 1,046,235 |
21
Item 3. Directors AND Officers
General
The manager of our company is Arrived Holdings, Inc., a Delaware corporation. The manager has established a Board of Directors for our company, consisting of two members, Ryan Frazier and Kenneth Cason.
The nature of our business to be conducted or promoted by us must at all times be to engage in any lawful act or activity for which LLCs may be organized under the Delaware Limited Liability Company Act.
All of our directors and executive officers are employees of the manager. The executive offices of the manager are located at 1700 Westlake Ave N, Suite 200, Seattle, WA 98109, and the telephone number of the manager’s executive offices is (814) 277-4833.
Executive Officers and Directors
The following table sets forth certain information with respect to each of the directors and executive officers of the manager:
Individual | Age | Position Held with our Company (1)(2) | Position Held with the Manager | |||
Ryan Frazier | 35 | Chief Executive Officer and Director | Chief Executive Officer, President and Director | |||
Sue Korn | 54 | Chief Financial Officer | Chief Financial Officer | |||
Kenneth Cason | 37 | Chief Technology Officer and Director | Chief Technology Officer and Director | |||
Alejandro Chouza | 43 | Chief Operating Officer | Chief Operating Officer |
(1) | The terms in office of Mr. Frazier, Mr. Cason, and Mr. Chouza began upon the organization of our company on July 11, 2022. Ms. Korn’s term in office began upon her appointment as CFO on January 11, 2024. The current executive officers and directors will serve in these capacities indefinitely, or until their successors are duly appointed or elected, as applicable. |
(2) | The executive officers of the manager are currently devoting a significant amount of their working time to the operations of our company to satisfy their respective responsibilities to the management of our company. Our officers will be working on a part-time basis for our business and are expected to devote at least forty (40) hours per month to the operations and management of our company. |
Biographical Information
Set forth below is biographical information of our executive officers and directors.
Ryan Frazier, our Chief Executive Officer and a director, has served as the Chief Executive Officer, President, and a director of Arrived Holdings, Inc. since its inception in February 2019 and as CEO and director of our company since its inception. In 2011, Mr. Frazier co-founded and was the CEO of DataRank, Inc., a social media listening platform used by Fortune 500 companies, including Procter & Gamble, Coca Cola, and The Clorox Company, to garner insights from their consumers. Mr. Frazier led DataRank through a merger with Simply Measured, Inc. in 2015, and again through a merger with Sprout Social, Inc. in 2017, after which he acted in the role of General Manager, leading the integration of the Simply Measured, Inc. and Sprout Social businesses in Sprout Social’s Seattle office. Mr. Frazier is an alumnus of Y Combinator, S13, and he graduated from the University of Arkansas in 2010 with a B.S. in International Business.
Sue Korn, our Chief Financial Officer, has served as the Chief Financial Officer of Arrived Holdings since January 2024. Ms. Korn began her career in equity research for diversified financial services companies at Kidder, Peabody in 1992, later moving to investment banking in Salomon Smith Barney’s Financial Institutions Group in 1997. She joined Providian Financial in 1998 where she oversaw planning and analysis, data management and reporting for a $33 billion credit card business. In 2011 she transitioned to FinTech, bringing her financial expertise to companies such as Prosper Marketplace (FP&A and back office operations), LendingClub (marketplace operations and treasury), Oportun (FP&A and accounting) and was co-founder/CFO/Head of Operations for online lender Vouch Financial. Ms. Korn graduated from Colby College with a B.A. in Philosophy/Math in 1991 and earned her M.B.A from Kellogg Graduate School of Management at Northwestern University in 1997 with majors in Finance, Management and Strategy and Organizational Behavior. She has held the Chartered Financial Analyst® designation since 1998.
22
Kenneth Cason, our Chief Technology Officer and a director, has served as the Chief Technology Officer and director of Arrived Holdings, Inc. since its inception in February 2019. Beginning in 2011, Mr. Cason served as the Co-Founder and Chief Technology Officer of DataRank, Inc. Mr. Cason worked extensively to help design and build large scale data collection, processing, and search systems. He remained employed with DataRank through two mergers; first with Simply Measured, Inc., in 2015, and then again with Sprout Social in 2017. During both mergers he worked to lead and integrate each company’s tech stack. Mr. Cason is an alumni of Y Combinator, S13, and he graduated from the University of Arkansas in 2010 with a B.S. in Computer Science and also received Associate degrees in Mathematics, Japanese and Chinese.
Alejandro Chouza, our Chief Operating Officer, has served as the Chief Operating Officer of Arrived Holdings, Inc. since its inception in February 2019. Mr. Chouza was previously the VP of Operations of Oyo Rooms beginning in May 2019. Prior to that, Mr. Chouza was the Regional General Manager of Uber Technologies, Inc., from September 2014 through May 2019, where he launched and managed operations in Mexico and the Northwest USA markets. Mr. Chouza graduated with a B.S. from Babson College and an M.B.A. from The Wharton School of the University of Pennsylvania.
There are no arrangements or understandings known to us pursuant to which any director was or is to be selected as a director or nominee. There are no agreements or understandings for any executive officer or director to resign at the request of another person and no officer or director is acting on behalf of nor will any of them act at the direction of any other person.
There are no family relationships between any director, executive officer, person nominated or chosen to become a director or executive officer or any significant employee.
The Manager and the Operating Agreement
The manager will be responsible for directing the management of our business and affairs, managing our day-to-day affairs, and implementing our investment strategy. The manager and its officers will not be required to devote all of their time to our business and are only required to devote such time to our affairs as their duties require.
The manager will perform its duties and responsibilities pursuant to the operating agreement. The manager will maintain a contractual, as opposed to a fiduciary relationship, with us and our investors. Furthermore, we have agreed to limit the liability of the manager and to indemnify the manager against certain liabilities.
The operating agreement further provides that our manager, in exercising its rights in its capacity as the managing member, will be entitled to consider only such interests and factors as it desires, including its own interests, and will have no duty or obligation (fiduciary or otherwise) to give any consideration to any interest of or factors affecting our company, any series of interests or any of the interest holders and will not be subject to any different standards imposed by the operating agreement, the LLC Act or under any other law, rule or regulation or in equity. In addition, the operating agreement provides that our manager will not have any duty (including any fiduciary duty) to our company, any series or any of the interest holders.
Our manager has not sponsored any prior real estate investment programs. Accordingly, this offering circular does not contain any information concerning prior performance of our manager and its affiliates, which means that you will be unable to assess any results from their prior activities before deciding whether to purchase interests in our series.
Responsibilities of the Manager
The responsibilities of the manager include:
● | Investment Advisory, Origination and Acquisition Services such as approving and overseeing our overall investment strategy, which will consist of elements such as investment selection criteria, diversification strategies and asset disposition strategies; |
● | Offering Services such as the development of our series offerings, including the determination of their specific terms; |
23
● | Management Services such as investigating, selecting, and, on our behalf, engaging and conducting business with such persons as the manager deems necessary to the proper performance of its obligations under the operating agreement, including but not limited to consultants, accountants, lenders, technical managers, attorneys, corporate fiduciaries, escrow agents, depositaries, custodians, agents for collection, insurers, insurance agents, developers, construction companies, property managers and any and all persons acting in any other capacity deemed by the manager necessary or desirable for the performance of any of the services under the operating agreement; |
● | Accounting and Other Administrative Services such as maintaining accounting data and any other information concerning our activities as will be required to prepare and to file all periodic financial reports and returns required to be filed with the Commission and any other regulatory agency, including annual financial statements, and managing and performing the various administrative functions necessary for our day-to-day operations; |
● | Investor Services such as managing communications with our investors, including answering phone calls, preparing and sending written and electronic reports and other communications; |
● | Financing Services such as monitoring and overseeing the service of our debt facilities and other financings, if any; and |
● | Disposition Services such as evaluating and approving potential asset dispositions, sales or liquidity transactions. |
Manager Affiliates
Our manager controls seven affiliated entities also conducting Tier 2 Regulation A offerings:
Arrived Homes, LLC – Arrived Homes, LLC was formed on July 13, 2020 as a Delaware series limited liability company to permit public investment in individual real estate properties that will be owned by individual series of Arrived Homes, LLC.
Arrived Homes II, LLC – Arrived Homes II, LLC was formed on February 2, 2022 as a Delaware series limited liability company to permit public investment in individual real estate properties that will be owned by individual series of Arrived Homes II, LLC.
Arrived STR 2, LLC– Arrived STR 2, LLC was formed on January 11, 2023 as a Delaware series limited liability company to permit public investment in individual real estate properties that will be owned by individual series of Arrived STR 2, LLC.
Arrived Homes 3, LLC – Arrived Homes 3, LLC was formed on January 4, 2023 as a Delaware series limited liability company to permit public investment in individual real estate properties that will be owned by individual series of Arrived Homes 3, LLC.
Arrived Homes 4, LLC – Arrived Homes 4, LLC was formed on July 28, 2023 as a Delaware series limited liability company to permit public investment in individual real estate properties that will be owned by individual series of Arrived Homes 4, LLC.
Arrived SFR Genesis Fund, LLC– Arrived SFR Genesis Fund, LLC was formed on May 1, 2023 as a Delaware limited liability company, to originate, invest in and manage a diversified portfolio of single family residential real estate properties.
Arrived Debt Fund, LLC – Arrived Debt Fund, LLC was formed on December 21, 2023 as a Delaware limited liability company to invest in and manage a diversified portfolio of residential real estate investments.
Compensation of Executive Officers
We do not currently have any employees nor do we currently intend to hire any employees who will be compensated directly by our company. Each of our executive officers, who are also executive officers of the manager, manages our day-to-day affairs, oversees the review, selection and recommendation of investment opportunities, services acquired properties and monitors the performance of these properties to ensure that they are consistent with our investment objectives. Each of these individuals receives compensation for his or her services, including services performed for us on behalf of the manager, from the manager. We do not intend to pay any compensation to these individuals.
Compensation of the Manager
The manager will receive compensation and reimbursement for costs incurred relating to our series offerings (e.g., Offering Expenses and Acquisition Expenses). Neither the manager nor any of its affiliates will receive any selling commissions or dealer manager fees in connection with this or other series offerings. See “Management—Management Compensation” in our offering circular and Note 6, Related Party Transactions in our financial statements for further details.
24
Item 4. Security Ownership of Management and Certain Securityholders
Our company is managed by Arrived Holdings, Inc., the manager, who will also be the manager of all of our series. The manager currently does not own, and at the closing of each series offering is not expected to own, any of the interests in any series.
No executive officers and directors beneficially own more than 10% of any series of our company. Additionally, no other security holders beneficially own more than 10% of any series of our company.
The manager or an affiliate of the manager may purchase interests in any series of our company on the same terms as offered to investors. No brokerage fee will be paid on any interests purchased by the manager or its affiliates. Additionally, the manager may acquire interests in any series of our company in the event that a promissory note issued to the manager in connection with the acquisition of a series property, if outstanding, is not repaid on or prior to its maturity date, at which point, the outstanding balance of the promissory note will be converted into series interests under the same terms as in the applicable series offering. See “Management-Management Compensation” in our offering circular for more detail.
The address of Arrived Holdings, Inc. is 1700 Westlake Ave N, Suite 200, Seattle, WA 98109.
Item 5. INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN Transactions
Since our formation in July 2022, we have entered into a number of transactions in which we were a participant and the amount involved exceeded or exceeds the lesser of $120,000 and one percent of the average of our total assets as of the date of formation, and in which any related person had a direct or indirect material interest (other than compensation described under “Compensation of Directors and Executive Officers” in our offering circular). See “The Series Properties Being Offered” in our offering circular contained in Post-Qualification Amendment No. 15 to our Offering Statement on Form 1-A for a description of the manager’s involvement in the purchase of properties on the relevant series’ behalf and the subsequent issuance of promissory notes by the series to the manager. See “Management—Management Compensation” in our offering circular for a description of the fees paid to the manager. We believe the terms obtained or consideration that we paid or received, as applicable, in connection with such transactions were comparable to terms available or the amounts that would be paid or received, as applicable, in arm’s-length transactions. With respect to the additional series that will be offering their interests by way of this offering circular and other future series, their properties will be acquired in accordance with one of the acquisition methods discussed in the section titled “Description of Business⸺Acquisition Mechanics” in our offering circular. Therefore, the manager is expected to continue to receive interest income from loans to the multiple series.
None.
25
ARRIVED STR, LLC AND ITS SERIES
CONSOLIDATED AND CONSOLIDATING FINANCIAL STATEMENTS
DECEMBER 31, 2023 and 2022
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Manager and Members of
Arrived STR, LLC and its Series
Seattle, Washington
Opinion on the Consolidated and Consolidating Financial Statements
We have audited the accompanying consolidated and consolidating balance sheets of Arrived STR, LLC and its Series (the Company) as of December 31, 2023 and 2022, and the related consolidated and consolidating statements of comprehensive income (loss), member’s equity (deficit), and cash flows for the year ended December 31, 2023 and for the period July 11, 2022 (date of inception) through December 31, 2022, and the related notes (collectively referred to as the consolidated and consolidating financial statements). In our opinion, the consolidated and consolidating financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of their operations and their cash flows for the year ended December 31, 2023 and for the period July 11, 2022 (date of inception) through December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.
Going Concern
The accompanying consolidated and consolidating financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the consolidated and consolidating financial statements, the Company’s lack of liquidity raises substantial doubt about their ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 3. The consolidated and consolidating financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These consolidated and consolidating financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated and consolidating financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated and consolidating financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated and consolidating financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated and consolidating financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated and consolidating financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ Morison Cogen LLP
We have served as the Company’s auditor since 2023.
Blue Bell, Pennsylvania
April 29, 2024
F-2
ARRIVED STR, LLC AND ITS SERIES
CONSOLIDATED AND CONSOLIDATING BALANCE SHEET
AS OF DECEMBER 31, 2023
Ace | Billingswood | Cactus | Cardinal | Coolbaugh | Hammock | |||||||||||||||||||
ASSETS | ||||||||||||||||||||||||
Current assets: | ||||||||||||||||||||||||
Cash | $ | 12,762 | $ | 5,522 | $ | 35,462 | $ | 26,945 | $ | 10,324 | $ | 1,561 | ||||||||||||
Other receivables | - | - | - | - | - | - | ||||||||||||||||||
Subscription receivables | - | - | - | - | - | - | ||||||||||||||||||
Prepaid expenses | 3,244 | 719 | 884 | 2,379 | 429 | 4,907 | ||||||||||||||||||
Due from (to) third party property manager | 5,025 | (8,285 | ) | 5,443 | 3,254 | (370 | ) | 979 | ||||||||||||||||
Total current assets | ||||||||||||||||||||||||
Property and equipment, net | 1,072,395 | 930,900 | 1,068,563 | 810,835 | 529,528 | 565,075 | ||||||||||||||||||
Total assets | $ | 1,093,425 | $ | 928,855 | $ | 1,110,353 | $ | 843,413 | $ | 539,911 | $ | 572,521 | ||||||||||||
LIABILITIES AND MEMBERS’ EQUITY | ||||||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||||||
Accrued expenses | $ | 13,482 | $ | 10,098 | $ | 15,539 | $ | 10,497 | $ | 15,694 | $ | 9,498 | ||||||||||||
Accounts payable | - | - | - | - | - | - | ||||||||||||||||||
Due to (from) related parties, property manager | - | - | - | - | (732 | ) | (558 | ) | ||||||||||||||||
Due to (from) related parties | 23,410 | 104 | 29,172 | 47,132 | (6,325 | ) | 3,689 | |||||||||||||||||
Total Current liabilities | 36,892 | 10,202 | 44,711 | 57,629 | 8,637 | 12,629 | ||||||||||||||||||
Mortgage payable, net | 431,829 | - | 432,113 | 305,772 | - | 222,510 | ||||||||||||||||||
Total Liabilities | 468,721 | 10,202 | 476,824 | 363,401 | 8,637 | 235,139 | ||||||||||||||||||
Members’ equity | ||||||||||||||||||||||||
Members’ capital | 723,356 | 1,072,802 | 728,567 | 528,186 | 630,244 | 536,706 | ||||||||||||||||||
Accumulated deficit | (98,652 | ) | (154,148 | ) | (95,038 | ) | (48,173 | ) | (98,970 | ) | (199,324 | ) | ||||||||||||
Total members’ equity | 624,704 | 918,654 | 633,528 | 480,013 | 531,274 | 337,382 | ||||||||||||||||||
Total liabilities and members’ equity | $ | 1,093,425 | $ | 928,855 | $ | 1,110,353 | $ | 843,413 | $ | 539,911 | $ | 572,521 |
The accompanying notes are an integral part of these consolidated and consolidating financial statements.
F-3
ARRIVED STR, LLC AND ITS SERIES
CONSOLIDATED AND CONSOLIDATING BALANCE SHEET
AS OF DECEMBER 31, 2023
Havasu | Hickorybear | Kinlani | Koi | Lakeridge | Lodge | |||||||||||||||||||
ASSETS | ||||||||||||||||||||||||
Current assets: | ||||||||||||||||||||||||
Cash | $ | 15,342 | $ | 28,072 | $ | 59,888 | $ | - | $ | 20,120 | $ | 43,291 | ||||||||||||
Other receivables | - | - | - | - | - | - | ||||||||||||||||||
Subscription receivables | - | - | - | - | - | - | ||||||||||||||||||
Prepaid expenses | 910 | 1,119 | 660 | 627 | 433 | 1,900 | ||||||||||||||||||
Due from (to) third party property manager | (853 | ) | 2,790 | 9,074 | 3,552 | 1,855 | 6,984 | |||||||||||||||||
Total current assets | ||||||||||||||||||||||||
Property and equipment, net | 1,076,178 | 777,086 | 795,691 | 870,622 | 604,076 | 1,116,523 | ||||||||||||||||||
Total assets | $ | 1,091,577 | $ | 809,068 | $ | 865,313 | $ | 874,800 | $ | 626,484 | $ | 1,168,698 | ||||||||||||
LIABILITIES AND MEMBERS’ EQUITY | ||||||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||||||
Accrued expenses | $ | 11,427 | $ | 16,947 | $ | 14,881 | $ | 9,238 | $ | 5,062 | $ | 23,590 | ||||||||||||
Accounts payable | - | - | - | - | - | - | ||||||||||||||||||
Due to (from) related parties, property manager | - | - | - | - | - | - | ||||||||||||||||||
Due to (from) related parties | (33,323 | ) | 21,505 | 30,335 | 32,452 | 8,704 | 19,371 | |||||||||||||||||
Total Current liabilities | (21,896 | ) | 38,452 | 45,217 | 41,690 | 13,766 | 42,962 | |||||||||||||||||
Mortgage payable, net | 463,247 | - | - | - | 276,968 | - | ||||||||||||||||||
Total Liabilities | 441,352 | 38,452 | 45,217 | 41,690 | 290,734 | 42,962 | ||||||||||||||||||
Members’ equity | ||||||||||||||||||||||||
Members’ capital | 771,404 | 879,519 | 864,199 | 921,513 | 416,841 | 1,256,491 | ||||||||||||||||||
Accumulated deficit | (121,179 | ) | (108,903 | ) | (44,102 | ) | (88,403 | ) | (81,091 | ) | (130,754 | ) | ||||||||||||
Total members’ equity | 650,225 | 770,616 | 820,096 | 833,110 | 335,750 | 1,125,737 | ||||||||||||||||||
Total liabilities and members’ equity | $ | 1,091,577 | $ | 809,068 | $ | 865,313 | $ | 874,800 | $ | 626,484 | $ | 1,168,698 |
The accompanying notes are an integral part of these consolidated and consolidating financial statements.
F-4
ARRIVED STR, LLC AND ITS SERIES
CONSOLIDATED AND CONSOLIDATING BALANCE SHEET
AS OF DECEMBER 31, 2023
Longbranch | Loop | Mirage | Myrtle | Oasis | Opry | |||||||||||||||||||
ASSETS | ||||||||||||||||||||||||
Current assets: | ||||||||||||||||||||||||
Cash | $ | 53,534 | $ | 9,253 | $ | 18,754 | $ | 25,351 | $ | 6,434 | $ | 79,528 | ||||||||||||
Other receivables | 4,544 | - | - | 13,544 | - | - | ||||||||||||||||||
Subscription receivables | - | - | - | - | - | - | ||||||||||||||||||
Prepaid expenses | 2,393 | 572 | 1,069 | 1,199 | 2,215 | (1,160 | ) | |||||||||||||||||
Due from (to) third party property manager | 7,618 | - | 2,540 | - | 2,975 | 2,059 | ||||||||||||||||||
Total current assets | ||||||||||||||||||||||||
Property and equipment, net | 885,977 | 738,413 | 625,628 | 471,283 | 1,001,312 | 1,084,771 | ||||||||||||||||||
Total assets | $ | 954,066 | $ | 748,239 | $ | 647,991 | $ | 511,377 | $ | 1,012,936 | $ | 1,165,198 | ||||||||||||
LIABILITIES AND MEMBERS’ EQUITY | ||||||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||||||
Accrued expenses | $ | 16,090 | $ | 8,989 | $ | 10,645 | $ | 13,710 | $ | 9,933 | $ | 27,267 | ||||||||||||
Accounts payable | - | - | - | - | - | - | ||||||||||||||||||
Due to (from) related parties, property manager | - | (642 | ) | - | 292 | - | - | |||||||||||||||||
Due to (from) related parties | 19,410 | 10,288 | 89,667 | 705 | (3,739 | ) | 1,723 | |||||||||||||||||
Total Current liabilities | 35,500 | 18,636 | 100,313 | 14,707 | 6,194 | 28,990 | ||||||||||||||||||
Mortgage payable, net | - | - | - | - | 477,000 | 452,568 | ||||||||||||||||||
Total Liabilities | 35,500 | 18,636 | 100,313 | 14,707 | 483,194 | 481,557 | ||||||||||||||||||
Members’ equity | ||||||||||||||||||||||||
Members’ capital | 987,781 | 806,621 | 736,827 | 586,720 | 596,820 | 782,606 | ||||||||||||||||||
Accumulated deficit | (69,216 | ) | (77,018 | ) | (189,149 | ) | (90,050 | ) | (67,078 | ) | (98,965 | ) | ||||||||||||
Total members’ equity | 918,565 | 729,603 | 547,678 | 496,670 | 529,741 | 683,641 | ||||||||||||||||||
Total liabilities and members’ equity | $ | 954,066 | $ | 748,239 | $ | 647,991 | $ | 511,377 | $ | 1,012,936 | $ | 1,165,198 |
The accompanying notes are an integral part of these consolidated and consolidating financial statements.
F-5
ARRIVED STR, LLC AND ITS SERIES
CONSOLIDATED AND CONSOLIDATING BALANCE SHEET
AS OF DECEMBER 31, 2023
Orchard | Palm | Pasquin | Pickler | Pointbreak | Regal | |||||||||||||||||||
ASSETS | ||||||||||||||||||||||||
Current assets: | ||||||||||||||||||||||||
Cash | $ | 26,625 | $ | 5,917 | $ | 18,902 | $ | 81,534 | $ | 88,877 | $ | 55,625 | ||||||||||||
Other receivables | - | - | - | - | - | - | ||||||||||||||||||
Subscription receivables | - | - | - | - | - | - | ||||||||||||||||||
Prepaid expenses | 495 | 578 | (127 | ) | 951 | - | 831 | |||||||||||||||||
Due from (to) third party property manager | 3,704 | 5,206 | 3,958 | 8,492 | - | 8,916 | ||||||||||||||||||
Total current assets | ||||||||||||||||||||||||
Property and equipment, net | 605,694 | 675,110 | 554,076 | 1,200,669 | 416,116 | 976,538 | ||||||||||||||||||
Total assets | $ | 636,517 | $ | 686,810 | $ | 576,810 | $ | 1,291,646 | $ | 504,992 | $ | 1,041,910 | ||||||||||||
LIABILITIES AND MEMBERS’ EQUITY | ||||||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||||||
Accrued expenses | $ | 6,038 | $ | 5,057 | $ | 13,556 | $ | 19,106 | $ | 4,127 | $ | 11,460 | ||||||||||||
Accounts payable | - | - | - | - | 25 | - | ||||||||||||||||||
Due to (from) related parties, property manager | - | (1,290 | ) | - | - | 1,840 | - | |||||||||||||||||
Due to (from) related parties | 7,394 | 2,683 | 16,645 | (1,534 | ) | 119,508 | (48,561 | ) | ||||||||||||||||
Total Current liabilities | 13,432 | 6,451 | 30,201 | 17,572 | 125,500 | (37,101 | ) | |||||||||||||||||
Mortgage payable, net | - | 306,381 | - | - | 153,307 | 465,500 | ||||||||||||||||||
Total Liabilities | 13,432 | 312,831 | 30,201 | 17,572 | 278,807 | 428,399 | ||||||||||||||||||
Members’ equity | ||||||||||||||||||||||||
Members’ capital | 726,954 | 548,364 | 651,803 | 1,317,242 | 394,441 | 669,282 | ||||||||||||||||||
Accumulated deficit | (103,869 | ) | (174,385 | ) | (105,194 | ) | (43,168 | ) | (168,256 | ) | (55,770 | ) | ||||||||||||
Total members’ equity | 623,085 | 373,979 | 546,609 | 1,274,074 | 226,185 | 613,512 | ||||||||||||||||||
Total liabilities and members’ equity | $ | 636,517 | $ | 686,810 | $ | 576,810 | $ | 1,291,646 | $ | 504,992 | $ | 1,041,910 |
The accompanying notes are an integral part of these consolidated and consolidating financial statements.
F-6
ARRIVED STR, LLC AND ITS SERIES
CONSOLIDATED AND CONSOLIDATING BALANCE SHEET
AS OF DECEMBER 31, 2023
Serenity | Smokey | Solstice | Sugarcreek | SuiteSpot | Consolidated | |||||||||||||||||||
ASSETS | ||||||||||||||||||||||||
Current assets: | ||||||||||||||||||||||||
Cash | $ | 78,386 | $ | 33,755 | $ | 126,133 | $ | 5,117 | $ | 26,062 | $ | 999,076 | ||||||||||||
Other receivables | - | - | - | - | - | 18,089 | ||||||||||||||||||
Subscription receivables | - | - | - | - | 265,063 | 265,063 | ||||||||||||||||||
Prepaid expenses | 919 | 643 | 4,979 | 387 | 1,013 | 35,164 | ||||||||||||||||||
Due from (to) third party property manager | 9,874 | (315 | ) | (421 | ) | 1,199 | - | 85,254 | ||||||||||||||||
Total current assets | ||||||||||||||||||||||||
Property and equipment, net | 1,144,082 | 789,208 | 798,531 | 462,156 | 968,831 | 23,615,866 | ||||||||||||||||||
Total assets | $ | 1,233,261 | $ | 823,290 | $ | 929,222 | $ | 468,859 | $ | 1,260,968 | $ | 25,018,511 | ||||||||||||
LIABILITIES AND MEMBERS’ EQUITY | ||||||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||||||
Accrued expenses | $ | 19,982 | $ | 9,168 | $ | 18,613 | $ | 3,742 | $ | 20,152 | $ | 373,587 | ||||||||||||
Accounts payable | - | - | - | - | - | 25 | ||||||||||||||||||
Due to (from) related parties, property manager | - | (1,451 | ) | - | 551 | 17,791 | 15,802 | |||||||||||||||||
Due to (from) related parties | (25,901 | ) | (434 | ) | 13,033 | 26,992 | 252,459 | 656,567 | ||||||||||||||||
Total Current liabilities | (5,919 | ) | 7,284 | 31,646 | 31,285 | 290,402 | 1,045,981 | |||||||||||||||||
Mortgage payable, net | 483,305 | - | - | 205,888 | - | 4,676,389 | ||||||||||||||||||
Total Liabilities | 477,386 | 7,284 | 31,646 | 237,172 | 290,402 | 5,722,370 | ||||||||||||||||||
Members’ equity | ||||||||||||||||||||||||
Members’ capital | 837,324 | 880,889 | 926,014 | 314,294 | 1,122,891 | 22,216,701 | ||||||||||||||||||
Accumulated deficit | (81,450 | ) | (64,882 | ) | (28,438 | ) | (82,608 | ) | (152,326 | ) | (2,920,560 | ) | ||||||||||||
Total members’ equity | 755,875 | 816,006 | 897,576 | 231,687 | 970,565 | 19,296,141 | ||||||||||||||||||
Total liabilities and members’ equity | $ | 1,233,261 | $ | 823,290 | $ | 929,222 | $ | 468,859 | $ | 1,260,968 | $ | 25,018,511 |
The accompanying notes are an integral part of these consolidated and consolidating financial statements.
F-7
ARRIVED STR, LLC AND ITS SERIES
CONSOLIDATED AND CONSOLIDATING BALANCE SHEET
AS OF DECEMBER 31, 2022
Ace | Billingswood | Cactus | Cardinal | Coolbaugh | Hammock | |||||||||||||||||||
ASSETS | ||||||||||||||||||||||||
Current assets: | ||||||||||||||||||||||||
Cash | $ | 100,279 | $ | - | $ | 190,955 | $ | 98,524 | $ | - | $ | 190,006 | ||||||||||||
Prepaid expenses | 6,923 | - | 353 | 5,886 | - | 8,215 | ||||||||||||||||||
Total current assets | 107,202 | - | 191,308 | 104,410 | - | 198,220 | ||||||||||||||||||
Property and equipment, net | 1,112,888 | - | 1,084,892 | 840,422 | - | 590,102 | ||||||||||||||||||
Deposits | - | - | - | - | - | - | ||||||||||||||||||
Total assets | $ | 1,220,090 | $ | - | $ | 1,276,200 | $ | 944,832 | $ | - | $ | 788,323 | ||||||||||||
LIABILITIES AND MEMBERS’ EQUITY (DEFICIT) | ||||||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||||||
Accrued expenses | $ | 17,385 | $ | - | $ | 10,931 | $ | 91,083 | $ | - | $ | 10,604 | ||||||||||||
Due from (to) third party property manager | (1,794 | ) | - | 873 | 281 | - | 305 | |||||||||||||||||
Due to (from) related parties | 71,902 | - | 118,523 | 27,909 | - | 142,679 | ||||||||||||||||||
Total Current liabilities | 87,493 | - | 130,327 | 119,273 | - | 153,588 | ||||||||||||||||||
Mortgage payable, net | 431,510 | - | 434,615 | 305,539 | - | 225,487 | ||||||||||||||||||
Total Liabilities | 519,002 | - | 564,942 | 424,812 | - | 379,075 | ||||||||||||||||||
Members’ equity (deficit) | ||||||||||||||||||||||||
Members’ capital | 774,526 | - | 782,539 | 581,692 | - | 543,304 | ||||||||||||||||||
Accumulated deficit | (73,438 | ) | - | (71,281 | ) | (61,672 | ) | - | (134,056 | ) | ||||||||||||||
Total members’ equity (deficit) | 701,087 | - | 711,258 | 520,020 | - | 409,248 | ||||||||||||||||||
Total liabilities and members’ equity (deficit) | $ | 1,220,090 | $ | - | $ | 1,276,200 | $ | 944,832 | $ | - | $ | 788,323 |
The accompanying notes are an integral part of these consolidated and consolidating financial statements.
F-8
ARRIVED STR, LLC AND ITS SERIES
CONSOLIDATED AND CONSOLIDATING BALANCE SHEET
AS OF DECEMBER 31, 2022
Havasu | Hickorybear | Kinlani | Koi | Lakeridge | Lodge | |||||||||||||||||||
ASSETS | ||||||||||||||||||||||||
Current assets: | ||||||||||||||||||||||||
Cash | $ | 189,143 | $ | - | $ | - | $ | - | $ | 122,770 | $ | 866 | ||||||||||||
Prepaid expenses | 2,263 | - | - | - | 1,494 | 1,916 | ||||||||||||||||||
Total current assets | 191,406 | - | - | - | 124,264 | 2,782 | ||||||||||||||||||
Property and equipment, net | 1,130,464 | - | - | - | 584,034 | 1,110,724 | ||||||||||||||||||
Deposits | - | - | - | - | - | - | ||||||||||||||||||
Total assets | $ | 1,321,870 | $ | - | $ | - | $ | - | $ | 708,298 | $ | 1,113,506 | ||||||||||||
LIABILITIES AND MEMBERS’ EQUITY (DEFICIT) | ||||||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||||||
Accrued expenses | $ | 57,718 | $ | - | $ | - | $ | - | $ | 3,156 | $ | 3,669 | ||||||||||||
Due from (to) third party property manager | - | - | - | - | 1,808 | - | ||||||||||||||||||
Due to (from) related parties | 45,447 | - | - | - | 19,272 | 1,139,704 | ||||||||||||||||||
Total Current liabilities | 103,165 | - | - | - | 24,237 | 1,143,373 | ||||||||||||||||||
Mortgage payable, net | 461,761 | - | - | - | 276,686 | - | ||||||||||||||||||
Total Liabilities | 564,926 | - | - | - | 300,923 | 1,143,373 | ||||||||||||||||||
Members’ equity (deficit) | ||||||||||||||||||||||||
Members’ capital | 809,178 | - | - | - | 431,065 | 425 | ||||||||||||||||||
Accumulated deficit | (52,235 | ) | - | - | - | (23,691 | ) | (30,292 | ) | |||||||||||||||
Total members’ equity (deficit) | 756,943 | - | - | - | 407,374 | (29,867 | ) | |||||||||||||||||
Total liabilities and members’ equity (deficit) | $ | 1,321,870 | $ | - | $ | - | $ | - | $ | 708,298 | $ | 1,113,506 |
The accompanying notes are an integral part of these consolidated and consolidating financial statements.
F-9
ARRIVED STR, LLC AND ITS SERIES
CONSOLIDATED AND CONSOLIDATING BALANCE SHEET
AS OF DECEMBER 31, 2022
Longbranch | Loop | Mirage | Myrtle | Oasis | Opry | |||||||||||||||||||
ASSETS | ||||||||||||||||||||||||
Current assets: | ||||||||||||||||||||||||
Cash | $ | - | $ | - | $ | 133,427 | $ | - | $ | 619 | $ | 187,186 | ||||||||||||
Prepaid expenses | - | - | 2,047 | 1,012 | 5,748 | - | ||||||||||||||||||
Total current assets | - | - | 135,474 | 1,012 | 6,367 | 187,186 | ||||||||||||||||||
Property and equipment, net | - | - | 628,341 | 406,028 | 1,042,339 | - | ||||||||||||||||||
Deposits | - | - | - | - | - | 23,659 | ||||||||||||||||||
Total assets | $ | - | $ | - | $ | 763,815 | $ | 407,039 | $ | 1,048,706 | $ | 210,845 | ||||||||||||
LIABILITIES AND MEMBERS’ EQUITY (DEFICIT) | ||||||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||||||
Accrued expenses | $ | - | $ | - | $ | 46,492 | $ | 2,774 | $ | 13,138 | $ | 11,218 | ||||||||||||
Due from (to) third party property manager | - | - | - | - | (1,744 | ) | - | |||||||||||||||||
Due to (from) related parties | - | - | 110,073 | 406,690 | (38,808 | ) | (609,886 | ) | ||||||||||||||||
Total Current liabilities | - | - | 156,565 | 409,464 | (27,414 | ) | (598,668 | ) | ||||||||||||||||
Mortgage payable, net | - | - | - | - | 477,000 | - | ||||||||||||||||||
Total Liabilities | - | - | 156,565 | 409,464 | 449,586 | (598,668 | ) | |||||||||||||||||
Members’ equity (deficit) | ||||||||||||||||||||||||
Members’ capital | - | - | 760,491 | 425 | 629,248 | 812,363 | ||||||||||||||||||
Accumulated deficit | - | - | (153,241 | ) | (2,850 | ) | (30,127 | ) | (2,850 | ) | ||||||||||||||
Total members’ equity (deficit) | - | - | 607,250 | (2,425 | ) | 599,120 | 809,513 | |||||||||||||||||
Total liabilities and members’ equity (deficit) | $ | - | $ | - | $ | 763,815 | $ | 407,039 | $ | 1,048,706 | $ | 210,845 |
The accompanying notes are an integral part of these consolidated and consolidating financial statements.
F-10
ARRIVED STR, LLC AND ITS SERIES
CONSOLIDATED AND CONSOLIDATING BALANCE SHEET
AS OF DECEMBER 31, 2022
Orchard | Palm | Pasquin | Pickler | Pointbreak | Regal | |||||||||||||||||||
ASSETS | ||||||||||||||||||||||||
Current assets: | ||||||||||||||||||||||||
Cash | $ | 225,298 | $ | 228,689 | $ | - | $ | - | $ | 137,269 | $ | 1,000 | ||||||||||||
Prepaid expenses | 1,309 | - | - | - | 14,218 | 1,863 | ||||||||||||||||||
Total current assets | 226,607 | 228,689 | - | - | 151,488 | 2,863 | ||||||||||||||||||
Property and equipment, net | 626,380 | 635,750 | - | - | 429,258 | 955,753 | ||||||||||||||||||
Deposits | - | - | - | - | - | - | ||||||||||||||||||
Total assets | $ | 852,987 | $ | 864,439 | $ | - | $ | - | $ | 580,746 | $ | 958,616 | ||||||||||||
LIABILITIES AND MEMBERS’ EQUITY (DEFICIT) | ||||||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||||||
Accrued expenses | $ | 13,353 | $ | 14,647 | $ | - | $ | - | $ | 14,026 | $ | 22,285 | ||||||||||||
Due from (to) third party property manager | 1,468 | 1,369 | - | - | 2,268 | - | ||||||||||||||||||
Due to (from) related parties | 160,982 | 72,373 | - | - | 115,175 | 498,397 | ||||||||||||||||||
Total Current liabilities | 175,802 | 88,389 | - | - | 131,469 | 520,682 | ||||||||||||||||||
Mortgage payable, net | - | 305,398 | - | - | 153,161 | 461,857 | ||||||||||||||||||
Total Liabilities | 175,802 | 393,786 | - | - | 284,630 | 982,539 | ||||||||||||||||||
Members’ equity (deficit) | ||||||||||||||||||||||||
Members’ capital | 751,572 | 555,415 | - | - | 396,219 | 425 | ||||||||||||||||||
Accumulated deficit | (74,388 | ) | (84,762 | ) | - | - | (100,103 | ) | (24,347 | ) | ||||||||||||||
Total members’ equity (deficit) | 677,184 | 470,653 | - | - | 296,115 | (23,922 | ) | |||||||||||||||||
Total liabilities and members’ equity (deficit) | $ | 852,987 | $ | 864,439 | $ | - | $ | - | $ | 580,746 | $ | 958,616 |
The accompanying notes are an integral part of these consolidated and consolidating financial statements.
F-11
ARRIVED STR, LLC AND ITS SERIES
CONSOLIDATED AND CONSOLIDATING BALANCE SHEET
AS OF DECEMBER 31, 2022
Serenity | Smokey | Solstice | Sugarcreek | SuiteSpot | Consolidated | |||||||||||||||||||
ASSETS | ||||||||||||||||||||||||
Current assets: | ||||||||||||||||||||||||
Cash | $ | 260,066 | $ | - | $ | - | $ | 96,948 | $ | - | $ | 2,163,045 | ||||||||||||
Prepaid expenses | 2,477 | - | - | 1,135 | - | 56,858 | ||||||||||||||||||
Total current assets | 262,543 | - | - | 98,083 | - | 2,219,903 | ||||||||||||||||||
Property and equipment, net | 1,150,501 | - | - | 443,839 | - | 12,771,714 | ||||||||||||||||||
Deposits | - | - | - | - | - | 23,659 | ||||||||||||||||||
Total assets | $ | 1,413,044 | $ | - | $ | - | $ | 541,922 | $ | - | $ | 15,015,276 | ||||||||||||
LIABILITIES AND MEMBERS’ EQUITY (DEFICIT) | ||||||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||||||
Accrued expenses | $ | 15,803 | $ | - | $ | - | $ | 7,175 | $ | - | $ | 355,457 | ||||||||||||
Due from (to) third party property manager | 481 | - | - | 1,210 | - | 6,523 | ||||||||||||||||||
Due to (from) related parties | 56,745 | - | - | 11,826 | - | 2,349,003 | ||||||||||||||||||
Total Current liabilities | 73,029 | - | - | 20,210 | - | 2,710,983 | ||||||||||||||||||
Mortgage payable, net | 483,831 | - | - | 205,748 | - | 4,222,592 | ||||||||||||||||||
Total Liabilities | 556,859 | - | - | 225,958 | - | 6,933,575 | ||||||||||||||||||
Members’ equity (deficit) | ||||||||||||||||||||||||
Members’ capital | 892,564 | - | - | 323,089 | - | 9,044,540 | ||||||||||||||||||
Accumulated deficit | (36,379 | ) | - | - | (7,125 | ) | - | (962,839 | ) | |||||||||||||||
Total members’ equity (deficit) | 856,185 | - | - | 315,964 | - | 8,081,702 | ||||||||||||||||||
Total liabilities and members’ equity (deficit) | $ | 1,413,044 | $ | - | $ | - | $ | 541,922 | $ | - | $ | 15,015,276 |
The accompanying notes are an integral part of these consolidated and consolidating financial statements.
F-12
ARRIVED STR, LLC AND ITS SERIES
CONSOLIDATED AND CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS)
FOR THE YEAR ENDED DECEMBER 31, 2023
Ace | Billingswood | Cactus | Cardinal | Coolbaugh | Hammock | |||||||||||||||||||
Rental income | $ | 100,643 | $ | 2,078 | $ | 103,996 | $ | 167,397 | $ | 21,319 | $ | 71,582 | ||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Depreciation | 40,493 | 18,241 | 37,923 | 41,689 | 20,700 | 25,027 | ||||||||||||||||||
Insurance | 7,052 | 1,917 | 3,909 | 5,185 | 1,206 | 4,881 | ||||||||||||||||||
Management fees | 15,051 | 416 | 14,942 | 32,877 | 4,001 | 11,887 | ||||||||||||||||||
Management fees, related party | 5,032 | 104 | 5,200 | 8,370 | 1,256 | 3,724 | ||||||||||||||||||
Repairs & maintenance | 9,085 | 29,888 | 15,697 | 19,047 | 58,117 | 12,275 | ||||||||||||||||||
Property taxes | 8,293 | 4,884 | 4,018 | 6,850 | 7,386 | 7,828 | ||||||||||||||||||
Credit loss expense | - | 89,794 | - | - | 6,207 | 40,838 | ||||||||||||||||||
Other operating expenses | 13,751 | 10,982 | 14,139 | 20,672 | 21,417 | 12,817 | ||||||||||||||||||
Total operating expenses | 98,756 | 156,226 | 95,827 | 134,689 | 120,289 | 119,277 | ||||||||||||||||||
Income (loss) from operations | 1,887 | (154,148 | ) | 8,169 | 32,708 | (98,970 | ) | (47,695 | ) | |||||||||||||||
Other income (expense) | ||||||||||||||||||||||||
Interest expenses | 27,101 | - | 31,927 | 19,210 | - | 17,594 | ||||||||||||||||||
Other Income | - | - | - | - | - | (21 | ) | |||||||||||||||||
Total Other income (expense) | 27,101 | - | 31,927 | 19,210 | - | 17,573 | ||||||||||||||||||
Net income (loss) | $ | (25,213 | ) | $ | (154,148 | ) | $ | (23,757 | ) | $ | 13,498 | $ | (98,970 | ) | $ | (65,268 | ) |
The accompanying notes are an integral part of these consolidated and consolidating financial statements.
F-13
ARRIVED STR, LLC AND ITS SERIES
CONSOLIDATED AND CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS)
FOR THE YEAR ENDED DECEMBER 31, 2023
Havasu | Hickorybear | Kinlani | Koi | Lakeridge | Lodge | |||||||||||||||||||
Rental income | $ | 54,417 | $ | 31,130 | $ | 54,125 | $ | 7,773 | $ | 32,167 | $ | 53,948 | ||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Depreciation | 40,787 | 22,056 | 24,237 | 19,140 | 26,628 | 46,001 | ||||||||||||||||||
Insurance | 4,082 | 3,904 | 2,122 | 1,791 | 2,647 | 5,961 | ||||||||||||||||||
Management fees | 7,675 | 8,121 | 23,146 | 46,745 | 7,298 | 13,128 | ||||||||||||||||||
Management fees, related party | 2,721 | 1,557 | 2,706 | 389 | 1,608 | 2,576 | ||||||||||||||||||
Repairs & maintenance | 21,425 | 72,023 | 20,307 | 18,055 | 16,945 | 54,769 | ||||||||||||||||||
Property taxes | 4,007 | 5,290 | 1,442 | 2,950 | 1,390 | 11,188 | ||||||||||||||||||
Credit loss expense | - | - | - | - | - | - | ||||||||||||||||||
Other operating expenses | 11,994 | 19,202 | 10,052 | 7,106 | 13,992 | 20,787 | ||||||||||||||||||
Total operating expenses | 92,690 | 132,154 | 84,014 | 96,176 | 70,509 | 154,410 | ||||||||||||||||||
Income (loss) from operations | (38,273 | ) | (101,023 | ) | (29,889 | ) | (88,403 | ) | (38,342 | ) | (100,463 | ) | ||||||||||||
Other income (expense) | ||||||||||||||||||||||||
Interest expenses | 30,672 | 8,254 | 14,213 | - | 19,059 | - | ||||||||||||||||||
Other Income | - | (374 | ) | - | - | - | - | |||||||||||||||||
Total Other income (expense) | 30,672 | 7,880 | 14,213 | - | 19,059 | - | ||||||||||||||||||
Net income (loss) | $ | (68,944 | ) | $ | (108,903 | ) | $ | (44,102 | ) | $ | (88,403 | ) | $ | (57,401 | ) | $ | (100,463 | ) |
The accompanying notes are an integral part of these consolidated and consolidating financial statements.
F-14
ARRIVED STR, LLC AND ITS SERIES
CONSOLIDATED AND CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS)
FOR THE YEAR ENDED DECEMBER 31, 2023
Longbranch | Loop | Mirage | Myrtle | Oasis | Opry | |||||||||||||||||||
Rental income | $ | 42,510 | $ | 13,555 | $ | 43,141 | $ | 22,604 | $ | 80,161 | $ | 62,687 | ||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Depreciation | 24,965 | 18,435 | 20,142 | 19,096 | 41,027 | 26,046 | ||||||||||||||||||
Insurance | 3,013 | 1,690 | 2,649 | 3,431 | 4,114 | 5,915 | ||||||||||||||||||
Management fees | 30,448 | 12,300 | 12,272 | 9,118 | 10,638 | 9,107 | ||||||||||||||||||
Management fees, related party | 2,125 | 1,738 | 2,157 | 1,977 | 4,623 | 3,314 | ||||||||||||||||||
Repairs & maintenance | 39,114 | 41,320 | 17,214 | 46,237 | 9,366 | 62,846 | ||||||||||||||||||
Property taxes | 887 | 264 | 10,846 | 7,382 | 2,961 | 5,419 | ||||||||||||||||||
Credit loss expense | - | 2,948 | - | 13,142 | - | - | ||||||||||||||||||
Other operating expenses | 11,173 | 11,878 | 13,769 | 9,420 | 12,085 | 13,447 | ||||||||||||||||||
Total operating expenses | 111,726 | 90,573 | 79,048 | 109,804 | 84,815 | 126,093 | ||||||||||||||||||
Income (loss) from operations | (69,216 | ) | (77,018 | ) | (35,907 | ) | (87,200 | ) | (4,654 | ) | (63,405 | ) | ||||||||||||
Other income (expense) | ||||||||||||||||||||||||
Interest expenses | - | - | - | - | 32,297 | 32,725 | ||||||||||||||||||
Other Income | - | - | - | - | - | (15 | ) | |||||||||||||||||
Total Other income (expense) | - | - | - | - | 32,297 | 32,710 | ||||||||||||||||||
Net income (loss) | $ | (69,216 | ) | $ | (77,018 | ) | $ | (35,907 | ) | $ | (87,200 | ) | $ | (36,951 | ) | $ | (96,115 | ) |
The accompanying notes are an integral part of these consolidated and consolidating financial statements.
F-15
ARRIVED STR, LLC AND ITS SERIES
CONSOLIDATED AND CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS)
FOR THE YEAR ENDED DECEMBER 31, 2023
Orchard | Palm | Pasquin | Pickler | Pointbreak | Regal | |||||||||||||||||||
Rental income | $ | 25,927 | $ | 58,730 | $ | 19,016 | $ | 45,636 | $ | 30,904 | $ | 77,665 | ||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Depreciation | 31,571 | 30,177 | 20,732 | 29,398 | 20,491 | 28,008 | ||||||||||||||||||
Insurance | 2,391 | 490 | 1,813 | 2,678 | 11,160 | 3,425 | ||||||||||||||||||
Management fees | 5,542 | 18,612 | 3,376 | 34,236 | 4,845 | 17,031 | ||||||||||||||||||
Management fees, related party | 1,296 | 3,272 | 951 | 1,744 | 1,370 | 3,414 | ||||||||||||||||||
Repairs & maintenance | 1,200 | 50,458 | 67,347 | 8,584 | 20,625 | 11,262 | ||||||||||||||||||
Property taxes | 111 | 3,364 | 5,115 | 2,918 | 3,063 | 1,523 | ||||||||||||||||||
Credit loss expense | - | 12,289 | 4,576 | - | 12,345 | - | ||||||||||||||||||
Other operating expenses | 13,295 | 9,481 | 20,301 | 9,246 | 12,838 | 8,937 | ||||||||||||||||||
Total operating expenses | 55,408 | 128,143 | 124,210 | 88,803 | 86,737 | 73,600 | ||||||||||||||||||
Income (loss) from operations | (29,481 | ) | (69,413 | ) | (105,194 | ) | (43,168 | ) | (55,833 | ) | 4,065 | |||||||||||||
Other income (expense) | ||||||||||||||||||||||||
Interest expenses | - | 20,287 | - | - | 12,319 | 35,578 | ||||||||||||||||||
Other Income | - | (77 | ) | - | - | - | (90 | ) | ||||||||||||||||
Total Other income (expense) | - | 20,210 | - | - | 12,319 | 35,488 | ||||||||||||||||||
Net income (loss) | $ | (29,481 | ) | $ | (89,623 | ) | $ | (105,194 | ) | $ | (43,168 | ) | $ | (68,153 | ) | $ | (31,423 | ) |
The accompanying notes are an integral part of these consolidated and consolidating financial statements.
F-16
ARRIVED STR, LLC AND ITS SERIES
CONSOLIDATED AND CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS)
FOR THE YEAR ENDED DECEMBER 31, 2023
Serenity | Smokey | Solstice | Sugarcreek | SuiteSpot | Consolidated | |||||||||||||||||||
Rental income | $ | 119,354 | $ | 24,222 | $ | 3,099 | $ | 11,780 | $ | 34,081 | $ | 1,415,647 | ||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Depreciation | 50,494 | 20,415 | 11,783 | 18,663 | 19,963 | 794,326 | ||||||||||||||||||
Insurance | 4,357 | 1,648 | 1,133 | 2,033 | 2,012 | 98,609 | ||||||||||||||||||
Management fees | 41,502 | 2,306 | 822 | 2,314 | (20,000 | ) | 379,756 | |||||||||||||||||
Management fees, related party | 5,968 | 4,983 | 155 | 589 | 28,523 | 103,441 | ||||||||||||||||||
Repairs & maintenance | 9,440 | 40,136 | 1,619 | 40,565 | 106,258 | 921,223 | ||||||||||||||||||
Property taxes | 5,842 | 21 | 1,353 | 641 | 1,436 | 118,672 | ||||||||||||||||||
Credit loss expense | - | - | - | - | - | 182,140 | ||||||||||||||||||
Other operating expenses | 14,630 | 19,596 | 6,827 | 8,825 | 18,483 | 391,143 | ||||||||||||||||||
Total operating expenses | 132,231 | 89,104 | 23,692 | 73,630 | 156,676 | 2,989,309 | ||||||||||||||||||
Income (loss) from operations | (12,878 | ) | (64,882 | ) | (20,594 | ) | (61,850 | ) | (122,595 | ) | (1,573,662 | ) | ||||||||||||
Other income (expense) | ||||||||||||||||||||||||
Interest expenses | 32,193 | - | 7,844 | 13,633 | 29,731 | 384,636 | ||||||||||||||||||
Other Income | - | - | - | - | - | (577 | ) | |||||||||||||||||
Total Other income (expense) | 32,193 | - | 7,844 | 13,633 | 29,731 | 384,059 | ||||||||||||||||||
Net income (loss) | $ | (45,071 | ) | $ | (64,882 | ) | $ | (28,438 | ) | $ | (75,483 | ) | $ | (152,326 | ) | $ | (1,957,721 | ) |
The accompanying notes are an integral part of these consolidated and consolidating financial statements.
F-17
ARRIVED STR, LLC AND ITS SERIES
CONSOLIDATED AND CONSOLIDATING STATEMENT OF COMPREHENSIVE LOSS
FOR THE PERIOD JULY 11, 2022 (DATE OF INCEPTION) THROUGH DECEMBER 31, 2022
Ace | Billingswood | Cactus | Cardinal | Coolbaugh | Hammock | |||||||||||||||||||
Rental income | $ | 4,370 | $ | - | $ | 4,812 | $ | 2,792 | $ | - | $ | 2,331 | ||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Depreciation | 5,911 | - | 6,815 | 3,385 | - | 4,228 | ||||||||||||||||||
Insurance | 1,076 | - | 1,070 | 797 | - | 2,402 | ||||||||||||||||||
Management fees | 693 | - | 304 | 737 | - | 846 | ||||||||||||||||||
Management fees, related party | - | - | - | - | - | - | ||||||||||||||||||
Repairs & maintenance | 56,863 | - | 54,491 | 45,077 | - | 116,987 | ||||||||||||||||||
Property taxes | 888 | - | 1,052 | 2,421 | - | 4,282 | ||||||||||||||||||
Other operating expenses | 3,695 | - | 4,906 | 5,835 | - | 4,894 | ||||||||||||||||||
Total operating expenses | 69,126 | - | 68,638 | 58,253 | - | 133,639 | ||||||||||||||||||
Loss from operations | (64,756 | ) | - | (63,826 | ) | (55,460 | ) | - | (131,309 | ) | ||||||||||||||
Other expenses | ||||||||||||||||||||||||
Interest expenses | (8,682 | ) | - | (7,456 | ) | (6,211 | ) | - | (2,748 | ) | ||||||||||||||
Total other expenses | (8,682 | ) | - | (7,456 | ) | (6,211 | ) | - | (2,748 | ) | ||||||||||||||
Net loss | $ | (73,438 | ) | $ | - | $ | (71,281 | ) | $ | (61,672 | ) | $ | - | $ | (134,056 | ) |
The accompanying notes are an integral part of these consolidated and consolidating financial statements.
F-18
ARRIVED STR, LLC AND ITS SERIES
CONSOLIDATED AND CONSOLIDATING STATEMENT OF COMPREHENSIVE LOSS
FOR THE PERIOD JULY 11, 2022 (DATE OF INCEPTION) THROUGH DECEMBER 31, 2022
Havasu | Hickorybear | Kinlani | Koi | Lakeridge | Lodge | |||||||||||||||||||
Rental income | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Depreciation | 789 | - | - | - | 263 | 1,302 | ||||||||||||||||||
Insurance | 377 | - | - | - | 214 | 383 | ||||||||||||||||||
Management fees | 315 | - | - | - | 155 | - | ||||||||||||||||||
Management fees, related party | - | - | - | - | - | - | ||||||||||||||||||
Repairs & maintenance | 43,657 | - | - | - | 15,350 | 24,487 | ||||||||||||||||||
Property taxes | 810 | - | - | - | 518 | 944 | ||||||||||||||||||
Other operating expenses | 2,850 | - | - | - | 4,529 | 3,176 | ||||||||||||||||||
Total operating expenses | 48,799 | - | - | - | 21,029 | 30,292 | ||||||||||||||||||
Loss from operations | (48,799 | ) | - | - | - | (21,029 | ) | (30,292 | ) | |||||||||||||||
Other expenses | ||||||||||||||||||||||||
Interest expenses | (3,436 | ) | - | - | - | (2,661 | ) | - | ||||||||||||||||
Total other expenses | (3,436 | ) | - | - | - | (2,661 | ) | - | ||||||||||||||||
Net loss | $ | (52,235 | ) | $ | - | $ | - | $ | - | $ | (23,691 | ) | $ | (30,292 | ) |
The accompanying notes are an integral part of these consolidated and consolidating financial statements.
F-19
ARRIVED STR, LLC AND ITS SERIES
CONSOLIDATED AND CONSOLIDATING STATEMENT OF COMPREHENSIVE LOSS
FOR THE PERIOD JULY 11, 2022 (DATE OF INCEPTION) THROUGH DECEMBER 31, 2022
Longbranch | Loop | Mirage | Myrtle | Oasis | Opry | |||||||||||||||||||
Rental income | $ | - | $ | - | $ | - | $ | - | $ | 13,235 | $ | - | ||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Depreciation | - | - | 2,870 | - | 9,175 | - | ||||||||||||||||||
Insurance | - | - | - | - | 1,641 | - | ||||||||||||||||||
Management fees | - | - | 945 | - | 848 | - | ||||||||||||||||||
Management fees, related party | - | - | - | - | - | - | ||||||||||||||||||
Repairs & maintenance | - | - | 141,489 | - | 7,151 | - | ||||||||||||||||||
Property taxes | - | - | 2,359 | - | 7,191 | - | ||||||||||||||||||
Other operating expenses | - | - | 5,579 | 2,850 | 8,743 | 2,850 | ||||||||||||||||||
Total operating expenses | - | - | 153,241 | 2,850 | 34,750 | 2,850 | ||||||||||||||||||
Loss from operations | - | - | (153,241 | ) | (2,850 | ) | (21,515 | ) | (2,850 | ) | ||||||||||||||
Other expenses | ||||||||||||||||||||||||
Interest expenses | - | - | - | - | (8,613 | ) | - | |||||||||||||||||
Total other expenses | - | - | - | - | (8,613 | ) | - | |||||||||||||||||
Net loss | $ | - | $ | - | $ | (153,241 | ) | $ | (2,850 | ) | $ | (30,127 | ) | $ | (2,850 | ) |
The accompanying notes are an integral part of these consolidated and consolidating financial statements.
F-20
ARRIVED STR, LLC AND ITS SERIES
CONSOLIDATED AND CONSOLIDATING STATEMENT OF COMPREHENSIVE LOSS
FOR THE PERIOD JULY 11, 2022 (DATE OF INCEPTION) THROUGH DECEMBER 31, 2022
Orchard | Palm | Pasquin | Pickler | Pointbreak | Regal | |||||||||||||||||||
Rental income | $ | 1,109 | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Depreciation | 7,476 | 145 | - | - | 2,687 | - | ||||||||||||||||||
Insurance | 689 | 4,228 | - | - | - | - | ||||||||||||||||||
Management fees | 825 | 172 | - | - | 702 | 261 | ||||||||||||||||||
Management fees, related party | - | - | - | - | - | - | ||||||||||||||||||
Repairs & maintenance | 60,206 | 67,817 | - | - | 87,895 | 19,435 | ||||||||||||||||||
Property taxes | - | 6,257 | - | - | 2,862 | 54 | ||||||||||||||||||
Other operating expenses | 6,302 | 3,870 | - | - | 5,602 | 3,490 | ||||||||||||||||||
Total operating expenses | 75,497 | 82,489 | - | - | 99,748 | 23,241 | ||||||||||||||||||
Loss from operations | (74,388 | ) | (82,489 | ) | - | - | (99,748 | ) | (23,241 | ) | ||||||||||||||
Other expenses | ||||||||||||||||||||||||
Interest expenses | - | (2,273 | ) | - | - | (355 | ) | (1,107 | ) | |||||||||||||||
Total other expenses | - | (2,273 | ) | - | - | (355 | ) | (1,107 | ) | |||||||||||||||
Net loss | $ | (74,388 | ) | $ | (84,762 | ) | $ | - | $ | - | $ | (100,103 | ) | $ | (24,347 | ) |
The accompanying notes are an integral part of these consolidated and consolidating financial statements.
F-21
ARRIVED STR, LLC AND ITS SERIES
CONSOLIDATED AND CONSOLIDATING STATEMENT OF COMPREHENSIVE LOSS
FOR THE PERIOD JULY 11, 2022 (DATE OF INCEPTION) THROUGH DECEMBER 31, 2022
Serenity | Smokey | Solstice | Sugarcreek | SuiteSpot | Consolidated | |||||||||||||||||||
Rental income | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 28,649 | ||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Depreciation | 3,985 | - | - | 355 | - | 49,387 | ||||||||||||||||||
Insurance | 821 | - | - | 162 | - | 13,860 | ||||||||||||||||||
Management fees | 329 | - | - | 116 | - | 7,248 | ||||||||||||||||||
Management fees, related party | - | - | - | - | - | - | ||||||||||||||||||
Repairs & maintenance | 21,553 | - | - | 264 | - | 762,720 | ||||||||||||||||||
Property taxes | 736 | - | - | 385 | - | 30,760 | ||||||||||||||||||
Other operating expenses | 3,093 | - | - | 3,795 | - | 76,059 | ||||||||||||||||||
Total operating expenses | 30,515 | - | - | 5,077 | - | 940,035 | ||||||||||||||||||
Loss from operations | (30,515 | ) | - | - | (5,077 | ) | - | (911,385 | ) | |||||||||||||||
Other expenses | ||||||||||||||||||||||||
Interest expenses | (5,864 | ) | - | - | (2,048 | ) | - | (51,453 | ) | |||||||||||||||
Total other expenses | (5,864 | ) | - | - | (2,048 | ) | - | (51,453 | ) | |||||||||||||||
Net loss | $ | (36,379 | ) | $ | - | $ | - | (7,125 | ) | $ | - | $ | (962,839 | ) |
The accompanying notes are an integral part of these consolidated and consolidating financial statements.
F-22
ARRIVED STR, LLC AND ITS SERIES
CONSOLIDATED AND CONSOLIDATING STATEMENT OF CHANGES IN MEMBER’S EQUITY
FOR THE YEAR ENDED DECEMBER 31, 2023
Ace | Billingswood | Cactus | Cardinal | Coolbaugh | Hammock | |||||||||||||||||||
Balance at January 1, 2023 | $ | 701,087 | $ | - | $ | 711,258 | $ | 520,020 | $ | - | $ | 409,248 | ||||||||||||
Issuance of membership units, net of offering costs | (1,200 | ) | 1,023,424 | (300 | ) | (2,400 | ) | 652,331 | - | |||||||||||||||
Deemed contribution from Manager | - | 69,539 | - | - | - | 18,603 | ||||||||||||||||||
Distributions | (49,970 | ) | (20,162 | ) | (53,673 | ) | (51,106 | ) | (22,087 | ) | (25,202 | ) | ||||||||||||
Net income (loss) | (25,213 | ) | (154,148 | ) | (23,757 | ) | 13,498 | (98,970 | ) | (65,268 | ) | |||||||||||||
Balance at December 31, 2023 | $ | 624,704 | $ | 918,654 | $ | 633,528 | $ | 480,013 | $ | 531,274 | $ | 337,382 |
The accompanying notes are an integral part of these consolidated and consolidating financial statements.
F-23
ARRIVED STR, LLC AND ITS SERIES
CONSOLIDATED AND CONSOLIDATING STATEMENT OF CHANGES IN MEMBER’S EQUITY
AS OF DECEMBER 31, 2023
Havasu | Hickorybear | Kinlani | Koi | Lakeridge | Lodge | |||||||||||||||||||
Balance at January 1, 2023 | $ | 756,943 | $ | - | $ | - | $ | - | $ | 407,374 | $ | (29,867 | ) | |||||||||||
Issuance of membership units, net of offering costs | (100 | ) | 915,183 | 897,392 | 940,013 | - | 1,301,196 | |||||||||||||||||
Deemed contribution from Manager | - | 453 | 2,240 | - | - | 1,984 | ||||||||||||||||||
Distributions | (37,673 | ) | (36,117 | ) | (35,434 | ) | (18,500 | ) | (14,224 | ) | (47,114 | ) | ||||||||||||
Net income (loss) | (68,944 | ) | (108,903 | ) | (44,102 | ) | (88,403 | ) | (57,401 | ) | (100,463 | ) | ||||||||||||
Balance at December 31, 2023 | $ | 650,225 | $ | 770,616 | $ | 820,096 | $ | 833,110 | $ | 335,750 | $ | 1,125,737 |
The accompanying notes are an integral part of these consolidated and consolidating financial statements.
F-24
ARRIVED STR, LLC AND ITS SERIES
CONSOLIDATED AND CONSOLIDATING STATEMENT OF CHANGES IN MEMBER’S EQUITY
AS OF DECEMBER 31, 2023
Longbranch | Loop | Mirage | Myrtle | Oasis | Opry | |||||||||||||||||||
Balance at January 1, 2023 | $ | - | $ | - | $ | 607,250 | $ | (2,425 | ) | $ | 599,120 | $ | 809,513 | |||||||||||
Issuance of membership units, net of offering costs | 1,028,311 | 831,886 | (100 | ) | 591,073 | (2,400 | ) | - | ||||||||||||||||
Deemed contribution from Manager | - | 2,948 | - | 12,631 | - | - | ||||||||||||||||||
Distributions | (40,530 | ) | (28,213 | ) | (23,564 | ) | (17,409 | ) | (30,028 | ) | (29,757 | ) | ||||||||||||
Net income (loss) | (69,216 | ) | (77,018 | ) | (35,907 | ) | (87,200 | ) | (36,951 | ) | (96,115 | ) | ||||||||||||
Balance at December 31, 2023 | $ | 918,565 | $ | 729,603 | $ | 547,678 | $ | 496,670 | $ | 529,741 | $ | 683,641 |
The accompanying notes are an integral part of these consolidated and consolidating financial statements.
F-25
ARRIVED STR, LLC AND ITS SERIES
CONSOLIDATED AND CONSOLIDATING STATEMENT OF CHANGES IN MEMBER’S EQUITY
AS OF DECEMBER 31, 2023
Orchard | Palm | Pasquin | Pickler | Pointbreak | Regal | |||||||||||||||||||
Balance at January 1, 2023 | $ | 677,184 | $ | 470,653 | $ | - | $ | - | $ | 296,115 | $ | (23,922 | ) | |||||||||||
Issuance of membership units, net of offering costs | (550 | ) | - | 668,458 | 1,368,211 | (250 | ) | 701,045 | ||||||||||||||||
Deemed contribution from Manager | - | 7,522 | 4,576 | - | 12,345 | - | ||||||||||||||||||
Distributions | (24,068 | ) | (14,574 | ) | (21,232 | ) | (50,969 | ) | (13,873 | ) | (32,188 | ) | ||||||||||||
Net income (loss) | (29,481 | ) | (89,623 | ) | (105,194 | ) | (43,168 | ) | (68,153 | ) | (31,423 | ) | ||||||||||||
Balance at December 31, 2023 | $ | 623,085 | $ | 373,979 | $ | 546,609 | $ | 1,274,074 | $ | 226,185 | $ | 613,512 |
The accompanying notes are an integral part of these consolidated and consolidating financial statements.
F-26
ARRIVED STR, LLC AND ITS SERIES
CONSOLIDATED AND CONSOLIDATING STATEMENT OF CHANGES IN MEMBER’S EQUITY
AS OF DECEMBER 31, 2023
Serenity | Smokey | Solstice | Sugarcreek | SuiteSpot | Consolidated | |||||||||||||||||||
Balance at January 1, 2023 | $ | 856,185 | $ | - | $ | - | $ | 315,964 | $ | - | $ | 8,081,702 | ||||||||||||
Issuance of membership units, net of offering costs | - | 896,932 | 939,388 | (1,000 | ) | 1,134,382 | 13,880,925 | |||||||||||||||||
Deemed contribution from Manager | - | 2,635 | - | - | 3,420 | 138,899 | ||||||||||||||||||
Distributions | (55,239 | ) | (18,678 | ) | (13,374 | ) | (7,794 | ) | (14,911 | ) | (847,663 | ) | ||||||||||||
Net income (loss) | (45,071 | ) | (64,882 | ) | (28,438 | ) | (75,483 | ) | (152,326 | ) | (1,957,721 | ) | ||||||||||||
Balance at December 31, 2023 | $ | 755,875 | $ | 816,006 | $ | 897,576 | $ | 231,687 | $ | 970,565 | $ | 19,296,141 |
The accompanying notes are an integral part of these consolidated and consolidating financial statements.
F-27
ARRIVED STR, LLC AND ITS SERIES
CONSOLIDATED AND CONSOLIDATING STATEMENT OF CHANGES IN MEMBERS’ EQUITY (DEFICIT)
FOR THE PERIOD JULY 11, 2022 (DATE OF INCEPTION) THROUGH DECEMBER 31, 2022
Ace | Billingswood | Cactus | Cardinal | Coolbaugh | Hammock | |||||||||||||||||||
Balance at July 11, 2022 | ||||||||||||||||||||||||
Issuance of membership units, net of offering costs | $ | 785,709 | $ | - | $ | 790,165 | $ | 587,912 | $ | - | $ | 550,253 | ||||||||||||
Deemed contribution from manager | 425 | - | 425 | 425 | - | 425 | ||||||||||||||||||
Distributions | (11,608 | ) | - | (8,051 | ) | (6,645 | ) | - | (7,374 | ) | ||||||||||||||
Net loss | (73,438 | ) | - | (71,281 | ) | (61,672 | ) | - | (134,056 | ) | ||||||||||||||
Balance at December 31, 2022 | $ | 701,087 | $ | - | $ | 711,258 | $ | 520,020 | $ | - | $ | 409,248 |
The accompanying notes are an integral part of these consolidated and consolidating financial statements.
F-28
ARRIVED STR, LLC AND ITS SERIES
CONSOLIDATED AND CONSOLIDATING STATEMENT OF CHANGES IN MEMBERS’ EQUITY (DEFICIT)
FOR THE PERIOD JULY 11, 2022 (DATE OF INCEPTION) THROUGH DECEMBER 31, 2022
Havasu | Hickorybear | Kinlani | Koi | Lakeridge | Lodge | |||||||||||||||||||
Balance at July 11, 2022 | ||||||||||||||||||||||||
Issuance of membership units, net of offering costs | $ | 808,753 | $ | - | $ | - | $ | - | $ | 430,640 | $ | - | ||||||||||||
Deemed contribution from manager | 425 | - | - | - | 425 | 425 | ||||||||||||||||||
Distributions | - | - | - | - | - | - | ||||||||||||||||||
Net loss | (52,235 | ) | - | - | - | (23,691 | ) | (30,292 | ) | |||||||||||||||
Balance at December 31, 2022 | $ | 756,943 | $ | - | $ | - | $ | - | $ | 407,374 | $ | (29,867 | ) |
The accompanying notes are an integral part of these consolidated and consolidating financial statements.
F-29
ARRIVED STR, LLC AND ITS SERIES
CONSOLIDATED AND CONSOLIDATING STATEMENT OF CHANGES IN MEMBERS’ EQUITY (DEFICIT)
FOR THE PERIOD JULY 11, 2022 (DATE OF INCEPTION) THROUGH DECEMBER 31, 2022
Longbranch | Loop | Mirage | Myrtle | Oasis | Opry | |||||||||||||||||||
Balance at July 11, 2022 | ||||||||||||||||||||||||
Issuance of membership units, net of offering costs | $ | - | $ | - | $ | 768,480 | $ | - | $ | 636,893 | $ | 820,306 | ||||||||||||
Deemed contribution from manager | - | - | 425 | 425 | 425 | 425 | ||||||||||||||||||
Distributions | - | - | (8,414 | ) | - | (8,070 | ) | (8,368 | ) | |||||||||||||||
Net loss | - | - | (153,241 | ) | (2,850 | ) | (30,127 | ) | (2,850 | ) | ||||||||||||||
Balance at December 31, 2022 | $ | - | $ | - | $ | 607,250 | $ | (2,425 | ) | $ | 599,120 | $ | 809,513 |
The accompanying notes are an integral part of these consolidated and consolidating financial statements.
F-30
ARRIVED STR, LLC AND ITS SERIES
CONSOLIDATED AND CONSOLIDATING STATEMENT OF CHANGES IN MEMBERS’ EQUITY (DEFICIT)
FOR THE PERIOD JULY 11, 2022 (DATE OF INCEPTION) THROUGH DECEMBER 31, 2022
Orchard | Palm | Pasquin | Pickler | Pointbreak | Regal | |||||||||||||||||||
Balance at July 11, 2022 | ||||||||||||||||||||||||
Issuance of membership units, net of offering costs | $ | 761,108 | $ | 561,324 | $ | - | $ | - | $ | 400,270 | $ | - | ||||||||||||
Deemed contribution from manager | 425 | 425 | - | - | 425 | 425 | ||||||||||||||||||
Distributions | (9,961 | ) | (6,334 | ) | - | - | (4,476 | ) | - | |||||||||||||||
Net loss | (74,388 | ) | (84,762 | ) | - | - | (100,103 | ) | (24,347 | ) | ||||||||||||||
Balance at December 31, 2022 | $ | 677,184 | $ | 470,653 | $ | - | $ | - | $ | 296,115 | $ | (23,922 | ) |
The accompanying notes are an integral part of these consolidated and consolidating financial statements.
F-31
ARRIVED STR, LLC AND ITS SERIES
CONSOLIDATED AND CONSOLIDATING STATEMENT OF CHANGES IN MEMBERS’ EQUITY (DEFICIT)
FOR THE PERIOD JULY 11, 2022 (DATE OF INCEPTION) THROUGH DECEMBER 31, 2022
Serenity | Smokey | Solstice | Sugarcreek | SuiteSpot | Consolidated | |||||||||||||||||||
Balance at July 11, 2022 | ||||||||||||||||||||||||
Issuance of membership units, net of offering costs | $ | 905,436 | $ | - | $ | - | $ | 326,748 | $ | - | $ | 9,133,996 | ||||||||||||
Deemed contribution from manager | 425 | - | - | 425 | - | 7,225 | ||||||||||||||||||
Distributions | (13,297 | ) | - | - | (4,084 | ) | - | (96,680 | ) | |||||||||||||||
Net loss | (36,379 | ) | - | - | (7,125 | ) | - | (962,839 | ) | |||||||||||||||
Balance at December 31, 2022 | $ | 856,185 | $ | - | $ | - | $ | 315,964 | $ | - | $ | 8,081,702 |
The accompanying notes are an integral part of these consolidated and consolidating financial statements.
F-32
ARRIVED STR, LLC AND ITS SERIES
CONSOLIDATED AND CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2023
Ace | Billingswood | Cactus | Cardinal | Coolbaugh | Hammock | |||||||||||||||||||
Cash Flows from Operating Activities: | ||||||||||||||||||||||||
Net income (loss) | $ | (25,213 | ) | $ | (154,148 | ) | $ | (23,757 | ) | $ | 13,498 | $ | (98,970 | ) | $ | (65,268 | ) | |||||||
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||||||||||||||||||||
Depreciation | 40,493 | 18,241 | 37,923 | 41,689 | 20,700 | 25,027 | ||||||||||||||||||
Amortization | 319 | - | 2,752 | 233 | - | 1,560 | ||||||||||||||||||
Credit loss expense | - | 89,794 | - | - | 6,207 | 40,838 | ||||||||||||||||||
(Increase) Decrease in assets | ||||||||||||||||||||||||
Other receivables | - | - | - | - | - | - | ||||||||||||||||||
Subscription receivables | - | - | - | - | - | - | ||||||||||||||||||
Due (from) to third party property managers | (5,025 | ) | 8,285 | (5,443 | ) | (3,254 | ) | 370 | (979 | ) | ||||||||||||||
Prepaid expenses | (3,244 | ) | (719 | ) | (884 | ) | (2,379 | ) | (429 | ) | (4,907 | ) | ||||||||||||
Increase (decrease) in liabilities | ||||||||||||||||||||||||
Accrued expenses | 13,482 | 10,098 | 15,539 | 10,497 | 15,694 | 9,498 | ||||||||||||||||||
Accounts payable | - | - | - | - | - | - | ||||||||||||||||||
Due to (from) related parties | (57,160 | ) | 10,463 | (127,649 | ) | (78,356 | ) | 147,123 | (169,014 | ) | ||||||||||||||
Net cash provided by (used in) operating activities | (36,348 | ) | (17,985 | ) | (101,520 | ) | (18,072 | ) | 90,695 | (163,243 | ) | |||||||||||||
Cash flows from financing activities | ||||||||||||||||||||||||
Repayments of amounts due to related party | - | (979,755 | ) | - | - | (710,615 | ) | - | ||||||||||||||||
Net proceeds from the issuance of membership units | (1,200 | ) | 1,023,424 | (300 | ) | (2,400 | ) | 652,331 | - | |||||||||||||||
Distributions | (49,970 | ) | (20,162 | ) | (53,673 | ) | (51,106 | ) | (22,087 | ) | (25,202 | ) | ||||||||||||
Net cash provided by (used in) financing activities | (51,170 | ) | 23,508 | (53,973 | ) | (53,506 | ) | (80,371 | ) | (25,202 | ) | |||||||||||||
Net change in cash | (87,518 | ) | 5,522 | (155,493 | ) | (71,578 | ) | 10,324 | (188,445 | ) | ||||||||||||||
Cash at beginning of year | 100,279 | - | 190,955 | 98,524 | - | 190,006 | ||||||||||||||||||
Cash at end of year | $ | 12,762 | $ | 5,522 | $ | 35,462 | $ | 26,945 | $ | 10,324 | $ | 1,561 | ||||||||||||
Cash paid for income taxes | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||
Cash paid for interest expenses | $ | 27,101 | $ | - | $ | 31,927 | $ | 19,210 | $ | - | $ | 17,594 | ||||||||||||
Supplemental disclosure of non-cash investing and financing activities: | ||||||||||||||||||||||||
Advance from related party for acquisition of property | $ | - | $ | 788,116 | $ | - | $ | - | $ | 443,542 | $ | - | ||||||||||||
Mortgage payable, net of capitalized loan costs for acquisition of property | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||
Deemed contribution from Manager | $ | - | $ | 69,539 | $ | - | $ | - | $ | - | $ | 18,603 |
The accompanying notes are an integral part of these consolidated and consolidating financial statements.
F-33
ARRIVED STR, LLC AND ITS SERIES
CONSOLIDATED AND CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2023
Havasu | Hickorybear | Kinlani | Koi | Lakeridge | Lodge | |||||||||||||||||||
Cash Flows from Operating Activities: | ||||||||||||||||||||||||
Net income (loss) | $ | (68,944 | ) | $ | (108,903 | ) | $ | (44,102 | ) | $ | (88,403 | ) | $ | (57,401 | ) | $ | (100,463 | ) | ||||||
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||||||||||||||||||||
Depreciation | 40,787 | 22,056 | 24,237 | 19,140 | 26,628 | 46,001 | ||||||||||||||||||
Amortization | 2,559 | 5,080 | 6,245 | - | 1,530 | - | ||||||||||||||||||
Credit loss expense | - | - | - | - | - | - | ||||||||||||||||||
(Increase) Decrease in assets | ||||||||||||||||||||||||
Other receivables | - | - | - | - | - | - | ||||||||||||||||||
Subscription receivables | - | - | - | - | - | - | ||||||||||||||||||
Due (from) to third party property managers | 853 | (2,790 | ) | (9,074 | ) | (3,552 | ) | (1,855 | ) | (6,984 | ) | |||||||||||||
Prepaid expenses | (910 | ) | (1,119 | ) | (660 | ) | (627 | ) | (433 | ) | (1,900 | ) | ||||||||||||
Increase (decrease) in liabilities | ||||||||||||||||||||||||
Accrued expenses | 11,427 | 16,947 | 14,881 | 9,238 | 5,062 | 23,590 | ||||||||||||||||||
Accounts payable | - | - | - | - | - | - | ||||||||||||||||||
Due to (from) related parties | (121,799 | ) | 28,397 | 113,878 | (87,339 | ) | (61,958 | ) | 198,349 | |||||||||||||||
Net cash provided by (used in) operating activities | (136,027 | ) | (40,333 | ) | 105,405 | (151,543 | ) | (88,426 | ) | 158,594 | ||||||||||||||
Cash flows from financing activities | ||||||||||||||||||||||||
Repayments of amounts due to related party | - | (810,661 | ) | (907,476 | ) | (769,971 | ) | - | (1,370,251 | ) | ||||||||||||||
Net proceeds from the issuance of membership units | (100 | ) | 915,183 | 897,392 | 940,013 | - | 1,301,196 | |||||||||||||||||
Distributions | (37,673 | ) | (36,117 | ) | (35,434 | ) | (18,500 | ) | (14,224 | ) | (47,114 | ) | ||||||||||||
Net cash provided by (used in) financing activities | (37,773 | ) | 68,405 | (45,517 | ) | 151,543 | (14,224 | ) | (116,169 | ) | ||||||||||||||
Net change in cash | (173,800 | ) | 28,072 | 59,888 | - | (102,650 | ) | 42,425 | ||||||||||||||||
Cash at beginning of year | 189,143 | - | - | - | 122,770 | 866 | ||||||||||||||||||
Cash at end of year | $ | 15,342 | $ | 28,072 | $ | 59,888 | $ | - | $ | 20,120 | $ | 43,291 | ||||||||||||
Cash paid for income taxes | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||
Cash paid for interest expenses | $ | 30,672 | $ | 8,254 | $ | 14,213 | $ | - | $ | 19,059 | $ | - | ||||||||||||
Supplemental disclosure of non-cash investing and financing activities: | ||||||||||||||||||||||||
Advance from related party for acquisition of property | $ | - | $ | 732,133 | $ | 755,585 | $ | 680,206 | $ | - | $ | - | ||||||||||||
Mortgage payable, net of capitalized loan costs for acquisition of property | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||
Deemed contribution from Manager | $ | - | $ | 453 | $ | 2,240 | $ | - | $ | - | $ | 1,984 |
The accompanying notes are an integral part of these consolidated and consolidating financial statements.
F-34
ARRIVED STR, LLC AND ITS SERIES
CONSOLIDATED AND CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2023
Longbranch | Loop | Mirage | Myrtle | Oasis | Opry | |||||||||||||||||||
Cash Flows from Operating Activities: | ||||||||||||||||||||||||
Net income (loss) | $ | (69,216 | ) | $ | (77,018 | ) | $ | (35,907 | ) | $ | (87,200 | ) | $ | (36,951 | ) | $ | (96,115 | ) | ||||||
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||||||||||||||||||||
Depreciation | 24,965 | 18,435 | 20,142 | 19,096 | 41,027 | 26,046 | ||||||||||||||||||
Amortization | - | - | - | - | - | 2,118 | ||||||||||||||||||
Credit loss expense | - | 2,948 | - | 13,142 | - | - | ||||||||||||||||||
(Increase) Decrease in assets | ||||||||||||||||||||||||
Other receivables | (4,544 | ) | - | - | (13,544 | ) | - | - | ||||||||||||||||
Subscription receivables | - | - | - | - | - | - | ||||||||||||||||||
Due (from) to third party property managers | (7,618 | ) | - | (2,540 | ) | - | (2,975 | ) | (2,059 | ) | ||||||||||||||
Prepaid expenses | (2,393 | ) | (572 | ) | (1,069 | ) | (1,199 | ) | (2,215 | ) | 1,160 | |||||||||||||
Increase (decrease) in liabilities | ||||||||||||||||||||||||
Accrued expenses | 16,090 | 8,989 | 10,645 | 13,710 | 9,933 | 27,267 | ||||||||||||||||||
Accounts payable | - | - | - | - | - | - | ||||||||||||||||||
Due to (from) related parties | 21,886 | 374 | (82,280 | ) | 23,071 | 29,424 | (36,316 | ) | ||||||||||||||||
Net cash provided by (used in) operating activities | (20,831 | ) | (46,844 | ) | (91,009 | ) | (32,925 | ) | 38,243 | (77,901 | ) | |||||||||||||
Cash flows from financing activities | ||||||||||||||||||||||||
Repayments of amounts due to related party | (913,417 | ) | (747,576 | ) | - | (515,389 | ) | - | - | |||||||||||||||
Net proceeds from the issuance of membership units | 1,028,311 | 831,886 | (100 | ) | 591,073 | (2,400 | ) | - | ||||||||||||||||
Distributions | (40,530 | ) | (28,213 | ) | (23,564 | ) | (17,409 | ) | (30,028 | ) | (29,757 | ) | ||||||||||||
Net cash provided by (used in) financing activities | 74,365 | 56,097 | (23,664 | ) | 58,275 | (32,428 | ) | (29,757 | ) | |||||||||||||||
Net change in cash | 53,534 | 9,253 | (114,673 | ) | 25,351 | 5,815 | (107,658 | ) | ||||||||||||||||
Cash at beginning of year | - | - | 133,427 | - | 619 | 187,186 | ||||||||||||||||||
Cash at end of year | $ | 53,534 | $ | 9,253 | $ | 18,754 | $ | 25,351 | $ | 6,434 | $ | 79,528 | ||||||||||||
Cash paid for income taxes | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||
Cash paid for interest expenses | $ | - | $ | - | $ | - | $ | - | $ | 32,297 | $ | 32,725 | ||||||||||||
Supplemental disclosure of non-cash investing and financing activities: | ||||||||||||||||||||||||
Advance from related party for acquisiton of property | $ | 818,127 | $ | 663,025 | $ | - | $ | 4,870 | $ | - | $ | - | ||||||||||||
Mortgage payable, net of capitalized loan costs for acquisition of property | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 462,000 | ||||||||||||
Deemed contribution from Manager | $ | - | $ | 2,948 | $ | - | $ | 12,631 | $ | - | $ | - |
The accompanying notes are an integral part of these consolidated and consolidating financial statements.
F-35
ARRIVED STR, LLC AND ITS SERIES
CONSOLIDATED AND CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2023
Orchard | Palm | Pasquin | Pickler | Pointbreak | Regal | |||||||||||||||||||
Cash Flows from Operating Activities: | ||||||||||||||||||||||||
Net income (loss) | $ | (29,481 | ) | $ | (89,623 | ) | $ | (105,194 | ) | $ | (43,168 | ) | $ | (68,153 | ) | $ | (31,423 | ) | ||||||
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||||||||||||||||||||
Depreciation | 31,571 | 30,177 | 20,732 | 29,398 | 20,491 | 28,008 | ||||||||||||||||||
Amortization | - | 1,693 | - | - | 146 | 2,375 | ||||||||||||||||||
Credit loss expense | - | 12,289 | 4,576 | - | 12,345 | - | ||||||||||||||||||
(Increase) Decrease in assets | ||||||||||||||||||||||||
Other receivables | - | - | - | - | - | - | ||||||||||||||||||
Subscription receivables | - | - | - | - | - | - | ||||||||||||||||||
Due (from) to third party property managers | (3,704 | ) | (5,206 | ) | (3,958 | ) | (8,492 | ) | - | (8,916 | ) | |||||||||||||
Prepaid expenses | (495 | ) | (578 | ) | 127 | (951 | ) | - | (831 | ) | ||||||||||||||
Increase (decrease) in liabilities | ||||||||||||||||||||||||
Accrued expenses | 6,038 | 5,057 | 13,556 | 19,106 | 4,127 | 11,460 | ||||||||||||||||||
Accounts payable | - | - | - | - | 25 | - | ||||||||||||||||||
Due to (from) related parties | (177,984 | ) | (162,008 | ) | 74 | 33,537 | (3,251 | ) | 671,723 | |||||||||||||||
Net cash provided by (used in) operating activities | (174,055 | ) | (208,199 | ) | (70,088 | ) | 29,430 | (34,270 | ) | 672,395 | ||||||||||||||
Cash flows from financing activities | ||||||||||||||||||||||||
Repayments of amounts due to related party | - | - | (558,236 | ) | (1,265,138 | ) | - | (1,286,627 | ) | |||||||||||||||
Net proceeds from the issuance of membership units | (550 | ) | - | 668,458 | 1,368,211 | (250 | ) | 701,045 | ||||||||||||||||
Distributions | (24,068 | ) | (14,574 | ) | (21,232 | ) | (50,969 | ) | (13,873 | ) | (32,188 | ) | ||||||||||||
Net cash provided by (used in) financing activities | (24,618 | ) | (14,574 | ) | 88,990 | 52,104 | (14,123 | ) | (617,770 | ) | ||||||||||||||
Net change in cash | (198,673 | ) | (222,772 | ) | 18,902 | 81,534 | (48,393 | ) | 54,625 | |||||||||||||||
Cash at beginning of year | 225,298 | 228,689 | - | - | 137,269 | 1,000 | ||||||||||||||||||
Cash at end of year | $ | 26,625 | $ | 5,917 | $ | 18,902 | $ | 81,534 | $ | 88,877 | $ | 55,625 | ||||||||||||
Cash paid for income taxes | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||
Cash paid for interest expenses | $ | - | $ | 20,287 | $ | - | $ | - | $ | 12,319 | $ | 35,578 | ||||||||||||
Supplemental disclosure of non-cash investing and financing activities: | ||||||||||||||||||||||||
Advance from related party for acquisiton of property | $ | - | $ | - | $ | 480,230 | $ | 1,088,545 | $ | - | $ | - | ||||||||||||
Mortgage payable, net of capitalized loan costs for acquisition of property | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||
Deemed contribution from Manager | $ | - | $ | 7,522 | $ | 4,576 | $ | - | $ | 12,345 | $ | - |
The accompanying notes are an integral part of these consolidated and consolidating financial statements.
F-36
ARRIVED STR, LLC AND ITS SERIES
CONSOLIDATED AND CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2023
Serenity | Smokey | Solstice | Sugarcreek | SuiteSpot | Consolidated | |||||||||||||||||||
Cash Flows from Operating Activities: | ||||||||||||||||||||||||
Net income (loss) | $ | (45,071 | ) | $ | (64,882 | ) | $ | (28,438 | ) | $ | (75,483 | ) | $ | (152,326 | ) | $ | (1,957,721 | ) | ||||||
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||||||||||||||||||||
Depreciation | 50,494 | 20,415 | 11,783 | 18,663 | 19,963 | 794,326 | ||||||||||||||||||
Amortization | 2,874 | - | 5,068 | 1,138 | 6,300 | 41,990 | ||||||||||||||||||
Credit loss expense | - | - | - | - | - | 182,140 | ||||||||||||||||||
(Increase) Decrease in assets | ||||||||||||||||||||||||
Other receivables | - | - | - | - | - | (18,089 | ) | |||||||||||||||||
Subscription receivables | - | - | - | - | (265,063 | ) | (265,063 | ) | ||||||||||||||||
Due (from) to third party property managers | (9,874 | ) | 315 | 421 | (1,199 | ) | - | (85,254 | ) | |||||||||||||||
Prepaid expenses | (919 | ) | (643 | ) | (4,979 | ) | (387 | ) | (1,013 | ) | (35,164 | ) | ||||||||||||
Increase (decrease) in liabilities | ||||||||||||||||||||||||
Accrued expenses | 19,982 | 9,168 | 18,613 | 3,742 | 20,152 | 373,587 | ||||||||||||||||||
Accounts payable | - | - | - | - | - | 25 | ||||||||||||||||||
Due to (from) related parties | (143,927 | ) | 138,599 | 199,638 | (29,510 | ) | 239,134 | 517,117 | ||||||||||||||||
Net cash provided by (used in) operating activities | (126,440 | ) | 102,973 | 202,106 | (83,037 | ) | (132,852 | ) | (452,105 | ) | ||||||||||||||
Cash flows from financing activities | ||||||||||||||||||||||||
Repayments of amounts due to related party | - | (947,471 | ) | (1,001,988 | ) | - | (960,557 | ) | (13,745,127 | ) | ||||||||||||||
Net proceeds from the issuance of membership units | - | 896,932 | 939,388 | (1,000 | ) | 1,134,382 | 13,880,925 | |||||||||||||||||
Distributions | (55,239 | ) | (18,678 | ) | (13,374 | ) | (7,794 | ) | (14,911 | ) | (847,663 | ) | ||||||||||||
Net cash provided by (used in) financing activities | (55,239 | ) | (69,218 | ) | (75,974 | ) | (8,794 | ) | 158,913 | (711,865 | ) | |||||||||||||
Net change in cash | (181,679 | ) | 33,755 | 126,133 | (91,831 | ) | 26,062 | (1,163,969 | ) | |||||||||||||||
Cash at beginning of year | 260,066 | - | - | 96,948 | - | 2,163,045 | ||||||||||||||||||
Cash at end of year | $ | 78,386 | $ | 33,755 | $ | 126,133 | $ | 5,117 | $ | 26,062 | $ | 999,076 | ||||||||||||
Cash paid for income taxes | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||
Cash paid for interest expenses | $ | 32,193 | $ | - | $ | 7,844 | $ | 13,633 | $ | 29,731 | $ | 384,636 | ||||||||||||
Supplemental disclosure of non-cash investing and financing activities: | ||||||||||||||||||||||||
Advance from related party for acquisition of property | $ | - | $ | 743,636 | $ | 729,317 | $ | - | $ | 901,175 | $ | 8,828,506 | ||||||||||||
Mortgage payable, net of capitalized loan costs for acquisition of property | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 462,000 | ||||||||||||
Deemed contribution from Manager | $ | - | $ | 2,635 | $ | - | $ | - | $ | 3,420 | $ | 138,899 |
The accompanying notes are an integral part of these consolidated and consolidating financial statements.
F-37
ARRIVED STR, LLC AND ITS SERIES
CONSOLIDATED AND CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE PERIOD JULY 11, 2022 (DATE OF INCEPTION) THROUGH DECEMBER 31, 2022
Ace | Billingswood | Cactus | Cardinal | Coolbaugh | Hammock | |||||||||||||||||||
Cash Flows from Operating Activities: | ||||||||||||||||||||||||
Net loss | $ | (73,438 | ) | $ | - | $ | (71,281 | ) | $ | (61,672 | ) | $ | - | $ | (134,056 | ) | ||||||||
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||||||||||||||||||||
Depreciation | 5,911 | - | 6,815 | 3,385 | - | 4,228 | ||||||||||||||||||
Amortization | 80 | - | - | 58 | - | - | ||||||||||||||||||
(Increase) Decrease in assets | ||||||||||||||||||||||||
Prepaid expenses | (6,923 | ) | - | (353 | ) | (5,886 | ) | - | (8,215 | ) | ||||||||||||||
Due to (from) related parties | - | - | - | - | - | - | ||||||||||||||||||
Increase (decrease) in liabilities | ||||||||||||||||||||||||
Accrued expenses | 15,590 | - | 19,260 | 91,364 | - | 10,909 | ||||||||||||||||||
Due to (from) related parties | 165,580 | - | 149,010 | 44,561 | - | 185,482 | ||||||||||||||||||
Net cash provided by (used in) operating activities | 106,801 | - | 103,451 | 71,811 | - | 58,348 | ||||||||||||||||||
Cash flows from financing activities | ||||||||||||||||||||||||
Repayments of amounts due to related party | (780,622 | ) | - | (694,610 | ) | (554,554 | ) | - | (411,222 | ) | ||||||||||||||
Net proceeds from the issuance of membership units | 785,709 | - | 790,165 | 587,912 | - | 550,253 | ||||||||||||||||||
Distributions | (11,608 | ) | - | (8,051 | ) | (6,645 | ) | - | (7,374 | ) | ||||||||||||||
Net cash provided by (used in) financing activities | (6,521 | ) | - | 87,504 | 26,713 | - | 131,657 | |||||||||||||||||
Net change in cash | 100,279 | - | 190,955 | 98,524 | - | 190,006 | ||||||||||||||||||
Cash at beginning of period | - | - | - | - | - | - | ||||||||||||||||||
Cash at end of period | $ | 100,279 | $ | - | $ | 190,955 | $ | 98,524 | $ | - | $ | 190,006 | ||||||||||||
Cash paid for income taxes | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||
Cash paid for interest expenses | $ | 8,682 | $ | - | $ | 7,456 | $ | 6,211 | $ | - | $ | 2,748 | ||||||||||||
Supplemental disclosure of non-cash investing and financing activities: | ||||||||||||||||||||||||
Advance from related party for acquisiton of property | $ | 693,000 | $ | - | $ | 608,130 | $ | 491,040 | $ | - | $ | 356,400 | ||||||||||||
Mortgage payable, net of capitalized loan costs for acquisition of property | $ | 431,510 | $ | - | $ | 434,615 | $ | 305,539 | $ | - | $ | 225,487 | ||||||||||||
Deemed contribution from Manager | $ | 425 | $ | - | $ | 425 | $ | 425 | $ | - | $ | 425 |
The accompanying notes are an integral part of these consolidated and consolidating financial statements.
F-38
ARRIVED STR, LLC AND ITS SERIES
CONSOLIDATED AND CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE PERIOD JULY 11, 2022 (DATE OF INCEPTION) THROUGH DECEMBER 31, 2022
Havasu | Hickorybear | Kinlani | Koi | Lakeridge | Lodge | |||||||||||||||||||
Cash Flows from Operating Activities: | ||||||||||||||||||||||||
Net income (loss) | $ | (52,235 | ) | $ | - | $ | - | $ | - | $ | (23,691 | ) | $ | (30,292 | ) | |||||||||
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||||||||||||||||||||
Depreciation | 789 | - | - | - | 263 | 1,302 | ||||||||||||||||||
Amortization | - | - | - | - | - | - | ||||||||||||||||||
(Increase) Decrease in assets | ||||||||||||||||||||||||
Prepaid expenses | (2,263 | ) | - | - | - | (1,494 | ) | (1,916 | ) | |||||||||||||||
Due to (from) related parties | - | - | - | - | - | - | ||||||||||||||||||
Increase (decrease) in liabilities | ||||||||||||||||||||||||
Accrued expenses | 61,154 | - | - | - | 7,626 | 3,669 | ||||||||||||||||||
Due to (from) related parties | 93,433 | - | - | - | 72,131 | 28,103 | ||||||||||||||||||
Net cash provided by (used in) operating activities | 100,879 | - | - | - | 54,836 | 866 | ||||||||||||||||||
Cash flows from financing activities | ||||||||||||||||||||||||
Repayments of amounts due to related party | (720,489 | ) | - | - | - | (362,706 | ) | - | ||||||||||||||||
Net proceeds from the issuance of membership units | 808,753 | - | - | - | 430,640 | - | ||||||||||||||||||
Distributions | - | - | - | - | - | - | ||||||||||||||||||
Net cash provided by (used in) financing activities | 88,264 | - | - | - | 67,934 | - | ||||||||||||||||||
Net change in cash | 189,143 | - | - | - | 122,770 | 866 | ||||||||||||||||||
Cash at beginning of period | - | - | - | - | - | - | ||||||||||||||||||
Cash at end of period | $ | 189,143 | $ | - | $ | - | $ | - | $ | 122,770 | $ | 866 | ||||||||||||
Cash paid for income taxes | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||
Cash paid for interest expenses | $ | 3,436 | $ | - | $ | - | $ | - | $ | 2,661 | $ | - | ||||||||||||
Supplemental disclosure of non-cash investing and financing activities: | ||||||||||||||||||||||||
Advance from related party for acquisition of property | $ | 630,000 | $ | - | $ | - | $ | - | $ | 310,750 | $ | 1,030,000 | ||||||||||||
Mortgage payable, net of capitalized loan costs for acquisition of property | $ | 461,761 | $ | - | $ | - | $ | - | $ | 276,686 | $ | - | ||||||||||||
Deemed contribution from Manager | $ | 425 | $ | - | $ | - | $ | - | $ | 425 | $ | 425 |
The accompanying notes are an integral part of these consolidated and consolidating financial statements.
F-39
ARRIVED STR, LLC AND ITS SERIES
CONSOLIDATED AND CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE PERIOD JULY 11, 2022 (DATE OF INCEPTION) THROUGH DECEMBER 31, 2022
Longbranch | Loop | Mirage | Myrtle | Oasis | Opry | |||||||||||||||||||
Cash Flows from Operating Activities: | ||||||||||||||||||||||||
Net income (loss) | $ | - | $ | - | $ | (153,241 | ) | $ | (2,850 | ) | $ | (30,127 | ) | $ | (2,850 | ) | ||||||||
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||||||||||||||||||||
Depreciation | - | - | 2,870 | - | 9,175 | - | ||||||||||||||||||
Amortization | - | - | - | - | - | - | ||||||||||||||||||
(Increase) Decrease in assets | ||||||||||||||||||||||||
Prepaid expenses | - | - | (2,047 | ) | (1,012 | ) | (5,748 | ) | - | |||||||||||||||
Due to (from) related parties | - | - | - | - | (38,808 | ) | (609,886 | ) | ||||||||||||||||
Increase (decrease) in liabilities | ||||||||||||||||||||||||
Accrued expenses | - | - | 46,492 | 2,774 | 11,394 | 11,218 | ||||||||||||||||||
Due to (from) related parties | - | - | 171,384 | 1,087 | 152,194 | 710,062 | ||||||||||||||||||
Net cash provided by (used in) operating activities | - | - | 65,458 | - | 98,079 | 108,544 | ||||||||||||||||||
Cash flows from financing activities | ||||||||||||||||||||||||
Repayments of amounts due to related party | - | - | (692,097 | ) | - | (726,284 | ) | (733,296 | ) | |||||||||||||||
Net proceeds from the issuance of membership units | - | - | 768,480 | - | 636,893 | 820,306 | ||||||||||||||||||
Distributions | - | - | (8,414 | ) | - | (8,070 | ) | (8,368 | ) | |||||||||||||||
Net cash provided by (used in) financing activities | - | - | 67,969 | - | (97,461 | ) | 78,642 | |||||||||||||||||
Net change in cash | - | - | 133,427 | - | 619 | 187,186 | ||||||||||||||||||
Cash at beginning of period | - | - | - | - | - | - | ||||||||||||||||||
Cash at end of period | $ | - | $ | - | $ | 133,427 | $ | - | $ | 619 | $ | 187,186 | ||||||||||||
Cash paid for income taxes | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||
Cash paid for interest expenses | $ | - | $ | - | $ | - | $ | - | $ | 8,613 | $ | - | ||||||||||||
Supplemental disclosure of non-cash investing and financing activities: | ||||||||||||||||||||||||
Advance from related party for acquisition of property | $ | - | $ | - | $ | 629,900 | $ | 405,000 | $ | 565,500 | $ | 638,000 | ||||||||||||
Mortgage payable, net of capitalized loan costs for acquisition of property | $ | - | $ | - | $ | - | $ | - | $ | 477,000 | $ | - | ||||||||||||
Deemed contribution from Manager | $ | - | $ | - | $ | 425 | $ | 425 | $ | 425 | $ | 425 |
The accompanying notes are an integral part of these consolidated and consolidating financial statements.
F-40
ARRIVED STR, LLC AND ITS SERIES
CONSOLIDATED AND CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE PERIOD JULY 11, 2022 (DATE OF INCEPTION) THROUGH DECEMBER 31, 2022
Orchard | Palm | Pasquin | Pickler | Pointbreak | Regal | |||||||||||||||||||
Cash Flows from Operating Activities: | ||||||||||||||||||||||||
Net income (loss) | $ | (74,388 | ) | $ | (84,762 | ) | $ | - | $ | - | $ | (100,103 | ) | $ | (24,347 | ) | ||||||||
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||||||||||||||||||||
Depreciation | 7,476 | 145 | - | - | 2,687 | - | ||||||||||||||||||
Amortization | - | - | - | - | 36 | - | ||||||||||||||||||
(Increase) Decrease in assets | ||||||||||||||||||||||||
Prepaid expenses | (1,309 | ) | - | - | - | (14,218 | ) | (1,863 | ) | |||||||||||||||
Due to (from) related parties | - | - | - | - | - | - | ||||||||||||||||||
Increase (decrease) in liabilities | ||||||||||||||||||||||||
Accrued expenses | 14,821 | 18,288 | - | - | 16,294 | 23,392 | ||||||||||||||||||
Due to (from) related parties | 126,507 | 147,299 | - | - | 138,975 | 3,819 | ||||||||||||||||||
Net cash provided by (used in) operating activities | 73,107 | 80,971 | - | - | 43,670 | 1,000 | ||||||||||||||||||
Cash flows from financing activities | ||||||||||||||||||||||||
Repayments of amounts due to related party | (598,956 | ) | (407,272 | ) | - | - | (302,194 | ) | - | |||||||||||||||
Net proceeds from the issuance of membership units | 761,108 | 561,324 | - | - | 400,270 | - | ||||||||||||||||||
Distributions | (9,961 | ) | (6,334 | ) | - | - | (4,476 | ) | - | |||||||||||||||
Net cash provided by (used in) financing activities | 152,191 | 147,718 | - | - | 93,600 | - | ||||||||||||||||||
Net change in cash | 225,298 | 228,689 | - | - | 137,269 | 1,000 | ||||||||||||||||||
Cash at beginning of period | - | - | - | - | - | - | ||||||||||||||||||
Cash at end of period | $ | 225,298 | $ | 228,689 | $ | - | $ | - | $ | 137,269 | $ | 1,000 | ||||||||||||
Cash paid for income taxes | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||
Cash paid for interest expenses | $ | - | $ | 2,273 | $ | - | $ | - | $ | 355 | $ | 1,107 | ||||||||||||
Supplemental disclosure of non-cash investing and financing activities: | ||||||||||||||||||||||||
Advance from related party for acquisition of property | $ | 550,000 | $ | 343,750 | $ | - | $ | - | $ | 229,100 | $ | 522,500 | ||||||||||||
Mortgage payable, net of capitalized loan costs for acquisition of property | $ | - | $ | 305,398 | $ | - | $ | - | $ | 153,161 | $ | 461,857 | ||||||||||||
Deemed contribution from Manager | $ | 425 | $ | 425 | $ | - | $ | - | $ | 425 | $ | 425 |
The accompanying notes are an integral part of these consolidated and consolidating financial statements.
F-41
ARRIVED STR, LLC AND ITS SERIES
CONSOLIDATED AND CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE PERIOD JULY 11, 2022 (DATE OF INCEPTION) THROUGH DECEMBER 31, 2022
Serenity | Smokey | Solstice | Sugarcreek | SuiteSpot | Consolidated | |||||||||||||||||||
Cash Flows from Operating Activities: | ||||||||||||||||||||||||
Net income (loss) | $ | (36,379 | ) | $ | - | $ | - | $ | (7,125 | ) | $ | - | $ | (962,839 | ) | |||||||||
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||||||||||||||||||||
Depreciation | 3,985 | - | - | 355 | - | 49,387 | ||||||||||||||||||
Amortization | - | - | - | - | - | 175 | ||||||||||||||||||
(Increase) Decrease in assets | ||||||||||||||||||||||||
Prepaid expenses | (2,477 | ) | - | - | (1,135 | ) | - | (56,858 | ) | |||||||||||||||
Due to (from) related parties | - | - | - | - | - | (648,694 | ) | |||||||||||||||||
Increase (decrease) in liabilities | ||||||||||||||||||||||||
Accrued expenses | 22,147 | - | - | 10,432 | - | 386,824 | ||||||||||||||||||
Due to (from) related parties | 133,197 | - | - | 42,396 | - | 2,365,222 | ||||||||||||||||||
Net cash provided by (used in) operating activities | 120,473 | - | - | 44,923 | - | 1,133,217 | ||||||||||||||||||
Cash flows from financing activities | ||||||||||||||||||||||||
Repayments of amounts due to related party | (752,546 | ) | - | - | (270,639 | ) | - | (8,007,487 | ) | |||||||||||||||
Net proceeds from the issuance of membership units | 905,436 | - | - | 326,748 | - | 9,133,996 | ||||||||||||||||||
Distributions | (13,297 | ) | - | - | (4,084 | ) | - | (96,680 | ) | |||||||||||||||
Net cash provided by (used in) financing activities | 139,593 | - | - | 52,025 | - | 1,029,828 | ||||||||||||||||||
Net change in cash | 260,066 | - | - | 96,948 | - | 2,163,045 | ||||||||||||||||||
Cash at beginning of period | - | - | - | - | - | - | ||||||||||||||||||
Cash at end of period | $ | 260,066 | $ | - | $ | - | $ | 96,948 | $ | - | $ | 2,163,045 | ||||||||||||
Cash paid for income taxes | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||
Cash paid for interest expenses | $ | 5,864 | $ | - | $ | - | $ | 2,048 | $ | - | $ | 51,453 | ||||||||||||
Supplemental disclosure of non-cash investing and financing activities: | ||||||||||||||||||||||||
Advance from related party for acquisition of property | $ | 657,000 | $ | - | $ | - | $ | 231,000 | $ | - | $ | 8,891,070 | ||||||||||||
Mortgage payable, net of capitalized loan costs for acquisition of property | $ | 483,831 | $ | - | $ | - | $ | 205,748 | $ | - | $ | 4,222,592 | ||||||||||||
Deemed contribution from Manager | $ | 425 | $ | - | $ | - | $ | 425 | $ | - | $ | 7,225 |
The accompanying notes are an integral part of these consolidated and consolidating financial statements.
F-42
ARRIVED STR, LLC AND ITS SERIES
NOTES TO THE CONSOLIDATED AND CONSOLIDATING FINANCIAL STATEMENTS
DECEMBER 31, 2023
NOTE 1: NATURE OF OPERATIONS
Arrived STR, LLC is a Delaware Series limited liability company formed on July 11, 2022, under the laws of Delaware. Arrived STR, LLC was formed to permit public investment in individual single family rental homes, each of which will be held by a separate property-owning subsidiary owned by a separate Series of limited liability interests, or “Series,” that Arrived Holdings, Inc. (the “Manager”) established. As a Delaware Series limited liability company, the debts, liabilities, obligations and expenses incurred, contracted for or otherwise existing with respect to a particular Series are segregated and enforceable only against the assets of such Series, as provided under Delaware law. Principal operations of Arrived STR, LLC and its Series (collectively, the “Company”) did not commence until July 31, 2022.
The following list represents each Arrived STR, LLC’s Series and each Series’ wholly-owned limited liability company (“LLC”), which was used to acquire the Series’ single family rental property, along with the date the Series was formed and the date that the Series’ LLC acquired the single family rental as of December 31, 2023.
SERIES OFFERING TABLE
Series Name | State LLC Name and wholly owned subsidiary of the Series | Date Formed | Acquisition Date | |||
Ace | Arrived AZ Ace, LLC | 9/6/2022 | 9/15/2022 | |||
Billingswood | Arrived NY Billingswood, LLC | 2/24/2023 | 4/13/2023 | |||
Cactus | Arrived AZ Cactus, LLC | 9/13/2022 | 9/30/2022 | |||
Cardinal | Arrived AZ Cardinal, LLC | 8/25/2022 | 9/14/2022 | |||
Coolbaugh | Arrived PA Coolbaugh, LLC | 2/2/2023 | 3/31/2023 | |||
Hammock | Arrived FL Hammock, LLC | 8/29/2022 | 9/23/2022 | |||
Havasu | Arrived AZ Havasu, LLC | 10/21/2022 | 11/17/2022 | |||
Hickorybear | Arrived OK Hickorybear, LLC | 1/25/2023 | 2/16/2023 | |||
Kinlani | Arrived AZ Kinlani, LLC | 1/23/2023 | 2/14/2023 | |||
Koi | Arrived AZ Koi, LLC | 2/22/2023 | 3/29/2023 | |||
Lakeridge | Arrived GA Lakeridge, LLC | 10/8/2022 | 11/4/2022 | |||
Lodge | Arrived OK Lodge, LLC | 11/2/2022 | 11/21/2022 | |||
Longbranch | Arrived OK Longbranch, LLC | 2/17/2023 | 3/29/2023 | |||
Loop | Arrived TN Loop, LLC | 3/6/2023 | 4/11/2023 | |||
Mirage | Arrived Series Mirage, a series of Arrived STR, LLC | 4/7/2023 | 9/16/2022 | |||
Myrtle | Arrived SC Myrtle, LLC | 12/2/2022 | 12/22/2022 | |||
Oasis | Arrived TN Oasis, LLC | 7/25/2022 | 8/26/2022 | |||
Opry | Arrived TN Opry, LLC | 9/19/2022 | 1/11/2023 | |||
Orchard | Arrived GA Orchard, LLC | 8/25/2022 | 9/30/2022 | |||
Palm | Arrived FL Palm, LLC | 10/10/2022 | 11/17/2022 | |||
Pasquin | Arrived PA Pasquin, LLC | 1/23/2023 | 2/8/2023 | |||
Pickler | Arrived AZ Pickler, LLC | 3/16/2023 | 4/5/2023 | |||
Pointbreak | Arrived FL Pointbreak, LLC | 8/29/2022 | 9/20/2022 | |||
Regal | Arrived TN Regal, LLC | 11/21/2022 | 12/19/2022 | |||
Serenity | Arrived AZ Serenity, LLC | 9/28/2022 | 10/20/2022 | |||
Smokey | Arrived TN Smokey, LLC | 3/10/2023 | 4/25/2023 | |||
Solstice | Arrived MO Solstice, LLC | 5/24/2023 | 7/5/2023 | |||
Sugarcreek | Arrived GA Sugarcreek, LLC | 10/8/2022 | 11/2/2022 | |||
SuiteSpot | Arrived AZ SuiteSpot, LLC | 5/15/2023 | 5/23/2023 |
F-43
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accounting and reporting policies of the Company and its Series (the “Company”) conform to accounting principles generally accepted in the United States of America (GAAP). The Company has adopted a calendar year as its fiscal year.
The Company is an emerging growth company as the term is used in The Jumpstart Our Business Startups Act, enacted on April 5, 2012 and has elected to comply with certain reduced public company reporting requirements, however, the Company may adopt accounting standards based on the effective dates for public entities.
Principles of Consolidation
These consolidated and consolidating financial statements include the accounts of Arrived STR, LLC and the Series listed in Note 1. All inter-company transactions have been eliminated.
Use of Estimates
The preparation of the consolidated and consolidating financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosures 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 significantly from those estimates.
Deferred Offering Costs
The Company complies with the requirements of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 340-10-S99-1 with regards to offering costs. Prior to the completion of an offering, offering costs are capitalized. The deferred offering costs are charged to members’ equity upon the completion of an offering or to expense if the offering is not completed. Offering costs include offering expense reimbursements and sourcing fees as noted below.
Per the operating agreement, the Manager is eligible to receive up to a maximum of 2% of the gross offering proceeds per the Series offering, as reimbursement for offering expenses including legal, accounting, escrow, underwriting, filing and compliance costs, as applicable, related to a specific offering.
Upon completion of an offering, the Series may also be required to pay the Manager sourcing fees as defined in the offering documents. The Manager is responsible for sourcing and analyzing the Series’ property.
Fair Value of Financial Instruments
FASB guidance specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy are as follows:
Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 1 primarily consists of financial instruments whose value is based on quoted market prices such as exchange-traded instruments and listed equities.
Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly (e.g., quoted prices of similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active).
Level 3 - Unobservable inputs for the asset or liability. Financial instruments are considered Level 3 when their fair values are determined using pricing models, discounted cash flows or similar techniques and at least one significant model assumption or input is unobservable.
The carrying amounts of the Company’s consolidated and consolidating financial instruments, such as cash, prepaid expenses, and other current liabilities approximate fair values due to the short-term nature of these instruments. The carrying value of the mortgage payable approximate their fair values based on interest rates and terms currently available for similar instruments.
F-44
Management Fee
The Manager will receive from a series an annual asset management fee equal to five percent (5%) of the gross revenues applicable to that series, paid out of the series’ net operating rental income. Such membership interests will be accrued on a quarterly basis at the then current price and issued to the Manager by the end of the fiscal year. Any fractional interest will be rounded up to the nearest whole number.
Property Management Fee
The company will appoint an affiliate of the manager or a third-party property management company to serve as property manager to manage the property of each series pursuant to a property management agreement. The fee arrangements for each property management company are set forth below:
Misfit Homes LLC
Initially, as compensation for the services provided by the property manager, each series will be charged a property management fee equal to fifteen percent (15%) of all rents and fees as remitted to the series on a monthly basis. Following stabilization, as compensation for the services provided by the property manager, each series will be charged a property management fee equal to fifteen percent (15%) of all rents and fees as remitted to the series on a monthly basis and paid to the property manager pursuant to the property management agreement. Such property management fee will increase to twenty percent (20%) of all rents and fees immediately following the time at which the net operating income of the series in a calendar year exceeds eight percent (8%) of the sum of the purchase price of the series property, the related furniture, fixtures and equipment and any setup costs for such series, each as disclosed below under “Use of Proceeds to the Issuer” for such series.
Old Town Rentals LLC
Initially, as compensation for the services provided by the property manager, each series will be charged a property management fee equal to fifteen percent (15%) of all rents and fees as remitted to the series on a monthly basis. Following stabilization, as compensation for the services provided by the property manager, each series will be charged a property management fee equal to fifteen percent (15%) of all rents and fees as remitted to the series on a monthly basis and paid to the property manager pursuant to the property management agreement. Such property management fee will increase to twenty percent (20%) of all rents and fees immediately following the time at which the net operating income of the series in a calendar year exceeds nine percent (9%) of the sum of the purchase price of the series property, the related furniture, fixtures and equipment and any setup costs for such series, each as disclosed below under “Use of Proceeds to the Issuer” for such series.
Roseus Hospitality Group LLC
Initially, as compensation for the services provided by the property manager, each series will be charged a property management fee equal to fifteen percent (15%) of all rents and fees as remitted to the series on a monthly basis. Following stabilization, as compensation for the services provided by the property manager, each series will be charged a property management fee equal to fifteen percent (15%) of all rents and fees as remitted to the series on a monthly basis and paid to the property manager pursuant to the property management agreement. Such property management fee will increase to twenty percent (20%) of all rents and fees immediately following the time at which the net operating income of the series in a calendar year exceeds ten percent (10%) of the sum of the purchase price of the series property, the related furniture, fixtures and equipment and any setup costs for such series, each as disclosed below under “Use of Proceeds to the Issuer” for such series.
F-45
Alpha Geek Capital 2 LLC
As compensation for the services provided by the property manager, each series will be charged a property management fee equal to twenty percent (20%) of all rents and fees as remitted to the series on a monthly basis and paid to the property manager pursuant to the property management agreement.
Southern Comfort Cabin Rentals, LLC
As compensation for the services provided by the property manager, each series will be charged a property management fee equal to twenty-five percent (25%) of all rents and fees as remitted to the series on a monthly basis and paid to the property manager pursuant to the property management agreement.
AvantStay, Inc.
As compensation for the services provided by the property manager, each series will be charged a property management fee equal to twenty percent (20%) of all rents and fees as remitted to the series on a monthly basis and paid to the property manager pursuant to the property management agreement.
Cabins in Broken Bow
As compensation for the services provided by the property manager, each series will be charged a property management fee equal to twenty-five percent (25%) of all rents and fees as remitted to the series on a monthly basis and paid to the property manager pursuant to the property management agreement.
Arrived Property Manager, LLC
As compensation for the services provided by the affiliated property manager, each series will be charged a property management fee equal to twenty percent (20%) of all rents and fees as remitted to the series on a monthly basis and paid to the property manager pursuant to the property management agreement.
The property manager for each Series is specified in the latest Offering Circular under "The Series Properties Being Offered.”
Furniture, Fixture and Equipment
In addition to the Management Fee, the Series shall pay property manager a one-time fee equal to twenty percent (20%) of out-of-pocket costs for furniture, fixture and equipment (“FF&E Fee”). The Series shall pay property manager the FF&E Fee upon the purchase of such furniture, fixture and equipment.
Property Disposition Fee
Upon the disposition and sale of the Series’ property, the Manager will charge the Series a market rate property disposition fee that will cover property sale expenses such as brokerage commissions, and title, escrow and closing costs. It is expected that the disposition fee charged to the Series will range from six to seven percent of the property sale price. To the extent that the actual property disposition fees are less than the amount charged to the Series, the Manager will receive the difference.
Prepaid and Accrued Expenses
Prepaid expenses consist of prepaid insurance. Accrued expenses include accrued property taxes, aum fees, and interest payable on the Series’ mortgage.
F-46
Due From (To) Third-party Property Managers
Due from (to) third-party property managers are uncollateralized obligations due under normal trade terms generally requiring payment within 30 days from the approved prior month financial statements. Due from (to) property managers are presented net of receipts and expenses for the reported month. The Company uses a loss-rate approach based on historical loss information, adjusted for management’s expectations about current and future economic conditions, as the basis to determine expected cash receipts and distributions. Management exercises significant judgment in determining expected credit losses. Key inputs include macroeconomic factors, industry trends, and the creditworthiness of counterparties. Management believes that the composition of receivables at year-end is consistent with historical conditions as credit terms and practices and the property managers have not changed significantly. The Company and Series determined it was not necessary to record an allowance for credit losses as of December 31, 2023.
In September 2023, the Series terminated the property management contract with Roseus Hospitality Group (“Roseus”) and believes the receivables from Roseus were no longer recoverable. As a result of this determination, as of December 31, 2023, the Series wrote off $182,140 of receivables to credit loss expense, which is reflected as a separate line item on the consolidated and consolidating statement of comprehensive income (loss). The Manager has committed to make each affected Series whole by providing capital contributions to each Series in the amount of the credit loss incurred. As of December 31, 2023, the Manager relieved $124,373 of amounts due the Manager from certain Series which was recorded by the Series as a capital contribution and a reduction in due to related party. The Manager will contribute the remaining balance of $57,767 in 2024, which consists of $23,130 to Arrived Series Billngswood, $6,207 to Arrived Series Coolbaugh, $22,235 to Arrived Series Hammock, $1,428 to Arrived Series Myrtle, and $4,767 to Arrived Series Palm,. The Manager will retain the right to collect the receivables from Roseus Hospitality Group if such receivables are repaid to the Series.
Property and Equipment
Property and equipment are stated at cost less accumulated depreciation. The Company’s property and equipment includes the cost of the purchased property, including the building and related land. The Company allocates certain capitalized title fees and relevant acquisition expenses to the capitalized costs of the building. All capitalized property costs, except for the value attributable to the land, are depreciated using the straight-line method over the estimated useful life of 27.5 years. Additions and property improvements in excess of $5,000 are capitalized and depreciated using the straight-line method over the estimated useful lives of 5-7 years, while routine repairs and maintenance are charged to expense as incurred. At the time of retirement or other disposition of property and equipment, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in the consolidated statement of comprehensive income.
Impairment of Long-Lived Assets
The Company continually monitors events and changes in circumstances that could indicate the carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell.
Operating Expenses
The Series is responsible for the costs and expenses attributable to the activities of the Series. The Manager will bear its own expenses of an ordinary nature. If the operating expenses exceed the amount of revenues generated from a Series property and cannot be covered by any operating expense reserves on the balance sheet of the Series, the Manager may (a) pay such operating expenses and not seek reimbursement, in which case the expenses would be recognized by the Series with a credit to contributed capital. (b) loan the amount of the operating expenses to the Series, on which the Manager and its affiliates may impose a reasonable rate of interest and be entitled to reimbursement of such amount from future revenues generated by Series’ property, and/or (c) cause additional interests to be issued in the Series in order to cover such additional amounts.
F-47
Revenue Recognition
The Company adopted FASB ASC 606, Revenue from Contracts with Customers, and its related amendments, effective at inception using the modified retrospective transition approach applied to all contracts. There were no cumulative impacts that were made. The Company determines revenue recognition through the following steps:
● | Identification of a contract with a customer; |
● | Identification of the performance obligations in the contract; |
● | Determination of the transaction price; |
● | Allocation of the transaction price to the performance obligations in the contract; and |
● | Recognition of revenue when or as the performance obligations are satisfied. |
Revenue is recognized when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. As a practical expedient, the Company does not adjust the transaction price for the effects of a significant financing component if, at contract inception, the period between customer payment and the transfer of goods or services is expected to be one year or less.
The Company recognizes rental revenue on a monthly basis when earned.
Comprehensive Income (loss)
The Company follows FASB ASC 220 in reporting comprehensive income (loss). Comprehensive income (loss) is a more inclusive financial reporting methodology that includes disclosure of certain financial information that historically has not been recognized in the calculation of net income (loss). Since the Company has no items of other comprehensive income (loss), comprehensive loss is equal to net loss.
Organizational Costs
In accordance with FASB ASC 720, Organizational Costs, accounting fees, legal fees, and costs of incorporation are expensed as incurred.
Income Taxes
The Company follows FASB ASC 740 when accounting for income taxes, which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed annually for temporary differences between the financial statements and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is the tax payable or refundable for the period plus or minus the change during the period in deferred tax assets and liabilities.
The Series have elected and qualify to be taxed as a C corporation.
Each Arrived STR Series is organized as an LLC for legal purposes and makes a subsequent election with the IRS to be treated as a C corporation for tax purposes. C corporations pay income tax at both the federal and state level. At the Federal level the tax rate is 21%. At the state level income taxes will be based on the tax table for that state. C corporations cannot allocate tax losses directly to shareholders, but under current law, federal losses may be accumulated and carried forward indefinitely and be used to offset up to 80% of taxable income in any future year, thereby reducing the reported taxable income.
Recently Issued and Recently Adopted Accounting Pronouncements
In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842). This ASU requires a lessee to recognize a right-of-use asset and a lease liability under most operating leases in its balance sheet. The ASU is effective for annual and interim periods beginning after December 15, 2021. Early adoption is permitted. The Company adopted the updates effective July 11, 2022 (date of inception) and the adoption of the standard had no effect on the consolidated and consolidating financial statements.
F-48
In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) and has issued subsequent amendments to this guidance. This new standard will replace all current guidance on this topic and eliminate all industry-specific guidance. The new revenue recognition standard provides a unified model to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. The guidance is effective for interim and annual periods beginning after December 31, 2018. The standard may be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. The Company adopted this standard upon inception, and it did not have a material impact on their consolidated and consolidating financial statements.
In June 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-13, Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments, as modified by FASB ASU No. 2019-10 and other subsequently issued related ASUs. The amendments in this Update affect loans, debt securities, trade receivables, and any other financial assets that have the contractual right to receive cash. The ASU requires an entity to recognize expected credit losses rather than incurred losses for financial assets. The amendments in this Update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company adopted this new guidance effective July 11, 2022 (date of inception) utilizing the modified retrospective transition method. The adoption of this standard did not have a material impact on the Company’s consolidated and consolidating financial statements but did change how the allowance for credit losses is determined.
Management does not believe that any other recently issued, but not yet effective, accounting standards could have a material effect on the accompanying consolidated financial statements. As new accounting pronouncements are issued, the Company will adopt those that are applicable under the circumstances.
NOTE 3: GOING CONCERN
The accompanying consolidated and consolidating financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has a lack of liquidity, minimal cash, and has losses from operations. These factors, among others, raise substantial doubt about the ability of the Company to continue as a going concern for a reasonable period of time. The Company’s ability to continue as a going concern in the next twelve months from the date of this Annual Report is dependent upon their ability to generate cash flow from their rental activity and/or obtain financing from the Manager. However, there are no assurances that the Company can be successful in generating cash flow from their rental activities or that the Manager will always be in the position to provide funding when needed. The consolidated and consolidating financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
F-49
NOTE 4: PROPERTY AND EQUIPMENT
Property and equipment, net consists of the following:
December 31, 2023 | ||||||||||||||||||||||||
Series | Building | Land | Property Improvements and Furniture, Fixture & Equipment | Total | Less: Accumulated Depreciation | Property and equipment, net | ||||||||||||||||||
Ace | $ | 784,055 | $ | 262,500 | $ | 72,244 | $ | 1,118,799 | $ | (46,404 | ) | $ | 1,072,395 | |||||||||||
Billingswood | 580,572 | 193,524 | 175,045 | 949,141 | (18,241 | ) | 930,900 | |||||||||||||||||
Cactus | 786,585 | 262,125 | 64,590 | 1,113,300 | (44,737 | ) | 1,068,563 | |||||||||||||||||
Cardinal | 558,670 | 186,000 | 111,239 | 855,909 | (45,073 | ) | 810,835 | |||||||||||||||||
Coolbaugh | 316,854 | 105,618 | 127,756 | 550,228 | (20,700 | ) | 529,528 | |||||||||||||||||
Hammock | 408,491 | 135,000 | 50,840 | 594,331 | (29,256 | ) | 565,075 | |||||||||||||||||
Havasu | 787,910 | 262,500 | 67,343 | 1,117,753 | (41,576 | ) | 1,076,178 | |||||||||||||||||
Hickorybear | 542,965 | 180,988 | 75,189 | 799,143 | (22,056 | ) | 777,086 | |||||||||||||||||
Kinlani | 563,096 | 187,699 | 69,134 | 819,929 | (24,237 | ) | 795,691 | |||||||||||||||||
Koi | 506,779 | 168,926 | 214,056 | 889,762 | (19,140 | ) | 870,622 | |||||||||||||||||
Lakeridge | 427,248 | 141,250 | 62,470 | 630,968 | (26,891 | ) | 604,076 | |||||||||||||||||
Lodge | 776,434 | 257,500 | 129,892 | 1,163,826 | (47,303 | ) | 1,116,523 | |||||||||||||||||
Longbranch | 607,063 | 202,354 | 101,524 | 910,941 | (24,965 | ) | 885,977 | |||||||||||||||||
Loop | 491,284 | 163,761 | 101,804 | 756,849 | (18,435 | ) | 738,413 | |||||||||||||||||
Mirage | 474,155 | 157,250 | 17,235 | 648,640 | (23,012 | ) | 625,628 | |||||||||||||||||
Myrtle | 304,778 | 101,250 | 84,351 | 490,379 | (19,096 | ) | 471,283 | |||||||||||||||||
Oasis | 735,013 | 245,004 | 71,498 | 1,051,515 | (50,203 | ) | 1,001,312 | |||||||||||||||||
Opry | 827,688 | 275,896 | 7,232 | 1,110,817 | (26,046 | ) | 1,084,771 | |||||||||||||||||
Orchard | 415,974 | 137,500 | 91,267 | 644,741 | (39,047 | ) | 605,694 | |||||||||||||||||
Palm | 467,428 | 156,250 | 81,753 | 705,432 | (30,322 | ) | 675,110 | |||||||||||||||||
Pasquin | 343,350 | 114,450 | 117,008 | 574,808 | (20,732 | ) | 554,076 | |||||||||||||||||
Pickler | 811,789 | 270,596 | 147,682 | 1,230,067 | (29,398 | ) | 1,200,669 | |||||||||||||||||
Pointbreak | 285,408 | 93,750 | 60,135 | 439,293 | (23,178 | ) | 416,116 | |||||||||||||||||
Regal | 718,253 | 237,500 | 48,793 | 1,004,546 | (28,008 | ) | 976,538 | |||||||||||||||||
Serenity | 806,520 | 273,750 | 118,291 | 1,198,561 | (54,479 | ) | 1,144,082 | |||||||||||||||||
Smokey | 551,134 | 183,711 | 74,777 | 809,622 | (20,415 | ) | 789,208 | |||||||||||||||||
Solstice | 543,583 | 181,194 | 85,538 | 810,315 | (11,783 | ) | 798,531 | |||||||||||||||||
Sugarcreek | 317,894 | 105,000 | 58,281 | 481,174 | (19,018 | ) | 462,156 | |||||||||||||||||
SuiteSpot | 670,968 | 223,656 | 94,169 | 988,793 | (19,963 | ) | 968,831 | |||||||||||||||||
$ | 16,411,939 | $ | 5,466,504 | $ | 2,581,135 | $ | 24,459,579 | $ | (843,713 | ) | $ | 23,615,866 |
F-50
December 31, 2022 | ||||||||||||||||||||||||
Series Name | Building | Land | Property Improvements and Furniture, Fixture & Equipment | Total | Less: Accumulated Depreciation | Property and equipment, net | ||||||||||||||||||
Ace | $ | 784,055 | $ | 262,500 | $ | 72,244 | $ | 1,118,799 | $ | (5,911 | ) | $ | 1,112,888 | |||||||||||
Cactus | 786,585 | 262,125 | 42,997 | 1,091,707 | (6,815 | ) | 1,084,892 | |||||||||||||||||
Cardinal | 558,670 | 186,000 | 99,137 | 843,807 | (3,385 | ) | 840,422 | |||||||||||||||||
Hammock | 408,491 | 135,000 | 50,840 | 594,331 | (4,228 | ) | 590,102 | |||||||||||||||||
Havasu | 787,910 | 262,500 | 80,843 | 1,131,253 | (789 | ) | 1,130,464 | |||||||||||||||||
Lakeridge | 427,248 | 141,250 | 15,800 | 584,298 | (263 | ) | 584,034 | |||||||||||||||||
Lodge | 776,434 | 257,500 | 78,092 | 1,112,026 | (1,302 | ) | 1,110,724 | |||||||||||||||||
Mirage | 463,672 | 157,250 | 10,289 | 631,211 | (2,870 | ) | 628,341 | |||||||||||||||||
Myrtle | 304,778 | 101,250 | - | 406,028 | - | 406,028 | ||||||||||||||||||
Oasis | 735,013 | 245,004 | 71,498 | 1,051,515 | (9,175 | ) | 1,042,339 | |||||||||||||||||
Orchard | 415,974 | 137,500 | 80,382 | 633,856 | (7,476 | ) | 626,380 | |||||||||||||||||
Opry | - | - | - | - | - | - | ||||||||||||||||||
Palm | 467,428 | 156,250 | 12,217 | 635,895 | (145 | ) | 635,750 | |||||||||||||||||
Pointbreak | 285,408 | 93,750 | 52,786 | 431,944 | (2,687 | ) | 429,258 | |||||||||||||||||
Regal | 718,253 | 237,500 | - | 955,753 | - | 955,753 | ||||||||||||||||||
Serenity | 806,520 | 273,750 | 74,216 | 1,154,486 | (3,985 | ) | 1,150,501 | |||||||||||||||||
Sugarcreek | 317,894 | 105,000 | 21,300 | 444,194 | (355 | ) | 443,839 | |||||||||||||||||
$ | 9,044,330 | $ | 3,014,129 | $ | 762,641 | $ | 12,821,101 | $ | (49,387 | ) | $ | 12,771,714 |
Depreciation expense for the year ended December 31, 2023 was $794,326 and depreciation expense for the period July 11, 2022 (date of inception) through December 31, 2022 was $49,387.
NOTE 5: MORTGAGE PAYABLE, NET
The following is a summary of the mortgages by each Series as of December 31, 2023 and 2022, respectively:
Series | Lender | Address | Mortgage
Principal | Cash/Financing | Term
(years) | Interest
Only Period (years) | Interest Rate | Capitalized
loan fees | Amortized | Mortgage
Payable, net of unamortized loan fees | ||||||||||||||||||||||
Ace | Certain Lending | 14249 N. 49th Street, Scottsdale, AZ 85254 | $ | 441,000 | Term | 30 | 7 | 6.625 | % | 9,570 | 399 | $ | 431,829 | |||||||||||||||||||
Cactus | Arrived Holding | 5108 E Janice Way, Scottsdale, AZ 85254 | 440,370 | Term | 30 | 5 | 6.625 | % | 11,009 | 2,752 | 432,113 | |||||||||||||||||||||
Cardinal | Certain Lending | 6085 North 85th Avenue, Glendale, AZ 85305 | 312,480 | Term | 30 | 7 | 6.625 | % | 7,000 | 292 | 305,772 | |||||||||||||||||||||
Hammock | Private Lender | 10736 Frances Lane, Largo, FL 33774 | 226,800 | Term | 30 | 5 | 6.625 | % | 5,849 | 1,560 | 222,510 | |||||||||||||||||||||
Havasu | Certain Lending | 520 Jones Drive, Havasu City, AZ 86406 | 472,500 | Term | 30 | 5 | 5.950 | % | 11,812 | 2,559 | 463,247 | |||||||||||||||||||||
Lakeridge | Arrived Holding | 105 Lake Ridge Drive, Blue Ridge, GA 30513 | 282,500 | Term | 30 | 5 | 5.950 | % | 7,062 | 1,530 | 276,968 | |||||||||||||||||||||
Oasis | Term | 964 Youngs Lane, Nashville, TN 37207 | 487,500 | Term | 30 | 7 | 6.625 | % | 10,500 | - | 477,000 | |||||||||||||||||||||
Opry | Cash | 3226 Charlotte Avenue, Nashville, TN 37209 | 462,000 | Term | 30 | 5 | 6.625 | % | 11,550 | 2,118 | 452,568 | |||||||||||||||||||||
Palm | Arrived Holding | 2299 Kentucky Street, West Palm Beach, FL 33406 | 312,500 | Term | 30 | 5 | 5.950 | % | 7,812 | 1,693 | 306,381 | |||||||||||||||||||||
Pointbreak | Certain Lending | 6410 Sunset Avenue #A & #B, Panama City, FL 32408 | 157,500 | Term | 30 | 7 | 6.625 | % | 4,375 | 182 | 153,307 | |||||||||||||||||||||
Regal | Arrived Holding | 2635 King Hollow Road, Sevierville, TN 37876 | 475,000 | Term | 30 | 5 | 6.990 | % | 11,875 | 2,375 | 465,500 | |||||||||||||||||||||
Serenity | Arrived Holding | 32 San Patricio Dr, Sedona, AZ 86336 | 492,750 | Term | 30 | 5 | 5.950 | % | 12,319 | 2,874 | 483,305 | |||||||||||||||||||||
Sugarcreek | Arrived Holding | 555 Sugar Creek Road, Blue Ridge, GA 30513 | 210,000 | Term | 30 | 5 | 5.950 | % | 5,250 | 1,138 | 205,888 | |||||||||||||||||||||
Subtotal | $ | 4,772,900 | $ | 115,983 | $ | 19,472 | $ | 4,676,389 |
F-51
Series | Lender | Address | Mortgage Principal | Cash/Financing | Term
(years) | Interest
Only Period (years) | Interest Rate | Capitalized
loan fees | Amortized | Mortgage
Payable, net of unamortized loan fees | ||||||||||||||||||||||
Ace | Certain Lending | 14249 N. 49th Street, Scottsdale, AZ 85254 | $ | 441,000 | Term | 30 | 7 | 6.63 | % | $ | 9,570 | $ | 80 | $ | 431,510 | |||||||||||||||||
Cactus | Arrived Holding | 5108 E Janice Way, Scottsdale, AZ 85254 | 440,370 | Term | 30 | 5 | 6.63 | % | 13,211 | - | 427,159 | |||||||||||||||||||||
Cardinal | Certain Lending | 6085 North 85th Avenue, Glendale, AZ 85305 | 312,480 | Term | 30 | 7 | 6.63 | % | 7,000 | 58 | 305,539 | |||||||||||||||||||||
Hammock | Private Lender | 10736 Frances Lane, Largo, FL 33774 | 226,800 | Term | 30 | 5 | 6.63 | % | 1,313 | - | 225,487 | |||||||||||||||||||||
Havasu | Certain Lending | 520 Jones Drive, Havasu City, AZ 86406 | 472,500 | Term | 30 | 5 | 5.95 | % | 14,175 | - | 458,325 | |||||||||||||||||||||
Lakeridge | Arrived Holding | 105 Lake Ridge Drive, Blue Ridge, GA 30513 | 282,500 | Term | 30 | 5 | 5.95 | % | 8,475 | - | 274,025 | |||||||||||||||||||||
Oasis | Term | 964 Youngs Lane, Nashville, TN 37207 | 487,500 | Term | 30 | 7 | 6.63 | % | 10,500 | - | 477,000 | |||||||||||||||||||||
Palm | Arrived Holding | 2299 Kentucky Street, West Palm Beach, FL 33406 | 312,500 | Term | 30 | 5 | 5.95 | % | 9,375 | - | 303,125 | |||||||||||||||||||||
Pointbreak | Certain Lending | 6410 Sunset Avenue #A & #B, Panama City, FL 32408 | 157,500 | Term | 30 | 7 | 6.63 | % | 4,375 | 36 | 153,161 | |||||||||||||||||||||
Regal | Arrived Holding | 2635 King Hollow Road, Sevierville, TN 37876 | 475,000 | Term | 30 | 5 | 6.99 | % | 14,250 | - | 460,750 | |||||||||||||||||||||
Serenity | Arrived Holding | 32 San Patricio Dr, Sedona, AZ 86336 | 492,750 | Term | 30 | 5 | 5.95 | % | 14,783 | - | 477,967 | |||||||||||||||||||||
Sugarcreek | Arrived Holding | 555 Sugar Creek Road, Blue Ridge, GA 30513 | 210,000 | Term | 30 | 5 | 5.95 | % | 6,300 | - | 203,700 | |||||||||||||||||||||
Subtotal | $ | 4,310,900 | $ | 113,327 | $ | 175 | $ | 4,197,748 |
Loan fees incurred in connection with the mortgages were capitalized as a debt discount and are being amortized to interest expenses over the life of the loan. During the year ended December 31, 2023, the Company recorded amortization of loan fees of $41,990. As of December 31, 2023, mortgage payable, net of unamortized loan fees of $115,983 was $ 4,676,389. During the period July 11, 2022 through December 31, 2022 the Company recorded amortization of loan fees of $175. As of December 31, 2022, mortgage payable, net of unamortized loan fees of $113,327 was $4,197,748.
NOTE 6: MEMBERS EQUITY (DEFICIT)
Each Series is managed by Arrived Holdings, Inc., a Delaware corporation and managing member of the Company (the “Manager”). Pursuant to the terms of the operating agreement, the Manager will provide certain management and advisory services, as well as management team and appropriate support personnel to the Series.
The Manager will be responsible for directing the management of Series’ business and affairs, managing the day-to-day affairs, and implementing the Series’ investment strategy. The Manager has a unilateral ability to amend the operating agreement and the allocation policy in certain circumstances without the consent of the investors. The investors only have limited voting rights with respect to the Series.
The Manager has sole discretion in determining what distributions, if any, are made to interest holders except as otherwise limited by law or the operating agreement. The Series expects the Manager to make distributions on a quarterly basis. However, the Manager may change the timing of distributions or determine that no distributions shall be made, in its sole discretion.
Membership Interests
During the year ended December 31, 2023, the Series closed on its public offerings for net proceeds of $21,962,627. During the period July 11, 2022 (date of inception) through December 31, 2022, the Series closed on its public offerings for net proceeds of $9,133,966. The following is a summary of the public offerings by each Series.
F-52
December 31, 2023 | ||||||||||||||||
Series Name | # of Units Issued | Net | Issuance expense (1%) | Offering expense (2%) | ||||||||||||
Ace | 89,163 | $ | 699,887 | $ | 8,840 | $ | 19,592 | |||||||||
Billingswood | 112,009 | 1,023,424 | 11,204 | 22,412 | ||||||||||||
Cactus | 89,412 | 710,958 | 8,856 | 17,910 | ||||||||||||
Cardinal | 66,298 | 517,620 | 6,588 | 14,544 | ||||||||||||
Coolbaugh | 71,199 | 652,331 | 7,133 | 14,266 | ||||||||||||
Hammock | 61,442 | 409,248 | 6,083 | 13,182 | ||||||||||||
Havasu | 91,863 | 756,843 | 9,096 | 19,459 | ||||||||||||
Hickorybear | 100,271 | 915,183 | 10,049 | 20,098 | ||||||||||||
Kinlani | 98,427 | 897,392 | 9,843 | 19,685 | ||||||||||||
Koi | 102,740 | 940,013 | 10,277 | 20,568 | ||||||||||||
Lakeridge | 49,033 | 407,374 | 4,855 | 10,396 | ||||||||||||
Lodge | 142,698 | 1,271,329 | 14,291 | 28,583 | ||||||||||||
Longbranch | 112,559 | 1,028,311 | 11,263 | 22,526 | ||||||||||||
Loop | 90,987 | 831,886 | 9,105 | 18,219 | ||||||||||||
Mirage | 84,117 | 607,150 | 8,379 | 16,927 | ||||||||||||
Myrtle | 64,479 | 588,648 | 6,449 | 12,898 | ||||||||||||
Oasis | 73,115 | 596,720 | 7,263 | 16,281 | ||||||||||||
Opry | 92,978 | 809,513 | 9,298 | 18,596 | ||||||||||||
Orchard | 82,945 | 676,634 | 8,243 | 16,656 | ||||||||||||
Palm | 63,334 | 470,653 | 6,271 | 13,312 | ||||||||||||
Pasquin | 73,166 | 668,458 | 7,327 | 14,705 | ||||||||||||
Pickler | 149,889 | 1,368,211 | 14,995 | 29,994 | ||||||||||||
Pointbreak | 44,732 | 295,865 | 4,441 | 9,624 | ||||||||||||
Regal | 80,468 | 677,123 | 8,048 | 17,087 | ||||||||||||
Serenity | 102,274 | 856,185 | 10,126 | 21,586 | ||||||||||||
Smokey | 98,305 | 896,932 | 9,831 | 19,678 | ||||||||||||
Solstice | 102,874 | 939,388 | 10,287 | 20,575 | ||||||||||||
Sugarcreek | 37,026 | 314,964 | 3,676 | 7,859 | ||||||||||||
SuiteSpot | 124,261 | 1,134,382 | 12,426 | 24,832 | ||||||||||||
2,552,062 | $ | 21,962,627 | $ | 254,541 | $ | 522,050 |
F-53
December 31, 2022 | ||||||||||||||||
Series | # of Units Issued | Net | Issuance expense (1%) | Offering expense (2%) | ||||||||||||
Ace | 89,292 | $ | 785,709 | $ | 8,840 | $ | 19,592 | |||||||||
Cactus | 89,451 | 790,165 | 8,856 | 17,910 | ||||||||||||
Cardinal | 66,545 | 587,912 | 6,588 | 14,544 | ||||||||||||
Hammock | 61,448 | 550,253 | 6,083 | 13,182 | ||||||||||||
Havasu | 91,882 | 808,753 | 9,096 | 19,459 | ||||||||||||
Lakeridge | 49,038 | 430,640 | 4,855 | 10,396 | ||||||||||||
Lodge | 140,226 | - | - | - | ||||||||||||
Mirage | 84,635 | 768,480 | 8,379 | 16,927 | ||||||||||||
Myrtle | 64,119 | - | - | - | ||||||||||||
Oasis | 73,362 | 636,893 | 7,263 | 16,281 | ||||||||||||
Orchard | 83,258 | 761,108 | 8,243 | 16,656 | ||||||||||||
Opry | 92,978 | 820,306 | 9,298 | 18,596 | ||||||||||||
Palm | 63,340 | 561,324 | 6,271 | 13,312 | ||||||||||||
Pointbreak | 44,861 | 400,270 | 4,441 | 9,624 | ||||||||||||
Regal | 80,478 | - | - | - | ||||||||||||
Serenity | 102,284 | 905,436 | 10,126 | 21,586 | ||||||||||||
Sugarcreek | 37,130 | 326,748 | 3,676 | 7,859 | ||||||||||||
1,314,327 | $ | 9,133,996 | $ | 102,014 | $ | 215,924 |
In connection with the public offering, each Series incurred brokerage fees of 1% of gross proceeds, which is paid directly to the broker as a deduction from gross proceeds. For the year ended December 31, 2023, and for the period July 11, 2022 through December 31, 2022, in accordance with the operating agreement, the Manager receives reimbursements for out-of-pocket expenses, up to 2% of gross proceeds from membership interest issuance which amounted to $306,126 and $522,050, reimbursements for sourcing fees, also per the agreement, can reach up to 5% of the purchase price which amounted to $539,360 and $1,094,310; reimbursements for financing and holding expenses up to 4.5% of the purchase price which amounted to $340,490 and $634,800
Subscription receivable
Subscription receivable of $265,062 was collected in January 2024.
Distributions
For the year ended December 31, 2023 and for the period July 11, 2022 through December 31, 2022 and 12 Series, respectively, made distributions to the investors of the respective Series totaling $847,663 and $96,680, respectively, which were recorded as reductions to members’ capital.
F-54
The following table reflects the total 2023 and 2022 distributions by Series.
Series | 2023 Distributions | 2022 Distributions | ||||||
Ace | $ | 49,970 | $ | 11,608 | ||||
Billingswood | 20,162 | - | ||||||
Cactus | 53,673 | 8,051 | ||||||
Cardinal | 51,106 | 6,645 | ||||||
Coolbaugh | 22,087 | - | ||||||
Hammock | 25,202 | 7,374 | ||||||
Havasu | 37,673 | - | ||||||
Hickorybear | 36,117 | - | ||||||
Kinlani | 35,434 | - | ||||||
Koi | 18,500 | - | ||||||
Lakeridge | 14,224 | - | ||||||
Lodge | 47,114 | - | ||||||
Longbranch | 40,530 | - | ||||||
Loop | 28,213 | - | ||||||
Mirage | 23,564 | 8,414 | ||||||
Myrtle | 17,409 | - | ||||||
Oasis | 30,028 | 8,070 | ||||||
Opry | 29,757 | 8,368 | ||||||
Orchard | 24,068 | 9,961 | ||||||
Palm | 14,574 | 6,334 | ||||||
Pasquin | 21,232 | - | ||||||
Pickler | 50,969 | - | ||||||
Pointbreak | 13,873 | 4,476 | ||||||
Regal | 32,188 | - | ||||||
Serenity | 55,239 | 13,297 | ||||||
Smokey | 18,678 | - | ||||||
Solstice | 13,374 | - | ||||||
Sugarcreek | 7,794 | 4,084 | ||||||
SuiteSpot | 14,911 | - | ||||||
$ | 847,663 | $ | 96,680 |
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NOTE 6: RELATED PARTY TRANSACATIONS
The Series’ Manager, Arrived Holdings, Inc., is a managing member with common management of the Series.
Due from (to) Related Party
The Series enters into various transactions with the Manager and affiliates of the Manager in the normal course of operating and financing activities. As of December 31, 2023, certain Series owed an aggregate of $656,567, including the initial funding for the certain properties’ purchases. As of December 31, 2023, certain Series repaid the Manager an aggregate of $9,785,722 after the Series’ respective offerings.
As of December 31, 2022, certain Series owed an aggregate of $2,997,697, including the initial funding for the certain properties’ purchases. As of December 31, 2022, certain Series were owed an aggregate of $648,694 from the Manager. The advances are non-interest bearing with no stated repayment terms.
Deemed Contributions
During the year ended December 31, 2023 and during the period July 11, 2022 through December 31, 2022, certain Series received deemed contributions from the Manager totaling $138,899 and $7,225, respectively, in exchange for forgiveness of amounts previously due.
Management Compensation
The following tables reflect the total management compensation paid by Series for the year ended December 31, 2023 and for the period July 11, 2022 (date of inception) through December 31, 2022:
December 31, 2023 | ||||||||||||||||||||
Series | Sourcing fees | Offering expenses | Asset management fee | Reimbursements of acquisition expenses | Property management fee, related party | |||||||||||||||
Ace | $ | - | $ | - | $ | 5,032 | $ | - | $ | - | ||||||||||
Billingswood | 38,750 | 22,412 | 104 | 2,500 | - | |||||||||||||||
Cactus | - | - | 5,200 | - | - | |||||||||||||||
Cardinal | - | - | 8,370 | - | - | |||||||||||||||
Coolbaugh | 21,000 | 14,266 | 1,066 | 2,500 | 190.00 | |||||||||||||||
Hammock | - | - | 3,579 | - | 145.00 | |||||||||||||||
Havasu | - | - | 2,721 | - | - | |||||||||||||||
Hickorybear | 36,000 | 20,098 | 1,557 | 5,000 | - | |||||||||||||||
Kinlani | 37,500 | 19,685 | 2,706 | 2,500 | - | |||||||||||||||
Koi | 33,750 | 20,568 | 389 | 2,500 | - | |||||||||||||||
Lakeridge | - | - | 1,608 | - | - | |||||||||||||||
Lodge | 51,500 | 28,583 | 2,576 | 2,500 | - | |||||||||||||||
Longbranch | 40,250 | 22,526 | 2,125 | 2,500 | - | |||||||||||||||
Loop | 32,500 | 18,219 | 678 | 2,500 | 1,059.80 | |||||||||||||||
Mirage | - | - | 2,157 | - | - | |||||||||||||||
Myrtle | 20,250 | 12,898 | 1,130 | - | 847.20 | |||||||||||||||
Oasis | - | - | 4,623 | - | - | |||||||||||||||
Opry | - | - | 3,314 | - | - | |||||||||||||||
Orchard | - | - | 1,296 | - | - | |||||||||||||||
Palm | - | - | 2,937 | - | 335.00 | |||||||||||||||
Pasquin | 22,500 | 14,705 | 951 | 2,500 | - | |||||||||||||||
Pickler | 55,000 | 29,994 | 1,744 | 2,500 | - | |||||||||||||||
Pointbreak | - | - | 1,545 | - | (175.65 | ) | ||||||||||||||
Regal | 47,500 | 17,087 | 3,414 | - | - | |||||||||||||||
Serenity | - | - | 5,968 | - | - | |||||||||||||||
Smokey | 37,250 | 19,678 | 1,211 | 2,500 | 3,771.80 | |||||||||||||||
Solstice | 36,200 | 20,575 | 155 | 2,500 | - | |||||||||||||||
Sugarcreek | - | - | 589 | - | - | |||||||||||||||
SuiteSpot | 45,000 | 24,832 | 1,704 | 2,500 | 26,819.20 | |||||||||||||||
$ | 554,950 | $ | 306,126 | $ | 70,448 | $ | 35,000 | $ | 32,992 |
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December 31, 2022 | ||||||||||||||||||||
Series | Sourcing fees | Offering expenses | Asset management fee | Reimbursements of acquisition expenses | Property management fee, related party | |||||||||||||||
Ace | $ | 52,500 | $ | 19,592 | $ | 693 | $ | - | $ | - | ||||||||||
Cactus | 52,420 | 17,910 | 304 | - | - | |||||||||||||||
Cardinal | 37,200 | 14,544 | 737 | - | - | |||||||||||||||
Hammock | 27,000 | 13,182 | 535 | - | - | |||||||||||||||
Havasu | 52,500 | 19,459 | 315 | - | - | |||||||||||||||
Lakeridge | 28,250 | 10,396 | 155 | - | - | |||||||||||||||
Lodge | - | - | - | - | - | |||||||||||||||
Mirage | 31,490 | 16,927 | 945 | - | - | |||||||||||||||
Myrtle | - | - | - | - | - | |||||||||||||||
Oasis | 48,750 | 16,281 | 848 | - | - | |||||||||||||||
Orchard | 27,500 | 16,656 | 825 | - | - | |||||||||||||||
Opry | 55,000 | 18,596 | - | - | - | |||||||||||||||
Palm | 31,250 | 13,312 | 172 | - | - | |||||||||||||||
Pointbreak | 19,750 | 9,624 | 391 | - | - | |||||||||||||||
Regal | - | - | 261 | - | - | |||||||||||||||
Serenity | 54,750 | 21,586 | 329 | - | - | |||||||||||||||
Sugarcreek | 21,000 | 7,859 | 116 | - | - | |||||||||||||||
$ | 539,360 | $ | 215,924 | $ | 6,625 | $ | - | $ | - |
NOTE 7: INCOME TAXES
Deferred taxes are recognized to account for temporary discrepancies between the bases of assets and liabilities for financial reporting and income tax purposes. These differences primarily arise from net operating loss carryforwards. As of December 31, 2023, and 2022, the Company had net deferred tax assets before valuation allowance of $772,287 and $258,868 solely attributable to federal and state net loss carryforwards.
The Company recognizes deferred tax assets to the extent that it believes that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. The Company assessed the need for a valuation allowance against its net deferred tax assets and determined a full valuation allowance is required due to the current uncertainty of the future realization of the deferred tax assets.
Therefore, a valuation allowance of $772,287 and $258,868 was recorded as of December 31, 2023, and 2022. Deferred tax assets were calculated using the Company’s combined effective tax rates, which it estimated to range from 26.0% to 33.3% based on the state of the respective Series. The effective rate is reduced to 0% for 2023 and 2022 due to the full valuation allowance on its net deferred tax assets.
The utilization of net operating loss carryforwards by the Company is contingent upon its capacity to generate sufficient future taxable income. As of December 31, 2023 and 2022, the Company has federal and state net operating loss carryforwards available to offset future taxable income in the amount of $2,920,560 and $962,839.
The Company’s policy is to record interest and penalties associated with unrecognized tax benefits as additional income taxes in the consolidated statement of comprehensive loss. As of January 1, 2023, the Company had no unrecognized tax benefits and no charge during 2023, and accordingly, the Company did not recognize any interest or penalties during 2023 related to unrecognized tax benefits. There is no accrual for uncertain tax positions as of December 31, 2023.
The Company is not presently subject to any income tax audit in any taxing jurisdiction, though its 2023 and 2022 tax year remains open to examination.
F-57
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* | Previously filed. |
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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.
ARRIVED STR, LLC | |||
By: | Arrived Holdings, Inc., its managing member | ||
By: | /s/ Ryan Frazier | ||
Name: | Ryan Frazier | ||
Title: | Chief Executive Officer | ||
Date: | April 29, 2024 |
Pursuant to the requirements of Regulation A, this report has been signed by the following persons on behalf of the issuer and in the capacities and on the dates indicated.
SIGNATURE | TITLE | DATE | ||
/s/ Ryan Frazier | Chief Executive Officer of Arrived Holdings, Inc. | April 29, 2024 | ||
Ryan Frazier | (principal executive officer) | |||
Chief Executive Officer and Director of Arrived STR, LLC | ||||
/s/ Sue Korn | Principal Financial and Accounting Officer of Arrived Holdings, Inc. | April 29, 2024 | ||
Sue Korn | (principal financial and accounting officer) | |||
Principal Financial and Accounting Officer of Arrived STR, LLC | ||||
Arrived Holdings, Inc. | Managing Member | April 29, 2024 |
By: | /s/ Ryan Frazier | |
Name: | Ryan Frazier | |
Title: | Chief Executive Officer |
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