Blueprint
UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
1-SA
☐
SEMIANNUAL REPORT PURSUANT TO REGULATION A
or
☒ SPECIAL
FINANCIAL REPORT PURSUANT TO REGULATION A
For the fiscal semiannual period
ended: June 30,
2019
RED OAK CAPITAL FUND III, LLC
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(Exact name of issuer as specified
in its charter)
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Delaware
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84-2079441
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State or other jurisdiction
of
incorporation or
organization
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|
(I.R.S.
Employer
Identification No.)
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625 Kenmoor Avenue SE, Suite 211
Grand Rapids, Michigan 49546
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(Full mailing address of principal
executive offices)
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(616) 734-6099
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(Issuer’s telephone number,
including area code)
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In this semi-annual report, references to the “Company,”
“we,” “us” or “our” or similar
terms refer to Red Oak Capital Fund III, LLC, a Delaware
limited liability company and references to our
“Manager” refer to Red Oak Capital GP, a Delaware
limited liability company, our sole member and manager.
As used in
this semi-annual report, an affiliate of,
or person affiliated with, a specified person,
is a person that directly, or indirectly through one or
more intermediaries, controls or is controlled by, or is under
common control with,
the person specified.
Item 1.
Management’s Discussion and Analysis of Financial Condition
and Results of Operations
Cautionary Statement Regarding Forward Looking
Statements
This
Semi-Annual Report on Form 1-SA of Red Oak Capital Fund III, LLC, a
Delaware limited liability company, referred to herein as
“we,” “us,” “our” or “the
Company,” contains certain forward-looking statements that
are subject to various risks and uncertainties. Forward-looking
statements are generally identifiable by use of forward-looking
terminology such as “may,” “will,”
“should,” “potential,”
“intend,” “expect,” “outlook,”
“seek,” “anticipate,”
“estimate,” “approximately,”
“believe,” “could,” “project,”
“predict,” or other similar words or expressions.
Forward-looking statements are based on certain assumptions,
discuss future expectations, describe future plans and strategies,
contain financial and operating projections or state other
forward-looking information. Our ability to predict results or the
actual effect of future events, actions, plans or strategies is
inherently uncertain. Although we believe that the expectations
reflected in our forward-looking statements are based on reasonable
assumptions, our actual results and performance could differ
materially from those set forth or anticipated in our
forward-looking statements.
When
considering forward-looking statements, you should keep in mind the
risk factors and other cautionary statements in this report.
Readers are cautioned not to place undue reliance on any of these
forward-looking statements, which reflect our views as of the date
of this report. The matters summarized below and elsewhere in this
report could cause our actual results and performance to differ
materially from those set forth or anticipated in forward-looking
statements. Accordingly, we cannot guarantee future results or
performance. Furthermore, except as required by law, we are under
no duty to, and we do not intend to, update any of our
forward-looking statements after the date of this report, whether
as a result of new information, future events or
otherwise.
General
As of the date
of this semi-annual report, Red Oak Capital Fund III, LLC has not
yet commenced active operations. Offering Proceeds will be applied
to invest in collateralized senior commercial mortgage notes, or
property loans, and the payment or reimbursement of selling
commissions and other fees, expenses and uses as described
throughout this offering circular. We will experience a relative
increase in liquidity as we receive additional proceeds from the
sale of Bonds and a relative decrease in liquidity as we spend net
offering proceeds in connection with the acquisition and operation
of our assets.
Further, we
have not entered into any arrangements creating a reasonable
probability that we will own a specific property loan or other
asset. The number of additional property loans and other assets
that we will acquire will depend upon the number of Bonds sold and
the resulting amount of the net proceeds available for investment
in additional property loans and other assets. Until required for
the acquisition or operation of assets or used for distributions,
we will keep the net proceeds of this offering in short-term, low
risk, highly liquid, interest-bearing
investments.
We intend to
make reserve allocations as necessary to (i) aid our objective of
preserving capital for our investors by supporting the maintenance
and viability of assets we acquire in the future and (ii) meet the
necessary covenants of the Bonds. If reserves and any other
available income become insufficient to meet our covenants and
cover our operating expenses and liabilities, it may be necessary
to obtain additional funds by borrowing, restructuring property
loans or liquidating our investment in one or more assets. There is
no assurance that such funds will be available, or if available,
that the terms will be acceptable to us. Additionally, our ability
to borrow additional funds will be limited by the restrictions
placed on our and our subsidiaries' borrowing activities by our
indenture.
Results of Operations
Having not
commenced active operations, we have not acquired any property
loans or other assets, our management is not aware of any material
trends or uncertainties, favorable or unfavorable, other than
national economic conditions affecting our targeted assets, the
commercial real estate industry and real estate generally, which
may be reasonably anticipated to have a material impact on the
capital resources and the revenue or income to be derived from the
operation of our assets.
Liquidity and Capital Resources
We are
offering and selling to the public in this offering up to
$50,000,000 of Bonds. Our principal demands for cash will be for
acquisition costs, including the purchase price of any
property’s loans, securities or other assets we acquire, the
payment of our operating and administrative expenses, and all
continuing debt service obligations, including our debt service on
the Bonds. Generally, we will fund additional acquisitions from the
net proceeds of this offering. We intend to acquire additional
assets with cash and/or debt. As we are dependent on capital raised
in this offering to conduct our business, our investment activity
over the next twelve (12) months will be dictated by the capital
raised in this offering. We expect to originate or acquire property
loans and meet our business objectives regardless of the amount of
capital raised in this offering. If the capital raised in this
offering is insufficient to purchase assets solely with cash, we
will implement a strategy of utilizing a mix of cash and debt to
acquire assets.
Subsequent to
the issuance of this semi-annual report, on September 27, 2019, Red
Oak Capital Fund III, LLC raised approximately $5.8 million, above
the minimum capital requirement, and was able to break escrow.
Additionally, on October 23, 2019, November 22, 2019, and December
23, 2019, we held subsequent closing of $19.9, $22.2, and $2.1
million, respectively. The Maximum allowable raise of $50 million
was achieved through the issuance date of this report.
We expect to
use debt financing as a source of capital. We have a 25% limit on
the amount of debt that can be employed in the operations of the
business.
We anticipate
that adequate cash will be generated from operations to fund our
operating and administrative expenses, and all continuing debt
service obligations, including the debt service obligations of the
Bonds. However, our ability to finance our operations is subject to
some uncertainties. Our ability to generate working capital is
dependent the performance of the mortgagor related to each of our
assets and the economic and business environments of the various
markets in which our underlying collateral properties are located.
Our ability to liquidate our assets is partially dependent upon the
state of real estate markets and the ability of mortgagors to
obtain financing at reasonable commercial rates. In general, we
intend to pay debt service from cash flow obtained from operations.
If cash flow from operations is insufficient then we may exercise
the option to partially leverage the asset to increase liquidity.
If we have not generated sufficient cash flow from our operations
and other sources, such as from borrowings, we may use funds out of
our Bond Service Reserve. Moreover, our Manager may change this
policy, in its sole discretion, at any time to facilitate meeting
its cash flow obligations.
Potential
future sources of capital include secured or unsecured financings
from banks or other lenders, establishing additional lines of
credit, proceeds from the sale of assets and undistributed cash
flow, subject to the limitations previously described. Note that,
currently, we have not identified any additional source of
financing, other than the proceeds of this offering, and there is
no assurance that such sources of financing will be available on
favorable terms or at all.
Item 2. Other Information
None.
Item 3. Financial Statements
TABLE OF CONTENTS
RED OAK CAPITAL
FUND III, LLC FINANCIAL STATEMENTS
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Financial Statements as of June 30, 2019 (unaudited) for the six
month period ended June 30, 2019
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Balance Sheet
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4
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Statement of
Operations
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5
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Statement of Changes in
Member’s Capital
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6
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Statement of Cash
Flows
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7
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Notes to Financial
Statements
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8
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Red Oak Capital
Fund III, LLC
Balance
Sheet
June 30,
2019
Assets
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Total assets
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$-
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Liabilities and
Member's Capital
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Liabilities:
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Total
liabilities
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-
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Total member's
capital
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-
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Total liabilities and member's
capital
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$-
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The accompanying footnotes are an
integral part of the financial statements
Red Oak Capital
Fund III, LLC
Statement of
Operations
For the period
June 12, 2019 (Date of Formation) through June 30,
2019
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Revenue:
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Total revenue
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$-
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Expenses:
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Total expenses
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-
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Net income
(loss)
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$-
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The accompanying footnotes are an
integral part of the financial statements
Red Oak Capital
Fund III, LLC
Statement of
Changes in Member's Capital
For the period
June 12, 2019 (Date of Formation) through June 30,
2019
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Member's
capital, June 12, 2019
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$-
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Capital
contributions
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-
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Capital
distributions
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-
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Net income
(loss)
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-
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Member's
capital, June 30, 2019
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$-
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The accompanying footnotes are an
integral part of the financial statements
Red Oak Capital
Fund III, LLC
Statement of
Cash Flows
For the period
June 12, 2019 (Date of Formation) through June 30,
2019
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Cash flows from
operating activities:
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Net income
(loss)
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$-
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Adjustments to reconcile net income
(loss)
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to net cash provided by (used in)
operating activities:
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Net cash provided by (used in)
operating activities
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-
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Cash flows from
financing activities:
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Net cash provided by (used in)
financing activities
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-
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Net change in
cash and cash equivalents
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-
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Cash and cash equivalents,
beginning of period
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-
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Cash and cash
equivalents, end of period
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$-
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The accompanying footnotes are an
integral part of the financial statements
Red Oak Capital
Fund III, LLC
Notes to
Financial Statements
For the period
June 12, 2019 (Date of Formation) through June 30,
2019
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Red Oak Capital Fund III, LLC, (the
“Company”) formerly known as Red Oak Capital Fixed
Income III, LLC, is a Delaware limited liability company formed to
originate senior loans collateralized by commercial real estate in
the United States of America. The Company’s plan is to
originate, acquire, and manage commercial real estate loans and
securities and other commercial real estate-related debt
instruments. Red Oak Capital GP, LLC is the Managing Member and
owns 100% of the member interests in the
Company.
The Company formed on June 12, 2019
and has not commenced operations. The Company anticipates raising a
minimum of $2 million and a maximum of $50 million of Series A
Bonds and Series B Bonds pursuant to an exemption from registration
under Regulation A of the Securities Act of 1933, as amended. Until
the minimum offering is achieved and an initial closing is
executed, the proceeds received in the offering will be kept in an
escrow account. If the Company is unable to raise the minimum
offering amount prior to the offering termination, all funds in the
escrow account will be returned. The Company’s term is
indefinite.
2.
Significant
accounting policies
Basis of
presentation
The financial statements of the
Company have been prepared in accordance with accounting principles
generally accepted in the United States ("GAAP") and all values are
stated in United States dollars.
The Financial Accounting Standards
Board ("FASB") Accounting Standards Codification ("ASC") is the
exclusive reference of authoritative accounting principles
recognized by nongovernmental entities with the exception of
guidance issued by the Securities and Exchange Commission ("SEC")
and its staff.
Use of
estimates
The preparation of the financial
statements requires the Managing Member to make estimates and
assumptions that affect the reported amounts and disclosures in the
financial statements. The Managing Member believes the estimates
utilized in preparing the Company’s financial statements are
reasonable and prudent; however, actual results could differ from
these estimates and such differences could be material to the
Company's financial statements.
Fair value
– hierarchy of fair value
In accordance with FASB ASC 820-10,
Fair Value Measurements and
Disclosures, the Company discloses the fair value of its
assets and liabilities in a hierarchy that prioritizes the inputs
to valuation techniques used to measure fair value. The hierarchy
gives the highest priority to valuations based upon unadjusted
quoted prices in active markets for identical assets and
liabilities and the lowest priority to valuations based upon
unobservable inputs that are significant to the valuation. FASB ASC
820-10-35-39 to 55 provides three levels of the fair value
hierarchy as follows:
Level One - Inputs use quoted
prices in active markets for identical assets or liabilities of
which the Company has the ability to access.
Level Two - Inputs use other
inputs that are observable, either directly or indirectly. These
Level 2 inputs include quoted prices for similar assets and
liabilities in active markets, and other inputs such as interest
rates and yield curves that are observable at commonly quoted
intervals.
Level Three - Inputs are
unobservable inputs, including inputs that are available in
situations where there is little, if any, market activity for the
related asset.
Red Oak Capital
Fund III, LLC
Notes to
Financial Statements
For the period
June 12, 2019 (Date of Formation) through June 30,
2019
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2.
Significant
accounting policies (continued)
In instances whereby inputs used to
measure fair value fall into different levels of the fair value
hierarchy, fair value measurements in their entirety are
categorized based on the lowest level input that is significant to
the valuation. The Company’s assessment of the significance
of particular inputs to these fair value measurements requires
judgement and considers factors specific to each asset or
liability.
Cash and cash
equivalents
Cash represents cash deposits held
at financial institutions. Cash equivalents may include short-term
highly liquid investments of sufficient credit quality that are
readily convertible to known amounts of cash and have original
maturities of three months or less. Cash equivalents are carried at
cost, plus accrued interest, which approximates fair value. Cash
equivalents are held to meet short-term liquidity requirements,
rather than for investment purposes. Cash and cash equivalents are
held at major financial institutions and are subject to credit risk
to the extent those balances exceed applicable Federal Deposit
Insurance Corporation or Securities Investor Protection Corporation
or Securities Investor Protection Corporation
limitations.
Mortgage loans
receivable
Mortgage loans receivable are
classified as held-for-investment based on the Company’s
intention and ability to hold the loans until maturity. The loans
are stated at the amount of unpaid principal adjusted for any
impairment or allowance for loan losses. The Company’s
mortgage loans receivable are expected to consist of senior secured
private company loans collateralized by the borrower’s
underlying commercial real estate assets. The repayment of the
loans will be dependent upon the borrower’s ability to obtain
a permanent financing solution or to sell the commercial real
estate asset. The Company’s mortgage loans receivable will
have heightened credit risk stemming from several factors,
including the concentration of loans to a limited number of
borrowers, the likelihood of construction projects running over
budget, and the inability of the borrower to sell the underlying
commercial real estate asset.
Nonaccrual
loans
Interest income is recognized to
the extent paid or if the analysis performed on the related
receivables supports the collectability of the interest receivable.
A loan is placed on nonaccrual when the future collectability of
interest and principal is not expected, unless, in the
determination of the Managing Member, the principal and interest on
the loan are well collateralized and in the process of collection.
When classified as nonaccrual, accrued interest receivable on the
loan is reversed and the future accrual of interest is suspended.
Payments of contractual interest are recognized as income only to
the extent that full recovery of the principal balance of the loan
is reasonably certain.
Impairment and
allowance for loan losses
Mortgage loans receivables are
considered “impaired” when, based on observable
information, it is probable the Company will be unable to collect
the total amount outstanding under the contractual terms of the
loan agreement. The Managing Member assesses mortgage loans
receivable for impairment on an individual loan basis and
determines the extent to which a specific valuation allowance is
necessary by comparing the loan’s remaining balance to either
the fair value of the collateral, less the estimated cost to sell,
or the present value of expected cash flows, discounted at the
loan’s base interest rate.
An allowance for loan losses on
mortgage loans receivable is established through a provision for
loan losses charged against income and includes specific reserves
for impaired loans. Loans deemed to be uncollectible are charged
against the allowance when the Managing Member believes that the
collectability of the principal is unlikely and subsequent
recoveries, if any, are credited to the allowance. The Managing
Member’s periodic evaluation of the adequacy of the allowance
is based on an assessment of the current loan portfolio, including
known inherent risks, adverse situations that may affect the
borrowers’ ability to repay, the estimated value of any
underlying collateral, and current economic
conditions.
Red Oak Capital
Fund III, LLC
Notes to
Financial Statements
For the period
June 12, 2019 (Date of Formation) through June 30,
2019
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2.
Significant
accounting policies (continued)
Bonds
payable
Company issued bonds will be held
as a liability upon the effective date of closing. The bond
interest will be expensed on an accrual basis. The contingent
interest associated with the bonds will be recognized on an accrual
basis at the end of each reporting period assuming a hypothetical
liquidation of the Company’s mortgage loans receivable at
fair value.
Income and
expense recognition
Interest income and other related
income are recognized on an accrual basis when earned, except as
noted in the nonaccrual loans section above. Operating expenses and
other related expenses are recorded on an accrual basis as
incurred.
Income
taxes
As a limited liability company, the
Company itself is not subject to United States federal income
taxes. Each member is individually liable for income taxes, if any,
on its share of the Company's net taxable income. Accordingly, no
provision or credit for income taxes is recorded in the
accompanying financial statements. The Company anticipates paying
distributions to members in amounts adequate to meet their tax
obligation.
The Company applies the
authoritative guidance for uncertainty in income taxes included in
Financial Accounting Standards Board (“FASB”) ASC 740,
Income Taxes, as amended by Accounting Standards Update 2009-06,
Implementation Guidance on Accounting for Uncertainty in Taxes and
Disclosures Amendments for Nonpublic Entities. This guidance
requires the Company to recognize a tax benefit or liability from
an uncertain position only if it is more likely than not that the
position is sustainable, based on its technical merits and
consideration of the relevant taxing authority’s widely
understood administrative practices and precedents. If this
threshold is met, the Company would measure the tax benefit or
liability as the largest amount that is greater than 50% likely of
being realized upon ultimate settlement.
As of June 30, 2019, the Company
had not recorded any benefit or liability for unrecognized
taxes.
The Company files United States
federal income tax returns as well as various state returns. With
few exceptions, the Company’s tax returns and the amount of
allocable income or loss are subject to examination by taxing
authorities for three years subsequent to the Company’s
commencement of operations. If such examinations result in changes
to income or loss, the tax liability of the members could be
changed accordingly. There are currently no examinations being
conducted of the Company by the Internal Revenue Service or any
other taxing authority.
The Company accrues all interest
and penalties under relevant tax law as incurred. As of June 30,
2019, no amount of interest and penalties related to uncertain tax
positions was recognized in the Statement of
Operations.
3.
Allocation of
net income and loss
It is anticipated that the
Operating Agreement will provide detailed provisions regarding the
allocation of net income and losses among the members over the life
of the Company. Generally, items of income and expense are
allocated among members in proportion to the applicable membership
interest.
Red Oak Capital
Fund III, LLC
Notes to
Financial Statements
For the period
June 12, 2019 (Date of Formation) through June 30,
2019
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4.
Related party
transactions
The Company will pay an annual
management fee, calculated and payable on a quarterly basis, to the
Managing Member. The management fee is based on an annual rate of
1.75% of the gross offering proceeds of Series A and Series B
Bondholders. As of June 30, 2019, no management fees have been
accrued or paid.
During 2019, the Managing Member,
as sole member of the Company, made no capital contributions or
received any distributions. Upon execution of the operating
agreement, the Managing Member must contribute
$100.
Upon raising the minimum required
capital from Series A and Series B Bondholders to break escrow, the
Company anticipates making quarterly interest payments to the
Series A and Series B Bondholders at a rate of 6.5% per annum and
8.5% per annum, respectively.
The anticipated maturity date of
Series A Bonds will be two years following the termination of the
bond offering, but no later than December 31, 2022, whereas the
maturity date will be five years following the termination of the
bond offering, but no later than December 31, 2025 for Series B
Bonds. Upon the maturity of the Series A and Series B Bonds, the
bondholders will receive a Contingent Interest Payment equal to 4%
and 24% of the Spread, respectively. The Spread is defined as the
difference between such bond’s pro-rata share of revenue
derived from senior secured private company loans less the interest
paid to such bondholder, withholding for fees at the discretion of
the Managing Member.
Series B Bonds will be redeemable
beginning January 1, 2022. Once the Company receives written notice
from the bondholder, it will have 120 days from the date of receipt
to redeem the bonds at a price per bond equal to:
(i)
$880 plus any accrued but unpaid
interest on the Bond if the notice is received on or after January
1, 2022 and (ii)
$900 plus any accrued but unpaid
interest on the Bond if the notice is received on or after January
1, 2024.
The Company’s obligation to
redeem bonds in any given year pursuant to this Series B Redemption
is limited to
10% of the outstanding principal
balance of the Series B Bonds on January 1st of the applicable
year. Bond redemptions pursuant to the Series B Redemption will
occur in the order that notices are received.
7.
Commitments and
contingencies
The Managing Member has incurred
and will continue to incur organizational and offering expenses
which are reimbursable from the Company, up to a maximum of 2% of
total gross proceeds from the Series A and Series B Bond offerings.
The organizational and offering costs are not represented on the
Company’s financial statements due to these being contingent
upon a successful completion of the Bond offerings. The Company
will expense organization costs when incurred and debt issuance
costs will be capitalized and amortized through the maturity of
each Series as applicable. As of June 30, 2019, there have been
$30,000 of organizational costs incurred by the Managing Member.
Through the date of issuance, the Managing Member has incurred
approximately $184,000 of organizational and offering
costs.
The Company has provided general
indemnifications to the Managing Member, any affiliate of the
Managing Member and any person acting on behalf of the Managing
Member or that affiliate when they act, in good faith, in the best
interest of the Company. The Company is unable to develop an
estimate of the maximum potential amount of future payments that
could potentially result from any hypothetical future claim but
expects the risk of having to make any payments under these general
business indemnifications to be remote.
Red Oak Capital
Fund III, LLC
Notes to
Financial Statements
For the period
June 12, 2019 (Date of Formation) through June 30,
2019
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On September 27, 2019 the Company
raised the minimum offering requirement, broke escrow and closed
with approximately $5.8 million in gross proceeds. The Company
commenced operations on this date.
Additionally, on
October 23, 2019, November 22, 2019, and December 23, 2019, the
Company held subsequent closing of $19.9, $22.2, and $2.1 million,
respectively. The maximum allowable raise of $50 million was
achieved through the issuance date of this
report.
The
financial statements were approved by management and available for
issuance on December 26, 2019. Subsequent events have been
evaluated through this date.
Item 4. Exhibits
The following
exhibits are filed as part of this semi-annual report on Form
1-SA:
Exhibit
Number
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Exhibit
Description
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Certificate of Formation of Red Oak
Capital Fund III, LLC, incorporated by reference to Exhibit 2(a) of
the Company’s Form 1-A filed on June 25,
2019
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Certificate of Amendment to
Certificate of Formation of Red Oak Capital Fixed Income III, LLC,
incorporated by reference to Exhibit 2(a) of the Company’s
Form 1-A/A filed on July 30, 2019
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Limited Liability Company Agreement
of Red Oak Capital Fund III, LLC, incorporated by reference to
Exhibit 2(b) of the Company’s Form 1-A filed on June 25,
2019
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First
Amendment to Limited Liability Company Agreement of Red Oak Capital
Fixed Income III, LLC, incorporated by reference to Exhibit
2(b) of the Company’s Form 1-A/A filed on July 30,
2019
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Form of Indenture between Red Oak
Capital Fund III, LLC and UMB Bank, N.A., incorporated by reference
to Exhibit 3(a) of the Company’s Form 1-A/A filed on July 30,
2019
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Form of Series A Bond, incorporated
by reference to Exhibit 3(b) of the Company’s Form 1-A/A
filed on July 30, 2019
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Form of Series B Bond, incorporated
by reference to Exhibit 3(c) of the Company’s Form 1-A/A
filed on July 30, 2019
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Form of Pledge and Security
Agreement, incorporated by reference to Exhibit 3(d) of the
Company’s Form 1-A/A filed on July 30,
2019
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Commercial Loan Agreement, dated
November 18, 2019, by and between Campbell Realty Investment Group,
LLC and Red Oak Capital Fund III, LLC, incorporated by reference to
Exhibit 6.1 of the Company’s Form 1-U filed on November 22,
2019
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Commercial Promissory Note, dated
November 18, 2019, issued by Campbell Realty Investment Group, LLC
in favor of Red Oak Capital Fund III, LLC, incorporated by
reference to Exhibit 6.2 of the Company’s Form 1-U filed on
November 22, 2019
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Commercial Loan Agreement, dated
November 22, 2019, by and between Leveraged, LLC and Red Oak
Capital Fund III, LLC, incorporated by reference to Exhibit 6.1 of
the Company’s Form 1-U filed on November 27,
2019
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Commercial Promissory Note, dated
November 22, 2019, issued by Leveraged, LLC in favor of Red Oak
Capital Fund III, LLC, incorporated by reference to Exhibit 6.2 of
the Company’s Form 1-U filed on November 27,
2019
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(6)(e)
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Commercial Loan Agreement, dated
December 2, 2019, by and between Shops@Bird & 89, LLC and Red
Oak Capital Fund III, LLC, incorporated by reference to Exhibit 6.1
of the Company’s Annual Report on Form 1-U filed on December
6, 2019
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(6)(f)
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Commercial Promissory Note, dated
December 2, 2019, issued by Shops@Bird & 89, LLC in favor of
Red Oak Capital Fund III, LLC, incorporated by reference to Exhibit
6.2 of the Company’s Annual Report on Form 1-U filed on
December 6, 2019
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Commercial Loan Agreement, dated December 10,
2019, by and between OM Hotel, LLC and Red Oak Capital Fund
III, LLC, incorporated by reference to Exhibit 6.1 of the
Company’s Form 1-U filed on December 16,
2019
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Commercial Promissory Note, dated
December 10, 2019, issued by OM Hotel, LLC in favor of Red Oak
Capital Fund III, LLC, incorporated by reference to Exhibit 6.2 of
the Company’s Form 1-U filed on December 16,
2019
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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.
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RED OAK CAPITAL FUND III, LLC,
a Delaware
limited liability company
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Date: December
26, 2019
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By:
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Red Oak
Capital GP, LLC,
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a
Delaware limited liability company
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Its:
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Sole
Member
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By:
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Red Oak
Capital Group, LLC,
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a
Delaware limited liability company
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Its:
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Sole
Member
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By:
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/s/ Chip Cummings
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Name:
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Chip
Cummings
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Its:
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Manager
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By:
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/s/ Joseph Elias
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Name:
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Joseph
Elias
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Its:
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Manager
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By:
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/s/ Kevin Kennedy
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Name:
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Kevin
Kennedy
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Its:
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Manager
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Pursuant to
the requirements of Regulation A, this report has been signed below
by the following persons on behalf of the issuer and in the
capacities and on the dates indicated.
Date: December
26, 2019
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By:
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/s/ Chip Cummings
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Name:
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Chip
Cummings
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Its:
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Senior
Managing Partner of the Sole Member of the
Manager
(Principal
Executive Officer)
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Date: December
26, 2019
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By:
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/s/ Jason Anderson
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Name:
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Jason
Anderson
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Its:
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Chief
Financial Officer of the Sole Member of the
Manager
(Principal
Financial Officer and Principal Accounting
Officer)
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