PART II 2 ea0239792-1k_arrivedstr.htm ANNUAL REPORT

 

 

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, 2024

 

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

 

ITEM 1. DESCRIPTION OF BUSINESS 1
   
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION 15
   
ITEM 3. DIRECTORS AND OFFICERS 25
   
ITEM 4. SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITYHOLDERS 28
   
ITEM 5. INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS 28
   
ITEM 6. OTHER INFORMATION 28
   
ITEM 7. FINANCIAL STATEMENTS F-1
   
ITEM 8. EXHIBITS 29

 

i

 

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 our latest offering circular (the “Offering Circular”) filed by the company with the Securities and Exchange Commission (the “Commission”), which may be accessed here and 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.

 

ii

 

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.

 

2

 

Our Manager

  

We are managed by Arrived Fund Manager, LLC, a Delaware limited liability company and managing member of our company, which we refer to herein as the “manager”. 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 wholly owned subsidiary of our sponsor, Arrived Holdings, Inc., a Delaware corporation, which is an 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.

 

3

 

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.

 

4

 

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.

 

5

 

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 our latest offering circular filed with the Securities and Exchange Commission on January 30, 2025, which may be accessed here.

 

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.

 

6

 

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:

  

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.

  

Boutiq, Inc.

 

As compensation for the services provided by the property manager, each series will be charged a property management fee equal to nineteen and one-half percent (19.5%) of all rents and fees as remitted to the series on a monthly basis. Such property management fee will be reduced to eighteen (18%) beginning immediately following the first accounting period that Boutiq manages properties for any entity managed by our Manager or its affiliates with a combined purchase price equal to or greater than $10 million.

 

8

 

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.”

 

Liquidity Platform

 

Overview of PPEX ATS Platform

 

The Company and its affiliates intend to enter into an arrangement with NCPS and its affiliates to facilitate secondary transactions in interests issued by the Company on the PPEX ATS. The PPEX ATS is owned and operated by NCPS. The arrangement with NCPS will be established to provide a venue for secondary trading of series interests and is designed to provide investors with an efficient means to buy and sell series interests in secondary transactions. The manager will enter into a brokerage agreement and a license agreement with the Executing Broker pursuant to which, subject to restrictions under state and federal securities laws and the transfer restrictions listed in the operating agreement, the Executing Broker is engaged to execute all resale transactions in interests based on the matching of orders on the PPEX ATS. The Executing Broker is a registered broker-dealer member of the PPEX ATS. NCPS is a broker-dealer registered with the Commission and a member of FINRA and SIPC. Neither the company nor the manager matches any orders or executes or settles any transfer of interests with respect to secondary trading on the PPEX ATS. The manager may elect not to transmit to the Executing Broker or the PPEX ATS any order information submitted by users who have not previously purchased securities issued by the company or its affiliates pursuant to Regulation A.

 

Secondary trades of series interests matched on the PPEX ATS are intended to comply with Blue Sky laws either through a manual exemption in states where available, through a direct filing with the state securities regulators where required, or as isolated non-issuer transactions.  

 

Process for Secondary Transactions

 

During specific trading windows, which we expect to occur quarterly and announce at least a week in advance of such trading window, isolated non-issuer transactions in interests of one or more series may be effected during trading hours established by NCPS as operator of the PPEX ATS (“Market Hours”) in accordance with the following process. Investors can submit bid and ask quotes through the user interface provided by the Arrived platform during a trading window. The Arrived platform immediately and automatically routes the quotes (i) to the Executing Broker, and (ii) by virtue of the Executing Broker’s status as a member of the PPEX ATS, to the PPEX ATS, which is owned and operated by NCPS, a registered broker-dealer. The PPEX ATS then matches orders in accordance with the rules established by the PPEX ATS, but no matching of buyers and sellers will occur other than during Market Hours in a trading window. Bid and ask quotes submitted during a trading window and Market Hours may be immediately matched by the PPEX ATS, while bid and ask quotes submitted during a trading window, but outside of Market Hours are eligible to match only upon the next commencement of Market Hours. To the extent that any bid or ask quote that does not result in a match still exists at the end of a trading window, such quote will be cancelled at the end of the relevant trading window.

 

Once matched by the PPEX ATS, orders are executed by the Executing Broker. When a trade is executed, the Executing Broker transmits the applicable information (including the number of interests and price at which they are being sold or purchased) to the Arrived platform, where it is displayed to the relevant investor. During Market Hours in a particular trading window, the Arrived platform periodically sends instructions regarding the transfer of funds for executed trades via the Executing Broker to Modern Treasury, Inc., the third-party holder of investor funds (“Modern Treasury”), which then effectuates the funds transfer between the buyer and seller. After Market Hours end, the Executing Broker provides instructions regarding any transfers of interests between investor accounts to the transfer agent, which transfers the interests accordingly. The clearing process, which includes the transfer of funds and interests, will be completed within one to two days following the conclusion of the relevant trading window. Neither the Arrived platform nor the Executing Broker clears or settles trades.

 

9

 

User Interface and Role of the Platform

 

The Arrived platform serves merely as the user interface for the purpose of enabling secondary market trading in interests. On the Arrived platform, investors input the details of any orders to buy or sell interests in secondary transactions (including the number of interests subject to the offer to buy or sell, as the case may be, and the price, if any, at which such offer is being made), and the orders then are routed (i) to the Executing Broker, and (ii) by virtue of the Executing Broker’s status as a member of the PPEX ATS, to the PPEX ATS. The manager may elect not to transmit to the Executing Broker or the PPEX ATS any order information submitted by users who have not previously purchased securities issued by the company or its affiliates pursuant to Regulation A. For clarity, because the Executing Broker is (i) a registered broker-dealer and a member of the PPEX ATS and (ii) licensed to use the Arrived platform to access and transmit order information entered onto the Arrived platform by Investors, such order information is automatically routed from the Arrived platform to both the Executing Broker and the PPEX ATS simultaneously. After the Executing Broker has executed a trade, information about the matched orders and executed trade is then communicated by the Executing Broker to the buyer and seller using the Arrived platform’s user interface. The PPEX ATS accepts orders transmitted from the Arrived platform only because the Executing Broker (which is a member of the PPEX ATS) is licensed to use the Arrived platform’s technology to transmit order information.

 

For the avoidance of doubt, the decision whether to engage in secondary market trading is left solely to the individual investors. Neither the company nor any of its affiliates acts as a broker or dealer, and none of them provide investors any direction or recommendation as to the purchase or sale of any interests in secondary market transactions. In addition, neither the Executing Broker nor NCPS makes any direction or recommendation as to the purchase or sale of any interests.

 

The Arrived platform acts as a user interface to receive information from, and deliver and display information to, investors and the registered broker-dealers. None of the company the manager or Arrived Holdings, Inc. will receive any compensation for its role in the trading procedure unless and until it, or one of its affiliates, registers as a broker-dealer. The manager or one of its affiliates in the future may register as a broker-dealer under state and federal securities laws, at which time it may charge fees in respect of trading of interests.

 

Agreements Relating to Secondary Trading on the PPEX ATS

 

The company intends to enter into an agreement (the “PPEX ATS Company Agreement”) with NCPS, pursuant to which NCPS will review the company’s and series’ governing documents, offering materials and regulatory filings so that the PPEX ATS may serve as an available venue for the potential resale transactions in interests to be conducted in accordance with the process described above. The PPEX ATS provides a matching platform for the Executing Broker as a broker-dealer member of the PPEX ATS to submit bid and ask quotes to purchase or sell interests on behalf of, and as directed by, investors.

 

The manager intends to enter into a Software and Services License Agreement with NCIT, the parent company of NCPS. Under this agreement, the Arrived platform’s technology is connected via an application programming interface to the PPEX ATS to facilitate the routing of information from the Arrived platform as a user interface to the PPEX ATS as described above.

 

The company also intends to enter into an agreement with the Executing Broker (the “Secondary Brokerage Agreement”), separate and apart from the Broker Dealer Agreement. Pursuant to the Secondary Brokerage Agreement, the Executing Broker will perform certain services in support of the secondary trading of interests on the PPEX ATS and will ultimately be responsible for the execution of secondary trades of interests. As compensation, the Executing Broker will receive up to 5% of the gross proceeds received related to each transaction (2.5% from the buyer and 2.5% from the seller involved in such transaction). The manager may, from time to time and at its sole discretion, opt to pay the compensation earned by the Executing Broker in connection with its services related to the PPEX ATS. 

 

10

 

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.

 

11

 

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

 

12

 

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 sole member of Arrived Fund Manager, LLC, our 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.

 

13

 

  ● 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.

 

14

 

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, 2024, 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.

 

15

 

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. We will utilize a “mobile wallet” feature for payment of distributions (the “Arrived Homes Wallet”). The Arrived Homes Wallet will be used to allow investors to pay for subscriptions, receive distributions and reinvest distributions.

 

Valuation Policies

 

Following the six-month introductory period, at the end of each quarterly period, our manager’s internal accountants and asset management team will calculate a net asset value (“NAV”) per interest for each series using a process that reflects, among other matters,

 

  ● an estimated value of the series property, as determined by the manager’s asset management team, including related liabilities, based upon (a) information from publicly available sources related to (i) market rents, comparable sales information and interest rates and (ii) with respect to debt, default rates and discount rates, and (b) in certain instances, reports regarding the underlying real estate provided by an independent valuation expert or automated valuation models;

 

  ● the price of liquid assets for which third party market quotes are available;

 

  ● accruals of our periodic distributions on interests in the series; and

 

  ● estimated accruals of the revenues, fees and expenses of the series where we will (a) amortize the brokerage fee, offering expenses and sourcing fee over five years and (b) include accrued fees and operating expenses, accrued distributions payable, accrued management fees and any inter-company loans extended to the series by our manager.

 

Such determinations may include subjective judgments by the manager regarding the applicability of certain inputs to market rents and comparable sales information. While we do look at capitalization rates to help us to determine whether or not to acquire a property (see “Description of Business - Our Investment Criteria” in our latest Offering Circular), we do not utilize a capitalization rate approach in determining NAV, because given the nature of the series properties as primary residences, we do not believe that the value of a series’ primary asset can be determined based solely on the series’ rental revenues as the resale value of such asset will be decided independently of the success of such rental revenues.

  

Note, however, that the determination of the NAV for the interests of each series is not based on, nor intended to comply with, fair value standards under U.S. GAAP, and such NAV may not be indicative of the price that we would receive for our assets at current market conditions. In instances where we determine that an appraisal of the series property is necessary, including, but not limited to, instances where the manager is unsure of its ability on its own to accurately determine the estimated value of such series property, or instances where third party market values for comparable properties are either nonexistent or extremely inconsistent, we will engage an appraiser that has expertise in appraising residential real estate assets, to act as our independent valuation expert. The independent valuation expert is not responsible for, nor for preparing, our NAV per interest. See “Description of the Securities Being Offered⸺Valuation Policies” in our latest Offering Circular for more details about the NAV and how it will be calculated, including the subsection “NAV Estimates Determination and Valuation Methodology” for additional information regarding our manager’s NAV valuation methodology. 

 

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.

 

16

 

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 years ended December 31, 2024 and 2023 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:

 

Rental Income
Series Name  December 31,
2024		   December 31,
2023		 
Ace  $          114,389   $          100,643 
Billingswood   29,112    2,078 
Cactus   120,581    103,996 
Cardinal   156,244    167,397 
Coolbaugh   50,468    21,319 
Hammock   50,347    71,582 
Havasu   42,315    54,417 
Hickorybear   47,836    31,130 
Kinlani   97,317    54,125 
Koi   124,500    7,773 
Lakeridge   50,898    32,167 
Lodge   98,553    53,948 
Longbranch   71,680    42,510 
Loop   44,977    13,555 
Mirage   38,237    43,141 
Myrtle   62,931    22,604 
Oasis   53,020    80,161 
Opry   49,523    62,687 
Orchard   31,974    25,927 
Palm   74,389    58,730 
Pasquin   48,229    19,016 
Pickler   145,586    45,636 
Pointbreak   64,245    30,904 
Regal   47,712    77,665 
Serenity   88,857    119,354 
Smokey   52,622    24,222 
Solstice   43,862    3,099 
Sugarcreek   26,810    11,780 
SuiteSpot   121,559    34,081 
   $2,048,774   $1,415,647 

 

17

 

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, 2024 and 2023, 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, 2024 and 2023. 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, 2024   December 31, 2023 
Series Name  Operating
Expenses		   Depreciation   Total
Expenses		   Operating
Expenses		   Depreciation   Total
Expenses		 
Ace  $58,695   $40,516   $99,212   $58,263   $40,493   $98,756 
Billingswood   97,145    59,543    156,688    137,985    18,241    156,226 
Cactus   57,570    41,521    99,091    57,904    37,923    95,827 
Cardinal   80,687    43,696    124,384    93,000    41,689    134,689 
Coolbaugh   50,492    37,073    87,565    99,589    20,700    120,289 
Hammock   87,015    25,022    112,037    94,250    25,027    119,277 
Havasu   29,402    43,137    72,539    51,903    40,787    92,690 
Hickorybear   54,327    34,888    89,215    110,097    22,056    132,154 
Kinlani   41,762    34,303    76,065    59,776    24,237    84,014 
Koi   66,934    62,071    129,005    77,036    19,140    96,176 
Lakeridge   52,423    27,646    80,069    43,881    26,628    70,509 
Lodge   86,550    58,862    145,412    108,409    46,001    154,410 
Longbranch   55,251    42,474    97,726    86,761    24,965    111,726 
Loop   47,691    38,226    85,917    72,138    18,435    90,573 
Mirage   42,533    20,308    62,840    58,907    20,142    79,048 
Myrtle   54,665    27,452    82,117    90,708    19,096    109,804 
Oasis   66,503    41,249    107,752    43,787    41,027    84,815 
Opry   50,564    31,670    82,235    100,047    26,046    126,093 
Orchard   41,358    33,380    74,738    23,837    31,571    55,408 
Palm   103,634    34,051    137,686    97,966    30,177    128,143 
Pasquin   60,869    35,887    96,756    103,478    20,732    124,210 
Pickler   67,288    59,056    126,344    59,405    29,398    88,803 
Pointbreak   61,175    24,541    85,716    66,246    20,491    86,737 
Regal   73,928    37,210    111,138    45,593    28,008    73,600 
Serenity   49,986    52,986    102,972    81,738    50,494    132,231 
Smokey   55,286    34,997    90,283    68,689    20,415    89,104 
Solstice   38,741    38,067    76,809    11,909    11,783    23,692 
Sugarcreek   39,414    23,216    62,630    54,967    18,663    73,630 
SuiteSpot   73,908    44,068    117,976    136,713    19,963    156,676 
   $1,745,799   $1,127,117   $2,872,916   $2,194,983   $794,326   $2,989,309 

 

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Other Expenses (Income)

 

During the years ended December 31, 2024 and 2023, each series incurred interest expenses. The following table summarizes the total of such expenses incurred by each series during the years ended December 31, 2024 and 2023. 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,
2024		   December 31,
2023		 
Ace  $            29,535   $            27,101 
Billingswood   -    - 
Cactus   33,807    31,927 
Cardinal   20,935    19,210 
Coolbaugh   -    - 
Hammock   16,098    17,573 
Havasu   32,818    30,672 
Hickorybear   -    7,880 
Kinlani   -    14,213 
Koi   -    - 
Lakeridge   19,622    19,059 
Lodge   -    - 
Longbranch   -    - 
Loop   -    - 
Mirage   -    - 
Myrtle   -    - 
Oasis   33,085    32,297 
Opry   35,468    32,710 
Orchard   -    - 
Palm   21,706    20,210 
Pasquin   -    - 
Pickler   -    - 
Pointbreak   10,580    12,319 
Regal   38,345    35,488 
Serenity   34,225    32,193 
Smokey   -    - 
Solstice   -    7,844 
Sugarcreek   14,587    13,633 
SuiteSpot   -    29,731 
   $340,810   $384,059 

 

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, 2024 and 2023. Such amounts are based on the audited financial statements of the company and each series included in this Annual Report on Form 1-K:

 

Cash & Cash Equivalents
Series Name  December 31,
2024		   December 31,
2023		 
Ace  $            11,204   $            12,762 
Billingswood   23,769    5,522 
Cactus   13,750    35,462 
Cardinal   9,676    26,945 
Coolbaugh   4,409    10,324 
Hammock   4,476    1,561 
Havasu   12,195    15,342 
Hickorybear   3,807    28,072 
Kinlani   41,377    59,888 
Koi   13,340    - 
Lakeridge   5,776    20,120 
Lodge   5,577    43,291 
Longbranch   10,512    53,534 
Loop   7,428    9,253 
Mirage   8,807    18,754 
Myrtle   25,169    25,351 
Oasis   7,494    6,434 
Opry   12,023    79,528 
Orchard   3,535    26,625 
Palm   -    5,917 
Pasquin   1,940    18,902 
Pickler   97,847    81,534 
Pointbreak   5,064    88,877 
Regal   20,282    55,625 
Serenity   71,400    78,386 
Smokey   13,163    33,755 
Solstice   66,103    126,133 
Sugarcreek   815    5,117 
SuiteSpot   3,225    26,062 
   $504,161   $999,076 

 

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.

 

20

 

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, 2025 through February 28, 2025 are listed below. For the avoidance of doubt, the below amounts are unaudited.

 

Rental Income
Series Name  February 28,
2025		 
Ace  $          23,941 
Billingswood   4,577 
Cactus   16,706 
Cardinal   9,423 
Coolbaugh   - 
Hammock   7,510 
Havasu   1,997 
Hickorybear   4,425 
Kinlani   12,959 
Koi   25,182 
Lakeridge   4,223 
Lodge   8,610 
Longbranch   4,898 
Loop   1,912 
Mirage   2,200 
Myrtle   3,462 
Oasis   4,342 
Opry   4,365 
Orchard   5,444 
Palm   1,048 
Pasquin   6,880 
Pickler   26,317 
Pointbreak   3,087 
Regal   6,390 
Serenity   7,120 
Smokey   687 
Solstice   276 
Sugarcreek   3,920 
SuiteSpot   21,984 

Subtotal

  $223,888 

 

21

 

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, 2025 through February 28, 2025. For the avoidance of doubt, the below amounts are unaudited.

 

Operating Expenses
February 28, 2025
Series Name  Operating
Expenses		   Depreciation   Total
Expenses		 
Ace  $13,001   $6,753   $19,753 
Billingswood   12,260    11,241    23,501 
Cactus   10,383    6,920    17,303 
Cardinal   9,639    8,227    17,866 
Coolbaugh   5,430    6,179    11,609 
Hammock   9,076    4,170    13,247 
Havasu   3,852    7,223    11,075 
Hickorybear   6,768    5,797    12,565 
Kinlani   5,380    5,717    11,097 
Koi   13,032    10,444    23,476 
Lakeridge   6,688    4,672    11,360 
Lodge   12,304    9,035    21,340 
Longbranch   5,302    7,063    12,365 
Loop   4,361    6,371    10,732 
Mirage   21,649    3,385    25,033 
Myrtle   5,623    4,659    10,282 
Oasis   7,555    7,280    14,836 
Opry   4,451    5,510    9,961 
Orchard   5,982    5,563    11,546 
Palm   12,153    6,343    18,496 
Pasquin   8,584    5,981    14,565 
Pickler   11,366    9,843    21,208 
Pointbreak   6,923    4,039    10,962 
Regal   6,321    6,313    12,634 
Serenity   7,881    8,831    16,712 
Smokey   5,173    5,833    11,006 
Solstice   3,222    6,363    9,585 
Sugarcreek   4,863    3,869    8,732 
SuiteSpot   16,875    7,484    24,359 

Subtotal

  $246,097   $191,109   $437,206 

 

22

 

Other Expenses

 

The following table summarizes the total of such expenses incurred by each series during the period between January 1, 2025 and February 28, 2025. For the avoidance of doubt, the below amounts are unaudited.

 

Other Expenses
Series Name  February 28,
2025		 
Ace  $            4,869 
Billingswood   - 
Cactus   4,862 
Cardinal   3,450 
Coolbaugh   - 
Hammock   2,504 
Havasu   4,685 
Hickorybear   - 
Kinlani   - 
Koi   - 
Lakeridge   2,801 
Lodge   - 
Longbranch   - 
Loop   - 
Mirage   - 
Myrtle   - 
Oasis   5,383 
Opry   5,101 
Orchard   - 
Palm   3,099 
Pasquin   - 
Pickler   - 
Pointbreak   1,739 
Regal   5,534 
Serenity   4,886 
Smokey   - 
Solstice   - 
Sugarcreek   2,083 
SuiteSpot   - 

Subtotal

  $50,998 

 

23

 

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 February 28, 2025. For the avoidance of doubt, the below amounts are unaudited.

 

Cash & Cash Equivalents
Series Name  February 28,
2025		 
Ace  $          14,642 
Billingswood   14,114 
Cactus   8,233 
Cardinal   5,984 
Coolbaugh   156 
Hammock   838 
Havasu   6,450 
Hickorybear   3,613 
Kinlani   46,361 
Koi   17,363 
Lakeridge   1,266 
Lodge   4,385 
Longbranch   14,357 
Loop   10,858 
Mirage   5,923 
Myrtle   15,572 
Oasis   4,585 
Opry   - 
Orchard   4,700 
Palm   - 
Pasquin   2,471 
Pickler   97,057 
Pointbreak   2,251 
Regal   15,902 
Serenity   69,768 
Smokey   7,538 
Solstice   60,274 
Sugarcreek   1,362 
SuiteSpot   8,464 
Subtotal  $444,485 

 

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Item 3. Directors AND Officers

 

General

 

The manager of our company is Arrived Fund Manager, LLC, a Delaware limited liability company. 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   36   Chief Executive Officer and Director   Chief Executive Officer, President and Director
Sue Korn   55   Chief Financial Officer   Chief Financial Officer
Kenneth Cason   38   Chief Technology Officer and Director   Chief Technology Officer and Director
Alejandro Chouza   44   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.

 

25

 

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;

 

26

 

  ● 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 eight 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 Homes 5, LLC – Arrived Homes 5, LLC was formed on July 12, 2024 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 5, 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.

 

27

 

Item 4. Security Ownership of Management and Certain Securityholders

 

Our company is managed by Arrived Fund Manager, LLC, 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 latest offering circular for more detail.

 

The address of Arrived Fund Manager, LLC 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 latest offering circular, which can be accessed here, 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.

 

Item 6. Other Information

 

None.

 

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Item 7. Financial Statements

 

ARRIVED STR, LLC AND ITS SERIES

CONSOLIDATED AND CONSOLIDATING FINANCIAL STATEMENTS

DECEMBER 31, 2024 AND 2023

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PCAOB ID #03523) F-2
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PCAOB ID #00536) F-3
CONSOLIDATED AND CONSOLIDATING BALANCE SHEET AS OF DECEMBER 31, 2024 F-4
CONSOLIDATED AND CONSOLIDATING BALANCE SHEET AS OF DECEMBER 31, 2023 F-9
CONSOLIDATED AND CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS) AS OF DECEMBER 31, 2024 F-14
CONSOLIDATED AND CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS FOR THE YEAR ENDED DECEMBER 31, 2023 F-19
CONSOLIDATED AND CONSOLIDATING STATEMENT OF CHANGES IN MEMBERS’ EQUITY (DEFICIT) AS OF DECEMBER 31, 2024 F-24
CONSOLIDATED AND CONSOLIDATING STATEMENT OF CHANGES IN MEMBERS’ EQUITY (DEFICIT) FOR YEAR ENDED DECEMBER 31, 2023 F-29
CONSOLIDATED AND CONSOLIDATING STATEMENT OF CASH FLOWS AS OF DECEMBER 31, 2024 F-34
CONSOLIDATED AND CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2023 F-39
NOTES TO CONSOLIDATED AND CONSOLIDATING FINANCIAL STATEMENTS F-44 to F-60

 

F-1

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Manager and Members of
Arrived STR, LLC

Seattle, Washington

 

Opinion on the Consolidated and Consolidating Financial Statements

 

We have audited the accompanying consolidated and consolidating balance sheet of Arrived STR, LLC and its Series (the Company) as of December 31, 2024, and the related consolidated and consolidating statements of comprehensive income (loss), changes in members’ equity (deficit), and cash flows for the year ended December 31, 2024 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, 2024 and the results of their operations and their cash flows for the year ended December 31, 2024 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 and losses from operations since inception 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 audit. 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 audit 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 audit, 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 audit 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 audit 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 audit provides a reasonable basis for our opinion.

 

/s/ Stephano Slack LLC

 

We have served as the Company’s auditor since 2024.

 

Wayne, Pennsylvania

April 30, 2025

 

F-2

 

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 sheet of Arrived STR, LLC and its Series (the Company) as of December 31, 2023, and the related consolidated and consolidating statements of comprehensive loss, changes in members’ equity (deficit), and cash flows for the period from July 11, 2022 (date of inception) through December 31, 2023, and the related consolidated and consolidating 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 consolidated and consolidating financial position of the Company as of December 31, 2023, and the results of their consolidated and consolidating operations and cash flows for the period from January 12, 2023 (date of inception) through December 31, 2023, 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 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 audit. 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 audit 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 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 audit, 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 audit 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 financial statements. Our audit 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 audit provides a reasonable basis for our opinion.

 

/s/ Morison Cogen LLP

 

We served as the Company’s auditor from 2022 to 2024.

 

Blue Bell, Pennsylvania

 

April 29, 2024

 

F-3

 

ARRIVED STR, LLC AND ITS SERIES

CONSOLIDATED AND CONSOLIDATING BALANCE SHEET

DECEMBER 31, 2024

 

 

   Ace   Billingswood   Cactus   Cardinal   Coolbaugh   Hammock 
ASSETS                        
Current assets:                        
Cash  $11,204   $23,769   $13,750   $9,676   $4,409   $4,476 
Other receivables   -    -    -    -    -    - 
Prepaid expenses   10,555    1,015    1,055    8,029    764    3,266 
Due from related parties, property manager   -    -    -    -    -    - 
Due from third party property manager   7,146    5,277    4,967    7,089    564    4,286 
Total current assets   28,905    30,061    19,771    24,794    5,737    12,028 
Property and equipment, net   1,031,878    927,985    1,027,042    801,139    492,455    540,053 
Total assets  $1,060,783   $958,045   $1,046,813   $825,933   $498,192   $552,081 
                               
LIABILITIES AND MEMBERS’ EQUITY                              
Current liabilities:                              
Accrued expenses  $4,503   $4,472   $10,623   $5,799   $3,818   $17,644 
Due to related parties, property manager   -    -    -    -    -    - 
Due to related parties   14,275    50,725    11,064    18,958    3,796    6,138 
Total Current liabilities   18,778    55,197    21,687    24,757    7,614    23,782 
Mortgage payable, net   432,148    -    434,315    306,005    -    223,583 
Operational notes, net   44,900    112,000    15,300    38,100    9,000    33,800 
Total Liabilities   495,826    167,197    471,303    368,862    16,614    281,165 
Members’ equity                              
Members’ capital   677,967    1,072,573    682,867    494,319    617,645    548,028 
Accumulated deficit   (113,009)   (281,725)   (107,356)   (37,248)   (136,067)   (277,112)
Total members’ equity   564,957    790,849    575,511    457,071    481,577    270,915 
Total liabilities and members’ equity  $1,060,783   $958,045   $1,046,813   $825,933   $498,192   $552,081 

 

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

DECEMBER 31, 2024

 

 

   Havasu   Hickorybear   Kinlani   Koi   Lakeridge   Lodge 
ASSETS                        
Current assets:                        
Cash  $12,195   $3,807   $41,377   $13,340   $5,776   $5,577 
Other receivables   -    -    -    -    -    - 
Prepaid expenses   1,115    1,501    808    914    513    2,095 
Due from related parties, property manager   -    -    -    -    -    - 
Due from third party property manager   -    4,917    7,979    6,727    2,404    8,907 
Total current assets   13,310    10,225    50,164    20,981    8,694    16,579 
Property and equipment, net   1,039,141    742,198    761,388    815,680    576,431    1,057,661 
Total assets  $1,052,450   $752,423   $811,553   $836,662   $585,124   $1,074,240 
                               
LIABILITIES AND MEMBERS’ EQUITY                              
Current liabilities:                              
Accrued expenses  $10,877   $7,465   $9,381   $8,069   $5,958   $12,008 
Due to related parties, property manager   -    -    -    -    -    - 
Due to related parties   4,727    7,505    7,572    6,592    3,801    13,066 
Total Current liabilities   15,604    14,970    16,953    14,660    9,759    25,074 
Mortgage payable, net   465,610    -    -    -    278,381    - 
Operational notes, net   -    42,000    -    20,100    19,000    27,900 
Total Liabilities   481,214    56,970    16,953    34,760    307,139    52,974 
Members’ equity                              
Members’ capital   755,457    845,736    817,449    894,809    407,868    1,198,880 
Accumulated deficit   (184,220)   (150,283)   (22,850)   (92,908)   (129,883)   (177,614)
Total members’ equity   571,237    695,454    794,599    801,901    277,985    1,021,266 
Total liabilities and members’ equity  $1,052,450   $752,423   $811,553   $836,662   $585,124   $1,074,240 

 

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

DECEMBER 31, 2024

 

 

   Longbranch   Loop   Mirage   Myrtle   Oasis   Opry 
ASSETS                        
Current assets:                        
Cash  $10,512   $7,428   $8,807   $25,169   $7,494   $12,023 
Other receivables   4,544    -    -    -    -    - 
Prepaid expenses   2,755    815    1,207    1,747    8,760    - 
Due from related parties, property manager   -    -    -    -    -    732 
Due from third party property manager   4,772    -    -    -    -    - 
Total current assets   22,583    8,243    10,014    26,915    16,254    12,755 
Property and equipment, net   843,502    700,188    605,321    443,831    973,340    1,060,674 
Total assets  $866,086   $708,431   $615,335   $470,746   $989,594   $1,073,429 
                               
LIABILITIES AND MEMBERS’ EQUITY                              
Current liabilities:                              
Accrued expenses  $8,992   $4,622   $8,699   $11,846   $3,497   $15,778 
Due to related parties, property manager   -    21,406    -    6    9,902    - 
Due to related parties   5,710    1,425    5,561    3,905    15,770    8,091 
Total Current liabilities   14,702    27,453    14,260    15,757    29,169    23,869 
Mortgage payable, net   -    -    -    -    477,788    454,878 
Operational notes, net   -    12,000    91,900    -    58,700    - 
Total Liabilities   14,702    39,453    106,160    15,757    565,657    478,746 
Members’ equity                              
Members’ capital   946,645    786,935    722,927    564,226    578,832    761,828 
Accumulated deficit   (95,261)   (117,958)   (213,752)   (109,236)   (154,894)   (167,145)
Total members’ equity   851,384    668,977    509,175    454,990    423,937    594,683 
Total liabilities and members’ equity  $866,086   $708,431   $615,335   $470,746   $989,594   $1,073,429 

 

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

DECEMBER 31, 2024

 

 

   Orchard   Palm   Pasquin   Pickler   Pointbreak   Regal 
ASSETS                        
Current assets:                        
Cash  $3,535   $-   $1,940   $97,847   $5,064   $20,282 
Other receivables   -    -    -    -    -    - 
Prepaid expenses   584    4,534    73    1,007    5,520    1,049 
Due from related parties, property manager   -    -    -    -    -    3,586 
Due from third party property manager   5,193    5,380    5,320    8,328    -    - 
Total current assets   9,312    9,914    7,332    107,182    10,584    24,916 
Property and equipment, net   572,314    664,886    518,189    1,141,613    400,717    949,328 
Total assets  $581,626   $674,800   $525,522   $1,248,795   $411,301   $974,244 
                               
LIABILITIES AND MEMBERS’ EQUITY                              
Current liabilities:                              
Accrued expenses  $3,904   $11,972   $4,000   $12,441   $6,405   $9,058 
Due to related parties, property manager   -    40    -    -    1,609    - 
Due to related parties   3,269    6,952    4,780    9,561    4,691    5,663 
Total Current liabilities   7,173    18,964    8,780    22,002    12,706    14,721 
Mortgage payable, net   -    307,943    -    -    153,453    467,875 
Operational notes, net   9,600    65,300    35,000    -    61,700    - 
Total Liabilities   16,773    392,207    43,780    22,002    227,859    482,596 
Members’ equity                              
Members’ capital   711,486    541,981    635,462    1,250,719    383,749    649,190 
Accumulated deficit   (146,632)   (259,388)   (153,721)   (23,926)   (200,307)   (157,542)
Total members’ equity   564,853    282,593    481,741    1,226,793    183,442    491,648 
Total liabilities and members’ equity  $581,626   $674,800   $525,522   $1,248,795   $411,301   $974,244 

 

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

DECEMBER 31, 2024

 

 

   Serenity   Smokey   Solstice   Sugarcreek   SuiteSpot   Consolidated 
ASSETS                        
Current assets:                        
Cash  $71,400   $13,163   $66,103   $815   $3,225   $504,161 
Other receivables   -    -    -    -    -    4,544 
Prepaid expenses   977    832    5,817    420    2,004    69,731 
Due from related parties, property manager   -    3,304    -    -    -    7,622 
Due from third party property manager   7,056    -    408    4,435    -    101,155 
Total current assets   79,433    17,299    72,328    5,670    5,229    687,214 
Property and equipment, net   1,091,096    754,211    766,972    438,940    933,113    22,671,286 
Total assets  $1,170,529   $771,510   $839,299   $444,610   $938,342   $23,358,500 
                               
LIABILITIES AND MEMBERS’ EQUITY                              
Current liabilities:                              
Accrued expenses  $10,362   $10,158   $6,490   $4,610   $9,606   $243,057 
Due to related parties, property manager   -    -    -    551    2,673    36,188 
Due to related parties   10,314    3,947    2,435    2,826    9,503    252,621 
Total Current liabilities   20,676    14,104    8,925    7,987    21,783    531,866 
Mortgage payable, net   485,769    -    -    206,938    -    4,694,685 
Operational notes, net   -    -    -    54,800    7,000    758,100 
Total Liabilities   506,445    14,104    8,925    269,724    28,783    5,984,651 
Members’ equity                              
Members’ capital   793,874    859,948    891,759    307,901    1,058,301    21,459,361 
Accumulated deficit   (129,790)   (102,542)   (61,384)   (133,015)   (148,742)   (4,085,513)
Total members’ equity   664,084    757,406    830,375    174,886    909,559    17,373,848 
Total liabilities and members’ equity  $1,170,529   $771,510   $839,299   $444,610   $938,342   $23,358,500 

 

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

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   21,030    (2,044)   41,790    32,578    10,383    7,446 
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 (DEFICIT)                              
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 (deficit)                              
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 (deficit)   624,704    918,654    633,528    480,013    531,274    337,382 
Total liabilities and members’ equity (deficit)  $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-9

 

ARRIVED STR, LLC AND ITS SERIES

CONSOLIDATED AND CONSOLIDATING BALANCE SHEET

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   15,399    31,982    69,622    4,178    22,408    52,175 
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 (DEFICIT)                              
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 (deficit)                              
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 (deficit)   650,225    770,616    820,096    833,110    335,750    1,125,737 
Total liabilities and members’ equity (deficit)  $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-10

 

ARRIVED STR, LLC AND ITS SERIES

CONSOLIDATED AND CONSOLIDATING BALANCE SHEET

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   68,089    9,825    22,363    40,094    11,624    80,427 
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 (DEFICIT)                              
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 (deficit)                              
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 (deficit)   918,565    729,603    547,678    496,670    529,741    683,641 
Total liabilities and members’ equity (deficit)  $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-11

 

ARRIVED STR, LLC AND ITS SERIES

CONSOLIDATED AND CONSOLIDATING BALANCE SHEET

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   30,824    11,701    22,733    90,978    88,877    65,372 
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 (DEFICIT)                              
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 (deficit)                              
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 (deficit)   623,085    373,979    546,609    1,274,074    226,185    613,512 
Total liabilities and members’ equity (deficit)  $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-12

 

ARRIVED STR, LLC AND ITS SERIES

CONSOLIDATED AND CONSOLIDATING BALANCE SHEET

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   89,179    34,082    130,691    6,703    292,137    1,402,645 
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 (DEFICIT)                              
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 (deficit)                              
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 (deficit)   755,875    816,006    897,576    231,687    970,565    19,296,141 
Total liabilities and members’ equity (deficit)  $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-13

 

ARRIVED STR, LLC AND ITS SERIES

CONSOLIDATED AND CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS)

FOR THE YEAR ENDED DECEMBER 31, 2024

 

 

   Ace   Billingswood   Cactus   Cardinal   Coolbaugh   Hammock 
                         
Rental income  $114,389   $29,112   $120,581   $156,244   $50,468   $50,347 
                               
Operating expenses:                              
Depreciation   40,516    59,543    41,521    43,696    37,073    25,022 
Insurance   2,501    2,514    2,465    3,428    3,010    17,653 
Management fees   17,129    10,522    17,521    22,628    15,170    14,273 
Management fees, related party   5,719    1,456    6,029    7,812    2,523    2,517 
Repairs & maintenance   9,997    16,863    8,832    15,690    3,215    27,458 
Property taxes   4,976    33,086    3,414    4,412    9,759    8,502 
Other operating expenses   18,373    32,705    19,310    26,717    16,816    16,611 
Total operating expenses   99,212    156,688    99,091    124,384    87,565    112,037 
                               
Income (loss) from operations   15,178    (127,577)   21,490    31,860    (37,097)   (61,690)
                               
Other income (expense)                              
Interest expenses   29,535    -    33,807    20,935    -    16,098 
Total Other income (expense)   29,535    -    33,807    20,935    -    16,098 
                               
Net income (loss)  $(14,357)  $(127,577)  $(12,318)  $10,925   $(37,097)  $(77,788)

 

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, 2024

 

 

   Havasu   Hickorybear   Kinlani   Koi   Lakeridge   Lodge 
                         
Rental income  $42,315   $47,836   $97,317   $124,500   $50,898   $98,553 
                               
Operating expenses:                              
Depreciation   43,137    34,888    34,303    62,071    27,646    58,862 
Insurance   2,566    4,186    1,888    2,682    2,026    6,571 
Management fees   6,347    8,594    14,598    18,664    9,395    18,377 
Management fees, related party   2,116    2,392    4,866    6,225    2,545    4,928 
Repairs & maintenance   4,507    12,596    4,489    12,919    19,879    16,112 
Property taxes   4,316    6,300    4,004    3,766    1,983    12,059 
Other operating expenses   9,550    20,260    11,918    22,678    16,596    28,503 
Total operating expenses   72,539    89,215    76,065    129,005    80,069    145,412 
                               
Income (loss) from operations   (30,224)   (41,380)   21,252    (4,505)   (29,170)   (46,860)
                               
Other income (expense)                              
Interest expenses   32,818    -    -    -    19,622    - 
Total Other income (expense)   32,818    -    -    -    19,622    - 
                               
Net income (loss)  $(63,041)  $(41,380)  $21,252   $(4,505)  $(48,792)  $(46,860)

 

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, 2024

 

 

   Longbranch   Loop   Mirage   Myrtle   Oasis   Opry 
                         
Rental income  $71,680   $44,977   $38,237   $62,931   $53,020   $49,523 
                               
Operating expenses:                              
Depreciation   42,474    38,226    20,308    27,452    41,249    31,670 
Insurance   2,498    3,332    2,023    6,314    2,689    2,453 
Management fees   13,282    -    10,106    -    7,623    4,910 
Management fees, related party   3,584    11,244    1,912    15,603    3,036    3,042 
Repairs & maintenance   11,840    8,896    8,067    8,882    25,358    16,777 
Property taxes   7,059    661    7,561    6,811    16,464    8,734 
Other operating expenses   16,988    23,559    12,864    17,055    11,334    14,649 
Total operating expenses   97,726    85,917    62,840    82,117    107,752    82,235 
                               
Income (loss) from operations   (26,045)   (40,940)   (24,603)   (19,186)   (54,732)   (32,712)
                               
Other income (expense)                              
Interest expenses   -    -    -    -    33,085    35,468 
Total Other income (expense)   -    -    -    -    33,085    35,468 
                               
Net income (loss)  $(26,045)  $(40,940)  $(24,603)  $(19,186)  $(87,816)  $(68,180)

 

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, 2024

 

 

   Orchard   Palm   Pasquin   Pickler   Pointbreak   Regal 
                         
Rental income  $31,974   $74,389   $48,229   $145,586   $64,245   $47,712 
                               
Operating expenses:                              
Depreciation   33,380    34,051    35,887    59,056    24,541    37,210 
Insurance   2,013    18,133    2,482    2,944    10,026    3,225 
Management fees   6,892    18,900    14,679    21,821    -    3,274 
Management fees, related party   1,599    3,719    2,411    7,817    15,201    8,103 
Repairs & maintenance   14,812    35,973    9,517    9,860    11,527    23,942 
Property taxes   94    7,984    5,643    3,800    2,346    2,437 
Other operating expenses   15,949    18,925    26,136    21,045    22,075    32,948 
Total operating expenses   74,738    137,686    96,756    126,344    85,716    111,138 
                               
Income (loss) from operations   (42,764)   (63,297)   (48,527)   19,242    (21,471)   (63,427)
                               
Other income (expense)                              
Interest expenses   -    21,706    -    -    10,580    38,345 
Total Other income (expense)   -    21,706    -    -    10,580    38,345 
                               
Net income (loss)  $(42,764)  $(85,003)  $(48,527)  $19,242   $(32,051)  $(101,771)

 

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 INCOME (LOSS)

FOR THE YEAR ENDED DECEMBER 31, 2024

 

 

   Serenity   Smokey   Solstice   Sugarcreek   SuiteSpot   Consolidated 
                         
Rental income  $88,857   $52,622   $43,862   $26,810   $121,559   $2,048,774 
                               
Operating expenses:                              
Depreciation   52,986    34,997    38,067    23,216    44,068    1,127,117 
Insurance   2,428    3,399    2,850    1,760    4,078    124,135 
Management fees   13,372    -    8,166    4,859    -    301,100 
Management fees, related party   4,443    13,156    2,193    1,341    30,390    177,922 
Repairs & maintenance   9,175    7,891    9,718    13,837    14,939    393,566 
Property taxes   5,647    154    1,950    996    2,217    177,135 
Other operating expenses   14,922    30,687    13,865    16,622    22,284    571,941 
Total operating expenses   102,972    90,283    76,809    62,630    117,976    2,872,916 
                               
Income (loss) from operations   (14,115)   (37,660)   (32,947)   (35,820)   3,584    (824,142)
                               
Other income (expense)                              
Interest expenses   34,225    -    -    14,587    -    340,810 
Total Other income (expense)   34,225    -    -    14,587    -    340,810 
                               
Net income (loss)  $(48,341)  $(37,660)  $(32,947)  $(50,407)  $3,584   $(1,164,953)

 

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 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-19

 

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-20

 

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-21

 

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-22

 

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-23

 

ARRIVED STR, LLC AND ITS SERIES

CONSOLIDATED AND CONSOLIDATING STATEMENT OF CHANGES IN MEMBERS’ EQUITY

FOR THE YEAR ENDED DECEMBER 31, 2024

 

 

   Ace   Billingswood   Cactus   Cardinal   Coolbaugh   Hammock 
                         
Balance at January 1, 2024  $624,704   $918,654   $633,528   $480,013   $531,274   $337,382 
Redemption of membership units   (1,100)   (300)   (1,200)   (650)   (300)   (100)
Deemed contribution from Manager   -    23,130    -    -    6,207    22,235 
Distributions   (44,289)   (23,058)   (44,500)   (33,217)   (18,506)   (10,813)
Net income (loss)   (14,357)   (127,577)   (12,318)   10,925    (37,097)   (77,788)
Balance at December 31, 2024  $564,957   $790,849   $575,511   $457,071   $481,577   $270,915 

 

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 MEMBERS’ EQUITY

FOR THE YEAR ENDED DECEMBER 31, 2024

 

 

   Havasu   Hickorybear   Kinlani   Koi   Lakeridge   Lodge 
                         
Balance at January 1, 2024  $650,225   $770,616   $820,096   $833,110   $335,750   $1,125,737 
Redemption of membership units   (700)   (400)   (300)   -    -    (400)
Deemed contribution from Manager   -    -    -    -    -    - 
Distributions   (15,247)   (33,383)   (46,449)   (26,704)   (8,973)   (57,211)
Net income (loss)   (63,041)   (41,380)   21,252    (4,505)   (48,792)   (46,860)
Balance at December 31, 2024  $571,237   $695,454   $794,599   $801,901   $277,985   $1,021,266 

 

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 MEMBERS’ EQUITY

FOR THE YEAR ENDED DECEMBER 31, 2024

 

 

   Longbranch   Loop   Mirage   Myrtle   Oasis   Opry 
                         
Balance at January 1, 2024  $918,565   $729,603   $547,678   $496,670   $529,741   $683,641 
Redemption of membership units   (300)   (400)   (450)   -    -    (700)
Deemed contribution from Manager   -    -    -    1,428    -    - 
Distributions   (40,836)   (19,286)   (13,450)   (23,922)   (17,988)   (20,079)
Net income (loss)   (26,045)   (40,940)   (24,603)   (19,186)   (87,816)   (68,180)
Balance at December 31, 2024  $851,384   $668,977   $509,175   $454,990   $423,937   $594,683 

 

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 MEMBERS’ EQUITY

FOR THE YEAR ENDED DECEMBER 31, 2024

 

 

   Orchard   Palm   Pasquin   Pickler   Pointbreak   Regal 
                         
Balance at January 1, 2024  $623,085   $373,979   $546,609   $1,274,074   $226,185   $613,512 
Redemption of membership units   (1,050)   (450)   (100)   (300)   (500)   (300)
Deemed contribution from Manager   -    4,767    -    -    -    - 
Distributions   (14,418)   (10,700)   (16,240)   (66,223)   (10,192)   (19,792)
Net income (loss)   (42,764)   (85,003)   (48,527)   19,242    (32,051)   (101,771)
Balance at December 31, 2024  $564,853   $282,593   $481,741   $1,226,793   $183,442   $491,648 

 

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

FOR THE YEAR ENDED DECEMBER 31, 2024

 

 

   Serenity   Smokey   Solstice   Sugarcreek   SuiteSpot   Consolidated 
                         
Balance at January 1, 2024  $755,875   $816,006   $897,576   $231,687   $970,565   $19,296,141 
Redemption of membership units   (500)   (300)   -    (100)   (100)   (11,000)
Deemed contribution from Manager   -    -    -    -    -    57,767 
Distributions   (42,950)   (20,640)   (34,255)   (6,294)   (64,490)   (804,107)
Net income (loss)   (48,341)   (37,660)   (32,947)   (50,407)   3,584    (1,164,953)
Balance at December 31, 2024  $664,084   $757,406   $830,375   $174,886   $909,559   $17,373,848 

 

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

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   -    1,023,724    -    -    653,631    - 
Redemption of membership units   (1,200)   (300)   (300)   (2,400)   (1,300)   - 
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-29

 

ARRIVED STR, LLC AND ITS SERIES

CONSOLIDATED AND CONSOLIDATING STATEMENT OF CHANGES IN MEMBERS’ EQUITY

FOR THE YEAR ENDED 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   -    917,383    897,392    940,513    -    1,303,346 
Redemption of membership units   (100)   (2,200)   -    (500)   -    (2,150)
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-30

 

ARRIVED STR, LLC AND ITS SERIES

CONSOLIDATED AND CONSOLIDATING STATEMENT OF CHANGES IN MEMBERS’ EQUITY

FOR THE YEAR ENDED 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   1,029,011    832,486    -    591,173    -    - 
Redemption of membership units   (700)   (600)   (100)   (100)   (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-31

 

ARRIVED STR, LLC AND ITS SERIES

CONSOLIDATED AND CONSOLIDATING STATEMENT OF CHANGES IN MEMBERS’ EQUITY

FOR THE YEAR ENDED 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   -    -    669,458    1,368,811    -    701,145 
Redemption of membership units   (550)   -    (1,000)   (600)   (250)   (100)
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-32

 

ARRIVED STR, LLC AND ITS SERIES

CONSOLIDATED AND CONSOLIDATING STATEMENT OF CHANGES IN MEMBERS’ EQUITY

FOR THE YEAR ENDED 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    -    1,134,382    13,898,775 
Redemption of membership units   -    -    -    (1,000)   -    (17,850)
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-33

 

ARRIVED STR, LLC AND ITS SERIES

CONSOLIDATED AND CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 2024

 

 

   Ace   Billingswood   Cactus   Cardinal   Coolbaugh   Hammock 
                         
Cash Flows from Operating Activities:                        
Net income (loss)  $(14,357)  $(127,577)  $(12,318)  $10,925   $(37,097)  $(77,788)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:                              
Depreciation   40,516    59,543    41,521    43,696    37,073    25,022 
Amortization   319    -    2,202    233    -    1,072 
(Increase) Decrease in assets                              
Other receivables   -    -    -    -    -    - 
Due (from) to third party property managers   (2,121)   (13,562)   476    (3,835)   (934)   (3,307)
Prepaid expenses   (7,312)   (296)   (171)   (5,651)   (335)   1,641 
Increase (decrease) in liabilities                              
Accrued expenses   (8,979)   (5,625)   (4,916)   (4,698)   (11,876)   8,146 
Due to (from) related parties, property manager   -    -    -    -    -    - 
Due to (from) related parties   (96,652)   79,273    (173,600)   (99,752)   27,384    (163,202)
Net cash provided by (used in) operating activities   (88,586)   (8,245)   (146,806)   (59,081)   14,214    (208,417)
                               
Cash Flows from Investing Activities                              
Additions to Property and equipment   -    (56,628)   -    (34,000)   -    - 
Net cash used in investing activities   -    (56,628)   -    (34,000)   -    - 
                               
Cash flows from financing activities                              
Operational notes, related party   44,900    112,000    15,300    38,100    9,000    33,800 
Redemption of membership units   (1,100)   (300)   (1,200)   (650)   (300)   (100)
Distributions   (44,289)   (23,058)   (44,500)   (33,217)   (18,506)   (10,813)
Net cash provided by (used in) financing activities   (489)   88,642    (30,400)   4,233    (9,806)   22,887 
Net change in cash   (89,075)   23,769    (177,205)   (88,848)   4,409    (185,530)
Cash at beginning of year   100,279    -    190,955    98,524    -    190,006 
Cash at end of year  $11,204   $23,769   $13,750   $9,676   $4,409   $4,476 
                               
Cash paid for income taxes  $-   $937   $-   $716   $-   $- 
Cash paid for interest expenses  $29,535   $-   $33,807   $20,935   $-   $16,098 
                               
Supplemental disclosure of non-cash investing and financing activities:                              
Operational notes, net    $44,900   $112,000   $15,300   $38,100   $9,000   $33,800 
Deemed contribution from Manager    $-   $23,130   $-   $-   $6,207   $22,235 

 

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, 2024

 

 

   Havasu   Hickorybear   Kinlani   Koi   Lakeridge   Lodge 
                         
Cash Flows from Operating Activities:                        
Net income (loss)  $(63,041)  $(41,380)  $21,252   $(4,505)  $(48,792)  $(46,860)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:                              
Depreciation   43,137    34,888    34,303    62,071    27,646    58,862 
Amortization   2,363    -    -    -    1,413    - 
(Increase) Decrease in assets                              
Other receivables   -    -    -    -    -    - 
Due (from) to third party property managers   (853)   (2,127)   1,095    (3,175)   (550)   (1,923)
Prepaid expenses   (205)   (382)   (149)   (287)   (80)   (195)
Increase (decrease) in liabilities                              
Accrued expenses   (550)   (9,482)   (5,500)   (1,169)   896    (11,582)
Due to (from) related parties, property manager   -    -    -    -    -    - 
Due to (from) related parties   (135,751)   14,072    37,125    (25,861)   (107,553)   36,120 
Net cash provided by (used in) operating activities   (154,901)   (4,410)   88,126    27,075    (127,021)   34,422 
                               
Cash Flows from Investing Activities                              
Additions to Property and equipment   (6,100)   -    -    (7,130)   -    - 
Net cash used in investing activities   (6,100)   -    -    (7,130)   -    - 
                               
Cash flows from financing activities                              
Operational notes, related party   -    42,000    -    20,100    19,000    27,900 
Redemption of membership units   (700)   (400)   (300)   -    -    (400)
Distributions   (15,247)   (33,383)   (46,449)   (26,704)   (8,973)   (57,211)
Net cash provided by (used in) financing activities   (15,947)   8,217    (46,749)   (6,604)   10,027    (29,711)
Net change in cash   (176,948)   3,807    41,377    13,340    (116,994)   4,711 
Cash at beginning of year   189,143    -    -    -    122,770    866 
Cash at end of year  $12,195   $3,807   $41,377   $13,340   $5,776   $5,577 
                               
Cash paid for income taxes  $-   $1,066   $50   $50   $-   $1,820 
Cash paid for interest expenses  $32,818   $-   $-   $-   $19,622   $- 
                               
Supplemental disclosure of non-cash investing and financing activities:                              
Operational notes, net    $-   $42,000   $-   $20,100   $19,000   $27,900 
Deemed contribution from Manager    $-   $-   $-   $-   $-   $- 

 

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, 2024

 

 

   Longbranch   Loop   Mirage   Myrtle   Oasis   Opry 
                         
Cash Flows from Operating Activities:                        
Net income (loss)  $(26,045)  $(40,940)  $(24,603)  $(19,186)  $(87,816)  $(68,180)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:                              
Depreciation   42,474    38,226    20,308    27,452    41,249    31,670 
Amortization   -    -    -    -    788    2,310 
(Increase) Decrease in assets                              
Other receivables   -    -    -    13,544    -    - 
Due (from) to third party property managers   2,846    -    2,540    -    2,975    2,059 
Prepaid expenses   (362)   (243)   (139)   (548)   (6,545)   (1,160)
Increase (decrease) in liabilities                              
Accrued expenses   (7,098)   (4,367)   (1,947)   (1,865)   (6,436)   (11,489)
Due to (from) related parties, property manager   -    (21,406)   -    (6)   (9,902)   732 
Due to (from) related parties   39,833    43,844    (198,779)   29,699    45,129    (102,754)
Net cash provided by (used in) operating activities   51,648    15,114    (202,619)   49,091    (20,560)   (146,811)
                               
Cash Flows from Investing Activities                              
Additions to Property and equipment   -    -    -    -    (13,277)   (7,574)
Net cash used in investing activities   -    -    -    -    (13,277)   (7,574)
                               
Cash flows from financing activities                              
Operational notes, related party   -    12,000    91,900    -    58,700    - 
Redemption of membership units   (300)   (400)   (450)   -    -    (700)
Distributions   (40,836)   (19,286)   (13,450)   (23,922)   (17,988)   (20,079)
Net cash provided by (used in) financing activities   (41,136)   (7,686)   78,000    (23,922)   40,712    (20,779)
Net change in cash   10,512    7,428    (124,620)   25,169    6,875    (175,164)
Cash at beginning of year   -    -    133,427    -    619    187,186 
Cash at end of year  $10,512   $7,428   $8,807   $25,169   $7,494   $12,023 
                               
Cash paid for income taxes  $1,251   $-   $1,697   $602   $1,324   $1,743 
Cash paid for interest expenses  $-   $-   $-   $-   $33,085   $35,468 
                               
Supplemental disclosure of non-cash investing and financing activities:                              
Operational notes, net    $-   $12,000   $91,900   $-   $58,700   $- 
Deemed contribution from Manager    $-   $-   $-   $1,428   $-   $- 

 

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, 2024

 

 

   Orchard   Palm   Pasquin   Pickler   Pointbreak   Regal 
                         
Cash Flows from Operating Activities:                        
Net income (loss)  $(42,764)  $(85,003)  $(48,527)  $19,242   $(32,051)  $(101,771)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:                              
Depreciation   33,380    34,051    35,887    59,056    24,541    37,210 
Amortization   -    1,563    -    -    146    2,375 
(Increase) Decrease in assets                              
Other receivables   -    -    -    -    -    - 
Due (from) to third party property managers   (1,489)   (174)   (1,362)   164    -    8,916 
Prepaid expenses   (89)   (3,956)   (200)   (55)   (5,520)   (218)
Increase (decrease) in liabilities                              
Accrued expenses   (2,134)   6,915    (9,555)   (6,666)   2,254    (2,402)
Due to (from) related parties, property manager   -    (40)   -    -    (1,609)   3,586 
Due to (from) related parties   (202,799)   (212,367)   7,037    92,629    (161,832)   101,678 
Net cash provided by (used in) operating activities   (215,895)   (259,011)   (16,720)   164,370    (174,072)   49,374 
                               
Cash Flows from Investing Activities                              
Additions to Property and equipment   -    (23,828)   -    -    (9,142)   (10,000)
Net cash used in investing activities   -    (23,828)   -    -    (9,142)   (10,000)
                               
Cash flows from financing activities                              
Operational notes, related party   9,600    65,300    35,000    -    61,700    - 
Redemption of membership units   (1,050)   (450)   (100)   (300)   (500)   (300)
Distributions   (14,418)   (10,700)   (16,240)   (66,223)   (10,192)   (19,792)
Net cash provided by (used in) financing activities   (5,868)   54,151    18,660    (66,523)   51,008    (20,092)
Net change in cash   (221,763)   (228,689)   1,940    97,847    (132,205)   19,282 
Cash at beginning of year   225,298    228,689    -    -    137,269    1,000 
Cash at end of year  $3,535   $-   $1,940   $97,847   $5,064   $20,282 
                               
Cash paid for income taxes  $-   $-   $-   $50   $151   $1,534 
Cash paid for interest expenses  $-   $21,706   $-   $-   $10,580   $38,345 
                               
Supplemental disclosure of non-cash investing and financing activities:                              
Operational notes, net    $9,600   $65,300   $35,000   $-   $61,700   $- 
Deemed contribution from Manager    $-   $4,767   $-   $-   $-   $- 

 

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 YEAR ENDED DECEMBER 31, 2024

 

 

   Serenity   Smokey   Solstice   Sugarcreek   SuiteSpot   Consolidated 
                         
Cash Flows from Operating Activities:                        
Net income (loss)  $(48,341)  $(37,660)  $(32,947)  $(50,407)  $3,584   $(1,164,953)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:                              
Depreciation   52,986    34,997    38,067    23,216    44,068    1,127,117 
Amortization   2,464    -    -    1,050    -    18,296 
(Increase) Decrease in assets                              
Other receivables   -    -    -    -    -    13,544 
Due (from) to third party property managers   2,818    (315)   (829)   (3,236)   -    (15,901)
Prepaid expenses   (58)   (190)   (838)   (33)   (991)   (34,568)
Increase (decrease) in liabilities                              
Accrued expenses   (9,620)   989    (12,123)   868    (10,546)   (130,555)
Due to (from) related parties, property manager   -    3,304    -    (551)   (2,673)   (28,566)
Due to (from) related parties   (145,464)   32,979    115,534    (115,446)   35,724    (1,203,755)
Net cash provided by (used in) operating activities   (145,216)   34,103    106,866    (144,540)   69,165    (1,419,341)
                               
Cash Flows from Investing Activities                              
Additions to Property and equipment   -    -    (6,508)   -    (8,350)   (182,537)
Net cash used in investing activities   -    -    (6,508)   -    (8,350)   (182,537)
                               
Cash flows from financing activities                              
Operational notes, related party   -    -    -    54,800    7,000    758,100 
Redemption of membership units   (500)   (300)   -    (100)   (100)   (11,000)
Distributions   (42,950)   (20,640)   (34,255)   (6,294)   (64,490)   (804,107)
Net cash provided by (used in) financing activities   (43,450)   (20,940)   (34,255)   48,406    (57,590)   (57,007)
Net change in cash   (188,666)   13,163    66,103    (96,133)   3,225    (1,658,884)
Cash at beginning of year   260,066    -    -    96,948    -    2,163,045 
Cash at end of year  $71,400   $13,163   $66,103   $815   $3,225   $504,161 
                               
Cash paid for income taxes  $-   $1,638   $-   $(50)  $50   $14,630 
Cash paid for interest expenses  $34,225   $-   $-   $14,587   $-   $340,810 
                               
Supplemental disclosure of non-cash investing and financing activities:                              
Operational notes, net    $-   $-   $-   $54,800   $7,000   $758,100 
Deemed contribution from Manager    $-   $-   $-   $-   $-   $57,767 

 

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 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)   23,507    (53,973)   (53,506)   (80,371)   (25,202)
Net change in cash and cash equivalents   (87,518)   5,522    (155,492)   (71,578)   10,323    (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   $1,560 
                               
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-39

 

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)   (88,425)   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)   151,542    (14,224)   (116,169)
Net change in cash and cash equivalents   (173,800)   28,073    59,888    (0)   (102,649)   42,425 
Cash at beginning of year   189,143    -    -    -    122,770    866 
Cash at end of year  $15,342   $28,072   $59,888   $(0)  $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-40

 

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)   (32,924)   38,243    (77,900)
                               
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   74,364    56,097    (23,664)   58,275    (32,428)   (29,757)
Net change in cash and cash equivalents   53,534    9,253    (114,673)   25,350    5,815    (107,657)
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 acquisition 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-41

 

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)   672,396 
                               
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 and cash equivalents   (198,673)   (222,773)   18,902    81,534    (48,393)   54,626 
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   $55,626 
                               
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 acquisition 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-42

 

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)   (132,853)   (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)   (69,217)   (75,974)   (8,794)   158,914    (711,865)
Net change in cash and cash equivalents   (181,679)   33,755    126,132    (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   $126,132   $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   $-   $900,000   $8,827,332 
Mortgage payable, net of capitalized loan costs for acquisition of property  $-   $-   $-   $-   $-   $462,000 
Deemed contribution from Manager  $-   $2,635   $-   $-   $3,420   $138,898 

 

The accompanying notes are an integral part of these consolidated and consolidating financial statements.

 

F-43

 

ARRIVED STR, LLC

NOTES TO THE CONSOLIDATED AND CONSOLIDATING FINANCIAL STATEMENTS

 

 

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 short-term 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 short-term rental property, along with the date the Series was formed and the date that the Series’ LLC acquired the single family short-term rental as of December 31, 2024.

 

Series Name  State LLC Name and wholly owned subsidiary of the Series  Date Formed  Acquisition Date
Arrived Series Ace, a series of Arrived STR, LLC (Ace)  Arrived AZ Ace, LLC  9/6/2022  9/15/2022
Arrived Series Billingswood, a series of Arrived STR, LLC (Billingswood)  Arrived NY Billingswood, LLC  2/24/2023  4/13/2023
Arrived Series Cactus, a series of Arrived STR, LLC (Cactus)  Arrived AZ Cactus, LLC  9/13/2022  9/30/2022
Arrived Series Cardinal, a series of Arrived STR, LLC (Cardinal)  Arrived AZ Cardinal, LLC  8/25/2022  9/14/2022
Arrived Series Coolbaugh, a series of Arrived STR, LLC (Coolbaugh)  Arrived PA Coolbaugh, LLC  2/2/2023  3/31/2023
Arrived Series Hammock, a series of Arrived STR, LLC (Hammock)  Arrived FL Hammock, LLC  8/29/2022  9/23/2022
Arrived Series Havasu, a series of Arrived STR, LLC (Havasu)  Arrived AZ Havasu, LLC  10/21/2022  11/17/2022
Arrived Series Hickorybear, a series of Arrived STR, LLC (Hickorybear)  Arrived OK Hickorybear, LLC  1/25/2023  2/16/2023
Arrived Series Kinlani, a series of Arrived STR, LLC (Kinlani)  Arrived AZ Kinlani, LLC  1/23/2023  2/14/2023
Arrived Series Koi, a series of Arrived STR, LLC (Koi)  Arrived AZ Koi, LLC  2/22/2023  3/29/2023
Arrived Series Lakeridge, a series of Arrived STR, LLC (Lakeridge)  Arrived GA Lakeridge, LLC  10/8/2022  11/4/2022
Arrived Series Lodge, a series of Arrived STR, LLC (Lodge)  Arrived OK Lodge, LLC  11/2/2022  11/21/2022
Arrived Series Longbranch, a series of Arrived STR, LLC (Longbranch)  Arrived OK Longbranch, LLC  2/17/2023  3/29/2023
Arrived Series Loop, a series of Arrived STR, LLC (Loop)  Arrived TN Loop, LLC  3/6/2023  4/11/2023
Arrived Series Mirage, a series of Arrived STR, LLC (Mirage)  Arrived Series Mirage, a series of Arrived STR, LLC  4/7/2023  9/16/2022
Arrived Series Myrtle, a series of Arrived STR, LLC (Myrtle)  Arrived SC Myrtle, LLC  12/2/2022  12/22/2022
Arrived Series Oasis, a series of Arrived STR, LLC (Oasis)  Arrived TN Oasis, LLC  7/25/2022  8/26/2022
Arrived Series Opry, a series of Arrived STR, LLC (Opry)  Arrived TN Opry, LLC  9/19/2022  1/11/2023
Arrived Series Orchard, a series of Arrived STR, LLC (Orchard)  Arrived GA Orchard, LLC  8/25/2022  9/30/2022
Arrived Series Palm, a series of Arrived STR, LLC (Palm)  Arrived FL Palm, LLC  10/10/2022  11/17/2022
Arrived Series Pasquin, a series of Arrived STR, LLC (Pasquin)  Arrived PA Pasquin, LLC  1/23/2023  2/8/2023
Arrived Series Pickler, a series of Arrived STR, LLC (Pickler)  Arrived AZ Pickler, LLC  3/16/2023  4/5/2023
Arrived Series Pointbreak, a series of Arrived STR, LLC (Pointbreak)  Arrived FL Pointbreak, LLC  8/29/2022  9/20/2022
Arrived Series Regal, a series of Arrived STR, LLC (Regal)  Arrived TN Regal, LLC  11/21/2022  12/19/2022
Arrived Series Serenity, a series of Arrived STR, LLC (Serenity)  Arrived AZ Serenity, LLC  9/28/2022  10/20/2022
Arrived Series Smokey, a series of Arrived STR, LLC (Smokey)  Arrived TN Smokey, LLC  3/10/2023  4/25/2023
Arrived Series Solstice, a series of Arrived STR, LLC (Solstice)  Arrived MO Solstice, LLC  5/24/2023  7/5/2023
Arrived Series Sugarcreek, a series of Arrived STR, LLC (Sugarcreek)  Arrived GA Sugarcreek, LLC  10/8/2022  11/2/2022
Arrived Series SuiteSpot, a series of Arrived STR, LLC (SuiteSpot)  Arrived AZ SuiteSpot, LLC  5/15/2023  5/23/2023

 

F-44

 

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The accounting and reporting policies of 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 its Series listed in Note 1. All inter-company transactions and balances have been eliminated upon consolidation.

 

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 consolidated and consolidating 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 and accrued expenses approximate fair value due to the short-term nature of these instruments. The carrying value of the mortgage payables and operational notes payable, related party approximate their fair values based on interest rates and terms currently available for similar instruments

 

F-45

 

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:

 

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. 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.

 

Boutiq, Inc.

 

As compensation for the services provided by the property manager, each Series will be charged a property management fee equal to nineteen and one-half percent (19.5%) of all rents and fees as remitted to the Series on a monthly basis. Such property management fee will be reduced to eighteen (18%) beginning immediately following the first accounting period that Boutiq, Inc. manages properties for any entity managed by the Manager or its affiliates with a combined purchase price equal to or greater than $10 million.

 

Arrived Property Manager, LLC

 

Arrived Property Manager, LLC, is a related party under common control. As compensation for the property management services provided by Arrived Property Manager, LLC, each Series will be charged a property management fee equal to twenty percent (20%) of all rents as remitted to the Series on a monthly basis. The Series managed by Arrived Property Manager, LLC are listed in Note 7.

 

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 includes accrued property taxes, dividends, interest payable on the Series’ mortgages payable, and interest payable for the Series’ operational notes payable– related party.

 

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, 2024 and 2023.

 

In September 2023, the Series terminated the property management contract with Roseus Hospitality Group (“Roseus”) and as of December 31, 2023, believed 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 loss. The Manager committed to make each affected Series whole by providing capital contributions to each Series in the amount of the credit loss incurred. During the year ended December 31, 2024, the Manager relieved $57,767 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. During the year ended December 31, 2023, the Manager relieved $138,899 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 (Note 7). The Manager retains 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 statement of comprehensive income.

 

Impairment of Long-Lived Assets

 

The Company continually monitors events and changes in circumstances that could indicate 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. The Company did not record any impairment losses on long-lived assets for the period ended December 31, 2024 and 2023.

 

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’s wholly-owned Series operate rental properties and recognizes rental revenue on a monthly basis as it is earned. Revenue from leasing arrangements falls outside the scope of FASB ASC 606 and is accounted for under the provisions of FASB ASC 842.

 

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 income (loss) is equal to net income (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. 

 

F-48

 

The Series have elected and qualify to be taxed as a C corporation.

 

Each 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 January 12, 2023 (date of inception) and the adoption of the standard had no effect on the 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 January 12, 2023 (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, and losses from operations since inception. 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 as of December 31, 2024 and 2023.

 

December 31, 2024

 

Series  Building   Land   Property
Improvements		   Total   Less:
Accumulated
Depreciation		   Property
and
equipment,
net		 
Ace  $784,055   $262,500   $72,244   $1,118,799   $(86,921)  $1,031,878 
Billingswood   580,572    193,524    231,673    1,005,769    (77,784)   927,985 
Cactus   786,585    262,125    64,590    1,113,300    (86,258)   1,027,042 
Cardinal   558,670    186,000    145,239    889,909    (88,770)   801,139 
Coolbaugh   316,854    105,618    127,756    550,228    (57,773)   492,455 
Hammock   408,491    135,000    50,840    594,331    (54,278)   540,053 
Havasu   787,910    262,500    73,443    1,123,853    (84,712)   1,039,141 
Hickorybear   542,965    180,988    75,189    799,143    (56,945)   742,198 
Kinlani   563,096    187,699    69,134    819,929    (58,540)   761,388 
Koi   506,779    168,926    221,186    896,892    (81,212)   815,680 
Lakeridge   427,248    141,250    62,470    630,968    (54,537)   576,431 
Lodge   776,434    257,500    129,892    1,163,826    (106,165)   1,057,661 
Longbranch   607,063    202,354    101,524    910,941    (67,439)   843,502 
Loop   491,284    163,761    101,804    756,849    (56,661)   700,188 
Mirage   474,155    157,250    17,235    648,640    (43,319)   605,321 
Myrtle   304,778    101,250    84,351    490,379    (46,548)   443,831 
Oasis   735,013    245,004    84,775    1,064,792    (91,451)   973,340 
Opry   827,688    275,896    14,806    1,118,391    (57,716)   1,060,674 
Orchard   415,974    137,500    91,267    644,741    (72,427)   572,314 
Palm   467,428    156,250    105,581    729,260    (64,373)   664,886 
Pasquin   343,350    114,450    117,008    574,808    (56,619)   518,189 
Pickler   811,789    270,596    147,682    1,230,067    (88,454)   1,141,613 
Pointbreak   285,408    93,750    69,277    448,435    (47,719)   400,717 
Regal   718,253    237,500    58,793    1,014,546    (65,218)   949,328 
Serenity   806,520    273,750    118,291    1,198,561    (107,465)   1,091,096 
Smokey   551,134    183,711    74,777    809,622    (55,411)   754,211 
Solstice   543,583    181,194    92,045    816,822    (49,850)   766,972 
Sugarcreek   317,894    105,000    58,281    481,174    (42,234)   438,940 
SuiteSpot   670,968    223,656    102,519    997,143    (64,031)   933,113 
   $16,411,939   $5,466,504   $2,763,672   $24,642,115   $(1,970,829)  $22,671,286 

 

F-50

 

December 31, 2023

 

Series  Building   Land   Property
Improvements		   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 

 

For the periods ended December 31, 2024 and 2023, depreciation expense was $1,127,117 and $794,326.

 

F-51

 

NOTE 5: MORTGAGE PAYABLES, RELATED PARTY

 

Mortgage payables, related party are secured by each Series’ property and are interest only with all of the accrued interest due on the maturity date or repayment date. As of December 31, 2024, all of the mortgage payables’ mature in more than one year and thus are reflected as non-current liabilities on the consolidated and consolidating balance sheets.

 

The following is a summary of Series that repaid the outstanding principal and accrued interest in full as of December 31, 2024 and 2023, respectively:

 

December 31, 2024

 

Series  Lender  Address  Mortgage
Principal		   Term
(years)		   Interest
Only Period
(years)		   Interest
Rate		 
Ace  Certain Lending  14249 N. 49th Street, Scottsdale, AZ 85254  $441,000   30   7    6.625%
Cactus  Arrived Short Term Notes, LLC  5108 E Janice Way, Scottsdale, AZ 85254   440,370   5   5    6.625%
Cardinal  Certain Lending  6085 North 85th Avenue, Glendale, AZ 85305   312,480   30   7    6.625%
Hammock  Private Lender  10736 Frances Lane, Largo, FL 33774   226,800   30   5    6.625%
Havasu  Certain Lending  520 Jones Drive, Havasu City, AZ 86406   472,500   30   5    5.950%
Lakeridge  Arrived Short Term Notes, LLC  105 Lake Ridge Drive, Blue Ridge, GA 30513   282,500   5   5    5.950%
Oasis  Certain Lending  964 Youngs Lane, Nashville, TN 37207   487,500   30   7    6.625%
Opry  Arrived Short Term Notes, LLC  3226 Charlotte Avenue, Nashville, TN 37209   462,000   5   5    6.625%
Palm  Arrived Short Term Notes, LLC  2299 Kentucky Street, West Palm Beach, FL 33406   312,500   5   5    5.950%
Pointbreak  Certain Lending  6410 Sunset Avenue #A & #B, Panama City, FL 32408   157,500   30   7    6.625%
Regal  Arrived Short Term Notes, LLC  2635 King Hollow Road, Sevierville, TN 37876   475,000   5   5    6.990%
Serenity  Arrived Short Term Notes, LLC  32 San Patricio Dr, Sedona, AZ 86336   492,750   5   5    5.950%
Sugarcreek  Arrived Short Term Notes, LLC  555 Sugar Creek Road, Blue Ridge, GA 30513   210,000   5   5    5.950%
      Subtotal  $4,772,900              

 

F-52

 

December 31, 2023

 

Series   Lender   Address   Mortgage
Principal		     Term
(years)		     Interest
Only Period
(years)		     Interest
Rate		  
Ace   Certain Lending   14249 N. 49th Street, Scottsdale, AZ 85254   $ 441,000     30     7       6.625 %
Cactus   Arrived Holding   5108 E Janice Way, Scottsdale, AZ 85254     440,370     30     5       6.625 %
Cardinal   Certain Lending   6085 North 85th Avenue, Glendale, AZ 85305     312,480     30     7       6.625 %
Hammock   Private Lender   10736 Frances Lane, Largo, FL 33774     226,800     30     5       6.625 %
Havasu   Certain Lending   520 Jones Drive, Havasu City, AZ 86406     472,500     30     5       5.950 %
Lakeridge   Arrived Holding   105 Lake Ridge Drive, Blue Ridge, GA 30513     282,500     30     5       5.950 %
Oasis   Certain Lending   964 Youngs Lane, Nashville, TN 37207     487,500     30     7       6.625 %
Opry   Private Lender   3226 Charlotte Avenue, Nashville, TN 37209     462,000     30     5       6.625 %
Palm   Arrived Holding   2299 Kentucky Street, West Palm Beach, FL 33406     312,500     30     5       5.950 %
Pointbreak   Certain Lending   6410 Sunset Avenue #A & #B, Panama City, FL 32408     157,500     30     7       6.625 %
Regal   Arrived Holding   2635 King Hollow Road, Sevierville, TN 37876     475,000     30     5       6.990 %
Serenity   Arrived Holding   32 San Patricio Dr, Sedona, AZ 86336     492,750     30     5       5.950 %
Sugarcreek   Arrived Holding   555 Sugar Creek Road, Blue Ridge, GA 30513     210,000     30     5       5.950 %
            $ 4,772,900                      

 

F-53

 

NOTE 6: OPERATIONAL NOTES PAYABLE, RELATED PARTY

 

As of December 31, 2024, several Series obtained operational notes from Arrived Short Term Notes, LLC, in an aggregate amount of $758,100. These notes are secured by real property on the asset of each respective Series, have a term of 18 months, bear interest at a rate of 7.5% per annum and is payable monthly on an interest-only basis. The operational notes payable do not have any prepayment penalties. The proceeds were used for property improvements and other operating needs.

 

The following is a summary of Series that obtained operational notes from a related party as of December 31, 2024 and 2023, respectively:

 

December 31, 2024

 

Series  Lender  Address  Operational
Notes		   Term
(Months)		   Interest
Only Period
(Months)		   Interest
Rate		 
Ace  Arrived Short Term Notes, LLC  14249 N. 49th Street, Scottsdale, AZ 85254  $44,900   18   18    7.50%
Billingswood  Arrived Short Term Notes, LLC  166 Billingswood Point, Athens, NY 12015   112,000   18   18    7.50%
Cactus  Arrived Short Term Notes, LLC  5108 E Janice Way, Scottsdale, AZ 85254   15,300   18   18    7.50%
Cardinal  Arrived Short Term Notes, LLC  6085 North 85th Avenue, Glendale, AZ 85305   38,100   18   18    7.50%
Coolbaugh  Arrived Short Term Notes, LLC  101 Coolbaugh Road, East Stroudsburg, PA 18302   9,000   18   18    7.50%
Hammock  Arrived Short Term Notes, LLC  10736 Frances Lane, Largo, FL 33774   33,800   18   18    7.50%
Hickorybear  Arrived Short Term Notes, LLC  111 Bear Hickory Trail, Broken Bow, OK 74728   42,000   18   18    7.50%
Koi  Arrived Short Term Notes, LLC  5921 E Thunderbird Road, Scottsdale, AZ 85254   20,100   18   18    7.50%
Lakeridge  Arrived Short Term Notes, LLC  105 Lake Ridge Drive, Blue Ridge, GA 30513   19,000   18   18    7.50%
Lodge  Arrived Short Term Notes, LLC  33 Lost Creek Trail, Broken Bow, OK 74728   27,900   18   18    7.50%
Loop  Arrived Short Term Notes, LLC  454 Loop Road, Gatlinburg, TN 37738   12,000   18   18    7.50%
Mirage  Arrived Short Term Notes, LLC  62432 Golden Street, Joshua Tree, CA 92252   91,900   18   18    7.50%
Oasis  Arrived Short Term Notes, LLC  964 Youngs Lane, Nashville, TN 37207   58,700   18   18    7.50%
Orchard  Arrived Short Term Notes, LLC  109 Jonagold Lane, Blue Ridge, GA 30513   9,600   18   18    7.50%
Palm  Arrived Short Term Notes, LLC  2299 Kentucky Street, West Palm Beach, FL 33406   65,300   18   18    7.50%
Pasquin  Arrived Short Term Notes, LLC  126 Pasquin Drive, East Stroudsburg, PA 18301   35,000   18   18    7.50%
Pointbreak  Arrived Short Term Notes, LLC  6410 Sunset Avenue #A & #B, Panama City Beach, FL 32408   61,700   18   18    7.50%
Sugarcreek  Arrived Short Term Notes, LLC  555 Sugar Creek Road, Blue Ridge, GA 30513   54,800   18   18    7.50%
SuiteSpot  Arrived Short Term Notes, LLC  8133 E Osborn Road, Scottsdale, AZ 85251   7,000   18   18    7.50%
      Subtotal  $758,100              

 

F-54

 

NOTE 6: MEMBER’S EQUITY

 

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 period July 11, 2022 (date of inception) through December 31, 2023, each Series has closed on its public offering for net proceeds of $21,962,627. As of December 31, 2024, no Series closed on public offerings. The following is a summary of the public offerings by each Series.

 

December 31, 2024

 

 

Series Name  # of Units
Issued		   Net proceeds
from the
issuance of
membership
units		   Issuance
expense
(1%)		   Offering
expense
(2%)		   # of units
redeemed		   Redemption
amount		 
Ace             -   $          -   $           -   $            -    (110)  $(1,100)
Billingswood   -    -    -    -    (30)   (300)
Cactus   -    -    -    -    (120)   (1,200)
Cardinal   -    -    -    -    (65)   (650)
Coolbaugh   -    -    -    -    (30)   (300)
Hammock   -    -    -    -    (10)   (100)
Havasu   -    -    -    -    (70)   (700)
Hickorybear   -    -    -    -    (40)   (400)
Kinlani   -    -    -    -    (30)   (300)
Koi   -    -    -    -    -    - 
Lakeridge   -    -    -    -    -    - 
Lodge   -    -    -    -    (40)   (400)
Longbranch   -    -    -    -    (30)   (300)
Loop   -    -    -    -    (40)   (400)
Mirage   -    -    -    -    (45)   (450)
Myrtle   -    -    -    -    -    - 
Oasis   -    -    -    -    -    - 
Opry   -    -    -    -    (70)   (700)
Orchard   -    -    -    -    (105)   (1,050)
Palm   -    -    -    -    (45)   (450)
Pasquin   -    -    -    -    (10)   (100)
Pickler   -    -    -    -    (30)   (300)
Pointbreak   -    -    -    -    (50)   (500)
Regal   -    -    -    -    (30)   (300)
Serenity   -    -    -    -    (50)   (500)
Smokey   -    -    -    -    (30)   (300)
Solstice   -    -    -    -    -    - 
Sugarcreek   -    -    -    -    (10)   (100)
SuiteSpot   -    -    -    -    (10)   (100)
    -   $-   $-   $-    (1,100)  $(11,000)

 

F-55

 

December 31, 2023
Series Name  # of Units Issued   Net proceeds from the issuance of membership units   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-56

 

In connection with the public offering, each Series incurred brokerage fees of 1% of gross proceeds, which is paid directly to a third party broker as a deduction from gross proceeds. In accordance with the operating agreement, the Manager received the following reimbursements, deducted from the gross proceeds of the offering. For the periods ended December 31, 2024 and 2023, the following reimbursements and fees to Manager:

 

·Offering Expenses: Up to 2% of gross proceeds

 

o2024: $0
o2023: $306,126

 

·Sourcing Fees: Up to 3.5% of gross proceeds

 

o2024: $0
o2023: $554,950

 

·Financing and Holding Expenses: Up to 2.5% of gross proceeds

 

o2024: $0
o2023: $340,490

 

Distributions

 

As of December 31, 2024 and 2023, distributions to investors were made by 29 Series, respectively, totaling $804,107 and $847,663, which were recognized as a reduction of members’ capital.

 

The following table reflects the total 2024 and 2023 dividend distributions by Series.

 

Series  2024
Distributions		   2023
Distributions		 
Ace  $44,289   $49,970 
Billingswood   23,058    20,162 
Cactus   44,500    53,673 
Cardinal   33,217    51,106 
Coolbaugh   18,506    22,087 
Hammock   10,813    25,202 
Havasu   15,247    37,673 
Hickorybear   33,383    36,117 
Kinlani   46,449    35,434 
Koi   26,704    18,500 
Lakeridge   8,973    14,224 
Lodge   57,211    47,114 
Longbranch   40,836    40,530 
Loop   19,286    28,213 
Mirage   13,450    23,564 
Myrtle   23,922    17,409 
Oasis   17,988    30,028 
Opry   20,079    29,757 
Orchard   14,418    24,068 
Palm   10,700    14,574 
Pasquin   16,240    21,232 
Pickler   66,223    50,969 
Pointbreak   10,192    13,873 
Regal   19,792    32,188 
Serenity   42,950    55,239 
Smokey   20,640    18,678 
Solstice   34,255    13,374 
Sugarcreek   6,294    7,794 
SuiteSpot   64,490    14,911 
   $804,107   $847,663 

 

F-57

 

NOTE 7: RELATED PARTY TRANSACTIONS

 

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, 2024 and 2023, certain Series owed an aggregate of $252,621 and $656,567, respectively, to the Manager, including amounts related to the initial funding for certain Series’ property acquisitions. During the years ended December 31, 2024 and 2023, certain Series repaid the Manager an aggregate of $0 and $9,785,722, respectively, following the completion of their respective offerings. All related party balances are non-interest bearing, short-term in nature, and do not have defined repayment terms.

 

Due from (to) Related Party Property Manager

 

As of December 31, 2024 and 2023, certain Series owed an aggregate of $36,188, and $15,802, respectively, to the Manager. As of December 31, 2024 and 2023, certain Series were owed from related party property manager an aggregate amount of $7,622 and $4,672, respectively.

 

Deemed Contributions

 

During the years ended December 31, 2024 and 2023, certain Series received deemed contributions from the Manager, amounting to $57,767 and $138,899, respectively, in exchange for forgiveness of amounts previously due to Manager (Note 2).

 

Management Compensation

 

The following table reflects details of the total fees paid by Series to the Manager for the periods ended December 31, 2024 and 2023.

 

December 31, 2024

 

Series  Sourcing
fees		   Financing
and holding
expenses		   Offering
expenses		   Asset
management
fee		   Reimbursements
of acquisition
expenses		   Property
management
fee, related
party		 
Ace  $     -   $       -   $             -   $5,719   $                     -   $- 
Billingswood   -    -    -    1,456    -    - 
Cactus   -    -    -    6,029    -    - 
Cardinal   -    -    -    7,812    -    - 
Coolbaugh   -    -    -    2,523    -    - 
Hammock   -    -    -    2,517    -    - 
Havasu   -    -    -    2,116    -    - 
Hickorybear   -    -    -    2,392    -    - 
Kinlani   -    -    -    4,866    -    - 
Koi   -    -    -    6,225    -    - 
Lakeridge   -    -    -    2,545    -    - 
Lodge   -    -    -    4,928    -    - 
Longbranch   -    -    -    3,584    -    - 
Loop   -    -    -    2,249    -    8,995 
Mirage   -    -    -    1,912    -    - 
Myrtle   -    -    -    3,147    -    12,456 
Oasis   -    -    -    2,651    -    385 
Opry   -    -    -    2,476    -    566 
Orchard   -    -    -    1,599    -    - 
Palm   -    -    -    3,719    -    - 
Pasquin   -    -    -    2,411    -    - 
Pickler   -    -    -    7,817    -    - 
Pointbreak   -    -    -    3,212    -    11,989 
Regal   -    -    -    2,386    -    5,717 
Serenity   -    -    -    4,443    -    - 
Smokey   -    -    -    2,631    -    10,524 
Solstice   -    -    -    2,193    -    - 
Sugarcreek   -    -    -    1,341    -    - 
SuiteSpot   -    -    -    6,078    -    24,312 

Subtotal

  $-   $-   $-   $102,977   $-   $74,945 

 

F-58

 

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 
Hammock   -    -    3,579    -    145 
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    1,060 
Mirage   -    -    2,157    -    - 
Myrtle   20,250    12,898    1,130    -    847 
Oasis   -    -    4,623    -    - 
Opry   -    -    3,314    -    - 
Orchard   -    -    1,296    -    - 
Palm   -    -    2,937    -    335 
Pasquin   22,500    14,705    951    2,500    - 
Pickler   55,000    29,994    1,744    2,500    - 
Pointbreak   -    -    1,545    -    (176)
Regal   47,500    17,087    3,414    -    - 
Serenity   -    -    5,968    -    - 
Smokey   37,250    19,678    1,211    2,500    3,772 
Solstice   36,200    20,575    155    2,500    - 
Sugarcreek   -    -    589    -    - 
SuiteSpot   45,000    24,832    1,704    2,500    26,819 
                          
Subtotal  $554,950   $306,126   $70,448   $35,000   $32,992 

 

F-59

 

NOTE 8: INCOME TAXES

 

Deferred taxes are recognized for temporary differences between the basis of assets and liabilities for financial statement and income tax purposes. These differences relate primarily to federal and state net operating loss carryforwards. As of December 31, 2024 and 2023, the Company and the Series had net deferred tax assets before valuation allowance of approximately $1,074,308 and $772,287, respectively, solely attributable to net operating loss carryforwards. 

 

The Company and Series 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 and Series 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 and Series 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.

 

Deferred tax assets were calculated using the Company’s and Series’ combined effective tax rates, which it estimated to be ranging from 21.0% to 28% based on the state of the respective Series. The effective rate is reduced to 0% for 2024 and 2023 due to the full valuation allowance on its net deferred tax assets.

 

The Company’s and the Series’ ability to utilize net operating loss carryforwards will depend on the generation of sufficient future taxable income. As of December 31, 2024 and 2023, the Company and the Series had net operating loss carryforwards available to offset future taxable income of $4,085,513 and $2,920,560, respectively. 

 

The Company’s and Series’ 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 December 31, 2023, the Company and Series had no unrecognized tax benefits and no charge during 2024, and accordingly, the Company and Series did not recognize any interest or penalties during 2024 related to unrecognized tax benefits. There is no accrual for uncertain tax positions as of December 31, 2024.

 

The Company and Series are not presently subject to any income tax audit in any taxing jurisdiction, though their 2024 and 2023 tax years remains open to examination.

 

NOTE 9: SUBSEQUENT EVENTS

 

Effective January 30, 2025, Arrived Holdings Inc. will no longer serve as the Manager of Arrived STR, LLC. The new Manager will be Arrived Fund Manager, LLC, a related party under common control.

 

F-60

 

ITEM 8. Exhibits

 

Exhibit No.   Description
2.1*   Certificate of Formation of Arrived STR, LLC
2.2*   Limited Liability Company Agreement of Arrived STR, LLC 
3.1*   Form of Series Designation of Arrived Series [*], a series of Arrived STR, LLC
4.1*   Form of Subscription Agreement of Arrived Series [*], a series of Arrived STR, LLC  
6.1*   Broker Dealer Agreement, dated July 26, 2022, between Arrived STR, LLC and Dalmore Group, LLC  
6.2*   Transfer Agency and Registrar Services Agreement, dated July 27, 2022, between Arrived STR, LLC and Colonial Stock Transfer Company, Inc. 
6.3*   Form of Promissory Note 
6.4*   Form of Property Management Agreement, dated [*], 202[*], between Misfit Homes LLC and Arrived Series [*], a series of Arrived STR, LLC
6.5*   Software and Services License Agreement, dated [*], 202[*], by and between North Capital Investment Technology, Inc. and Arrived Holdings, Inc. 
6.6*   Purchase and Sale Agreement dated July 19, 2022 between Arrived Holdings, Inc./Assignee and Seller for Arrived Series Oasis property
6.6.1*   Assignment of Contract from Arrived Holdings, Inc. to Arrived Series Oasis dated July 25, 2022 for Arrived Series Oasis property
6.7*   Purchase and Sale Agreement dated August 17, 2022 between Arrived Holdings, Inc./Assignee and Seller for Arrived Series Ace property
6.7.1*   Assignment of Contract from Arrived Holdings, Inc. to Arrived Series Ace dated August 26, 2022 for Arrived Series Ace property
6.7.2*   Counteroffer to Offer dated August 18, 2022 between Arrived Holdings, Inc./Assignee and Seller for Series Ace Property
6.7.3*   Addendum to Purchase and Sale Agreement dated August 23, 2022 between Arrived Holdings, Inc./Assignee and Seller for Series Ace Property
6.8*   Purchase and Sale Agreement dated August 15, 2022 between Arrived Holdings, Inc./Assignee and Seller for Arrived Series Cardinal property
6.8.1*   Assignment of Contract from Arrived Holdings, Inc. to Arrived Series Cardinal dated August 26, 2022 for Arrived Series Cardinal property
6.9*   Purchase and Sale Agreement dated August 23, 2022 between Arrived Holdings, Inc./Assignee and Seller for Arrived Series Hammock property
6.9.1*   Assignment of Contract from Arrived Holdings, Inc. to Arrived Series Hammock dated August 30, 2022 for Arrived Series Hammock property
6.10*   Purchase and Sale Agreement dated August 10, 2022 between Arrived Holdings, Inc./Assignee and Seller for Arrived Series Mirage property  
6.10.1*   Counteroffer to Offer dated August 15, 2022 between Arrived Holdings, Inc./Assignee and Seller for Series Mirage Property

 

29

 

6.11*   Purchase and Sale Agreement dated August 23, 2022 between Arrived Holdings, Inc./Assignee and Seller for Arrived Series Orchard property
6.11.1*   Assignment of Contract from Arrived Holdings, Inc. to Arrived Series Orchard dated August 26, 2022 for Arrived Series Orchard property
6.11.2*   Addendum to Purchase and Sale Agreement dated August 23, 2022 between Arrived Holdings, Inc./Assignee and Seller for Series Orchard Property
6.12*   Purchase and Sale Agreement dated August 11, 2022 between Arrived Holdings, Inc./Assignee and Seller for Arrived Series Pointbreak property
6.12.1*   Assignment of Contract from Arrived Holdings, Inc. to Arrived Series Pointbreak dated August 30, 2022 for Arrived Series Pointbreak property
6.12.2*   Addendum to Purchase and Sale Agreement dated September 28, 2022 between Arrived Holdings, Inc./Assignee and Seller for Series Pointbreak Property
6.13*   Form of Property Management Agreement, dated [*], 202[*], between Old Town Rentals LLC and Arrived Series [*], a series of Arrived STR, LLC
6.14*   Form of Property Management Agreement, dated [*], 202[*], between Roseus Hospitality Group LLC and Arrived Series [*], a series of Arrived STR, LLC
6.15*   Form of Property Management Agreement, dated [*], 202[*], between Southern Comfort Cabin Rentals, LLC and Arrived Series [*], a series of Arrived STR, LLC
6.16*   Form of Property Management Agreement, dated [*], 202[*], between Alpha Geek Capital 2 LLC and Arrived Series [*], a series of Arrived STR, LLC
6.17*   Purchase and Sale Agreement dated September 9, 2022 between Arrived Holdings, Inc./Assignee and Seller for Arrived Series Cactus property
6.17.1*   Assignment of Contract from Arrived Holdings, Inc. to Arrived Series Cactus dated September 13, 2022 for Arrived Series Cactus property
6.17.2*   Counteroffer to Offer dated September 10, 2022 between Arrived Holdings, Inc./Assignee and Seller for Series Cactus Property
6.18*   Purchase and Sale Agreement dated August 18, 2022 between Arrived Holdings, Inc./Assignee and Seller for Arrived Series Opry property
6.18.1*   Assignment of Contract from Arrived Holdings, Inc. to Arrived Series Opry dated September 19, 2022 for Arrived Series Opry property
6.19*   Purchase and Sale Agreement dated October 4, 2022 between Arrived Holdings, Inc./Assignee and Seller for Arrived Series Lakeridge property
6.19.1*   Assignment of Contract from Arrived Holdings, Inc. to Arrived Series Lakeridge dated October 8, 2022 for Arrived Series Lakeridge property

 

30

 

6.20*   Purchase and Sale Agreement dated October 7, 2022 between Arrived Holdings, Inc./Assignee and Seller for Arrived Series Palm property
6.20.1*   Assignment of Contract from Arrived Holdings, Inc. to Arrived Series Palm dated September 13, 2022 for Arrived Series Palm property
6.20.2*   Addendum to Purchase and Sale Agreement dated September 23, 2022 between Arrived Holdings, Inc./Assignee and Seller for Series Palm Property
6.21*   Purchase and Sale Agreement dated September 9, 2022 between Arrived Holdings, Inc./Assignee and Seller for Arrived Series Serenity property
6.21.1*   Assignment of Contract from Arrived Holdings, Inc. to Arrived Series Serenity dated September 28, 2022 for Arrived Series Serenity property
6.21.2*   Addendum to Purchase and Sale Agreement dated September 24, 2022 between Arrived Holdings, Inc./Assignee and Seller for Series Serenity Property
6.21.3*   Addendum to Purchase and Sale Agreement dated September 24, 2022 between Arrived Holdings, Inc./Assignee and Seller for Series Serenity Property
6.22*   Purchase and Sale Agreement dated October 6, 2022 between Arrived Holdings, Inc./Assignee and Seller for Arrived Series Sugarcreek property
6.22.1*   Assignment of Contract from Arrived Holdings, Inc. to Arrived Series Sugarcreek dated October 8, 2022 for Arrived Series Sugarcreek property
6.23*   Purchase and Sale Agreement dated October 18, 2022 between Arrived Holdings, Inc./Assignee and Seller for Arrived Series Havasu property
6.23.1*   Assignment of Contract from Arrived Holdings, Inc. to Arrived Series Havasu dated October 19, 2022 for Arrived Series Havasu property
6.24*   Form of Property Management Agreement, dated [*], 202[*], between AvantStay, Inc. and Arrived Series [*], a series of Arrived STR, LLC
6.25*   Purchase and Sale Agreement dated November 18, 2022 between Arrived Holdings, Inc./Assignee and Seller for Arrived Series Regal property
6.25.1*   Assignment of Contract from Arrived Holdings, Inc. to Arrived Series Regal dated November 29, 2022 for Arrived Series Regal property 
6.26*   Purchase and Sale Agreement dated October 28, 2022 between Arrived Holdings, Inc./Assignee and Seller for Arrived Series Lodge property  
6.26.1*   Assignment of Contract from Arrived Holdings, Inc. to Arrived Series Lodge dated November 10, 2022 for Arrived Series Lodge property
6.27*   Form of Property Management Agreement, dated [*], 202[*], between Cabins in Broken Bow and Arrived Series [*], a series of Arrived STR, LLC
6.26*   Purchase and Sale Agreement dated January 14, 2023 between Arrived Holdings, Inc./Assignee and Seller for Arrived Series Hickorybear property  
6.26.1*   Assignment of Contract from Arrived Holdings, Inc. to Arrived Series Hickorybear dated January 25, 2023 for Arrived Series Hickorybear property
6.26.2*   Addendum to Purchase and Sale Agreement dated January 12, 2023 between Arrived Holdings, Inc./Assignee and Seller for Series Hickorybear Property
6.27*   Purchase and Sale Agreement dated January 16, 2023 between Arrived Holdings, Inc./Assignee and Seller for Arrived Series Kinlani property  
6.27.1*   Assignment of Contract from Arrived Holdings, Inc. to Arrived Series Kinlani dated January 23, 2023 for Arrived Series Kinlani property
6.28*   Purchase and Sale Agreement dated January 20, 2023 between Arrived Holdings, Inc./Assignee and Seller for Arrived Series Myrtle property  
6.28.1*   Assignment of Contract from Arrived Holdings, Inc. to Arrived Series Myrtle dated January 20, 2022 for Arrived Series Myrtle property
6.28.2*   Addendum to Purchase and Sale Agreement dated December 3, 2022 between Arrived Holdings, Inc./Assignee and Seller for Series Myrtle Property
6.29*   Purchase and Sale Agreement dated January 11, 2023 between Arrived Holdings, Inc./Assignee and Seller for Arrived Series Pasquin property 

 

31

 

6.29.1*   Assignment of Contract from Arrived Holdings, Inc. to Arrived Series Pasquin dated January 23, 2023 for Arrived Series Pasquin property
6.29.2*   Addendum to Purchase and Sale Agreement dated January 10, 2023 between Arrived Holdings, Inc./Assignee and Seller for Series Pasquin Property
6.30*   Purchase and Sale Agreement dated January 19, 2023 between Arrived Holdings, Inc./Assignee and Seller for Arrived Series Coolbaugh property  
6.30.1*   Assignment of Contract from Arrived Holdings, Inc. to Arrived Series Coolbaugh dated February 3, 2023 for Arrived Series Coolbaugh property
6.31*   Purchase and Sale Agreement dated February 10, 2023 between Arrived Holdings, Inc./Assignee and Seller for Arrived Series Koi property  
6.31.1*   Assignment of Contract from Arrived Holdings, Inc. to Arrived Series Koi dated February 22, 2023 for Arrived Series Koi property
6.31.2*   Counteroffer to Offer dated February 15, 2022 between Arrived Holdings, Inc./Assignee and Seller for Series Koi Property
6.32*   Purchase and Sale Agreement dated February 10, 2023 between Arrived Holdings, Inc./Assignee and Seller for Arrived Series Longbranch property  
6.32.1*   Assignment of Contract from Arrived Holdings, Inc. to Arrived Series Longbranch dated February 22, 2023 for Arrived Series Longbranch property
6.33*   Purchase and Sale Agreement dated March 4, 2023 between Arrived Holdings, Inc./Assignee and Seller for Arrived Series Loop property  
6.33.1*   Assignment of Contract from Arrived Holdings, Inc. to Arrived Series Loop dated March 6, 2023 for Arrived Series Loop property
6.33.2*   Addendum to Purchase and Sale Agreement dated March 5, 2023 between Arrived Holdings, Inc./Assignee and Seller for Series Loop Property
6.33.4*   Counteroffer to Offer dated March 5, 2022 between Arrived Holdings, Inc./Assignee and Seller for Series Loop Property
6.34*   Purchase and Sale Agreement dated March 9, 2023 between Arrived Holdings, Inc./Assignee and Seller for Arrived Series Pickler property  
6.34.1*   Assignment of Contract from Arrived Holdings, Inc. to Arrived Series Pickler dated March 16, 2023 for Arrived Series Pickler property
6.35*   Purchase and Sale Agreement dated February 10, 2023 between Arrived Holdings, Inc./Assignee and Seller for Arrived Series Billingswood property  
6.35.1*   Assignment of Contract from Arrived Holdings, Inc. to Arrived Series Billingswood dated February 24, 2023 for Arrived Series Billingswood property
6.36*   Purchase and Sale Agreement dated March 3, 2023 between Arrived Holdings, Inc./Assignee and Seller for Arrived Series Smokey property  
6.36.1*   Assignment of Contract from Arrived Holdings, Inc. to Arrived Series Smokey dated March 10, 2023 for Arrived Series Smokey property
6.36.2*   Counteroffer to Offer dated March 8, 2022 between Arrived Holdings, Inc./Assignee and Seller for Series Smokey Property
6.37*   Purchase and Sale Agreement dated May 24, 2023 between Arrived Holdings, Inc./Assignee and Seller for Arrived Series Solstice property  
6.37.1*   Assignment of Contract from Arrived Holdings, Inc. to Arrived Series Solstice dated May 24, 2023 for Arrived Series Solstice property
6.38*   Purchase and Sale Agreement dated April 30, 2023 between Arrived Holdings, Inc./Assignee and Seller for Arrived Series SuiteSpot property  
6.38.1*   Assignment of Contract from Arrived Holdings, Inc. to Arrived Series SuiteSpot dated May 15, 2023 for Arrived Series SuiteSpot property
6.39*   Form of Property Management Agreement, dated [*], 202[*], between Arrived Property Manager, LLC and Arrived Series [*], a series of Arrived STR, LLC

 

* Previously filed.

 

32

 

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 Fund Manager, LLC, its managing member
     
  By: /s/ Ryan Frazier
    Name:  Ryan Frazier
    Title: Chief Executive Officer
    Date: April 30, 2025

  

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 30, 2025
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 30, 2025
Sue Korn     (principal financial and accounting officer)    
    Principal Financial and Accounting Officer of Arrived STR, LLC    
         
Arrived Fund Manager, LLC   Managing Member   April 30, 2025

   

By: /s/ Ryan Frazier  
Name:  Ryan Frazier  
Title: Chief Executive Officer  

 

33