SEC Comment Letter 0000000000-22-013536 to MCI Income Fund VII, LLC (CIK 0001954416)
MCI Income Fund VII, LLC (CIK 0001954416)
Date: Dec. 15, 2022 · CIK: 0001954416 · Accession: 0000000000-22-013536
AI Filing Summary & Sentiment
File numbers found in text: 024-12073
Letter
United States securities and exchange commission logo December 15, 2022 Armin Afzalipour Co-President MCI Income Fund VII, LLC 2101 Cedar Springs, Suite 700 Dallas, Texas 75201 Re:MCI Income Fund VII, LLC Offering Statement on Form 1-A Filed November 18, 2022 File No. 024-12073 Dear Armin Afzalipour: We have reviewed your offering statement and have the following comments. In some of our comments, we may ask you to provide us with information so we may better understand your disclosure. Please respond to this letter by amending your offering statement and providing the requested information. If you do not believe our comments apply to your facts and circumstances or do not believe an amendment is appropriate, please tell us why in your response. After reviewing any amendment to your offering statement and the information you provide in response to these comments, we may have additional comments. Offering Statement on Form 1-A filed November 18, 2022 Offering Circular Summary, page 2 1.To enhance readability and understanding of the nature of your business, please revise the first paragraph describing your company using plain English principles so that someone not already familiar with your business may easily understand it. 2.Please revise to identify the types of third parties and the specific affiliates of the Developer or Company who might receive loans.
FirstName LastNameArmin Afzalipour Comapany NameMCI Income Fund VII, LLC December 15, 2022 Page 2 FirstName LastName Armin Afzalipour MCI Income Fund VII, LLC December 15, 2022 Page 2 Offering Circular Summary Our Sponsor and Management, page 3 3.We note your disclosure that you, your Sponsor, Manager, and Developer are under common ownership. Please expand your disclosure to discuss the Sponsor and Manager's ability to cause the Developer to distribute or transfer cash from operations to fund other affiliated projects of the Sponsor. Risk Factors, page 9 4.We note the risk factors under Risks Related to Real Estate Investments Generally beginning on page 25. Please provide additional risk factor disclosure addressing the different risk profiles associated with the types of collateral underlying your loans—e.g., single family residential, multi-family and commercial loans—and the fact that investors will not know in advance the mix of loan types you will have, or tell us why you believe such risk factor disclosure is not warranted. Use of Proceeds, page 29 5.We note that you have provided disclosure presenting your use of proceeds if 50% of the maximum amount is raised. Please expand your disclosure to present your use of proceeds if 75% and 25% of the maximum amount is raised. Index to Financial Statements, page F-1 6.We note your disclosure that you reserve the right to provide financing to third parties or affiliates of you and Developer, and we note that your LLC agreement says that you have the power to fund loans to or equity investments in Megatel Homes, L.L.C., Megatel Holdings, LLC, and Megatel Homes III, LLC, on such terms and conditions as the Manager determines, in its sole discretion. Given this, please tell us whether you believe it is necessary to provide audited financial statements of these Megatel entities in your filing in order to provide investors with sufficient information to make an informed decision and provide the basis for your conclusion. MCI Development 1, LLC NOTES TO FINANCIAL STATEMENTS, page F-15 7.We note your disclosure that MCI Development 1, LLC (the Developer) was formed on August 26, 2022 and has not commenced operations. Please tell us how the Developer intends to develop, construct, redevelop, reposition and/or market for sale, the properties which it will acquire. We will consider qualifying your offering statement at your request. If a participant in your offering is required to clear its compensation arrangements with FINRA, please have FINRA advise us that it has no objections to the compensation arrangements prior to qualification.
FirstName LastNameArmin Afzalipour Comapany NameMCI Income Fund VII, LLC December 15, 2022 Page 3 FirstName LastName Armin Afzalipour MCI Income Fund VII, LLC December 15, 2022 Page 3 We remind you that the company and its management are responsible for the accuracy and adequacy of their disclosures, notwithstanding any review, comments, action or absence of action by the staff. We also remind you that, following qualification of your Form 1-A, Rule 257 of Regulation A requires you to file periodic and current reports, including a Form 1-K which will be due within 120 calendar days after the end of the fiscal year covered by the report. You may contact Eric McPhee at 202-551-3693 or Robert Telewicz at 202-551-3438 if you have questions regarding comments on the financial statements and related matters. Please contact Ronald (Ron) E. Alper at 202-551-3329 or Maryse Mills-Apenteng at 202-551-3457 with any other questions. Sincerely, Division of Corporation Finance Office of Real Estate & Construction cc: Robert R. Kaplan, Jr.
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United States securities and exchange commission logo
December 15, 2022
Armin Afzalipour
Co-President
MCI Income Fund VII, LLC
2101 Cedar Springs, Suite 700
Dallas, Texas 75201
Re:MCI Income Fund VII, LLC
Offering Statement on Form 1-A
Filed November 18, 2022
File No. 024-12073
Dear Armin Afzalipour:
We have reviewed your offering statement and have the following comments. In some of
our comments, we may ask you to provide us with information so we may better understand your
disclosure.
Please respond to this letter by amending your offering statement and providing the
requested information. If you do not believe our comments apply to your facts and
circumstances or do not believe an amendment is appropriate, please tell us why in your
response. After reviewing any amendment to your offering statement and the information you
provide in response to these comments, we may have additional comments.
Offering Statement on Form 1-A filed November 18, 2022
Offering Circular Summary, page 2
1.To enhance readability and understanding of the nature of your business, please revise the
first paragraph describing your company using plain English principles so that someone
not already familiar with your business may easily understand it.
2.Please revise to identify the types of third parties and the specific affiliates of the
Developer or Company who might receive loans.
FirstName LastNameArmin Afzalipour
Comapany NameMCI Income Fund VII, LLC
December 15, 2022 Page 2
FirstName LastName
Armin Afzalipour
MCI Income Fund VII, LLC
December 15, 2022
Page 2
Offering Circular Summary
Our Sponsor and Management, page 3
3.We note your disclosure that you, your Sponsor, Manager, and Developer are under
common ownership. Please expand your disclosure to discuss the Sponsor and Manager's
ability to cause the Developer to distribute or transfer cash from operations to fund other
affiliated projects of the Sponsor.
Risk Factors, page 9
4.We note the risk factors under Risks Related to Real Estate Investments Generally
beginning on page 25. Please provide additional risk factor disclosure addressing the
different risk profiles associated with the types of collateral underlying your loans—e.g.,
single family residential, multi-family and commercial loans—and the fact that investors
will not know in advance the mix of loan types you will have, or tell us why you believe
such risk factor disclosure is not warranted.
Use of Proceeds, page 29
5.We note that you have provided disclosure presenting your use of proceeds if 50% of the
maximum amount is raised. Please expand your disclosure to present your use of
proceeds if 75% and 25% of the maximum amount is raised.
Index to Financial Statements, page F-1
6.We note your disclosure that you reserve the right to provide financing to third parties or
affiliates of you and Developer, and we note that your LLC agreement says that you have
the power to fund loans to or equity investments in Megatel Homes, L.L.C., Megatel
Holdings, LLC, and Megatel Homes III, LLC, on such terms and conditions as the
Manager determines, in its sole discretion. Given this, please tell us whether you believe
it is necessary to provide audited financial statements of these Megatel entities in your
filing in order to provide investors with sufficient information to make an informed
decision and provide the basis for your conclusion.
MCI Development 1, LLC
NOTES TO FINANCIAL STATEMENTS, page F-15
7.We note your disclosure that MCI Development 1, LLC (the Developer) was formed on
August 26, 2022 and has not commenced operations. Please tell us how the Developer
intends to develop, construct, redevelop, reposition and/or market for sale, the properties
which it will acquire.
We will consider qualifying your offering statement at your request. If a participant in
your offering is required to clear its compensation arrangements with FINRA, please have
FINRA advise us that it has no objections to the compensation arrangements prior to
qualification.
FirstName LastNameArmin Afzalipour
Comapany NameMCI Income Fund VII, LLC
December 15, 2022 Page 3
FirstName LastName
Armin Afzalipour
MCI Income Fund VII, LLC
December 15, 2022
Page 3
We remind you that the company and its management are responsible for the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action or absence of
action by the staff. We also remind you that, following qualification of your Form 1-A, Rule 257
of Regulation A requires you to file periodic and current reports, including a Form 1-K which
will be due within 120 calendar days after the end of the fiscal year covered by the report.
You may contact Eric McPhee at 202-551-3693 or Robert Telewicz at 202-551-3438 if
you have questions regarding comments on the financial statements and related matters. Please
contact Ronald (Ron) E. Alper at 202-551-3329 or Maryse Mills-Apenteng at 202-551-3457 with
any other questions.
Sincerely,
Division of Corporation Finance
Office of Real Estate & Construction
cc: Robert R. Kaplan, Jr.