SEC Company Response from Worthy Wealth Realty, Inc. (CIK 0002041878) — Jan 17, 2025
Worthy Wealth Realty, Inc. (CIK 0002041878)
Date: Jan. 17, 2025 · CIK: 0002041878 · Accession: 0001493152-25-002710
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 024-12536
Letter
United States Securities and Exchange Commission Division of Corporation Finance Re: Worthy Wealth Realty, Inc. Offering Statement on Form 1-A Filed November 26, 2024 File No. 024-12536
Dear Ms. Adegbuyi:
We serve as counsel to Worthy Wealth Realty, Inc. (the “Company”) and have been asked to provide this narrative response to your comment letter, dated December 23, 2024, on behalf of the Company. Where applicable, revisions have been made to the Company’s Amended Offering Statement, which has been filed as Amendment No. 1 (“Amendment 1”) to Offering Statement on Form 1-A (the “Offering Statement”). The Company responds as follows:
Offering Statement on Form 1-A
General
1. Please revise where appropriate to address dilution to potential investors.
Response:
There is no dilution to potential investors in the proposed offering in that the potential investors will be offered Worthy Wealth Housing Bonds, which are non-convertible debt securities. While the Company has outstanding equity, and reserves the right to issue additional equity in the future (though it has no present intent to do so), said equity is not dilutive to investors in Worthy Wealth Housing Bonds. The Company will not offer Worthy Wealth Housing Bonds or other debt securities to its officers, directors, or affiliated persons on terms different from the terms set forth in the Offering Statement.
United States Securities and Exchange Commission
January 17, 2025
Page
Dickinson Wright PLLC
Cover Page
2. We note that the website you included in this section does not appear to be a functioning website. Please advise and revise your disclosure accordingly. With respect to the Worthy App, please provide a description and screen shots of the presentation of the various Worthy offerings on the App.
Response:
The website “www.worthywealth.com“ included in the “Cover Page” section of the Offering Statement has been constructed and is presently fully functioning. The website and Worthy Wealth App will include an active link to the Company’s Regulation A offering once qualified. Further, it is anticipated that, upon the commencement of any private offerings and/or the qualification of any additional Regulation A offerings by the Company, Worthy Wealth, Inc., or any subsidiaries of Worthy Wealth, Inc., that the website and the Worthy App will include a link to such other offerings, which link(s) will clearly distinguish between each such offering then available. No other offerings will be listed on the website or the Worthy App.
In Amendment 1 the Company has included a description of the Worthy App and a screen shot of the presentation of the Company’s offering under the Offering Statement.
Organizational Structure, Page 6
3. We note references to the “Acquisition” included on pages 4 and 26. Accordingly, please revise your organizational chart to provide a full picture of the various legal entities and various affiliations that you are associated with, as well as the nature and extent of existing operations of the related entities. For example, include Worthy Financial, Inc. and the Worthy Property Bonds companies, as defined on page 5 of the offering circular filed by your parent company on October 7, 2024. Also include narrative disclosure explaining which entities have sole or shared control over the websites and Worthy App where operations and offerings are conducted, both before and after the acquisition. In your revised disclosure, please:
● explain the reasons for the reorganization and how the different existing and proposed operations of the affiliated entities are similar to and different from the proposed operations by Worthy Wealth Realty, Inc.
● update for recent events as of the most recent practicable date. In this regard, it appears that the acquisition entered into in December 2023 was amended in October 2024 and is contingent on your parent company raising $10 million.
● clarify here, and where appropriate, to explain the intended timing of the acquisition and the reasonably likely impact to you of the parent company not being able to close the acquisition.
Response:
Neither the Company nor Worthy Wealth, Inc., are presently affiliated with Worthy Financial, Inc., or its subsidiary entities, other than those relationships clearly described in the “Relationships and Related Party Transactions” section. All contracts between Worthy Wealth, Inc., and Worthy Financial, Inc. or any of its subsidiaries are presently and accurately described in the Offering Circular, including, but not limited to, those related to the negotiated Acquisition.
Neither the closing nor the failure to close the Acquisition will have any impact on the operations of the Company, or the offering under the Offering Circular. To the extent the Acquisition is closed the acquired companies will be owned and operated by Worthy Wealth, Inc., and the conduct of their business operations will be separate and apart from the conduct of the business operations of the Company.
United States Securities and Exchange Commission
January 17, 2025
Page
Dickinson Wright PLLC
In Amendment 6 the Company has:
● added an organizational chart showing the organization of all Worthy Wealth, Inc. subsidiaries in the event of the closing of the Acquisition;
● added disclosure that Worthy Wealth, Inc.’s general purpose of the Acquisition is to acquire from Worthy Financial, Inc., two active subsidiaries with business models that are in line with the business models of Worthy Wealth, Inc. and its subsidiaries (namely investing in real estate projects).
● added a description of the business operations of Worthy Property Bonds, Inc., and Worthy Property Bonds 2, Inc., and how they are different from the operations of the Company.
● updated its disclosure regarding any recent events as of the most recent practicable date, including, but not limited to, that the acquisition agreement entered into in December 2023 was amended in October 2024 and is contingent on Worthy Wealth, Inc. raising $10 million.
● clarified the intended timing of the Acquisition and that there will be no impact on the Company or Worthy Wealth, Inc. if the Acquisition is not closed.
Summary of the Offering
Worthy Wealth Realty Rewards Program, Page 10
4. We note the reference to “qualifying action.” Revise to clarify the terms and conditions of the various channels by which investors may receive reward bonds. When will the program be launched? Are the reward bonds only offered to existing investors? How do investors know if they qualify? Please clarify how the $250,000 limit will be implemented.
Response:
In Amendment 1 the Company has deleted all references to the following investor offers with respect to reward bonds: “Attending Worthy Events” and “Joining through one of our Marketing Partners”, and has rebranded the program as the Worthy Wealth Referral Program and rebranded the bonds issued thereunder as Referral Bonds.
With respect to the remaining investor offer with respect to referral bonds, specifically “Referring a New Investor”, the current disclosure in the Offering Statement accurately discloses all requirements that must be met for a Referrer and Referree to obtain a referral bond.
In Amendment 1 the Company has clarified that it internally tracks all issued referral bonds, and once the principal amount of referral bonds have been issued the Referral Program will no longer be available. Further, the total principal amount of referral bonds available under the revised Referral Program will be $125,000.
United States Securities and Exchange Commission
January 17, 2025
Page
Dickinson Wright PLLC
Risk Factors
Our management has raised substantial doubt about our ability to continue as a going concern, Page 14
5. Please revise this risk factor to disclose the risks you will be subject to if you do not raise sufficient funds in this offering or if your parent declines to make advances to you. Refer to your discussion on page 28.
Response:
In Amendment 1 the Company has revised the Risk Factors section to disclose the risks the Company will be subject to if the Company does not raise sufficient funds in the offering or if Worthy Wealth, Inc. declines to make advances to the Company.
Plan of Operations, Page 28
6. Please revise to clarify the statement that you plan to “invest the proceeds in real estate loans, real estate interests and other permissible activities.” It is unclear whether and how such investments are different from statements elsewhere that you plan to lend to “borrowers that acquire property and provide infrastructure (e.g. roads, water, electric, sewer, etc.) for the subsequent resale of buildable lots to national homebuilders.” For example, are you limited to investing proceeds in real estate loans to borrowers that acquire property and infrastructure for subsequent resale of lots to national homebuilders?
Response:
In Amendment 1 the Company has revised the Offering Statement throughout to clarify that the Company intends to solely make the type of investments detailed in Response 7 below.
7. Clarify the planned geographic areas of operation and intended loan characteristics. For example, clarify any loan-to-value, credit score, concentration, loan amount or other limits.
Response:
In Amendment 1 the Company has clarified that the planned geographic area of the Company’s investment portfolio is anticipated to be the Southeastern United Stated.
In Amendment 1 the Company has clarified the Company’s intended investment characteristics to include the following:
● The investments will consist of a tenant in common ownership interest in undeveloped properties acquired by infrastructure developers. The infrastructure developers will construct necessary infrastructure on said properties (e.g. roads, water, electric, sewer, etc.) for the subsequent resale of buildable lots to national homebuilders;
● The original amount of each investment is anticipated to be between $1,000,000 and $2,000,000;
● The investments will receive interest at a stated rate from the infrastructure developers;
● As buildable lots on the subject properties are sold to home builders, the amount of such investments will be paid down/off pursuant to the terms of the related investment documents.
● It is anticipated that the foregoing described investments will close in connection with the infrastructure developer’s acquisition of the property or after the developer has acquired the property.
● All investments will be supported by extensive third party fair market appraisals of the subject properties provided to the Company.
United States Securities and Exchange Commission
January 17, 2025
Page
Dickinson Wright PLLC
8. Please revise to explain the extent to which you and your affiliated entities have agreements or understandings with respect to allocation of proceeds or business opportunities. For example, it is unclear if loans or other asset acquisitions would be appropriate for multiple Worthy entities and, if so, how you and the other Worthy entities determine which entity invests in such loans or assets.
Response:
In Amendment 1 the Company has clarified that:
● all of the investments the Company intends to make with the proceeds of the offering will be invested pursuant to investment documentation with one or more infrastructure developers, none of which infrastructure developers had, have or will have contractual relationships or otherwise do business with Worthy Wealth, Inc., or any subsidiaries thereof, other than the Company.
● none of Worthy Wealth, Inc., its other subsidiaries, or the target companies have made similarly structured investments in the past, with the exception of three comparative investment previously made by Worthy Property Bonds 2, Inc., and none will in the future, such that there will be no overlap in business models.
● all of the proceeds of all Company investments will be payable directly to the Company and no other entity.
Management’s Discussion and Analysis of Financial Condition and Results of Operations Worthy App, Page 31
9. Please revise your disclosure to identify and explain the different related entities offering and selling or proposing to offer and sell securities on the App and Worthy websites. With a view to clarifying disclosure, advise us of the extent to which potential investors understand which Worthy entity is offering and selling the particular securities they consider purchasing. In this regard, (1) confirm that the Worthy App provides a link to your offering statement, and (2) describe how you confirm that users meet the offeree requirements.
Response:
Please see the Company’s response to Comment #2 above.
In Amendment 1 the Company has clarified that the technology underlying the App is “white label” licensed to the Company under a Technology License Agreement with Worthy Wealth, Inc., which licensed said technology from Worthy Financial, Inc. The website and App are operated by Worthy Wealth Management, Inc. (with the assistance of a Worthy Financial, Inc. subsidiary pursuant to the terms of the license between Worthy Wealth, Inc., and Worthy Financial, Inc.), and will solely includ
Show Raw Text
CORRESP
1
filename1.htm
350
East Las Olas Boulevard, Suite 1750
Ft. Lauderdale, FL 33301-4268
Telephone:
954-991-5420
Facsimile:
844-670-6009
http://www.dickinsonwright.com
Clint
J. Gage
CGage@dickinsonwright.com
954-991-5425
January
17, 2025
Aisha
Adegbuyi
United
States Securities and Exchange Commission
Division
of Corporation Finance
Washington,
DC 20549
Re: Worthy
Wealth Realty, Inc.
Offering Statement on Form 1-A
Filed November 26, 2024
File No. 024-12536
Dear
Ms. Adegbuyi:
We
serve as counsel to Worthy Wealth Realty, Inc. (the “Company”) and have been asked to provide this narrative response
to your comment letter, dated December 23, 2024, on behalf of the Company. Where applicable, revisions have been made to the Company’s
Amended Offering Statement, which has been filed as Amendment No. 1 (“Amendment 1”) to Offering Statement on Form
1-A (the “Offering Statement”). The Company responds as follows:
Offering
Statement on Form 1-A
General
1.
Please revise where appropriate to address dilution to potential investors.
Response:
There
is no dilution to potential investors in the proposed offering in that the potential investors will be offered Worthy Wealth Housing
Bonds, which are non-convertible debt securities. While the Company has outstanding equity, and reserves the right to issue additional
equity in the future (though it has no present intent to do so), said equity is not dilutive to investors in Worthy Wealth Housing Bonds.
The Company will not offer Worthy Wealth Housing Bonds or other debt securities to its officers, directors, or affiliated persons on
terms different from the terms set forth in the Offering Statement.
United
States Securities and Exchange Commission
January
17, 2025
Page
2
Dickinson
Wright PLLC
Cover
Page
2.
We note that the website you included in this section does not appear to be a functioning website. Please advise and revise your disclosure
accordingly. With respect to the Worthy App, please provide a description and screen shots of the presentation of the various Worthy
offerings on the App.
Response:
The
website “www.worthywealth.com“ included in the “Cover Page” section of the Offering Statement has been
constructed and is presently fully functioning. The website and Worthy Wealth App will include an active link to the Company’s
Regulation A offering once qualified. Further, it is anticipated that, upon the commencement of any private offerings and/or the qualification
of any additional Regulation A offerings by the Company, Worthy Wealth, Inc., or any subsidiaries of Worthy Wealth, Inc., that the website
and the Worthy App will include a link to such other offerings, which link(s) will clearly distinguish between each such offering then
available. No other offerings will be listed on the website or the Worthy App.
In
Amendment 1 the Company has included a description of the Worthy App and a screen shot of the presentation of the Company’s offering
under the Offering Statement.
Organizational
Structure, Page 6
3.
We note references to the “Acquisition” included on pages 4 and 26. Accordingly, please revise your organizational chart
to provide a full picture of the various legal entities and various affiliations that you are associated with, as well as the nature
and extent of existing operations of the related entities. For example, include Worthy Financial, Inc. and the Worthy Property Bonds
companies, as defined on page 5 of the offering circular filed by your parent company on October 7, 2024. Also include narrative disclosure
explaining which entities have sole or shared control over the websites and Worthy App where operations and offerings are conducted,
both before and after the acquisition. In your revised disclosure, please:
● explain
the reasons for the reorganization and how the different existing and proposed operations
of the affiliated entities are similar to and different from the proposed operations by Worthy
Wealth Realty, Inc.
● update
for recent events as of the most recent practicable date. In this regard, it appears that
the acquisition entered into in December 2023 was amended in October 2024 and is contingent
on your parent company raising $10 million.
● clarify
here, and where appropriate, to explain the intended timing of the acquisition and the reasonably
likely impact to you of the parent company not being able to close the acquisition.
Response:
Neither
the Company nor Worthy Wealth, Inc., are presently affiliated with Worthy Financial, Inc., or its subsidiary entities, other than those
relationships clearly described in the “Relationships and Related Party Transactions” section. All contracts between Worthy
Wealth, Inc., and Worthy Financial, Inc. or any of its subsidiaries are presently and accurately described in the Offering Circular,
including, but not limited to, those related to the negotiated Acquisition.
Neither
the closing nor the failure to close the Acquisition will have any impact on the operations of the Company, or the offering under the
Offering Circular. To the extent the Acquisition is closed the acquired companies will be owned and operated by Worthy Wealth, Inc.,
and the conduct of their business operations will be separate and apart from the conduct of the business operations of the Company.
United
States Securities and Exchange Commission
January
17, 2025
Page
3
Dickinson
Wright PLLC
In
Amendment 6 the Company has:
● added
an organizational chart showing the organization of all Worthy Wealth, Inc. subsidiaries
in the event of the closing of the Acquisition;
● added
disclosure that Worthy Wealth, Inc.’s general purpose of the Acquisition is to acquire
from Worthy Financial, Inc., two active subsidiaries with business models that are in line
with the business models of Worthy Wealth, Inc. and its subsidiaries (namely investing in
real estate projects).
● added
a description of the business operations of Worthy Property Bonds, Inc., and Worthy Property
Bonds 2, Inc., and how they are different from the operations of the Company.
● updated
its disclosure regarding any recent events as of the most recent practicable date, including,
but not limited to, that the acquisition agreement entered into in December 2023 was amended
in October 2024 and is contingent on Worthy Wealth, Inc. raising $10 million.
● clarified
the intended timing of the Acquisition and that there will be no impact on the Company or
Worthy Wealth, Inc. if the Acquisition is not closed.
Summary
of the Offering
Worthy Wealth Realty Rewards Program, Page 10
4.
We note the reference to “qualifying action.” Revise to clarify the terms and conditions of the various channels by which
investors may receive reward bonds. When will the program be launched? Are the reward bonds only offered to existing investors? How do
investors know if they qualify? Please clarify how the $250,000 limit will be implemented.
Response:
In
Amendment 1 the Company has deleted all references to the following investor offers with respect to reward bonds: “Attending Worthy
Events” and “Joining through one of our Marketing Partners”, and has rebranded the program as the Worthy Wealth Referral
Program and rebranded the bonds issued thereunder as Referral Bonds.
With
respect to the remaining investor offer with respect to referral bonds, specifically “Referring a New Investor”, the current
disclosure in the Offering Statement accurately discloses all requirements that must be met for a Referrer and Referree to obtain a referral
bond.
In
Amendment 1 the Company has clarified that it internally tracks all issued referral bonds, and once the principal amount of referral
bonds have been issued the Referral Program will no longer be available. Further, the total principal amount of referral bonds available
under the revised Referral Program will be $125,000.
United
States Securities and Exchange Commission
January
17, 2025
Page
4
Dickinson
Wright PLLC
Risk
Factors
Our
management has raised substantial doubt about our ability to continue as a going concern, Page 14
5.
Please revise this risk factor to disclose the risks you will be subject to if you do not raise sufficient funds in this offering or
if your parent declines to make advances to you. Refer to your discussion on page 28.
Response:
In
Amendment 1 the Company has revised the Risk Factors section to disclose the risks the Company will be subject to if the Company does
not raise sufficient funds in the offering or if Worthy Wealth, Inc. declines to make advances to the Company.
Plan
of Operations, Page 28
6.
Please revise to clarify the statement that you plan to “invest the proceeds in real estate loans, real estate interests and other
permissible activities.” It is unclear whether and how such investments are different from statements elsewhere that you plan to
lend to “borrowers that acquire property and provide infrastructure (e.g. roads, water, electric, sewer, etc.) for the subsequent
resale of buildable lots to national homebuilders.” For example, are you limited to investing proceeds in real estate loans to
borrowers that acquire property and infrastructure for subsequent resale of lots to national homebuilders?
Response:
In
Amendment 1 the Company has revised the Offering Statement throughout to clarify that the Company intends to solely make the type of
investments detailed in Response 7 below.
7.
Clarify the planned geographic areas of operation and intended loan characteristics. For example, clarify any loan-to-value, credit score,
concentration, loan amount or other limits.
Response:
In
Amendment 1 the Company has clarified that the planned geographic area of the Company’s investment portfolio is anticipated to
be the Southeastern United Stated.
In
Amendment 1 the Company has clarified the Company’s intended investment characteristics to include the following:
● The
investments will consist of a tenant in common ownership interest in undeveloped properties
acquired by infrastructure developers. The infrastructure developers will construct necessary
infrastructure on said properties (e.g. roads, water, electric, sewer, etc.) for the subsequent
resale of buildable lots to national homebuilders;
● The
original amount of each investment is anticipated to be between $1,000,000 and $2,000,000;
● The
investments will receive interest at a stated rate from the infrastructure developers;
● As
buildable lots on the subject properties are sold to home builders, the amount of such investments
will be paid down/off pursuant to the terms of the related investment documents.
● It
is anticipated that the foregoing described investments will close in connection with the
infrastructure developer’s acquisition of the property or after the developer has acquired
the property.
● All
investments will be supported by extensive third party fair market appraisals of the subject
properties provided to the Company.
United
States Securities and Exchange Commission
January
17, 2025
Page
5
Dickinson
Wright PLLC
8.
Please revise to explain the extent to which you and your affiliated entities have agreements or understandings with respect to allocation
of proceeds or business opportunities. For example, it is unclear if loans or other asset acquisitions would be appropriate for multiple
Worthy entities and, if so, how you and the other Worthy entities determine which entity invests in such loans or assets.
Response:
In
Amendment 1 the Company has clarified that:
● all
of the investments the Company intends to make with the proceeds of the offering will be
invested pursuant to investment documentation with one or more infrastructure developers,
none of which infrastructure developers had, have or will have contractual relationships
or otherwise do business with Worthy Wealth, Inc., or any subsidiaries thereof, other than
the Company.
● none
of Worthy Wealth, Inc., its other subsidiaries, or the target companies have made similarly
structured investments in the past, with the exception of three comparative investment previously
made by Worthy Property Bonds 2, Inc., and none will in the future, such that there will
be no overlap in business models.
● all
of the proceeds of all Company investments will be payable directly to the Company and no
other entity.
Management’s
Discussion and Analysis of Financial Condition and Results of Operations Worthy App, Page 31
9.
Please revise your disclosure to identify and explain the different related entities offering and selling or proposing to offer and sell
securities on the App and Worthy websites. With a view to clarifying disclosure, advise us of the extent to which potential investors
understand which Worthy entity is offering and selling the particular securities they consider purchasing. In this regard, (1) confirm
that the Worthy App provides a link to your offering statement, and (2) describe how you confirm that users meet the offeree requirements.
Response:
Please
see the Company’s response to Comment #2 above.
In
Amendment 1 the Company has clarified that the technology underlying the App is “white label” licensed to the Company under
a Technology License Agreement with Worthy Wealth, Inc., which licensed said technology from Worthy Financial, Inc. The website and App
are operated by Worthy Wealth Management, Inc. (with the assistance of a Worthy Financial, Inc. subsidiary pursuant to the terms of the
license between Worthy Wealth, Inc., and Worthy Financial, Inc.), and will solely includ