SEC Company Response from Worthy Wealth Realty, Inc. (CIK 0002041878) — Feb 21, 2025
Worthy Wealth Realty, Inc. (CIK 0002041878)
Date: Feb. 21, 2025 · CIK: 0002041878 · Accession: 0001493152-25-007812
AI Filing Summary & Sentiment
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 January 17, 2025 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 February 3, 2025, 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. 2 (“Amendment 2”) to Offering Statement on Form 1-A (the “Offering Statement”). The Company responds as follows:
Offering Statement on Form 1-A
General
1. We note the statement on the cover page that you are conducting a Regulation 506(c) offering, and that the terms may be different. Given the two public offerings, please clarify how someone is able to find the terms of the other offering to determine if they are better or more suitable for the potential investor.
Response:
In Amendment 2 the Company has clarified that if during the offering period under the Offering Statement, at any time the Company is conducting a concurrent Regulation 506(c) offering, potential investors will have the ability, through the Worthy Wealth Website and Worthy Wealth App (the only sources for a potential investor to invest in the offering under the Offering Statement), to view the terms of, and investor qualification requirements for, each such offering, and to invest in one, both, or neither.
United States Securities and Exchange Commission
February 21, 2025
Page 2
Dickinson Wright PLLC
2. We note your disclosure on page 31 and the statement in your response to prior comment 2 that the website and Worthy App will include a link to separate offerings by you, Worthy Wealth, Inc., and any subsidiaries of Worthy Wealth, Inc., “which link(s) will clearly distinguish between each such offering then available.” We also note that the website currently advertises “Worthy Bonds” at 7% interest. Please revise Summary and where appropriate and advise us of the following:
Response:
The website through which the offering under the Offering Statement will be made is www.worthywealth.com (the “WW Website”). That website does not contain information with respect to an offering of 7% Worthy Bonds. The WW Website, as well as the Worthy Wealth App (collectively, the “Tech Platform”) as stated in prior response 2, will contain only a link to separate offerings by the Company, Worthy Wealth, Inc., and any other subsidiaries of Worthy Wealth, Inc. (the “Worthy Wealth Companies”), which link(s) will clearly distinguish between each such offering then available. Worthy Property Bonds, Inc., and Worthy Property Bonds 2, Inc., are not presently subsidiaries of Worthy Wealth, Inc., the Company’s parent company and sole shareholder, and therefore, any offerings by said companies will not appear on the Tech Platform (“General Response”).
● Please advise us if the website and Worthy App will be revised to include offering materials for the 9% Worthy Wealth Housing Bonds separate from the current website offering of 7% Worthy Bonds; provide us supplementally with any such offering materials to be used, including screen shots;
Response:
Please see the General Response above. The screenshots in the Amendment 2 are accurate.
● Please advise us whether and how the separate offerings will distinguish between the different investment objectives; for example, between Worthy Wealth Realty’s “ownership interests in undeveloped properties acquired by infrastructure developers,” Worthy Property Bonds, Inc.’s “Acquisition of Mortgages and Other Liens on and Interests in Real Estate,” and Worthy Property Bonds 2, Inc.’s “Acquisition of Mortgages and Other Liens on and Interests in Real Estate.” In this regard, advise us of how investors are able to know which entity is selling them bonds when they invest in an entity seeking the Acquisition of Mortgages and other Liens on and Interests in Real Estate. See prior comment 9;
Response:
Please see the General Response above. When a potential investor enters the Tech Platform they will have the ability to click through to the Company’s offering, and any other offerings then available by the Worthy Wealth Companies, as detailed in the General Response above, and when they click on any particular offering they will be presented with required disclosure documents (i.e. an offering circular for Regulation A offerings, and a private placement documents for private placements), and other details of the particular offering.
United States Securities and Exchange Commission
February 21, 2025
Page 3
Dickinson Wright PLLC
● With respect to the illiquid nature of the investments, the website states: “Quick Cash: You can easily access your money when you need it.” Please reconcile with disclosure in the Form 1-A that the bonds are subject to repayment at the demand of the holder “subject to liquidity, no sooner than 36 months from the date that the purchase funds have cleared, upon 90 days prior written notice by holder;”
Response:
Please see the General Response above. The statement “Quick Cash: You can easily access your money when you need it.” does not appear on the WW Website.
● The website refers to “conservative loan-to-value rates between 55% and 65%.” Please revise the offering circular’s discussion of investment strategy to address your anticipated loan-to-value ratios;
Response:
Please see the General Response above. The WW Website does not refer to “conservative loan-to-value rates between 55% and 65%.”
● The website discussion of Worthy Bonds states that the no fees or penalties provisions apply to “Worthy Community and Property Bond Funds 1 and 2 only.” Please revise Worthy Website on page 30 and where appropriate to clarify the instances when investors may be charged fees or commissions, including by “other financial intermediaries;” and
Response:
Please see the General Response above. The WW Website does not contain a “discussion . . . that the no fees or penalties provisions apply to “Worthy Community and Property Bond Funds 1 and 2 only.”
● Please revise the cover page and where appropriate to highlight the key differences between the different offerings; for example, it is unclear if the higher interest rate for the Worthy Wealth Housing Bonds is meant to compensate for the decreased liquidity and/or the different type of real estate asset you seek to invest in compared to the real estate interests of the Target Companies issuing bonds at 7%.
Response:
Please see the General Response above. The Target Companies have not been acquired as of the date hereof, and the terms of the Company’s proposed offering of Worthy Housing Bonds, as set forth in the Offering Statement, have no relation to any prior or current offerings by the Target Companies.
United States Securities and Exchange Commission
February 21, 2025
Page 4
Dickinson Wright PLLC
3. We note your response to prior comment 5. We also note the statements in the last risk factor on page 21 that investors must rely only on your “cash flow from operations and possible funding from WWI for repayment of principal and interest,” and that, if those sources are not sufficient to pay any amounts owed under the Worthy Wealth Housing Bonds, “then [investors] may lose all or part of [their] investment.” Additionally, we note the statement on page 7 that $3 million is required to operate for 12 months and that, if you fail to raise at least $20 million sales of Worthy Wealth Housing Bonds, you “may not be able to fully carry out” your plan of operations. Given the offering has no minimum, please revise Summary and where appropriate to clearly disclose your plans for funding quarterly interest payments (1) during the period when operations have not generated cash flow, clarifying the approximate time period you anticipate that to take, and (2) assuming you raise less than 25% of the total offering. For example, if proceeds over the course of a year fund significantly less than the $17.7 million of real estate, as presented in the first column on page 24, it appears that you will not be able to fully carry out your plan of operations. Please revise Business, MD&A or where appropriate to clarify your plan of operations in that event, and include a separate risk factor explaining the risk.
Response:
In Amendment 2 the Company has revised the Offering Statement to provide that:
● Worthy Wealth, Inc., the Company’s parent company, intends to provide capital contributions, as necessary and to the extent possible, to the Company to satisfy the Company’s operating costs and the Company’s obligations to the holders of Worthy Wealth Housing Bonds.
● The Company anticipates promptly deploying raised capital through the investments described in the Offering Statement, which investments will provide immediate interest returns sufficient to enable the Company to make interested payments on issued Worthy Wealth Housing Bonds.
● The orderly liquidation of the Company’s investments pursuant to the terms thereof will enable the Company make all required payments to the holders of Worthy Wealth Housing Bonds upon the redemption thereof.
● While the Company’s full business model is based upon raising capital of $75 million, the Company can (as described in the foregoing bullet points) successfully operate and meet it’s obligations with funding in an amount less than $75 million.
● $20 million is not required for the Company to successfully conduct it’s proposed business operations.
Cover Page
4. Please revise the cover page to present the Referral Bonds and quantify the amount being offered.
Response:
In Amendment 2 the Company has revised the cover page of the Offering Statement to present the Referral Bonds and to quantify the amount being offered as a footnote to the proceeds table. The Offering Statement contains numerous specific references to the Referral Bonds, the Referral Program, and the terms thereof.
United States Securities and Exchange Commission
February 21, 2025
Page 5
Dickinson Wright PLLC
Summary of the Offering
Worthy Wealth Realty Referral Program, Page 10
5. We note your response to prior comment 4. However, we are unable to locate disclosure clarifying when the referral program will be launched, whether the bonds are only offered to existing investors and how investors know if they qualify. It is also still unclear what actions meet the standard for “qualifying action.” Please revise accordingly.
Response:
While the Company believes the current disclosure in the Offering Statement accurately sets forth information that is responsive to each of the comments in Comment 5, in Amendment 2 the Company has revised the appropriate Referral Program disclosure to more clearly describe the terms of the Referral Program.
Our Business
Plan of Operations, Page 28
6. We note your response to prior comment 7 that your investments will be geographically concentrated in projects in the Southeastern United States. Please disclose which specific states you intend to concentrate these projects. Explain the meaning and potential impact to you and/or investors of the “tenant in common” nature of the investment interests. Additionally, revise the discussion of your investment strategy to disclose the anticipated loan-to-value, credit score and other key characteristics under the investment objectives. For example, are the targeted projects suburban neighborhoods, urban properties, or otherwise? Tell us whether you have been in discussions with “national homebuilders” and provide a basis for the statement that you expect your lenders to resell lots to national homebuilders.
Response:
The investments contemplated by the Company’s business plan do not involve loans, they involve direct investments in real estate projects, which investments will provide for a direct ownership interest in the underlying real estate in the form of a tenant in common interest, with interest payable thereon and a return of capital invested upon sale thereof. The concepts of loan-to-value, credit scores, etc., which are standard in loan transactions, do not apply.
In Amendment 2 the Company has revised the Offering Statement to:
● Provide that investments will be in projects in high growth, high demand, suburban markets located in the Southeast United States, including North Carolina, South Carolina, Georgia, Alabama, and Tennessee.
● Further explain the meaning and potential impact of the “tenant in common” nature of the intended investment interests.
● Clarify that the Company has been in discussions with several infrastructure developers that are seeking investments in their various projects, which infrastructure developers are specifically in the business of developing real estate lots for sale to national homebuilders.
United States Securities and Exchange Commission
February 21, 2025
Page 6
Dickinson Wright PLLC
Liquidity and Capital Resources, Page 30
7. Please revise your disclosure on page 31 to clarify what you mean by the statement that you “white label” sublicense the rights to use the Worthy Fintech Platform from WWI.
Response:
In Amendment 2 the Co
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
February
21, 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
January 17, 2025
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 February 3, 2025, 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. 2 (“Amendment 2”) to Offering Statement on Form
1-A (the “Offering Statement”). The Company responds as follows:
Offering
Statement on Form 1-A
General
1. We
note the statement on the cover page that you are conducting a Regulation 506(c) offering, and that the terms may be different. Given
the two public offerings, please clarify how someone is able to find the terms of the other offering to determine if they are better
or more suitable for the potential investor.
Response:
In
Amendment 2 the Company has clarified that if during the offering period under the Offering Statement, at any time the Company is conducting
a concurrent Regulation 506(c) offering, potential investors will have the ability, through the Worthy Wealth Website and Worthy Wealth
App (the only sources for a potential investor to invest in the offering under the Offering Statement), to view the terms of, and investor
qualification requirements for, each such offering, and to invest in one, both, or neither.
United States Securities and Exchange Commission
February 21, 2025
Page 2
Dickinson Wright PLLC
2. We
note your disclosure on page 31 and the statement in your response to prior comment 2 that the website and Worthy App will include a
link to separate offerings by you, Worthy Wealth, Inc., and any subsidiaries of Worthy Wealth, Inc., “which link(s) will clearly
distinguish between each such offering then available.” We also note that the website currently advertises “Worthy Bonds”
at 7% interest. Please revise Summary and where appropriate and advise us of the following:
Response:
The
website through which the offering under the Offering Statement will be made is www.worthywealth.com (the “WW Website”).
That website does not contain information with respect to an offering of 7% Worthy Bonds. The WW Website, as well as the Worthy Wealth
App (collectively, the “Tech Platform”) as stated in prior response 2, will contain only a link to separate offerings
by the Company, Worthy Wealth, Inc., and any other subsidiaries of Worthy Wealth, Inc. (the “Worthy Wealth Companies”),
which link(s) will clearly distinguish between each such offering then available. Worthy Property Bonds, Inc., and Worthy Property Bonds
2, Inc., are not presently subsidiaries of Worthy Wealth, Inc., the Company’s parent company and sole shareholder, and therefore,
any offerings by said companies will not appear on the Tech Platform (“General Response”).
● Please
advise us if the website and Worthy App will be revised to include offering materials for
the 9% Worthy Wealth Housing Bonds separate from the current website offering of 7% Worthy
Bonds; provide us supplementally with any such offering materials to be used, including screen
shots;
Response:
Please
see the General Response above. The screenshots in the Amendment 2 are accurate.
● Please
advise us whether and how the separate offerings will distinguish between the different investment
objectives; for example, between Worthy Wealth Realty’s “ownership interests
in undeveloped properties acquired by infrastructure developers,” Worthy Property Bonds,
Inc.’s “Acquisition of Mortgages and Other Liens on and Interests in Real Estate,”
and Worthy Property Bonds 2, Inc.’s “Acquisition of Mortgages and Other Liens
on and Interests in Real Estate.” In this regard, advise us of how investors are able
to know which entity is selling them bonds when they invest in an entity seeking the Acquisition
of Mortgages and other Liens on and Interests in Real Estate. See prior comment 9;
Response:
Please
see the General Response above. When a potential investor enters the Tech Platform they will have the ability to click through to the
Company’s offering, and any other offerings then available by the Worthy Wealth Companies, as detailed in the General Response
above, and when they click on any particular offering they will be presented with required disclosure documents (i.e. an offering circular
for Regulation A offerings, and a private placement documents for private placements), and other details of the particular offering.
United States Securities and Exchange Commission
February 21, 2025
Page 3
Dickinson Wright PLLC
● With
respect to the illiquid nature of the investments, the website states: “Quick Cash:
You can easily access your money when you need it.” Please reconcile with disclosure
in the Form 1-A that the bonds are subject to repayment at the demand of the holder “subject
to liquidity, no sooner than 36 months from the date that the purchase funds have cleared,
upon 90 days prior written notice by holder;”
Response:
Please
see the General Response above. The statement “Quick Cash: You can easily access your money when you need it.” does not
appear on the WW Website.
● The
website refers to “conservative loan-to-value rates between 55% and 65%.” Please
revise the offering circular’s discussion of investment strategy to address your anticipated
loan-to-value ratios;
Response:
Please
see the General Response above. The WW Website does not refer to “conservative loan-to-value rates between 55% and 65%.”
● The
website discussion of Worthy Bonds states that the no fees or penalties provisions apply
to “Worthy Community and Property Bond Funds 1 and 2 only.” Please revise Worthy
Website on page 30 and where appropriate to clarify the instances when investors may be charged
fees or commissions, including by “other financial intermediaries;” and
Response:
Please
see the General Response above. The WW Website does not contain a “discussion . . . that the no fees or penalties provisions apply
to “Worthy Community and Property Bond Funds 1 and 2 only.”
● Please
revise the cover page and where appropriate to highlight the key differences between the
different offerings; for example, it is unclear if the higher interest rate for the Worthy
Wealth Housing Bonds is meant to compensate for the decreased liquidity and/or the different
type of real estate asset you seek to invest in compared to the real estate interests of
the Target Companies issuing bonds at 7%.
Response:
Please
see the General Response above. The Target Companies have not been acquired as of the date hereof, and the terms of the Company’s
proposed offering of Worthy Housing Bonds, as set forth in the Offering Statement, have no relation to any prior or current offerings
by the Target Companies.
United States Securities and Exchange Commission
February 21, 2025
Page 4
Dickinson Wright PLLC
3. We
note your response to prior comment 5. We also note the statements in the last risk factor on page 21 that investors must rely only on
your “cash flow from operations and possible funding from WWI for repayment of principal and interest,” and that, if those
sources are not sufficient to pay any amounts owed under the Worthy Wealth Housing Bonds, “then [investors] may lose all or part
of [their] investment.” Additionally, we note the statement on page 7 that $3 million is required to operate for 12 months and
that, if you fail to raise at least $20 million sales of Worthy Wealth Housing Bonds, you “may not be able to fully carry out”
your plan of operations. Given the offering has no minimum, please revise Summary and where appropriate to clearly disclose your plans
for funding quarterly interest payments (1) during the period when operations have not generated cash flow, clarifying the approximate
time period you anticipate that to take, and (2) assuming you raise less than 25% of the total offering. For example, if proceeds over
the course of a year fund significantly less than the $17.7 million of real estate, as presented in the first column on page 24, it appears
that you will not be able to fully carry out your plan of operations. Please revise Business, MD&A or where appropriate to clarify
your plan of operations in that event, and include a separate risk factor explaining the risk.
Response:
In
Amendment 2 the Company has revised the Offering Statement to provide that:
● Worthy
Wealth, Inc., the Company’s parent company, intends to provide capital contributions,
as necessary and to the extent possible, to the Company to satisfy the Company’s operating
costs and the Company’s obligations to the holders of Worthy Wealth Housing Bonds.
● The
Company anticipates promptly deploying raised capital through the investments described in
the Offering Statement, which investments will provide immediate interest returns sufficient
to enable the Company to make interested payments on issued Worthy Wealth Housing Bonds.
● The
orderly liquidation of the Company’s investments pursuant to the terms thereof will
enable the Company make all required payments to the holders of Worthy Wealth Housing Bonds
upon the redemption thereof.
● While
the Company’s full business model is based upon raising capital of $75 million, the
Company can (as described in the foregoing bullet points) successfully operate and meet it’s
obligations with funding in an amount less than $75 million.
● $20
million is not required for the Company to successfully conduct it’s proposed business
operations.
Cover
Page
4. Please
revise the cover page to present the Referral Bonds and quantify the amount being offered.
Response:
In
Amendment 2 the Company has revised the cover page of the Offering Statement to present the Referral Bonds and to quantify the amount
being offered as a footnote to the proceeds table. The Offering Statement contains numerous specific references to the Referral Bonds,
the Referral Program, and the terms thereof.
United States Securities and Exchange Commission
February 21, 2025
Page 5
Dickinson Wright PLLC
Summary
of the Offering
Worthy
Wealth Realty Referral Program, Page 10
5. We
note your response to prior comment 4. However, we are unable to locate disclosure clarifying when the referral program will be launched,
whether the bonds are only offered to existing investors and how investors know if they qualify. It is also still unclear what actions
meet the standard for “qualifying action.” Please revise accordingly.
Response:
While
the Company believes the current disclosure in the Offering Statement accurately sets forth information that is responsive to each of
the comments in Comment 5, in Amendment 2 the Company has revised the appropriate Referral Program disclosure to more clearly describe
the terms of the Referral Program.
Our
Business
Plan
of Operations, Page 28
6. We
note your response to prior comment 7 that your investments will be geographically concentrated in projects in the Southeastern United
States. Please disclose which specific states you intend to concentrate these projects. Explain the meaning and potential impact to you
and/or investors of the “tenant in common” nature of the investment interests. Additionally, revise the discussion of your
investment strategy to disclose the anticipated loan-to-value, credit score and other key characteristics under the investment objectives.
For example, are the targeted projects suburban neighborhoods, urban properties, or otherwise? Tell us whether you have been in discussions
with “national homebuilders” and provide a basis for the statement that you expect your lenders to resell lots to national
homebuilders.
Response:
The
investments contemplated by the Company’s business plan do not involve loans, they involve direct investments in real estate projects,
which investments will provide for a direct ownership interest in the underlying real estate in the form of a tenant in common interest,
with interest payable thereon and a return of capital invested upon sale thereof. The concepts of loan-to-value, credit scores, etc.,
which are standard in loan transactions, do not apply.
In
Amendment 2 the Company has revised the Offering Statement to:
● Provide
that investments will be in projects in high growth, high demand, suburban markets located
in the Southeast United States, including North Carolina, South Carolina, Georgia, Alabama,
and Tennessee.
● Further
explain the meaning and potential impact of the “tenant in common” nature of
the intended investment interests.
● Clarify
that the Company has been in discussions with several infrastructure developers that are
seeking investments in their various projects, which infrastructure developers are specifically
in the business of developing real estate lots for sale to national homebuilders.
United States Securities and Exchange Commission
February 21, 2025
Page 6
Dickinson Wright PLLC
Liquidity
and Capital Resources, Page 30
7. Please
revise your disclosure on page 31 to clarify what you mean by the statement that you “white label” sublicense the rights
to use the Worthy Fintech Platform from WWI.
Response:
In
Amendment 2 the Co