United States securities and exchange commission logo
April 15, 2024
Sally Outlaw
Chief Executive Officer
Worthy Wealth, Inc.
11175 Cicero Drive, Suite 100
Alpharetta, Georgia 30022
Re: Worthy Wealth, Inc.
Amendment No. 2 to
Offering Statement on Form 1-A
Filed March 26,
2024
File No. 024-12388
Dear Sally Outlaw:
We have reviewed your
amended offering statement and have the following comments.
Please respond to this letter by amending your offering statement
and providing the
requested information. If you do not believe a comment applies 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 this letter, we may have additional comments.
Unless we note otherwise,
any references to prior comments are to comments in our March 7, 2024
letter.
Amended Offering Statement on Form 1-A
General
1. We note your response
to comment 1 that you have included audited financial statements
of Worthy Property
Bonds 2 as of and for the period ended March 31, 2023, in your
amended filing, but
these financial statements do not appear to be included. Please
include audited
financial statements of Worthy Property Bonds 2 as of and for the fiscal
year ended March 31,
2023 in your next amendment.
2. It remains unclear from
your response to prior comment 3 how you concluded that these
offerings should not be
aggregated. Please provide an expanded response with a complete
legal analysis which
addresses each element of our prior comment as set forth
below. Please provide a
detailed analysis about whether the funds from this offering
should, for the
purposes of determining the offering limit under Rule 251(a)(2), be
aggregated with the
Regulation A offerings of the Target Companies. Address whether the
securities offered by
Worthy Wealth present a distinct investment opportunity for
Sally Outlaw
FirstName LastNameSally Outlaw
Worthy Wealth, Inc.
Comapany
April NameWorthy Wealth, Inc.
15, 2024
April 215, 2024 Page 2
Page
FirstName LastName
investors. In addition, please provide further detail on the proposed
interrelation and
interaction of the Target Companies and Worthy Wealth, including plans
to transfer the
funds they plan to raise to Worthy Wealth and any other affiliated
entities, including
Worthy Financial, Inc. and its subsidiaries. Also, please tell us
whether any proceeds of
this offering will be used to satisfy redemption requests made by
investors in your
affiliates Regulation A offerings. In your response, please address
the following
statements from the offering circular and affiliate s filing, and
whether your planned
activities or the activities of your affiliates have or are deviating
from what was
represented to the Staff in comment response number 3 of the Worthy
Property Bonds,
Inc s letter dated October 21, 2021:
On page 10 of your offering circular, you state [o]ur business
model, which will be
implemented through the Target Companies, will be centered
primarily around
purchasing or otherwise acquiring mortgages and other liens on
and interests in real
estate through our subsidiaries . The proceeds from the Target
Companies sale of
Worthy Bonds will provide the capital for these activities.
On page 30 of your offering circular, you state [w]e expect to
generate income
through the WPB Companies from (i) the interest rates we charge
on our real estate
loans and mortgages and other investments which we have acquired
and (ii) profits
we realize on the sale of the interests in real estate that we
acquire.
To the extent that Worthy Peer Capital, Inc. s asset
liquidity does not provide
sufficient funds for full bond redemption, it is the intention of
WFI, the parent
company of Worthy Peer Capital, Inc., to provide capital
contributions to Worthy
Peer Capital, Inc. from a pending equity financing. Worthy
Peer Capital, Inc. Form
1-SA filed September 1, 2023.
3. We note your revisions and response to prior comment 4; however, it is
unclear how you
concluded that offering bonus securities only to initial investors is
not in effect a delayed
offering of the shares which do not carry bonus securities. See Rule
251(d)(3)(i)(F) of
Regulation A. Please amend your disclosure to remove this incentive
from your filing or
revise your bonus share structure so that it does not constitute a
delayed offering, as
previously requested.
4. We note your revised disclosure in response to prior comment 4 that
the Selling
Shareholders will only participate in the offering after the Company
has sold 3,000,000
Shares and that they may sell up to 55,750 Shares pro rata at that
stage. Please explain
how that would work in practice given your plan of distribution. For
example, would an
investor who subscribes for shares after you cross the 3,000,000
threshold acquire those
shares from the selling shareholders rather than the company until you
reach the threshold
of 3,055,750 shares? If so, please explain why this would not be a
delayed offering of
shares by the issuer.
5. Please revise the plan of distribution disclosure on page 25 to
reflect that this is a min/max
offering as per your response to prior comment 5. Also, it remains
unclear how your
offering complies with Rule 10b-9 which requires that funds be
promptly returned to
Sally Outlaw
FirstName LastNameSally Outlaw
Worthy Wealth, Inc.
Comapany
April NameWorthy Wealth, Inc.
15, 2024
April 315, 2024 Page 3
Page
FirstName LastName
investors unless a specified number of units of the security are sold
at a specified price
within a specified time or Rule 15c2-4 of the Exchange Act, which
requires that funds be
deposited promptly with the escrow bank. Please revise.
6. Your response to prior comment 6 does not address how your changes to
the terms of the
securities offered, in this case the interest rates on the bonds,
complies with the
requirements of Rule 253(g) and Rule 252(f)(2)(ii) of Regulation A.
Please provide an
analysis which shows how you concluded that changes in the terms of
the securities are
not required to be reflected in a revised offering statement by post
qualification
amendment or supplement, as applicable. Please cite all authority on
which you rely. Also,
we note no changes in response to the latter part of the comment;
therefore, we reissue
that part. In addition, we note that more than 12 months has passed
since the qualification
of the Form 1-A for Worthy Property Bonds Inc. and Worthy Property
Bonds has not filed
a post qualification amendment to include the updated financial
statements as required by
Rule 252(f)(2). Please add risk factor disclosures regarding the
resultant risks and
potential liabilities to the company.
7. We note your response to prior comment 4 that the Offering Circular
was amended to
clarify that the bonus shares will count toward the maximum limit of
$75,000,000 under
Regulation A, Tier 2. However, Item 4 of Part I of the Form 1-A was
not revised to reflect
these shares. Please revise.
Offering Circular Summary, page 10
8. Please disclose the identity of the escrow agent in your offering
statement as requested in
prior comment 8. We may have further comment once your file your
escrow agreement
as an exhibit.
9. Please provide prominent disclosure of the substance of your response
to prior comment 9
including the proposed terms of the promissory note. We note your
disclosure on page F-
14 that the Company will sell common stock for the first $10,000,000
and acquire debt at
5.5% annual interest for the remaining $20,000,000 due.
Selected Pro Forma Financial Data, page 13
10. We note that you have excluded the $20M note payable from this summary
information,
and that the pro forma revenue and expense information provided does
not agree to the
pro forma financial statements provided elsewhere in this filing.
Please revise to ensure
this summary information is consistent with your pro forma financial
statements.
Risk Factors
The Company's Bylaws contain a forum selection..., page 23
11. Please expand this risk factor to address whether these provisions
apply to claims under
the Securities Exchange Act and/or the Securities Act. Also, clearly
describe any risks or
other impacts on investors, include, but not limited to, increased
costs to bring a claim and
Sally Outlaw
Worthy Wealth, Inc.
April 15, 2024
Page 4
that these provisions can discourage claims or limit investors
ability to bring a claim in a
judicial forum that they find favorable. Address whether there is any
question as to
whether a court would enforce the provision. Regarding the attorney
fee shifting
provision, please describe the level of recovery required by the
plaintiff to avoid
payment; explain who is subject to the provision (e.g., former and
current shareholders)
and who would be allowed to recover (e.g., company, directors,
officers, affiliates); and
state whether purchasers of Units in a secondary transaction would be
subject to
such provision.
Plan of Distribution and Selling Shareholders, page 25
12. We reissue prior comment 13. Please disclose for the selling
shareholders the nature of
any position, office, or other material relationship which the selling
security holder has
had within the past three years with the registrant or any of its
predecessors or affiliates.
See Item 507 of Regulation S-K.
Description of Business, page 30
13. We note your revisions in response to prior comment 14; however, it
appears you continue
to refer investors to other websites for information regarding Worthy
Property Bonds and
Worthy Property Bonds 2. We note your continued statements that - More
information on
these offerings can be found at the Worthy websites, through the
Worthy app, or by
searching the offerings at www.sec.gov/edgar/search. Please remove
these statements
throughout your offering statement and either incorporate by reference
information
regarding the businesses of these entities in accordance with General
Instruction III to
Form 1-A or include such information directly in your offering
statement.
14. We reissue prior comment 15, as it appears you are still attempting to
incorporate by
reference financial statements of Worthy Property Bonds 2 by reference
on pages 36
and 55. As previously noted, Worthy Property Bonds 2 has not filed a
Form 1-K for the
fiscal year ended March 31, 2023 therefore, you do not appear to have
met the
condition to incorporate by reference those financials set forth in
General Instruction
III(a)(2)(A). Also, to the extent you are eligible to incorporate by
reference financial
statements of Worthy Property Bonds, please revise
to properly incorporate by reference in accordance with General
Instruction III to Form 1-
A including as applicable Instructions III(a)(2)(B) and (C) and III(b).
Also, remove the
references to the financial statements as exhibits in the Exhibit Index
as these financials
were not filed as exhibits to the filings referenced in the index.
Lastly, please reconcile
references to the fiscal year ended February 28 to the March 31
disclosed in the Form 1-A
for Worthy
FirstName PropertyOutlaw
LastNameSally Bonds 2.
Comapany
15. NameWorthy
Please Wealth,inInc.
provide disclosure your business section of your business
plans as reflected in
your
April 15, response
2024 Page 4to prior comment 16.
FirstName LastName
Sally Outlaw
FirstName LastNameSally Outlaw
Worthy Wealth, Inc.
Comapany
April NameWorthy Wealth, Inc.
15, 2024
April 515, 2024 Page 5
Page
FirstName LastName
Liquidity and capital resources, page 42
16. Please revise your liquidity discussion to include the information
provided in your
response to prior comment 17.
Conflicts of Interest, page 45
17. Refer to prior comment 18. Please provide an expanded discussion in
this section to
disclose all specific conflicts of interest of the company, its
officers, and directors. We
note, for example, that the risk factor on page 17 references
additional roles at other WFI
subsidiaries.
Certain Relationships and Related Party Transactions, page 46
18. You do not appear to have described any of the transactions requested
in prior comment
18; therefore, we reissue the comment. It appears you have or will
enter into numerous
related party agreements with Worthy Financial, Inc. We also note that
the Acquisition
appears to be a related party transaction. Please revise your related
party disclosure to
address each of these transactions.
Pro Forma Financial Statements, page F-12
19. We note your response to comment 26 that your acquisition of Worthy
Property Bonds
and Worthy Property Bond 2 does not represent an acquisition of
entities under common
control. Please provide us with more detailed analysis of your
accounting for this
transaction. In your analysis, please address which entity will be the
accounting acquirer,
and if one of the legal acquisition targets will be the predecessor of
the combined entity.
To the extent you determine that you are not the accounting acquirer,
please revise your
pro forma financial statements as necessary.
Exhibits
20. Prior comment 27 also requested that you file the agreement with
Worthy Wealth
Management and other related party agreements as exhibits. Please file
those exhibits
accordingly.
Sally Outlaw
FirstName LastNameSally Outlaw
Worthy Wealth, Inc.
Comapany
April NameWorthy Wealth, Inc.
15, 2024
April 615, 2024 Page 6
Page
FirstName LastName
Please contact Eric McPhee at 202-551-3693 or Kristina Marrone at
202-551-3429 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Ruairi Regan at 202-551-3269 or Pam Howell at 202-551-3357 with any
other questions.
Sincerely,
Division of
Corporation Finance
Office of Real Estate
& Construction
cc: Frank Borger Gilligan, Esq.