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0001477932-20-000443.txt : 20200130 0001477932-20-000443.hdr.sgml : 20200130 20200130103834 ACCESSION NUMBER: 0001477932-20-000443 CONFORMED SUBMISSION TYPE: 1-A PUBLIC DOCUMENT COUNT: 17 FILED AS OF DATE: 20200130 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LB 1 LLC CENTRAL INDEX KEY: 0001779420 IRS NUMBER: 833769519 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 1-A SEC ACT: 1933 Act SEC FILE NUMBER: 024-11147 FILM NUMBER: 20560086 BUSINESS ADDRESS: STREET 1: 818 NATCHEZ VALLEY TRACE CITY: GRAYSON STATE: 2Q ZIP: 30017 BUSINESS PHONE: 410-627-1569 MAIL ADDRESS: STREET 1: 818 NATCHEZ VALLEY TRACE CITY: GRAYSON STATE: 2Q ZIP: 30017 1-A 1 primary_doc.xml 1-A LIVE 0001779420 XXXXXXXX LB 1 LLC DE 2018 0001779420 6500 83-3769519 0 0 818 Natchez Valley Trace Grayson GA 30017 410-627-1569 Wallace A. Glausi Other 100.00 0.00 7500.00 0.00 7600.00 7500.00 0.00 7500.00 100.00 7600.00 0.00 0.00 0.00 0.00 0.00 0.00 Spiegel Accountancy Corp Common 1000 None None 0 0 true true true Tier2 Audited Debt Y N N Y N N 50000000 0 0.00 0.00 0.00 50000000.00 50000000.00 0.00 Various 5000000.00 0.00 Spiegel Accountancy Corp 35000.00 Wallace A. Glausi 75000.00 0.00 Wallace A. Glausi 25000.00 44865000.00 true AK AL AR AZ CA CO CT DC DE FL GA HI IA ID IL IN KS KY LA MA MD ME MI MN MO MS MT NC ND NE NH NJ NM NV NY OH OK OR PA RI SC SD TN TX UT VA VT WA WI WV WY AK AL AR AZ CA CO CT DC DE FL GA HI IA ID IL IN KS KY LA MA MD ME MI MN MO MS MT NC ND NE NH NJ NM NV NY OH OK OR PA RI SC SD TN TX UT VA VT WA WI WV WY false LB 1 LLC Common Membership Interest 1000 0 $1,000.00 Founding Capital Contribution Securities Act Rule 4(a)(2) PART II AND III 2 lb1_1a.htm PART II

PART II – OFFERING CIRCULAR

PRELIMINARY OFFERING CIRCULAR: An offering statement pursuant to Regulation A relating to these securities has been filed with the Securities and Exchange Commission. Information contained in this Preliminary Offering Circular is subject to completion or amendment. These securities may not be sold nor may offers to buy be accepted before the offering statement filed with the Commission is qualified. This Preliminary Offering Circular shall not constitute an offer to sell or the solicitation of an offer to buy nor may there be any sales of these securities in any state in which such offer, solicitation or sale would be unlawful before registration or qualification under the laws of any such state. We may elect to satisfy our obligation to deliver a Final Offering Circular by sending you a notice within two business days after the completion of our sale to you that contains the URL where the Final Offering Circular or the offering statement in which such Final Offering Circular was filed may be obtained.

PRELIMINARY OFFERING CIRCULAR DATED: JANUARY 29, 2020, SUBJECT TO COMPLETION

LB 1 LLC

c/o Amed Hazel

818 Natchez Valley Trace

Grayson, GA 30017

Best Efforts Offering of

$50,000,0001

Note Investments (“Notes”)

Minimum Note Holder Amount: $500

This Offering Circular relates to the offer and sale on a best efforts basis of up to an aggregate of $50,000,000 in Notes issued by LB1 LLC (the “Company”). The offering will commence as soon as this Offering Circular has been qualified by the Securities and Exchange Commission (the “SEC”) and shall remain open to new and existing investors through subsequent closings until the Company has sold Securities with an aggregate purchase price of $50,000,000, unless earlier terminated in the Manager’s sole discretion. This offering is available to both accredited and non-accredited investors. Generally, if you are a non-accredited investor, your aggregate investment in any particular offering may not exceed more than 10% of the greater of your annual income or net worth. Before making any representation that your investment does not exceed applicable thresholds, we encourage you to review Rule 251(d)(2)(i)(c) of Regulation A. For general information on investing, we encourage you to refer to www.investor.gov.

The Company is a Delaware limited liability company. The manager of the Company is Legacy Builders Management, LLC (the “Manager”), a Delaware limited liability company. The Company will endeavor to produce attractive risk adjusted returns by investing in a range of real estate backed opportunities. Opportunities may include, but are not limited to loans to Affiliates, investments into Affiliates’ other funds, preferred equity investments and partnerships, the acquisition and disposition of non-performing notes as well as other real estate backed investment funds. Investments shall be made in target markets in which the Manager feels confident and comfortable in its ability to invest and underwrite effectively. The Company may also take any action incidental and conducive to the furtherance of the aforementioned purposes.

The Company is hereby offering to investors, pursuant to this Offering Circular, an opportunity to purchase Notes in the minimum amount of Five Hundred Dollars ($500) (the “Minimum Investment Amount”) and up to the maximum aggregate amount of Fifty Million Dollars ($50,000,000) (the “Maximum Offering Amount”) in any twelve (12) month period (the “Offering”). The Manager has the sole discretion to accept investments in a lesser amount or require a higher Minimum Investment Amount.

________

1The Company expects to raise a cumulative sum of approximately $200 million in Note sales prior to the end of the year 2022 with a maximum raise of no more than $50 million in any twelve-month period from the commencement of this Offering.

	Price to public		Underwriting discount and commissions (1)		Proceeds to Issuer			Proceeds to Other Persons
Offering Amount	$	50,000,000		N/A		$	49,900,000		$	100,000	(2)
TOTAL	$	50,000,000				$	49,900,000		$	100,000	(2)

_______________

(1)	The Company does not intend to use commissioned sales agents or underwriters. Please refer to the section entitled “PLAN OF DISTRIBUTION” of this Offering Circular for additional information.
(2)	Proceeds may be used to pay the fees associated with the company’s accountants, legal counsel and other service providers in connection with preparing and filing this Offering Circular. Such amounts are not contingent on the amount of securities sold.
(3)	There is no minimum amount for this offering.

Investing in the Securities involves a high degree of risk, including risks associated with income tax, use of proceeds and conflicts of interest. Before buying any Securities, you should carefully read the discussion of material risks of investing in the Securities in “RISK FACTORS” herein. This Offering Circular supersedes any prior offering memorandum with respect to the Securities.

THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION DOES NOT PASS UPON THE MERITS OF OR GIVE ITS APPROVAL TO ANY SECURITIES OFFERED OR THE TERMS OF THE OFFERING, NOR DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF ANY OFFERING CIRCULAR OR OTHER SOLICITATION MATERIALS. THESE SECURITIES ARE OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION WITH THE COMMISSION; HOWEVER, THE COMMISSION HAS NOT MADE AN INDEPENDENT DETERMINATION THAT THE SECURITIES OFFERED ARE EXEMPT FROM REGISTRATION.

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	Page
IMPORTANT INFORMATION REGARDING THIS OFFERING CIRCULAR		4
SUMMARY OF OFFERING		5
STATE LAW EXEMPTION AND PURCHASE RESTRICTIONS		8
STATEMENT REGARDING FORWARD-LOOKING INFORMATION		9
RISK FACTORS		10
USE OF PROCEEDS		21
DESCRIPTION OF BUSINESS		22
DESCRIPTION OF SECURITIES OFFERED		23
PLAN OF DISTRIBUTION		24
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		25
MANAGEMENT		27
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITYHOLDERS		31
INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS		31
CONFLICTS OF INTEREST		31
CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS		33
ERISA CONSIDERATIONS		34
HOW TO SUBSCRIBE		35
ADDITIONAL INFORMATION		35
GLOSSARY OF DEFINED TERMS		36
AUDITED FINANCIAL STATEMENTS		39
PART III – EXHIBITS		49
EXHIBIT 2.A: CERTIFICATE OF FORMATION, AS AMENDED
EXHIBIT 2.B: OPERATING AGREEMENT
EXHIBIT 4.1: FORM OF SUBSCRIPTION BOOKLET
OVERVIEW
FORM OF SUBSCRIPTION AGREEMENT
FORM OF SECURED PROMISSORY NOTE
FORM OF INTERCREDITOR SECURITY AGREEMENT
EXHIBIT 11.1: CONSENT OF WALLACE A. GLAUSI, ATTORNEY AT LAW
(INCLUDED IN EXHIBIT 12)
EXHIBIT 11.2: CONSENT OF SPIEGEL ACCOUNTANCY CORP., CPAS
EXHIBIT 12: OPINION OF COUNSEL
SIGNATURES		50

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IMPORTANT INFORMATION REGARDING THIS OFFERING CIRCULAR

This offering circular has been prepared solely for the benefit of authorized persons interested in the offering. This memorandum does not constitute an offer or solicitation to any person except those particular persons who satisfy the suitability standards described herein.

This offering circular is part of an offering statement that we filed with the SEC, using a continuous offering process. Periodically, as we make material investments, or have other material developments, we will provide an offering circular supplement that may add, update or change information contained in this offering circular. Any statement that we make in this offering circular will be modified or superseded by any inconsistent statement made by us in a subsequent offering circular supplement. The offering statement we filed with the SEC includes exhibits that provide more detailed descriptions of the matters discussed in this offering circular. You should read this offering circular and the related exhibits filed with the SEC and any offering circular supplement, together with additional information contained in our annual reports, semi-annual reports and other reports and information statements that we will file periodically with the SEC. See the section entitled “Additional Information” below for more details.

There is no public market for the Notes and none is expected to develop in the future. Sums invested are also subject to substantial restrictions upon withdrawal and transfer, and the membership interests offered hereby should be purchased only by investors who have no need for liquidity in their investment.

Non-U.S. investors have certain restrictions on resale and hedging under regulation S of the act. Distributions under this offering might result in a tax liability for the non-U.S. investors. Each prospective investor is urged to consult his, her or its own tax advisor or pension consultant to determine his, her or its tax liability.

No person has been authorized in connection with this offering to give any information or to make any representations other than those contained in this memorandum, and any such information or representations should not be relied upon. Any prospective purchaser of Notes who receives any such information or representations should contact the manager immediately to determine the accuracy of such information. Neither the delivery of this memorandum nor any sales hereunder shall, under any circumstances, create an implication that there has been no change in the affairs of the company or in the information set forth herein since the date hereof.

Prospective investors should not regard the contents of this memorandum or any other communication from the company as a substitute for careful and independent tax and financial planning. Each prospective investor is encouraged to consult with his, her, or its own independent legal counsel, accountant and other professionals with respect to the legal and tax aspects of this investment and with specific reference to his, her, or its own tax situation, prior to subscribing for membership interests.

The purchase of Notes by an individual retirement account (“IRA”), Keogh plan or other qualified retirement plan involves special tax risks and other considerations that should be carefully considered. Income earned by qualified plans as a result of an investment in the company may be subject to federal income taxes, even though such plans are otherwise tax exempt.

The Notes are offered subject to prior sale, acceptance of an offer to purchase, and to withdrawal or cancellation of the offering without notice. The manager reserves the right to reject any investment in whole or in part.

The manager will make available to any prospective investor and his, her, or its advisors the opportunity to ask questions and receive answers concerning the terms and conditions of the offering, the company or any other relevant matters, and to obtain any additional information to the extent the manager possesses such information.

The information contained in this memorandum has been supplied by the manager. This memorandum contains summaries of documents not contained in this memorandum, but all such summaries are qualified in their entirety by references to the actual documents. Copies of documents referred to in this memorandum, but not included as an exhibit, will be made available to qualified prospective investors upon request.

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SUMMARY OF OFFERING

The following information is only a brief summary of, and is qualified in its entirety by, the detailed information appearing elsewhere in this Offering Circular. This Offering Circular, together with the exhibits attached including, but not limited to, the Limited Liability Company Operating Agreement of the Company (the “Operating Agreement”), and Subscription Agreement, should be read in their entirety before any investment decision is made. All capitalized terms used herein but not defined herein shall have the meaning ascribed to them in the Operating Agreement. If there is a conflict between the terms contained in this Offering Circular and the Operating Agreement, then this Offering Circular shall prevail.

The Company

LB 1 LLC (the “Company”) is a Delaware limited liability company with a principal office located at 818 Natchez Valley Trace, Grayson, Georgia, 30017. The Company purchases distressed debt and may make loans, mostly in the east coast of the United States.

The Manager

Legacy Builders Management LLC is a Delaware limited liability company located at 818 Natchez Valley Trace, Grayson, Georgia. The Manager will manage the Company. The Manager and its Affiliates will receive Management and other Fees.

Investment Objective

The Company is focused on purchasing and selling performing and non-performing mortgage notes secured by first deeds of trust, mortgages or land contracts, as well as originating and selling real estate backed mortgage loans. The Company intends to conduct operations throughout the United States.

Offering Size

The Company is seeking to raise a maximum aggregate amount of approximately $200 million in Note sales by the end of 2022 with a maximum raise of no more than $50 million in any twelve-month period from the date of Offering. However; the Manager, in Manager’s discretion may reduce or increase the minimum or maximum aggregate amounts where the Manager deems appropriate.

Manager Capital Commitment

The Manager may make, directly or indirectly through its Affiliates or members, a Capital Commitment to the Company, but any such capital commitment shall not exceed five percent (5%) of the aggregate amount of Notes issued. The investment would be made as a member of the Company, and will be subordinate to the Notes issued to the Note Holders of the Company. The Manager is NOT obligated to make any Capital Commitment.

Term of the Company

The Company is an open-ended “evergreen” Company with no set end date. The Manager expects to originate and acquire Company Assets on a frequent and ongoing basis and will continue to do so indefinitely until the Maximum Offering has been reached, or until the Manager believes market conditions do not justify doing so. The Manager intends generally to utilize the return of capital from the disposition of Company Assets to originate and acquire new Company Assets, however; the Manager expects to manage the Company’s investments and capital structure in such a manner as to attempt to provide a reasonable level of capability for the Company to accommodate redemption requests given the relatively illiquid nature of real estate based investments in general.

If the Manager deems it appropriate based on evolving market conditions and dynamics, the Manager shall cease to originate and acquire new Company Assets and shall distribute any return of capital from the disposition of Company Assets in accordance with the Liquidation Waterfall until all Company Assets have been liquidated. The Manager may choose to redeem Notes and liquidate Company Assets at any time during the life of the Company.

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Note Holders/Notes

Notes may be purchased, with the consent of the Manager, at any time at the interest rate and terms defined for that period by the Manager. The Company may prepay the outstanding principal and interest to any Note Holder at any time without penalty.

Note Holders will be lenders to the Company on a Pari Passu basis with the other Note Holders and have a blanket secured interest in the Company Assets. This secured interest will be in a senior position except in circumstances where individual Company Assets have been or are being pledged by the Company to any senior lender (“Credit Facility or “Facility”).

Target Returns

Note Rates are expected to be in the range from 5% to 10%, depending on investment size and Note duration.

Minimum Investment

Investors shall have the opportunity to purchase notes (“Notes”) from the Company in the minimum investment amount of Five Hundred Dollars ($500), however; the Manager may, in Manager’s discretion, accept a lesser amount.

Quarterly Distributions

Note holders shall have the option (prior to any liquidation of the Company) to receive Returns actually distributed either (a) paid to them via ACH, or (b) have the earned interest reinvested into the Note Holder’s capital account on a quarterly basis.

Redemption

Notes that are not otherwise redeemed at maturity may be redeemed by the Manager in its sole discretion. The granting or not of the early Repayment request shall be subject to the sole discretion of the Manager and may be subject to an Early Repayment Fee.

Investor Suitability

This offering is limited to certain individuals, Keogh plans, IRAs and other qualified Investors who meet certain minimum standards of income and/or net worth. Each purchaser must execute a Subscription Agreement and Investor Questionnaire making certain representations and warranties to the Company, including such purchaser’s qualifications as a “Qualified Purchaser.” (See “Investor Suitability herein”).

Financial Reporting

The Company expects to use the accrual basis of accounting and shall prepare its financial statements in accordance with Generally Accepted Accounting Principles (“GAAP”). The Company will produce a minimum of quarterly financial reports to investors.

Books and Records

Note Holders or their authorized representatives shall at all reasonable times and for any purpose reasonably related to the business and affairs of the Company and their interest therein have access to the Company’s books and records.

Affiliates of the Manager

The Affiliates of the Manager include, but are not limited to Premier Fund Management Group, LLC, Legacy Builders LLC, Legacy Builders Management LLC, Amed Hazel and Rochelle Hazel are either directly or indirectly controlling principals of the Company.

Management Fee

The Manager will charge an annual Management Fee of 3% of the total Assets Under Management (“AUM”). The Management Fee shall be calculated, prorated, and paid at the end of each calendar month.

Company Administration

The Company intends initially to manage administration in house, but may retain the services of an outside third-party administrator to provide administration and investor relations functions. The cost thereof shall be a Company Expense, at a cost not to exceed .35% of the Company’s AUM. Loan servicing shall be administered internally by the Manager, or an Affiliate of the Manager at usual and customary market rates.

Company Income

The Company will receive as Company income, 100% of all interest collected on loans.

Use of Leverage/Credit Facilities

The Company and/or any SPV(s) of the Company may choose to borrow money from time to time from one or more senior lenders (“Credit Facilities” or “Facilities”) and may pledge one or more Company Assets as collateral for any such borrowing.

Any Facility shall be nonrecourse to the Members. The Manager (and/or its principals) and the Company may agree to provide its Guarantees for a given Facility but are not required to do so. Any Facility will likely have covenants that affect the Company, any SPVs, and the Manager.

Company Expenses

Company Expenses shall include, but not necessarily be limited to the following: Company organizational costs, legal and accounting related costs for tax return preparation, financial statement preparation and/or audits, legal fees and costs, filing, licensing or other governmental fees, other third party audits, loan servicing fees, insurance costs (including without limitation GL, D&O, E&O and Fidelity), Company administration costs, fees associated with any Credit Facilities; and any other expenses associated with operation of the Company or management of its Assets. Expenses may include expenses for services provided by Affiliates and costs and expenses may be apportioned and/or reimbursed to or from Affiliates.

Waterfall	The following outlines the priority ( Waterfall ) for the distribution of cash from the Company:

		·	Interest and principal payments on any Facility;
		·	Note Holder interest, payable monthly;
		·	Company Expenses;
		·	Manager annualized 3% Management Fee (paid monthly) on total AUM as of the last calendar day of each month, and any other fees due the Manager;
		·	Repayment of maturing Notes, if any; and
		·	Distribution of remaining cash to the Manager.

	Upon dissolution of the Company, except a dissolution caused by the dissolution, bankruptcy, or withdrawal of the Manager where a substitute Manager is retained within 90 days of such dissolution or bankruptcy or one year in the case of withdrawal, the Company will be liquidated and the proceeds of liquidation will be applied as follows:

		·	Interest and outstanding principal balance of any Credit Facility;
		·	Note Holder principal, followed by accrued Note Holder interest, all on a Pari Passu basis; and
		·	Liquidation and/or other Company Expenses;
		·	Manager annualized 3% Management Fee (paid monthly) on total AUM as of the last day of each calendar month; and
		·	Distribution of remaining assets to the Manager.

STATE LAW EXEMPTION AND PURCHASE RESTRICTIONS

Securities will be sold only to “qualified purchasers” (as defined in Regulation A under the Securities Act). As a Tier 2 offering pursuant to Regulation A under the Securities Act, this offering will be exempt from state law “Blue Sky” review, subject to meeting certain state filing requirements and complying with certain anti-fraud provisions, to the extent that investments offered hereby are offered and sold only to “qualified purchasers” or at a time when our Securities are listed on a national securities exchange. “Qualified purchasers” include: (i) “accredited investors” under Rule 501(a) of Regulation D and (ii) all other investors so long as their investment in does not represent more than 10% of the greater of their annual income or net worth (for natural persons), or 10% of the greater of annual revenue or net assets at fiscal year-end (for non-natural persons). Accordingly, we reserve the right to reject any investor’s subscription in whole or in part for any reason, including if we determine in our sole and absolute discretion that such investor is not a “qualified purchaser” for purposes of Regulation A.

To determine whether a potential investor is an “accredited investor “ for purposes of satisfying one of the tests in the “qualified purchaser” definition, the investor must be a natural person who has:

	1.	an individual net worth, or joint net worth with the person’s spouse, that exceeds $1.0 million at the time of the purchase, excluding the value of the primary residence of such person; or

	2.	earned income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year. If the investor is not a natural person, different standards apply. See Rule 501 of Regulation D for more details.

For purposes of determining whether a potential investor is a “qualified purchaser,” annual income and net worth should be calculated as provided in the “accredited investor” definition under Rule 501 of Regulation D. In particular, net worth in all cases should be calculated excluding the value of an investor’s home, home furnishings and automobiles.

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STATEMENT REGARDING FORWARD-LOOKING INFORMATION

This Offering Circular contains certain forward-looking statements that are subject to various risks and uncertainties. Forward-looking statements are generally identifiable by use of forward-looking terminology such as “may,” “will,” “should,” “potential,” “intend,” “expect,” “outlook,” “seek,” “anticipate,” “estimate,” “approximately,” “believe,” “could,” “project,” “predict,” or other similar words or expressions. Forward-looking statements are based on certain assumptions, discuss future expectations, describe future plans and strategies, contain financial and operating projections or state other forward-looking information. Our ability to predict results or the actual effect of future events, actions, plans or strategies is inherently uncertain. Although we believe that the expectations reflected in our forward-looking statements are based on reasonable assumptions, our actual results and performance could differ materially from those set forth or anticipated in our forward-looking statements. Factors that could have a material adverse effect on our forward-looking statements and upon our business, results of operations, financial condition, funds derived from operations, cash available for dividends, cash flows, liquidity and prospects include, but are not limited to, the factors referenced in this Offering Circular, including those set forth below.

When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements in this Offering Circular. Readers are cautioned not to place undue reliance on any of these forward-looking statements, which reflect our views as of the date of this Offering Circular. The matters summarized below and elsewhere in this Offering Circular could cause our actual results and performance to differ materially from those set forth or anticipated in forward-looking statements. Accordingly, we cannot guarantee future results or performance. Furthermore, except as required by law, we are under no duty to, and we do not intend to, update any of our forward-looking statements after the date of this Offering Circular, whether as a result of new information, future events or otherwise.

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RISK FACTORS

There are significant risks associated with investing in the Company’s Securities and such Securities are highly speculative and should not be purchased by anyone who cannot afford a total loss of his or her entire investment. Before you purchase Securities in the Company, please review below a list of risks that the Company specifically wants to bring to your attention. There are undoubtedly many more risks that could interfere with the business of the Company and the summary below is not intended to be full and complete. You should carefully consider the following risk factors together with all of the other information included in this offering circular, including the matters addressed under “Forward-Looking Statements,” in evaluating an investment in the Company’s Securities. If any of the following risks were to occur, the Company’s business, financial condition, results of operations, cash flows and ability to make cash distributions could be materially adversely affected.

Risks Relating to an Investment in the Company – General

We are conducting this offering on a “best efforts” basis.

This Offering is being conducted on a “best efforts” basis. No guarantee can be given that all or any of the securities will be sold, or that sufficient proceeds will be available to conduct successful operations. Receipt of a relatively small amount of capital contributions may reduce the ability of the Company to spread investment risks through diversification of its loan portfolio. If we are unable to raise substantial funds, we will make fewer investments resulting in less diversification in terms of the type, number and size of investments that we make. In that case, the likelihood that any single asset’s performance would adversely affect our profitability will increase. Your investment in our shares will be subject to greater risk to the extent that we lack a diversified portfolio of investments. Further, we will have certain fixed operating expenses, including certain expenses as a public reporting company, regardless of whether we are able to raise substantial funds in this offering. Our inability to raise substantial funds would increase our fixed operating expenses as a percentage of gross income, reducing our net income and limiting our ability to make distributions.

An investment in Securities is speculative and there is no guarantee of profitability.

The Manager anticipates that revenues will be sufficient to create net profits for the Company. However, there can be no assurance that revenues will be sufficient for such purpose. Although the Manager believes in each investment’s economic viability, there can be no guarantee that the investments will be profitable to the extent anticipated. Poor performance by a few of the investments could significantly affect the total returns to Investors.

There is no guaranteed return of investor’s investment.

The investments offered hereby are speculative and involve a high degree of risk. There can be no guarantee that an Investor will realize a substantial return on the investment, or any return at all, or that the Investor will not lose the entire investment. For this reason, each prospective Investor should read this Offering Circular and all documents in the Subscription Booklet carefully and should consult with his/her or its own legal counsel, accountant(s), or business advisor(s) prior to making any investment decision.

There is no assurance that we can obtain suitable financing arrangements.

The Company and/or any SPV(s) of the Company may choose from time to time to borrow money from one or more lenders (a “Credit Facility” or “Facility”) and utilize one or more Company Assets as collateral for any such borrowing. The Company further may issue debt securities in the future. The Operating Agreement grants the Manager significant latitude and discretion in its ability to use Credit Facilities in the operation of the Company. However, the Operating Agreement also places specific limitations on the use of Credit Facilities by the Manager, namely:

The Company will not utilize a Facility in an amount in excess of 80% of the Stated Value of any Company Asset at the time of procurement of that debt.

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Any Facility shall be nonrecourse to the Investors. The Manager and/or the Company may agree to provide its Guaranty for a given Facility but is not required to do so. Any Facility will likely have covenants that affect the Company, any SPV(s), and the Manager.

Although the purpose of leverage is to provide flexibility and additional liquidity options to the Company, reduce required Member equity, as well as potentially increase the overall Member return, its use is inherently risky and can instead increase the risk of loss.

Risks Related to Compliance and Regulation

We are subject to significant government regulation, which may affect our ability to operate.

The industry in which the Company will become an active participant may be highly regulated at both state and federal levels, both with respect to its activities as an issuer of securities and its investing activities. Some of these regulations are discussed in greater detail below under “U.S. Securities Laws and Foreign Investors,” “Compliance with Anti-Money Laundering Requirements,” “Usury Risk,” “Risk that the Company May Become Subject to the Provisions of the Investment Company Act of 1940,” “Risk that the Manager May Become Subject to the Provisions of the Investment Advisers Act of 1940,” “The Company’s Reliance on Exclusions from the Investment Company Act May Impact Certain Investment Decisions,” and “Recent and Anticipated Legislative and Regulatory Activity.” The Company or the Company Assets may be subject to governmental regulations in addition to those discussed in this Offering Circular, and new regulations or regulatory agencies may develop that affect the Company’s operations and ability to generate revenue. The Company will attempt to comply with all applicable regulations affecting the markets in which it operates. However, such regulation may become overly burdensome and therefore may have a negative effect on the Company’s ability to perform as illustrated.

We are offering securities pursuant to recent amendments to Regulation A promulgated pursuant to the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, and we cannot be certain if the reduced disclosure requirements applicable to Tier 2 issuers will make our securities less attractive to investors as compared to a traditional initial public offering.

As a Tier 2 issuer, we will be subject to scaled disclosure and reporting requirements as compared to a traditional initial public offering, which may make an investment in our Securities less attractive to investors who are accustomed to enhanced disclosure and more frequent financial reporting. In addition, given the relative lack of regulatory precedence regarding the recent amendments to Regulation A, there is a significant amount of regulatory uncertainty in regards to how the SEC or the individual state securities regulators will regulate both the offer and sale of our securities, as well as any ongoing compliance that we may be subject to. If our scaled disclosure and reporting requirements, or regulatory uncertainty regarding Regulation A, reduces the attractiveness of our Securities, we may be unable to raise the necessary funds necessary to commence operations, or acquire property, which could severely affect the value of our Securities.

We may become subject to the Investment Company Act, which could interfere with our intended operations.

The Company intends to operate so as to not be regulated as an investment company under the Investment Company Act based upon certain exemptions thereunder. Specifically, the Company expects to be exempted from registration under the Investment Company Act because the Company will be primarily engaged in purchasing or acquiring mortgages and other liens on, and interests in, real estate and the purchase and/or sale of loans, assets and distressed assets as determined under exemptions from the Investment Company Act and rules issued thereunder. Accordingly, the Company does not expect to be subject to the restrictive provisions of the Investment Company Act. However, if the Company fails to qualify for exemption from registration as an investment company, its ability to conduct its business as described herein will be compromised. Any such failure to qualify for such exemption would likely have a material adverse effect on the Company.

Our reliance on certain exclusions from the Investment Company Act may impact certain investment decisions.

The Investment Company Act excludes a real estate program from the definition of an “investment company” if it is “primarily engaged” in, the origination or acquisition of mortgages and other liens on, and/or interests in, real estate. The Manager has not sought a no-action letter from the SEC to confirm that the Company is eligible for this exemption. However, the Manager will rely on guidance issued by the SEC stating that so long as qualifying percentages of the Company’s assets consist of (1) mortgages and other liens on or interests in real estate; and (2) the remaining percentage of the Company’s assets consist primarily of real estate related assets, the Company will remain exempt from the Investment Company Act registration requirements. These formulaic requirements may negatively impact the Company’s investment flexibility and the ability of the Manager to invest in other funds, limited partnerships, limited liability companies, and other similar vehicles.

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This offering is being made subject to Regulation A, which has recently undergone significant changes.

The Company is conducting this offering pursuant to Regulation A, which was amended effective June 19, 2015. Because of these recent amendments, there is still significant uncertainty with respect to the parameters of an offering pursuant to this regulation. In addition, these regulations may change as regulators develop practices with respect to such amendments, which changes may be detrimental to the Company or its ability to raise funds. If the Company were to inadvertently violate the parameters of this type of offering, it may be subject to enforcement action or civil liabilities under securities laws. Such violation may also affect the Company’s ability to raise capital in the future.

Compliance with anti-money laundering requirements may require the Company to disclose investor information to regulatory authorities.

The Company may be subject to certain provisions of the Uniting and Strengthening America By Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (“the Patriot Act”), including, but not limited to, Title III thereof, the International Money Laundering and Abatement and Anti-Terrorist Financing Act of 2001 (“Title III”), certain regulatory and legal requirements imposed or enforced by the Office of Foreign Assets Control (“OFAC”) and other similar laws of the United States. In response to increased regulatory concerns with respect to the sources of the Company’s capital used in investments and other activities, the Manager may request that Investors provide additional documentation verifying, among other things, such Investor’s identity and source of funds to be used to purchase Units. The Manager may decline to accept a subscription if this information is not provided or on the basis of the information that is provided. Requests for documentation and additional information may be made at any time during which a Member holds Units. The Manager may be required to report this information, or report the failure to comply with such requests for information, to appropriate governmental authorities, in certain circumstances without informing a Member that such information has been reported. The Manager will take such steps as it determines are necessary to comply with applicable law, regulations, orders, directives or special measures, including, but not limited to, those imposed or enforced by OFAC, the Patriot Act and Title III. Governmental authorities are continuing to consider appropriate measures to implement anti-money laundering laws and at this point it is unclear what steps the Manager may be required to take; however, these steps may include prohibiting a Member from making further contributions of capital to the Company, from lending further monies to the Company, depositing distributions or interest to which such Member would otherwise be entitled into an escrow account or causing the withdrawal of such Investor from the Company.

Risks Related to Conflicts of Interest

There are conflicts of interest between us, our Manager and its Affiliates.

The Manager, its Affiliates, and its principals are subject to various conflicts of interest in managing the Company. The Company will pay the Manager and/or Affiliates substantial fees, some of which are not determined by arm’s length negotiations. The Company will pay a monthly Management Fee to the Manager of 3% (annualized) of the total collective assets under management, (“AUM”) as determined on the last day of each month. Given that the Management Fee and other fees are calculated off the AUM, a potential incentive exists for the Manager to inflate the AUM in order to increase the Manager’s fees.

The Manager and/or Affiliates may charge reasonable, market-based loan origination, extension, processing, underwriting, administration, loan servicing, legal, accounting and inspection fees in connection with services provided in connection with the business of the Company. The Manager and/or Affiliates may receive fees in connection with the origination of mortgage loans. The Manager and/or Affiliates may receive compensation in the form of commissions paid through the closing of the purchase or sale of a Company borrower, or Company Asset. The Manager and/or Affiliates may receive compensation from the construction and project management services it provides to Company Borrowers or the Company directly for properties it acquires through foreclosure. The Manager and/or Affiliates may receive compensation for title and escrow related services it provides to borrowers and/or the Company directly. All fees and compensation paid to Affiliates shall be market-based and commercially reasonable at all times. In these regards, the interests of the Manager and its Affiliates are in conflict with the Members.

The Company does not at this time have its own officers, directors, or employees. The Manager supervises and controls the business affairs of the Company, locates investment opportunities for the Company, raises capital for the Company, administers the financial affairs of the Company, and renders certain other services. The Manager, however, shall devote only such time to the Company’s affairs as may be reasonably necessary to conduct its business. The Manager, and/or its Affiliates and principals, may be a manager of other companies (some of which may directly compete with the business of the Company) and have other business interests of significance. These conflicts are described in greater detail under “Conflicts of Interest” below.

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The Company will make Mortgage Loans and Preferred Equity Investments to Affiliates of the Manager.

The Company may make Mortgage Loans and preferred equity investments to one or more of the Manager’s Affiliates, and allocating the Manager’s management time, services, and functions between such Affiliate and the Company presents an inherent conflict of interest. The Manager, however, believes that it will have sufficient staff, consultants, independent contractors, and business managers to perform all necessary responsibilities to the Company, while servicing the needs of any Affiliate who is a Borrower from the Company.

It is the Company’s policy that loans and investments made to an Affiliate will be underwritten to the same standards as a loans and investments made to a non-affiliated Borrower; however, there is subjectivity in determining whether any Borrower has met the underwriting criteria.

Additionally, while the Company and the Manager expect to take the same approach to all Borrowers, it is uncertain that the Company and Manager would exercise the same level of assertiveness and the same collection practices with Affiliated Borrowers than with non-Affiliated Borrowers.

An increase in the number of Notes issued may reduce the amount the Company has available to make distributions to investors.

The Company is open-ended, which means it does not have restrictions on the amount of Notes the Company will issue. If demand is high enough, the Company may continue to issue Notes no matter how many Investors there are. While this Offering is for up to a maximum amount of $50,000,000, this amount may be increased at any time in the sole discretion of the Manager. Additional Notes may be sold from time to time to the Manager, its Affiliates, new Investors, or current Investors that choose to exercise their Reinvestment Option. As additional Notes are issued, the increase in Notes may reduce the amount the Company has available to make distributions to any one Investor, as distributions will need to be distributed amongst more Notes. The Company intends to only accept additional capital to the extent it will result in additional yields sufficient to provide for the associated distributions, but the Company cannot assure Investors that this will happen. In addition, subsequent sales may be on terms that are more or less favorable to the Note Holders than under previous issuances of Notes. Since all Notes are Pari Passu however, Investors that paid different amounts may be entitled to similar returns.

Risks Related to Mortgage Loans and Real Estate Asset Based Model

Real estate investing is inherently risky.

The Company will be subject to the risks that generally relate to investing in real estate. Real estate historically has experienced significant fluctuations and cycles in performance that may result in reductions in the value of the Company’s real estate related investments. The performance and value of its investments once originated or acquired depends upon many factors beyond the Company’s control. The ultimate performance and value of the Company’s investments are subject to the varying degrees of risk generally incident to the ownership and operation of the properties in which the Company invests and which collateralize or support its investments.

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The ultimate performance and value of the Company’s investments will depend upon, in large part, the Borrower’s or the Company’s ability to operate any given property so that it produces sufficient cash flows necessary to pay the interest and principal due to the Company on its Mortgage Loans and investments and/or to recover the Company’s equity investment in the case of REO. Revenues and cash flows may be adversely affected by: changes in national or local economic conditions; changes in local real estate market conditions due to changes in national or local economic conditions or changes in local property market characteristics, including, but not limited to, changes in the supply of and demand for competing properties within a particular local property market; competition from other properties offering the same or similar services; changes in interest rates and the credit markets which may affect the ability to finance, and the value of, investments; the ongoing need for capital improvements, particularly in older building structures; changes in real estate tax rates and other operating expenses; changes in governmental rules and fiscal policies, civil unrest, acts of God, including earthquakes, hurricanes, and other natural disasters, acts of war, or terrorism, which may decrease the availability of or increase the cost of insurance or result in uninsured losses; changes in governmental rules and fiscal policies which may result in adverse tax consequences, unforeseen increases in operating expenses generally or increases in the cost of borrowing; decreases in consumer confidence; government taking investments by eminent domain; various uninsured or uninsurable risks; the bankruptcy or liquidation of major tenants; adverse changes in zoning laws; the impact of present or future environmental legislation and compliance with environmental laws; the impact of lawsuits which could cause the Company to incur significant legal expenses and divert management’s following:

Other owner(s) of a Participation in such an Asset may have different ideas, motivations, or desired outcomes than the Company which may give rise to disputes in how to manage such as Asset. There may be additional legal costs for Participations in event of default due to having multiple participants in the ownership of the Asset.

The Company’s real estate related investments will be subject to the varying degrees of risk and significant fluctuations in their value. The value of the Company’s investments depends upon the real property owner’s ability to repair or rehabilitate the property as projected, operate the real property in a manner sufficient to meet its commitments, including debt service, and/or maintain or increase revenues in excess of operating expenses or, in the case of real property leased to a single lessee, the ability of the lessee to make rental payments. Revenues may be adversely affected by changes in national or international economic conditions; changes in local market conditions due to changes in general or local economic conditions and neighborhood characteristics; the financial condition of tenants, buyers, and sellers of properties; competition from other properties offering the same or similar services; changes in interest rates and in the availability, cost, and terms of mortgages; the impact of present or future environmental legislation and compliance with environmental laws; the ongoing need for capital improvements (particularly in older structures); changes in real estate tax rates and other operating expenses; adverse changes in governmental rules and fiscal policies; civil unrest; acts of God, including earthquakes, hurricanes, and other natural disasters; acts of war; acts of terrorism (any of which may result in uninsured losses); adverse changes in zoning laws; and other factors that are beyond the control of the real property owners and the Company. In the event that any of the properties underlying the Company’s investments experience any of the foregoing events or occurrences, the ability of the real property owner to pay the interest and principal on any debt securities would be negatively impacted.

The Company may invest in subordinated (Unsecured or Second Lien Position) Loans which are inherently risky.

Some of the Company’s investments may consist of subordinated Mortgage Loans. Such investments will be subordinated to the senior obligations of the property or issuer, either contractually, inherently due to the nature of equity securities, or both. In the event of default on the senior debt, the Company as a holder of a subordinated loan may be at the risk of realizing a loss of up to all of its investment before the senior debt will suffer any loss. Consequently, greater credit risks are usually attached to these subordinated investments than to a Borrower’s first mortgage or other senior obligations. In addition, these securities may not be protected by financial or other covenants and may have limited liquidity. Adverse changes in the Borrower’s financial condition and/or in general economic conditions may impair the ability of the Borrower to make payments on the subordinated securities and cause them to default more quickly with respect to such securities than with respect to the Borrower’s senior obligations. In most cases, the Company’s management of its investments and its remedies with respect thereto, including the ability to foreclose on any Collateral securing investments, will be subject to the rights of the more senior lenders and contractual Inter-creditor provisions.

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The Company’s investments are illiquid in nature.

Although some of the Company’s investments may generate current income, the illiquidity commonly associated with real estate investments may limit the Company’s ability to vary its portfolio of investments in response to changes in economic and other conditions. Illiquidity may result from the absence of an established market for investments as well as the legal or contractual restrictions on their resale. In addition, illiquidity may result from the decline in value of a property comprising one of the Company’s investments. There can be no assurances that the fair market value of any property held by the Company will not decrease in the future, leaving the Company’s investment relatively illiquid.

Furthermore, although the Manager expects that the Company’s investments will be disposed of prior to dissolution, the Company may have to sell, distribute, or otherwise dispose of its investments at a disadvantageous time as a result of dissolution.

The Company may become subject to penalties for usury.

State and federal usury laws limit the interest that lenders are entitled to receive on loans. Statutes differ in their provision relating to usury and as to the consequences of a usurious loan. One group of statutes requires the lender to forfeit the interest above the applicable limit or imposes a specified penalty. Under this statutory scheme, a Borrower may have the recorded mortgage or deed of trust canceled upon paying its debt with lawful interest, or the lender may foreclose, but only for the debt plus lawful interest. Under a second, more severe type of statute, a violation of the usury law results in the invalidation of the transaction, permitting the Borrower to have the recorded mortgage or deed of trust canceled without any payment and prohibiting the lender from foreclosing.

Transactions originated or acquired by the Company may be subject to state usury laws imposing maximum interest charges and possible penalties for violation, including restitution of excess interest and unenforceability of debt. The Company intends to originate or acquire transactions which charge various rates of interest, and uncertainties in determining the legality of interest rates and other borrowing charges under some state statutes may result in inadvertent violations. Some state laws make it illegal to charge or collect interest at a rate exceeding a certain percentage rate per annum, unless the lender belongs to a class of regulated lenders such as banks, mortgage companies, or real estate brokers. It is expected that all loans made and acquired by the Company will attempt to comply with state usury restrictions, if any, and will utilize usury savings clauses; however, usury laws in the states where the Company’s investments are located may limit the ability of the Company to charge interest and may create risk to the Company and the Company’s principal.

The Company relies on digital operations.

The Company is nearly paperless, with all documents secured and managed digitally. The Company utilizes industry proven software that allows it to track and manage its investments with confidence and accuracy. However, there are risks associated with technology. Defects in software products and errors or delays in processing of electronic transactions could result in:

	·	transaction or processing errors;
	·	diversion of technical and other resources from other efforts;
	·	loss of credibility with current or potential customers;
	·	harm to reputation; or
	·	exposure to liability claims.

In addition, the Company relies on technologies supplied by third parties that may also contain undetected errors, viruses, or defects that could have a material adverse effect on the Company’s financial condition and results of operations.

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Other General Risks of an Investment in the Company

The Company may be unable to find a sufficient number of attractive investment opportunities to meet its investment objectives.

The Company has not identified the particular investments it will make. Accordingly, an Investor must rely upon the ability of the Manager in making investments consistent with the Company’s investment objectives and policies. Although the principals have been successful in locating investments in the past, the Company may be unable to find a sufficient number of attractive opportunities to invest its committed capital or meet its investment objectives.

Furthermore, there may be a period of time before the Manager fully invests the proceeds of this Offering and begins to make distributions or payments. The Company’s Manager will attempt to invest the proceeds as quickly as prudence and circumstances permit; however, no assurance can be given as to how quickly the proceeds will be invested. Consequently, the distributions you receive on your investment may be reduced pending the investment of the Offering proceeds in real estate loans or direct real estate acquisition.

The Company’s Due Diligence May Not Reveal All Factors Affecting an Investment and May Not Reveal Weaknesses in Such Investments.

There can be no assurance that the Manager’s due diligence processes will uncover all relevant facts that would be material to an investment decision. Before making an investment, the Manager will assess the strength of the underlying properties and any other factors that they believe are material to the performance of the investment. In making the assessment and otherwise conducting customary due diligence, the Manager will rely on the resources available to them and, in some cases, investigations by third parties.

The Company will be relying on the Manager’s discretion and acquisition expertise.

The Manager will make all Company management decisions, including Company Asset selection. The Company will be relying in large part on the Manager’s acquisition expertise. The Manager may resign at any time with one-year notice to the Members without liability to the Company or Manager.

If the Manager withdraws or is terminated the Members may not be able to locate a suitable replacement.

The Company presently only has one Manager. If the Manager, subject to its one-year notice requirement, withdraws from the Company, is terminated by the Members, for cause, or is terminated as Manager by dissolution or bankruptcy, it may be difficult or impossible for the Members of the Company to locate a suitable replacement for the Manager. If it is unable to replace the Manager, the Company would proceed with liquidating the Company’s Assets, which may or may not be able to be successfully executed.

The Company’s activities may subject it to the risks of becoming involved in litigation.

The Company’s investment activities may include activities that will subject it to the risks of becoming involved in litigation by third parties. The expense of defending claims against the Company by third parties and paying any amounts pursuant to settlements or judgments would be borne by the Company and would reduce net assets and could require the Partners to return distributed capital and earnings to the Company. The General Partner, the Investment Manager, and their Affiliates will be indemnified by the Company in connection with such litigation, subject to certain conditions.

Because of the nature of certain of our investments, the Company may be subject to allegations of lender liability.

In recent years, a number of judicial decisions in the U.S. have upheld the right of Borrowers to sue lending institutions on the basis of various evolving legal theories (collectively termed “lender liability”). Generally, lender liability is founded upon the premise that an institutional lender has violated a duty (whether implied or contractual) of good faith and fair dealing owed to the Borrower or has assumed a degree of control over the Borrower resulting in creation of a fiduciary duty owed to the borrower or its other creditors or shareholders. Because of the nature of certain of the Company’s investments, the Company could be subject to allegations of lender liability.

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In addition, under common law principles that, in some cases, form the basis for lender liability claims, if a lending institution (a) intentionally takes an action that results in the undercapitalization of a Borrower to the detriment of other creditors of such Borrower, (b) engages in other inequitable conduct to the detriment of such other creditors, (c) engages in fraud with respect to, or makes misrepresentations to, such other creditors or (d) uses its influence as an equity holder to dominate or control a Borrower to the detriment of the other creditors of such Borrower, a court applying bankruptcy laws may elect to subordinate the claim of the offending lending institution to the claims of the disadvantaged creditor or creditors, a remedy called “equitable subordination.” The Company could be subject to claims from creditors of an obligor that the Company’s investments in debt obligations of such obligor should be equitably subordinated. Alternatively, in bankruptcy a court may re-characterize the Company’s claims or restructure the debt using “cram down” provisions of the bankruptcy laws.

Disruptions in the financial markets or deteriorating economic conditions could adversely impact the Company’s ability to access capital.

As a result of the credit crisis and the occurrence of several high profile bankruptcies, recent government bailouts, bank failures, other negative corporate events, and certain other recent events, the financial markets have been disrupted in general and the availability and cost of capital for the Company and that of the Company’s competitors have been adversely affected. The achievement of the Company’s targeted rate of return is dependent, at least in part, upon the Company’s ability to access capital at rates and on terms the Manager determines to be acceptable. If the Company’s ability to access capital becomes significantly constrained, the Company’s financial condition and future investments may be significantly adversely affected.

Uninsured losses including those relating to real property or excessively expensive premiums for insurance coverage could reduce our cash flows and the return on our shareholders’ investment.

The Company will require that all Assets are insured against hazard. However, some events may be uninsurable or insurance coverage for such events may not be economically practicable. Losses from earthquakes, floods, or other weather phenomena, for example, as well as losses due to theft or fraudulent acts that could occur may be uninsured and cause losses to the Company. In addition, insurance may lapse without proper notice to the Manager and/or Assets may become temporarily uninsured and sustain damage during this period.

There may not be sufficient quality opportunities to immediately invest the proceeds received when Assets are paid off.

There is a risk that when the Assets are paid off, there may not be sufficient quality opportunities to immediately redeploy the proceeds received from these payoffs into new Assets. If the Company is unable to locate new Assets in a timely manner, the excess cash may water down the overall yield to the Company or the Manager may choose to repay Investors a portion or all of their Capital Account earlier than expected.

The real estate and financial sectors are highly competitive industries and competitive conditions could adversely affect our business or financial results.

The business and arena in which the Company is engaged is highly competitive, and the Company and Manager compete with numerous established entities, some of which have more financial resources and experience in the business than the Company or Manager. The Company and Manager expect to encounter significant competition from other market participants including private lenders, private equity fund managers, real estate developers, pension funds, real estate investment trusts, other private parties, potential investors or homeowners, and other people and/or entities with objectives similar in whole or in part to those of the Company. Any general increase in the availability of capital for such purposes may increase competition for Company Assets and could reduce the yields they produce, including those of the Company.

We may become subject to the Investment Company Act, which could interfere with our intended operations.

The Company intends to operate so as to not be regulated as an investment company under the Investment Company Act of 1940 (the “Investment Company Act”) based upon certain exemptions thereunder. Companies that are subject to the Investment Company Act must register with the SEC and become subject to various registration, governance, and reporting requirements. Compliance with such restrictions would limit the Company’s flexibility, and create additional financial and administrative burdens on the Company. The Company believes it can avoid these restrictions based on one or more exemptions provided for companies like the Company. Specifically, the Company expects to be exempted from registration under the Investment Company Act because the Company will not make a public offering of the Units and the engaged in purchasing or acquiring mortgages and other liens on, and interests in, real estate as determined under exemptions from the Investment Company Act and rules issued thereunder. Accordingly, the Company does not expect to be subject to the restrictive provisions of the Investment Company Act. However, the SEC has recently indicated that it may seek to narrow the exemption from registration for entities engaged in purchasing or acquiring mortgages and other liens on real estate. If the Company fails to qualify for exemption from registration as an investment company, its ability to conduct its business as described herein will be compromised. Any such failure to qualify for such exemption would likely have a material adverse effect on the Company.

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Though the Manager does not intend to register under the Investment Advisers Act, it may be required to register under one or more state investment adviser acts (“State Advisers Acts”). State Advisers Acts are similar to the Investment Advisers Act but generally apply to investment advisers that are not subject to the Investment Advisers Act because of the amount of AUM or other exemptions from registration. The Manager intends to seek exemptions from such registration where possible. If the Manager does have to register under one or more State Advisers Acts, such registration may create administrative and financial burdens on the Manager.

Our Manager may become subject to the Investment Company Act, which would subject it to various regulatory requirements.

The Manager has not registered as an investment adviser under the Investment Advisers Act of 1940 (the “Investment Advisers Act”) and intends to operate so as to not be required to register as an investment adviser with the SEC for as long as possible (based upon certain exemptions thereunder). Specifically, investment advisers are not required to register under the Investment Advisers Act so long as they have less than $110 million in AUM, and the Manager expects to be further exempted from registration so long as the Manager has less than $150 million in AUM based on the fact that it is a manager to a real estate company that is a qualifying private company exempt from registration under the Investment Company Act. If or when the Manager exceeds that threshold, unless it is eligible for another exemption, it will be required to register under the Investment Advisers Act and will be subject to various restrictive provisions provided for therein. The Manager cannot determine at this time, what, if any, impact such registration and restrictions will have on its business or the business of the Company.

The Company’s Reliance on Exclusions from the Investment Company Act May Impact Certain Investment Decisions

The Investment Company Act excludes a real estate program from the definition of an “investment company” if it is “primarily engaged” in, the origination or acquisition of mortgages and other liens on, and/or interests in, real estate. The Manager has not sought a no-action letter from the SEC to confirm that the Company is eligible for this exemption. However, the Manager will rely on guidance issued by the SEC stating that so long as qualifying percentages of the Company’s assets consist of (1) mortgages and other liens on or interests in real estate; and (2) the remaining percentage of the Company’s assets consist primarily of real estate related assets, the Company will remain exempt from the Investment Company Act registration requirements. Because the Company is relying on an exemption that is dependent on the nature of the Company’s investment holdings, the Manager may need to consider such restrictions when assessing a potential investment for the Company, and may decide not to pursue an asset because such asset would jeopardize the Company’s use of the exemption, as opposed to whether or not the asset would otherwise be a sound investment for the Company.

Recent legislative and regulatory initiatives have imposed restrictions and requirements could have an adverse effect on our business.

The U.S. Congress, the SEC, and other regulators have taken, or represented that they may take, action to increase or otherwise modify the laws, rules, and regulations applicable to techniques and instruments in which the Company may invest. New (or modified) laws, rules, and regulations may prevent, or significantly limit the ability of, the Manager from using certain such instruments or from engaging in such transactions. This may impair the ability of the Manager to carry out the Company’s investment strategy and may otherwise have an adverse impact on the Company’s returns. Compliance with such new or modified laws, rules, and regulations may also increase the Company’s expenses and therefore, may adversely affect the Company’s performance. It is not possible at this time to predict with certainty what, if any, impact the new or modified regulations will have on the Manager or the Company, and it is possible that such impact could be adverse and material.

We may become liable for indemnification obligations to our Manager or its affiliates.

The Company will be required to indemnify the Manager and certain affiliated persons and entities of the Manager for liabilities incurred in connection with the affairs of the Company. Such liabilities may be material and have an adverse effect on the returns to the Members. The indemnification obligation of the Company will be payable from the assets of the Company, and Investors may be required to return certain amounts distributed to them to satisfy the indemnity obligations of the Company.

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Risks Specific to Note Holders

Risk of Failure to Notify Manager of Desire to Cash-Out at Maturity

The Note Holder shall have responsibility for notifying the Manager of its desire to cash-out its Note. No later than 90 days prior to the Maturity Date, a Note Holder shall notify the Manager of Note Holder’s desire to cash-out and receive payment of outstanding principal and interest upon the Maturity Date. If the Note Holder does not provide the 90-day Cash-Out Notice, the Note upon the Maturity Date will automatically extend at the Note rate less 1% until either (i) the Note Holder notifies the Company that it wishes for the outstanding balance of the Note to be rolled over into a new Note, and such new Note is executed, or (ii) 90 days after the Note Holder provides a Cash-Out Notice.

Risk of 90-Day Continuance at Election of the Company

The Company may not be able to repay the principal balance of a Note at its Maturity Date. The Company shall have the right, upon receipt of 90 days Cash-Out Notice, to continue to make interest payments on a monthly basis to the Note Holder at the existing Note Rate plus 1% for up to 90 days beyond the Maturity Date without such continuation constituting an Event of Default.

Notes are not Liquid

An investment in the Notes is intended as an illiquid investment, and Notes are only repurchased or repayable early upon the written consent of the Manager, which may be withheld in its sole discretion.

Restrictions on Transfer

Note Holders will not be free to sell or transfer Notes without written consent from the Manager which may be withheld in its sole discretion. There is no market for the Notes, public or private, and there is no likelihood that one will ever develop. Note Holders must be prepared to hold their Notes to the Maturity Date, or beyond, and as a long-term investment. To comply with applicable tax and securities laws, the Manager, in its sole discretion, may refuse to consent to a transfer or assignment of Notes.

Pari Passu Intercreditor Interests; Note Holder Representative

The respective interests of each Note Holder in and to any payments made by the Company in respect of the Notes, any Security, and any collections in connection with the foreclosure of such Security shall be Pari Passu and no Note Holder shall have any priority over the other; provided further, that any such payments, Security, and/or collections received by any Note Holder, other than such payments, Security, and collections that are received by all Note Holders on a pro rata basis, shall be paid by such Note Holder to the Representative, to be held in trust for the benefit of all Note Holders.

The Representative shall initially be the Manager, and the Manager shall retain the right to select and appoint successor Representatives. The Representative shall have the authority to sign all documents and take any action necessary to protect each Note Holder’s Pari Passu rights in the Security. This means the Representative will be the only party with the authority to take any enforcement action with respect to the Notes, foreclose or take any other action to realize upon the Notes or the Security, institute any action or proceeding to collect or enforce the Notes, commence or cause to be commenced any bankruptcy or similar proceeding against the Company, or commence or exercise any other right to remedy against the Company. The Note Holder shall execute the Intercreditor Agreement as part of the documents, prior to acceptance by the Manager. By doing so, all Note Holders shall be treated equally with respect to their rights of payment.

Note Holders Have No Right to Vote or to be Involved in Management

Note Holders cannot exercise any control over the Company’s affairs and will not have any vote or influence over the Company, its investment policies, or any of its operations. The Manager will exercise complete control over the Company. The Manager has broad investment authority and may change its investment and underwriting policies (within the confines of its overall investment strategy) in its sole discretion, consistent with the duties it owes to all of the Note Holders. The Operating Agreement also provides that in its sole discretion, the Manager may withdraw from the Company at any time with one-year notice, which may result in the Company’s dissolution if a replacement is not named within such period.

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Power of Attorney

Pursuant to the Intercreditor Agreement and the Subscription Agreement, the Note Holder appoints the Manager as the initial Representative, and any successor Representative, as determined by the Manager, as its true and lawful representative and attorney-in-fact in such Note Holder’s name, place, and stead to make, execute, sign, acknowledge, file, and record all instruments, agreements, or documents as may be necessary or advisable to reflect the exercise by the Representative of any of the powers granted to it under the Subscription Agreement and the Intercreditor Agreement.

The Note Holder will further authorize the Representative to take any further action which the Representative shall consider necessary or advisable in connection with any of the foregoing, giving the Representative full power and authority to do and perform each and every act or thing whatsoever requisite to be done in and about the foregoing as fully as such Note Holder might or could do if personally present. The Note Holder shall be bound by any representation made by the Representative acting in good faith pursuant to such power of attorney, and the Note Holder will waive any and all defenses which may be available to contest, negate or disaffirm the action of the Representative taken in good faith pursuant to such power of attorney.

Tax Risks

General tax considerations.

As with any investment that generates income and/or loss and distributes cash, an investment has federal income tax risks. The significant tax risks are discussed in greater detail later in this Offering Circular. All Investors are encouraged to review the tax risk section with competent tax counsel.

Investors should understand the role of the Company and the United States Internal Revenue Service (“IRS”) concerning the tax issues involved in any investment in the Company. The IRS may do any of the following:

	·	Review the federal income taxation rules involving the Company and any investment in it, and issue revised interpretations of established concepts.
	·	Scrutinize the proper application of tax laws to the Company, including a comprehensive audit of the Company at any time. The Company does not expect to fall under the reporting requirements for tax shelters, as the Company does not have the avoidance or evasion of Federal income tax as a significant purpose. If the Company borrows significant sums and incurs significant losses, however, the Company may be required to notify the IRS of its status as a tax shelter. The effect of such action is generally unknown, but could result in increased IRS scrutiny of the Company’s taxes.

The Company will:

	·	Retain an accounting firm to annually prepare a financial statement on the Company’s behalf. At the discretion of the Manager, the Manager may at any time change accounting firms; and
	·	Not apply to the IRS for any ruling concerning the establishment or operation of the Company.

AN INVESTMENT IN THE NOTES WILL RESULT IN TAX CONSEQUENCES TO THE INVESTOR. THUS, EACH PROSPECTIVE INVESTOR SHOULD CONSULT WITH ITS OWN TAX ADVISOR, ATTORNEY, FINANCIAL ADVISOR, BUSINESS ADVISOR, AND ACCOUNTING ADVISOR AS TO LEGAL, BUSINESS, TAX, ACCOUNTING AND RELATED MATTERS, IN ORDER TO FULLY UNDERSTAND THE FEDERAL, STATE, LOCAL, AND FOREIGN INCOME TAX CONSEQUENCES OF AN INVESTMENT IN THE COMPANY, AND ANY AND ALL TAX RAMIFICATIONS, AND ITS SUITABILITY FOR THE INVESTOR FROM A TAX AND PLANNING STANDPOINT.

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This Offering Circular and any subscription materials provided by the Company do not constitute tax advice, and are not intended to substitute for tax planning.

The various tax issues, for both US and non-US investors, are beyond the scope of this Offering Circular and any subscription materials provided by the Company.

Nothing contained in this Offering Circular or any subscription or other materials should be construed as legal, financial, business, tax or accounting advice.

Nothing in this Offering Circular or any subscription or other materials should be relied upon for the maintenance of books and records for any tax, accounting, legal, or other procedure.

Neither the Company nor any Manager thereof has any indemnification obligation to any Member or investor as a result of any tax due as a result of an investment in the Company.

Investors may be subject to state and local taxes and filings.

Even if you would not otherwise be subject to tax in certain states, you may be required to file tax returns in states where we invest. Certain jurisdictions may collect taxes through withholding at the company level or at the investment level and any amounts so withheld that are allocable to your investment may be treated as a distribution to you. It is expected that income and gain we earn will subject you to tax and filing requirements in an unknown number of jurisdictions. We urge you to consult your tax advisor regarding the applicability of state and local taxes to, and additional filing requirements associated with, an investment in the Company.

EACH PROSPECTIVE INVESTOR SHOULD CONSULT WITH ITS OWN TAX ADVISOR, ATTORNEY, FINANCIAL ADVISOR, BUSINESS ADVISOR, AND ACCOUNTING ADVISOR AS TO LEGAL, BUSINESS, TAX, ACCOUNTING AND RELATED MATTERS, IN ORDER TO PROPERLY RECORD AND ACCOUNT FOR THE FEDERAL, STATE, LOCAL, AND FOREIGN INCOME TAX CONSEQUENCE (AND OTHER TAX CONSEQUENCES) OF AN INVESTMENT IN THE COMPANY, AND ANY AND ALL TAX REPORTING, FILINGS AND PROCEDURES REQUIRED AS A RESULT OF THE TAX CONSEQUENCES OF AN INVESTMENT IN THE NOTES.

USE OF PROCEEDS

The net proceeds to the Company from the sale of the Notes will be equal to the aggregate principal amount of the Units we sell less our offering expenses. If we sell the maximum offering amount, which is $50,000,000, the net proceeds will be approximately $49,900,000.00, after deducting estimated expenses for the preparation, filing, printing, legal, accounting and other fees and expenses related to the offering of approximately $100,000.00. The Company intends to use the net proceeds from this offering to invest in Company Assets and purchase Mortgage Notes and other distressed Real Estate, SPVs and other Real Estate Based Assets. The Company has not identified the particular investments it will make. Accordingly, an investor must rely upon the ability of the Manager in making investments consistent with the Company’s investment objectives and policies. Although the Manager has been successful in locating investments in the past, the Company may be unable to find a sufficient number of attractive opportunities to invest its committed capital or meet its investment objectives. The Company does not intend to use net proceeds for the purpose of repurchasing equity interests in the Company, but because of the nature of the Company’s cash flows, some proceeds from time to time may be used for such purposes. The proceeds will be used to compensate the Manager only to the extent that such proceeds may contribute to the fees of the Manager as discussed below under “Management” in this Offering Circular.

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DESCRIPTION OF BUSINESS

Overview

The Company was organized as a Delaware limited liability company in October 2018 pursuant to filing the Certificate of Formation with the Secretary of State of Delaware.

Investment Objectives and Strategy

The Company’s objectives with respect to acquiring Assets are to effectively deploy the proceeds of this Offering in Assets which are expected to:

	·	Preserve and protect each Note Holders’ interests;
	·	Provide the Note Holders with annualized returns that will vary from time to time, initially ranging from 5% to 10%, depending on investment size and duration of Note maturity;
	·	Ultimately provide Note Holders with a full return of their invested funds.

No assurance can be given that these objectives will be attained or that the Company’s capital will not decrease.

Strategy to Achieve Company Investment Objectives

The Company will endeavor to produce attractive risk adjusted returns by purchasing distressed loans and also by making real estate backed loans, with an expected focus on the East Coast.

Plan of Operation

The Manager will analyze and review a number of project investment opportunities on an ongoing basis.

THERE IS NO GUARANTEE THAT THE COMPANY WILL INVEST IN ANY PARTICULAR PROJECT OR OPPORTUNITY. FOR ANY NUMBER OF REASONS, THE COMPANY MAY OPT AGAINST PURSUING ANY PARTICULAR OPPORTUNITY.

The Company, either directly or through special purpose vehicles, which will be subsidiary funds owned by the Company, (each a “SPV”) will provide capital to real estate investors including Affiliates of the Manager. The Company and/or any SPV(s) of the Company may choose to borrow money from time to time from one or more senior lenders (“Credit Facilities” or “Facilities”) and may pledge one or more Company Assets as collateral for any such borrowing.

Investments shall be made in markets in which the Manager feels confident and comfortable in its ability to invest and underwrite effectively.

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The Company will typically originate, purchase and acquire assets described below, subject to modification in the Manager’s discretion:

	·	To purchase performing and non-performing Notes and other Real Estate backed loans
	·	The assets acquired will generally be, but are not limited to, first lien position loans.
	·	The Notes will be generally sold off to other investors
	·	Asset acquisitions may be townhomes, single family residences, condominiums, multi-family units and other commercial assets.
	·	At times Notes may be held within the fund for a time of, but not limited to, 6-18 months for the purposes of maximum returns to the investors.
	·	The Notes will generally be, but not limited to, purchased in non-judicial states

DESCRIPTION OF SECURITIES OFFERED

The following descriptions of our securities, certain provisions of Delaware law and certain provisions of our certificate of formation and operating agreement, which will be in effect upon consummation of this offering, are summaries and are qualified by reference to Delaware law, our certificate of formation and our operating agreement, copies of which are filed as exhibits to the offering statement of which this offering circular is a part. See “Where You Can Find More Information.”

General

The Company is a Delaware limited liability company organized in 2018. The Company will sell Notes to its investors. (“Notes”). The Company operating agreement provides that it may issue an unlimited number of Notes as well as subsequent offerings with the approval of our Manager.

All of the Notes offered by this offering circular will be duly authorized and validly issued. Upon payment in full of the consideration payable with respect to the Notes, as determined by our Manager, the holders of such Notes will not be liable to the Company to make any additional investments with respect to such Notes Holders of Notes have no conversion, exchange, sinking fund or appraisal rights, no pre-emptive rights to subscribe for any securities of our Company and no preferential rights to distributions.

We intend to have a December 31 fiscal year end.

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Distributions

We expect to distribute interest to the Note Holders as set forth in each individual Note.

Although we reserve the right to do so, we do not have any current intention to list our Units on a stock exchange or other trading market, nor is it expected that a public market for the Units will develop. We also do not anticipate that we will distribute other assets in kind (other than in the context of a roll up transaction).

Voting Rights

Transfer Agent and Registrar

As of the date of this offering circular, we have not engaged a transfer agent, and do not intend to engage a transfer agent until such time as we are required to do so, or deem it to be in the best interest of the Company in order to satisfy the conditional exemption contained in Rule 12g5-1(a)(7) of the Securities Exchange Act of 1934, as amended, or the Exchange Act.

PLAN OF DISTRIBUTION

We are offering up to $50,000,000.00 in Notes pursuant to this offering circular. Our investments will be primarily offered by associated persons of ours, through our Affiliate Legacy Builders Management LLC and through online platforms. In conducting this offering, such persons and online platforms intend to rely on the exemption from registration contained in Exchange Act Rule 3a4-1.

Legacy Builders Management LLC, and such other platforms as may be chosen by the Manager shall not be subject to the registration requirements of Section 304 of the JOBS Act because they will not offer and Sell securities pursuant to Section 4(a)(6) of the Securities Act, and, therefore, will not meet the definition of a “funding portal.” This offering circular and supplements hereto will be furnished to prospective investors upon their request via electronic PDF format and will be available for viewing and download 24 hours per day, 7 days per week on the Company’s website, as well as on the SEC’s website at www.sec.gov.

Advertising, Sales and other Promotional Materials

In addition to this offering circular, subject to limitations imposed by applicable securities laws, we expect to use additional advertising, sales and other promotional materials in connection with this offering. These materials may include information relating to this offering, the past performance of our sponsor and its affiliates, property brochures, articles and publications concerning real estate, or public advertisements and audio-visual materials, in each case only as authorized by us. In addition, the sales material may contain certain quotes from various publications without obtaining the consent of the author or the publication for use of the quoted material in the sales material. Although these materials will not contain information in conflict with the information provided by this offering circular and will be prepared with a view to presenting a balanced discussion of risk and reward with respect to our Units, these materials will not give a complete understanding of this offering, us or our Units and are not to be considered part of this offering circular. This offering is made only by means of this offering circular and prospective investors must read and rely on the information provided in this offering circular in connection with their decision to invest.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The Company Affiliates include, but are not limited to Premier Fund Management Group, LLC, Legacy Builders Management LLC.

As of the end of 2018 the family of companies was proud to have achieved some of the following benchmarks and successes:

	·	The launch of Premier Note Fund I with a $600,000 Capital raise in under 30 days
	·	Fund Manager has viewed and underwritten in excess of $100MM in Mortgage Loans
	·	Developed a Training Platform where we teach Investors & Buyers how to buy from us
	·	Developed a proprietary algorithm for maximizing profits on each loan that is liquidated
	·	Secured relationships with the Top 200 non-performing Mortgage Note funds
	·	Fund Manager has authored a Best Seller on the topic of Mortgage Notes, which is generating tremendous interest in the Fund
	·	Fund Manager is a contributing writer to the publication The Billionaire Chronicle

In addition,

Affiliated with top industry associations such as the American Association of Private Lenders, Geraci, LLP and Pitbull Private Lenders

The Company and its Affiliates offer a number of competitive advantages which include:

	·	A seasoned and experienced management team with developed relationships;
	·	Extensive real estate acquisition and management experience;
	·	Competitive lending terms and programs;
	·	Aggressive Non-Performing Note Acquisitions
	·	Established deal sourcing and underwriting processes;
	·	Ability to adapt and manage operations as needed;
	·	Innovative approach to internal and external products & offerings

BUSINESS

LB 1, LLC (the “Company”) was formed on October 3, 2018 as a Delaware Corporation for the general purpose of engaging in any lawful activity for which corporations may be organized under the law of the State of Delaware.

Results of Operations

2018 and 2019

The Company did not have any revenues or expenses for the period of October 3, 3018 (“inception”) through December 31, 2018, or the 11-month period from January 1, 2019 through November 30, 2019.

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Liquidity and Capital Resources

2018

The Company did not have any operations or corresponding cash flows from inception through December 31, 2018 related to operating, investing of financing activities.

2019

The Company had net cash of $100 at November 30, 2019.

Operating Activities

During the 11-month period from January 1, 2019 through November 30, 2019, the Company used $45,800 to pay for syndication expenses related to the Capital raise filing.

Financing Activities

During the 11-month period January 1, 2019 through November 30, 2019, the Company received $100 in contributions from the founders.

Related Party Transactions

The Company owes the founders $7,500 at November 30, 2019 for certain syndication expenses paid during the 11-month period ended November 30, 2019. The Company also owes $38,300 to one of the founders’ companies for certain syndication expenses paid on its behalf during the 11-month period ended November 30, 2019.

Plan of Operations

Management of the Company intends to use a substantial portion of the net proceeds for general working capital and, once certain funding milestones are met, to move into marketing efforts, developing the team, developing our website, and marketing our offering. In our opinion, the proceeds from this Offering may not satisfy our cash requirements indefinitely, so we anticipate that it will be necessary to raise additional funds to implement the plan of operations. During that time frame, we may not be able to satisfy our cash requirements through sales and the proceeds from this Offering alone, and therefore we anticipate that we will need to attempt to raise additional capital through the sale of additional securities in additional offerings, or through other methods of obtaining financing such as through loans or other types of debt. We cannot assure that we will have sufficient capital to finance our growth and business operations or that such capital will be available on terms that are favorable to us or at all.

Trend Information

W are still in the startup phase, and therefore, unable to identify any known trends, uncertainties, demands, commitments or events involving our business that are reasonably likely to have a material effect on our revenues, income from continuing operations, profitability, liquidity or capital resources, or that would cause the reported financial information in this Offering to not be indicative of future operating results or financial condition.

Off-Balance Sheet Arrangements

Other than the financial commitments discussed in the financial statement footnotes (Note 5) related to attorney fees for offering related expenses, we do not have any off balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Critical Accounting Policies

We have identified the policies outlined in this Offering Circular and attachments as critical to our current business operations and an understanding of our results of operations. Those policies outlined are not intended to be a comprehensive list of all of our accounting policies. In many cases, the accounting treatment of a particular transaction is specifically dictated by accounting principles generally accepted in the United States, with no need for management’s judgment in their application. The impact and any associated risks related to these policies on our business operations is discussed throughout Management’s Discussion and Analysis of Financial Condition and Results of Operation where such policies affect our reported and expected financial results. Note that our preparation of the financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of our financial statements, and the reported amounts of revenue and expenses during the reporting period. There can be no assurance that actual results will not differ from those estimates.

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Revenue Recognition

The Company had no revenue from inception through December 31, 2018, or the 11-month period from January 1, through November 30, 2019.

Additional Company Matters

The Company has not filed for bankruptcy protection nor has it ever been involved in receivership or similar proceedings. The Company is not presently involved in any legal proceedings material to the business or financial condition of the Company. The Company does not anticipate any material reclassification, merger, consolidation, or purchase or sale of a significant proportion of assets (not in the ordinary course of business) during the next 12 months.

MANAGEMENT

The Manager of the Company is Legacy Builders Management LLC, a Delaware limited liability company. The principals of the Manager are Amed Hazel and Rochelle Hazel. The Company does not have any employees at this time.

Name	Position	Age	Term of Office
Amed Hazel	CEO	48	N/A
Rochelle Hazel	CFO	43	N/A

Amed N. Hazel Sr.

Amed Hazel is the co-founder and Managing Partner of Premier Capital Investments, LLC, Premier Fund Management Group and Legacy Builders Management, LLC.

Amed entered the real estate business as a wholesaler with his wife and partner Rochelle. In a very short span they closed over 180 wholesale deals. They also incorporated short sales, lease options, rentals and other real estate strategies.

Amed and his wife shifted gears and broke the barriers of Wall Street to open the non-performing note business to the public. Over time and hundreds of deals later, they founded Premier Fund Management Group LLC. An investment fund for high net worth individuals to invest capital for passive returns.

Amed has been in the real estate business for more than 15 years, and works as a consultant in the real estate industry, specializing in non-performing notes. He created an algorithm that shows exit strategies and their profit margins so investors will know exactly how much profit is coming from a deal.

Amed is an Internationally recognized Podcast personality and educator and the author and creator of Note Buying Cash Machine, an online training platform for investors to learn the ins and outs of the non-performing note business.

Amed Hazel is the published author of the best seller, “Profiting From Non-performing Mortgage Notes”, which is sold on Amazon, carried by other book publishers, available on audible.com and soon to be published in multiple other languages. Amed is also a contributing writer for The Billionaire Chronicle, an International publication for high net worth investors.

You can find Amed on many stages, educating the masses on topics such as: Mortgage Notes, authoring their own books, Investment Strategies and other matters of personal Finance and Success.

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Rochelle Hazel

Rochelle is the co-founder and Managing Partner of Premier Capital Investments, LLC, Premier Fund Management Group and Legacy Builders Management, LLC.

Rochelle began investing in real estate in 2006, with a focus on Wholesaling. Always looking to continue with her education and business excellence, she soon became known for her negotiating expertise in working with homeowners and banks in completing the Short Sale process. She was known as the “Short Sale Queen”. Along with her husband, Amed Hazel, Rochelle successfully closed in excess of 180 Real Estate deals between 2007-2009.

Rochelle created a Real Estate coaching program in 2008 to teach other up and coming real estate investors how to “perfect the close” in getting contracts signed and taking deals through the closing process. She is well known in the real estate investing community, both for her in-person coaching programs and for the online platform she created in 2007, which she operated through 2011.

Rochelle Hazel became a master of not only closing the deals and coaching the clients, but also was an innovator of several marketing systems that always kept a steady flow of buyers, sellers and clients flowing through the business.

In 2008, Rochelle, along with her husband Amed, learned of a little known, obscure facet of real estate and began her Mortgage Note journey. Through lots of trial and error, because there was no learning platform for this topic, they created massive success.

In 2014, Premier Note Fund I was created in order to increase the impact Rochelle & Amed were able to have on the Mortgage Note industry with Accredited Investors. In 2018, Rochelle & Amed decided to create Legacy Builders Management, LLC in order to help the average, working individual, who may not yet be wealthy, get in position to build their own Legacy through passive investments.

Rochelle is passionate about being a catalyst for the average person to grow and create a Legacy for future generations.

Over the years, Rochelle has built and cultivated relationships with many banks and other financial institutions, brokers, attorneys, note buyers, note service-based companies, and other entrepreneurs.

You can find Rochelle speaking to many groups from REIAs to Women’s Groups to Meetup Groups, as well as on a platform created by she and her husband to educate people on investments and personal finance.

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Company Expenses

The Company will be responsible for all of its operating expenses including, without limitation, (i) all costs and expenses incurred in connection with identifying, evaluating, structuring, negotiating, developing, closing and servicing investments consummated by the Company (including, without limitation, any due diligence, travel, legal and accounting expenses, any deposits and commitment fees and other fees and out-of-pocket costs related thereto); (ii) taxes of the Company; (iii) all costs and expenses associated with obtaining and maintaining insurance for the Company and its assets, if any; (iv) all costs related to litigation (including threatened litigation) involving the Company, and indemnification expenses; (v) expenses and fees associated with third party auditors, accountants, attorneys and tax advisors and other professionals with respect to the Company and its activities; (vi) fees incurred in connection with the maintenance of bank or custodian accounts; (vii) brokerage points and commissions, referral and finder fees, and other investment costs incurred by or on behalf of the Company and paid to third parties; (viii) all expenses incurred in connection with the registration of the Company’s securities under applicable securities laws or regulations; (ix) all expenses associated with the borrowing of funds and procurement of lines of credit; (x) all expenses of liquidating the Company or its investments; and (xi) other general ordinary Company administration and overhead expenses.

The Manager (and NOT the Company) will be responsible for costs of its own personnel (including compensation and benefits), office space and general overhead expenses incurred in performing duties to the Company.

Management Fees

The Company does not have any employees, officers, or directors. The Manager is responsible for managing the Company. The Manager will receive compensation for its services to the Company, in the form of a base management fee and a management incentive fee, described in the following paragraphs.

The Manager will charge an annual Management Fee of 3% of the total Assets Under Management (“AUM”). The Management Fee shall be calculated, prorated, and paid at the end of each calendar month.

Investment by the Principals

The Manager may invest in the Company.

Fiduciary Duties of the Manager

Duties owed the Company by the Manager are prescribed by law and our Operating Agreement (“Operating Agreement”). The Act, provides that Delaware limited liability companies may, in their Operating Agreements, limit or eliminate any and all liabilities for breach of duties (including fiduciary duties) of a member, manager or other person to a limited liability company or to another member or manager or to another person that is a party to or is otherwise bound by a limited liability company agreement.

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The Operating Agreement provides that the Manager will not be liable to the Company for losses resulting from errors in judgment or other acts or omissions unless the Manager acted fraudulently or in bad faith. Notwithstanding the foregoing, the Operating Agreement provides that neither the Manager nor any owner, director, officer, employee, or agent of the Manager shall be indemnified for any loss or damage incurred by them in connection with any judgment entered in or settlement of any lawsuit involving allegations that federal or state securities laws were violated by the Manager or by any such person in connection with the offer or sale of Units unless: (a) where the lawsuit is not settled, the person seeking indemnification successfully defends that lawsuit; and (b) indemnification is specifically approved by a court of law.

It is the position of the U.S. Securities and Exchange Commission that indemnification for liabilities arising from, or out of, a violation of federal securities law is void as contrary to public policy. However, indemnification will be available for settlements and related expenses of lawsuits alleging securities law violations if a court approves the settlement and indemnification, and also for expenses incurred in successfully defending such lawsuits if a court approves such indemnification.

The Operating Agreement provides that the Manager is not required to manage the Company as its sole and exclusive function. The Manager may have other business interests and may engage in activities other than those relating to the Company. The pursuit of such ventures by the Manager and/or Affiliates, even if competitive with the business of the Company, shall not be deemed wrongful or improper or a violation of any fiduciary duties by the Manager.

By subscribing to and holding our Units, each member will automatically agree to be bound by the provisions in our Operating Agreement, as may be amended from time to time. The failure of a member to sign our Operating Agreement does not render our Operating Agreement unenforceable against that person.

Indemnification and Exculpation

Subject to certain limitations, our operating agreement limits the liability of our Manager, its officers and directors, our sponsor and our sponsor’s shareholder and affiliates, for monetary damages and provides that we will indemnify and pay or reimburse reasonable expenses in advance of final disposition of a proceeding to our Manager, its officers and directors, our sponsor and our sponsor’s shareholder and affiliates.

Our operating agreement provides that to the fullest extent permitted by applicable law our Manager, its owners, directors, officers, employees and agents, will not be liable to the Company. In addition, pursuant to our operating agreement, we have agreed to indemnify our Manager, its owners, directors, officers, employees and agents, to the fullest extent permitted by law, against all expenses and liabilities (including judgments, fines, penalties, interest, amounts paid in settlement with the approval of our Company and attorney’s fees and disbursements) arising from the performance of any of their obligations or duties in connection with their service to us or the operating agreement, including in connection with any civil, criminal, administrative, investigative or other action, suit or proceeding to which any such person may hereafter be made party by reason of being or having been the Manager or one of our Manager’s directors or officers.

Insofar as the foregoing provisions permit indemnification of directors, officers or persons controlling us for liability arising under the Securities Act, we have been informed that, in the opinion of the SEC, this indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

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SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITYHOLDERS

The following table presents information regarding the ownership of the Company’s equity interests as of effective October 31, 2018 by:

	·	our Manager; and
	·	each equity owner known by us to beneficially hold 10% or more of the Company’s equity interests, which consist of all of our Manager’s Principals.

Beneficial ownership is generally determined under the rules of the SEC and generally includes voting or investment power with respect to securities. Unless otherwise noted, the address for each beneficial owner is listed below.

Name and Address	Number of Units Beneficially Owned		Percent of Class2
Manager:
Legacy Builders Management, LLC 818 Natchez Valley Trace Grayson, GA 30017		100		100	%
TOTAL		100		100	%

Other holders of 10% or more of the beneficial equity interests of the Company:

Principals of Manager (each a member and manager of the Manager):

Amed Hazel 818 Natchez Valley Trace Grayson, GA 30017		50		50	%
Rochelle Hazel 818 Natchez Valley Trace Grayson, GA 30017		50		50	%

INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS

Other than the Manager’s relationship to the Company as Manager, the Company has not engaged in, nor currently proposes to engage in, any transaction in which any of the Manager, any affiliates of the Manager, any other person holding more than a 10% interest in the Company, or any immediate family member of such persons, had or is to have a direct or indirect material interest.

CONFLICTS OF INTEREST

The Company is subject to various conflicts of interest arising out of its relationship with the Manager. None of the agreements and arrangements between the Company and the Manager, including those relating to compensation, resulted from arm’s length negotiations. In addition, no assurances can be made that other conflicts of interest will not arise in the future. These conflicts of interest include, but are not limited to, the Receipt of Management Fee, Company Administration Fee and Loan Servicing Fees by the Manager.

The Manager will be paid the Management Fee, as a percentage of AUM, which is based on the Stated Value of the Company Assets (as determined by the Manager). Such Management Fee is intended to compensate the Manager for its services and was not negotiated on an arm’s length basis. Since absent the existence of a Management Fee, Members might receive a higher rate of return, the interests of the Manager and the Investors are adverse in this respect.

___________

2 Percentages are based on 100 Units outstanding.

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Receipt of Other Asset Level Fees by the Manager and its Affiliates

The Manager and/or Affiliates may charge reasonable, market-based loan origination, extension, processing, underwriting, loan servicing, fund administration, accounting, legal, appraisal and inspection fees in connection with services provided in connection with the business of the Company. All fees and compensation paid to Affiliates shall be market-based and commercially reasonable at all times.

Competition by the Company with Other Affiliated Companies

The Manager and its members may engage for their own accounts or for the accounts of others in other business ventures, including other public or private limited partnerships or limited liability companies. Neither the Company nor any holder of a Unit issued by the Company is entitled to an interest therein. The Manager’s members invest in real estate or other activities similar to those of the Company for their own accounts, and expect to continue to do so. The Company’s investment objectives and underwriting criteria may differ substantially from those of additional real estate investment programs sponsored by the Manager.

The Manager and its members may be members or managers of other entities which have investment objectives that have some similarities to the Company, which may cause the Manager’s members to pursue investments that are competitive with those of the Company. However, the decision as to the suitability of the investment by the Company will be determined by the Manager in its sole discretion and will be based upon a review of the Company’s investment portfolio and upon factors including but not limited to such as property location, investment size, net income, the effect of the investment on diversification of the Company’s portfolio, and the amount of Company capital then available for investment.

Sale or Participation of Loans

The Company will purchase, sell and/or participate loans to Affiliates of the Manager and to third parties with whom the Manager, or Affiliates of the Manager have a business relationship.

Preferred Equity Investments

The Company will, either directly or indirectly, make preferred equity investments in assets, companies and funds which will include Affiliates.

Other Investments

Personnel of the Manager and its respective Affiliates involved in managing and executing responsibilities of the Manager may have investments in other companies, funds or accounts and real estate interests sponsored by or affiliated with the Manager as well as investments in non-affiliates. The performance of and financial returns on such other investments may be at odds with those of the Company.

Lack of Independent Legal Representation

The Manager and Company are not represented by separate counsel. The attorneys and other experts who have prepared the documents for this Offering also perform other services for the Manager. This representation will continue.

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Manager as Member

The Manager is a Member of the Company and from time to time may invest additional amounts in the Company. Any further investment by the Manager will be made according to the then prevailing Unit Price and otherwise be in such form and in such amount as determined by the Manager in its sole discretion, without notice or approval of the other Members. The Manager may also determine to have the Company accept its investment while rejecting the investments of others (though it does not intend to do so). As additional Units are issued, the increase in Units may reduce the amounts the Company has available to make distributions to other Investors, as distributions will need to be distributed amongst more Units. In addition, the Manager will be eligible to have the same rights to request the Company to redeem its Units as any other Member. Any such redemption may reduce the amount of funds available for the redemption or repayment of other Investors’ interests.

Furthermore, the interests of the Manager in its capacity as a Member may be adverse to the interests of other Members.

Indemnification

Pursuant to the Operating Agreement, the Company will indemnify its Manager and any of its Affiliates, agents, or attorneys from any action, claim, or liability arising from any act or omission made in good faith and in performance of its duties under the Operating Agreement. If the Company becomes obligated to make such payments, such indemnification costs would be paid from funds that would otherwise be available to distribute to Investors or invest in further Company Assets. To the extent these indemnification provisions protect the Manager and its Affiliates, agents, or attorneys at the cost of the Investors in the Company, a conflict of interest may exist.

Other Services or Potential Compensation

The Company may engage Affiliates of the Manager to perform services for and on behalf of the Company and the Company may, in connection with such services, pay to such Affiliates brokerage commissions and fees, property management fees, and other compensation as described in this Offering. Affiliates of the Company may receive commissions or fees from unrelated third parties with whom the Company is purchasing or selling a real property asset or engaging in another transaction and, that in such event, such Affiliate may have a potentially conflicting division of loyalties and responsibilities regarding the Company and the other parties to the transaction.

CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS

The tax considerations relating to the purchase, ownership and disposition of the membership interests are significant and complex. It is impossible for any memorandum such as this to address all of the tax considerations that may be relevant to holders in light of their particular circumstances or to holders subject to special rules under US Federal income tax laws.

Therefore, all prospective investors are urged to consult their individual tax advisors with respect to the tax ramifications of any investment in, or holding of, any security of the company.

Under current law, the Company, which intends to be treated as a partnership for U.S. tax purposes, will be required to file a tax return with the IRS. If the tax returns of the Company are audited by the IRS, the tax treatment of the Company’s income and deductions generally is determined at the Company level and U.S. tax deficiencies arising from the audit, if any, are paid by the Members that were partners for U.S. tax purposes in the year subject to the audit.

The Bipartisan Budget Act of 2015 (“BBA”), changed many of the rules relating to the Tax Matters Member or Partnership Representative and their representation of the entity (in this case the Company) with respect to all tax matters. Specifically, under the general rule imposed under new legislation, an audit adjustment of the Company’s tax return filed or required to be filed for any tax year beginning during or after 2018 (a “Filing Year”) could result in a tax liability (including interest and penalties) imposed on the Company for the year during which the adjustment is determined (the “Adjustment Year”). The tax liability generally is determined by using the highest tax rates under the Code applicable to U.S. taxpayers, in which case any Adjustment Year partners of the Company would bear the audit tax liability at significantly higher rates (including interest and penalties) arising from audit adjustments and in amounts that are unrelated to their Filing Year economic interests in the Company partnership items that were adjusted.

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To mitigate the potential adverse consequences of the general rule, the Company may be able to elect to pass through such audit adjustments for any year to the Members who were partners in the Company for the Filing Year (instead of those who are partners/members in the Adjustment Year), in which case those partners generally would be responsible for the payment of any tax deficiency, determined after including their shares of the adjustments on their tax returns for the Adjustment Year. The ramifications of the BBA changes to the audit procedures and rules could be significant, and prospective investors are strongly encouraged to consult with competent and experienced tax advisors and counsel with respect to the BBA changes, before making an investment in the Company.

AS REQUIRED BY U.S. TREASURY REGULATIONS GOVERNING TAX PRACTICE, YOU ARE HEREBY ADVISED THAT ANY WRITTEN TAX ADVICE CONTAINED HEREIN WAS NOT WRITTEN OR INTENDED TO BE USED (AND CANNOT BE USED) BY ANY TAXPAYER FOR THE PURPOSE OF AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER THE INTERNAL REVENUE CODE OF THE UNITED STATES; THE ADVICE WAS PREPARED TO SUPPORT THE PROMOTION OR MARKETING OF TRANSACTIONS OR MATTERS ADDRESSED BY THE WRITTEN ADVICE; AND PROSPECTIVE INVESTORS REVIEWING THIS DISCUSSION SHOULD CONSULT THEIR OWN TAX ADVISERS CONCERNING THE U.S. FEDERAL, STATE, AND LOCAL INCOME TAX CONSEQUENCES IN THEIR PARTICULAR SITUATIONS OF THE PURCHASE, OWNERSHIP, AND DISPOSITION OF INTERESTS, AS WELL AS ANY CONSEQUENCES UNDER THE LAWS OF ANY OTHER TAXING JURISDICTION.

ERISA CONSIDERATIONS

In considering the acquisition of Units to be held as a portion of the assets of an “employee benefit plan” within the meaning of Section 3(3) of ERISA (“a Benefit Plan” or “Plan”), a Plan fiduciary, taking into account the facts and circumstances of such trust, should consider, among other things: (a) the effect of the “Plan Asset Regulations” (Labor Regulation Section 2510.3-101) including potential “prohibited transactions” under the Code and ERISA; (b) whether the investment satisfies the “exclusive purpose,” “prudence,” and “diversification” requirements of Sections 404(a)(l)(A),(B) and (C) of ERISA; (c) whether the investment is a permissible investment under the documents and instruments governing the plan as provided in Section 404 (a)(l)(D) of ERISA; (d) the Plan may not be able to distribute Units to participants or beneficiaries in pay status because the Manager may withhold its consent; and (e) the fact that no market will exist in which the fiduciary can sell or otherwise dispose of the Units and the Company has no history of operations. The prudence of a particular investment must be determined by the responsible fiduciary with respect to each employee benefit plan, taking into account the facts and circumstances of the investment.

Any Investor that invests funds belonging to a qualified retirement plan or IRA should carefully review the tax risks provisions of this Offering Circular as well as consult with their own tax advisors. The contents hereof are not to be construed as tax, legal, or investment advice. PROSPECTIVE BENEFIT PLAN INVESTORS ARE URGED TO CONSULT THEIR ERISA ADVISORS WITH RESPECT TO ERISA AND RELATED TAX MATTERS, AS WELL AS OTHER MATTERS AFFECTING THE BENEFIT PLAN’S INVESTMENT IN THE COMPANY. MOREOVER, MANY OF THE TAX ASPECTS OF THE OFFERING DISCUSSED HEREIN ARE APPLICABLE TO BENEFIT PLAN INVESTORS WHICH SHOULD ALSO BE DISCUSSED WITH QUALIFIED TAX COUNSEL BEFORE INVESTING IN THE COMPANY.

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HOW TO SUBSCRIBE

How to Become and Investor

In order to invest, a prospective investor must electronically complete, sign and deliver to us an executed subscription agreement in the form attached to this offering circular as Appendix A, and wire funds for its subscription amount in accordance with the instructions provided therein. Settlement may occur up to 45 days after a prospective investor submits a subscription agreement, depending on the volume of subscriptions received. An investor will become a member of our Company, including for tax purposes, and the shares will be issued, as provided in the operating agreement and subscription agreement. The number of shares issued to an investor will be calculated based on the price per share in effect on the date we receive the subscription. We reserve the right to reject any investor’s subscription in whole or in part for any reason, including if we determine in our sole and absolute discretion that such investor is not a “qualified purchaser” for purposes of Section 18(b)(4)(D)(ii) of the Securities Act. If the offering terminates or if any prospective investor’s subscription is rejected, all funds received from such investors will be returned without interest or deduction.

ADDITIONAL INFORMATION

We have filed with the SEC an offering statement under the Securities Act on Form 1-A regarding this offering. This offering circular, which is part of the offering statement, does not contain all the information set forth in the offering statement and the exhibits related thereto filed with the SEC, reference to which is hereby made. Upon the qualification of our initial offering statement, we became subject to the informational reporting requirements of the Exchange Act that are applicable to Tier 2 companies whose securities are registered pursuant to Regulation A, and accordingly, we will file annual reports, semi-annual reports and other information with the SEC. You may read and copy the offering statement, the related exhibits and the reports and other information we file with the SEC at the SEC’s public reference facilities maintained by the SEC at 100 F Street, N.E., Washington, DC 20549.

You can also request copies of those documents, upon payment of a duplicating fee, by writing to the SEC. Please call the SEC at 1-800-SEC- 0330 for further information regarding the operation of the public reference rooms. The SEC also maintains a website at www.sec.gov that contains reports, information statements and other information regarding issuers that file with the SEC.

You may also request a copy of these filings at no cost, by writing, or telephoning us at:

LB 1 LLC

c/o Amed Hazel

818 Natchez Valley Trace

Grayson, GA 30017

(410) 627-1569

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GLOSSARY OF DEFINED TERMS

The following terms shall have the meaning ascribed to them below when used elsewhere in this Offering Circular with the initial letter capitalized. Other capitalized terms found throughout this Offering Circular and not defined below or in the body of the Offering Circular shall have the meaning as ascribed to them in the Operating Agreement:

“Affiliates” shall mean The Affiliates of the Manager include, but are not limited to Premier Mortgage Group LLC, and Legacy Builders Management LLC.

“AUM” means total Company Assets under management. AUM shall be determined by the Manager based on consistently applied methodology which may be updated, modified. or improved in its sole discretion.

“Broker/Dealer” means a licensed broker/dealer employed by the Manager for the purpose of locating Investors for this Offering.

“Capital” shall mean the all capital invested by Members.

“Cash-Out Notice” shall mean that 60-day notice required to be given to the Manager from any Note Holder prior to (or after) a Note’s Maturity Date of the Note Holder’s desire to be cashed out of such Note.

“Code” means the Internal Revenue Code of 1986, as amended.

“Collateral” shall mean the property and interests securing a Mortgage Loan, primarily real property.

“Credit Facility” or “Facility” means any secured line of credit, including obligations to Note Holders, warehouse lines, and/or individual loans from any lender, secured in first position by one or more of the Company Assets.

“Cumulative” means that any shortfall of a Preferred Return in a given month shall carry forward until paid.

“Distributable Cash” means at the time of determination by the Manager, cash generated from the Company’s Assets and other operations of the Company after payment of or provision for the following expenses (a) interest and principal payments due under any Credit Facility or any other amounts borrowed by the Company, (b) Company Expenses, and (c) such amounts as the Manager deems reasonable in order to provide for any anticipated, contingent or unforeseen expenditures or liabilities of the Company. Distributable Cash shall be determined without regard to (i) capital contributions made by Members or (ii) principal advanced on Company indebtedness. Distributable Cash shall be determined by the Manager in its sole discretion.

“Distributions” means amounts which from time to time are distributed to Note Holders, at the Manager’s discretion, but subject to the limitations on discretion set forth in the Operating Agreement.

“Early Repayment Fee” means a fee up to 5% as determined by the Manager, of the original principal balance of the Note, plus an amount equal to the interest rate differential between the original interest stated on the Note and the interest allocable to the shortened holding period, will be charged for any Notes repurchased early. The Manager may or may not approve a request for a premature redemption in its sole discretion.

“Company Assets” or “Assets” means any and all assets of the Company including Mortgage Loans, real property, contracts or notes receivable, cash, or any other asset or receivable of the Company.

“Company Expenses” means Company organizational costs, CPA and accounting related costs for tax return preparation, financial statement preparation and/or audits, legal fees and costs, filing, licensing or other governmental fees, other third party audits, loan servicing fees, insurance costs (including without limitation GL, D&O, E&O and Fidelity), Company administration costs, fees associated with any Credit Facilities; and any other expenses associated with operation of the Company or management of its Assets. Expenses may include expenses for services provided by Affiliates and costs and expenses may be apportioned and/or reimbursed to or from Affiliates.

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“Intercreditor Agreement” means the Intercreditor Security Agreement signed by each Note Holder, the Manager on behalf of the Company, and the Manager as Note Holder Representative.

“Investor” means the purchaser of Notes pursuant to this Offering (“Note Holder”).

“IRS” means the United States Internal Revenue Service.

“Leverage” means any note obligations of the Company on credit facilities; participations agreements; or Company note offerings.

“LTC” means the ratio of the loan amount (or unpaid principal balance) of any Mortgage Loan to the total acquisition costs at the time of acquisition of the property that secured the Mortgage Loan, including, without limitation, closing costs, title, recording and conveyancing fees, transfer taxes or documentary stamp taxes, pro-rata adjustments, lenders fees and origination charges.

“LTV” means the ratio of the loan amount (or unpaid principal balance) of any Mortgage Loan to the real property Collateral that secures that Mortgage Loan.

“Management Fee” means that 1% of AUM as an annual fee (payable as 0.0833% of AUM monthly) to be paid by the Company to the Manager. The Management Fee will be deemed earned daily and paid to the Manager on the last day of each calendar month, based upon the AUM as of the payment date as calculated by the Manager in its sole discretion. The Management Fee shall be paid by the Company prior to making any interest payments to Note Holders.

“Manager” means Legacy Builders Management LLC, a Delaware limited liability company.

“Maturity Date” means the date upon which a Note is due and payable in full as stated in the Note.

“Money Market Account” means one or more accounts in which the Company’s available cash will be placed. Each Money Market Account will consist of investments that are immediately liquid, and that, in the Manager’s judgment, are sufficiently safe while producing a yield, if any, on the Company’s cash.

“Mortgage Loans” means the loans originated or acquired by the Company (either in whole or in participation interests) from or through the Manager and which are secured by real estate.

“Note” or “Notes” mean a Note or the Notes issued from the Company to a Note Holder, to be executed by the Manager.

“Note Holder” means any purchaser of Note(s) pursuant to this Offering.

“Note Rate” means the total interest rate payable under a Note.

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“Offering” shall mean the issuance of Notes in the Company pursuant to the terms of the Offering Circular, the Operating Agreement, the Intercreditor Agreement, the Subscription Booklets, and other related documents.

“Operating Agreement” means the Operating Agreement of the Company, to be executed by the Manager as well as each Member of the Company.

“Pari Passu” means proportionally, at an equal pace with, and without preference over other Investors of the same status.

“Participation” shall mean an investment by the Company in which it owns some undivided percentage interest in a Mortgage Loan.

“Repayment” means the Company’s paying of cash to a Note Holder to satisfy the Note Holder’s outstanding Note. The Manager shall have the right, at all time to repay a note prior to its Maturity Date.

“Reinvest,” “Reinvestment,” or “Reinvestment Option” each refer to a Note Holder’s election to add to its Note balance in lieu of receiving its interest payment in cash.

“SEC” means the United States Securities and Exchange Commission.

“Security” means the collateral securing the Notes.

“Stated Value” shall mean the figure used by the Company as the value for each Asset it owns to assist in determining the AUM. The Stated Value of each individual Company Asset shall be determined on the last day of each calendar quarter by the Manager in its sole discretion. The Manager, however, shall establish and follow a methodology for determining the Stated Value and may modify, alter, or improve the methodology from time to time in its sole discretion.

“Subscription Booklets” shall mean that package of documents provided to Investors for the purposes of evaluating the Offering and purchasing Notes in the Company. The Note Holder Subscription Booklet shall include this Offering Circular, the Operating Agreement, the Intercreditor Agreement, a sample Note, the Note Subscription Agreement, and the Investor Suitability Statement.

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LB 1 LLC

November 30, 2019

Audited Financial Statements

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LB 1 LLC

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November 30, 2019

	Page

Independent Auditors’ Report		41

Balance Sheet		42

Statement of Income and Comprehensive Income		43

Statement of Changes in Member’s Equity		44

Statement of Cash Flows		45

Notes to Financial Statements		46

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Independent Auditors’ Report

To the Member

LB 1 LLC

Grayson, Georgia

Report on the Financial Statements

We have audited the accompanying financial statements of LB 1 LLC, a Delaware Limited Liability Corporation, which comprise the balance sheet as of November 30, 2019, and the related statements of income and comprehensive income, changes in member’s equity, and cash flows for the 11-month period (“period”) then ended, and the related notes to the financial statements.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to LB 1 LLC’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of LB 1 LLC’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements referred to above presents fairly, in all material respects, the financial position of LB 1 LLC as of November 30, 2019 and the results of its operations and its cash flows for the 11-month period then ended in accordance with accounting principles generally accepted in the United States of America.

Pleasant Hill, California

Spiegel Accountancy Corp.

January 17, 2020

Certified Public Accountants

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LB 1 LLC

Balance Sheet

November 30, 2019

ASSETS

Current Assets:
Cash	$	100
Deferred Syndication Expenses		45,800
Total Assets	$	45,900

LIABILITIES AND MEMBER’S EQUITY

Liabilities:
Related Party Payables	$	45,800

Total Liabilities		45,800

Member’s Equity		100

Total Liabilities and Member’s Equity	$	45,900

See Notes to Financial Statements

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LB 1 LLC

Statement of Income and Comprehensive Income

Period Ended November 30, 2019

Income from Operations	$	–

Operating Expenses		–

Provision for Income Taxes		–

Net Income		–

Other Comprehensive Income		–

Comprehensive Income	$	–

See Notes to Financial Statements

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LB 1 LLC

Statement of Changes in Member’s Equity

Period Ended November 30, 2019

	Member’s Equity

Balance at January 1, 2019	$	–

Contributions		100

Accumulated Comprehensive Income		–

Balance at July November 30, 2019	$	100

See Notes to Financial Statements

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LB 1 LLC

Statement of Cash Flows

Period Ended November 30, 2019

Cash Flows from Operating Activities:
Net Income	$	–
Adjustments to Reconcile Net Income to Net Cash from Operating Activities:		–
Change in Assets and Liabilities:
Deferred Syndication Expenses		(45,800	)
Related Party Payables		45,800

Net Cash From Operating Activities		–

Cash Flows From Financing Activities:
Member Contribution		100

Net Cash Provided by Financing Activities		100

Net Increase in Cash		100

Cash – Beginning of Period		–

Cash – End of Period	$	100

Supplementary Disclosure of Cash Flow Information:

Cash Paid During the Year for:
Income Taxes	$	–
Interest Expenses	$	–

See Notes to Financial Statements

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LB 1 LLC

Notes to Financial Statements

November 30, 2019

NOTE 1 – SUMMARY OF ORGANIZATION AND SIGNIFICANT ACOUNTING POLICIES

Organization

LB 1 LLC (the “Company”), was incorporated on October 3, 2018 in the state of Delaware. The Company is focused on purchasing and selling performing and non-performing mortgage notes secured by first deeds of trust, mortgages or land contracts, as well as originating and selling real estate backed mortgage loans. The Company intends to conduct operations throughout the United States.

The Company’s fiscal year end is December 31. The Company did not have any activity from October 3, 2018 through December 31, 2018. The Company is managed by Legacy Builders Management, LLC, (the “Manager”) who is the sole owner of Class A units. The Manager is in complete control of the Company business.

Basis of Presentation and Use of Estimates

The Company’s financial statements are prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America. These require the use of estimates and assumptions that affect the assets reported in the financial statements, as well as amounts included in the notes thereto, including discussion and disclosure of contingent liabilities. Although the Company uses its best estimates and judgments, actual results could differ from these estimates as future confirming events occur.

Deferred Syndication Expenses

Financial Accounting Standard Board Accounting Standards Codification number 340-10-S99-1, Other Assets and Deferred Costs, allows specific, incremental costs directly related to securities offerings to be deferred and charged against the gross proceeds of the offering. The Company defers applicable syndication expenses based on this criteria. The Company will write off all deferred syndication expenses if a securities offering is aborted.

Fair Value Measurements

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. The Company determines the fair values of its assets and liabilities based on a fair value hierarchy that includes 3 levels of inputs that may be used to measure fair value. The 3 levels are as follows:

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LB 1 LLC

Notes to Financial Statements

November 30, 2019

NOTE 1 – SUMMARY OF ORGANIZATION AND SIGNIFICANT ACOUNTING POLICIES (CONTINUED)

Fair Value Measurements (Continued)

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or

liabilities that the Company has the ability to access at the measurement date. An active market is a market in which transactions occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2 inputs are those other than quoted prices that are observable for the asset or liability, either directly or indirectly.

Level 3 inputs are unobservable inputs for the asset or liability. Unobservable inputs reflect the Company’s own assumptions about the inferences that market participants would use in pricing the asset or liability (including assumptions about risk). Unobservable inputs are developed based on the best information available in the circumstances and may include the Company’s own data.

Fair value measurements are further discussed in Note 4.

Income Taxes

The Company is an LLC under the Internal Revenue Code and a similar section of the state code. The members of an LLC are taxed on their proportionate shares of the Company’s taxable income. Therefore, no provision or liability for federal income taxes has been included in these financial statements.

LB 1 LLC’s income tax returns are subject to review and examination by federal, state and local governmental authorities. As of November 30, 2019, no income tax returns have been filed with federal, state and local governmental authorities.

Recent Accounting Pronouncements

Fair Value Measurement – In August 2018, the FASB issued ASU 2018-13, Disclosure Framework (Topic 820) – Changes to the Disclosure Requirement for Fair Value Measurement. This guidance removes or modifies various disclosures relating to the activity or reconciliation of Level 1, Level 2 and Level 3 fair value measurements. It is effective for interim and annual periods beginning after December 15, 2019. Management will evaluate this guidance and the impact it will have on the financial statements.

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LB 1 LLC

Notes to Financial Statements

November 30, 2019

NOTE 2 – RISKS AND UNCERTAINTIES

The Company did not generate any revenue for the 11-month period ended November 30, 2019. The Company is currently in the process of securing investor financing and commencing operations. However, there can be no assurance that LB 1 LLC will successfully be able to generate debt financing or commence operations. Failure to secure debt financing or commence operations could adversely affect the Company’s ability to achieve it business objective and the results of its operations.

NOTE 3 – CASH CONCENTRATION

The Company maintains funds in a financial institution that is a member of the Federal Deposit Insurance Corporation. As such, funds are insured based on the Federal Reserve limit. LB 1 LLC has not experienced any losses to date, and management believes it is not exposed to any significant credit risk on the current account balance.

NOTE 4 – FAIR VALUE MEASUREMENTS

Due to their short term nature, the carrying values of cash deferred syndication expenses, and related party payables approximate their fair value at November 30, 2019.

NOTE 5 – COMMITMENTS AND CONTINGENT LIABILITIES

As of November 30, 2019, the Company expects that securities counsel will provide services related to the Offering in an amount not to exceed $20,000.

In the normal course of business, the Company may become a party to litigation matters involving claims against it. At November 30, 2019, there are no current matters that would have a material effect on the Company’s financial position or results of operations.

NOTE 6 – RELATED PARTY TRANSACTIONS

Related Party Payables

The Company owes the founders $7,500 at November 30, 2019 for certain syndication expenses paid during the 11-month period. The Company also owes $38,300 to one of the founders’ companies for certain syndication expenses paid on its behalf.

NOTE 7 – SUBSEQUENT EVENTS

The Company has evaluated subsequent events through January 17, 2020, the date the financial statements were available to be issued, and there were no events to report.

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PART III – EXHIBITS

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SIGNATURES

Pursuant to the requirements of Regulation A, the issuer certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form 1-A and has duly caused this offering statement to be signed on its behalf by the undersigned, duly authorized, in Gwinnett county, state of Georgia on the 29th day of January, 2020.

	LB 1 LLC By: LEGACY BUILDERS MANAGEMENT LLC Its: Manager

	By:	/s/ Amed Hazel
	Name:	Amed Hazel
	Title:	Manager


	By:	/s/ Rochelle Hazel
	Name:	Rochelle Hazel
	Title:	Manager

This offering statement has been signed by the following persons in the capacities and on the dates indicated.

Name	Title/Capacity	Date

/s/ Amed Hazel	Manager and 50% Member of Manager; and	January 29, 2020
Amed Hazel	Principal Accounting Officer

/s/ Rochelle Hazel	Manager and 50% Member of Manager	January 29, 2020
Rochelle Hazel

EX1A-2A CHARTER 3 lb1_ex2a.htm CERTIFICATE OF FORMATION

EXHIBIT 2.A

EX1A-2B BYLAWS 4 lb1_ex2b.htm OPERATING AGREEMENT

EXHIBIT 2.B

OPERATING AGREEMENT

LB 1 LLC

THE LIMITED LIABILITY COMPANY SHARES OF MEMBERSHIP INTEREST DESCRIBED IN THIS OPERATING AGREEMENT (THE “SHARES”) HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”). ALL SHARES MUST BE ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION OF THE SHARES. A PURCHASER OF ANY INTEREST MUST BE PREPARED TO BEAR THE ECONOMIC RISK OF THE INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE SHARES CANNOT BE SOLD UNLESS THEY ARE SUBSEQUENTLY REGISTERED OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE. THERE IS NO OBLIGATION OF THE ISSUER TO REGISTER THE SHARES. THIS AGREEMENT ALSO PROVIDES FOR FURTHER RESTRICTIONS ON TRANSFER OF THE SHARES.

OPERATING AGREEMENT

LB 1 LLC

This OPERATING AGREEMENT (this “Agreement”) of LB 1 LLC (the “Company”) is made effective as of November 26, 2018, by and among Legacy Builders Management, LLC the “Manager”), and the holders of shares of membership interest in the Company who have executed this Agreement as of the date hereof or who later become party to this Agreement as provided below (each a “Shareholder” or “Member” and together, the “Shareholders” or “Members”).

1. Organization

The Company was formed as a Delaware limited liability company by the filing of a Certificate of Formation with the Secretary of State of the State of Delaware pursuant to the Delaware Limited Liability Company Act (as amended from time to time, the “Act”). The rights and liabilities of the Shareholders or Members shall be as provided in the Act, except as otherwise provided herein. In the event of any inconsistency between any terms and conditions contained in this Agreement and any non-mandatory provisions of the Act, the terms and conditions contained in this Agreement shall govern.

2. Name; Purpose; Term

The name of the Company is “LB 1 LLC.” The purpose of the Company is to engage in any lawful act or activity and to exercise any powers permitted to limited liability companies organized under the Act that are related or incidental to and reasonably necessary, convenient or advisable to achieve such purposes. The term of the Company commenced immediately upon the filing of the Certificate of Formation and shall continue unless and until the Company is dissolved and liquidated as provided for herein.

3. Registered Office and Agent

The registered office and agent of the Company in the State of Delaware initially shall be as set forth in the Certificate of Formation and thereafter as may from time to time be designated by the Managers.

4. Books and Records

The Company shall maintain all books of accounts necessary to prepare financial statements and tax returns. All books of account shall be maintained at the principal offices of the Company and shall be open for inspection by any Member at any reasonable time.

5. Membership Interests and Classes

5.1 Membership Interests

A Member is admitted as a Member of the Company upon approval by the Manager and upon the Member’s agreement through the execution of a counterpart of this Agreement to become a Member and to comply with the terms and conditions of this Agreement, as may be subsequently amended. All membership Interests are uncertificated securities that are subject to the limitations of this Agreement.

5.2 Membership Classes

The Company shall issue membership Interests identified as belonging to such classes of common or preferred Interests that the Company establishes from time to time in exchange for consideration determined by the Company in accordance with this Agreement and the Act. Each class of membership Interests shall have the rights and preferences specified in this Agreement or in any resolution or amendment identifying an additional class of Interests.

6. Accounting and Tax Matters

The fiscal year of the Company shall commence on January 1 and terminate on December 31 each year, except the first fiscal year, which commenced on the date indicated above, and the final fiscal year, which shall terminate concurrently with the final liquidation of the assets of the Company. Unless otherwise determined by the Managers, the Company shall maintain its books of account and accounting records on an annual, unaudited tax accounting basis consistent with the Company’s fiscal year, and the accounts shall readily disclose all items that the Members take into account for income tax purposes. The Managers shall cause the Company to prepare and file all required local, state and federal tax or informational returns. To the extent necessary, the Managers shall designate a “tax matters partner” as defined in Section 6231(a)(7) of the Internal Revenue Code of 1986, as amended (the “Code”).

7. Capital Contributions.

7.1 Capital Contributions

Each Member has contributed to the capital of the Company the cash, property, or services identified across from the Member’s name on Schedule 1. Except as set forth in this Section 7, no Member shall have the obligation to make any additional capital contributions to the Company. No Member may make any additional capital contributions to the Company without the consent of the Managers.

7.2 No Third-Party Beneficiary

No creditor or other third party having dealings with the Company shall have the right to cause any Member to make a capital contribution to the Company or to pursue any other right or remedy hereunder, it being understood and agreed that the provisions of this Agreement shall be solely for the benefit of, and may be enforced solely by, the parties hereto and their respective successors and permitted assigns. None of the rights or obligations of the Members herein set forth to make capital contributions to the Company, if any, shall be deemed an asset of the Company for any purpose by any creditor or other third party, nor may such rights or obligations be sold, transferred or assigned by the Company, and such rights or obligations may not be pledged or encumbered to secure any debt or other obligation of the Company or of any of the Members.

8. Capital Accounts

A capital account (“Capital Account”) shall be established and maintained for each Member in accordance with Section 704(b) of the Code and Treasury Regulations Section 1.704-1(b)(2)(iv). This Agreement shall be interpreted and applied in a manner consistent with Code Section 704(b) and the Treasury Regulations promulgated thereunder. No interest shall be paid on the capital of the Company or on any subsequent contributions of capital. The Capital Accounts of the Members may be increased or decreased to reflect a revaluation of property on the Company’s books and records, but only in accordance with the rules set forth in Treasury Regulation 1.704-1(b)(2)(iv)(f). Following any such revaluation, the Members’ Capital Accounts shall be adjusted in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv)(g) for allocations of depreciation, depletion, amortization and gain or loss as computed for book purposes with respect to such property.

9. Allocations of Profits, Losses, Deductions and Credits

Profits or Losses (each as defined below) of the Company shall be determined for each fiscal period and shall be credited and charged to the Members’ Capital Accounts as follows:

9.1 Timing and Amount

Profits and Losses of the Company shall be determined and allocated to the Capital Accounts of the Members with respect to each fiscal year of the Company as of the end of each such year. Subject to the other provisions of this Agreement, an allocation to a Member of a share of Profits or Losses shall be treated as an allocation of the same share of each item of income, gain, loss or deduction that is taken into account in computing Profits or Losses. “Profits” or “Losses” for each fiscal year of the Company shall mean the net taxable income or net taxable loss of the Company, as determined in accordance with Code Section 703(a) (for this purpose, all items of income, gain, loss, or deduction required to be stated separately pursuant to Code Section 703(a)(1) shall be included in taxable income or loss), modified to take into account the rules for properly maintaining capital accounts as set forth in Treasury Regulations Section 1.704-1(b)(2)(iv).

9.2 Allocations

Except as otherwise provided in this Section 9, all Profits and Losses of the Company shall be allocated in proportion to their respective Percentage Interests. “Percentage Interest” means the respective interests of each Member identified on Schedule 1, and as may be updated (which shall not be deemed an amendment) from time to time to reflect any changes to the Members’ Percentage Interests.

9.3 Tax Allocations.

(a) Except as otherwise provided in this Section 9.3, each item of income, gain, loss and deduction shall be allocated for income tax purposes among the Members in the same manner as its correlative item of “book” income, gain, loss or deduction is allocated pursuant to Section 9.

(b) Notwithstanding the foregoing provisions of this Section 9, income, gain, loss and deduction with respect to property contributed to the Company by a Member, or with respect to a revaluation of Company assets pursuant to Treasury Regulation 1.704-1(b)(2)(iv)(f), shall be allocated among the Members, pursuant to Regulations promulgated under Section 704(c) of the Code, so as to take account of the variation, if any, between the adjusted basis of such property to the Company and its fair market value. The Company shall account for such variation under any method approved under Section 704(c) of the Code and the applicable Treasury Regulations as chosen by the Members.

(c) Allocations pursuant to this Section 9.3 are solely for purposes of federal, state and local income taxes and shall not affect, or in any way be taken into account in computing, any Member’s Capital Account or share of Profits, Losses, other tax items or distributions pursuant to any provision of this Agreement.

10. Distributions of Available Cash

(a) At such times as the Manager determine it desirable, Available Cash (as defined below) shall be distributed to the Members in accordance with their respective Percentage Interests.

(b) Notwithstanding Section 10(a), the Managers shall use commercially reasonable efforts to timely distribute to each Member cash in an amount equal to its share of the Company’s taxable income for the prior fiscal year multiplied by the sum of the maximum federal and state income tax rates provided for individuals under the Code and the applicable state income tax code, respectively. For purposes of determining the amount to be distributed to each Member pursuant to this Section 10(b), distributions made in the prior fiscal year pursuant to Section 10(a) shall be treated as made pursuant to this Section 10(b).

(c) “Available Cash” of the Company shall be determined by the Managers, and for any applicable period shall mean the amount (if any) by which the gross cash receipts of the Company during such period from all sources, including net operating income, contributions to the capital of the Company, funds borrowed by the Company and any and all receipts in respect of the Company’s interest in other entities, exceed the expenses and expenditures during such period and the amounts required to provide for the future needs of the business of the Company and to establish and fund reasonable reserves against future costs and liabilities.

11. Management Duties and Restrictions

11.1 Manager(s)

The Company shall be manager-managed by one or more Managers. The Manager shall initially be Legacy Builders Management, LLC. (Throughout this Agreement, the term “Manager” and “Managers” are interchangeable). Members collectively holding at least a majority of the Percentage Interests in the Company may, by written consent or affirmative vote, and with 30 days’ notice, remove the Managers. Members may then, by a majority vote, or written consent, elect a new Manager, provided, however, that such removal of the Manager shall not become effective until the election of the new Manager. Removal of the Manager shall in no way impair any rights of the Manager attributable to the period prior to the effective date of removal. The Manager may voluntarily withdraw from the Company with 90 days’ written notice to the Members. In the event of the Manager’s withdrawal, or if the Manager dies or becomes legally incapacitated or unable to effectively perform his duties as a Manager, the Members shall, by a majority vote, or written consent, elect a new Manager. The resignation of a Manager shall not become effective until the election of a new Manager by the Members, or twelve (12) months from the date of the Manager’s resignation notice to the Members, which comes first.

11.2 Management of Company; Authority

Except as otherwise expressly provided in mandatory provisions of the Act or in this Agreement, (a) the decisions and management of the business and affairs of the Company shall be vested exclusively in the Managers and (b) no Member shall have any right or power to take part in the management or control of the Company or its business or affairs. The Managers have all of the rights and powers of a Manager as provided in the Act, this Agreement, and as otherwise provided by law. Any action of the Managers shall constitute the act of and bind the Company.

11.3 Limitations on Manager’s Authority

No Manager or Member shall take any action, or fail to take any action, that could impair the limited liability status of the Members.

11.4 Evidence of Authority

Any person dealing with the Company may rely on a certificate signed by the Manager as to:

(a) the identity of the Managers and Members;

(b) the existence or nonexistence of any fact or facts that constitute a condition precedent to acts by the Managers or Members or any other matter germane to the Company’s affairs;

(d) any other matter whatsoever involving the Company or the Managers or any Member.

12. Limitation on Liabilities; Indemnification

12.1 Limitation on Liabilities

No Manager or Member shall have any liability whatsoever for the obligations or liabilities of the Company or for any breach of duty in any capacity, except to the extent expressly provided in this Agreement or pursuant to non-waivable provisions of the Act. No Manager or Member shall owe any duty (fiduciary or otherwise) to the Company or any Member, except pursuant to non-waivable provisions of the Act. No Member shall be required to return any distribution from the Company, except as expressly provided under non-waivable provisions of the Act. Notwithstanding any other provision in this Agreement, no Member shall have any obligation to restore a deficit Capital Account.

12.2 Indemnification

The Company shall indemnify and hold harmless the Managers, Members and officers of the Company to the full extent permitted by law from and against any and all losses, claims, demands, costs, damages, liabilities, joint and several, expenses of any nature (including attorney fees and disbursements), judgments, fines, settlements and other amounts arising from any and all claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative, in which a Manager, Member or officer may be involved, or threatened to be involved as a party or otherwise, arising from, or in connection with, the performance of any action by such Manager, Member or officer for, on behalf of, or otherwise in connection with, the Company. Each such person shall be entitled to an advancement of expenses in connection with defending any such action.

13. Transfers of Interests

13.1 Prohibition

Except as set forth in this Section 13, no Member may sell, assign, transfer, encumber or otherwise dispose (“Transfer”) of its Percentage Interests or withdraw from the Company without the prior written consent of the Managers (or, in case of a Manager, the other Members holding a majority of the Company interests), which consent may be withheld in the Manager’s or Members’, as the case may be, absolute discretion. Upon a Transfer in accordance with the foregoing provisions, and the assumption of obligations hereunder, including the execution of a written agreement to be bound by the terms of this Agreement, the transferee shall be admitted as a Member in addition to or in substitution for the transferor Member, as the case may be. Transfers in violation of this Agreement, including this Section, shall be null and void.

13.2 Mandatory Transfer

(a) If any Member or, if the Member is a corporate entity, any individual owning or controlling 50% or more of that entity’s equity (an “Employed Member”) is employed by Legacy Opportunity Fund, LLC or any of its affiliated companies (collectively “Legacy”) and the Employed Member resigns his or her employment with Legacy for any reason within five years after becoming a Member, or if Legacy terminates the Employed Member at any time for fraud, theft, willful neglect, or other similar misconduct, Legacy will, effective upon the date of such resignation or termination, have an irrevocable option to repurchase the Employed Member’s Percentage Interest as of the date of the resignation or termination in exchange for repayment of the value of the Employed Member’s initial capital contribution, without interest.

(b) If an Employed Member resigns his or her employment with Legacy for any reason more than five years after becoming a Member, if Legacy terminates the Employed Member’s employment for any reason other than fraud, theft, willful neglect, or other similar misconduct, or if the Employed Member dies or suffers a bona fide disability that leaves Employed Member unable to work, as determined by Legacy in its sole discretion, Legacy shall then have the right but not the obligation to repurchase the Employed Member’s Percentage Interest in exchange for the fair market value of the Employed Member’s Percentage Interest as of the date of the Employed Member’s death, disability, or termination, as determined by Legacy in its sole reasonable discretion.

(c) Legacy may designate and assign its Manager or one or more employees, officers, directors or Members of Legacy or its Manager to exercise all or a part of Legacy’s repurchase rights under this Section. Employed Member hereby appoints the Secretary of the Company, or any other person designated by the Manager to act as Secretary, as Employed Member’s attorney-in-fact to sell, assign and transfer to Legacy or its designee, all of the Percentage Interest repurchased by Legacy or its designee pursuant to this Section.

13.3 Buy-Sell

(a) At any time prior to the Company winding up pursuant to this Agreement, a Member or Members (the “Offering Member”) shall have the right to institute the buy-sell procedures in this Section to cause the other Member(s) (the “Receiving Member”), to either sell to the Offering Member all of the Receiving Member’s Units or purchase from the Offering Member all of the Offering Member’s Units, all on the terms herein set out:

(i) The Offering Member shall give written notice of the offer (the “Buy-Sell Notice”) to the Receiving Member, which Buy-Sell Notice shall state that the Offering Member is making an offer to purchase all of the Receiving Member’s Units for a specified purchase price payable in cash per Unit.

(ii) Within thirty (30) days after the Receiving Member receives the Buy-Sell Notice, the Receiving Member shall notify the Offering Member of its election to either:

(A) sell to the Offering Member all of the Units owned by the Receiving Member for the purchase price per Unit set out in the Buy-Sell Notice; or

(B) purchase all of the Offering Member’s Units for the purchase price per Unit set out in the Buy-Sell Notice.

(iii) The failure of the Receiving Member to notify the Offering Member in writing (signed by the Receiving Member) within the thirty (30) day period of its election to buy or sell, shall conclusively be deemed to be an election by the Receiving Member to sell to the Offering Member all of the Receiving Member’s respective Units in the Company as provided in this Section, and the election shall be treated as having occurred on the last day of the thirty (30) day period.

(iv) The closing of the sale and purchase of the Units contemplated by this Section shall occur at the principal office of the Company within sixty (60) days after the Receiving Member notifies (or is deemed, pursuant to the provisions of Section 10.4(a)(iii) to have notified) the Offering Member of its election to sell or buy. At the closing, the following transactions shall occur:

(A) the selling Member shall transfer the selling Member’s Units to the purchasing Member and the selling Member shall execute and deliver to the purchasing Member all documents required to give effect to the sale and purchase of such Units. Failure of the selling Member to timely execute the required documents in the sole discretion and reasonable judgment of the Managers, shall permit the Managers to execute the documents on behalf of the selling Member, and such signatures and execution shall be binding upon the selling Member; and

(B) the purchasing Member shall: (i) pay to the selling Member the purchase price stated in the Buy-Sell Notice for the Units being purchased; (ii) repay, or cause the Company to repay, to the selling Member or its Affiliates, as the case may be, all amounts they have loaned or advanced to the Company; and (iii) deliver releases of the selling Member and its Affiliates from third persons to whom the selling Member or its Affiliates have guaranteed the repayment of the Company’s loans, advances or other obligations. The selling Member will cooperate with the purchasing Member in obtaining the releases.

14. Incapacity of a Member or Involuntary Transfer

The incapacity or involuntary transfer of a Member as the result of the Member’s death or incapacity shall not cause the dissolution of the Company.

15. Effect of Incapacity or Involuntary Transfer

Subject to Legacy’s repurchase rights under Section 13 above, upon the occurrence of an incapacity or involuntary transfer, the Member suffering the incapacity or involuntary transfer, or such Member’s permitted successors (i) shall be entitled to receive thereafter only the distributions and allocations of income, gain, loss, deduction, credit or similar items to which the Member would have been entitled, and (ii) shall not be entitled or enabled to exercise any other rights or powers of a Member.

16. Dissolution

The Company shall continue unless dissolved (i) by determination of the Manager; (ii) by determination of the Members holding a majority of the Company interests or (iii) by operation of law. Upon the dissolution of the Company, the affairs of the Company shall be wound up and liquidated forthwith.

17. Winding Up

In the event the Company is dissolved, the Company’s affairs shall be wound up as expeditiously as possible, the assets of the Company sold or distributed and the Company terminated. The winding up of the Company’s affairs and the liquidation and distribution of its assets shall be conducted by such person as the Managers shall appoint, who is authorized to do any and all acts and things authorized by law to effect such liquidation and distribution of the Company’s assets. The Company’s assets shall be used first to pay or provide for the payment of all of the Company’s debts (including those to Managers or Members), with the balance being distributed to the Members in accordance with their respective Percentage Interests, after giving effect to the Class B Liquidation Preference, and giving effect to all contributions, distributions and allocations for all taxable periods prior to the winding up period and to all contributions and allocations for the winding up period. The Company’s assets may be sold or such assets as are in excess of the amount required to meet all of the Company’s liabilities to third persons may be distributed in kind to the Members. If any assets of the Company are to be distributed in kind, such assets shall be valued and shall be deemed sold at their fair market value and any gain or loss deemed realized shall be allocated to the Capital Accounts of the Members pursuant to this Agreement as if such gain or loss had actually been fully realized in the winding up taxable period.

18. Miscellaneous and Administrative Provisions

18.1 Governing Law

This Agreement is being delivered in Delaware and the parties intend that this Agreement shall be governed by and construed and enforced in accordance with the laws of the state of Delaware applicable to contracts made and to be wholly performed in Delaware by persons domiciled in Delaware without reference to rules governing conflicts of law.

18.2 Amendments

This Agreement may be amended only by an instrument in writing signed by the Manager and Members holding at least a majority of the Percentage Interests in the Company, except where such amendment directly and materially adversely affects a Member, then such amendment must also be signed by such affected Member.

18.3 Notices

All notices, requests, demands, consents, approvals, declarations and other communications required by this Agreement shall be in writing and shall be deemed delivered (a) if given by facsimile or electronic mail, when transmitted and the appropriate telephonic or electronic confirmation received, (b) if given by first-class air mail (certified and return-receipt requested), when delivered, and (c) if given by an internationally recognized overnight courier, when received or personally delivered, in each case, to the number or addressed of a Member as contained on the books of the Company, with a copy to the Company to its registered office or at such other address as may have otherwise been specified by written notice. Notices shall be deemed delivered when received.

18.4 Parties Bound

This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.

18.5 Entire Agreement

This Agreement contains the entire understanding among the parties and supersedes any other or prior understandings or written or oral agreements among the parties with respect to the subject matter hereof.

18.6 Counterparts

This Agreement may be executed in counterparts, all of which shall constitute the same agreement. Delivery of an executed signature page to this Agreement by facsimile transmission shall be as effective as delivery of a manually signed counterpart hereof.

IN WITNESS WHEREOF, the parties hereto have executed this Operating Agreement of LB 1 LLC as of the day and year first written above.

MANAGER: Legacy Builders Management, LLC		INITIAL MEMBER: Legacy Builders Management, LLC

By:	/s/ Amed Hazel		By:	/s/ Amed Hazel
	Amed Hazel			Amed Hazel
	Manager			Manager

By:	/s/ Rochelle Hazel		By:	/s/ Rochelle Hazel
	Rochelle Hazel			Rochelle Hazel
	Manager			Manager

Schedule 1

As of 11/26/18

Member		Initial Capital Contribution			Percentage Interest
Legacy Builders Management, LLC		$	1,000.00				100	%

EX1A-4 SUBS AGMT.1 5 lb1_ex41.htm FORM OF SUBSCRIPTION BOOKLET

EXHIBIT 4.1

LB 1 LLC

A Delaware Limited Liability Company

SUBSCRIPTION BOOKLET

SECURED PROMISSORY NOTES

NOVEMBER 2019

LB 1 LLC

c/o Amed Hazel

818 Natchez Valley Trace

Grayson, GA 30017

OVERVIEW

Content and Purpose

This Subscription Booklet (this “Subscription Booklet”) relates to the offering (the “Offering”) of a Secured Promissory Note (“Note”, or “Notes” if plural) of LB 1 LLC, a Delaware limited liability company (the “Company”). The Investor should review all the documents carefully, confer with legal and tax counsel, and then complete this Subscription Booklet which consists of the following:

Subscription Agreement

Accredited Investor Questionnaire and Subscription Information

Secured Promissory Note

Intercreditor Agreement

The primary purpose of this Subscription Booklet is to apprise the prospective Note holder of the business of the Company and the risks associated with the Company, and to assist the Company in determining whether a prospective Note holder is eligible under applicable U.S. laws to become a holder of the Notes (the “Holder”). The Company will not register the Offering under the U.S. Securities Act of 1933, as amended, and will not register itself as an investment company under the U.S. Investment Company Act of 1940, as amended. Instead, the Company will rely on exemptions from these laws that are available only if the Note Holder satisfies certain criteria that are covered in this Subscription Booklet.

The Company, in its sole discretion, may reject any subscription, if it determines that the subscriber does not satisfy the applicable legal standards. The Company may also reject any subscription (in whole or in part) for any other reason it deems appropriate based solely upon its own best judgment.

Note Holder Instructions:

Prior to completing this Subscription Booklet, the Note holder should do the following:

	1.	Complete and sign the Accredited Investor Questionnaire and the Signature Pages.

	2.	Send a copy of the entire completed Subscription Booklet appropriately executed and any additional required documents marked to the attention of Mr. Amed Hazel at the Company’s address provided herein below.

	3.	Payments may be made by wire transfer. The Company will hold the wire transfer in a separate non-interest bearing account until we have signed the documents.

Compliance with these instructions will speed the Company’s review of your subscription submission.

Documents that the Company Will Return

Upon acceptance of the prospective subscription and receipt of payment, Mr. Amed Hazel on behalf of the Company will:

sign the Secured Promissory Note and send the original to the Note Holder, and

sign and return a fully executed copy of all other documents and return a copy for the Note Holder’s records.

Circumstances in which Beneficial Owners of an Entity Must Also Complete Accredited Investor Questionnaire

The beneficial owners of an entity that is a prospective Note holder (in addition to the entity itself) must complete an Accredited Investor Questionnaire if:

the entity was formed for the purpose of purchasing the Note;

the entity is participant-directed (as described in Part Two, Section C, Question 1(c) of the Accredited Investor Questionnaire); or

the entity is a revocable trust.

If any of these circumstances apply, please attach as exhibits to this Subscription Booklet a completed Accredited Investor Questionnaire for each beneficial owner of the entity.

Contact Information for Questions

If you have questions about completing this Subscription Booklet, feel free to contact:

LB 1 LLC

c/o Amed Hazel

818 Natchez Valley Trace

Grayson, GA 30017

Unless elsewhere defined herein or the context otherwise requires capitalized words in this Subscription Booklet have the meanings given to them in the Note. This Subscription Booklet and the documents, each and all, form the necessary documents for a purchase of the Note. The Note Holder shall execute each and every document required by the Company to affect a purchase of the Note.

SUBSCRIPTION AGREEMENT

This subscription agreement (the “Subscription Agreement”) is entered into as of each Closing (as hereinafter defined), by and between LB 1 LLC, a Delaware limited liability company (the “Company”) on the one hand, and the Note Holder signatories to this Subscription Agreement on the other. This Subscription Agreement shall be executed by the Company, or its duly authorized representative, on behalf of the Company, upon the Company’s acceptance of the documents executed by the Note Holder.

1.1 Definitions. Capitalized words in this Subscription Agreement have the meanings given to them in this Subscription Agreement, the Note, and the Subscription Booklet. This Subscription Agreement and the documents, each and all, form the necessary documents for a purchase of the Notes. The Note Holder shall execute all documents required by the Company to effect a purchase of the Notes.

1.2 Purchase.

(a) Purchase and Consideration.

The Note Holder hereby contracts to purchase a Note or Notes in the Principal Amount set forth on Note Holder’s signature page attached hereto. By signing this Subscription Agreement, the Note Holder agrees to be bound by the terms and conditions of the Note as set forth therein. Each Subscription Agreement between the Company and each respective Note Holder is a separate agreement, and the sale of each Note to each Note Holder is a separate sale.

(b) Closing Procedures.

1. Tender; Acceptance. Note Holder shall tender the Note Holder’s signed documents to the Company for acceptance by the Company, in the Company’s sole discretion. The Company will hold the tendered documents and consideration pending the Company’s review of such documents and acceptance of Note Holder as a Note Holder in the Offering. If the Company does not accept the tender, then the Company will so inform the Note Holder, and return Note Holder’s consideration.

2. Closing of Note Purchases. Closing of purchases of the Notes shall occur upon acceptance of this Subscription Agreement by the Company, in its sole discretion, with the close of each such sale being referred to as a “Closing”.

3. Delivery. The executed documents shall be delivered to the Company at its address or electronically through the DocuSign System.

4. Conditions to Closing. Value will be considered received by the Company only upon the Company’s (i) acceptance of this Subscription Agreement by its countersignature on the signature page, and (ii) having deposited in the U.S. Mail, or overnight delivery service, or electronically through the DocuSign System, the following items for delivery to Note Holder:

i. A signed original Note executed by the Company, as applicable;

ii. A copy of this Subscription Agreement fully executed by the Company as to the Note Holder; and

iii. Any other of the documents requested or required by the Company.

The Company will deliver copies of the fully executed documents to each Note Holder promptly upon the Closing of such Note Holder’s purchase of a Note.

(c) Termination of Offering. The Termination Date of the Offering shall be the date selected by the Company in its sole discretion.

(d) Minimum Investment. Each Note Holder must purchase a Note with a minimum Principal amount of five hundred dollars ($500) unless a waiver, signed by the Company in his sole discretion, is provided.

1.3 Representations of the Company. The Company represents and warrants to each Note Holder as set forth below in this Section 1.3. All such representations and warranties to each Note Holder are as of the date of the applicable Closing as to such Note Holder, except as otherwise indicated:

(a) Corporate Existence and Power. The Company is a corporation duly organized and validly existing under the laws of the State of Delaware; and the Company has full power and authority to transact the business in which it is engaged, and full power, authority, and legal right to enter into this Subscription Agreement and to incur and perform its obligations hereunder.

(b) Authority, No Contravention, Valid Issuance. The making and performance by the Company of this Subscription Agreement, and the issuance of the Notes (i) have been duly authorized, (ii) and to the Company’s management current knowledge do not violate any provision of any applicable law, rule, regulation, or order of any court, regulatory commission, board or other administrative agency, or any provision of the Company’s Certificate of Formation, as may be amended and/or restated, or the Company’s operating agreement, as may be amended or restated, and, (iii) do not result in the breach of, or constitute a default, or require any consent under (except to the extent such consent has been received), or result in the creation of any lien upon any properties or assets of the Company pursuant to any other indenture, bank, or other credit agreement, mortgage or other agreement or instrument to which the Company is a party, or by which it or any of its properties may be bound or affected.

(c) Binding Obligations. This Subscription Agreement has been duly executed and delivered by the Company and constitutes the legal, valid, and binding obligation of the Company, enforceable in accordance with its terms (subject to limitations as to enforceability which might result from bankruptcy, insolvency, or other similar laws affecting the enforcement of creditors’ rights generally).

(d) Approvals. To the Company’s actual and current knowledge, no authorization, consent, license, or approval of, or filing (except for filings with the appropriate office of states as may be required by securities laws of the Note Holder’s state of residence, or with the SEC if and as required by federal securities laws), or registration with, or notification to, any governmental body or regulatory or supervisory authority is required for the execution, delivery, or performance by the Company of this Subscription Agreement.

(e) Statements of Material Facts. The Company has used its best efforts to ensure that statements of material facts are not misleading.

1.4 Event of Default; Remedies.

Events of Default under the Note and the remedies therefore are described in the Note.

1.5 Representations of Note Holders. Each Note Holder for him, her, or itself represents and warrants to the Company as follows:

(a) Authority to Execute Agreement. Note Holder has full power and authority and legal right to make this Subscription Agreement and to incur and perform Note Holder’s obligations hereunder, and the performance by the Note Holder of this Subscription Agreement has been duly authorized by all necessary action of the Note Holder.

(b) Purchase Entirely for Own Account. Note Holder is purchasing the Notes solely for Note Holder’s own account for investment and not with a view to or for sale or distribution and not with any present intention of selling, offering to sell, or otherwise disposing of or distributing the Notes, as the case may be, in any transaction other than a transaction complying with the registration requirements of the Securities Act or pursuant to an exemption therefrom. Note Holder also represents that the entire legal and beneficial interest of the Notes, as the case may be, is being purchased by Note Holder for Note Holder’s account and is purchased neither in whole nor in part for any other person or entity.

(c) Accredited Investor. Note Holder has completed an Accredited Investor Questionnaire as requested by Company to document Note Holder’s status as an Accredited Investor. Such Accredited Investor Questionnaire is complete and accurate. Note Holder is aware that Company is relying upon the accuracy of that Accredited Investor Questionnaire in issuing a Note or Notes to the Note Holder.

(d) Access to Information. Note Holder has had the opportunity to fully investigate the investment Note Holder is making in the Notes, including, without implied limitation (i) the opportunity to discuss the Company’s business and financial condition, properties, operations, and prospects with the Company’s management and (ii) ask questions to the Company, which questions, if any, were answered by the Company to Note Holder’s satisfaction. Note Holder represents that he, she, or it has reviewed the documents prepared by the Company and has asked such questions as Note Holder may have concerning the documents and received satisfactory answers to all such questions, if any, and has not relied on any matters outside those described in the documents in making Note Holder’s decision to purchase a Note or Notes. NOTE HOLDER ALSO CONFIRMS HIS, HER, OR ITS UNDERSTANDING THAT (I) ALL PROJECTIONS OF FUTURE PERFORMANCE BY THE COMPANY AND REPRESENTATIONS OR FORWARD-LOOKING STATEMENTS CONCERNING FUTURE PERFORMANCE BY THE COMPANY ARE BASED ON THE COMPANY’S MANAGEMENT GOOD FAITH PROJECTIONS OR BELIEF, AND DO NOT REPRESENT COMMITMENTS OR WARRANTIES OF ANY PARTICULAR PERFORMANCE BY THE COMPANY, (II) THAT NO PARTICULAR PERFORMANCE BY THE COMPANY CAN BE ASSURED, AND (III) THAT ALL SUCH FORWARD-LOOKING STATEMENTS MUST BE REGARDED AS HIGHLY SPECULATIVE AND UNCERTAIN.

(e) Investment Experience; Ability to Sustain Loss. Note Holder has carefully reviewed this Subscription Agreement, the Risk Factors and the Subscription Booklet, is experienced in investments comparable to those of the Notes of the Company, is able to fend for her, him, or itself, and has such knowledge and experience in financial or business matters that he, she, or it is capable of evaluating the merits and risks of the investment in the Notes. Note Holder understands the risks associated with purchasing the Notes in particular. Note Holder is able to sustain the loss of Note Holder’s entire investment of Principal in the Notes. If Note Holder is a legal entity, then Note Holder has not been organized for the purpose of purchasing or otherwise acquiring the Notes.

(f) UNDERSTANDING OF RISKS. NOTE HOLDER CONFIRMS HIS, HER, OR ITS UNDERSTANDING THAT THE COMPANY AND ITS PROPOSED BUSINESS AND TRANSACTIONS ARE SUBJECT TO ALL THE RISKS INHERENT IN AN EARLY STAGE, PRE-REVENUE COMPANY, AND UNDERSTAND ALL THE RISKS IN TRANSACTIONS INVOLVING THE COMPANY’S BUSINESS, INVESTMENT OBJECTIVES, MULTIPLE PARTIES, AND LENDERS. NOTE HOLDER HAS READ AND REVIEWED THE DOCUMENTS, WITH SUCH OF NOTE HOLDER’S ATTORNEYS, ADVISORS, AND AGENTS AS NOTE HOLDER HAS DEEMED NECESSARY TO MAKE AN INFORMED DECISION ABOUT THE PURCHASE OF THE NOTES.

(g) Authorization. The execution, delivery, and performance of this Subscription Agreement by Note Holder (i) does not require the consent, approval, or authorization of any governmental or regulatory authority and (ii) does not violate any applicable law, judgment, order, injunction, decree, rule, regulation, or ruling of any governmental authority applicable to Note Holder.

(h) RESTRICTED SECURITIES. NOTE HOLDER UNDERSTANDS THAT THE NOTES HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION. SUCH EXEMPTION DEPENDS UPON, AMONG OTHER THINGS, THE GOOD FAITH NATURE OF NOTE HOLDER’S INVESTMENT INTENT STATED IN THIS SUBSCRIPTION AGREEMENT AND NOTE HOLDER’S QUALIFIED STATUS AS AN ACCREDITED INVESTOR AS DESCRIBED IN SECTION 1.5(C) ABOVE. NOTE HOLDER UNDERSTANDS THAT THE NOTES MUST BE HELD BY THE NOTE HOLDER AND NOT TRANSFERRED, UNLESS THE COMPANY CONSENTS IN WRITING, OR UNLESS THE NOTES ARE SUBSEQUENTLY REGISTERED UNDER THE SECURITIES ACT, OR UNLESS AN EXEMPTION FROM REGISTRATION IS OTHERWISE AVAILABLE. NOTE HOLDER UNDERSTANDS THAT THE COMPANY IS NOT OBLIGATED TO REGISTER THE NOTES. NOTE HOLDER ALSO UNDERSTANDS THAT THE NOTES MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED, OR THE WRITTEN CONSENT OF THE COMPANY IS GIVEN, WHICH CONSENT MAY BE WITHHELD FOR ANY REASON BY THE COMPANY.

1.6 Covenants. These covenants last for so long as each Note Holder holds Notes:

(a) Compliance with Laws. The Company will comply with the requirements of applicable laws, rules, regulations, and orders of any governmental authority, except where contested in good faith and by proper proceedings.

(b) Taxes.

1. The Company Taxes. The Company will pay and discharge taxes, assessments, and governmental charges or levies imposed upon the Company or upon its income or profits or upon any property belonging to it, prior to the date on which penalties attach thereto, and lawful claims which, if unpaid, might become a lien upon its property, provided that it shall not be required to pay any such tax assessment, charge, levy, or claim the payment of which is being contested in good faith and by proper proceedings and in respect of which it is maintaining adequate reserves.

2. Note Holder Taxes. Note Holder has read the documents, understands the tax aspects and risks associated with the purchase of the Notes, and agrees that the Note Holder shall be solely and entirely responsible for any and all tax payments, tax obligations, fees, and assessments, along with all reporting of Note Holder’s tax consequences, as a result of the purchase of, and any income from, the Notes. The Company shall have no obligation, responsibility or liability to the Note Holder in connection with the payment or remittance of any taxes or tax filings required to be made by the Note Holder.

1.7 Restrictions on Transfer of Notes.

(a) Restrictions. In addition to any other restrictions on transfer imposed by applicable federal or state securities laws, no Note Holder may transfer any interest in any of the Notes except as provided in this Section. Note Holder understands that the Notes may not be offered, sold, transferred, pledged, or otherwise disposed of unless: (i) the Company files an effective registration statement for the Notes under the Securities Act and applicable state securities laws, or (ii) the written consent of the Company is given, which consent may be withheld for any reason by the Company, and the Company receives an opinion of counsel acceptable to the Company that registration is not required for such transfer.

(b) Obligations Binding Upon Transferees. Any permitted transferee of Notes or any interest therein will receive and hold such Notes or interests subject to the provisions of this Section 1.7. Any such transferee shall agree in writing that the transferee shall hold the Notes subject to the provisions of this Section 1.7 and that no further transfers shall be made except as provided in this Section 1.7.

(c) Purported Transfers in Violation. Any purported transfer of Notes in violation of the provisions of this Section 1.7 is null and void and shall be of no effect. The purported transferee shall have no interest in any of the Notes purported to be transferred. Each Note Holder agrees that in the event of a purported transfer of Notes in violation of the provisions of this Section 1.7, the Company may enforce the provisions of this Section 1.7 by specific performance or other injunctive relief, in addition to any of the remedies available at law or in equity.

1.8 Other Matters.

(a) Amendments. This Subscription Agreement may be amended or modified only in writing signed by the Note Holder and the Company.

(b) Assignment. This Subscription Agreement shall not be assigned by the Note Holder without the prior written consent of the Company. Any purported assignment of this Subscription Agreement in violation of this section is null and void and shall be of no effect.

(c) Counterparts; Facsimile. This Subscription Agreement may be executed in counterparts, each of which shall be an original and all of which shall constitute but one document. Delivery of an executed signature page to this Subscription Agreement and any of the other agreements, documents, and instruments contemplated hereby, by facsimile transmission shall be as effective as delivery of a manually signed counterpart or thereof.

(d) Expenses and Attorneys’ Fees; Additional Information. Each party shall pay its own costs and expenses incurred in connection with the negotiation, execution, delivery, and performance of this Subscription Agreement. Each party in any suit, action, or appeal filed or held concerning this Subscription Agreement shall be responsible for its own attorneys’ fees and shall not be responsible for the attorneys’ fees of any other party. Each of the parties shall promptly execute and deliver such additional documents and shall do such acts that are reasonably necessary in connection with the performance of their respective obligations hereunder to carry out the intent of this Subscription Agreement.

(e) Governing Law. This Subscription Agreement shall be governed and construed and enforced in accordance with the laws of the State of Delaware without regard to conflict of law principles thereunder. The exclusive venue for disputes under this Subscription Agreement shall be the courts of the State of Delaware.

(f) Confidentiality. The Note Holder acknowledges that the information provided to it regarding the Company is confidential and non-public. The Note Holder agrees that all of the information will be kept in confidence and will be neither used to its personal benefit (other than in connection with its subscription for the Notes) nor disclosed to any third party. This obligation does not apply to any such information which (a) is part of public knowledge or is readily accessible as literature at the date of this Subscription Agreement, (b) becomes part of public knowledge or literature and, thus, becomes readily accessible by publication (except as a result of a breach by Note Holder of this provision), or (c) is received from third parties (except third parties who disclose it in violation of any confidentiality agreement they may have with the Company).

(g) Notices. All notices or other communications required or permitted by this Subscription Agreement must be in writing; must be delivered to the Company at the addresses set forth below, or any other address that a party may designate by notice to the other parties; and are considered delivered upon (i) actual receipt if delivered personally, (ii) one day after deposit with a nationally recognized overnight delivery service, or (iii) at the end of the third business day after the date of deposit in the United States mail, postage pre-paid, certified, return receipt requested.

To Company:		LB 1 LLC
		c/o Amed Hazel 818 Natchez Valley Trace Grayson, GA 30017

with a copy to:		Wallace A. Glausi
		Attorney at Law 550 Park Avenue, Suite 220 Portland, OR 97205

(h) Non-Waiver. A waiver of one or more breaches of any clause of this Subscription Agreement shall not act to waive any other breach, whether of the same or different causes.

(i) Severability. Each clause of this Subscription Agreement is severable. If any clause is ruled void or unenforceable, then the balance of this Subscription Agreement shall nonetheless remain in effect.

(j) Term. Unless otherwise agreed to in writing by the parties, this Subscription Agreement shall remain in full force and effect to the extent required to give full effect to the covenants and agreements contained in the Note, after which it terminates.

[Signature pages to follow]

SUBSCRIPTION AGREEMENT

SIGNATURE PAGES

IN WITNESS WHEREOF, the undersigned has executed this Subscription Agreement for the acquisition of Notes to be issued by the Company.

A.	NOTE HOLDER’S LEGAL NAME: ____________________________

	Print Note Holder’s name in full exactly as it should appear on the Note.

B.	SUBSCRIPTION TERMS:

Original Note Amount: $ _______________

Maturity date of Note Issued: _________________

Annual Note Interest Rate: __________________

C.	FORM OF PAYMENT: The total amount must equal the Principal Amount of the Note.

o	Enclosed check for U.S. $________________.
o	Wire Transfer for U.S. $_________________. (Please see wiring instructions in the section “For wire transfer” below for more information.

D.	TYPE OF INVESTOR: (Please check the appropriate box pertaining to the Note Holder.)

o	Individual	o	Corporation
o	Estate	o	Partnership
o	Revocable Trust	o	Custodian
o	Irrevocable Trust	o	Benefit Plan
o	IRA	o	Exempt Organization
o	Other (please specify): __________________________

E.	NOTE HOLDER INFORMATION AND SIGNATURE:

Residence or Principal Business Address of Note Holder:		Mailing Address for Receiving Communications:

		o Check if same as prior column




Phone No.: (____)_____________		Phone No.: (___)______________
Fax No.: (____) ____________		Fax No.: (___)_____________

Email Address(primary)________________@___________________.

Social Security or Federal Tax Identification No.: _____________________________.

For wire transfer: please carefully follow the instructions below to ensure proper routing of your payment:

	Bank Name:		M&T Bank
	Bank Address:		9840 Groffs Mill Dr.
			Grayson, GA
	Account Name:		LB 1 LLC
	Account Number:		9871798493
	Routing Number:		052000113

F.	COMPANY ACCEPTANCE OF NOTE HOLDER:

The undersigned hereby accepts the foregoing subscription for the Notes of the Company and, subject to delivery of payment and other documents to be delivered by the Note Holder, agrees that the Note Holder shall become a Holder of the Note effective as of the date signed by the Company authorized representative below.

Manager:

Legacy Builders Management LLC

By: ________________________________

Amed Hazel, Manager

Date: _______________________________

SECURED PROMISSORY NOTE

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”). THIS NOTE HAS BEEN ACQUIRED WITHOUT A VIEW TO DISTRIBUTION AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THIS NOTE UNDER THE ACT AND UNDER ANY APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL FOR THE HOLDER (CONCURRED IN BY LEGAL COUNSEL FOR THE COMPANY) THAT SUCH REGISTRATION IS NOT REQUIRED AS TO SUCH SALE OR OFFER.

Month/Day/Year of Note Issuance: ________________

Principal Amount of Note: ________________

LB 1 LLC

FOR VALUE RECEIVED, as of [____________] (the “Issue Date”), in accordance with the terms and conditions contained in this Secured promissory note (“Note”) the undersigned, LB 1 LLC, a Delaware limited liability company (the “Company”), promises to pay to [_________________] (“Holder” or “Note Holder”), the principal and interest accrued thereon, as provided below.

1. Amount and Repayment.

1.1 Principal Amount. The principal sum of this Note is the principal amount set forth above: _________________________ ($)[______] (the “Principal Amount”).

1.2 Interest. The Principal Amount will bear interest from the Issue Date through the date of payment as described below (“Interest”), accruing as follows: ______________ simple per annum, starting to accrue from the Issue Date provided that the interest shall accrue only on the principal amounts of the Note not repaid and not converted.

1.3 Payment of the Note; Maturity Date. The Company will make payments of Interest and the Principal Amount on the Note as follows.

1.3.1 The Note Interest is due and will be paid in full on the Maturity Date.

1.3.2 The Note’s Principal Amount, along with all accrued and unpaid Interest, will become payable on the Maturity Date, unless the Note is paid off earlier or becomes subject to accelerated payoffs as set forth above (“Maturity Date”).

1.4 Prepayment Provisions. The Company may prepay all or any portion of the Principal Amount of the Note or Interest accrued thereon, at any time prior to the Maturity Date, without penalty.

1.5 Events of Default. The Note will be in default and all Principal Amount not repaid and Interest shall be due in full in the event of any of the following:

1.5.1 A default in payment or performance of the Note that is not cured within fifteen (15) business days of Note Holder notice to Company, or

1.5.2 The Company institution a voluntary bankruptcy proceeding, or

1.5.3 The commencement of an involuntary bankruptcy action against the Company which such action not cured by the Company within ninety (90) days of its commencement.

2. Other Matters.

2.1 Notice. All notices and other communications given or made pursuant hereto shall be in writing and shall be deemed effectively given: (i) upon personal delivery to the party to be notified, (ii) when sent by confirmed electronic mail or facsimile if sent during normal business hours of the recipient; if not, then on the next business day, (iii) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (iv) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent to the respective parties at the addresses set forth in the Subscription Agreement (or at such other addresses as shall be specified by notice given in accordance with this Section 3.1).

2.2 Amendment and Assignment.

3.2.1 Amendment. This Note may individually be amended only upon the written consent of the Company and the Note Holder.

3.2.2 Assignment. In addition to any other restrictions on transfer imposed by applicable federal or state securities laws, no Note Holder may transfer any interest in any of this Note except as provided in this Section. Note Holder understands that the Note may not be offered, sold, transferred, pledged, or otherwise disposed of unless: (i) the Company files an effective registration statement for the Note under the Securities Act and applicable state securities laws, or (ii) the written consent of the Company is given, which consent may be withheld for any reason by the Company, and the Company receives an opinion of counsel acceptable to the Company that registration is not required for such transfer.

3.2.3 Obligations Binding Upon Transferees. Any permitted transferee of Note or any interest therein will receive and hold such Note or interests subject to the provisions of Section 3.2. Any such transferee shall agree in writing that the transferee shall hold the Note subject to the provisions of Section 3.2 and that no further transfers shall be made except as provided in Section 3.2.

3.2.4 Purported Transfers in Violation. Any purported transfer of Note in violation of the provisions of Section 3.2 is null and void and shall be of no effect. The purported transferee shall have no interest in any of the Note purported to be transferred. Each Note Holder agrees that in the event of a purported transfer of Note in violation of the provisions of Section 3.2, the Company may enforce the provisions of Section 3.2 by specific performance or other injunctive relief, in addition to any of the remedies available at law or in equity.

2.3 Governing Law; Specific Performance. This Note and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of Delaware, without giving effect to principles of conflicts of law.

2.4 Severability. Each clause of this Note is severable. If any clause is ruled void or unenforceable, the balance of the Note shall nonetheless remain in effect.

2.5 Security; Note Subordination. The Note Holder shall execute an Intercreditor Agreement as the security Agreement between the Company and the Note Holder. But such Intercreditor Agreement shall be subordinate to any Company’s senior debt financing (both in the right to payment and in the right to security, if applicable), and the Company is permitted to incur indebtedness ranking senior or pari passu with the Note while the Note is outstanding.

	LB 1 LLC

	By:
		Amed Hazel

INTERCREDITOR SECURITY AGREEMENT

This Intercreditor Security Agreement (the “Intercreditor Security Agreement”), dated as of _____________, 20___, is by and among LB 1 LLC, a Delaware Limited Liability Company (“Company”), and ____________________________________ (“Investor”) as Representative or his successor thereto, and the undersigned Note Holder.

Recitals:

A. Pursuant to the terms and conditions of the Offering of the Company, Secured Promissory Notes (the “Notes”) will be issued to Accredited Investors in exchange for cash consideration. The Notes are secured by a security interest in shares of the Company.

B. It is acknowledged that Representative would enter into an agreement with the Company providing for the orderly prosecution of any enforcement or foreclosure action with respect to the Notes.

C. The parties wish to describe the relative rights of Representative with respect to the Notes.

D. All capitalized terms in this Intercreditor Security Agreement not defined herein have the meanings given to them in the Notes. This Intercreditor Security Agreement, the Notes, and the other documents referenced in the Subscription Booklet for the Offering each and all, form the necessary documents for a purchase of the Notes. The Note Holder shall execute each and every document required by the Company to effect a purchase of the Notes.

Agreement:

Now, therefore, for and in consideration of the mutual covenants contained in this Intercreditor Security Agreement, the undersigned hereby agree as follows:

1. Pari Passu Interests. The Company, the Representative, and the Note Holder acknowledge and agree that the respective interests of each Note Holder in and to any payments made by the Company in respect of the Notes, the Security, and any collections in connection with the foreclosure of such Security shall be pari passu and no Note Holder shall have any priority over the other; provided further, that any such payments, Security and/or collections received by any Note Holder, other than such payments, Security and collections that are received by all Note Holders on a pro rata basis, shall be paid by such Note Holder to the Representative, to be held in trust for the benefit of all Note Holders.

2. Designation of Representative as Sole Representative. The Company and the Representative acknowledge that the Note Holders have designated the Representative as the sole representative of all Note Holders and furthermore that the Note Holders have granted to the Representative a Power of Attorney, and the authority to control the orderly prosecution of any enforcement action with respect to the Note or foreclosure of the Security that each of the Note Holders receives a pari passu interest in the Security. As described below, the Note Holder hereby appoints Representative as its agent, representative and attorney-in-fact, with the exclusive right to manage, perform, and enforce the terms of the Notes to the extent that such Note Holder has the right to do so, and to exercise and enforce all privileges and rights exercisable and enforceable thereunder, for the joint benefit of the Note Holders. Neither the Representative nor any of his employees shall be liable for any action taken or omitted to be taken by her under or in connection with the Notes, except for its own gross negligence or willful misconduct. The Representative may resign as sole representative of all the Note Holders at any time by delivering written notice to the Note Holders. In the event that the Representative ceases to serve as representative for all the Note Holders, the Holders of at least one half of the dollar Principal Amount of the Notes may designate a new Representative.

3. Power of Attorney. Note Holder hereby makes, constitutes, and appoints the Representative, and any successor Representative, as determined hereunder as its true and lawful representative and attorney-in-fact in such Note Holder’s name, place, and stead to make, execute, sign, acknowledge, file, and record with respect to the Note any further action which the Representative shall consider necessary or advisable in connection with any of the foregoing, hereby giving the Representative full power and authority to do and perform each and every act or thing whatsoever requisite to be done in and about the foregoing as fully as such Note Holder might or could do if personally present, and hereby ratifying and confirming all that the Representative shall lawfully do or cause to be done by virtue hereof; provided, however, that the Representative shall not have any right, power, or authority to amend or modify this Intercreditor Security Agreement when acting in such capacity except as set forth herein. The foregoing power of attorney is hereby declared to be irrevocable and a power coupled with an interest, and it shall survive the death of a Note Holder and extend to the Note Holder’s heirs, legal representatives, successors, and assigns.

4. Specific Enforcement. As sole representative of all Note Holders, Representative shall be the only party to take any enforcement or set-off action with respect to the Notes, foreclose or take any other action to realize upon the Note or the Security, institute any action or proceeding to collect or enforce the Note, commence or cause to be commenced any bankruptcy or similar proceeding against the Company or commence or exercise any other right or remedy against the Company or under any document related to the Notes or under applicable law.

5. Note Holder Security.

5.1 Grant and Definition. As Security for the due and timely performance and payment of Company’s Obligations to the Note Holders under the Notes, the Company hereby grant to the Note Holders a security interest in all of the Company’s right, title and interest in Company shares. The foregoing shall collectively be defined as the “Security”.

5.2 Note Security. Note Holder acknowledges that the Security for the Note is a prorated interest in shares of the Company.

5.3 Representative. Note Holder further acknowledges that all Security and filings granted and made under the Note shall be held, pursuant to this Intercreditor Security Agreement, in the name of _________________, who shall act as the initial Representative for all Note Holders. The Representative shall have the sole discretion to appoint a successor Representative or Representatives. Such Representative or Representatives shall receive and keep record of quarterly updates and reports from the Company, and such reports shall be available to the Note Holder from the Representative.

5.4 Perfection. The Company hereby authorizes the Note Holder, through the designated Representative, to file any UCC financing statements, and any amendment or modifications thereto or continuations thereof, and to file any other instrument or document, and take any other action the Representative deems necessary or appropriate to perfect or protect the Security Interest created under this Intercreditor Security Agreement.

6. Note Subordination. The Note Holder agrees that, except as expressly otherwise provided in this Intercreditor Security Agreement or as any senior lender of the Company may otherwise expressly consent in writing, the payment of the Notes shall be postponed and subordinated in right of payment and priority to the payment in full of the liabilities to the senior lender. Furthermore, no payments or other distributions in respect of the Notes shall be made (whether at stated maturity, by acceleration or otherwise) nor shall any property or assets of the Company be applied to the purchase or other acquisition or retirement of any Note liabilities prior to the termination of this Intercreditor Security Agreement, unless otherwise agreed to in writing by the senior lender. Notwithstanding anything to the contrary contained in this Section 6 or elsewhere in this Intercreditor Security Agreement, the Company may repay in full the Note liabilities, so long as no event of default (as defined in the Note or loan documentation between the Company and the senior lender) has occurred and is continuing at the time of any such payment. The Note Holder hereby subordinates all claims and security interests it may have against, or with respect to, any of the assets of the Company to the security interests granted by the Company the senior lender in respect of the liabilities to the senior lender. The Note Holder agrees that, in the event of any dissolution, winding up, liquidation, readjustment, reorganization or other similar proceedings relating to the Company or to its creditors, as such, or to its property (whether voluntary or involuntary, partial or complete, and whether in bankruptcy, insolvency or receivership, or upon an assignment for the benefit of creditors, or any other marshalling of the assets and liabilities of the Company, or any sale of all or substantially all of the assets of the Company, or otherwise), the liabilities to the senior lender shall first be paid in full before the Note Holder shall be entitled to receive and to retain any payment or distribution in respect of the Note.

7. All Note Holders Treated Equally. Notwithstanding the order of filing of any financing statement, or the perfection or non-perfection of any Security, respective interests of each Note Holder in and to the Security and any collections in connection with the foreclosure of such Security shall be pari passu and no party shall have any priority over the other.

8. No Obligation to Take Action. Except for action expressly required to be taken by Representative hereunder and under the terms and conditions of the Subscription Agreement, Representative shall be entitled to refrain from taking any action hereunder unless Representative shall be indemnified by all Note Holders to Representative’s satisfaction from any and all liability and expense it may incur by reason of taking such action. If Representative declines to take action hereunder, the Note Holders may designate a new Representative by a vote of the majority in interests of the Note Holders and such new Representative shall have the same authority to act on behalf of the Note Holders as granted to Representative hereunder.

9. Third Party Beneficiaries. The Company and Representative acknowledge and agree that each Note Holder is a third-party beneficiary under this Intercreditor Security Agreement, and that each Note Holder may enforce any and all rights arising under this Intercreditor Security Agreement. Each Note Holder has agreed to be bound by the terms and conditions to this Intercreditor Security Agreement pursuant to execution of it and of the Subscription Agreement.

10. Reimbursement. Representative shall be reimbursed by the Note Holders for all reasonable expenses incurred on behalf of the Note Holders in connection with any enforcement action.

11. Other Matters.

11.1 Amendments. This Intercreditor Security Agreement may be amended or modified only in writing signed by the Holders of at least one half of the dollar Principal Amount of the Notes, and the Company.

11.2 Assignment. This Intercreditor Security Agreement shall not be assignable by the Note Holder without the prior written consent of the Company and the Assembly Developers. Any purported assignment of this Intercreditor Security Agreement in violation of this section is null and void and shall be of no effect.

11.3 Counterparts; Facsimile. This Intercreditor Security Agreement may be executed in counterparts, or electronically through the DocuSign System, each of which shall be an original and all of which shall constitute but one document. Delivery of an executed signature page to this Intercreditor Security Agreement and any of the other agreements, documents and instruments contemplated hereby, by facsimile transmission, shall be as effective as delivery of a manually signed counterpart or thereof.

11.4 Expenses and Attorneys’ Fees. Each party shall pay its own costs and expenses incurred in connection with the negotiation, execution, delivery, and performance of this Intercreditor Security Agreement. Each party in any suit, action, or appeal filed or held concerning this Intercreditor Security Agreement shall be responsible for its own attorneys’ fees and shall not be responsible for the attorneys’ fees of any other party.

11.5 Additional Documents and Acts. Each of the parties shall promptly execute and deliver such additional documents and shall do such acts that are reasonably necessary in connection with the performance of their respective obligations hereunder to carry out the intent of this Intercreditor Security Agreement.

11.6 Governing Law. This Intercreditor Security Agreement shall be governed and construed and enforced in accordance with the laws of the State of Delaware without regard to conflict of law principles thereunder. The exclusive venue for disputes under this Intercreditor Security Agreement shall be the courts of the State of Delaware.

11.7 Notices. All notices or other communications required or permitted by this Intercreditor Security Agreement must be in writing; must be delivered to the Company and the Assembly Developers at the addresses set forth below, or any other address that a party may designate by notice to the other parties; and are considered delivered upon (i) actual receipt if delivered personally, (ii) one day after deposit with a nationally recognized overnight delivery service, or (iii) at the end of the third business day after the date of deposit in the United States mail, postage pre-paid, certified, return receipt requested.

To Company:		LB 1 LLC
		c/o Amed Hazel 818 Natchez Valley Trace Grayson, GA 30017

with a copy to:		Wallace A. Glausi
		Attorney at Law 550 Park Avenue, Suite 220 Portland, OR 97205

To Representative:		_______________________
		_______________________

To Note Holder:		At the address set forth on the Subscription Agreement signature page executed by Note Holder.

11.8 Non-Waiver. A waiver of one or more breaches of any clause of this Intercreditor Security Agreement shall not act to waive any other breach, whether of the same or different causes.

11.9 Severability. Each clause of this Intercreditor Security Agreement is severable. If any clause is ruled void or unenforceable, then the balance of this Intercreditor Security Agreement shall nonetheless remain in effect.

11.10 Term. Unless otherwise agreed to in writing by the parties, this Intercreditor Security Agreement shall remain in full force and effect and shall not terminate until the Notes secured by this Agreement are repaid in full.

IN WITNESS WHEREOF, the parties have executed this Intercreditor Security Agreement as of the date first above written.

Company: LB 1 LLC

By:		Date: _______________, 20___
	Amed Hazel


Representative:

By:		Date: _______________, 20___
	________________________


Note Holder:

		Date: _______________, 20___

By:

EX1A-11 CONSENT.1 6 lb1_ex111.htm CONSENT OF WALLACE A. GLAUSI, ATTORNEY AT LAW

EXHIBIT 11.1

CONSENT OF WALLACE A. GLAUSI, ATTORNEY AT LAW

(SEE EXHIBIT 12)

EX1A-11 CONSENT.2 7 lb1_ex112.htm CONSENT OF SPIEGEL ACCOUNTANCY CORP

EXHIBIT 11.2

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby provide our consent, dated January 24, 2020, to the incorporation by reference in this Report on the Form 1-A registration of LB 1 LLC for the 11-month period ended November 30, 2019 of our report dated January 17, 2020 included in its Registration Statement on Form 1-A relating to the financial statements for the 11-month period ended November 30, 2019, listed in the accompanying index.

Spiegel Accountancy Corp

Pleasant Hill, California

January 24, 2020

EX1A-12 OPN CNSL 8 lb1_ex12.htm OPINION OF COUNSEL

EXHIBIT 12

Wallace A. Glausi

Attorney At Law

550 Park Avenue, Suite 220

Portland, OR 97205

(503) 515-3657

January 7, 2020

Re: Qualification Statement for LB 1 LLC on Form 1-A

To whom it may concern:

We have been retained by LB 1 LLC (the “Company”), in connection with the preparation and filing with the Securities and Exchange Commission, under the Securities Act of 1933, as amended, of the Company’s Offering Statement on Form 1-A (the “Offering Statement”). The Offering Statement covers $50,000,000 of the Company’s promissory notes (the “Notes”).

In our capacity as such counsel, we have examined and relied upon the originals or copies, certified or otherwise identified to our satisfaction, of the following:

1. Certificate of Formation of the Company;

2. Operating Agreement of the Company;

3. The Offering Statement; and

4. The form of Subscription Agreement.

We have also examined such other corporate records, documents, certificates, and other agreements and instruments, and have made such other examinations, as we have deemed relevant, necessary or appropriate to enable us to render the opinions hereinafter expressed.

Based on that examination, we are of the opinion that:

1. The Company is duly authorized to issue the Notes.

2. When issued and sold by the Company against payment therefor pursuant to the terms of the Subscription Agreement, the Notes will be validly issued, fully paid and non-assessable.

We hereby consent to the filing of this opinion as an exhibit and to the Offering Statement and to the use of our name in the Offering Statement. In giving the foregoing consent, we do not hereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act, or the rules and regulations of the Securities and Exchange Commission.

Sincerely,

Attorney at Law

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