June 5, 2019
Nathan Kivi
Manager and Chief Financial Officer
HCo Cape May LLC
2100 Powers Ferry Road S.E., Suite 370
Atlanta, Georgia 30339
Re: HCo Cape May LLC
Amendment No. 2 to
Offering Statement on Form 1-A
Filed May 21, 2019
File No. 024-10953
Dear Mr. Kivi:
We have reviewed your amended offering statement and have the following
comments. In some of our comments, we may ask you to provide us with
information so we
may better understand your disclosure.
Please respond to this letter by amending your offering statement and
providing the
requested information. If you do not believe our comments apply to your facts
and
circumstances or do not believe an amendment is appropriate, please tell us why
in your
response.
After reviewing any amendment to your offering statement and the
information you
provide in response to these comments, we may have additional comments. Unless
we note
otherwise, our references to prior comments are to comments in our May 13, 2019
letter.
Form 1-A/A filed May 21, 2019
General
1. We note your response to comment 1 and revised disclosure, and we reissue
the comment
in part. Given that you will conduct one or more closings on a rolling
basis and all
subsequent closings after the initial closing "shall take place in the
Company's sole and
absolute discretion as to timing and frequency," you appear to be
conducting an offering
on a delayed basis, which you do not appear eligible to do. Please refer
to Rule
251(d)(3)(i)(F) and provide us with your detailed explanation regarding
how this offering
will be conducted on a continuous, rather than a delayed, basis.
2. You state on page 12 that the offering may be extended by the company in
its sole
Nathan Kivi
FirstName May LLC
HCo Cape LastNameNathan Kivi
Comapany NameHCo Cape May LLC
June 5, 2019
June 5, 2019 Page 2
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FirstName LastName
discretion and will terminate on "the day upon which a determination
is made by the
Company to terminate the Offering in its sole discretion." Given the
open nature of the
duration, it appears that the offering may extend beyond three years.
Please revise to
comply with Rule 251(d)(3)(i)(F) of Regulation A.
Dilution, page 35
3. We note your revised dilution disclosures. Your dilution disclosures
continue to
disclose a net tangible book value per share before offering based on
113 shares and
another net tangible book value per voting shares outstanding based on
887 voting shares.
However, you've indicated elsewhere within your document that 1,000
voting shares are
outstanding before the offering. It remains unclear why the net
tangible book value per
share before offering and voting shares outstanding within your
dilution table are not
calculated based on the 1,000 voting shares outstanding before this
offering. Please
clarify and/or revise accordingly.
Description of the Business, page 44
4. We note your revised disclosure in this section, including the
statement, "[t]he Company
is targeting a return exceeding 10.0% without the use of debt and
after management fees
payable to HotelierCo LLC. The Company will look to acquire and
renovate adjoining
sites to increase the rooms owned by the Company with a target return
exceeding 10.0%
without the use of debt and after management fees payable to
HotelierCo LLC." We
reissue prior comment 3. Given that you intend to buy and renovate the
property with
offering proceeds and have no operating history, please remove this
projection.
Interest of Management and Others in Certain Related-Party Transactions, page
51
5. We note your revised disclosure in this section. We further note your
disclosure on page
45 that the total project cost, including acquisition costs for the
property, will be
approximately $14.4 million, and your disclosure in the Use of
Proceeds table that you
expect to use approximately $2.2 million of offering proceeds to
acquire the property.
Please revise your disclosure in this section to quantify the total
Development Fee you
expect to be payable to HotelierCo on the basis of your projected
development costs and
to quantify the cash payment and number of shares you expect
HotelierCo to receive.
Refer to Item 13(a) of Form 1-A and the instructions thereto.
Exhibits
6. Please file the consent of counsel to the use of the legality opinion
as an exhibit, or revise
the legal opinion to include such consent therein, pursuant to Item
17.11 of Form 1-A.
Nathan Kivi
HCo Cape May LLC
June 5, 2019
Page 3
You may contact Howard Efron, Staff Accountant, at 202-551-3439 or
Wilson Lee, Staff
Accountant, at 202-551-3468 if you have questions regarding comments on the
financial
statements and related matters. Please contact Joshua Lobert, Staff Attorney,
at 202-551-7150 or
Sara von Althann, Staff Attorney, at 202-551-3207 with any other questions.
Sincerely,
FirstName LastNameNathan Kivi
Division of
Corporation Finance
Comapany NameHCo Cape May LLC
Office of Real
Estate and
June 5, 2019 Page 3 Commodities
FirstName LastName