July 22, 2019
Chip Cummings
Chief Executive Officer
Red Oak Capital Fixed Income III, LLC
625 Kenmoor Avenue SE
Suite 211
Grand Rapids, MI 49546
Re: Red Oak Capital Fixed Income III, LLC
Offering Statement on Form 1-A
Filed June 25, 2019
File No. 024-11026
Dear Mr. Cummings:
We have reviewed your 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.
FORM 1-A FILED ON JUNE 25, 2019
Cover Page
1. We note that you intend to operate your business in a manner that will
permit you to
maintain an exemption from registration under the Investment Company Act
of 1940, as
amended. Please be advised that you are responsible for analyzing how
your investments,
investment strategy and business model will support that exemption.The
staff has not
reviewed and does not necessarily concur with disclosure with respect to
the availability
of that exemption.
2. Please be advised that you are responsible for analyzing the
applicability of the
Investment Advisers Act of 1940 to your external manager.
Chip Cummings
FirstName LastNameChip Cummings
Red Oak Capital Fixed Income III, LLC
Comapany NameRed Oak Capital Fixed Income III, LLC
July 22, 2019
July 22, 2019 Page 2
Page 2
FirstName LastName
3. We note you were formed in June 2019 to originate senior loans
collateralized by
commercial real estate but have not yet commenced operations and have
no assets. Please
tell us your basis for including 'fixed income' in your name and how
you
considered whether it was appropriate in light of your lack of
operations and assets.
Risk Factors
The Bonds do not elimimnate our company's or its subsidiaries' ability to incur
additional debt...,
page 8
4. We note your disclosure in this risk factor that the indenture will
limit your ability to incur
debt to 25% of the outstanding principal or any loans or other assets.
However, in the
following risk factor, you state that the indenture will not restrict
you from incurring debt
in excess of 25% of any loans or other assets. Please revise your
disclosure, as
appropriate, to reconcile this discrepancy.
Use of Proceeds, page 25
5. We note that your calculation of net proceeds for the maximum offering
amount of Series
A and Series B Bonds does not reflect the deduction of selling
commissions. Please
clarify and/or revise your use of proceeds table accordingly.
Security Ownership of Certain Beneficial Owners and Management, page 52
6. We note your disclosure regarding management owning "Class A." Please
clarify the
nature of the interests held by management. Additionally, as
applicable, please file your
amended articles of incorporation that provides for the issuance of
these shares to
management.
Compensation of our Manager and its Affiliates , page 56
7. We note your disclosure on page 13 that you will pay a disposition
fee. Please revise your
disclosure in this section to include all fees, including the
disposition fee.
Notes to Financial Statements
Note 7. Commitments and Contingencies, page F-9
8. We note your disclosure that your managing manager has incurred and
will continue to
incur organizational and offering costs which are reimbursable from
the Company. To the
extent material, please revise your filing to disclose the total
amount of organization and
offering costs the managing member has incurred on your behalf to
date.
We will consider qualifying your offering statement at your request. If
a participant in
your offering is required to clear its compensation arrangements with FINRA,
please have
FINRA advise us that it has no objections to the compensation arrangements
prior to
qualification.
Chip Cummings
Red Oak Capital Fixed Income III, LLC
July 22, 2019
Page 3
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff. We also remind you that, following qualification of your
Form 1-A, Rule 257
of Regulation A requires you to file periodic and current reports, including a
Form 1-K which
will be due within 120 calendar days after the end of the fiscal year covered
by the report.
You may contact Jeffrey Lewis at 202-551-6216 or Wilson Lee at
202-551-3468if you
have questions regarding comments on the financial statements and related
matters. Please
contact Stacie Gorman at 202-551-3585 or Jennifer Gowetski at 202-551-3401 with
any other
questions.
Sincerely,
FirstName LastNameChip Cummings
Division of
Corporation Finance
Comapany NameRed Oak Capital Fixed Income III, LLC
Office of Real
Estate and
July 22, 2019 Page 3 Commodities
FirstName LastName