8-K: Belpointe PREP Secures CT Property Interest, Grants Put/Call Rights

Belpointe PREP, LLC entered a Letter Agreement to acquire an indirect interest in a Connecticut property, issuing Class B units with structured put and call options.

Summary

• Belpointe PREP, LLC (the Company) entered into a Letter Agreement on January 6, 2026, with Daniel Suozzi and 100 Tokeneke Partners, LLC, an indirect minority-owned subsidiary.
• Daniel Suozzi contributed his indirect ownership interest in real property located at 100 Tokeneke Road, Darien, Connecticut, to Tokeneke Partners.
• In exchange for the property interest, Suozzi received 243,000 Class B units in Tokeneke Partners (Tokeneke Units).
• Suozzi holds a 'Put Right' to sell all or any portion of these Tokeneke Units to the Company between January 6, 2026, and May 31, 2027, for a purchase price of $14.50 per unit.
• The purchase price for the Put Right will be paid in Belpointe PREP's Class A units, valued at the average of the high and low sale prices on the NYSE American on the trading day prior to the Put Notice.
• Tokeneke Manager, LLC (manager of Tokeneke Partners) holds a 'Call Right' to purchase all or any portion of Suozzi's Tokeneke Units between June 1, 2027, and December 31, 2027, also for $14.50 per unit, paid in Belpointe PREP's Class A units.
• Both the Put and Call Periods can be automatically revived for a 30-day period if Tokeneke Partners' initial equity financing has not been consummated by their respective termination dates.
• The Company is obligated to register the Class A units issuable to Suozzi for resale on a registration statement (Resale Registration Statement) as soon as practicable and maintain its effectiveness for 30 months or until Rule 144 limitations are met.

Sentiment

Score: 6

Explanation: The filing details a structured transaction for acquiring a real property interest, which is a neutral to slightly positive operational development. The put/call options provide clarity on future unit transfers, and registration rights facilitate liquidity, which are generally positive for the involved parties. However, potential future dilution from Class A unit issuance is a consideration.

Positives

• Acquisition of an indirect ownership interest in real property located at 100 Tokeneke Road, Darien, Connecticut, through a subsidiary.
• Structured mechanism (put/call options) provides flexibility for both the company and Daniel Suozzi regarding the future ownership of the Tokeneke Units.
• The company will register the Class A units issued to Suozzi, facilitating his liquidity and potentially reducing future market overhang.

Negatives

• Potential future dilution for existing Class A unit holders if Suozzi exercises his Put Right or the Company exercises its Call Right, as payment is made in Class A units.
• The Company incurs costs and obligations related to preparing and maintaining a resale registration statement for Suozzi's Class A units.
• The fixed purchase price of $14.50 per Tokeneke Unit may not reflect future market value changes of the underlying property or Tokeneke Partners.

Risks

• Market price volatility of Belpointe PREP's Class A units could impact the effective value of the consideration received by Daniel Suozzi upon exercise of the put or call options.
• Failure of Tokeneke Partners to consummate its initial equity financing could extend the Put and Call Periods, prolonging the uncertainty around the unit transfers.
• The Company faces ongoing compliance and financial obligations to maintain the effectiveness of the resale registration statement for Suozzi's Class A units.
• Indemnification obligations exist for both the Company and Daniel Suozzi related to the resale registration statement.

Future Outlook

The Company anticipates filing a resale registration statement for the Class A units issuable to Daniel Suozzi as soon as practicable. The Put and Call options provide a structured path for the eventual transfer of Daniel Suozzi's Tokeneke Units, with potential extensions if Tokeneke Partners' initial equity financing is not completed by the specified termination dates.

Management Comments

• Brandon E. Lacoff, Chairman of the Board and Chief Executive Officer, signed the report on behalf of Belpointe PREP, LLC.
• Brandon E. Lacoff also signed on behalf of 100 Tokeneke Partners, LLC and Tokeneke Manager, LLC as Authorized Signatory.

Industry Context

This transaction reflects a common strategy in real estate investment, where a company acquires an interest in a property through a subsidiary, often involving a structured earn-out or liquidity mechanism for the contributing party. The use of put and call options provides a defined exit strategy or acquisition path, common in private equity and real estate deals, which are then disclosed for a publicly traded entity. The specific location (Darien, CT) suggests a focus on high-value real estate markets.

Comparison to Industry Standards

• The filing does not provide sufficient detail on the specific real property or the market conditions to make a detailed comparison to industry-specific benchmarks or comparable projects.
• The structure of the put/call option at a fixed price, with payment in company stock, is a standard mechanism for such transactions, but without context on the property's valuation relative to the $14.50 unit price, a specific assessment is not possible.

Related Party Transactions

• The Letter Agreement is between Belpointe PREP, LLC, its indirect minority-owned subsidiary 100 Tokeneke Partners, LLC, and Daniel Suozzi. Daniel Suozzi is a party to the LLC Agreement of 100 Tokeneke Partners, LLC and is receiving units in the subsidiary, making this a transaction with a significant unitholder of a subsidiary.

Stakeholder Impact

• Shareholders (Class A Unit holders): Potential for future dilution due to the issuance of Class A units as payment for the Tokeneke Units.
• Daniel Suozzi: Gains liquidity options for his 243,000 Class B Tokeneke Units through the Put Right and the Company's commitment to register the Class A units he would receive.
• 100 Tokeneke Partners, LLC: Acquires the indirect ownership interest in the real property at 100 Tokeneke Road, Darien, Connecticut.

Next Steps

• Belpointe PREP, LLC will prepare and file a resale registration statement with the SEC for the Class A units issuable to Daniel Suozzi.
• The Company will use commercially reasonable efforts to cause the resale registration statement to become effective and maintain its effectiveness.
• Daniel Suozzi may exercise his Put Right to sell Tokeneke Units to the Company during the Put Period (Jan 6, 2026 May 31, 2027, with potential extension).
• Tokeneke Manager, LLC may exercise its Call Right to purchase Tokeneke Units from Daniel Suozzi during the Call Period (June 1, 2027 Dec 31, 2027, with potential extension).
• 100 Tokeneke Partners, LLC is expected to consummate its initial equity financing.

Key Dates

Recommendation

This filing details a specific, structured real estate transaction involving a subsidiary and a contributing party. It's an operational event rather than a major strategic shift or financial performance update. While it involves potential future dilution, the terms are defined, and the acquisition of a property interest is generally part of the company's ongoing business. Without further context on the property's value, the company's overall portfolio, or its financial performance, a 'hold' recommendation is appropriate as this event alone does not significantly alter the investment thesis for or against the company.

Keywords

Real Estate, Property Acquisition, Put Option, Call Option, SEC Filing, 8-K, Belpointe PREP, Tokeneke Partners, Darien Connecticut, Class A Units, Registration Rights, Equity Financing