Bequest Bonds I: $2.08M Sold After April 30, 5% Surrender Offer

What Bequest Bonds I is

Bequest Bonds I, Inc. is a Delaware corporation that sells unsecured bonds to the public under Tier 2 of Regulation A and lends the money out. Its offering circular describes the plan in one sentence: “Our business plan is to make direct and indirect investments in performing and non-performing loans secured by real estate.” The bonds are not secured by the loans and are not insured. The circular says: “There is no insurance or guarantee of our obligation to make payments on the Bonds.” Despite what the name suggests to some searchers, these are not insurance or life-settlement products; the circular describes residential mortgage loans, a preferred equity interest in an affiliated fund, and one loan to a collector of delinquent consumer receivables.

Investors buy through the company's own site and a broker-dealer of record, Dalmore Group, LLC, which handles processing and compliance. In 2026 the company changed hands inside its own group: all of its equity moved to Bequest Asset Management, LLC on July 1, 2026, which became the manager, and the president and a director resigned on July 15, 2026. Interest is paid monthly. This page uses job titles only for people named in the filings.

How a Regulation A seller becomes a Section 5 problem

Section 5 of the Securities Act says securities cannot be sold unless they are registered or exempt. Regulation A is the exemption. For an offering that runs continuously, the rule has a condition that is easy to miss: sales under a qualified offering statement are allowed “only if the issuer is current in its annual and semiannual filings pursuant to Rule 257(b)” at the time of the sale (17 CFR 230.251(d)(3)(i)(F)). If the company was not current, a sale is not covered by the exemption, and the buyer can ask for the money back with interest.

The sequence in Bequest's own filings runs as follows.

The company's exact words matter, because they are narrower than “the company sold while delinquent.” It says the SEC staff “advised the Company that it believed the audit report included in that 1-A POS (and the Company's previously filed Form 1-K), which contained a disclaimer of opinion, did not include a clear expression of an opinion on the Company's financial statements.” Its reading of the consequence: the report may not count as a proper filing, so after April 30, 2026 it “was no longer current in its required periodic filings.” The circular also says “Eligible security holders have not filed a claim against the Company alleging a violation of Section 5 of the Securities Act,” but that they could in the future.

The 1-K was therefore filed 26 days after its April 30 due date, and the reissued, clean-opinion version came on September 29. Whether the May 26 filing cured the problem is the open question, and the filings do not say that any court or the SEC has decided it.

The surrender offer, term by term

The company plans to make the offer after the amended offering statement is qualified. As of October 21, 2026 the 1-SA says the July 2026 amendment “has not been qualified” and the October 15 amendment is a further one, so no holder has a live election yet.

The company says it will tell every previous bondholder about the offers and will highlight the SEC staff's view. It “expects that this will resolve any potential Section 5 liability.”

What the 5% formula does to different classes (our arithmetic)

The price is not simply principal plus a fixed return. Because it deducts every payment already received, a class that pays more than 5% a year gives back a little of the excess.

Example (our arithmetic, simplified): a $10,000 Class B purchase that has paid 6% interest for six months has received $300. The surrender credits 5% for six months, $250. The payout is $10,000 + $250 - $300 = $9,950, which is $50 less than the original $10,000, equal to the 1-point difference for half a year. The real figure depends on the exact purchase date, because interest starts on the first day of the first month after purchase, and on payments made. Whether a given buyer is better off surrendering, holding or exchanging depends on those numbers and on the company's ability to pay.

Classes D, E and F are 81.1% of the $8,413,633 payable to bondholders on June 30, 2026 (our arithmetic, $6,826,770). The circular does not say how much of the $2,084,000 sits in which class.

Can the company pay everyone?

Cash of $676,000 is 32.4% of the $2,084,000 and 21.4% of the current bonds (our arithmetic). The cash fell because on September 30, 2026 the company paid $1,471,070 to buy 28 loans from two affiliated funds. The company says it has “sufficient capital to continue to fund our expenses over the next twelve months” but “cannot provide assurance that its existing assets will generate sufficient cash flow to repay all bonds in full.”

Funding sources matter here. The company stopped taking Regulation A subscriptions pending qualification (“We stopped accepting subscriptions under our Regulation A offering, pending qualification of our amended offering statement”), and says it has issued about $727,000 of bonds in a Rule 506(b) private placement since then. The circular says the company has no binding agreements to obtain funds through bank loans, lines of credit or other sources.

The financials behind the going concern paragraph

The 1-SA says: “these factors raise substantial doubt about our ability to continue as a going concern within one year after the date the financial statements are available to be issued.” Management's stated plan is to keep selling bonds, which the company itself calls “not fully within our control.” Bond interest is the largest cost: interest expense was $261,802, and the company also pays its manager 3.0% a year of the fair value of its assets.

The reissued fiscal 2025 statements also changed. $100,460 of 2025 payments from Bequest Funds, LLC that were first booked as preferred return income was recharacterized as return of capital, mortgage loans moved from cost to fair value, and the net loss rose from $250,108 to $342,693.

The affiliate behind 37% of the assets

On June 30, 2026 the bond company's largest asset, at $2,856,540, was a preferred equity interest in Bequest Funds, LLC, an affiliate under common control; the 1-SA says “It represented approximately 37% of total assets.” (It was about 54% at December 31, 2025.) The 1-SA says that fund and Bequest Legacy Fund I, LLC “voluntarily reported to the Securities and Exchange Commission that they used investor capital contributions to fund operating preferred return payments earlier than permitted under their operating agreements.” They suspended preferred return payments from February through July 2026, and Bequest Funds, LLC resumed current-month payments in August 2026. The accrued and unpaid preferred return was about $179,311 on September 30, 2026. The company says it is not itself the subject of the SEC matter and that, to its knowledge, the SEC has taken no further action.

The company's June 30 test of whether the fund investment is recoverable showed “coverage of approximately 100.7% of the senior investor claim, and no impairment was recorded.” If one assumption is removed, coverage falls to about 99.7%. The margin is a rounding error against a $2.9 million balance.

What the loans look like

The September figure includes 28 loans bought from the two affiliated funds that day for $1,471,070. The company says the 23 loans bought from Bequest Funds, LLC were priced to a balance-weighted yield of about 14.4% at roughly 73.8% of unpaid principal. Related-party purchases in which the buyer's manager is also on the other side are an area where a reader should check the pricing support in the circular itself.

What a reader can do with this

• Find your purchase dates. Only purchases after April 30, 2026 qualify for the cash surrender. Series A bonds bought earlier can be exchanged or held, not surrendered, under the plan in the circular.
• Wait for the notice, then read it. The offer has not been made. When it arrives, compare three numbers: what you would get by surrender, the principal and interest you are owed if you hold, and the new terms under the exchange.
• Remember who set the formula. The formula is the company's plan, not a court judgment or SEC order.
• Weigh the unsecured claim. The bonds are not backed by the loans; a bondholder is a general creditor. The company and its auditor both state substantial doubt about going concern, which is a reason to compare timing as well as yield.
• Get a second opinion before the window opens. If you hold a position, the choice between surrender, exchange and holding has tax and portfolio effects; see the box below.
• Compare other Reg A bond issuers with compliance trouble. See our pages on Reg A real estate offerings, Groundfloor's going concern paragraph, Terra Property Trust and real estate bonds, and our guide to real estate notes.

FAQ

Sources: Bequest Bonds I, Inc. (CIK 0002016678) Form 1-A POS, accession 0001213900-26-109708, October 15, 2026; Form 1-SA, 0001213900-26-107666, October 8, 2026; Form 1-K/A, 0001213900-26-106851, October 5, 2026; 17 CFR 230.251(d)(3)(i)(F) (eCFR). Dollar amounts marked "approximately" are the company's rounding. Percentages, ratios and the surrender example are our arithmetic. This is analysis of public documents, not investment, legal or tax advice.