Wellstreet Housing Bonds: 11.7% Cash Cover, Going-Concern Doubt

What the bond is, in the company's own terms

Wellstreet Realty sells bonds in $10 pieces. The app “rounds up” a user's debit-card and linked credit-card purchases until the round-ups reach $10.00, then buys a bond. The company can also be paid directly through its website. The terms below are from the offering circular dated September 29, 2026 and repeated in the Form 1-K.

The company says its lending will follow a rule: any mortgage loan would be a first mortgage “in an amount not greater than 70% of the independently assessed property value.” It also says at least 95% of its assets will be such investments and up to 5% will go to working capital and general corporate purposes.

Who stands behind it: a subsidiary, a parent and a sister

Wellstreet Realty has no full-time employees. Its officers and staff are employed by Wellstreet Management, Inc., a parent subsidiary that the company reimburses at cost under a management services agreement with no interest or maturity. The parent, Wellstreet Financial, Inc. (WSF), owns all 100 shares of the issuer. The app and website are WSF's: it bought the Worthy fintech platform on March 31, 2026 and owes the seller $1,000,000 in cash on or before December 31, 2026, plus $1,000,000 of its restricted stock. The circular says that if WSF does not pay the purchase price in full by that date, the “assigned works shall be assigned back” to the seller. For the history of the Worthy companies that came before, see our Worthy Bonds review.

The parent's numbers are the latest we could read: its own annual report for the year ended June 30, 2026 was not on EDGAR when we checked on October 28, 2026. Its December 31, 2025 consolidated cash includes cash held by the subsidiaries, so it is not a separate cushion behind the bonds.

The balance sheet at June 30, 2026

Two ratios follow from these lines (our arithmetic). Cash covered 11.7% of the bonds at June 30, 2026, against 31.6% at December 31, 2025, when no loan had yet been made. And total assets were 89.5% of total liabilities. For comparison, our Compound Real Estate Bonds review found cash covering 11.6% of that issuer's bonds on the same date.

How the money is supposed to be earned

The business is a spread: the company wants to earn more on loans than it pays on bonds, and to use up to 5% of bond proceeds for overhead until it does. At June 30, 2026 the whole loan book was one loan.

A scenario, so the spread is visible (our arithmetic, holding June 30, 2026 balances fixed for a full year): 9% on $2,218,910 of bonds is $199,702 of interest, while 12.75% on $1,700,000 is $216,750, a spread of $17,048. Add the $10,430 of investment income earned this year and the total is $27,478, against $220,876 of operating expenses. The gap is about $193,000 a year before any new loans or bonds. Closing it needs a much larger loan book, lower costs or the parent's money.

Two details in the cash numbers are worth reading before relying on that spread. Interest on the bonds is payable quarterly, yet the company paid $10,512 in cash for interest against $82,369 of interest expense, 12.8% (our arithmetic), and carried $71,858 of accrued interest. And the loan notes say “These loans require monthly interest payments to us.” Yet the cash flow statement adds $18,063 of unpaid interest receivable against $24,685 of interest earned, so 73.2% of the year's loan interest was not yet collected (our arithmetic).

Who has been paying the losses

The company's going-concern note states: “We are dependent on advances from WSF and proceeds from the offering to provide capital for our operations. WSF is not obligated to provide advances to us.” The text also says the company will not repay the parent's advances and that they carry no interest rate or maturity, yet the balance sheet shows $130,540 as a liability labelled “Due to related party,” which Note 11 says is owed to the parent. Either reading leaves the same practical point for a bondholder: the group has funded the issuer so far, and nothing in the filings requires it to keep doing so.

Bond sales are slowing

The company's plan, in its own going-concern note, rests on the offering raising money and the parent advancing it. A slower pace does not by itself mean the company cannot pay, but it lengthens the time during which the parent's support does the work. The sister issuer told the SEC on the same day that it “ceased offering securities for purchase” on August 31, 2026, while saying it “may resume the offering in the future.”

Where the filings disagree with themselves

None of these is an allegation. They are places where a reader checking one document against another gets different answers, and where the company, not we, can say which is right.

What the auditor and the company say about going concern

The annual report repeats the paragraph in the business section, the management discussion, the auditor's report and Note 2. The critical audit matter the auditor flags is the allowance for credit losses on the one mortgage loan, for which it confirmed with the borrower, reviewed the note and collateral documents and checked later collections. It reported agreement with the $17,000 allowance. The auditor has served the company since 2024.

The company's own wording on what the plan depends on is plain: the offering must keep raising money or its parent must keep advancing it, and it says “No assurances can be given that the Company will achieve success, without seeking additional financing.” The 1-K also says that if the company is deemed an investment company, it could no longer use Regulation A; the circular adds that bonds sold earlier could then carry a right of rescission. We read that as a standard risk paragraph, not a finding.

What a reader can do with this

• Find what you hold. The bond is “a full and unconditional obligation of our Company,” meaning Wellstreet Realty, not the parent or the app. Check which entity your account statement names.
• Count the lock. If you bought in the first weeks (the first bonds date from October 8, 2025), the earliest date the terms allow you to ask for repayment is around October 2028, subject to liquidity, on 90 days' notice. Before then the exits are the company's own redemption or a sale to another person, and the filing says no public market is expected.
• Do the small-ticket math. A $1,000 position earns about $21.78 a quarter at 9% APY, then about $24.11 at 10% (our arithmetic, treating APY as an effective annual rate paid quarterly). The question is not the rate but whether the issuer can keep paying it from loan interest and new bonds.
• Read the next two filings. WSF's own annual report is due; the issuer's next semiannual report will show whether cash, loans and bonds moved. Our email alert below covers the issuer.
• Compare with other Regulation A bonds. See real estate bonds, real estate notes, Bequest Bonds I and Robert Ventures, each read from its own filings.
• Get a second opinion before changing a position. A choice to hold, ask for redemption or add more has tax and portfolio effects; see the box below.

FAQ

Sources: Wellstreet Realty, Inc. (CIK 2041878) Form 1-K for the year ended June 30, 2026, accession 0001493152-26-048470, October 26, 2026; Form 1-A POS, accession 0001493152-26-044913, September 29, 2026; Form 1-SA for the six months ended December 31, 2025, accession 0001493152-26-012307, March 24, 2026; Form 1-U, accession 0001493152-26-039806 (dated July 14, 2026). Wellstreet Senior Living, Inc. (CIK 2054462) Form 1-K, accession 0001493152-26-048473. Wellstreet Financial, Inc. (CIK 2007516) Form 1-SA, accession 0001493152-26-013524. Percentages, per-month rates, the spread scenario and the $1,000 example are our arithmetic. This is analysis of public documents, not investment, legal or tax advice.