Business Context and Reporting Period
This Form 8-K filing by Belpointe PREP, LLC (NYSE American: OZ) reports a material definitive agreement entered into on March 3, 2026, with the report dated March 9, 2026. The Company, through its indirect wholly-owned subsidiary BPOZ 100 Tokeneke Holding, LLC, extended a loan to 100 Tokeneke Road, LLC to facilitate the purchase of real property located at 100 Tokeneke Road, Darien, Connecticut.
Key Financial Metrics and Transaction Details
- Company Loan: $5,000,000 principal amount via a convertible promissory note (BPOZ Tokeneke Note).
- Related Party Loan: $3,250,000 principal amount via a convertible promissory note (Related Party Note) from Belpointe Tokeneke Investment, LLC.
- Interest Rate: Both notes bear interest at 3.6% per annum.
- Maturity Date: Both notes are due and payable on March 3, 2026.
- Conversion Terms: Notes are convertible into Class A units of 100 Tokeneke Partners, LLC at a conversion price of $14.50 per unit.
- Related Party Ownership: Following a mandatory conversion of $625,000 of the Related Party Loan, the Related Party became the 50% beneficial owner of Tokeneke Partners.
Material Changes and Related Party Transactions
The filing discloses a significant related party transaction involving an entity in which certain immediate family members of the Company's Chief Executive Officer hold a passive beneficial ownership interest. The total financing package for the property acquisition was $8,250,000, split between the Company ($5,000,000) and the Related Party ($3,250,000). The transactions were reviewed and approved by the Conflicts Committee of the Board of Directors in compliance with the Company's Policy Regarding Transactions with Related Persons and applicable NYSE American rules.
Guidance, Outlook, and Risks
The filing does not provide updated financial guidance, outlook, or management commentary regarding future earnings. The primary risk disclosed relates to the concentration of ownership in the subsidiary (Tokeneke Partners) following the mandatory conversion, where the Related Party holds a 50% stake. The full text of the promissory notes is not included in this filing but will be filed as exhibits to the Quarterly Report on Form 10-Q for the quarter ended March 31, 2026.
Investor Verification Checklist
- Verify the full terms of the BPOZ Tokeneke Note and Related Party Note in the upcoming Form 10-Q for the quarter ended March 31, 2026.
- Confirm the specific identity and beneficial ownership structure of the "Related Party" (Belpointe Tokeneke Investment, LLC) and its relationship to the CEO's family.
- Assess the impact of the 50% related-party ownership in Tokeneke Partners on future consolidation or equity accounting treatments.
- Review the Conflicts Committee's approval documentation to ensure full compliance with related party transaction policies.