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There are risks and special factors associated with the purchase of the Investment Certificate(s) being offered by Pinnacle Capital Holdings, LLC (the “LLC”). In analyzing the Offering, prospective investors should carefully consider, among others, the matters set forth below.


(1) Newly Organized Entity. The LLC is a newly organized entity. The LLC has no history of operations or earnings. THE LLC IS NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION (“FDIC”), OR ANY OTHER GOVERNMENTAL CORPORATION OR AGENCY.

(2) Deposit of Funds From Sale of Investment Certificates. The LLC will deposit all funds received from the sale of Investment Certificate(s) in a bank or other financial institution that does insure deposits (all interest on such deposits, if any, shall accrue for the benefit of the LLC) by the FDIC; however, there are limits on the amounts of such insurance. Accordingly, if the amounts on deposit exceed the limits of insurance, there is a substantial risk that the LLC will not have sufficient resources to permit the Investment Certificate(s) to be cashed in in full.

(3) Un‐audited Financial Information. Any financial information, such as projections for a Project, provided by the LLC will not have not been audited. Although the LLC believes that such financial information accurately reflects the financial projections for a Project, such financial information has not been subjected to the additional procedures and verification required in the audit process. However, such projections have been made in good faith, and to the best estimate of the LLC.

(4) Projects Encumbered. The acquisition of a Project may, and in most cases will, include financing a portion of the purchase price of the Project. In the event that obtaining a loan is required for the purchase of a Project (“Loan”), and the Loan is not paid in accordance with its respective terms, conditions and provisions, or in the event any default occurs in the terms, conditions and provisions of the instruments securing payment of such Loan, then in either event, the holder of such loan would have the right to foreclose on the Project.

(5) Ability to Repay Loan. The ability to repay a Loan is dependent upon (a) the revenue from the Project being sufficient to cover the debt service on the Loan and to pay other expenses of the Project, or (b) additional capital contributions being made; or (c) being able to sell the Project for an amount sufficient to repay to Loan; or (d) being able secure third‐party financing to pay off the Loan. There is no assurance or guarantee that either (a), (b), (c) or (d) will be possible.

(6) High Degree of Risk. Investments in real estate are highly speculative and risky. The market for such properties can be very volatile, and the owners of the newly formed limited liability company which will own a Project should be prepared to lose all or a part of their investment, as part of the risk of an Investment Opportunity.

(7) Potential Need for More Capital; Additional Capital Contributions; Guarantees. While the LLC believes that the capital and operating needs for a newly formed limited liability company will be met through the capital contributions from its members and the Loan, there is no assurance that additional capital contributions or additional financing will be necessary for a Project to meet its operating needs. Obtaining the Loan or additional financing could require personal guarantees from the members of the newly formed limited liability company which will own the Project. There is no assurance that additional capital contributions or additional financing can be obtained.

(8) Risks of Real Estate Ownership. There are certain risks incident to the ownership, owning and leasing real estate generally, and in particular improved real estate. Those risks include, among other things, changes in general or local economic conditions; changes in interest rates and availability of funds which may render rental, sale, refinancing, or exchange of the property difficult or unattractive; increases in real property tax rates and other operating expenses; changes in government rules and fiscal policies; changes in employment or other factors affecting the area where the property is located; and changes in real estate and zoning laws. It is difficult to predict the possible residual value of commercial real estate property. Real estate in general is not a readily marketable asset. No guarantee can be given that tenants will be found, future tenants will renew their leases upon expiration or that new tenants can be found in the event that such tenants do not renew their leases. Although the property will be covered by casualty and liability insurance, there are certain types of losses (generally of a catastrophic nature) that are either uninsurable (in whole or in part) or for which insurance is not economically feasible or may not adequately cover all losses. Such risks include, without limitation, earthquakes, war, and hurricanes. Should such disasters occur with respect to the Property, the LLC could suffer a loss of all or a portion of its capital investment.

(9) Compliance with Governmental Regulations. Real estate operations are subject to various federal, state, and local governmental regulations that may be changed from time to time in response to economic or political conditions. The production, handling, storage, transportation, and disposal of hazardous substances are subject to regulation under federal, state, and local laws and regulations primarily relating to protection of human health and the environment. These laws and regulations have continually imposed increasingly strict requirements for water and air pollution control and solid waste management.


(10) Reliance on Manager or Managers of Newly Formed Limited Liability Company. The newly formed limited liability company which will own a Project will be managed by a manager or managers. Most decisions with respect to that newly formed limited liability company will be made by the manager or managers which will include the day‐to‐day management of the Project owned by the newly formed limited liability company.

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