Form 253G2 My Racehorse CA LLC

June 23, 2021 5:30 PM EDT

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Table of Contents

 

EXPLANATORY NOTE

 

This is a post-qualification amendment to an offering statement on Form 1-A filed by My Racehorse CA LLC (the “Company”). The offering statement was originally filed by the Company on September 10, 2018, and has been amended by the Company on numerous occasions since that date. The offering statement, as amended by pre-qualification amendments, was qualified by the U.S. Securities and Exchange Commission (the “SEC”) on February 22, 2019. Since that date, certain post-qualification amendments to the offering statement have also been qualified by the SEC.

 

Different Series of the Company have already been offered, or have been qualified but not yet launched as of the date hereof, by the Company under the offering statement, as amended and qualified. Each such Series of the Company will continue to be offered and sold by the Company following the filing of this post-qualification amendment until sold out, subject to the offering conditions contained in the offering statement, as qualified. The Series already qualified under the offering statement are as follows:

 

Series Name Horse Name (if different) Qualification Date:
Form 1-A
Series Palace Foal Ocean Magic 18 February 22, 2019
POS-AM #2
Series De Mystique ‘17 Dancing Destroyer June 6, 2019
POS-AM #3
Series Martita Sangrita 17 Carpe Vinum July 11, 2019
Series Daddy’s Joy July 11, 2019
Series Vertical Threat July 11, 2019
Series Shake it Up Baby July 11, 2019
Series Tizamagician July 11, 2019
POS-AM #4
Series Power Up Paynter July 25, 2019
Series Two Trail Sioux 17 Annahilate July 25, 2019
Series Wayne O July 25, 2019
POS-AM #5
Series Big Mel September 6, 2019
POS-AM #6
Series Amandrea October 11, 2019
Series Keertana 18 American Heiress October 11, 2019
Series Sunny 18 Solar Strike October 11, 2019
Series Lazy Daisy October 11, 2019
POS-AM #7
Series New York Claiming Package (1) (i)         Augusta Moon; and
(ii)        Hizaam
December 18, 2019
Series The Filly Four (2) (i)         Moonlight d’Oro;
(ii)        Joyful Addiction;
(iii)       Lady Valentine; and
(iv)       Shared Empire
December 18, 2019
POS-AM #8
Series Lane Way February 19, 2020
POS-AM #10
Series Mo Mischief May 13, 2020
Series Deep Cover May 13, 2020
Series Big Mel (Addtl. 9% Interest) May 13, 2020
Series Sunny 18 (Addtl. 9% Interest) Solar Strike May 13, 2020

 

 

 

 i 

 

 

POS-AM #11
Series Popular Demand June 5, 2020
POS-AM #12
Series Authentic June 26, 2020
Series Storm Shooter June 26, 2020
POS-AM #15
Series Thirteen Stripes August 7, 2020
Series Naismith August 7, 2020
Series NY Exacta (3)

(i)         Quick Conversation; and

(ii)        Psychedelic Shack

August 7, 2020
POS-AM #18
Series Apple Down Under 19 Howboutdemapples October 30, 2020
Series Just Louise 19 Forbidden Kingdom October 30, 2020
Series Lost Empire 19 Laforgia October 30, 2020
POS-AM #19
Series Man Among Men November 12, 2020
Series Frosted Oats November 12, 2020
Series Tapitry 19 Infinite Empire November 12, 2020
Series Classofsixtythree 19 Sixtythreecaliber November 12, 2020
Series Cayala 19 Provocateur November 12, 2020
Series Margaret Reay 19 A Mo Reay November 12, 2020
Series Awe Hush 19 Can’t Hush This November 12, 2020
Series Exonerated 19 Above Suspicion November 12, 2020
Series Speightstown Belle 19 Ancient Royalty November 12, 2020
Series Consecrate 19 Sacred Beauty November 12, 2020
Series Latte Da 19 Inalattetrouble November 12, 2020
Series Midnight Sweetie 19 Dolce Notte November 12, 2020
Series Ambleside Park 19 Lookwhogotlucky November 12, 2020
Series Athenian Beauty 19 Quantum Theory November 12, 2020
Series Future Stars Stable (4)

(i)         Man Among Men;

(ii)        Frosted Oats;

(iii)       Infinite Empire;

(iv)      Sixtythreecaliber;

(v)        Provocateur;

(vi)       A Mo Reay;

(vii)      Can’t Hush This;

(viii)     Above Suspicion;

(ix)       Ancient Royalty;

(x)        Sacred Beauty;

(xi)       Inalattetrouble;

(xii)      Dolce Notte;

(xiii)     Lookwhogotlucky; and

(xiv)     Quantum Theory

November 12, 2020
Series Collusion Illusion November 12, 2020

 

 

 

 ii 

 

 

POS-AM #23
Series Monomoy Girl April 14, 2021
Series Got Stormy April 14, 2021
Series Social Dilemma April 14, 2021
POS-AM #24 and #25  
Series Carrothers April 30, 2021
Series Going to Vegas April 30, 2021
Series Ari the Adventurer 19 April 30, 2021
Series Wonder Upon a Star 19 April 30, 2021
Series Echo Warrior 19 April 30, 2021
POS-AM #26
Series Silverpocketsfull 19 May 10, 2021
Series Who'sbeeninmybed 19 May 10, 2021
Series Into Summer 19 May 10, 2021
Series Mrs Whistler May 10, 2021
Series Race Hunter 19 May 10, 2021
Series Co Cola 19 May 10, 2021
Series Vow May 10, 2021
Series You Make Luvin Fun 19 Magical Ways May 10, 2021
Series Miss Sakamoto May 10, 2021
Series Courtisane 19 May 10, 2021
Series Grand Traverse Bay 19 May 10, 2021

 

(1) Series New York Claiming Package is comprised of two (2) horses, (i) a 2016 Filly named, Augusta Moon, and (ii) a 2015 Colt named, Hizaam. On December 22, 2019, Augusta Moon, one of the two Underlying Assets of Series New York Claiming Package, was claimed/purchased from a race for $35,000. See below for more information.

 

(2) Series The Filly Four is comprised of four (4) horses, (i) a 2018 Filly named, Moonlight d’Oro (formerly Venetian Sonata 18), (ii) a 2018 Filly named, Joyful Addiction (formerly My Sweet Addiction 18), (iii) a 2018 Filly named, Lady Valentine (formerly My Lady Lauren 18), and (iv) a 2018 Filly named, Shared Empire (formerly Sapucai 18).

 

(3) Series NY Exacta is comprised of two (2) horses, (i) a 2018 Filly named Quick Conversation, and (ii) a 2018 Colt named Psychedelic Shack.

 

(4) Series Future Stars Stable is comprised of fourteen (14) horses, (i) a 2019 Colt named, Man Among Men, (ii) a 2019 Filly named, Frosted Oats, (iii) a 2019 Filly named, Infinite Empire (formerly Tapitry 19), (iv) a 2019 Filly named, Sixtythreecaliber (formerly Classofsixtythree 19), (v) a 2019 Colt named, Provocateur (formerly Cayala 19), (vi) a 2019 Filly named, A Mo Reay (formerly Margaret Reay 19), (vii) a 2019 Colt named, Can’t Hush This (formerly Awe Hush 19), (viii) a 2019 Filly named, Above Suspicion (formerly Exonerated 19), (ix) a 2019 Colt named, Ancient Royalty (formerly Speightstown Belle 19), (x) a 2019 Filly named, Sacred Beauty (formerly Consecrate 19), (xi) a 2019 Filly named Inalattetrouble (formerly Latte Da 19), (xii) a 2019 Filly named, Dolce Notte (formerly Midnight Sweetie 19), (xiii) a 2019 Colt named, Lookwhogotlucky (formerly Ambleside Park 19), and (xiv) a 2019 Colt named, Quantum Theory (formerly Athenian Beauty 19).

 

The purpose of this post-qualification amendment is to amend, update and/or replace certain information contained in the Offering Circular and to add additional Series to the offering statement by means of this post-qualification amendment.

 

 

 

 

 

 iii 

 

 

Table of Contents

Filed Pursuant to 253(g)(2)

File No. 024-10896

 

 

OFFERING CIRCULAR

DATED JUNE 23, 2021

 

MY RACEHORSE CA LLC

 

 

250 W. 1st Street, Suite 256

Claremont, CA 91711

(909) 740-9175

www.myracehorse.com

 

Series Membership Interests Overview

Newly Added (To be Qualified)

  Number of
Shares
Price to Public Underwriting
Discounts and
Commissions (1)(2)
Proceeds to
Issuer (3)
  Total Maximum        
Series Our Miss Jones 19 Per Unit 1 $156.00 $1.56 $154.44
  Total Maximum 1,200 $187,200.00 $1,872.00 $185,328.00
           
Series Margarita Friday 19 Per Unit 1 $166.00 $1.66 $164.34
  Total Maximum 2,000 $332,000.00 $3,320.00 $328,680.00
           
Series Queen Amira 19 Per Unit 1 $165.00 $1.65 $163.35
  Total Maximum 2,000 $330,000.00 $3,300.00 $326,700.00
           
Series Salute to America Per Unit 1 $273.00 $2.73 $270.27
  Total Maximum 1,000 $273,000.00 $2,730.00 $270,270.00
           
Series Desire Street 19 Per Unit 1 $201.00 $2.01 $198.99
  Total Maximum 1,020 $205,020.00 $2,050.20 $202,969.80

 

 iv 

 

 
Series Membership Interests Overview
Active Offerings (Previously Qualified)
   

Number of

Shares

Price to Public

Underwriting

Discounts and

Commissions

(1)(2)

Proceeds to
Issuer (3)
Series Lost Empire 19 Per Unit 1 $35.00 $0.35 $34.65
  Total Maximum 10,200 $357,000.00 $3,570.00 $353,430.00
           
Series Cayala 19 Per Unit 1 $91.00 $0.91 $90.09
  Total Maximum 4,100 $373,100.00 $3,731.00 $369,369.00
           
Series Consecrate 19 Per Unit 1 $157.00 $1.57 $155.43
  Total Maximum 410 $64,370.00 $643.70 $63,726.30
           
Series Future Stars Stable (9) Per Unit 1 $50.00 $0.50 $49.50
  Total Maximum 10,000 $500,000.00 $5,000.00 $495,000.00
           
Series Collusion Illusion (15) Per Unit 1 $30.00 $0.30 $29.70
  Total Maximum 25,000 $750,000.00 $7,500.00 $742,500.00
           
Series Monomoy Girl Per Unit 1 $46.00 $0.46 $45.54
  Total Maximum 10,200 $469,200.00 $4,692.00 $464,508.00
           
Series Got Stormy Per Unit 1 $45.00 $0.45 $44.55
  Total Maximum 5,100 $229,500.00 $2,295.00 $227,205.00
           
Series Social Dilemma Per Unit 1 $167.00 $1.67 $165.33
  Total Maximum 510 $85,170.00 $851.70 $84,318.30
           
Series Carrothers Per Unit 1 $101.00 $1.01 99.99
  Total Maximum 5,100 $515,100.00 $5,151.00 $509,949.00
           
Series Going to Vegas Per Unit 1 $86.00 $0.86 $85.14
  Total Maximum 5,100 $438,600.00 $4,386.00 $434,214.00
           
Series Ari the Adventurer 19 Per Unit 1 $85.00 $0.85 $84.15
  Total Maximum 5,100 $433,500.00 $4,335.00 $429,165.00
           
Series Wonder Upon a Star 19 Per Unit 1 $37.00 $0.37 $36.63
  Total Maximum 10,000 $370,000.00 $3,700.00 $366,300
           
Series Echo Warrior 19 Per Unit 1 $58.00 $0.58 $57.42
  Total Maximum 6,000 $348,000.00 $3,480.00 $344,520.00

 

 v 

 

 

Series Silverpocketsfull 19 Per Unit 1 $89.00 $0.89 $88.11
  Total Maximum 5,100 $453,900.00 $4,539.00 $449,361.00
           
Series Who'sbeeninmybed 19 Per Unit 1 $74.00 $0.74 $73.26
  Total Maximum 5,100 $377,400.00 $3,774.00 $373,626.00
           
Series Into Summer 19 Per Unit 1 $386.00 $3.86 $382.14
  Total Maximum 650 $250,900.00 $2,509.00 $248,391.00
           
Series Mrs Whistler Per Unit 1 $137.00 $1.37 $135.63
  Total Maximum 2,000 $274,000.00 $2,740.00 $271,260.00
           
Series Race Hunter 19 Per Unit 1 $52.00 $0.52 $51.48
  Total Maximum 10,000 $520,000.00 $5,200.00 $514,800.00
           
Series Co Cola 19 Per Unit 1 $106.00 $1.06 $104.94
  Total Maximum 5,100 $540,600.00 $5,406.00 $535,194.00
           
Series Vow Per Unit 1 $179.00 $1.79 $177.21
  Total Maximum 2,000 $358,000.00 $3,580.00 $354,420.00
           
Series You Make Luvin Fun 19 Per Unit 1 $75.00 $0.75 $74.25
  Total Maximum 6,000 $450,000.00 $4,500.00 $445,500.00
           
Series Miss Sakamoto Per Unit 1 $54.00 $0.54 $53.46
  Total Maximum 6,000 $324,000.00 $3,240.00 $320,760.00
           
Series Courtisane 19 Per Unit 1 $49.00 $0.49 $48.51
  Total Maximum 10,000 $490,000.00 $4,900.00 $485,100.00
           
Series Grand Traverse Bay 19 Per Unit 1 $447.00 $4.47 $442.53
  Total Maximum 750 $335,250.00 $3,352.50 $331,897.50

 

 

 

 

 

 

 

 

 vi 

 

 

Series Membership Interests Overview
Closed/Terminated Offerings (17)
   

Number of

Shares

Price to Public

Underwriting

Discounts and

Commissions

(1)(2)

Proceeds to
Issuer (3)
Series Vertical Threat (4) Per Unit 1 $210.00 $0.00 $210.00
  Total Maximum 537 $112,770.00 $0.00 $112,770.00
           
Series Amandrea (16) Per Unit 1 $295.00 $0.00 $295.00
  Total Maximum 550 $162,250.00 $0.00 $162,250.00
           
Series Keertana 18 Per Unit 1 $100.00 $0.00 $100.00
  Total Maximum 5,100 $510,000.00 $0.00 $510,000.00
           
Series Lazy Daisy Per Unit 1 $115.00 $0.00 $115.00
  Total Maximum 1,250 $143,750.00 $0.00 $143,750.00
           
Series The Filly Four (7) Per Unit 1 $180.00 $0.00 $180.00
  Total Maximum 8,000 $1,440,000.00 $0.00 $1,440,000.00
           
Series Popular Demand Per Unit 1 $244.00 $0.00 $244.00
  Total Maximum 1,020 $248,880.00 $0.00 $248,880.00
           
Series Authentic Per Unit 1 $206.00 $0.00 $206.00
  Total Maximum 12,500 $2,575,000.00 $0.00 $2,575,000.00
           
Series Storm Shooter Per Unit 1 $162.00 $0.00 $162.00
  Total Maximum 2,000 $324,000.00 $0.00 $324,000.00
           
Series Naismith Per Unit 1 $152.00 $0.00 $152.00
  Total Maximum 2,000 $304,000.00 $0.00 $304,000.00
           
Series NY Exacta (8) Per Unit 1 $228.00 $0.00 $228.00
  Total Maximum 2,000 $456,000.00 $0.00 $456,000.00
           
Series Palace Foal Per Unit 1 $120.00 $0.00 $120.00
  Total Maximum 510 $61,200.00 $0.00 $61,200.00
           
Series De Mystique '17 Per Unit 1 $140.00 $0.00 $140.00
  Total Maximum 250 $35,000.00 $0.00 $35,000.00
           
Series Martita Sangrita 17 (12) Per Unit 1 $320.00 $0.00 $320.00
  Total Maximum 576 $184,320.00 $0.00 $184,320.00

 

 

 vii 

 

 

           
Series Daddy's Joy Per Unit 1 $180.00 $0.00 $180.00
  Total Maximum 600 $108,000.00 $0.00 $108,000.00
           
Series Shake It Up Baby Per Unit 1 $130.00 $0.00 $130.00
  Total Maximum 250 $32,500.00 $0.00 $32,500.00
           
Series Tizamagician (13) Per Unit 1 $320.00 $0.00 $320.00
  Total Maximum 339 $108,480.00 $0.00 $108,480.00
           
Series Power Up Paynter Per Unit 1 $190.00 $0.00 $190.00
  Total Maximum 600 $114,000.00 $0.00 $114,000.00
           
Series Wayne O Per Unit 1 $95.00 $0.00 $95.00
  Total Maximum 6,000 $570,000.00 $0.00 $570,000.00
           
Series New York Claiming Package Per Unit 1 $140.00 $0.00 $140.00
  Total Maximum 510 $71,400.00 $0.00 $71,400.00
           
Series Lane Way (14) Per Unit 1 $90.00 $0.00 $90.00
  Total Maximum 6,000 $540,000.00 $0.00 $540,000.00
           
Series Big Mel (5) Per Unit 1 $121.00 $0.00 $121.00
  Total Maximum 6,000 $726,000.00 $0.00 $726,000.00
           
Series Two Trail Sioux 17 Per Unit 1 $300.00 $0.00 $300.00
  Total Maximum 450 $135,000.00 $0.00 $135,000.00
           
Series Sunny 18 (6) Per Unit 1 $65.00 $0.00 $65.00
  Total Maximum 6,000 $390,000.00 $0.00 $390,000.00
           
Series Mo Mischief Per Unit 1 $75.00 $0.00 $75.00
  Total Maximum 5,100 $382,500.00 $0.00 $382,500.00
           
Series Deep Cover (11) Per Unit 1 $220.00 $0.00 $220.00
  Total Maximum 800 $176,000.00 $0.00 $176,000.00
           
Series Thirteen Stripes Per Unit 1 $229.00 $0.00 $229.00
  Total Maximum 1,000 $229,000.00 $0.00 $229,000.00
           
Series Man Among Men Per Unit 1 $273.00 $2.73 $270.27
  Total Maximum 820 $223,860.00 $2,238.60 $221,621.40

 

 

 

 8 

 

 

Series Frosted Oats Per Unit 1 $42.00 $0.42 $41.58
  Total Maximum 4,100 $172,200.00 $1,722.00 $170,478.00
           
Series Tapitry 19 Per Unit 1 $273.00 $2.73 $270.27
  Total Maximum 820 $223,860.00 $2,238.60 $221,621.40
           
Series Classofsixtythree 19 Per Unit 1 $193.00 $1.93 $191.07
  Total Maximum 1,000 $193,000.00 $1,930.00 $191,070.00
           
Series Margaret Reay 19 Per Unit 1 $301.00 $3.01 $297.99
  Total Maximum 820 $246,820.00 $2,468.20 $244,351.80
           
Series Awe Hush 19 Per Unit 1 $164.00 $1.64 $162.36
  Total Maximum 1800 $295,200.00 $2,952.00 $292,248.00
           
Series Exonerated 19 Per Unit 1 $169.00 $1.69 $167.31
  Total Maximum 820 $138,580.00 $1,385.80 $137,194.20
           
Series Speightstown Belle 19 Per Unit 1 $139.00 $1.39 $137.61
  Total Maximum 900 $125,100.00 $1,251.00 $123,849.00
           
Series Latte Da 19 Per Unit 1 $35.00 $0.35 $34.65
  Total Maximum 4,100 $143,500.00 $1,435.00 $142,065.00
           
Series Midnight Sweetie 19 Per Unit 1 $148.00 $1.48 $146.52
  Total Maximum 820 $121,360.00 $1,213.60 $120,146.40
           
Series Ambleside Park 19 Per Unit 1 $205.00 $2.05 $202.95
  Total Maximum 410 $84,050.00 $840.50 $83,209.50
           
Series Athenian Beauty 19 Per Unit 1 $47.00 $0.47 $46.53
  Total Maximum 1,800 $84,600.00 $846.00 $83,754.00
           
Series Apple Down Under 19 Per Unit 1 $173.00 $1.73 $171.27
  Total Maximum 600 $103,800.00 $1,038.00 $102,762.00
           
Series Motion Emotion Per Unit 1 $84.00 $0.84 $83.16
  Total Maximum 1,020 $85,680.00 $856.80 $84,823.20
           
Series Action Bundle (10) Per Unit 1 $31.00 $0.31 $30.69
  Total Maximum 10,000 $310,000.00 $3,100.00 $306,900.00
           
Series Just Louise 19 Per Unit 1 $229.00 $2.29 $226.71
  Total Maximum 1,020 $233,580.00 $2,335.80 $231,244.20

 

 

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  (1) The Company has engaged Dalmore Group, LLC (“Dalmore”), Member FINRA/SIPC, to act as the broker/dealer of record for all offerings and, thus, they will be entitled to a Brokerage Fee as reflected herein and described in greater detail under “Plan of Distribution and Subscription Procedure – Broker” and “– Fees and Expenses” and per the Broker-Dealer Agreement.
     
  (2) No underwriter has been engaged in connection with the Offering. The securities being offered hereby will only be offered by us and persons associated with us, in reliance on the exemption from registration contained in Rule 3a4-1 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We intend to distribute all offerings of membership interests in any series of the Company principally through the MyRacehorse™ Platform as described in greater detail under “Plan of Distribution and Subscription Procedure.”

 

  (3) The use of proceeds for each Series assumes a fully subscribed Series, including interests previously issued under prior offerings of the applicable Series Interests, if any.

 

  (4) The Company has authorized an offering of up to 600 series interests in Vertical Threat. The Company previously sold 63 series interests in Vertical Threat pursuant to an exemption based California intrastate offering permit (the “Prior Vertical Threat Sale”). These series interests were sold for $210 per series interest, the same price as in the Series Vertical Threat Offering. As a result, the Company is only offering a total of 537 Series Vertical Threat Interests in the Series Vertical Threat Offering under Regulation A.
     
  (5)

On December 30, 2019, the Company approved a forward split of the Series Membership Interests of Series Big Mel (the “Series Big Mel Interests”), at a ratio of 5-for-1 (the “Split”).  As a result of the foregoing, the total number of Series Big Mel Interests held by each member of Series Big Mel only will be converted automatically into the number of Series Big Mel Interests equal to (i) the number of issued and outstanding Series Big Mel Interests held by such member immediately prior to the Split, multiplied by (ii) 5. No fractional Series Big Mel Interests will be issued, and no cash or other consideration will be paid. The Series Big Mel Interests are held in electronic form with the Company’s transfer agent. Members do not have to take any action as the effect of the Split will be automatically reflected in each member’s online account. Immediately after the Split, each member’s percentage ownership interest in Series Big Mel will remain unchanged. The rights and privileges of the Series Big Mel members will be otherwise unaffected by the Split. As a result of the Split, the terms of the Series Big Mel Offering will be proportionally adjusted as follows: (i) the Total Maximum of Series Big Mel Interests offered will be increased to 5,100 and (ii) the price per Series Big Mel Interest will be decreased to $121. The overall value of Series Big Mel, including the aggregate offering amount of $617,100 and the corresponding use of proceeds will remain unchanged. The practical effect of the Split is to allow the Company to issue Series Big Mel Interests in smaller increments than originally contemplated without affecting any existing member’s percentage interests in Series Big Mel or the overall economics of the Series Big Mel Offering. See also the Company’s Form 1-U filed with the SEC on December 30, 2019.

 

On March 25, 2020, the Company acquired an additional 9% interest in Big Mel, taking its total interest to 60%. As such, the Company has added an additional 900 Series Big Mel Interests to the Offering Statement to be qualified on the same terms as previously sold such that 6,000 total Series Big Mel Interests are authorized in Series Big Mel.

 

On December 9, 2020, the Company purchased the remaining 40% ownership interest in Big Mel. As a result, Series Big Mel will now hold a 100% interest in Big Mel. In exchange, Series Big Mel now also has responsibility for 100% of the operating expenses associated with Big Mel. See also the Company’s Form 1-U filed with the SEC on December 11, 2020.

     
  (6)

On March 25, 2020, the Company acquired an additional 9% interest in Solar Strike (Series Sunny 18), taking its total interest to 60%. As such, the Company has added an additional 900 Series Sunny 18 Interests to the Offering Statement to be qualified on the same terms as previously sold such that 6,000 Series Sunny 18 Interests are authorized in Series Sunny 18.

On July 27, 2020, the Company elected to geld Solar Strike due to health and safety concerns. Solar Strike still has the ability to race but will no longer be able to breed. In connection with the gelding, the Company and Spendthrift entered into an amendment to the Solar Strike Co-Ownership Agreement to clarify the right to geld and the effect of gelding on breeding rights and bonuses. See also the Company’s Form 1-U filed with the SEC on July 28, 2020.

 

On November 23, 2020, the Company purchased the remaining 40% ownership interest in Solar Strike, the 2018 Colt that is the Underlying Asset of Series Sunny 18. As a result, Series Sunny 18 will now hold a 100% interest in Solar Strike. In exchange, Series Sunny 18 now also has responsibility for 100% of the operating expenses associated with Solar Strike. See also the Company’s Form 1-U filed with the SEC on November 30, 2020.

 

On July 19, 2020, the Series Sunny 18 Offering was sold out and closed.

 

 

 

 x 

 

 

  (7) Series The Filly Four is comprised of four (4) horses, (i) a 2018 Filly named, Venetian Sonata 18, (ii) a 2018 Filly named, My Sweet Addiction 18, (iii) a 2018 Filly named, My Lady Lauren 18, and (iv) a 2018 Filly named, Sapucai 18.
     
  (8) Series NY Exacta is comprised of two (2) horses, (i) a 2018 Filly named, Quick Conversation, and (ii) a 2018 Colt named, Psychedelic Shack
     
  (9)

Series Future Stars Stable is comprised of fourteen (14) horses, (i) a 2019 Colt named, Man Among Men, (ii) a 2019 Filly named, Frosted Oats, (iii) a 2019 Filly named, Infinite Empire (formerly Tapitry 19), (iv) a 2019 Filly named, Sixtythreecaliber (formerly Classofsixtythree 19), (v) a 2019 Colt named, Provocateur (formerly Cayala 19), (vi) a 2019 Filly named, A Mo Reay (formerly Margaret Reay 19), (vii) a 2019 Colt named, Can’t Hush This (formerly Awe Hush 19), (viii) a 2019 Filly named, Above Suspicion (formerly Exonerated 19), (ix) a 2019 Colt named, Ancient Royalty (formerly Speightstown Belle 19), (x) a 2019 Filly named, Sacred Beauty (formerly Consecrate 19), (xi) a 2019 Filly named Inalattetrouble (formerly Latte Da 19), (xii) a 2019 Filly named, Dolce Notte (formerly Midnight Sweetie 19), (xiii) a 2019 Colt named, Lookwhogotlucky (formerly Ambleside Park 19), and (xiv) a 2019 Colt named, Quantum Theory (formerly Athenian Beauty 19.

 

On December 18, 2020, the Company filed Post-Qualification Amendment No. 20 to its offering statement on Form 1-A with the SEC and disclosed that all of the Series Interests offered for Series Future Stars Stable were sold out as of November 21, 2020. However, certain investors that tried to purchase Series Interests of Series Future Stars Stable were not able to complete their transaction because of failed ACH payment attempts. As a result, the Company is reoffering only those remaining amounts of Series Interests in Series Future Stars Stable that were not sold.

 

On April 26, 2021, Ancient Royalty, one of the underlying assets of Series Future Stars Stable, died. The Company held mortality insurance on Ancient Royalty. See the Company’s Form 1-U filed with the SEC on April 30, 2021. Due to the value of mortality insurance and the large volume of other assets in Series Future Stars Stable, the Series Future Stars Stable Offering will remain active.

     
  (10)

Series Action Bundle is comprised of three (3) horses: (i) a 2017 Filly named His Glory, (ii) a 2015 Filly named Altea, and (iii) a 2016 Filly named Bohemian Bourbon.

     
  (11) On April 2, 2021, the Company purchased the remaining 20% ownership interest in Deep Cover, the 2018 Colt that is the Underlying Asset of Series Deep Cover. As a result, Series Deep Cover will now hold a 100% interest in Deep Cover. In exchange, Series Deep Cover now also has responsibility for 100% of the operating expenses associated with Deep Cover as of March 28, 2021. See also the Company’s Form 1-U filed with the SEC on April 7, 2021.
     
  (12) The Company has authorized an offering of up to 600 series interests in Carpe Vinum (f.k.a. Martita Sangrita 17). The Company previously sold 24 series interests in Carpe Vinum pursuant to an exemption based California intrastate offering permit (the “Prior Carpe Vinum Sale”). These series interests were sold for $320 per series interest, the same price as in the Series Martita Sangrita 17 Offering. As a result, the Company is only offering a total of 576 Series Martita Sangrita 17 Interests in the Series Martita Sangrita 17 Offering under Regulation A.
     
  (13)

The Company has authorized an offering of up to 600 series interests in Tizamagician. The Company previously sold 261 series interests in Tizamagician pursuant to an exemption based California intrastate offering permit (the “Prior Tizamagician Sale”). These series interests were sold for $320 per series interest, the same price as in the Series Tizamagician Offering. As a result, the Company is only offering a total of 339 Series Tizamagician Interests in the Series Tizamagician Offering under Regulation A.

 

     
  (14)

On March 9, 2021, the Company purchased the remaining 40% ownership interest in Lane Way, the 2017 Colt that is the Underlying Asset of Series Lane Way. As a result, Series Lane Way will now hold a 100% interest in Lane Way. In exchange, Series Lane Way now also has responsibility for 100% of the operating expenses associated with Lane Way. See also the Company’s Form 1-U filed with the SEC on March 15, 2021.

 

     
  (15)

As of December 31, 2020, Series Interests in Series Collusion Illusion were fully subscribed. However, certain investors that tried to purchase Series Interests in Series Collusion Illusion were not able to complete their transaction either because of (a) failed ACH payment attempts, or (b) a cancellation/refund of such transaction. As a result, the Company is reoffering only those remaining amounts of Series Interests in Series Collusion Illusion that were not sold.

 

 

 

 

 xi 
 

 

  (16)

On December 30, 2020, the Company purchased the remaining 45% ownership interest in Amandrea, the 2016 Filly that is the Underlying Asset of Series Amandrea, for $11,250. As a result, Series Amandrea will now hold a 100% interest in Amandrea. In exchange, Series Amandrea now also has responsibility for 100% of the operating expenses associated with Amandrea. See also the Company’s Form 1-U filed with the SEC on January 6, 2021.

 

  (17) The following offerings were terminated/closed:

 

  · On February 6, 2020, the Series Palace Foal Offering was terminated prior to any securities being offered.
  · On September 6, 2019, the Series De Mystique ‘17 Offering was sold out and closed.
  · On October 18, 2019, the Series Martita Sangrita 17 Offering was sold out and closed.
  · On September 23, 2019, the Series Daddy’s Joy Offering was sold out and closed.
  · On January 22, 2020, Shake it Up Baby died. The Company held mortality insurance on Shake it Up Baby. See the Company’s Form 1-U filed with the SEC on February 6, 2020.
  · On September 9, 2019, the Series Tizamagician Offering was sold out and closed.
  · On October 11, 2019, the Series Power Up Paynter Offering was sold out and closed.
  · On October 26, 2019, the Series Wayne O Offering was sold out and closed.
  · On or around November 30, 2020, Wayne O, the 2017 Colt that is the Underlying Asset of Series Wayne O, was gelded. See also the Company’s Form 1-U filed with the SEC on November 30, 2020.
  · On December 22, 2019, Augusta Moon, one of the two Underlying Assets of Series New York Claiming Package, was claimed/purchased from a race for $35,000. The sale contains no other material terms and conditions. As a result of Augusta Moon being sold, the Company plans to issue a dividend of $65.93 per each Series New York Claiming Package Membership Interest which dividend represents such member’s pro rata share of the sale proceeds from the claim, the unused training reserve, unused insurance and the unrealized manager fee. See also the Company’s Form 1-U filed with the SEC on December 30, 2019. As a result of the claiming of Augusta Moon, the Series New York Claiming Package Offering was closed.
  · On May 25, 2020, the Series Lane Way Offering was sold out and closed.
  · On June 1, 2020, the Series Big Mel Offering was sold out and closed.
  · On July 9, 2020, Annahilate, the 2017 Colt that is the Underlying Asset for Series Two Trail Sioux 17, suffered a fracture to his lateral sesamoid in his front left limb after a workout. Although this injury is not life threatening, the nature of this injury is career ending. Because Annahilate will no longer be able to generate revenue since he will need to be retired from racing, the Series Two Trail Sioux 17 was closed. As a result, the Manager will terminate and wind up Series Two Trail Sioux 17 because Series Two Trail Sioux 17 would no longer have any assets or liabilities. See also the Company’s Form 1-U filed with the SEC on July 15, 2020.
  · On July 28, 2020, the Company elected to geld Solar Strike due to health and safety concerns.  Solar Strike still has the ability to race and generate revenues but will no longer be able to breed. In connection with the gelding, the Company and Spendthrift entered into an amendment to the Solar Strike Co-Ownership Agreement to clarify the right to geld and the effect of gelding on breeding rights and bonuses. See also the Company’s Form 1-U filed with the SEC on July 28, 2020. As a result, the Series Sunny 18 offering was closed.
  · On September 18, 2020, the Series Vertical Threat Offering was sold out and closed.
  · On September 18, 2020, the Series Amandrea Offering was sold out and closed.
  · On September 18, 2020, the Series Keertana 18 Offering was sold out and closed.
  · On September 18, 2020, the Series Lazy Daisy Offering was sold out and closed.
  · On September 18, 2020, the Series The Filly Four Offering was sold out and closed.
  · On September 18, 2020, the Series Mo Mischief Offering was sold out and closed.
  · On September 18, 2020, the Series Deep Cover Offering was sold out and closed.
  · On September 18, 2020, the Series Popular Demand Offering was sold out and closed.
  · On September 18, 2020, the Series Authentic Offering was sold out and closed.
  · On September 18, 2020, the Series Storm Shooter Offering was sold out and closed.
  · On September 18, 2020, the Series Naismith Offering was sold out and closed.
  · On September 18, 2020, the Series NY Exacta Offering was sold out and closed.
  · On September 18, 2020, the Series Thirteen Stripes Offering was sold out and closed.
  · On November 9, 2020, Authentic, the 2017 Colt that is the Underlying Asset for Series Authentic, was retired from racing and began his stud career. See also the Company’s Form 1-U filed with the SEC on November 12, 2020.

 

 

 

 

 

 xii 
 

 

  · On November 16, 2020, the Series Man Among Men Offering was sold out and closed.
  · On November 17, 2020, the Series Frosted Oats Offering was sold out and closed.
  · On November 16, 2020, the Series Tapitry 19 Offering was sold out and closed.
  · On November 17, 2020, the Series Classofsixtythree 19 Offering was sold out and closed.
  · On November 17, 2020, the Series Margaret Reay 19 Offering was sold out and closed.
  · On November 17, 2020, the Series Awe Hush 19 Offering was sold out and closed.
  · On November 17, 2020, the Series Exonerated 19 Offering was sold out and closed.
  · On November 17, 2020, the Series Speightstown Belle 19 Offering was sold out and closed.
    On April 26, 2021, Ancient Royalty, the underlying asset of Series Speightstown Belle 19, died. The Company held mortality insurance on Ancient Royalty. See the Company’s Form 1-U filed with the SEC on April 30, 2021.
  · On November 17, 2020, the Series Latte Da 19 Offering was sold out and closed.
  · On November 17, 2020, the Series Midnight Sweetie 19 Offering was sold out and closed.
  · On November 16, 2020, the Series Ambleside Park 19 Offering was sold out and closed.
  · On November 16, 2020, the Series Athenian Beauty 19 Offering was sold out and closed.
  · On January 16, 2021, the Series Apple Down Under 19 Offering was sold out and closed.
  · On April 2, 2021, the Series Motion Emotion Offering was terminated prior to any securities being offered.
  · On April 2, 2021, the Series Action Bundle Offering was terminated prior to any securities being offered.
  ·

On April 14, 2021, the Series Just Louise 19 Offering was sold out and closed.

 

My Racehorse CA LLC, a Nevada series limited liability company (“we,” “us,” “our,” “MRH” or the “Company”) is offering, on a best efforts basis, up to the amount of membership interests of each of the series of the Company (the “Maximum”) without any minimum target as set forth in the above table entitled “Series Membership Interests Overview.”

 

All of the series of the Company offered hereunder may collectively be referred to herein as the “Series” and each, individually, as a “Series”. The interests of all Series described above may collectively be referred to herein as the “Interests” and each, individually, as an “Interest” and the offerings of the Interests may collectively be referred to herein as the “Offerings” and each, individually, as an “Offering”.

 

An Offering Circular, presented in Offering Circular format, was filed with the Securities and Exchange Commission (the “Commission”) with respect to the Series Palace Foal Offering and was qualified by the Commission on February 22, 2019 (the “Original Offering Circular”). This Post-Qualification Amendment No. 27 to the Original Offering Circular describes each individual Series set forth in the above table entitled “Series Membership Interests Overview.”

 

Series Interests are available for purchase exclusively through the MyRacehorse™ Platform and will be issued in book-entry electronic form only. StartEngine Secure LLC has been engaged as the Company’s SEC-registered transfer agent and registrar of the Series Interests pursuant to Section 17A(c) of the Exchange Act.

 

 

 

 xiii 

 

 

 

A purchaser of the Interests shall be deemed an “Investor” or “Interest Holder.” There will be separate closings with respect to each Offering. The Company may undertake one or more closings on a rolling basis with respect to each Offering (each, a “Closing”). After each Closing, funds tendered by Investors will be available to the Company. Because the Offering is being made on a best efforts basis and without a minimum offering amount, the Company may close the offering at any level of proceeds raised. Each such Offering shall be terminated on the earlier of (i) the date subscriptions for the Maximum Interests of such Series have been accepted, (ii) a date determined by the Manager in its sole discretion, or (iii) the date which is one year from the date this Offering Circular is qualified by the Commission which period may be extended by an additional six months by the Manager in its sole discretion.

 

No securities are being offered by existing security holders. Each Offering is being conducted under Regulation A (17 CFR 230.251 et. seq.) and the information contained herein is being presented in Offering Circular format. See “Plan of Distribution and Subscription Procedure” and “Description of Interests Offered” for additional information.

 

GENERALLY, NO SALE MAY BE MADE TO YOU IN ANY OFFERING IF THE AGGREGATE PURCHASE PRICE YOU PAY IS MORE THAN 10% OF THE GREATER OF YOUR ANNUAL INCOME OR NET WORTH. DIFFERENT RULES APPLY TO ACCREDITED INVESTORS AND NON-NATURAL PERSONS. BEFORE MAKING ANY REPRESENTATION THAT YOUR INVESTMENT DOES NOT EXCEED APPLICABLE THRESHOLDS, WE ENCOURAGE YOU TO REVIEW RULE 251(d)(2)(i)(C) OF REGULATION A. FOR GENERAL INFORMATION ON INVESTING, WE ENCOURAGE YOU TO REFER TO WWW.INVESTOR.GOV.

 

The United States Securities and Exchange Commission does not pass upon the merits of or give its approval to any securities offered or the terms of the offering, nor does it pass upon the accuracy or completeness of any offering circular or other solicitation materials. These securities are offered pursuant to an exemption from registration with the Commission; however, the Commission has not made an independent determination that the securities offered are exempt from registration. This Offering Circular shall not constitute an offer to sell or the solicitation of an offer to buy, nor may there be any sales of these securities in, any state in which such offer, solicitation or sale would be unlawful before registration or qualification of the offer and sale under the laws of such state.

 

An investment in the Interests involves a high degree of risk. See the section titled, “Risk Factors”, herein for a description of some of the risks that should be considered before investing in the Interests.

 

 

 

 

 xiv 

 

 

TABLE OF CONTENTS

MY RACEHORSE CA LLC

 

 

SECTION PAGE 
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS 1
OFFERING SUMMARY 2
RISK FACTORS 12
POTENTIAL CONFLICTS OF INTEREST 22
DILUTION 23
USE OF PROCEEDS – SERIES LOST EMPIRE 19 24
USE OF PROCEEDS – SERIES CAYALA 19 26
USE OF PROCEEDS – SERIES CONSECRATE 19 28
USE OF PROCEEDS – SERIES FUTURE STARS STABLE 30
USE OF PROCEEDS – SERIES COLLUSION ILLUSION 32
USE OF PROCEEDS – SERIES MONOMOY GIRL 34
USE OF PROCEEDS – SERIES GOT STORMY 35
USE OF PROCEEDS – SERIES SOCIAL DILEMMA 36
USE OF PROCEEDS – SERIES CARROTHERS 37
USE OF PROCEEDS – SERIES GOING TO VEGAS 38
USE OF PROCEEDS – SERIES ARI THE ADVENTURER 19 39
USE OF PROCEEDS – SERIES WONDER UPON A STAR 19 41
USE OF PROCEEDS – SERIES ECHO WARRIOR 19 42
USE OF PROCEEDS – SERIES SILVERPOCKETSFULL 19 43
USE OF PROCEEDS – SERIES WHO’SBEENINMYBED 19 45
USE OF PROCEEDS – SERIES INTO SUMMER 19 47
USE OF PROCEEDS – SERIES MRS WHISTLER 48
USE OF PROCEEDS – SERIES RACE HUNTER 19 49
USE OF PROCEEDS – SERIES CO COLA 19 50
USE OF PROCEEDS – SERIES VOW 51
USE OF PROCEEDS – SERIES YOU MAKE LUVIN FUN 19 52
USE OF PROCEEDS – SERIES MISS SAKAMOTO 53
USE OF PROCEEDS – SERIES COURTISANE 19 54
USE OF PROCEEDS – SERIES GRAND TRAVERSE BAY 19 55
USE OF PROCEEDS – SERIES OUR MISS JONES 19 56
USE OF PROCEEDS – SERIES MARGARITA FRIDAY 19 57
USE OF PROCEEDS – SERIES QUEEN AMIRA 19 58
USE OF PROCEEDS – SERIES SALUTE TO AMERICA 59
USE OF PROCEEDS – SERIES DESIRE STREET 19 60
DESCRIPTION OF LAFORGIA (F.K.A. LOST EMPIRE 19) 61
DESCRIPTION OF PROVOCATEUR (F.K.A. CAYALA 19) 67
DESCRIPTION OF SACRED BEAUTY (F.K.A. CONSECRATE 19) 72
DESCRIPTION OF FUTURE STARS STABLE 78
DESCRIPTION OF COLLUSION ILLUSION 89

 

 

 

 xv 
 

 

 

DESCRIPTION OF MONOMOY GIRL 93
DESCRIPTION OF GOT STORMY 99
DESCRIPTION OF SOCIAL DILEMMA 105
DESCRIPTION OF CARROTHERS 111
DESCRIPTION OF GOING TO VEGAS 117
DESCRIPTION OF ARI THE ADVENTURER 19 124
DESCRIPTION OF WONDER UPON A STAR 19 130
DESCRIPTION OF ECHO WARRIOR 19 136
DESCRIPTION OF SILVERPOCKETSFULL 19 142
DESCRIPTION OF WHO’SBEENINMYBED 19 148
DESCRIPTION OF INTO SUMMER 19 154
DESCRIPTION OF MRS WHISTLER 159
DESCRIPTION OF RACE HUNTER 19 164
DESCRIPTION OF CO COLA 19 169
DESCRIPTION OF VOW 174
DESCRIPTION OF MAGICAL WAYS (F.K.A. YOU MAKE LUVIN FUN 19) 178
DESCRIPTION OF MISS SAKAMOTO 183
DESCRIPTION OF COURTISANE 19 189
DESCRIPTION OF GRAND TRAVERSE BAY 19 194
DESCRIPTION OF OUR MISS JONES 19 200
DESCRIPTION OF MARGARITA FRIDAY 19 205
DESCRIPTION OF QUEEN AMIRA 19 209
DESCRIPTION OF SALUTE TO AMERICA 215
DESCRIPTION OF DESIRE STREET 19 219
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION 223
PLAN OF DISTRIBUTION AND SUBSCRIPTION PROCEDURE 251
DESCRIPTION OF THE BUSINESS 256
MANAGEMENT 264
COMPENSATION 266
PRINCIPAL INTEREST HOLDERS 267
DESCRIPTION OF INTERESTS OFFERED 270
MATERIAL UNITED STATES TAX CONSIDERATIONS 274
WHERE TO FIND ADDITIONAL INFORMATION 276
FINANCIAL STATEMENTS F-1

 

 

 

 

 xvi 

 

 

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

 

The information contained in this Offering Circular includes some statements that are not historical and that are considered “forward-looking statements.” Such forward-looking statements include, but are not limited to, statements regarding:

 

·our development plans for our business;
·our strategies and business outlook;
·the racing prospects for the respective Underlying Assets;
·potential distributions or dividends of race winnings and other revenue sources;
·anticipated development of the Company, the Manager and each Series of the Company;
·the overall growth of the horse racing industry;
·our compliance with regulatory matters (including the Investment Company Act, Investment Advisers Act and state securities regulations);
·the development of the MyRacehorse™ Platform (defined below); and
·various other matters (including contingent liabilities and obligations and changes in accounting policies, standards and interpretations).

 

These forward-looking statements express the Manager’s expectations, hopes, beliefs, and intentions regarding the future. In addition, without limiting the foregoing, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipates”, “believes”, “continue”, “could”, “estimates”, “expects”, “intends”, “may”, “might”, “plans”, “possible”, “potential”, “predicts”, “projects”, “seeks”, “should”, “will”, “would” and similar expressions and variations, or comparable terminology, or the negatives of any of the foregoing, may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.

 

The forward-looking statements contained in this Offering Circular are based on current expectations and beliefs concerning future developments that are difficult to predict. Neither the Company nor the Manager can guarantee future performance, or that future developments affecting the Company, the Manager or the MyRacehorse™ Platform will be as currently anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements.

 

All forward-looking statements attributable to us are expressly qualified in their entirety by these risks and uncertainties. These risks and uncertainties, along with others, are also described below under the heading “Risk Factors.” Should one or more of these risks or uncertainties materialize, or should any of the parties’ assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. You should not place undue reliance on any forward-looking statements and should not make an investment decision based solely on these forward-looking statements.  We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

 

 

 

 

1 

 

 

OFFERING SUMMARY

 

The following summary is qualified in its entirety by the more detailed information appearing elsewhere herein and in the Exhibits hereto. You should read the entire Offering Circular and carefully consider, among other things, the matters set forth in the section captioned Risk Factors.” You are encouraged to seek the advice of your attorney, tax consultant, and business advisor with respect to the legal, tax, and business aspects of an investment in the Interests.  All references in this Offering Circular to “$” or “dollars” are to United States dollars.

 

The Company: The Company is My Racehorse CA LLC, a Nevada series limited liability company formed on December 27, 2016.
   
Underlying Asset(s) and Offering Per Series Interest: The Underlying Asset for each Series and the Offering Price per Interest for each respective Series is set forth in the description for such asset herein.

 

  The assets of all Series described below may collectively be referred to herein as the “Underlying Assets” and each, individually, as an “Underlying Asset.” It is not anticipated that any of the Series would own any assets other than said interest in such Underlying Asset, plus certain prepaid cash reserves for insurance and other administrative expenses pertaining to the Series and amounts earned from the monetization of such Underlying Asset.

 

Securities Offered: Investors will acquire membership interests in a Series of the Company, each of which is intended to be a separate series of the Company for purposes of assets and liabilities. It is intended that owners of interests in a Series will only have assets, liabilities, profits and losses pertaining to the specific Underlying Assets owned by that Series. For example, an owner of interests in Series Monomoy Girl will only have an interest in the assets, liabilities, profits and losses pertaining to Series Monomoy Girl and its related operations and not as it relates to Series Lost Empire or any other series. See the “Description of Interests Offered” section for further details. The Interests will be non-voting except with respect to certain matters set forth in the Amended and Restated Series Limited Liability Company Agreement of the Company (the “Operating Agreement”).  The purchase of membership interests in a Series of the Company is an investment only in that Series (and with respect to that Series’ Underlying Asset) and not an investment in the Company as a whole.
   
Investors: Each Investor must be a “qualified purchaser.” See “Plan of Distribution and Subscription Procedure – Investor Suitability Standards” for further details. The Manager may, in its sole discretion, decline to admit any prospective Investor, or accept only a portion of such Investor’s subscription, regardless of whether such person is a “qualified purchaser”.

 

Manager:

Experiential Squared, Inc., a Delaware corporation, will serve as the manager of the Company and of each Series (the “Manager”) pursuant to that certain Management Services Agreement (the “Management Agreement”). Experiential Squared, Inc., also owns and operates a mobile app-based investment platform called MyRacehorse™ (the MyRacehorse™ platform and any successor platform used by the Company for the offer and sale of interests, the “MyRacehorse™ Platform”), which is licensed to the Company pursuant to the terms of the Management Agreement, through which the Interests are sold.

 

The Manager and/or its affiliates may, from time to time, purchase Interests at their discretion on the same terms and conditions as the Investors. The Company, the Manager, its affiliates and/or third parties may also (1) acquire horses that are listed on MyRacehorse.com pursuant to a promissory note between the Series and lender or (2) have the Series acquire the horses upon close of the respective offering. In many instances, said lender will have a right, prior to completion of the Offering, to participate in pre-closing dividends from revenue generated by its interest in the Underlying Asset and the right to convert into the unsold portion of the offering prior to being fully funded.

 

 

 

2 

 

 

   
Broker:

The Company has entered into an agreement with Dalmore Group, LLC (“Dalmore” or the “Broker”) a New York limited liability company and a broker-dealer which is registered with the Commission and is registered in each state where such Offering will be made prior to the launch of such Offering. Dalmore will act as the broker/dealer of record for each transaction and provide related services in connection with such Offering as described in the Broker-Dealer Agreement incorporated by reference as Exhibit 6.60.

 

Dalmore is a member of FINRA.

   
Minimum Interest purchase:

The minimum subscription by an Investor is 1 Interest in a Series. Notwithstanding the foregoing, the Manager has discretion to increase the minimum subscription by an Investor to greater than 1 Interest in a Series.

 

Purchase Price Consideration; Gift Cards:

The Purchase price for an Investor’s subscription will be payable in cash in United States Dollars at the time of subscription.

 

In addition, the Company sells gift cards for cash that are redeemable only on www.myracehorse.com for merchandise, race track experiences and also as consideration for the purchase of Interests.

 

The gift cards are valued at the cash value paid (e.g. if a purchaser pays $100 they get a gift card with a $100 value), are not redeemable for cash, (except as required by applicable law) have no expiration date and may be used solely on myracehorse.com. There are no discounts, differentiated pricing or other more favorable offering terms given or credited to investors that use gift cards in connection with the purchase of Interests.

 

To the extent even a $1 balance on a gift card remains, it can be used towards the purchase of Interests in combination with cash.

 

The recipient or user of a gift card will still need to qualify as a “qualified purchaser” to invest and will be subject to the same subscription process as investors that subscribe for cash. See “Investor Suitability Standards” and “Plan of Distribution and Subscription Procedure” for more information.

   
Offering size: There is no minimum offering amount for the sale of Interests in each Offering. The Maximum Interests offered per Series is set forth in the “Series Membership Interests Overview” table set forth above.

 

Offering Period: There will be a separate closing for each Offering. Each Offering is being conducted on a best efforts basis without any minimum target. The Company may undertake one or more closings on a rolling basis for each Offering. After each closing, funds tendered by Investors will be available to the Company. Because each Offering is being made on a best efforts basis and without a minimum offering amount, the Company may close each Offering at any level of proceeds raised. Each respective Offering shall be terminated on the earlier of (i) the date subscriptions for the Maximum Interests of such Series have been accepted, (ii) a date determined by the Manager in its sole discretion, or (iii) the date which is one year from the date this Offering Circular is qualified by the Commission which period may be extended by an additional six months by the Manager in its sole discretion.

 

 

 

 

 3 
 

 

Additional Investors:

After the Closing of each Offering, no Member will be required to make additional capital contributions. If a Series’ funds are insufficient to meet the needs of the Series, the Manager may (a) advance funds and not seek reimbursement, (b) loan funds to such Series, on which the Manager may impose a reasonable rate of interest, which shall not be lower than the Applicable Federal Rate (as defined in the Internal Revenue Code), and be entitled to reimbursement of such amount from future revenues generated by such Series, and/or (c) cause additional Interests to be issued in order to cover such additional amounts.

 

 

In the event that the Manager determines to issue additional Interests (as described in (c) above), the Manager shall notify the Members of the need for additional capital and the Members may be permitted, but not required, to make additional capital contributions to the Series on a pro-rata basis. In the event all Members do not make additional capital contributions, the Manager has discretion to sell additional Interests to third parties to meet the capital needs of such Series.

 

Use of proceeds:

The proceeds received by a Series from its respective Offering will be applied in the following order of priority of payment:

 

(i) Brokerage Fee: A fee equal to 1.0% of the amount raised through this Offering (which excludes any Interests purchased by the Manager, its affiliates or the Horse Sellers) paid to Dalmore as compensation for brokerage services;

 

(ii) Due Diligence Fee: A fee equal to approximately 15.0% of the amount raised through this Offering, on average, paid to Manager as compensation for due diligence services in evaluating, investigation and discovering the Underlying Assets (fee is subject to change in sole discretion of Manager as disclosed in each Series Agreement);

 

(iii) Bloodstock Fee: A fee up to 5.0% of the cost of the Underlying Asset paid to the Manager, an affiliate of the Manager, or a third party service provider as compensation for bloodstock services for creating and facilitating breeding plans for the Underlying Asset, analyzing pedigrees to assess the Underlying Asset’s value, and purchasing and/or selling the Underlying Asset on behalf of the Company;

 

(iv) Asset Cost of the Underlying Asset: Actual cost of the Underlying Asset paid to the Horse Seller (which may have been paid off prior to such Offering through a loan to the Company), including any accrued interest under potential loans to the Company and through down-payments by the Manager and/or its affiliates to acquire an interest in the Underlying Asset prior to an Offering; and

 

(v) Offering Expenses: In general these costs include actual legal, accounting, underwriting, filing and compliance costs incurred by the Company in connection with an Offering of a series of Interests (and excludes ongoing costs described in Operating Expenses), as applicable, paid to legal advisors, printing and accounting firms, as the case may be.

 

In the case of the Offerings hereunder, the Manager has agreed to pay and not be reimbursed for Offering Expenses.

 

The Manager bears all expenses related to item (iv) above on behalf of a Series and may be reimbursed by a Series through the proceeds of a successful offering. In addition, the Manager or an affiliate may loan the Company or a Series the funds required to pay any costs identified in items (ii) and (iii), which will be reimbursed through the proceeds of a successful offering or refunded if an offering is aborted. Any loans made under item (iv), other than down-payments, accrue interest at the Applicable Federal Rate (as defined in the Internal Revenue Code). See “Use of Proceeds” and “Plan of Distribution and Subscription Procedure – Fees and Expenses” sections for further details.

 

 

 

 4 
 

 

Operating expenses: “Operating Expenses” are costs and expenses attributable to the activities of the Series (collectively, “Operating Expenses”), which may be as much as or greater than the actual cost of a Series’ interest in the applicable Underlying Asset, including:

 

  · costs incurred in managing the Underlying Asset, including, but not limited to boarding, maintenance, training and transportation costs (the “Upkeep Fees”);

 

  · costs incurred prior to the offering of the Underlying Asset, including, but not limited to costs associated with the initial acquisition of the Underlying Asset, vet checks, blood stock fees, etc. related to the pre-offering operation of the Underlying Asset (“Prepaid Expenses”), and, to the extent that Prepaid Expenses are lower than anticipated, any overage would be maintained in an operating account for future Operating Expenses and/or Distributable Cash which occur after the acquisition of the Underlying Asset;

 

  · costs incurred in preparing any reports and accounts of the Series, including any tax filings and any annual audit of the accounts of the Series (if applicable) or costs payable to any third party registrar or transfer agent and any reports to be filed with the Commission including periodic reports on Forms 1-K, 1-SA and 1-U;

 

  · any indemnification payments; and

 

  · any and all insurance premiums or expenses in connection with the Underlying Asset, including mortality, liability and/or medical insurance of the Underlying Asset to insure against the death, injury or third party liability of racehorse ownership (as described in “Description of the Business – Business of the Company”). The decision to purchase insurance on a horse is made on a horse-by-horse basis. THERE IS NO GUARANTEE THAT A HORSE YOU INVEST IN WILL BE INSURED.

 

  The Company has purchased mortality insurance for Laforgia, Provocateur, Sacred Beauty, The Future Stars Stable, Collusion Illusion, Carrothers, Going to Vegas, Ari the Adventurer 19, Wonder Upon a Star 19, Echo Warrior 19, Silverpocketsfull 19, Who’sbeeninmybed 19, Into Summer 19, Mrs Whistler, Race Hunter 19, Co Cola 19, Vow, Magical Ways (f.k.a. You Make Luvin Fun 19), Miss Sakamoto, Courtisane 19, Grand Traverse Bay 19, Our Miss Jones 19, Margarita Friday 19, Queen Amira 19, Salute to America, and Desire Street 19.

 

 

For certain Offerings, the Manager has agreed to pay and not be reimbursed for Operating Expenses related to each Series incurred prior to Closing. In such instances, only Operating Expenses incurred post-Closing shall be the responsibility of a Series. See “Use of Proceeds” for each such Series for reference to inclusion of Prepaid Expenses in Operating Expenses for a Series-by-Series determination.

 

 

5 

 

 

  We anticipate that for a majority of the Offerings, we will allocate a sizable portion of such Offering to a cash reserve to be spent on Upkeep Fees which cover operating expenses related specifically to the training, upkeep and maintenance of the applicable Underlying Asset. However, if the Operating Expenses exceed the amount of revenues generated from the applicable Underlying Asset, the Manager may (a) pay such Operating Expenses and not seek reimbursement, (b) loan the amount of the Operating Expenses to such Series, on which the Manager may impose a reasonable rate of interest, which shall not be lower than the Applicable Federal Rate (as defined in the Internal Revenue Code), and be entitled to reimbursement of such amount from future revenues generated by such Series (“Operating Expenses Reimbursement Obligation(s)”), and/or (c) cause additional Interests to be issued in order to cover such additional amount. In such cases, until a Series generates revenues from its interest in the applicable Underlying Asset, we expect a Series to, initially, deplete only the Upkeep Fees. We may incur Operating Expenses Reimbursement Obligations or the Manager pays such Operating Expenses incurred and will not seek reimbursement if Operating Expenses exceed revenues and Upkeep Fees. See discussion of “Description of the Business – Operating Expenses” for additional information.

 

From time to time, certain Offerings will not have an allocated upfront cash reserve for Upkeep Fees as part of such Offering proceeds. Instead, the Manager or an affiliate will, in connection with such Offering, incur liabilities related to Upkeep Fees on behalf of the Series and be entitled to reimbursement of such amount only upon a sale of the Underlying Asset or a dissolution or termination of such Series and not from Distributable Cash (as defined below) from ongoing revenues generated by such Series. Notwithstanding the foregoing, in these types of Offerings, there will still exist a smaller pre-paid cash reserve for Prepaid Expenses and insurance, administrative and general Operating Expenses which is intended to cover three years of such projected Operating Expenses (excluding Upkeep Fees).

 

In addition, the Manager, in these types of Offerings, retains discretion to also (a) loan the amount of the Operating Expenses to such Series, on which the Manager may impose a reasonable rate of interest, which shall not be lower than the Applicable Federal Rate (as defined in the Internal Revenue Code), and/or (b) cause additional Interests to be issued in order to cover such additional amounts.

 

Regardless of the type of Offering, an Interest Holder will be liable only to the extent of their agreed upon capital contributions and, if no such capital remains at dissolution, such Interest Holder will not be liable for the failure of a Series to repay its underlying debt or liabilities, including the Operating Expenses Reimbursement Obligations.

   
Further issuance of Interests: A further issuance of Interests of a Series may be made in the event the Operating Expenses of that Series exceed the income generated from its interest in the Underlying Asset and cash reserves of that particular Series. This may occur if the Company does not take out sufficient amounts under an Operating Expenses Reimbursement Obligation to pay such excess Operating Expenses, or the Manager does not pay such amounts without seeking reimbursement.

 

 

 

 6 
 

 

Co-Ownership Agreements; Bonuses; Kickers:

The Company, through individual Series, intends to purchase interests in racehorses, but generally will not own 100% of such horse. The Series’ percentage ownership in a specific horse is determined on a series-by-series basis. This means that the Series will enter into an agreement with other owners of the Underlying Asset (“Co-Owners”) which will govern the rights of the Series vis-à-vis the other Co-Owners and the Underlying Asset (the “Co-Ownership Agreements”).

 

As an owner of a racehorse, the individual Series will receive a percentage of the purse winnings that is equal to its ownership percentage, as well as other revenue-generating events including, but not limited to claiming races (which may result in a sale of a racehorse held by a series), race Bonuses (as described below), sales of the racehorse, marketing or sponsorship activities and the sale of future breeding rights less expenses and liabilities (including “Kickers” if any as described below). Similarly, the individual Series will be responsible for the expenses of the racehorse at a rate equal to its ownership percentage. These expenses will often be payable directly by the Series. Copies of such Co-Ownership Agreements for each respective Series are attached as exhibits hereto and descriptions of such terms are included with each Series’ respective description herein.

 

Certain of the Series’ Co-Ownership Agreements may include bonuses related to winning of graded stakes races in the form of future stallion bonuses (“Future Stallion Bonuses”) or future broodmare bonuses (“Future Broodmare Bonuses, and together with Future Stallion Bonuses, “Bonuses”). Such Bonuses may be voided prior to being earned to the extent a decision is made by the Co-Owners to geld the Stallion in the discretion of the Manager or the Syndicate Manager (typically due to health and safety concerns or to better maximize its racing career prospects). These Bonuses will be distributable (less expenses, reserves, etc.) as in the same manner generic race winnings as described in “Distributable Cash” below.

 

 

In addition, certain Co-Ownership Agreements may be negotiated with the original Horse Seller for a payment to Horse Seller upon a horse winning certain races or awards (the “Kickers”). Kickers are contractual obligations of a Series to the original seller of a horse which could result in a payment obligation to the original horse seller upon the happening of certain events like Grade 1 race wins. They act as a “performance bonus” and are tied to certain revenue-generating events in the life of the Series. In the event that a co-ownership agreement contains a Kicker, the campaign page, which screenshots are included in each series description contained herein, will contain express descriptions of the Kicker, its terms and its impact on such Series.

 

Such Kickers are payable out of race winnings but are often offset but the upside associated with lifetime breeding rights which, although it may reduce the short-term Distributable Cash of a Series, can significantly increase the long-term value of a Series whether upon a sale of the Underlying Asset or the future revenue generated by lifetime breeding rights.

 

Each Kicker can be generally seen as a contingent liability of that Series that, when triggered, becomes a liability payable by that Series prior to any distributions to that Series’ members. This is the same case as it relates to any expenses of the Series or reserves needed to be maintained for the ongoing operations of such Series. As a result of such liability, Distributable Cash (as defined below) may be considerably less than stated race winnings.

 

In any event, a Series member will be liable only to the extent of their agreed upon capital contributions and, if no such capital remains at dissolution or at the time a Kicker payment is due, such Series member will not be liable for the failure of a Series to repay its underlying debt or liabilities, including the payment of any Kickers.

 

 

 

 7 
 

 

   
Racing Leases:

As an alternative to the Co-Ownership structures discussed above, which include the purchase, sale and breeding rights associated with the full ownership of a horse, for certain Series, the Company, through individual Series, may enter into lease agreements or “racing leases” which will entitle the Series to the exclusive right to “all of the racing qualities of an ownership interest in the horse” including the operation of such horse during a set racing term (typically 1 year) in exchange for an upfront lease fee. The Series’ percentage lease interest in a specific horse is determined on a series-by-series basis. This means that the Series will enter into an agreement with other owners of the Underlying Asset (“Owners”) which will govern the rights of the Series during the lease term and the operation of the Underlying Asset (the “Lease Agreement”).

 

As the lessee of a racehorse, the individual Series will receive a percentage of the purse winnings that is equal to its lessee percentage, as well as other revenue-generating events as well as marketing and advertising related revenues. Similar to the Co-Ownership arrangements, the individual Series in the Lease Agreement will be responsible for the expenses of the racehorse at a rate equal to its lessee percentage. These expenses will often be payable directly by the Series. At the end of such lease term, however, the ownership rights in the horse revert back to the Owner along with the obligation to cover any future expenses associated with such horse.

 

In the event that the Owner intends to retire the horse and elects to terminate the Lease Agreement due to health, breeding or economic interest concerns, the pro rata portion of the lease fee remaining on the Series will be re-paid to the Series.

 

The Company’s intent with racing leases is to capture the value of the racing career of said horse without the complexities, time and expense associated with the purchase, sale or breeding of a horse outside of its useful racing life.

 

Copies of such Lease Agreements for each respective Series, and any amendments to such Lease Agreements, if applicable, are attached as exhibits hereto and descriptions of such additional terms are included with each Series’ respective description herein.

 

 

 

 

 8 

 

 

Distributable Cash:

“Distributable Cash” shall mean the net income (as determined under U.S. generally accepted accounting principles (“GAAP”)) generated by a Series plus any change in net working capital and depreciation and amortization (and any other non-cash Operating Expenses) for such Series and less any liabilities (including obligations to pay Kickers to Horse Sellers) related to its interest in the applicable Underlying Asset. The Manager may maintain Distributable Cash funds in a deposit account or an investment account for the benefit of each Series.

 

A Series will typically generate Distributable Cash from revenue-generating events of such Series. The frequency with which such event occurs, or the timing of when such revenue is actually distributed to Members, is dependent on the racing schedule of the Underlying Asset, cash reserves in such Series, ongoing contractual obligations of a Series, potential sales of the Underlying Asset, the terms of such Series’ Co-Ownership Agreement and other revenue-generating events which do not occur on a fixed or set time period (e.g. quarterly or monthly) but which will recur on an ongoing basis so long as revenue is generated.

 

Management Fee:

As compensation for the services provided by the Manager under the Management Agreement, the Manager will be paid an initial one-time 15% Due Diligence Fee from each Series and a subsequent fee of 10% of Gross Proceeds generated by each Series. “Gross Proceeds” is defined as the sum of all money generated by a Series, prior to any deductions that have been made or will be used for expenses. In the event that the Manager performs bloodstock services for an Underlying Asset, the Manager will also be paid up to 5.0% of the cost of the Underlying Asset for providing such services.

 

The Management Fee does not accumulate if no Gross Proceeds are generated. The Management Fee is due only upon each revenue-generating event of such Series. The frequency with which such event occurs is dependent on the racing schedule of the Underlying Asset, cash reserves in such Series, potential sales of the Underlying Asset, the terms of such Series’ Co-Ownership Agreement and other revenue-generating events which do not occur on a fixed or set time period (e.g. quarterly or monthly) but which will recur on an ongoing basis so long as revenue is generated.

 

Distribution Rights: The Manager has sole discretion in determining what distributions of Distributable Cash, if any, are made to Interest Holders of a Series. Any Distributable Cash generated by a Series from the utilization of the Underlying Asset shall be applied by that Series in the following order of priority (after payment of liabilities, including contractual obligations under Co-Ownership Agreements, if any):

 

  · 10% of the Gross Proceeds for that Series to the Manager as a Management Fee;

 

  · 5.0% of the cost of the Underlying Asset paid to the Manager, an affiliate of the Manager, or a third party service provider as compensation for providing bloodstock services for an Underlying Asset;

 

  · thereafter to create such reserves for that Series as the Manager deems necessary, in its sole discretion, to meet future Operating Expenses of that Series; and

 

  · thereafter, 100% (net of corporate income taxes applicable to a Series, if any) by way of distribution to the Interest Holders of that Series on a pro rata percentage basis.

 

 

 

 9 

 

 

 

As described above in “Operating Expenses” Operating Expenses Reimbursement Obligations are not payable prior to a distribution of Distributable Cash to Interest Holders of a Series. Instead, Operating Expenses Reimbursement Obligations are payable only upon a sale of the Underlying Asset or a dissolution or termination of such Series and not from Distributable Cash.

 

Timing of Distributions:

The Manager may make periodic distributions of Distributable Cash remaining to Interest Holders of a Series subject to it having the right, in its sole discretion, to withhold distributions in order to meet anticipated costs and liabilities of a Series. The Manager may change the timing of potential distributions to a Series in its sole discretion.

 

FOR THE AVOIDANCE OF DOUBT, A RACE WIN BY A SERIES’ RACEHORSE WILL NOT RESULT IN AN IMMEDIATE DISTRIBUTION OF CASH TO INTEREST HOLDERS.

 

No Trading Market:

There is currently no public trading market for our Interests, and we do not intend or expect that any such market will ever develop. If an active public trading market for our securities does not develop or is not sustained, it may be difficult or impossible for you to resell your shares at any price. Even if a public market does develop, the market price could decline below the amount you paid for your shares.

 

The Company estimates that each Series will exist for 4-6 years (the racing life cycle) and then the Underlying Asset will be sold, which will be the primary liquidity event other than Distributions on Gross Proceeds as discussed above. A sale of the Underlying Asset may occur at a lower value than when the Underlying Asset was first acquired or at a lower price than the aggregate of costs, fees and expenses used to purchase the Underlying Asset, including the repayment of the Operating Expenses Reimbursement Obligations described above.

 

Manager Duties: The Manager may not be liable to the Company, any Series or the Investors for errors in judgment or other acts or omissions not amounting to fraud, willful misconduct or gross negligence, since provision has been made in the Operating Agreement for exculpation of the Manager. Therefore, Investors have a more limited right of action than they would have absent the limitation in the Operating Agreement.

 

Indemnification: To the fullest extent permitted by applicable law, subject to approval of each Series Manager, all officers, directors, shareholders, partners, members, employees, representatives or agents of the Manager or a Series Manager, or their respective affiliates, employees or agents (each, a “Covered Person”) shall be entitled to indemnification from such Series (and the Company generally) for any loss, damage or claim incurred by such Covered Person by reason of any act or omission performed or omitted by such Covered Person in good faith on behalf of the Series Manager, or such Series and in a manner reasonably believed to be within the scope of authority conferred on such Covered Person by this Agreement and any Series Agreement, except that no Covered Person shall be entitled to be indemnified for any loss, damage or claim incurred by such Covered Person by reason of fraud, deceit, gross negligence, willful misconduct or a wrongful taking with respect to such acts or omissions; provided, however, that any indemnity under the Operating Agreement shall be provided out of and to the extent of the assets of the such Series only, and no other Covered Person or any other Series or the Company shall have any liability on account thereof.

 

 

 

 10 
 

 

  To the fullest extent permitted by applicable law, subject to approval of a Series Manager, all expenses (including legal fees) incurred by a Covered Person in defending any claim, demand, action, suit or proceeding shall, from time to time, be advanced by such Series prior to the final disposition of such claim, demand, action, suit or proceeding upon receipt by such Series of an undertaking by or on behalf of the Covered Person to repay such amount if it shall be determined that the Covered Person is not entitled to be indemnified as authorized in the Operating Agreement.

 

Transfers: The Manager may refuse a transfer by an Interest Holder of its Interest(s) if such transfer would result in (a) the assets of a Series being deemed “plan assets” for purposes of ERISA, (b) result in a change of U.S. federal income tax treatment of the Company and/or a Series, or (c) the Company, a Series or the Manager being subject to additional regulatory requirements. Furthermore, as the Interests are not registered under the Securities Act of 1933, as amended (the “Securities Act”), transfers of Interests may only be effected pursuant to exemptions under the Securities Act and permitted by applicable state securities laws and there is a right of first refusal on transfers of Interests. See “Description of Interests Offered – Limitations on Transferability” for more information.

 

Where to Buy; Transfer Agent: Series Interests will be available for purchase exclusively on the MyRacehorse™ Platform at myracehorse.com. These Series Interests will be issued in book-entry electronic form only. StartEngine Secure LLC is the SEC-registered transfer agent and registrar for the Series Interests.
   
Governing law: The Company and the Operating Agreement will be governed by Nevada law and any dispute in relation to the Company and the Operating Agreement is subject to the dispute resolution provisions set forth therein. If an Interest Holder were to bring a claim against the Company or the Manager pursuant to the Operating Agreement, it would be required to do so in compliance with these dispute resolution provisions. Notwithstanding the foregoing, mandatory arbitration provisions set forth therein do not apply to claims made under the federal securities laws.

 

 

 

 

 

 

 

 

 

 

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RISK FACTORS

 

The Interests offered hereby are highly speculative in nature, involve a high degree of risk and should be purchased only by persons who can afford to lose their entire investment. There can be no assurance that the Company’s investment objectives will be achieved or that a secondary market would ever develop for the Interests, whether via the MyRacehorse™ Platform, via third party registered broker-dealers or otherwise. The risks described in this section should not be considered an exhaustive list of the risks that prospective Investors should consider before investing in the Interests. Prospective Investors should obtain their own legal and tax advice prior to making an investment in the Interests and should be aware that an investment in the Interests may be exposed to other risks of an exceptional nature from time to time. The following considerations are among those that should be carefully evaluated before making an investment in the Interests.

 

Risks relating to the structure, operation and performance of the Company

 

An investment in our Interests is a speculative investment and, therefore, no assurance can be given that you will realize your investment objectives.

 

No assurance can be given that Investors will realize a return on their investments in us or that they will not lose their entire investment in our Interests. For this reason, each prospective subscriber for our Interests should carefully read this Offering Circular. All such persons or entities should consult with their legal and financial advisors prior to making an investment in the Interests.

 

An investment in an Offering constitutes only an investment in that Series and not in the Company, any other Series or the Underlying Asset.

 

A purchase of Interests in a Series does not constitute an investment in the Company, any other Series of the Company, or the Underlying Asset directly. This results in limited voting rights of the Investor, which are solely related to such Series. Investors will have voting rights only with respect to certain matters, primarily relating to the removal of the Manager for “cause.” The Manager thus retains significant control over the management of the Company and the Underlying Asset.  Furthermore, because the Interests in a Series do not constitute an investment in the Company as a whole, holders of the Interests in the Series will not receive any economic benefit from, or be subject to the liabilities of, the assets of any other Series. In addition, the economic interest of a holder in a Series will not be identical to owning a direct undivided interest in the applicable Underlying Asset because, among other things, a Series may be required to pay corporate taxes before distributions are made to the holders, and the Manager will receive a fee in respect of its management of the applicable Underlying Asset.

 

There is no public trading market for our securities.

 

There is currently no public trading market for any of our Interests, and we do not intend or expect that any such market will ever develop. If an active public trading market for our securities does not develop or is not sustained, it may be difficult or impossible for you to resell your Interests at any price. Even if a public market does develop, the market price could decline below the amount you paid for your Interests.

 

There may be state law restrictions on an Investor’s ability to sell the Interests.

 

Each state has its own securities laws, often called “blue sky” laws, which (1) limit sales of securities to a state’s residents unless the securities are registered in that state or qualify for an exemption from registration and (2) govern the reporting requirements for broker-dealers and stock brokers doing business directly or indirectly in the state. Before a security is sold in a state, there must be a registration in place to cover the transaction, or it must be exempt from registration. We do not know whether our securities will be registered, or exempt, under the laws of any states. A determination regarding registration will be made by the broker-dealers, if any, who agree to facilitate sales of our Interests. There may be significant state blue sky law restrictions on the ability of Investors to sell, and on purchasers to buy, our Interests. Investors should consider the resale market for our securities to be limited. Investors may be unable to resell their securities, or they may be unable to resell them without the significant expense of state registration or qualification.

 

Lack of operating history.

 

The Company and each Series were recently formed, have generated nominal revenues and have limited operating history upon which prospective Investors may evaluate their performance. No guarantee can be given that the Company and any Series will achieve their investment objectives, the value of any Underlying Asset will increase or that any Underlying Asset will be successfully monetized.

 

 

 

12 

 

 

Limited Investor appetite.

 

Due to the start-up nature of the Company, there can be no guarantee that the Company will reach its funding target from potential Investors with respect to any Series or future proposed Series. In the event the Company does not reach a funding target, it may not be able to achieve its investment objectives by acquiring additional interests in underlying assets through the issuance of further Series and monetizing them together with interests in such Underlying Assets to generate distributions for Investors. In addition, if the Company is unable to raise funding for additional Series, this may impact any Investors already holding interests as they will not see the benefits which arise from economies of scale following the acquisition by other Series of additional underlying assets and other monetization opportunities (e.g., Membership Experience Programs - hosting events with the race horses, winners circle access, race day privileges, etc.).

 

There are few, if any, businesses that have pursued a strategy or investment objective similar to the Company’s.

 

Few, if any, other companies crowd fund racehorse ownership interests or run a platform for crowd funding of interests in racehorses. The Company and the Interests may not gain market acceptance from potential Investors, potential Horse Sellers or service providers within the racehorse ownership/syndicate industry, including insurance companies, syndicate managers, training facilities or maintenance partners. This could result in an inability of the Manager to operate the Underlying Asset profitably. This could impact the issuance of further series of interests and additional underlying assets being acquired by the Company. This would further inhibit market acceptance of the Company and if the Company does not acquire any additional underlying assets, Investors would not receive any benefits which arise from economies of scale (such as reduction in offering costs as a large number of interests in underlying assets may be listed on subsequent offering circulars, group discounts on mortality insurance and the ability to monetize its interest in underlying assets through Membership Experience Programs, as described below, that would require the Company to own a substantial number of its interest in underlying assets).

 

Offering amount exceeds value of Underlying Asset.

 

The size of each Offering will exceed the purchase price of such Series’ interest in the applicable Underlying Asset as at the date of such Offering (as the proceeds of each Offering in excess of the purchase price of the applicable Underlying Asset will be used to pay fees, costs and expenses incurred in making each Offering, acquiring the interest in the applicable Underlying Asset, Due Diligence Fees and Operating Expenses). If the applicable Underlying Asset had to be sold and there has not been substantial appreciation of the applicable Underlying Asset prior to such sale, there may not be sufficient proceeds from the sale of the applicable Underlying Asset to repay Investors the amount of their initial investment (after first paying off any liabilities on the horse at the time of the sale including but not limited to any outstanding Operating Expenses Reimbursement Obligation or Kickers or other contractual obligations in Co-Ownership Agreements) or any additional profits in excess of this amount.

 

Excess Operating Expenses

 

Operating Expenses related to a particular Series incurred post-Closing shall be the responsibility of the Series. The Company maintains a reserve for estimated Operating Expenses for the Underlying Asset, which excludes UpKeep Fees.

 

The Manager or an affiliate will incur liabilities related to Upkeep Fees on behalf of the Series and be entitled to reimbursement of such amount only upon a sale of the Underlying Asset or a dissolution or termination of such Series and not from Distributable Cash (as defined below) from ongoing revenues generated by such Series (“Operating Expenses Reimbursement Obligation(s)”). Notwithstanding the foregoing, there will still exist a smaller pre-paid cash reserve for Prepaid Expenses and insurance, administrative and general Operating Expenses which is intended to cover three years of such projected Operating Expenses (excluding Upkeep Fees).

 

However, if the Operating Expenses of a particular Series exceed the amount of revenues generated from the interest in the Underlying Asset of such Series, the Manager retains discretion to also (a) loan the amount of the Operating Expenses to such Series, on which the Manager may impose a reasonable rate of interest, which shall not be lower than the Applicable Federal Rate (as defined in the Internal Revenue Code), and/or (b) cause additional Interests to be issued in order to cover such additional amounts.

 

If additional Interests are issued in a particular Series, this would dilute the current value of the Interests held by existing Investors and the amount of any future distributions payable to such existing Investors.

 

 

 

13 

 

  

In any event, an Interest Holder will be liable only to the extent of their agreed upon capital contributions and, if no such capital remains at dissolution, such Interest Holder will not be liable for the failure of a Series to repay its underlying debt or liabilities, including the Operating Expenses Reimbursement Obligations.

 

Reliance on the Manager and its personnel.

 

The successful operation of the Company (and therefore, the success of the Interests) is in part dependent on the ability of the Manager to source, acquire and manage the Underlying Assets. As Experiential Squared, Inc. has only been in existence since June 2016 and is an early-stage company, it has no significant operating history within the horse racing sector, which evidences its ability to find, acquire, manage and utilize the Underlying Assets.

 

The success of the Company (and therefore, the Interests) will be highly dependent on the expertise and performance of the Manager and its team, its expert network and other professionals (which include third party experts) to find, acquire, manage and utilize the Underlying Assets. There can be no assurance that these individuals will continue to be associated with the Manager. The loss of the services of one or more of these individuals could have a material adverse effect on the Underlying Assets and, in particular, their ongoing management and use to support the investment of the Interest Holders.

 

Furthermore, the success of the Company and the value of the Interests is dependent on there being critical mass from the market for the Interests and that the Company is able to acquire a number of underlying assets in multiple series of interests so that the Investors can benefit from economies of scale which arise from holding more than one Underlying Assets (e.g., a reduction in offering costs if a large number of Underlying Assets are listed on subsequent offering circulars at the same time). In the event that the Company is unable to source additional Underlying Assets due to, for example, competition for such Underlying Assets or lack of Underlying Assets available in the marketplace, then this could materially impact the success of the Company and its objectives of acquiring additional Underlying Assets through the issuance of further series of interests and monetizing them together with the Underlying Assets at the Membership Experience Programs to generate distributions for Investors.

 

Liability of investors between series of interests.

 

The Company is structured as a Nevada series limited liability company that issues a separate series of interests for each Underlying Asset. Each Series will merely be a separate series and not a separate legal entity. Under the Nevada Revised Statutes (the “NRS”), if certain conditions (as set forth in NRS Section 86.296(3)) are met, the liability of investors holding one series of interests is segregated from the liability of investors holding another series of interests and the assets of one series of interests are not available to satisfy the liabilities of other series of interests. Although this limitation of liability is recognized by the courts of Nevada, there is no guarantee that if challenged in the courts of another U.S. State or a foreign jurisdiction, such courts will uphold a similar interpretation of Nevada corporation law, and in the past certain jurisdictions have not honored such interpretation. If the Company’s series limited liability company structure is not respected, then Investors may have to share any liabilities of the Company with all investors and not just those who hold the same series of interests as them. Furthermore, while we intend to maintain separate and distinct records for each series of interests and account for them separately and otherwise meet the requirements of the NRS, it is possible a court could conclude that the methods used did not satisfy Section 86.296(3) of the NRS and thus potentially expose the assets of such Series to the liabilities of another Series. The consequence of this is that Investors may have to bear higher than anticipated expenses which would adversely affect the value of their Interests or the likelihood of any distributions being made by a particular Series to its Investors. In addition, we are not aware of any court case that has tested the limitations on inter-series liability provided by Section 86.296(3) in federal bankruptcy courts and it is possible that a bankruptcy court could determine that the assets of one series of interests should be applied to meet the liabilities of the other series of interests or the liabilities of the Company generally where the assets of such other series of interests or of the Company generally are insufficient to meet our liabilities.

 

If any fees, costs and expenses of the Company are not allocable to a specific Series, they will be borne proportionately across all of the Series (which may include future Series and Interests yet to be issued). Although the Manager will allocate fees, costs and expenses acting reasonably and in accordance with its sole discretion, there may be situations where it is difficult to allocate fees, costs and expenses to a specific series of interests and therefore, there is a risk that a series of interests may bear a proportion of the fees, costs and expenses for a service or product for which another series of interests received a disproportionately high benefit.

 

 

 

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Potential breach of the security measures of the MyRacehorse™ Platform.

 

The highly automated nature of the MyRacehorse™ Platform through which potential investors may acquire interests may make it an attractive target and potentially vulnerable to cyber-attacks, computer viruses, physical or electronic break-ins or similar disruptions. The MyRacehorse™ Platform processes certain confidential information about investors, the Horse Sellers and the underlying assets. While we intend to take commercially reasonable measures to protect the confidential information and maintain appropriate cybersecurity, the security measures of the MyRacehorse™ Platform, the Company, the Manager or the Company’s service providers (including Dalmore) could be breached. Any accidental or willful security breaches or other unauthorized access to the MyRacehorse™ Platform could cause confidential information to be stolen and used for criminal purposes or have other harmful effects. Security breaches or unauthorized access to confidential information could also expose the Company to liability related to the loss of the information, time-consuming and expensive litigation and negative publicity, or loss of the proprietary nature of the Manager’s and the Company’s trade secrets. If security measures are breached because of third-party action, employee error, malfeasance or otherwise, or if design flaws in the MyRacehorse™ Platform software are exposed and exploited, the relationships between the Company, investors, users and the Horse Sellers could be severely damaged, and the Company or the Manager could incur significant liability or have their attention significantly diverted from utilization of the underlying assets, which could have a material negative impact on the value of interests or the potential for distributions to be made on the interests.

 

Because techniques used to sabotage or obtain unauthorized access to systems change frequently and generally are not recognized until they are launched against a target, the Company, and other third-party service providers may be unable to anticipate these techniques or to implement adequate preventative measures. In addition, federal regulators and many federal and state laws and regulations require companies to notify individuals of data security breaches involving their personal data. These mandatory disclosures regarding a security breach are costly to implement and often lead to widespread negative publicity, which may cause investors, the Horse Sellers or service providers within the industry, including insurance companies, to lose confidence in the effectiveness of the secure nature of the MyRacehorse™ Platform. Any security breach, whether actual or perceived, would harm the reputation of the Company and the MyRacehorse™ Platform and the Company could lose investors and the Horse Sellers. This would impair the ability of the Company to achieve its objectives of acquiring additional underlying assets through the issuance of further series of interests and monetizing them together with the Underlying Asset at the Membership Experience Programs.

 

The novel coronavirus could have a material adverse impact on our business, results of operations, financial condition, cash flows or liquidity.

 

The outbreak of a novel coronavirus (which causes the disease now known as COVID-19), was first identified in December 2019 in Wuhan, China, and has since spread globally. Government efforts to contain the spread of the coronavirus through lockdowns of cities, business closures, restrictions on travel and emergency quarantines, among others, and responses by businesses and individuals to reduce the risk of exposure to infection, including reduced travel, cancellation of meetings and events, and implementation of work-at-home policies, among others, have caused significant disruptions to the global economy and normal business operations across a growing list of sectors and countries.  The foregoing are likely to adversely affect business confidence and consumer sentiments, and have been, and may continue to be, accompanied by significant volatility in financial and commodity markets.  The spread of the coronavirus, particularly if it develops into a worldwide health crisis, also may have broader macro-economic implications, including reduced levels of economic growth and possibly a global recession, the effects of which could be felt well beyond the time the spread of infection is contained.

 

In terms of the impact on sporting events, many countries have begun to impose emergency measures that ban large public gatherings.  A wide range of sports events around the world have been postponed or cancelled due to concerns over coronavirus contagion, including at the urging of clubs unwilling to play in stadiums without fans. As it relates to the horse racing industry, live racing has been able to operate in certain jurisdictions without fans, and in other jurisdictions has been restricted from holding races even without fans. Live racing is the only method of generating revenue for an active racehorse and, without racing, no revenue will be derived for a horse, despite the expenses to care for the horse continuing. Virtually all racing jurisdictions have continued to allow training, but this could change without notice impacting a horse’s ability to maintain their level of fitness and conditioning resulting in a compromised ability to return to the races upon restrictions being lifted relative to live racing.

 

 

 

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The coronavirus and the responses thereto could have a range of other effects on us.  For example, the implementation of business continuity plans in a fast moving public health emergency could have an adverse effect on our internal controls (potentially giving rise to significant deficiencies or material weaknesses) and also increase our vulnerability to information technology and other systems disruptions.

 

We currently are unable to predict the duration and severity of the spread of the coronavirus, and responses thereto, on our business and operations, and on our results of operations, financial condition, cash flow and liquidity, as these depend on rapidly evolving developments, which are highly uncertain and will be a function of factors beyond our control, such as the speed of contagion, the implementation of effective preventative and containment measures, the development of effective medical solutions, the timing and scope of governmental restrictions on public gatherings, mobility and other activities, financial and other market reactions to the foregoing, and reactions and responses of the populace both in affected regions and regions yet to be affected.  While we expect we will suffer adverse effects, the more severe the outbreak and the longer it lasts, the more likely it is that the effects on us and our business will be materially adverse.

 

Risks relating to the Offerings

 

We are offering our Interests pursuant to recent amendments to Regulation A promulgated pursuant to the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, and we cannot be certain if the reduced disclosure requirements applicable to Tier 2 issuers will make our Interests less attractive to investors.

 

As a Tier 2 issuer, we will be subject to scaled disclosure and reporting requirements which may make an investment in our Interests less attractive to investors who are accustomed to enhanced disclosure and more frequent financial reporting. In addition, given the relative lack of regulatory precedent regarding the recent amendments to Regulation A, there is a significant amount of regulatory uncertainty in regards to how the Commission or the individual state securities regulators will regulate both the offer and sale of our securities, as well as any ongoing compliance that we may be subject to. If our scaled disclosure and reporting requirements, or regulatory uncertainty regarding Regulation A, reduces the attractiveness of the Interests, we may be unable to raise the funds necessary to fund future offerings, which could impair our ability to develop a diversified portfolio of racehorses and create economies of scale, which may adversely affect the value of the Interests or the ability to make distributions to Investors.

 

There may be deficiencies with our internal controls that require improvements, and if we are unable to adequately evaluate internal controls, we may be subject to penalties.

 

As a Tier 2 issuer, we will not need to provide a report on the effectiveness of our internal controls over financial reporting, and we will be exempt from the auditor attestation requirements concerning any such report so long as we are a Tier 2 issuer. We are in the process of evaluating whether our internal control procedures are effective and therefore there is a greater likelihood of undiscovered errors in our internal controls or reported financial statements as compared to issuers that have conducted such evaluations.

 

Impact of non-compliance with regulations.

 

As of September 3, 2020, the Interests are being sold through Dalmore, which will act as the broker/dealer of record and is a registered broker/dealer under the Securities Exchange Act of 1934 (the “Exchange Act”) and Member FINRA/SIPC. Interests will be registered in each state where the Offering and sale of such Interests will occur prior to the launch of such Offering. In addition, if the Manager is required to register as a ‘broker-dealer’, there is a risk that any Series of Interests offered and sold while the Manager was not registered may be subject to a right of rescission, which may result in the early termination of the Series of Interests.

 

 

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Furthermore, the Company is not registered and will not be registered as an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”), and the Manager is not registered and will not be registered as an investment adviser under the Investment Advisers Act of 1940, as amended (the “Investment Advisers Act”), and thus the Interests do not have the benefit of the protections of the Investment Company Act or the Investment Advisers Act. The Company and the Manager have taken the position that the underlying assets are not “investment securities” within the meaning of the of the Investment Company Act or the Investment Advisers Act. Further, the Company, any Series, the Manager, and/or any of their respective affiliates intend that no Series will hold underlying assets in which the Manager has limited or no management control, so that it is not considered to be an investment company within the meaning of the Investment Company Act. These positions, however, are based upon applicable case law that is inherently subject to judgments and interpretation.  If the Company were to be required to register under the Investment Company Act or the Manager were to be required to register under the Investment Advisers Act, it could have a material and adverse impact on the results of operations and expenses of each Series and the Manager may be forced to liquidate and wind up each Series or rescind the Offerings for any of the Series or the offering for any other series of interests.

 

Possible Changes in Federal Tax Laws.

 

The Internal Revenue Code (the “Code”) is subject to change by Congress, and interpretations of the Code may be modified or affected by judicial decisions, by the Treasury Department through changes in regulations and by the Internal Revenue Service through its audit policy, announcements, and published and private rulings. Although significant changes to the tax laws historically have been given prospective application, no assurance can be given that any changes made in the tax law affecting the Company, a series, or an investment in any series of interest of the Company would be limited to prospective effect. Accordingly, the ultimate effect on an Investor’s tax situation may be governed by laws, regulations or interpretations of laws or regulations which have not yet been proposed, passed or made, as the case may be.

 

We have elected to delay compliance with certain new or revised financial accounting standards.

 

We have elected to delay compliance with the new revenue recognition accounting standard, ASC Topic 606 Revenue from Contracts with Customers, which took effect on January 1, 2018 until the date that a company that is not an issuer (as defined under section 2(a) of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7201(a)) is required to comply with such new or revised accounting standard, if such standard also applies to companies that are not issuers. Management does not believe the provisions of ASC Topic 606 will have a material impact on our financial position or results of operations, but some investors may view this as a lack of access to certain information they may deem important.

 

Risks relating to the Horse Racing industry

 

There can be no assurances that the value of the racehorse (whether it is a Thoroughbred, Quarter Horse or Standardbred) which is owned by the Series will not decrease in the future which may have an adverse impact on the Company’s or an Individual Series’ activities and financial position.

 

The business of owning, training and racing horses is a high-risk venture. There is no assurance that any horse and therefore any interest in such horse acquired by the Series will be successful. Horses are subject to aging, illness, injury and disease which may result in permanent or temporary retirement from racing, restrictions in racing schedules, layups, and even natural death or euthanasia of the animal. There can be no assurances that the value of the interest in such Underlying Asset which may be acquired and owned by a Series, will not decrease in the future or that a Series will not subsequently incur losses on the racing careers or sale or other disposition of any or all of the horses which such Series may acquire. No combination of management ability, experience, knowledge, care or scientific approach can avoid the inherent possibilities of loss.

 

 

 

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While the Company believes that there is a market for horse breeding, training and racing, such a market is highly volatile. The horse industry is dependent upon the present and future values of horses and of the Company’s and Series’ horse(s) in particular. The Company can provide no assurance that it will be successful in its proposed activity. The expenses incurred may result in operating losses for the Company and there is no assurance that the Company will generate profits or that any revenues generated will be sufficient to offset expenses incurred or would result in a profit to the Company. As a result, it is possible that Investors will lose all or a substantial part of their investment in the Company. Additionally, there is no assurance that there will be any cash available for distribution.

 

The valuation of racehorses is a highly speculative matter and the market for racehorses is extremely volatile. If the valuation of an individual Series' horse decreases the individual Series will still be responsible for the expenses of maintaining, training and racing the horse at lower level races or smaller venues which could negatively impact the revenues from the horse.

 

The valuation of horses (particularly racehorses) is a highly speculative matter and prices fluctuated widely, particularly in recent years. The success of the Company, and each an individual Series, is dependent upon the present and future values of racehorses generally, and of the Company's racehorses in particular, the racing industry in general, as well as the racing success of the Underlying Assets. Although the future value of horses generally cannot be predicted, it will be affected by general economic conditions such as inflation, employment, recessions, tariffs, unstable or adverse credit market conditions, other business conditions, the amount of money available for investment purposes, and the continued interest of investors and enthusiasts in the racehorse industry. In the past, there has been growing foreign investment in certain types of racehorses, and the continued ability of foreign investors to acquire horses is subject to change due to economic, political or regulatory conditions. The value of racehorses is also subject to federal income tax treatment of racing and related activities, the continuation or expansion of legalized gambling and the size of racing purses, all which cannot be predicted. The expense of maintaining, boarding, training and racing horses can be expected to increase during the term of a Series or the Company, regardless of what happens to the future market price of racehorses or the performance of the Company racehorses. Further, there is always a risk of liability for damages caused by the Underlying Assets to other persons or property.

 

The cost of racing is unpredictable and speculative and may negatively impact the Company’s and each individual Series’ ability to generate revenue.

 

Increases in operation costs, labor rates and other variable costs, such as costs of feed and grain and costs of transporting animals (all of which are subject to inflationary pressure and should be expected to increase), to an extent which cannot be matched by increases in revenue. The racehorse industry, like other industries, is subject to labor disputes, labor shortages, and government intervention, changes in laws, licensing or regulatory restrictions may adversely impact the availability of grooms, trainers, jockeys and other horse industry workers. Adverse weather and economic conditions may result in unforeseen circumstances including, without limitation, restrictions on attendance at a particular race or racetrack, ability to transport the horses, and increases in costs or decreases in revenues. Changes in government regulations, whether or not relating to the horse racing industry, may result in additional expenses or reduced revenue from operations.

 

If a horse is unsuccessful in racing, becomes sick or injured, the Underlying Asset’s value will be adversely affected which may have a negative impact of the Company's and such individual Series' valuation and its revenue. 

 

Horse racing is extremely speculative and expensive. In the event that a horse in which a Series has an interest was to be transported to various tracks and training centers throughout the United States, and thus exposed too many other horses in training, the risk of illness, injury or death increases significantly. A horse in which a Series has an interest must earn enough through racing to cover expenses of boarding and training. If a horse in which a Series has an interest is unsuccessful in racing, their value will be adversely affected. Furthermore, revenues from racing are dependent upon the size of the purses offered. The size of the purses depends in general on the extent of public interest in horse racing, and in particular on the relative quality of the specific horses in contention in any specific meeting or race. Although public interest has been strong in recent years, there is no assurance that public interest will remain constant, much less increase. Legalized gambling proliferating in many states threatens to curtail interest in horse racing as a means of recreation. In addition, there is no assurance that the horse in which a Series has an interest will be of such quality that they may compete in any races which offer purses of a size sufficient to cover such Series' expenses.

 

 

 

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Horse racing could be subjected to restrictive regulation or banned entirely which could adversely affect the conduct of the Company's business.

 

The racing future of and/or market for the horses in which the Company and/or a Series' has an interest depends upon continuing governmental acceptance of horse racing as a form of legalized gambling. Although horse racing has a long history of acceptance in the United States and as a source of revenue, at any time, horse racing could be subjected to restrictive regulation or banned entirely. The value of the interest in an Underlying Asset would be substantially diminished by any such regulation or ban. Horse racing is regulated in various states and foreign countries by racing regulatory bodies which oversee the conduct of racing as well as the licensing of owners, trainers and others. Further, other forms of gambling are being approved throughout the United States and therefore no assurance can be provided that the legalization of other forms of gambling and competition from non-gambling sports and other activities will not adversely affect attendance and participation, and therefore the profitability of horse racing and sales. Lastly, our ownership structure is novel and may prepare us to seek regulatory approval to race in certain jurisdictions.

 

The Company may not purchase insurance on its horse which could require Company resources to be spent to cover any loses from the death or injury of a horse.

 

The decision to purchase insurance on a horse is made on a horse-by-horse basis. There is no guarantee that a horse you invest in will be insured. Mortality insurance insures against the death of a horse during the Company's partial ownership. Medical insurance covers possible risks of injury during racing or training. Liability insurance covers the risk that the horse in which the Company or a Series has an interest causes death, injury or damage to persons or property. Without insurance an individual Series is responsible for the cost of injury of veterinary expenses, surgery, and rehabilitation, or in the event of death, the Company will lose its investment in the horse. The payment of such liabilities may have a material adverse effect on our financial position. See Series descriptions as to whether insurance has or has not been purchased related to your Interests.

 

A decrease in average attendance per racing date coupled with increasing costs could jeopardize the continued existence of certain racetracks which could negatively impact the Company's operations.

 

A decrease in average attendance per racing date coupled with increasing costs could jeopardize the continued existence of certain racetracks which could impact the availability of race tracks available for horses in which the Company or a Series has an interest to race at and then negativity impact its operations.

 

Industry practices and structures have developed which may not be attributable solely to profit-maximizing, economic decision-making which may have an adverse impact on our Company's activities business. 

 

Because horse racing is a sport as well as a business, industry practices and structures have developed which not be attributable solely to profit-maximizing, economic decision-making. For instance, a particular bloodline could command substantial prices owing principally to the interest of a small group of individuals having particular goals unrelated to economics. A decline in this interest could be expected to adversely affect the value of the bloodline.

 

Series may only own a minority interest in Underlying Assets as a result it may not have sufficient control regarding the training or racing of the Underlying Asset.

 

A Series will not always own a majority interest in a particular horse. Therefore, despite its best efforts to build in oversight rights and major decision rights (such as the sale of an Underlying Asset) a Series and the Company may have minimal input with regard to the race selection and training of the horse(s). As a result, the Company and such Series may be dependent on the majority owners’ decisions as to when and where to race or show the horse and to its training regime. Additionally, there are situations in which a trainer or owner may have a conflict of interest which could negatively impact the ability of a horse to be placed in a particular race and given priority in workout times, jockeys or stabling.

 

 

 

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Market shortages may impact the ability of the Series to generate revenue.

 

The Company, through its individual Series, will primarily engage in horse racing in the United States. The future success of these activities will depend upon the ability of the Manager to purchase an interest in high-quality horses through an individual Series. The future success of these activities also depends upon whether the horse is being handled by highly skilled trainers and ridden by highly skilled jockeys. Because horse racing is an intensely competitive activity and the Company will be competing with a number of persons who have substantially greater experience and financial resources than Company to purchase interests in the best racehorses, there can be no assurance that the Company will be successful in the endeavors of pursuing certain racehorses for any Series. Further, once purchased, because the Company may have only a minority interest in such horse, the Company will have limited input into the training, handling, and management of the horse and therefore can make no assurances as to the success of the investment.

  

The Company, via an individual Series, has no intention of paying dividend payments on a regular schedule as revenues are irregular, seasonal, and unpredictable.

 

The revenues, if any, of an individual Series may be highly irregular and seasonal. While the Manager will endeavor to sell horses or interests in horses for cash at the time of sale, there can be no assurance that other payment terms will not be required by the relevant market conditions. The consequent variance in the amount or the timing of the Company's dividends, if any, could pose particular risks for Investors who seek to transfer their Interests during the term of the Company.

 

Competitive interests and other factors can have unforeseen consequences.

 

The horseracing industry is highly competitive and speculative. Horseracing in the United States and in foreign countries draws competitors and participants from locations throughout the United States and overseas, who have been in the business of horseracing for many years and have substantially greater financial resources than Company. The Company will be competing in its racing and selling activities with such persons. Similarly, horse markets are international, and auctions are frequently internationally advertised. This can be favorable in that it increases the value of Underlying Assets but, by the same token, Company has little influence and may not be able to compete with such competitors in the acquisition of interests in horses. The Company will be competing in the purchase and sale of horses with most of the major horse breeders and dealers in the United States and foreign countries. Thus, prices at which the Company buys or sells its interests in the Underlying Assets may vary dramatically. Market factors, which are beyond the Company’s control, will greatly affect the profitability of the Company. Such factors include, but are not limited to, auction prices, private sales, foreign investors, federal income tax treatment of the racing industry and the size of racing purses. Further, the Company and the concept of crowdfunding in the racehorse industry is a new venture and thus the risk of unforeseen issues and problems is high.

 

There is a lack of financial forecasts for the Company and for individual Series.

 

While the Company believes that there is a market for racehorse breeding, training and racing, such a market is highly volatile. The racehorse industry is dependent upon the present and future values of racehorses and of the horses in which the Company or a Series invested in particular. There can be no assurance that the Company will be successful in its proposed activity. The expenses incurred may result in operating losses for the Company and there is no assurance that the Company will generate profits or that any revenues generated will be sufficient to offset expenses incurred or would result in a profit to the Company. As a result, it is possible that the Investors will lose all or a substantial part of their investment in the Company. Additionally, there is no assurance that there will be any cash available for dividends. In addition, dividends, if any, may be less than their distributive share of taxable income and the Investors’ tax liability could require out-of-pocket expenditures by the Investors.

 

Lack of Diversification.

 

It is not anticipated that each Series would own any assets other than its interest in such Underlying Asset, plus potential cash reserves for maintenance, training, insurance and other Upkeep Fees pertaining to its interest in such Underlying Asset and amounts earned by such Series from the monetization of its interest in such Underlying Asset. Investors looking for diversification will have to create their own diversified portfolio by investing in other opportunities in addition to such Series.

 

 

 

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Risks Related to Ownership of our Interests

 

You will have only limited voting rights regarding our management and it will be difficult to remove our Manager, therefore, you will not have the ability to actively influence the day-to-day management of our business and affairs.

 

Our Manager has sole power and authority over the management of our Company and the individual Series. Furthermore, our Manager may only be removed for “Good Cause” meaning fraud, deceit, gross negligence, willful misconduct or a wrongful taking, bad faith, death, disability or disappearance, etc.

 

To remove the Manager for “Good Cause”, Members holding in excess of 75% of the percentage interests, must approve. Therefore, you will not have an active role in our Company’s management and it would likely be difficult to cause a change in our management. As a result, you will not have the ability to alter our management’s path if you feel they have erred.

  

Lack of voting rights.

 

The Manager has a unilateral ability to amend the Operating Agreement in certain circumstances without the consent of the Investors, and the Investors only have limited voting rights in respect of a Series. Investors will therefore be subject to any amendments the Manager makes (if any) to the Operating Agreement and also any decision it takes in respect of the Company and the applicable Series, which the Investors do not get a right to vote upon. Investors may not necessarily agree with such amendments or decisions and such amendments or decisions may not be in the best interests of all of the Investors as a whole but only a limited number.

 

Furthermore, the Manager can only be removed as manager of the Company and each Series in very limited circumstances. Investors would therefore not be able to remove the Manager merely because they did not agree, for example, with how the Manager was operating an underlying asset.

 

The offering price for the Interests determined by us may not necessarily bear any relationship to established valuation criteria such as earnings, book value or assets that may be agreed to between purchasers and sellers in private transactions or that may prevail in the market if and when our Interests can be traded publicly.

 

The price of the Interests was derived as a result of our negotiations with Horse Sellers based upon various factors including prevailing market conditions, our future prospects and our capital structure, as well as certain expenses incurred in connection with the Offerings and the acquisition of interests in each Underlying Asset. These prices do not necessarily accurately reflect the actual value of the Interests or the price that may be realized upon disposition of the Interests.

 

Funds from purchasers accompanying subscriptions for the Interests will not accrue interest prior to admission of the subscriber as an Investor in the Series, if it occurs, in respect of such subscriptions.

 

The funds paid by purchasers for the Interests will go into the Company’s general operating account and be allocated to the specific Series which is subject of the investment. Investors will not have the use of such funds or receive interest thereon pending the completion of said Offering. No subscriptions will be accepted and Interests sold unless valid subscriptions for such Offering are received and accepted prior to the termination of the Offering Period. If we terminate an Offering prior to accepting a subscriber’s subscription, funds will be returned, without interest or deduction, to the proposed Investor.

 

The Company’s Operating Agreement contains mandatory arbitration provisions that restrict your ability to bring claims against the company, except in instances of claims related to Federal and State securities laws.

 

Investors will be obligated to submit any claims against the Company to arbitration, except in instances of claims related to Federal and State securities laws.  Investors will be limited in the location, venue and circumstances under which a claim for damages can be brought against the Company or its officer, directors, managers or related parties. This limitation reduces the ability of Investors to dispute or fight against decisions made by the Company or its managers which may be viewed as having a negative impact on the value of your underlying investment.

 

 

 

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POTENTIAL CONFLICTS OF INTEREST

 

We have identified the following conflicts of interest that may arise in connection with the Interests, in particular, in relation to the Company, the Manager, the Manager’s majority stockholder and the Underlying Assets. The conflicts of interest described in this section should not be considered as an exhaustive list of the conflicts of interest that prospective Investors should consider before investing in the Interests.

 

Manager’s Fees and Compensation

 

None of the compensation set forth under "Compensation to Manager and Its Affiliates" was determined by arms' length negotiations. It is anticipated that the commissions and profits received by the Manager may be higher or lower depending upon market conditions.

 

This conflict of interest will exist in connection with Company management and Investors must rely upon the duties of the Manager of good faith and fair dealing to protect their interests, as qualified by the Operating Agreement.

 

The Manager has the right to retain the services of other firms, in addition to or in lieu of the Manager, to perform various services, asset management and other activities in connection with the business that is described in this Offering Circular.

 

The Company converted an advance from founders outstanding as of December 31, 2017 to equity in the Company to ease the cash flow burden to the Company. The Company also has borrowed $1,119,860 from the manager of the Company in order to acquire horse assets prior to establishing and issuing securities in the underlying series holding the horse assets for the fiscal year ended December 31, 2020. Because these are related party transactions, no guarantee can be made that the terms of the arrangements are at arm’s length.

 

Upkeep Fee Liabilities; Operating Expenses Reimbursement Obligations; Manager Loans

 

The Manager or an affiliate will incur liabilities related to Upkeep Fees on behalf of the Series and be entitled to reimbursement of such amount only upon a sale of the Underlying Asset or a dissolution or termination of such Series and not from Distributable Cash from ongoing revenues generated by such Series (“Operating Expenses Reimbursement Obligation(s)”). Notwithstanding the foregoing, there will still exist a smaller pre-paid cash reserve for Prepaid Expenses and insurance, administrative and general Operating Expenses which is intended to cover three years of such projected Operating Expenses (excluding Upkeep Fees).

 

In addition, the Manager retains discretion to also (a) loan the amount of the Operating Expenses to such Series, on which the Manager may impose a reasonable rate of interest, which shall not be lower than the Applicable Federal Rate (as defined in the Internal Revenue Code), and/or (b) cause additional Interests to be issued in order to cover such additional amounts.

 

An Interest Holder will be liable only to the extent of their agreed upon capital contributions and, if no such capital remains at dissolution, such Interest Holder will not be liable for the failure of a Series to repay its underlying debt or liabilities, including the Operating Expenses Reimbursement Obligations.

  

Other Series or Businesses

 

The Manager may engage for its own account, or for the account of others, in other business ventures, similar to that of the Company or otherwise, and neither the Company nor any Investor shall be entitled to any interest therein.

 

The Company will not have independent management and it will rely on the Manager for the operation of the Company. The Manager will devote only so much time to the business of the Company as is reasonably required. The Manager will have conflicts of interest in allocating management time, services and functions between its existing business interests other than the Company and any future entities which it may organize as well as other business ventures in which it may be involved. The Manager believes it has sufficient staff available to be fully capable of discharging its responsibilities to all such entities.

 

 

 

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The Manager, acting in the same capacities for other investors, companies, partnerships or entities, may result in competition with individual Series, including other Series. There are no restrictions on the Manager, or any of its affiliates, against operating other businesses in such competition with the Company. If the Manager or any of its affiliates did operate such a business that competed for clients with the Company, it could substantially impair the Company's financial results.

 

Manager Affiliation with Majority Owners

 

The Manager may independently determine to invest in syndicates that own majority interests in certain assets owned by individual Series. The Manager may derive compensation from its membership in these syndicates in addition to any compensation earned as a Manager of an individual Series.

 

An affiliate of Spendthrift Farm LLC is a Majority Stockholder in the Manager and Spendthrift is frequently a Horse Seller and Co-Owner in our Underlying Assets. Our interests in these transactions may be different from the interests of affiliates in these transactions.

 

On March 17, 2020, an affiliate of Spendthrift Farm, LLC, a Kentucky limited liability company (“Spendthrift”), became a majority stockholder in Experiential Squared, Inc., the Manager of the Company. Spendthrift is also a Horse Seller and Co-Owner with the Company in several of the Underlying Assets of existing Series and will continue to hold those positions in future Series. As such, the Company recognizes that there may be a heightened risk of conflicts of interest representing our interests in these transactions on the one hand and the interests of the Manager and its affiliates in preserving or furthering their respective relationships on the other hand and/or proper valuation of certain transactions (or the perception thereof). The Manager and the Company, in determining whether to approve or authorize a particular transaction with Spendthrift, will consider whether the transaction between the Company and Spendthrift is fair and reasonable to the Company and has terms and conditions no less favorable to us than those available from unaffiliated third parties.

 

Lack of Independent Legal Representation

 

The Members have not been separately represented by independent legal counsel in connection with the Company’s organization or in their dealings with the Manager. The Investors must rely on the good faith and integrity of the Manager to act in accordance with the terms and conditions of this Offering. The terms of the management of the business and the operating agreement have all been prepared by the Company. Therefore, the terms of these agreements have not been negotiated in an arms' length transaction, and there is no assurance that the Company could not have obtained more favorable terms from a third party for any of these agreements. PROSPECTIVE INVESTORS MUST RELY ON THEIR OWN LEGAL COUNSEL FOR LEGAL ADVICE IN CONNECTION WITH THIS INVESTMENT.

 

We do not have a conflicts of interest policy.

 

The Company, the Manager and their affiliates will try to balance the Company’s interests with their own.  However, to the extent that such parties take actions that are more favorable to other entities than the Company, these actions could have a negative impact on the Company’s financial performance and, consequently, on distributions to Investors and the value of the Interests. The Company has not adopted, and does not intend to adopt in the future, either a conflicts of interest policy or a conflicts resolution policy.

 

DILUTION

 

Dilution means a reduction in value, control or earnings of the Interests the Investor owns. There will be no dilution to any Investors associated with any Offering. However, from time to time, additional Series Interests may be issued in order to raise capital to cover the applicable Series’ ongoing operating expenses. See “Description of the Business – Operating Expenses” for further details.

 

 

 

 

23 

 

 

USE OF PROCEEDS – SERIES LOST EMPIRE 19

 

We estimate that the gross proceeds of the Series Lost Empire 19 Offering will be $357,000.00 and assumes the full amount of the Series Lost Empire 19 Offering is sold, and will be used as follows:

 

  Dollar Amount Percentage of
Gross Cash Proceeds
Uses    
Cash Portion of the Asset Cost $229,500.00 64.3%
Brokerage Fee (1) $3,570.00 1.0%
Due Diligence Fee $52,550.00 15.0%
Offering Expenses (None) (2) $0.00 0.0%
Operating Expenses (including Prepaid Expenses but Excluding Upkeep Fees) (3)(4)(5) $70,380.00 19.7%
Total Fees and Expenses $127,500.00 35.7%
Total Proceeds $357,000.00 100.0%

_______________________

(1) Calculation of Brokerage Fee excludes proceeds from the sale of Interests to the Manager, its affiliates, or the Horse Seller, if any.
(2) Solely in connection with the offering of the Series Lost Empire 19 Interests, the Manager has assumed and will not be reimbursed for Offering Expenses.
(3) To the extent that Operating Expenses are lower than anticipated, any overage would be maintained in an operating account for future Operating Expenses and/or Distributable Cash. The Company estimates the Cash Reserves for Operating Expenses for Series Lost Empire 19 will last through September 2023.
(4) Operating Expenses may also include Prepaid Expenses which are costs incurred prior to the offering of the Underlying Asset, including, but not limited to costs associated with the initial acquisition of the Asset, four months of initial training expenses, vet checks, blood stock fees, etc. related to the pre-offering operation of the Underlying Asset. To the extent that Prepaid Expenses are lower than anticipated, any overage would be maintained in an operating account for future Operating Expenses and/or Distributable Cash which occur after acquisition of the Underlying Asset.
(5)

We do not intend to allocate an upfront cash reserve for Upkeep Fees as part of the Offering proceeds. Instead, the Manager or an affiliate will incur liabilities related to Upkeep Fees on behalf of the Series and be entitled to reimbursement of such amount only upon a sale of the Underlying Asset or a dissolution or termination of such Series and not from Distributable Cash (as defined below) from future revenues generated by such Series (“Operating Expenses Reimbursement Obligation(s)”). Notwithstanding the foregoing, there will still exist a smaller pre-paid cash reserve for insurance, administrative and general Operating Expenses which is intended to cover three years of projected Operating Expenses (excluding Upkeep Fees).

 

In addition, the Manager retains discretion to also (a) loan the amount of the Operating Expenses to such Series, on which the Manager may impose a reasonable rate of interest, which shall not be lower than the Applicable Federal Rate (as defined in the Internal Revenue Code), and and/or (b) cause additional Interests to be issued in order to cover such additional amounts.

 

The Company acquired the 51% interest in Laforgia from the Horse Seller for a total cost of $229,500 (the “Asset Cost”) exclusive of agent fees and expenses as part of the auction.

 

The allocation of the net proceeds of the Series Lost Empire 19 Offering set forth above represents our intentions based upon our current plans and assumptions regarding industry and general economic conditions, our future revenues and expenditures. The amounts and timing of our actual expenditures will depend upon numerous factors, including market conditions, cash generated by our operations, business developments, and related rate of growth. The Manager reserves the right to modify the use of proceeds based on the factors set forth above. In the event that less than the Maximum Series Lost Empire 19 Interests are sold in connection with the Series Lost Empire 19 Offering, the Manager may pay, and not seek reimbursement for Offering Expenses and Upkeep Fees.

 

 

 

24 

 

 

In the event that less than the “Cash Portion of the Asset Cost” of a series, including Series Lost Empire 19, is raised, (i) the Manager and/or its affiliates may exercise their right to purchase interests in the series on the same terms and conditions as the Investors, (ii) if such Underlying Asset was originally acquired by the Company or an affiliate pursuant to a Profit Participation Convertible Promissory Note or similar instrument, such party may exercise its conversion rights, and/or (iii) the series may obtain a loan from the Manager, affiliates or third parties to obtain sufficient working capital to operate the underlying asset.

 

The purchase price of Laforgia includes reserves for administrative and insurance Operating Expenses through September 2023 but does not include reserves for Upkeep Fees. The Company anticipates that Laforgia may begin racing and, thus, generating revenue in or about September 2021. Until such time, the Manager or affiliates plan to incur liabilities related to Upkeep Fees on behalf of the Series and will be entitled to reimbursement of such amount only upon a sale of the Underlying Asset or a dissolution or termination of such Series and not from Distributable Cash (as defined below) from future revenues generated by such Series (“Operating Expenses Reimbursement Obligation(s)”).

 

Should Laforgia need more time than anticipated in training or fails to generate sufficient revenues as expected, the Manager may loan the Series money from time-to-time to cover operating expenses or sell additional interests as described above. The Company may update racing start dates and reserve contingency timelines based on the circumstances of each race horse and, as such, actual timelines are subject to change.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 25 

 

 

USE OF PROCEEDS – SERIES CAYALA 19

 

We estimate that the gross proceeds of the Series Cayala 19 Offering will be $373,100.00 and assumes the full amount of the Series Cayala 19 Offering is sold, and will be used as follows:

 

  Dollar Amount Percentage of
Gross Cash Proceeds
Uses    
Cash Portion of the Asset Cost $246,000.00 65.9%
Brokerage Fee (1) $3,731.00 1.0%
Due Diligence Fee $55,965.00 15.0%
Offering Expenses (None) (2) $0.00 0.0%
Operating Expenses (including Prepaid Expenses but Excluding Upkeep Fees) (3)(4)(5) $67,404.00 18.1%
Total Fees and Expenses $127,100.00 34.1%
Total Proceeds $373,100.00 100.0%

_______________________

(1) Calculation of Brokerage Fee excludes proceeds from the sale of Interests to the Manager, its affiliates, or the Horse Seller, if any.
(2) Solely in connection with the offering of the Series Cayala 19 Interests, the Manager has assumed and will not be reimbursed for Offering Expenses.
(3) To the extent that Operating Expenses are lower than anticipated, any overage would be maintained in an operating account for future Operating Expenses and/or Distributable Cash. The Company estimates the Cash Reserves for Operating Expenses for Series Cayala 19 will last through September 2023.
(4) Operating Expenses may also include Prepaid Expenses which are costs incurred prior to the offering of the Underlying Asset, including, but not limited to costs associated with the initial acquisition of the Asset, four months of initial training expenses, vet checks, blood stock fees, etc. related to the pre-offering operation of the Underlying Asset. To the extent that Prepaid Expenses are lower than anticipated, any overage would be maintained in an operating account for future Operating Expenses and/or Distributable Cash which occur after acquisition of the Underlying Asset.
(5)

We do not intend to allocate an upfront cash reserve for Upkeep Fees as part of the Offering proceeds. Instead, the Manager or an affiliate will incur liabilities related to Upkeep Fees on behalf of the Series and be entitled to reimbursement of such amount only upon a sale of the Underlying Asset or a dissolution or termination of such Series and not from Distributable Cash (as defined below) from future revenues generated by such Series (“Operating Expenses Reimbursement Obligation(s)”). Notwithstanding the foregoing, there will still exist a smaller pre-paid cash reserve for insurance, administrative and general Operating Expenses which is intended to cover three years of projected Operating Expenses (excluding Upkeep Fees).

 

In addition, the Manager retains discretion to also (a) loan the amount of the Operating Expenses to such Series, on which the Manager may impose a reasonable rate of interest, which shall not be lower than the Applicable Federal Rate (as defined in the Internal Revenue Code), and and/or (b) cause additional Interests to be issued in order to cover such additional amounts.

 

The Company acquired the 41% interest in Provocateur from the Horse Seller for a total cost of $246,000 (the “Asset Cost”) exclusive of agent fees and expenses as part of the auction.

 

 

 

 26 

 

 

The allocation of the net proceeds of the Series Cayala 19 Offering set forth above represents our intentions based upon our current plans and assumptions regarding industry and general economic conditions, our future revenues and expenditures. The amounts and timing of our actual expenditures will depend upon numerous factors, including market conditions, cash generated by our operations, business developments, and related rate of growth. The Manager reserves the right to modify the use of proceeds based on the factors set forth above. In the event that less than the Maximum Series Cayala 19 Interests are sold in connection with the Series Cayala 19 Offering, the Manager may pay, and not seek reimbursement for Offering Expenses and Upkeep Fees.

  

In the event that less than the “Cash Portion of the Asset Cost” of a series, including Series Cayala 19, is raised, (i) the Manager and/or its affiliates may exercise their right to purchase interests in the series on the same terms and conditions as the Investors, (ii) if such Underlying Asset was originally acquired by the Company or an affiliate pursuant to a Profit Participation Convertible Promissory Note or similar instrument, such party may exercise its conversion rights, and/or (iii) the series may obtain a loan from the Manager, affiliates or third parties to obtain sufficient working capital to operate the underlying asset.

 

The purchase price of Provocateur includes reserves for administrative and insurance Operating Expenses through September 2023 but does not include reserves for Upkeep Fees. The Company anticipates that Provocateur may begin racing and, thus, generating revenue in or about September 2021. Until such time, the Manager or affiliates plan to incur liabilities related to Upkeep Fees on behalf of the Series and will be entitled to reimbursement of such amount only upon a sale of the Underlying Asset or a dissolution or termination of such Series and not from Distributable Cash (as defined below) from future revenues generated by such Series (“Operating Expenses Reimbursement Obligation(s)”).

 

Should Provocateur need more time than anticipated in training or fails to generate sufficient revenues as expected, the Manager may loan the Series money from time-to-time to cover operating expenses or sell additional interests as described above. The Company may update racing start dates and reserve contingency timelines based on the circumstances of each race horse and, as such, actual timelines are subject to change.

 

 

 

 

 

 

 

 

 

 

 

 

  

 27 

 

 

USE OF PROCEEDS – SERIES CONSECRATE 19

 

We estimate that the gross proceeds of the Series Consecrate 19 Offering will be $64,370.00 and assumes the full amount of the Series Consecrate 19 Offering is sold, and will be used as follows:

 

  Dollar Amount Percentage of
Gross Cash Proceeds
Uses    
Cash Portion of the Asset Cost $32.800.00 51.0%
Brokerage Fee (1) $643.70 1.0%
Due Diligence Fee $9,655.50 15.0%
Offering Expenses (None) (2) $0.00 0.0%
Operating Expenses (including Prepaid Expenses but Excluding Upkeep Fees) (3)(4)(5) $21,270.80 33.0%
Total Fees and Expenses $31,570.00 49.0%
Total Proceeds $64,370.00 100.0%

_______________________

(1) Calculation of Brokerage Fee excludes proceeds from the sale of Interests to the Manager, its affiliates, or the Horse Seller, if any.
(2) Solely in connection with the offering of the Series Consecrate 19 Interests, the Manager has assumed and will not be reimbursed for Offering Expenses.
(3) To the extent that Operating Expenses are lower than anticipated, any overage would be maintained in an operating account for future Operating Expenses and/or Distributable Cash. The Company estimates the Cash Reserves for Operating Expenses for Series Consecrate 19 will last through September 2023.
(4) Operating Expenses may also include Prepaid Expenses which are costs incurred prior to the offering of the Underlying Asset, including, but not limited to costs associated with the initial acquisition of the Asset, four months of initial training expenses, vet checks, blood stock fees, etc. related to the pre-offering operation of the Underlying Asset. To the extent that Prepaid Expenses are lower than anticipated, any overage would be maintained in an operating account for future Operating Expenses and/or Distributable Cash which occur after acquisition of the Underlying Asset.
(5)

We do not intend to allocate an upfront cash reserve for Upkeep Fees as part of the Offering proceeds. Instead, the Manager or an affiliate will incur liabilities related to Upkeep Fees on behalf of the Series and be entitled to reimbursement of such amount only upon a sale of the Underlying Asset or a dissolution or termination of such Series and not from Distributable Cash (as defined below) from future revenues generated by such Series (“Operating Expenses Reimbursement Obligation(s)”). Notwithstanding the foregoing, there will still exist a smaller pre-paid cash reserve for insurance, administrative and general Operating Expenses which is intended to cover three years of projected Operating Expenses (excluding Upkeep Fees).

 

In addition, the Manager retains discretion to also (a) loan the amount of the Operating Expenses to such Series, on which the Manager may impose a reasonable rate of interest, which shall not be lower than the Applicable Federal Rate (as defined in the Internal Revenue Code), and and/or (b) cause additional Interests to be issued in order to cover such additional amounts.

 

The Company acquired the 41% interest in Sacred Beauty from the Horse Seller for a total cost of $32,800 (the “Asset Cost”) exclusive of agent fees and expenses as part of the auction.

 

 

 

 28 

 

 

The allocation of the net proceeds of the Series Consecrate 19 Offering set forth above represents our intentions based upon our current plans and assumptions regarding industry and general economic conditions, our future revenues and expenditures. The amounts and timing of our actual expenditures will depend upon numerous factors, including market conditions, cash generated by our operations, business developments, and related rate of growth. The Manager reserves the right to modify the use of proceeds based on the factors set forth above. In the event that less than the Maximum Series Consecrate 19 Interests are sold in connection with the Series Consecrate 19 Offering, the Manager may pay, and not seek reimbursement for Offering Expenses and Upkeep Fees.

  

In the event that less than the “Cash Portion of the Asset Cost” of a series, including Series Consecrate 19, is raised, (i) the Manager and/or its affiliates may exercise their right to purchase interests in the series on the same terms and conditions as the Investors, (ii) if such Underlying Asset was originally acquired by the Company or an affiliate pursuant to a Profit Participation Convertible Promissory Note or similar instrument, such party may exercise its conversion rights, and/or (iii) the series may obtain a loan from the Manager, affiliates or third parties to obtain sufficient working capital to operate the underlying asset.

 

The purchase price of Sacred Beauty includes reserves for administrative and insurance Operating Expenses through September 2023 but does not include reserves for Upkeep Fees. The Company anticipates that Sacred Beauty may begin racing and, thus, generating revenue in or about September 2021. Until such time, the Manager or affiliates plan to incur liabilities related to Upkeep Fees on behalf of the Series and will be entitled to reimbursement of such amount only upon a sale of the Underlying Asset or a dissolution or termination of such Series and not from Distributable Cash (as defined below) from future revenues generated by such Series (“Operating Expenses Reimbursement Obligation(s)”).

 

Should Sacred Beauty need more time than anticipated in training or fails to generate sufficient revenues as expected, the Manager may loan the Series money from time-to-time to cover operating expenses or sell additional interests as described above. The Company may update racing start dates and reserve contingency timelines based on the circumstances of each race horse and, as such, actual timelines are subject to change.

 

 

 

 29 

 

 

USE OF PROCEEDS – SERIES FUTURE STARS STABLE

 

We estimate that the gross proceeds of the Series Future Stars Stable Offering will be $500,000.00 and assumes the full amount of the Series Future Stars Stable Offering is sold, and will be used as follows:

 

  Dollar Amount Percentage of
Gross Cash Proceeds
Uses    
Cash Portion of the Asset Cost $335,500.00 67.1%
Brokerage Fee (1) $5,000.00 1.0%
Due Diligence Fee $75,000.00 15.0%
Offering Expenses (None) (2) $0.00 0.0%
Operating Expenses (including Prepaid Expenses but Excluding Upkeep Fees) (3)(4)(5) $84,500.00 16.9%
Total Fees and Expenses $164,500.00 32.9%
Total Proceeds $500,000.00 100.0%

_______________________

(1) Calculation of Brokerage Fee excludes proceeds from the sale of Interests to the Manager, its affiliates, or the Horse Seller, if any.
(2) Solely in connection with the offering of the Series Future Stars Stable Interests, the Manager has assumed and will not be reimbursed for Offering Expenses.
(3) To the extent that Operating Expenses are lower than anticipated, any overage would be maintained in an operating account for future Operating Expenses and/or Distributable Cash. The Company estimates the Cash Reserves for Operating Expenses for Series Future Stars Stable will last through September 2023.
(4) Operating Expenses may also include Prepaid Expenses which are costs incurred prior to the offering of the Underlying Asset, including, but not limited to costs associated with the initial acquisition of the Asset, four months of initial training expenses, vet checks, blood stock fees, etc. related to the pre-offering operation of the Underlying Asset. To the extent that Prepaid Expenses are lower than anticipated, any overage would be maintained in an operating account for future Operating Expenses and/or Distributable Cash which occur after acquisition of the Underlying Asset.
(5)

We do not intend to allocate an upfront cash reserve for Upkeep Fees as part of the Offering proceeds. Instead, the Manager or an affiliate will incur liabilities related to Upkeep Fees on behalf of the Series and be entitled to reimbursement of such amount only upon a sale of the Underlying Asset or a dissolution or termination of such Series and not from Distributable Cash (as defined below) from future revenues generated by such Series (“Operating Expenses Reimbursement Obligation(s)”). Notwithstanding the foregoing, there will still exist a smaller pre-paid cash reserve for insurance, administrative and general Operating Expenses which is intended to cover three years of projected Operating Expenses (excluding Upkeep Fees).

 

In addition, the Manager retains discretion to also (a) loan the amount of the Operating Expenses to such Series, on which the Manager may impose a reasonable rate of interest, which shall not be lower than the Applicable Federal Rate (as defined in the Internal Revenue Code), and and/or (b) cause additional Interests to be issued in order to cover such additional amounts.

 

The Company acquired the 10% interest in Man Among Men from the Horse Seller for a total cost of $36,000 (the “Asset Cost”) exclusive of agent fees and expenses as part of the auction.

 

The Company acquired the 10% interest in Frosted Oats from the Horse Seller for a total cost of $25,000 (the “Asset Cost”) exclusive of agent fees and expenses as part of the auction.

 

The Company acquired the 10% interest in Tapitry 19 from the Horse Seller for a total cost of $36,000 (the “Asset Cost”) exclusive of agent fees and expenses as part of the auction.

 

The Company acquired the 10% interest in Classofsixtythree 19 from the Horse Seller for a total cost of $25,000 (the “Asset Cost”) exclusive of agent fees and expenses as part of the auction.

 

The Company acquired the 10% interest in Cayala 19 from the Horse Seller for a total cost of $60,000 (the “Asset Cost”) exclusive of agent fees and expenses as part of the auction.

 

The Company acquired the 10% interest in Margaret Reay 19 from the Horse Seller for a total cost of $40,000 (the “Asset Cost”) exclusive of agent fees and expenses as part of the auction.

 

 

 

 30 

 

 

The Company acquired the 10% interest in Awe Hush 19 from the Horse Seller for a total cost of $22,00000 (the “Asset Cost”) exclusive of agent fees and expenses as part of the auction.

 

The Company acquired the 10% interest in Exonerated 19 from the Horse Seller for a total cost of $21,000 (the “Asset Cost”) exclusive of agent fees and expenses as part of the auction.

 

The Company acquired the 10% interest in Speightstown Belle 19 from the Horse Seller for a total cost of $8,500 (the “Asset Cost”) exclusive of agent fees and expenses as part of the auction.

 

The Company acquired the 10% interest in Consecrate 19 from the Horse Seller for a total cost of $8,000 (the “Asset Cost”) exclusive of agent fees and expenses as part of the auction.

 

The Company acquired the 10% interest in Latte Da 19 from the Horse Seller for a total cost of $19,500 (the “Asset Cost”) exclusive of agent fees and expenses as part of the auction.

 

The Company acquired the 10% interest in Midnight Sweetie 19 from the Horse Seller for a total cost of $18,000 (the “Asset Cost”) exclusive of agent fees and expenses as part of the auction.

 

The Company acquired the 10% interest in Ambleside Park 19 from the Horse Seller for a total cost of $11,500 (the “Asset Cost”) exclusive of agent fees and expenses as part of the auction.

 

The Company acquired the 10% interest in Athenian Beauty 19 from the Horse Seller for a total cost of $5,000 (the “Asset Cost”) exclusive of agent fees and expenses as part of the auction.

 

The allocation of the net proceeds of the Series Future Stars Stable Offering set forth above represents our intentions based upon our current plans and assumptions regarding industry and general economic conditions, our future revenues and expenditures. The amounts and timing of our actual expenditures will depend upon numerous factors, including market conditions, cash generated by our operations, business developments, and related rate of growth. The Manager reserves the right to modify the use of proceeds based on the factors set forth above. In the event that less than the Maximum Series Future Stars Stable Interests are sold in connection with the Series Future Stars Stable Offering, the Manager may pay, and not seek reimbursement for Offering Expenses and Upkeep Fees.

  

In the event that less than the “Cash Portion of the Asset Cost” of a series, including Series Future Stars Stable, is raised, (i) the Manager and/or its affiliates may exercise their right to purchase interests in the series on the same terms and conditions as the Investors, (ii) if such Underlying Asset was originally acquired by the Company or an affiliate pursuant to a Profit Participation Convertible Promissory Note or similar instrument, such party may exercise its conversion rights, and/or (iii) the series may obtain a loan from the Manager, affiliates or third parties to obtain sufficient working capital to operate the underlying asset.

 

The purchase price of Future Stars Stable includes reserves for administrative and insurance Operating Expenses through September 2023 but does not include reserves for Upkeep Fees. The Company anticipates Man Among Men, Frosted Oats, Infinite Empire (formerly Tapitry 19), Sixtythreecaliber (formerly Classofsixtythree 19), Provocateur (formerly Cayala 19), A Mo Reay (formerly Margaret Reay 19), Can’t Hush This (formerly Awe Hush 19), Above Suspicion (formerly Exonerated 19), Sacred Beauty (formerly Consecrate 19), Inalattetrouble (formerly Latte Da 19), Dolce Notte (formerly Midnight Sweetie 19), Lookwhogotlucky (formerly Ambleside Park 19), and Quantum Theory (formerly Athenian Beauty 19) may begin racing and, thus, generating revenue in or about September 2021. Until such time, the Manager or affiliates plan to incur liabilities related to Upkeep Fees on behalf of the Series and will be entitled to reimbursement of such amount only upon a sale of the Underlying Asset or a dissolution or termination of such Series and not from Distributable Cash (as defined below) from future revenues generated by such Series (“Operating Expenses Reimbursement Obligation(s)”).

 

Should Man Among Men, Frosted Oats, Infinite Empire (formerly Tapitry 19), Sixtythreecaliber (formerly Classofsixtythree 19), Provocateur (formerly Cayala 19), A Mo Reay (formerly Margaret Reay 19), Can’t Hush This (formerly Awe Hush 19), Above Suspicion (formerly Exonerated 19), Sacred Beauty (formerly Consecrate 19), Inalattetrouble (formerly Latte Da 19), Dolce Notte (formerly Midnight Sweetie 19), Lookwhogotlucky (formerly Ambleside Park 19), and Quantum Theory (formerly Athenian Beauty 19) need more time than anticipated in training or fails to generate sufficient revenues as expected, the Manager may loan the Series money from time-to-time to cover operating expenses or sell additional interests as described above. The Company may update racing start dates and reserve contingency timelines based on the circumstances of each race horse and, as such, actual timelines are subject to change

 

 

 

 31 
 

 

USE OF PROCEEDS – SERIES COLLUSION ILLUSION

 

We estimate that the gross proceeds of the Series Collusion Illusion Offering will be $750,000.00 and assumes the full amount of the Series Collusion Illusion Offering is sold, and will be used as follows:

 

  Dollar Amount Percentage of
Gross Cash Proceeds
Uses    
Cash Portion of the Asset Cost $550,000.00 73.3%
Brokerage Fee (1) $7,500.00 1.0%
Due Diligence Fee $112,500.00 15.0%
Offering Expenses (None) (2) $0.00 0.0%
Operating Expenses (including Prepaid Expenses but Excluding Upkeep Fees) (3)(4)(5) $80,000.00 10.7%
Total Fees and Expenses $200,000.00 26.7%
Total Proceeds $750,000.00 100.0%

_______________________

(1) Calculation of Brokerage Fee excludes proceeds from the sale of Interests to the Manager, its affiliates, or the Horse Seller, if any.
(2) Solely in connection with the offering of the Series Collusion Illusion Interests, the Manager has assumed and will not be reimbursed for Offering Expenses.
(3) To the extent that Operating Expenses are lower than anticipated, any overage would be maintained in an operating account for future Operating Expenses and/or Distributable Cash. The Company estimates the Cash Reserves for Operating Expenses for Series Collusion Illusion will last through September 2023.
(4) Operating Expenses may also include Prepaid Expenses which are costs incurred prior to the offering of the Underlying Asset, including, but not limited to costs associated with the initial acquisition of the Asset, four months of initial training expenses, vet checks, blood stock fees, etc. related to the pre-offering operation of the Underlying Asset. To the extent that Prepaid Expenses are lower than anticipated, any overage would be maintained in an operating account for future Operating Expenses and/or Distributable Cash which occur after acquisition of the Underlying Asset.
(5)

We do not intend to allocate an upfront cash reserve for Upkeep Fees as part of the Offering proceeds. Instead, the Manager or an affiliate will incur liabilities related to Upkeep Fees on behalf of the Series and be entitled to reimbursement of such amount only upon a sale of the Underlying Asset or a dissolution or termination of such Series and not from Distributable Cash (as defined below) from future revenues generated by such Series (“Operating Expenses Reimbursement Obligation(s)”). Notwithstanding the foregoing, there will still exist a smaller pre-paid cash reserve for insurance, administrative and general Operating Expenses which is intended to cover three years of projected Operating Expenses (excluding Upkeep Fees).

 

In addition, the Manager retains discretion to also (a) loan the amount of the Operating Expenses to such Series, on which the Manager may impose a reasonable rate of interest, which shall not be lower than the Applicable Federal Rate (as defined in the Internal Revenue Code), and and/or (b) cause additional Interests to be issued in order to cover such additional amounts.

 

The Company acquired the 25% interest in Collusion Illusion from the Horse Seller for a total cost of $550,000 (the “Asset Cost”) exclusive of agent fees and expenses as part of the auction.

 

 

 

 32 

 

 

The allocation of the net proceeds of the Series Collusion Illusion Offering set forth above represents our intentions based upon our current plans and assumptions regarding industry and general economic conditions, our future revenues and expenditures. The amounts and timing of our actual expenditures will depend upon numerous factors, including market conditions, cash generated by our operations, business developments, and related rate of growth. The Manager reserves the right to modify the use of proceeds based on the factors set forth above. In the event that less than the Maximum Series Collusion Illusion Interests are sold in connection with the Series Collusion Illusion Offering, the Manager may pay, and not seek reimbursement for Offering Expenses and Upkeep Fees.

  

In the event that less than the “Cash Portion of the Asset Cost” of a series, including Series Collusion Illusion, is raised, (i) the Manager and/or its affiliates may exercise their right to purchase interests in the series on the same terms and conditions as the Investors, (ii) if such Underlying Asset was originally acquired by the Company or an affiliate pursuant to a Profit Participation Convertible Promissory Note or similar instrument, such party may exercise its conversion rights, and/or (iii) the series may obtain a loan from the Manager, affiliates or third parties to obtain sufficient working capital to operate the underlying asset.

  

Collusion Illusion has commenced racing. Thus, the Company anticipates that Collusion Illusion may soon start generating revenue which should allow Series Collusion Illusion to maintain an ongoing reserve for Operating Expenses without the need to raise additional capital. Should Collusion Illusion need more time than anticipated in training or fails to generate sufficient revenues as expected, the Manager may loan the Series money from time-to-time to cover operating expenses as referenced above. The Company may update racing start dates and reserve contingency timelines based on the circumstances of each race horse and, as such, actual timelines are subject to change.

 

 

 

 

 33 

 

 

USE OF PROCEEDS – SERIES MONOMOY GIRL

 

We estimate that the gross proceeds of the Series Monomoy Girl Offering will be $469,200.00 and assumes the full amount of the Series Monomoy Girl Offering is sold, and will be used as follows:

 

  Dollar Amount Percentage of
Gross Cash Proceeds
Uses    
Lease Fee $300,000.00 63.9%
Brokerage Fee (1) $4,692.00 1.0%
Due Diligence Fee $70,380.00 15.0%
Offering Expenses (None) (2) $0.00 0.0%
Operating Expenses (including Prepaid Expenses but Excluding Upkeep Fees) (3)(4) $94,128.00 20.1%
Total Fees and Expenses $169,200.00 36.1%
Total Proceeds $469,200.00 100.0%

_______________________

(1) Calculation of Brokerage Fee excludes proceeds from the sale of Interests to the Manager, its affiliates, or the Horse Seller, if any.
(2) Solely in connection with the offering of the Series Monomoy Girl Interests, the Manager has assumed and will not be reimbursed for Offering Expenses.
(3) To the extent that Operating Expenses are lower than anticipated, any overage would be maintained in an operating account for future Operating Expenses and/or Distributable Cash. The Company estimates the Cash Reserves for Operating Expenses for Series Monomoy Girl will last through November 2021.
(4) Operating Expenses may also include Prepaid Expenses which are costs incurred prior to the offering of the Underlying Asset, including, but not limited to costs associated with the initial acquisition of the Asset, twelve months of initial training expenses, vet checks, blood stock fees, etc. related to the pre-offering operation of the Underlying Asset. To the extent that Prepaid Expenses are lower than anticipated, any overage would be maintained in an operating account for future Operating Expenses and/or Distributable Cash which occur after acquisition of the Underlying Asset.

 

The Company acquired the 51% lessee interest in Monomoy Girl from the Horse Seller for a total cost of $300,000 (the “Lease Fee”).

 

The allocation of the net proceeds of the Series Monomoy Girl Offering set forth above represents our intentions based upon our current plans and assumptions regarding industry and general economic conditions, our future revenues and expenditures. The amounts and timing of our actual expenditures will depend upon numerous factors, including market conditions, cash generated by our operations, business developments, and related rate of growth. The Manager reserves the right to modify the use of proceeds based on the factors set forth above. In the event that less than the Maximum Series Monomoy Girl Interests are sold in connection with the Series Monomoy Girl Offering, the Manager may pay, and not seek reimbursement for Offering Expenses and Upkeep Fees.

  

In the event that less than the “Lease Fee” of a series, including Series Monomoy Girl, is raised, (i) the Manager and/or its affiliates may exercise their right to purchase interests in the series on the same terms and conditions as the Investors, (ii) if such Underlying Asset was originally acquired by the Company or an affiliate pursuant to a Profit Participation Convertible Promissory Note or similar instrument, such party may exercise its conversion rights, and/or (iii) the series may obtain a loan from the Manager, affiliates or third parties to obtain sufficient working capital to operate the underlying asset.

  

Monomoy Girl has commenced racing. Thus, the Company anticipates that Monomoy Girl may soon start generating revenue which should allow Series Monomoy Girl to maintain an ongoing reserve for Operating Expenses without the need to raise additional capital. Should Monomoy Girl need more time than anticipated in training or fails to generate sufficient revenues as expected, the Manager may loan the Series money from time-to-time to cover operating expenses as referenced above. The Company may update racing start dates and reserve contingency timelines based on the circumstances of each race horse and, as such, actual timelines are subject to change.

 

On February 28, 2021, Monomoy Girl raced in the 2021 Grade 3, Bayakoa Stakes and finished in first place (the “2021 Bayakoa Stakes”). The proceeds from the 2021 Bayakoa Stakes shall remain in Series Monomoy Girl, and investors that purchase Series Interests in Series Monomoy Girl shall have the right to receive its pro rata share of such proceeds as Distributable Cash after accounting for applicable Operating Expenses related to Series Monomoy Girl.

 

 

 34 

 

 

USE OF PROCEEDS – SERIES GOT STORMY

 

We estimate that the gross proceeds of the Series Got Stormy Offering will be $229,500.00 and assumes the full amount of the Series Got Stormy Offering is sold, and will be used as follows:

 

  Dollar Amount Percentage of
Gross Cash Proceeds
Uses    
Lease Fee $125,000.00 54.5%
Brokerage Fee (1) $2,295.00 1.0%
Due Diligence Fee $34,425.00 15.0%
Offering Expenses (None) (2) $0.00 0.0%
Operating Expenses (including Prepaid Expenses but Excluding Upkeep Fees) (3)(4) $67,780.00 29.5%
Total Fees and Expenses $104,500.00 45.5%
Total Proceeds $229,500.00 100.0%

_______________________

(1) Calculation of Brokerage Fee excludes proceeds from the sale of Interests to the Manager, its affiliates, or the Horse Seller, if any.
(2) Solely in connection with the offering of the Series Got Stormy Interests, the Manager has assumed and will not be reimbursed for Offering Expenses.
(3) To the extent that Operating Expenses are lower than anticipated, any overage would be maintained in an operating account for future Operating Expenses and/or Distributable Cash. The Company estimates the Cash Reserves for Operating Expenses for Series Got Stormy will last through November 2021.
(4) Operating Expenses may also include Prepaid Expenses which are costs incurred prior to the offering of the Underlying Asset, including, but not limited to costs associated with the initial acquisition of the Asset, twelve months of initial training expenses, vet checks, blood stock fees, etc. related to the pre-offering operation of the Underlying Asset. To the extent that Prepaid Expenses are lower than anticipated, any overage would be maintained in an operating account for future Operating Expenses and/or Distributable Cash which occur after acquisition of the Underlying Asset.

 

The Company acquired the 51% lessee interest in Got Stormy from the Horse Seller for a total cost of $125,000 (the “Lease Fee”).

 

The allocation of the net proceeds of the Series Got Stormy Offering set forth above represents our intentions based upon our current plans and assumptions regarding industry and general economic conditions, our future revenues and expenditures. The amounts and timing of our actual expenditures will depend upon numerous factors, including market conditions, cash generated by our operations, business developments, and related rate of growth. The Manager reserves the right to modify the use of proceeds based on the factors set forth above. In the event that less than the Maximum Series Got Stormy Interests are sold in connection with the Series Got Stormy Offering, the Manager may pay, and not seek reimbursement for Offering Expenses and Upkeep Fees.

  

In the event that less than the “Lease Fee” of a series, including Series Got Stormy, is raised, (i) the Manager and/or its affiliates may exercise their right to purchase interests in the series on the same terms and conditions as the Investors, (ii) if such Underlying Asset was originally acquired by the Company or an affiliate pursuant to a Profit Participation Convertible Promissory Note or similar instrument, such party may exercise its conversion rights, and/or (iii) the series may obtain a loan from the Manager, affiliates or third parties to obtain sufficient working capital to operate the underlying asset.

  

Got Stormy has commenced racing. Thus, the Company anticipates that Got Stormy may soon start generating revenue which should allow Series Got Stormy to maintain an ongoing reserve for Operating Expenses without the need to raise additional capital. Should Got Stormy need more time than anticipated in training or fails to generate sufficient revenues as expected, the Manager may loan the Series money from time-to-time to cover operating expenses as referenced above. The Company may update racing start dates and reserve contingency timelines based on the circumstances of each race horse and, as such, actual timelines are subject to change.

 

On February 27, 2021, Got Stormy raced in the 2021 Grade 3, Honey Fox Stakes and finished in first place (the “2021 Honey Fox Stakes”). The proceeds from the 2021 Honey Fox Stakes shall remain in Series Got Stormy, and investors that purchase Series Interests in Series Got Stormy shall have the right to receive its pro rata share of such proceeds as Distributable Cash after accounting for applicable Operating Expenses related to Series Got Stormy.

 

 

 

 35 

 

 

USE OF PROCEEDS – SERIES SOCIAL DILEMMA

 

We estimate that the gross proceeds of the Series Social Dilemma Offering will be $85,170.00 and assumes the full amount of the Series Social Dilemma Offering is sold, and will be used as follows:

 

  Dollar Amount Percentage of
Gross Cash Proceeds
Uses    
Lease Fee $25,000.00 29.4%
Brokerage Fee (1) $851.70 1.0%
Due Diligence Fee $12,775.50 15.0%
Offering Expenses (None) (2) $0.00 0.0%
Operating Expenses (including Prepaid Expenses but Excluding Upkeep Fees) (3)(4) $46,542.80 54.6%
Total Fees and Expenses $60,170.00 70.6%
Total Proceeds $85,170.00 100.0%

_______________________

(1) Calculation of Brokerage Fee excludes proceeds from the sale of Interests to the Manager, its affiliates, or the Horse Seller, if any.
(2) Solely in connection with the offering of the Series Social Dilemma Interests, the Manager has assumed and will not be reimbursed for Offering Expenses.
(3) To the extent that Operating Expenses are lower than anticipated, any overage would be maintained in an operating account for future Operating Expenses and/or Distributable Cash. The Company estimates the Cash Reserves for Operating Expenses for Series Social Dilemma will last through November 2021.
(4) Operating Expenses may also include Prepaid Expenses which are costs incurred prior to the offering of the Underlying Asset, including, but not limited to costs associated with the initial acquisition of the Asset, twelve months of initial training expenses, vet checks, blood stock fees, etc. related to the pre-offering operation of the Underlying Asset. To the extent that Prepaid Expenses are lower than anticipated, any overage would be maintained in an operating account for future Operating Expenses and/or Distributable Cash which occur after acquisition of the Underlying Asset.

 

The Company acquired the 51% lessee interest in Social Dilemma from the Horse Seller for a total cost of $25,000 (the “Lease Fee”).

 

The allocation of the net proceeds of the Series Social Dilemma Offering set forth above represents our intentions based upon our current plans and assumptions regarding industry and general economic conditions, our future revenues and expenditures. The amounts and timing of our actual expenditures will depend upon numerous factors, including market conditions, cash generated by our operations, business developments, and related rate of growth. The Manager reserves the right to modify the use of proceeds based on the factors set forth above. In the event that less than the Maximum Series Social Dilemma Interests are sold in connection with the Series Social Dilemma Offering, the Manager may pay, and not seek reimbursement for Offering Expenses and Upkeep Fees.

  

In the event that less than the “Lease Fee” of a series, including Series Social Dilemma, is raised, (i) the Manager and/or its affiliates may exercise their right to purchase interests in the series on the same terms and conditions as the Investors, (ii) if such Underlying Asset was originally acquired by the Company or an affiliate pursuant to a Profit Participation Convertible Promissory Note or similar instrument, such party may exercise its conversion rights, and/or (iii) the series may obtain a loan from the Manager, affiliates or third parties to obtain sufficient working capital to operate the underlying asset.

  

Social Dilemma has commenced racing. Thus, the Company anticipates that Social Dilemma may soon start generating revenue which should allow Series Social Dilemma to maintain an ongoing reserve for Operating Expenses without the need to raise additional capital. Should Social Dilemma need more time than anticipated in training or fails to generate sufficient revenues as expected, the Manager may loan the Series money from time-to-time to cover operating expenses as referenced above. The Company may update racing start dates and reserve contingency timelines based on the circumstances of each race horse and, as such, actual timelines are subject to change.

 

 

 

 

 36 

 

 

USE OF PROCEEDS – SERIES CARROTHERS

 

We estimate that the gross proceeds of the Series Carrothers Offering will be $515,100.00 and assumes the full amount of the Series Carrothers Offering is sold, and will be used as follows:

 

  Dollar Amount Percentage of
Gross Cash Proceeds
Uses    
Cash Portion of the Asset Cost $307,004.70 59.60%
Brokerage Fee (1) $5,151.00 1.0%
Due Diligence Fee $77,265.00 15.0%
Offering Expenses (None) (2) $0.00 0.0%
Operating Expenses (including Prepaid Expenses but Excluding Upkeep Fees) (3)(4) $125,679.30 24.40%
Total Fees and Expenses $208,095.30 40.40%
Total Proceeds

$515,100.00

100.0%

_______________________

(1) Calculation of Brokerage Fee excludes proceeds from the sale of Interests to the Manager, its affiliates, or the Horse Seller, if any.
(2) Solely in connection with the offering of the Series Carrothers Interests, the Manager has assumed and will not be reimbursed for Offering Expenses.
(3) To the extent that Operating Expenses are lower than anticipated, any overage would be maintained in an operating account for future Operating Expenses and/or Distributable Cash. The Company estimates the Cash Reserves for Operating Expenses for Series Carrothers will last through March 2023.
(4) Operating Expenses may also include Prepaid Expenses which are costs incurred prior to the offering of the Underlying Asset, including, but not limited to costs associated with the initial acquisition of the Asset, twenty-two months of initial training expenses, vet checks, blood stock fees, etc. related to the pre-offering operation of the Underlying Asset. To the extent that Prepaid Expenses are lower than anticipated, any overage would be maintained in an operating account for future Operating Expenses and/or Distributable Cash which occur after acquisition of the Underlying Asset.

 

The Company acquired the 51% interest in Carrothers from the Horse Seller for a total cost of $307,004.70 (the “Asset Cost”) exclusive of agent fees and expenses as part of the auction.

 

The allocation of the net proceeds of the Series Carrothers Offering set forth above represents our intentions based upon our current plans and assumptions regarding industry and general economic conditions, our future revenues and expenditures. The amounts and timing of our actual expenditures will depend upon numerous factors, including market conditions, cash generated by our operations, business developments, and related rate of growth. The Manager reserves the right to modify the use of proceeds based on the factors set forth above. In the event that less than the Maximum Series Carrothers Interests are sold in connection with the Series Carrothers Offering, the Manager may pay, and not seek reimbursement for Offering Expenses and Upkeep Fees.

  

In the event that less than the “Cash Portion of the Asset Cost” of a series, including Series Carrothers, is raised, (i) the Manager and/or its affiliates may exercise their right to purchase interests in the series on the same terms and conditions as the Investors, (ii) if such Underlying Asset was originally acquired by the Company or an affiliate pursuant to a Profit Participation Convertible Promissory Note or similar instrument, such party may exercise its conversion rights, and/or (iii) the series may obtain a loan from the Manager, affiliates or third parties to obtain sufficient working capital to operate the underlying asset.

 

Carrothers has commenced racing. Thus, the Company anticipates that Carrothers may soon start generating revenue which should allow Series Carrothers to maintain an ongoing reserve for Operating Expenses without the need to raise additional capital. Should Carrothers need more time than anticipated in training or fails to generate sufficient revenues as expected, the Manager may loan the Series money from time-to-time to cover operating expenses as referenced above. The Company may update racing start dates and reserve contingency timelines based on the circumstances of each race horse and, as such, actual timelines are subject to change.

 

 

 

 37 

 

 

USE OF PROCEEDS – SERIES GOING TO VEGAS

 

We estimate that the gross proceeds of the Series Going to Vegas Offering will be $438,600.00 and assumes the full amount of the Series Going to Vegas Offering is sold, and will be used as follows:

 

  Dollar Amount Percentage of
Gross Cash Proceeds
Uses    
Cash Portion of the Asset Cost $255,000.00 58.14%
Brokerage Fee (1) $4,386.00 1.00%
Due Diligence Fee $65,790.00 15.00%
Offering Expenses (None) (2) $0.00 0.0%
Operating Expenses (including Prepaid Expenses but Excluding Upkeep Fees) (3)(4) $113,424.00 25.86%
Total Fees and Expenses $183,600.00 41.86%
Total Proceeds $438,600.00 100.0%

_______________________

(1) Calculation of Brokerage Fee excludes proceeds from the sale of Interests to the Manager, its affiliates, or the Horse Seller, if any.
(2) Solely in connection with the offering of the Series Going to Vegas Interests, the Manager has assumed and will not be reimbursed for Offering Expenses.
(3) To the extent that Operating Expenses are lower than anticipated, any overage would be maintained in an operating account for future Operating Expenses and/or Distributable Cash. The Company estimates the Cash Reserves for Operating Expenses for Series Going to Vegas will last through September 2023.
(4) Operating Expenses may also include Prepaid Expenses which are costs incurred prior to the offering of the Underlying Asset, including, but not limited to costs associated with the initial acquisition of the Asset, twenty-four months of initial training expenses, vet checks, blood stock fees, etc. related to the pre-offering operation of the Underlying Asset. To the extent that Prepaid Expenses are lower than anticipated, any overage would be maintained in an operating account for future Operating Expenses and/or Distributable Cash which occur after acquisition of the Underlying Asset.

 

The Company acquired the 51% interest in Going to Vegas from the Horse Seller for a total cost of $255,000.00 (the “Asset Cost”) exclusive of agent fees and expenses as part of the auction.

 

The allocation of the net proceeds of the Series Going to Vegas Offering set forth above represents our intentions based upon our current plans and assumptions regarding industry and general economic conditions, our future revenues and expenditures. The amounts and timing of our actual expenditures will depend upon numerous factors, including market conditions, cash generated by our operations, business developments, and related rate of growth. The Manager reserves the right to modify the use of proceeds based on the factors set forth above. In the event that less than the Maximum Series Going to Vegas Interests are sold in connection with the Series Going to Vegas Offering, the Manager may pay, and not seek reimbursement for Offering Expenses and Upkeep Fees.

  

In the event that less than the “Cash Portion of the Asset Cost” of a series, including Series Going to Vegas, is raised, (i) the Manager and/or its affiliates may exercise their right to purchase interests in the series on the same terms and conditions as the Investors, (ii) if such Underlying Asset was originally acquired by the Company or an affiliate pursuant to a Profit Participation Convertible Promissory Note or similar instrument, such party may exercise its conversion rights, and/or (iii) the series may obtain a loan from the Manager, affiliates or third parties to obtain sufficient working capital to operate the underlying asset.

 

Going to Vegas has commenced racing. Thus, the Company anticipates that Going to Vegas may soon start generating revenue which should allow Series Going to Vegas to maintain an ongoing reserve for Operating Expenses without the need to raise additional capital. Should Going to Vegas need more time than anticipated in training or fails to generate sufficient revenues as expected, the Manager may loan the Series money from time-to-time to cover operating expenses as referenced above. The Company may update racing start dates and reserve contingency timelines based on the circumstances of each race horse and, as such, actual timelines are subject to change.

 

 

 

 38 

 

 

USE OF PROCEEDS – SERIES ARI THE ADVENTURER 19

 

We estimate that the gross proceeds of the Series Ari the Adventurer 19 Offering will be $433,500.00 and assumes the full amount of the Series Ari the Adventurer 19 Offering is sold, and will be used as follows:

 

  Dollar Amount Percentage of
Gross Cash Proceeds
Uses    
Cash Portion of the Asset Cost $293,250.00 67.65%
Brokerage Fee (1) $4,335.00 1.000%
Due Diligence Fee $65,025.00 15.00%
Offering Expenses (None) (2) $0.00 0.0%
Operating Expenses (including Prepaid Expenses but Excluding Upkeep Fees) (3)(4)(5) $70,890.00 16.35%
Total Fees and Expenses $140,250.00 32.35%
Total Proceeds $433,500.00 100.0%

 

_______________________

(1) Calculation of Brokerage Fee excludes proceeds from the sale of Interests to the Manager, its affiliates, or the Horse Seller, if any.
(2) Solely in connection with the offering of the Series Ari the Adventurer 19 Interests, the Manager has assumed and will not be reimbursed for Offering Expenses.
(3) To the extent that Operating Expenses are lower than anticipated, any overage would be maintained in an operating account for future Operating Expenses and/or Distributable Cash. The Company estimates the Cash Reserves for Operating Expenses for Series Ari the Adventurer 19 will last through December 2023.
(4) Operating Expenses may also include Prepaid Expenses which are costs incurred prior to the offering of the Underlying Asset, including, but not limited to costs associated with the initial acquisition of the Asset, vet checks, blood stock fees, etc. related to the pre-offering operation of the Underlying Asset. To the extent that Prepaid Expenses are lower than anticipated, any overage would be maintained in an operating account for future Operating Expenses and/or Distributable Cash which occur after acquisition of the Underlying Asset.
(5)

We do not intend to allocate an upfront cash reserve for Upkeep Fees as part of the Offering proceeds. Instead, the Manager or an affiliate will incur liabilities related to Upkeep Fees on behalf of the Series and be entitled to reimbursement of such amount only upon a sale of the Underlying Asset or a dissolution or termination of such Series and not from Distributable Cash (as defined below) from future revenues generated by such Series (“Operating Expenses Reimbursement Obligation(s)”). Notwithstanding the foregoing, there will still exist a smaller pre-paid cash reserve for insurance, administrative and general Operating Expenses which is intended to cover three years of projected Operating Expenses (excluding Upkeep Fees).

 

In addition, the Manager retains discretion to also (a) loan the amount of the Operating Expenses to such Series, on which the Manager may impose a reasonable rate of interest, which shall not be lower than the Applicable Federal Rate (as defined in the Internal Revenue Code), and and/or (b) cause additional Interests to be issued in order to cover such additional amounts.

 

The Company acquired the 51% interest in Ari the Adventurer 19 from the Horse Seller for a total cost of $293,250. (the “Asset Cost”) exclusive of agent fees and expenses as part of the auction.

 

The allocation of the net proceeds of the Series Ari the Adventurer 19 Offering set forth above represents our intentions based upon our current plans and assumptions regarding industry and general economic conditions, our future revenues and expenditures. The amounts and timing of our actual expenditures will depend upon numerous factors, including market conditions, cash generated by our operations, business developments, and related rate of growth. The Manager reserves the right to modify the use of proceeds based on the factors set forth above. In the event that less than the Maximum Series Ari the Adventurer 19 Interests are sold in connection with the Series Ari the Adventurer 19 Offering, the Manager may pay, and not seek reimbursement for Offering Expenses and Upkeep Fees.

 

 

 

 39 

 

 

In the event that less than the “Cash Portion of the Asset Cost” of a series, including Series Ari the Adventurer 19, is raised, (i) the Manager and/or its affiliates may exercise their right to purchase interests in the series on the same terms and conditions as the Investors, (ii) if such Underlying Asset was originally acquired by the Company or an affiliate pursuant to a Profit Participation Convertible Promissory Note or similar instrument, such party may exercise its conversion rights, and/or (iii) the series may obtain a loan from the Manager, affiliates or third parties to obtain sufficient working capital to operate the underlying asset.

 

The purchase price of Ari the Adventurer 19 includes reserves for administrative and insurance Operating Expenses through December 2023 but does not include reserves for Upkeep Fees. The Company anticipates that Ari the Adventurer 19 may begin racing and, thus, generating revenue in or about September 2021. Until such time, the Manager or affiliates plan to incur liabilities related to Upkeep Fees on behalf of the Series and will be entitled to reimbursement of such amount only upon a sale of the Underlying Asset or a dissolution or termination of such Series and not from Distributable Cash (as defined below) from future revenues generated by such Series (“Operating Expenses Reimbursement Obligation(s)”).

 

Should Ari the Adventurer 19 need more time than anticipated in training or fails to generate sufficient revenues as expected, the Manager may loan the Series money from time-to-time to cover operating expenses or sell additional interests as described above. The Company may update racing start dates and reserve contingency timelines based on the circumstances of each race horse and, as such, actual timelines are subject to change.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 40 

 

 

USE OF PROCEEDS – SERIES WONDER UPON A STAR 19

 

We estimate that the gross proceeds of the Series Wonder Upon a Star 19 Offering will be $370,00.00 and assumes the full amount of the Series Wonder Upon a Star 19 Offering is sold, and will be used as follows:

 

  Dollar Amount Percentage of
Gross Cash Proceeds
Uses    
Cash Portion of the Asset Cost $140,000.00 37.84%
Brokerage Fee (1) $3,700.00 1.000%
Due Diligence Fee $55,500.00 15.00%
Offering Expenses (None) (2) $0.00 0.0%
Operating Expenses (including Prepaid Expenses but Excluding Upkeep Fees) (3)(4) $170,800.00 46.16%
Total Fees and Expenses $230,000.00 62.16%
Total Proceeds $370,000.00 100.0%

 

_______________________

(1) Calculation of Brokerage Fee excludes proceeds from the sale of Interests to the Manager, its affiliates, or the Horse Seller, if any.
(2) Solely in connection with the offering of the Series Wonder Upon a Star 19 Interests, the Manager has assumed and will not be reimbursed for Offering Expenses.
(3) To the extent that Operating Expenses are lower than anticipated, any overage would be maintained in an operating account for future Operating Expenses and/or Distributable Cash. The Company estimates the Cash Reserves for Operating Expenses for Series Wonder Upon a Star 19 will last through March 2023.
(4) Operating Expenses may also include Prepaid Expenses which are costs incurred prior to the offering of the Underlying Asset, including, but not limited to costs associated with the initial acquisition of the Asset, twenty-four months of initial training expenses, vet checks, blood stock fees, etc. related to the pre-offering operation of the Underlying Asset. To the extent that Prepaid Expenses are lower than anticipated, any overage would be maintained in an operating account for future Operating Expenses and/or Distributable Cash which occur after acquisition of the Underlying Asset.

 

The Company acquired the 100% interest in Wonder Upon a Star 19 from the Horse Seller for a total cost of $140,000.00 (the “Asset Cost”) exclusive of agent fees and expenses as part of the auction.

 

The allocation of the net proceeds of the Series Wonder Upon a Star 19 Offering set forth above represents our intentions based upon our current plans and assumptions regarding industry and general economic conditions, our future revenues and expenditures. The amounts and timing of our actual expenditures will depend upon numerous factors, including market conditions, cash generated by our operations, business developments, and related rate of growth. The Manager reserves the right to modify the use of proceeds based on the factors set forth above. In the event that less than the Maximum Series Wonder Upon a Star 19 Interests are sold in connection with the Series Wonder Upon a Star 19 Offering, the Manager may pay, and not seek reimbursement for Offering Expenses and Upkeep Fees.

 

In the event that less than the “Cash Portion of the Asset Cost” of a series, including Series Wonder Upon a Star 19, is raised, (i) the Manager and/or its affiliates may exercise their right to purchase interests in the series on the same terms and conditions as the Investors, (ii) if such Underlying Asset was originally acquired by the Company or an affiliate pursuant to a Profit Participation Convertible Promissory Note or similar instrument, such party may exercise its conversion rights, and/or (iii) the series may obtain a loan from the Manager, affiliates or third parties to obtain sufficient working capital to operate the underlying asset.

 

The purchase price of Wonder Upon a Star 19 includes reserves for administrative and insurance Operating Expenses through March 2023 but does not include reserves for Upkeep Fees. The Company anticipates that Wonder Upon a Star 19 may begin racing and, thus, generating revenue in or about September 2021. Until such time, the Manager or affiliates plan to incur liabilities related to Upkeep Fees on behalf of the Series and will be entitled to reimbursement of such amount only upon a sale of the Underlying Asset or a dissolution or termination of such Series and not from Distributable Cash (as defined below) from future revenues generated by such Series (“Operating Expenses Reimbursement Obligation(s)”).

 

Should Wonder Upon a Star 19 need more time than anticipated in training or fails to generate sufficient revenues as expected, the Manager may loan the Series money from time-to-time to cover operating expenses or sell additional interests as described above. The Company may update racing start dates and reserve contingency timelines based on the circumstances of each race horse and, as such, actual timelines are subject to change.

 

 

 

 41 

 

 

USE OF PROCEEDS – SERIES ECHO WARRIOR 19

 

We estimate that the gross proceeds of the Series Echo Warrior 19 Offering will be $348,000.00 and assumes the full amount of the Series Echo Warrior 19 Offering is sold, and will be used as follows:

 

  Dollar Amount Percentage of
Gross Cash Proceeds
Uses    
Cash Portion of the Asset Cost $162,000.00 46.55%
Brokerage Fee (1) $3,480.00 1.000%
Due Diligence Fee $52,200.00 15.00%
Offering Expenses (None) (2) $0.00 0.00%
Operating Expenses (including Prepaid Expenses but Excluding Upkeep Fees) (3)(4) $130,320.00 37.45%
Total Fees and Expenses $186,000.00 53.45%
Total Proceeds $348,000.00 100.00%

_______________________

(1) Calculation of Brokerage Fee excludes proceeds from the sale of Interests to the Manager, its affiliates, or the Horse Seller, if any.
(2) Solely in connection with the offering of the Series Echo Warrior 19 Interests, the Manager has assumed and will not be reimbursed for Offering Expenses.
(3) To the extent that Operating Expenses are lower than anticipated, any overage would be maintained in an operating account for future Operating Expenses and/or Distributable Cash. The Company estimates the Cash Reserves for Operating Expenses for Series Echo Warrior 19  will last through March 2023.
(4) Operating Expenses may also include Prepaid Expenses which are costs incurred prior to the offering of the Underlying Asset, including, but not limited to costs associated with the initial acquisition of the Asset, twenty-four months of initial training expenses, vet checks, blood stock fees, etc. related to the pre-offering operation of the Underlying Asset. To the extent that Prepaid Expenses are lower than anticipated, any overage would be maintained in an operating account for future Operating Expenses and/or Distributable Cash which occur after acquisition of the Underlying Asset.

 

The Company acquired the 60% interest in Echo Warrior 19 from the Horse Seller for a total cost of $162,000.00 (the “Asset Cost”) exclusive of agent fees and expenses as part of the auction.

 

The allocation of the net proceeds of the Series Echo Warrior 19 Offering set forth above represents our intentions based upon our current plans and assumptions regarding industry and general economic conditions, our future revenues and expenditures. The amounts and timing of our actual expenditures will depend upon numerous factors, including market conditions, cash generated by our operations, business developments, and related rate of growth. The Manager reserves the right to modify the use of proceeds based on the factors set forth above. In the event that less than the Maximum Series Echo Warrior 19 Interests are sold in connection with the Series Echo Warrior 19 Offering, the Manager may pay, and not seek reimbursement for Offering Expenses and Upkeep Fees.

 

In the event that less than the “Cash Portion of the Asset Cost” of a series, including Series Echo Warrior 19, is raised, (i) the Manager and/or its affiliates may exercise their right to purchase interests in the series on the same terms and conditions as the Investors, (ii) if such Underlying Asset was originally acquired by the Company or an affiliate pursuant to a Profit Participation Convertible Promissory Note or similar instrument, such party may exercise its conversion rights, and/or (iii) the series may obtain a loan from the Manager, affiliates or third parties to obtain sufficient working capital to operate the underlying asset.

 

The purchase price of Echo Warrior 19 includes reserves for administrative and insurance Operating Expenses through March 2023 but does not include reserves for Upkeep Fees. The Company anticipates that Echo Warrior 19 may begin racing and, thus, generating revenue in or about January 2022. Until such time, the Manager or affiliates plan to incur liabilities related to Upkeep Fees on behalf of the Series and will be entitled to reimbursement of such amount only upon a sale of the Underlying Asset or a dissolution or termination of such Series and not from Distributable Cash (as defined below) from future revenues generated by such Series (“Operating Expenses Reimbursement Obligation(s)”).

 

Should Echo Warrior 19 need more time than anticipated in training or fails to generate sufficient revenues as expected, the Manager may loan the Series money from time-to-time to cover operating expenses or sell additional interests as described above. The Company may update racing start dates and reserve contingency timelines based on the circumstances of each race horse and, as such, actual timelines are subject to change.

 

 

 

 42 

 

 

USE OF PROCEEDS – SERIES SILVERPOCKETSFULL 19

 

We estimate that the gross proceeds of the Series Silverpocketsfull 19 Offering will be $453,900.00 and assumes the full amount of the Series Silverpocketsfull 19 Offering is sold, and will be used as follows:

 

  Dollar Amount Percentage of
Gross Cash Proceeds
Uses    
Cash Portion of the Asset Cost $280,500.00 61.80%
Brokerage Fee (1) $4,539.00 1.000%
Due Diligence Fee $68,085.00 15.00%
Offering Expenses (None) (2) $0.00 0.0%
Operating Expenses (including Prepaid Expenses but Excluding Upkeep Fees) (3)(4)(5) $100,776.00 22.20%
Total Fees and Expenses $173,400.00 32.35%
Total Proceeds $453,900.00 100.0%

 

_______________________

(1) Calculation of Brokerage Fee excludes proceeds from the sale of Interests to the Manager, its affiliates, or the Horse Seller, if any.
(2) Solely in connection with the offering of the Series Silverpocketsfull 19 Interests, the Manager has assumed and will not be reimbursed for Offering Expenses.
(3) To the extent that Operating Expenses are lower than anticipated, any overage would be maintained in an operating account for future Operating Expenses and/or Distributable Cash. The Company estimates the Cash Reserves for Operating Expenses for Series Silverpocketsfull 19 will last through April 2023.
(4) Operating Expenses may also include Prepaid Expenses which are costs incurred prior to the offering of the Underlying Asset, including, but not limited to costs associated with the initial acquisition of the Asset, vet checks, blood stock fees, etc. related to the pre-offering operation of the Underlying Asset. To the extent that Prepaid Expenses are lower than anticipated, any overage would be maintained in an operating account for future Operating Expenses and/or Distributable Cash which occur after acquisition of the Underlying Asset.
(5)

We do not intend to allocate an upfront cash reserve for Upkeep Fees as part of the Offering proceeds. Instead, the Manager or an affiliate will incur liabilities related to Upkeep Fees on behalf of the Series and be entitled to reimbursement of such amount only upon a sale of the Underlying Asset or a dissolution or termination of such Series and not from Distributable Cash (as defined below) from future revenues generated by such Series (“Operating Expenses Reimbursement Obligation(s)”). Notwithstanding the foregoing, there will still exist a smaller pre-paid cash reserve for insurance, administrative and general Operating Expenses which is intended to cover three years of projected Operating Expenses (excluding Upkeep Fees).

 

In addition, the Manager retains discretion to also (a) loan the amount of the Operating Expenses to such Series, on which the Manager may impose a reasonable rate of interest, which shall not be lower than the Applicable Federal Rate (as defined in the Internal Revenue Code), and and/or (b) cause additional Interests to be issued in order to cover such additional amounts.

 

The Company acquired the 51% interest in Silverpocketsfull 19 from the Horse Seller for a total cost of $280,500.00 (the “Asset Cost”) exclusive of agent fees and expenses as part of the auction.

 

The allocation of the net proceeds of the Series Silverpocketsfull 19 Offering set forth above represents our intentions based upon our current plans and assumptions regarding industry and general economic conditions, our future revenues and expenditures. The amounts and timing of our actual expenditures will depend upon numerous factors, including market conditions, cash generated by our operations, business developments, and related rate of growth. The Manager reserves the right to modify the use of proceeds based on the factors set forth above. In the event that less than the Maximum Series Silverpocketsfull 19 Interests are sold in connection with the Series Silverpocketsfull 19 Offering, the Manager may pay, and not seek reimbursement for Offering Expenses and Upkeep Fees.

 

 

 

 

 

 43 
 

 

 

In the event that less than the “Cash Portion of the Asset Cost” of a series, including Series Silverpocketsfull 19, is raised, (i) the Manager and/or its affiliates may exercise their right to purchase interests in the series on the same terms and conditions as the Investors, (ii) if such Underlying Asset was originally acquired by the Company or an affiliate pursuant to a Profit Participation Convertible Promissory Note or similar instrument, such party may exercise its conversion rights, and/or (iii) the series may obtain a loan from the Manager, affiliates or third parties to obtain sufficient working capital to operate the underlying asset.

 

The purchase price of Silverpocketsfull 19 includes reserves for administrative and insurance Operating Expenses through April 2023 but does not include reserves for Upkeep Fees. The Company anticipates that Silverpocketsfull 19 may begin racing and, thus, generating revenue in or about September 2021. Until such time, the Manager or affiliates plan to incur liabilities related to Upkeep Fees on behalf of the Series and will be entitled to reimbursement of such amount only upon a sale of the Underlying Asset or a dissolution or termination of such Series and not from Distributable Cash (as defined below) from future revenues generated by such Series (“Operating Expenses Reimbursement Obligation(s)”).

 

Should Silverpocketsfull 19 need more time than anticipated in training or fails to generate sufficient revenues as expected, the Manager may loan the Series money from time-to-time to cover operating expenses or sell additional interests as described above. The Company may update racing start dates and reserve contingency timelines based on the circumstances of each race horse and, as such, actual timelines are subject to change.

 

 

 

 

 

 

 

 

 44 
 

 

USE OF PROCEEDS – SERIES WHO’SBEENINMYBED 19

 

We estimate that the gross proceeds of the Series Who’sbeeninmybed 19 Offering will be $377,400.00 and assumes the full amount of the Series Who’sbeeninmybed 19 Offering is sold, and will be used as follows:

 

  Dollar Amount Percentage of
Gross Cash Proceeds
Uses    
Cash Portion of the Asset Cost $229,500.00 60.81%
Brokerage Fee (1) $3,774.00 1.000%
Due Diligence Fee $56,610.00 15.00%
Offering Expenses (None) (2) $0.00 0.0%
Operating Expenses (including Prepaid Expenses but Excluding Upkeep Fees) (3)(4)(5) $87,516.00 23.19%
Total Fees and Expenses $147,900.00 39.19%
Total Proceeds $377,400.00 100.0%

 

_______________________

(1) Calculation of Brokerage Fee excludes proceeds from the sale of Interests to the Manager, its affiliates, or the Horse Seller, if any.
(2) Solely in connection with the offering of the Series Who’sbeeninmybed 19 Interests, the Manager has assumed and will not be reimbursed for Offering Expenses.
(3) To the extent that Operating Expenses are lower than anticipated, any overage would be maintained in an operating account for future Operating Expenses and/or Distributable Cash. The Company estimates the Cash Reserves for Operating Expenses for Series Who’sbeeninmybed 19 will last through April 2023.
(4) Operating Expenses may also include Prepaid Expenses which are costs incurred prior to the offering of the Underlying Asset, including, but not limited to costs associated with the initial acquisition of the Asset, vet checks, blood stock fees, etc. related to the pre-offering operation of the Underlying Asset. To the extent that Prepaid Expenses are lower than anticipated, any overage would be maintained in an operating account for future Operating Expenses and/or Distributable Cash which occur after acquisition of the Underlying Asset.
(5)

We do not intend to allocate an upfront cash reserve for Upkeep Fees as part of the Offering proceeds. Instead, the Manager or an affiliate will incur liabilities related to Upkeep Fees on behalf of the Series and be entitled to reimbursement of such amount only upon a sale of the Underlying Asset or a dissolution or termination of such Series and not from Distributable Cash (as defined below) from future revenues generated by such Series (“Operating Expenses Reimbursement Obligation(s)”). Notwithstanding the foregoing, there will still exist a smaller pre-paid cash reserve for insurance, administrative and general Operating Expenses which is intended to cover three years of projected Operating Expenses (excluding Upkeep Fees).

 

In addition, the Manager retains discretion to also (a) loan the amount of the Operating Expenses to such Series, on which the Manager may impose a reasonable rate of interest, which shall not be lower than the Applicable Federal Rate (as defined in the Internal Revenue Code), and and/or (b) cause additional Interests to be issued in order to cover such additional amounts.

 

The Company acquired the 51% interest in Who’sbeeninmybed 19 from the Horse Seller for a total cost of $229,500.00 (the “Asset Cost”) exclusive of agent fees and expenses as part of the auction.

 

The allocation of the net proceeds of the Series Who’sbeeninmybed 19 Offering set forth above represents our intentions based upon our current plans and assumptions regarding industry and general economic conditions, our future revenues and expenditures. The amounts and timing of our actual expenditures will depend upon numerous factors, including market conditions, cash generated by our operations, business developments, and related rate of growth. The Manager reserves the right to modify the use of proceeds based on the factors set forth above. In the event that less than the Maximum Series Who’sbeeninmybed 19 Interests are sold in connection with the Series Who’sbeeninmybed 19 Offering, the Manager may pay, and not seek reimbursement for Offering Expenses and Upkeep Fees.

 

 

 

 45 
 

 

In the event that less than the “Cash Portion of the Asset Cost” of a series, including Series Who’sbeeninmybed 19, is raised, (i) the Manager and/or its affiliates may exercise their right to purchase interests in the series on the same terms and conditions as the Investors, (ii) if such Underlying Asset was originally acquired by the Company or an affiliate pursuant to a Profit Participation Convertible Promissory Note or similar instrument, such party may exercise its conversion rights, and/or (iii) the series may obtain a loan from the Manager, affiliates or third parties to obtain sufficient working capital to operate the underlying asset.

 

The purchase price of Who’sbeeninmybed 19 includes reserves for administrative and insurance Operating Expenses through April 2023 but does not include reserves for Upkeep Fees. The Company anticipates that Who’sbeeninmybed 19 may begin racing and, thus, generating revenue in or about September 2021. Until such time, the Manager or affiliates plan to incur liabilities related to Upkeep Fees on behalf of the Series and will be entitled to reimbursement of such amount only upon a sale of the Underlying Asset or a dissolution or termination of such Series and not from Distributable Cash (as defined below) from future revenues generated by such Series (“Operating Expenses Reimbursement Obligation(s)”).

 

Should Who’sbeeninmybed 19 need more time than anticipated in training or fails to generate sufficient revenues as expected, the Manager may loan the Series money from time-to-time to cover operating expenses or sell additional interests as described above. The Company may update racing start dates and reserve contingency timelines based on the circumstances of each race horse and, as such, actual timelines are subject to change.

 

 

 

 

 

 

 

 

 

 

 

 46 
 

 

USE OF PROCEEDS – SERIES INTO SUMMER 19

 

We estimate that the gross proceeds of the Series Into Summer 19 Offering will be $250,900.00 and assumes the full amount of the Series Into Summer 19 Offering is sold, and will be used as follows:

 

  Dollar Amount Percentage of
Gross Cash Proceeds
Uses    
Cash Portion of the Asset Cost $91,000.00 36.27%
Brokerage Fee (1) $2,509.00 1.000%
Due Diligence Fee $37,635.00 15.00%
Offering Expenses (None) (2) $0.00 0.0%
Operating Expenses (including Prepaid Expenses but Excluding Upkeep Fees) (3)(4) $119,756.00 47.73%
Total Fees and Expenses $159,900.00 63.73%
Total Proceeds $250,900.00 100.00%

_______________________

(1) Calculation of Brokerage Fee excludes proceeds from the sale of Interests to the Manager, its affiliates, or the Horse Seller, if any.
(2) Solely in connection with the offering of the Series Into Summer 19 Interests, the Manager has assumed and will not be reimbursed for Offering Expenses.
(3) To the extent that Operating Expenses are lower than anticipated, any overage would be maintained in an operating account for future Operating Expenses and/or Distributable Cash. The Company estimates the Cash Reserves for Operating Expenses for Series Into Summer 19  will last through April 2023.
(4) Operating Expenses may also include Prepaid Expenses which are costs incurred prior to the offering of the Underlying Asset, including, but not limited to costs associated with the initial acquisition of the Asset, twenty-four months of initial training expenses, vet checks, blood stock fees, etc. related to the pre-offering operation of the Underlying Asset. To the extent that Prepaid Expenses are lower than anticipated, any overage would be maintained in an operating account for future Operating Expenses and/or Distributable Cash which occur after acquisition of the Underlying Asset.

 

The Company acquired the 65% interest in Into Summer 19 from the Horse Seller for a total cost of $91,000.00 (the “Asset Cost”) exclusive of agent fees and expenses as part of the auction.

 

The allocation of the net proceeds of the Series Into Summer 19 Offering set forth above represents our intentions based upon our current plans and assumptions regarding industry and general economic conditions, our future revenues and expenditures. The amounts and timing of our actual expenditures will depend upon numerous factors, including market conditions, cash generated by our operations, business developments, and related rate of growth. The Manager reserves the right to modify the use of proceeds based on the factors set forth above. In the event that less than the Maximum Series Into Summer 19 Interests are sold in connection with the Series Into Summer 19 Offering, the Manager may pay, and not seek reimbursement for Offering Expenses and Upkeep Fees.

 

In the event that less than the “Cash Portion of the Asset Cost” of a series, including Series Into Summer 19, is raised, (i) the Manager and/or its affiliates may exercise their right to purchase interests in the series on the same terms and conditions as the Investors, (ii) if such Underlying Asset was originally acquired by the Company or an affiliate pursuant to a Profit Participation Convertible Promissory Note or similar instrument, such party may exercise its conversion rights, and/or (iii) the series may obtain a loan from the Manager, affiliates or third parties to obtain sufficient working capital to operate the underlying asset.

 

The purchase price of Into Summer 19 includes reserves for administrative and insurance Operating Expenses through April 2023 but does not include reserves for Upkeep Fees. The Company anticipates that Into Summer 19 may begin racing and, thus, generating revenue in or about September 2021. Until such time, the Manager or affiliates plan to incur liabilities related to Upkeep Fees on behalf of the Series and will be entitled to reimbursement of such amount only upon a sale of the Underlying Asset or a dissolution or termination of such Series and not from Distributable Cash (as defined below) from future revenues generated by such Series (“Operating Expenses Reimbursement Obligation(s)”).

 

Should Into Summer 19 need more time than anticipated in training or fails to generate sufficient revenues as expected, the Manager may loan the Series money from time-to-time to cover operating expenses or sell additional interests as described above. The Company may update racing start dates and reserve contingency timelines based on the circumstances of each race horse and, as such, actual timelines are subject to change.

 

 

 

 

 47 
 

 

USE OF PROCEEDS – SERIES MRS WHISTLER

 

We estimate that the gross proceeds of the Series Mrs Whistler Offering will be $274,000.00 and assumes the full amount of the Series Mrs Whistler Offering is sold, and will be used as follows:

 

  Dollar Amount Percentage of
Gross Cash Proceeds
Uses    
Cash Portion of the Asset Cost $80,000.00 29.20%
Brokerage Fee (1) $2,740.00 1.000%
Due Diligence Fee $41,100.00 15.00%
Offering Expenses (None) (2) $0.00 0.0%
Operating Expenses (including Prepaid Expenses but Excluding Upkeep Fees) (3)(4) $150,160.00 54.80%
Total Fees and Expenses $194,000.00 70.80%
Total Proceeds $274,000.00 100.00%

_______________________

(1) Calculation of Brokerage Fee excludes proceeds from the sale of Interests to the Manager, its affiliates, or the Horse Seller, if any.
(2) Solely in connection with the offering of the Series Mrs Whistler Interests, the Manager has assumed and will not be reimbursed for Offering Expenses.
(3) To the extent that Operating Expenses are lower than anticipated, any overage would be maintained in an operating account for future Operating Expenses and/or Distributable Cash. The Company estimates the Cash Reserves for Operating Expenses for Series Mrs Whistler will last through April 2023.
(4) Operating Expenses may also include Prepaid Expenses which are costs incurred prior to the offering of the Underlying Asset, including, but not limited to costs associated with the initial acquisition of the Asset, twenty-four months of initial training expenses, vet checks, blood stock fees, etc. related to the pre-offering operation of the Underlying Asset. To the extent that Prepaid Expenses are lower than anticipated, any overage would be maintained in an operating account for future Operating Expenses and/or Distributable Cash which occur after acquisition of the Underlying Asset.

 

The Company acquired the 100% interest in Mrs Whistler from the Horse Seller for a total cost of $80,000.00 (the “Asset Cost”) exclusive of agent fees and expenses as part of the auction.

 

The allocation of the net proceeds of the Series Mrs Whistler Offering set forth above represents our intentions based upon our current plans and assumptions regarding industry and general economic conditions, our future revenues and expenditures. The amounts and timing of our actual expenditures will depend upon numerous factors, including market conditions, cash generated by our operations, business developments, and related rate of growth. The Manager reserves the right to modify the use of proceeds based on the factors set forth above. In the event that less than the Maximum Series Mrs Whistler Interests are sold in connection with the Series Mrs Whistler Offering, the Manager may pay, and not seek reimbursement for Offering Expenses and Upkeep Fees.

 

In the event that less than the “Cash Portion of the Asset Cost” of a series, including Series Mrs Whistler, is raised, (i) the Manager and/or its affiliates may exercise their right to purchase interests in the series on the same terms and conditions as the Investors, (ii) if such Underlying Asset was originally acquired by the Company or an affiliate pursuant to a Profit Participation Convertible Promissory Note or similar instrument, such party may exercise its conversion rights, and/or (iii) the series may obtain a loan from the Manager, affiliates or third parties to obtain sufficient working capital to operate the underlying asset.

 

The purchase price of Mrs Whistler includes reserves for administrative and insurance Operating Expenses through April 2023 but does not include reserves for Upkeep Fees. The Company anticipates that Mrs Whistler may begin racing and, thus, generating revenue in or about September 2021. Until such time, the Manager or affiliates plan to incur liabilities related to Upkeep Fees on behalf of the Series and will be entitled to reimbursement of such amount only upon a sale of the Underlying Asset or a dissolution or termination of such Series and not from Distributable Cash (as defined below) from future revenues generated by such Series (“Operating Expenses Reimbursement Obligation(s)”).

 

Should Mrs Whistler need more time than anticipated in training or fails to generate sufficient revenues as expected, the Manager may loan the Series money from time-to-time to cover operating expenses or sell additional interests as described above. The Company may update racing start dates and reserve contingency timelines based on the circumstances of each race horse and, as such, actual timelines are subject to change.

 

 

 

 

 48 
 

 

USE OF PROCEEDS – SERIES RACE HUNTER 19

 

We estimate that the gross proceeds of the Series Race Hunter 19 Offering will be $520,000.00 and assumes the full amount of the Series Race Hunter 19 Offering is sold, and will be used as follows:

 

  Dollar Amount Percentage of
Gross Cash Proceeds
Uses    
Cash Portion of the Asset Cost $250,000.00 48.08%
Brokerage Fee (1) $5,200.00 1.000%
Due Diligence Fee $78,000.00 15.00%
Offering Expenses (None) (2) $0.00 0.0%
Operating Expenses (including Prepaid Expenses but Excluding Upkeep Fees) (3)(4) $186,800.00 35.92%
Total Fees and Expenses $270,000.00 51.92%
Total Proceeds $520,000.00 100.00%

_______________________

(1) Calculation of Brokerage Fee excludes proceeds from the sale of Interests to the Manager, its affiliates, or the Horse Seller, if any.
(2) Solely in connection with the offering of the Series Race Hunter 19 Interests, the Manager has assumed and will not be reimbursed for Offering Expenses.
(3) To the extent that Operating Expenses are lower than anticipated, any overage would be maintained in an operating account for future Operating Expenses and/or Distributable Cash. The Company estimates the Cash Reserves for Operating Expenses for Series Race Hunter 19 will last through April 2023.
(4) Operating Expenses may also include Prepaid Expenses which are costs incurred prior to the offering of the Underlying Asset, including, but not limited to costs associated with the initial acquisition of the Asset, twenty-four months of initial training expenses, vet checks, blood stock fees, etc. related to the pre-offering operation of the Underlying Asset. To the extent that Prepaid Expenses are lower than anticipated, any overage would be maintained in an operating account for future Operating Expenses and/or Distributable Cash which occur after acquisition of the Underlying Asset.

 

The Company acquired the 100% interest in Race Hunter 19 from the Horse Seller for a total cost of $250,000.00 (the “Asset Cost”) exclusive of agent fees and expenses as part of the auction.

 

The allocation of the net proceeds of the Series Race Hunter 19 Offering set forth above represents our intentions based upon our current plans and assumptions regarding industry and general economic conditions, our future revenues and expenditures. The amounts and timing of our actual expenditures will depend upon numerous factors, including market conditions, cash generated by our operations, business developments, and related rate of growth. The Manager reserves the right to modify the use of proceeds based on the factors set forth above. In the event that less than the Maximum Series Race Hunter 19 Interests are sold in connection with the Series Race Hunter 19 Offering, the Manager may pay, and not seek reimbursement for Offering Expenses and Upkeep Fees.

 

In the event that less than the “Cash Portion of the Asset Cost” of a series, including Series Race Hunter 19, is raised, (i) the Manager and/or its affiliates may exercise their right to purchase interests in the series on the same terms and conditions as the Investors, (ii) if such Underlying Asset was originally acquired by the Company or an affiliate pursuant to a Profit Participation Convertible Promissory Note or similar instrument, such party may exercise its conversion rights, and/or (iii) the series may obtain a loan from the Manager, affiliates or third parties to obtain sufficient working capital to operate the underlying asset.

 

The purchase price of Race Hunter 19 includes reserves for administrative and insurance Operating Expenses through April 2023 but does not include reserves for Upkeep Fees. The Company anticipates that Race Hunter 19 may begin racing and, thus, generating revenue in or about September 2021. Until such time, the Manager or affiliates plan to incur liabilities related to Upkeep Fees on behalf of the Series and will be entitled to reimbursement of such amount only upon a sale of the Underlying Asset or a dissolution or termination of such Series and not from Distributable Cash (as defined below) from future revenues generated by such Series (“Operating Expenses Reimbursement Obligation(s)”).

 

Should Race Hunter 19 need more time than anticipated in training or fails to generate sufficient revenues as expected, the Manager may loan the Series money from time-to-time to cover operating expenses or sell additional interests as described above. The Company may update racing start dates and reserve contingency timelines based on the circumstances of each race horse and, as such, actual timelines are subject to change.

 

 

 

 49 
 

 

USE OF PROCEEDS – SERIES CO COLA 19

 

We estimate that the gross proceeds of the Series Co Cola 19 Offering will be $540,600.00 and assumes the full amount of the Series Co Cola 19 Offering is sold, and will be used as follows:

 

  Dollar Amount Percentage of
Gross Cash Proceeds
Uses    
Cash Portion of the Asset Cost $318,750.00 58.96%
Brokerage Fee (1) $5,406.00 1.000%
Due Diligence Fee $81,090.00 15.00%
Offering Expenses (None) (2) $0.00 0.00%
Operating Expenses (including Prepaid Expenses but Excluding Upkeep Fees) (3)(4) $135,354.00 25.04%
Total Fees and Expenses $221,850.00 41.04%
Total Proceeds $540,600.00 100.00%

_______________________

(1) Calculation of Brokerage Fee excludes proceeds from the sale of Interests to the Manager, its affiliates, or the Horse Seller, if any.
(2) Solely in connection with the offering of the Series Co Cola 19 Interests, the Manager has assumed and will not be reimbursed for Offering Expenses.
(3) To the extent that Operating Expenses are lower than anticipated, any overage would be maintained in an operating account for future Operating Expenses and/or Distributable Cash. The Company estimates the Cash Reserves for Operating Expenses for Series Co Cola 19 will last through April 2023.
(4) Operating Expenses may also include Prepaid Expenses which are costs incurred prior to the offering of the Underlying Asset, including, but not limited to costs associated with the initial acquisition of the Asset, twenty-four months of initial training expenses, vet checks, blood stock fees, etc. related to the pre-offering operation of the Underlying Asset. To the extent that Prepaid Expenses are lower than anticipated, any overage would be maintained in an operating account for future Operating Expenses and/or Distributable Cash which occur after acquisition of the Underlying Asset.

 

The Company acquired the 51% interest in Co Cola 19 from the Horse Seller for a total cost of $318,750.00 (the “Asset Cost”) exclusive of agent fees and expenses as part of the auction.

 

The allocation of the net proceeds of the Series Co Cola 19 Offering set forth above represents our intentions based upon our current plans and assumptions regarding industry and general economic conditions, our future revenues and expenditures. The amounts and timing of our actual expenditures will depend upon numerous factors, including market conditions, cash generated by our operations, business developments, and related rate of growth. The Manager reserves the right to modify the use of proceeds based on the factors set forth above. In the event that less than the Maximum Series Co Cola 19 Interests are sold in connection with the Series Co Cola 19 Offering, the Manager may pay, and not seek reimbursement for Offering Expenses and Upkeep Fees.

 

In the event that less than the “Cash Portion of the Asset Cost” of a series, including Series Co Cola 19, is raised, (i) the Manager and/or its affiliates may exercise their right to purchase interests in the series on the same terms and conditions as the Investors, (ii) if such Underlying Asset was originally acquired by the Company or an affiliate pursuant to a Profit Participation Convertible Promissory Note or similar instrument, such party may exercise its conversion rights, and/or (iii) the series may obtain a loan from the Manager, affiliates or third parties to obtain sufficient working capital to operate the underlying asset.

 

The purchase price of Co Cola 19 includes reserves for administrative and insurance Operating Expenses through April 2023 but does not include reserves for Upkeep Fees. The Company anticipates that Co Cola 19 may begin racing and, thus, generating revenue in or about September 2021. Until such time, the Manager or affiliates plan to incur liabilities related to Upkeep Fees on behalf of the Series and will be entitled to reimbursement of such amount only upon a sale of the Underlying Asset or a dissolution or termination of such Series and not from Distributable Cash (as defined below) from future revenues generated by such Series (“Operating Expenses Reimbursement Obligation(s)”).

 

Should Co Cola 19 need more time than anticipated in training or fails to generate sufficient revenues as expected, the Manager may loan the Series money from time-to-time to cover operating expenses or sell additional interests as described above. The Company may update racing start dates and reserve contingency timelines based on the circumstances of each race horse and, as such, actual timelines are subject to change.

 

 

 

 

 

 50 
 

 

USE OF PROCEEDS – SERIES VOW

 

We estimate that the gross proceeds of the Series Vow Offering will be $358,000.00 and assumes the full amount of the Series Vow Offering is sold, and will be used as follows:

 

  Dollar Amount Percentage of
Gross Cash Proceeds
Uses    
Cash Portion of the Asset Cost $140,000.00 39.11%
Brokerage Fee (1) $3,580.00 1.000%
Due Diligence Fee $53,700.00 15.00%
Offering Expenses (None) (2) $0.00 0.00%
Operating Expenses (including Prepaid Expenses but Excluding Upkeep Fees) (3)(4) 160,720.00 44.89%
Total Fees and Expenses $218,000.00 60.89%
Total Proceeds $358,000.00 100.00%

_______________________

(1) Calculation of Brokerage Fee excludes proceeds from the sale of Interests to the Manager, its affiliates, or the Horse Seller, if any.
(2) Solely in connection with the offering of the Series Vow Interests, the Manager has assumed and will not be reimbursed for Offering Expenses.
(3) To the extent that Operating Expenses are lower than anticipated, any overage would be maintained in an operating account for future Operating Expenses and/or Distributable Cash. The Company estimates the Cash Reserves for Operating Expenses for Series Vow will last through April 2023.
(4) Operating Expenses may also include Prepaid Expenses which are costs incurred prior to the offering of the Underlying Asset, including, but not limited to costs associated with the initial acquisition of the Asset, twenty-four months of initial training expenses, vet checks, blood stock fees, etc. related to the pre-offering operation of the Underlying Asset. To the extent that Prepaid Expenses are lower than anticipated, any overage would be maintained in an operating account for future Operating Expenses and/or Distributable Cash which occur after acquisition of the Underlying Asset.

 

The Company acquired the 100% interest in Vow from the Horse Seller for a total cost of $140,000.00 (the “Asset Cost”) exclusive of agent fees and expenses as part of the auction.

 

The allocation of the net proceeds of the Series Vow Offering set forth above represents our intentions based upon our current plans and assumptions regarding industry and general economic conditions, our future revenues and expenditures. The amounts and timing of our actual expenditures will depend upon numerous factors, including market conditions, cash generated by our operations, business developments, and related rate of growth. The Manager reserves the right to modify the use of proceeds based on the factors set forth above. In the event that less than the Maximum Series Vow Interests are sold in connection with the Series Vow Offering, the Manager may pay, and not seek reimbursement for Offering Expenses and Upkeep Fees.

 

In the event that less than the “Cash Portion of the Asset Cost” of a series, including Series Vow, is raised, (i) the Manager and/or its affiliates may exercise their right to purchase interests in the series on the same terms and conditions as the Investors, (ii) if such Underlying Asset was originally acquired by the Company or an affiliate pursuant to a Profit Participation Convertible Promissory Note or similar instrument, such party may exercise its conversion rights, and/or (iii) the series may obtain a loan from the Manager, affiliates or third parties to obtain sufficient working capital to operate the underlying asset.

 

The purchase price of Vow includes reserves for administrative and insurance Operating Expenses through April 2023 but does not include reserves for Upkeep Fees. The Company anticipates that Vow may begin racing and, thus, generating revenue in or about September 2021. Until such time, the Manager or affiliates plan to incur liabilities related to Upkeep Fees on behalf of the Series and will be entitled to reimbursement of such amount only upon a sale of the Underlying Asset or a dissolution or termination of such Series and not from Distributable Cash (as defined below) from future revenues generated by such Series (“Operating Expenses Reimbursement Obligation(s)”).

 

Should Vow need more time than anticipated in training or fails to generate sufficient revenues as expected, the Manager may loan the Series money from time-to-time to cover operating expenses or sell additional interests as described above. The Company may update racing start dates and reserve contingency timelines based on the circumstances of each race horse and, as such, actual timelines are subject to change.

 

 

 

 

 

 51 
 

 

USE OF PROCEEDS – SERIES YOU MAKE LUVIN FUN 19

 

We estimate that the gross proceeds of the Series You Make Luvin Fun 19 Offering will be $450,000.00 and assumes the full amount of the Series You Make Luvin Fun 19 Offering is sold, and will be used as follows:

 

  Dollar Amount Percentage of
Gross Cash Proceeds
Uses    
Cash Portion of the Asset Cost $240,000.00 53.33%
Brokerage Fee (1) $4,500.00 1.000%
Due Diligence Fee $67,500.00 15.00%
Offering Expenses (None) (2) $0.00 0.00%
Operating Expenses (including Prepaid Expenses but Excluding Upkeep Fees) (3)(4) 138,000.00 30.67%
Total Fees and Expenses $210,000.00 46.67%
Total Proceeds $450,000.00 100.00%

_______________________

(1) Calculation of Brokerage Fee excludes proceeds from the sale of Interests to the Manager, its affiliates, or the Horse Seller, if any.
(2) Solely in connection with the offering of the Series You Make Luvin Fun 19 Interests, the Manager has assumed and will not be reimbursed for Offering Expenses.
(3) To the extent that Operating Expenses are lower than anticipated, any overage would be maintained in an operating account for future Operating Expenses and/or Distributable Cash. The Company estimates the Cash Reserves for Operating Expenses for Series You Make Luvin Fun 19 will last through April 2023.
(4) Operating Expenses may also include Prepaid Expenses which are costs incurred prior to the offering of the Underlying Asset, including, but not limited to costs associated with the initial acquisition of the Asset, twenty-four months of initial training expenses, vet checks, blood stock fees, etc. related to the pre-offering operation of the Underlying Asset. To the extent that Prepaid Expenses are lower than anticipated, any overage would be maintained in an operating account for future Operating Expenses and/or Distributable Cash which occur after acquisition of the Underlying Asset.

 

The Company acquired the 60% interest in Magical Ways (f.k.a. You Make Luvin Fun 19) from the Horse Seller for a total cost of $240,000.00 (the “Asset Cost”) exclusive of agent fees and expenses as part of the auction.

 

The allocation of the net proceeds of the Series You Make Luvin Fun 19 Offering set forth above represents our intentions based upon our current plans and assumptions regarding industry and general economic conditions, our future revenues and expenditures. The amounts and timing of our actual expenditures will depend upon numerous factors, including market conditions, cash generated by our operations, business developments, and related rate of growth. The Manager reserves the right to modify the use of proceeds based on the factors set forth above. In the event that less than the Maximum Series You Make Luvin Fun 19 Interests are sold in connection with the Series You Make Luvin Fun 19 Offering, the Manager may pay, and not seek reimbursement for Offering Expenses and Upkeep Fees.

 

In the event that less than the “Cash Portion of the Asset Cost” of a series, including Series You Make Luvin Fun 19, is raised, (i) the Manager and/or its affiliates may exercise their right to purchase interests in the series on the same terms and conditions as the Investors, (ii) if such Underlying Asset was originally acquired by the Company or an affiliate pursuant to a Profit Participation Convertible Promissory Note or similar instrument, such party may exercise its conversion rights, and/or (iii) the series may obtain a loan from the Manager, affiliates or third parties to obtain sufficient working capital to operate the underlying asset.

 

The purchase price of Magical Ways includes reserves for administrative and insurance Operating Expenses through April 2023 but does not include reserves for Upkeep Fees. The Company anticipates that Magical Ways may begin racing and, thus, generating revenue in or about September 2021. Until such time, the Manager or affiliates plan to incur liabilities related to Upkeep Fees on behalf of the Series and will be entitled to reimbursement of such amount only upon a sale of the Underlying Asset or a dissolution or termination of such Series and not from Distributable Cash (as defined below) from future revenues generated by such Series (“Operating Expenses Reimbursement Obligation(s)”).

 

Should Magical Ways need more time than anticipated in training or fails to generate sufficient revenues as expected, the Manager may loan the Series money from time-to-time to cover operating expenses or sell additional interests as described above. The Company may update racing start dates and reserve contingency timelines based on the circumstances of each race horse and, as such, actual timelines are subject to change.

 

 

 

 

 52 
 

 

USE OF PROCEEDS – SERIES MISS SAKAMOTO

 

We estimate that the gross proceeds of the Series Miss Sakamoto Offering will be $324,000.00 and assumes the full amount of the Series Miss Sakamoto Offering is sold, and will be used as follows:

 

  Dollar Amount Percentage of
Gross Cash Proceeds
Uses    
Cash Portion of the Asset Cost $150,000.00 46.30%
Brokerage Fee (1) $3,240.00 1.000%
Due Diligence Fee $48,600.00 15.00%
Offering Expenses (None) (2) $0.00 0.00%
Operating Expenses (including Prepaid Expenses but Excluding Upkeep Fees) (3)(4) 122,160.00 37.70%
Total Fees and Expenses $174,000.00 53.70%
Total Proceeds $324,000.00 100.00%

_______________________

(1) Calculation of Brokerage Fee excludes proceeds from the sale of Interests to the Manager, its affiliates, or the Horse Seller, if any.
(2) Solely in connection with the offering of the Series Miss Sakamoto Interests, the Manager has assumed and will not be reimbursed for Offering Expenses.
(3) To the extent that Operating Expenses are lower than anticipated, any overage would be maintained in an operating account for future Operating Expenses and/or Distributable Cash. The Company estimates the Cash Reserves for Operating Expenses for Series Miss Sakamoto will last through April 2023.
(4) Operating Expenses may also include Prepaid Expenses which are costs incurred prior to the offering of the Underlying Asset, including, but not limited to costs associated with the initial acquisition of the Asset, twenty-four months of initial training expenses, vet checks, blood stock fees, etc. related to the pre-offering operation of the Underlying Asset. To the extent that Prepaid Expenses are lower than anticipated, any overage would be maintained in an operating account for future Operating Expenses and/or Distributable Cash which occur after acquisition of the Underlying Asset.

 

The Company acquired the 60% interest in Miss Sakamoto from the Horse Seller for a total cost of $150,000.00 (the “Asset Cost”) exclusive of agent fees and expenses as part of the auction.

 

The allocation of the net proceeds of the Series Miss Sakamoto Offering set forth above represents our intentions based upon our current plans and assumptions regarding industry and general economic conditions, our future revenues and expenditures. The amounts and timing of our actual expenditures will depend upon numerous factors, including market conditions, cash generated by our operations, business developments, and related rate of growth. The Manager reserves the right to modify the use of proceeds based on the factors set forth above. In the event that less than the Maximum Series Miss Sakamoto Interests are sold in connection with the Series Miss Sakamoto Offering, the Manager may pay, and not seek reimbursement for Offering Expenses and Upkeep Fees.

 

In the event that less than the “Cash Portion of the Asset Cost” of a series, including Series Miss Sakamoto, is raised, (i) the Manager and/or its affiliates may exercise their right to purchase interests in the series on the same terms and conditions as the Investors, (ii) if such Underlying Asset was originally acquired by the Company or an affiliate pursuant to a Profit Participation Convertible Promissory Note or similar instrument, such party may exercise its conversion rights, and/or (iii) the series may obtain a loan from the Manager, affiliates or third parties to obtain sufficient working capital to operate the underlying asset.

 

The purchase price of Miss Sakamoto includes reserves for administrative and insurance Operating Expenses through April 2023 but does not include reserves for Upkeep Fees. The Company anticipates that Miss Sakamoto may begin racing and, thus, generating revenue in or about September 2021. Until such time, the Manager or affiliates plan to incur liabilities related to Upkeep Fees on behalf of the Series and will be entitled to reimbursement of such amount only upon a sale of the Underlying Asset or a dissolution or termination of such Series and not from Distributable Cash (as defined below) from future revenues generated by such Series (“Operating Expenses Reimbursement Obligation(s)”).

 

Should Miss Sakamoto need more time than anticipated in training or fails to generate sufficient revenues as expected, the Manager may loan the Series money from time-to-time to cover operating expenses or sell additional interests as described above. The Company may update racing start dates and reserve contingency timelines based on the circumstances of each race horse and, as such, actual timelines are subject to change.

 

 

 

 

 53 
 

 

USE OF PROCEEDS – SERIES COURTISANE 19

 

We estimate that the gross proceeds of the Series Courtisane 19 Offering will be $490,000.00 and assumes the full amount of the Series Courtisane 19 Offering is sold, and will be used as follows:

 

  Dollar Amount Percentage of
Gross Cash Proceeds
Uses    
Cash Portion of the Asset Cost $230,000.00 46.94%
Brokerage Fee (1) $4,900.00 1.000%
Due Diligence Fee $73,500.00 15.00%
Offering Expenses (None) (2) $0.00 0.00%
Operating Expenses (including Prepaid Expenses but Excluding Upkeep Fees) (3)(4) 181,600.00 37.06%
Total Fees and Expenses $260,000.00 53.06%
Total Proceeds $490,000.00 100.00%

_______________________

(1) Calculation of Brokerage Fee excludes proceeds from the sale of Interests to the Manager, its affiliates, or the Horse Seller, if any.
(2) Solely in connection with the offering of the Series Courtisane 19 Interests, the Manager has assumed and will not be reimbursed for Offering Expenses.
(3) To the extent that Operating Expenses are lower than anticipated, any overage would be maintained in an operating account for future Operating Expenses and/or Distributable Cash. The Company estimates the Cash Reserves for Operating Expenses for Series Courtisane 19 will last through April 2023.
(4) Operating Expenses may also include Prepaid Expenses which are costs incurred prior to the offering of the Underlying Asset, including, but not limited to costs associated with the initial acquisition of the Asset, twenty-four months of initial training expenses, vet checks, blood stock fees, etc. related to the pre-offering operation of the Underlying Asset. To the extent that Prepaid Expenses are lower than anticipated, any overage would be maintained in an operating account for future Operating Expenses and/or Distributable Cash which occur after acquisition of the Underlying Asset.

 

The Company acquired the 100% interest in Courtisane 19 from the Horse Seller for a total cost of $230,000.00 (the “Asset Cost”) exclusive of agent fees and expenses as part of the auction.

 

The allocation of the net proceeds of the Series Courtisane 19 Offering set forth above represents our intentions based upon our current plans and assumptions regarding industry and general economic conditions, our future revenues and expenditures. The amounts and timing of our actual expenditures will depend upon numerous factors, including market conditions, cash generated by our operations, business developments, and related rate of growth. The Manager reserves the right to modify the use of proceeds based on the factors set forth above. In the event that less than the Maximum Series Courtisane 19 Interests are sold in connection with the Series Courtisane 19 Offering, the Manager may pay, and not seek reimbursement for Offering Expenses and Upkeep Fees.

 

In the event that less than the “Cash Portion of the Asset Cost” of a series, including Series Courtisane 19, is raised, (i) the Manager and/or its affiliates may exercise their right to purchase interests in the series on the same terms and conditions as the Investors, (ii) if such Underlying Asset was originally acquired by the Company or an affiliate pursuant to a Profit Participation Convertible Promissory Note or similar instrument, such party may exercise its conversion rights, and/or (iii) the series may obtain a loan from the Manager, affiliates or third parties to obtain sufficient working capital to operate the underlying asset.

 

The purchase price of Courtisane 19 includes reserves for administrative and insurance Operating Expenses through April 2023 but does not include reserves for Upkeep Fees. The Company anticipates that Courtisane 19 may begin racing and, thus, generating revenue in or about September 2021. Until such time, the Manager or affiliates plan to incur liabilities related to Upkeep Fees on behalf of the Series and will be entitled to reimbursement of such amount only upon a sale of the Underlying Asset or a dissolution or termination of such Series and not from Distributable Cash (as defined below) from future revenues generated by such Series (“Operating Expenses Reimbursement Obligation(s)”).

 

Should Courtisane 19 need more time than anticipated in training or fails to generate sufficient revenues as expected, the Manager may loan the Series money from time-to-time to cover operating expenses or sell additional interests as described above. The Company may update racing start dates and reserve contingency timelines based on the circumstances of each race horse and, as such, actual timelines are subject to change.

 

 

 

 

 54 
 

 

USE OF PROCEEDS – SERIES GRAND TRAVERSE BAY 19

 

We estimate that the gross proceeds of the Series Grand Traverse Bay 19 Offering will be $335,250.00 and assumes the full amount of the Series Grand Traverse Bay 19 Offering is sold, and will be used as follows:

 

  Dollar Amount Percentage of
Gross Cash Proceeds
Uses    
Cash Portion of the Asset Cost $150,000.00 44.74%
Brokerage Fee (1) $3,352.50 1.000%
Due Diligence Fee $50,287.50 15.00%
Offering Expenses (None) (2) $0.00 0.00%
Operating Expenses (including Prepaid Expenses but Excluding Upkeep Fees) (3)(4) 131,610.00 39.26%
Total Fees and Expenses $185,250.00 55.26%
Total Proceeds $335,250.00 100.00%

_______________________

(1) Calculation of Brokerage Fee excludes proceeds from the sale of Interests to the Manager, its affiliates, or the Horse Seller, if any.
(2) Solely in connection with the offering of the Series M Grand Traverse Bay 19 Interests, the Manager has assumed and will not be reimbursed for Offering Expenses.
(3) To the extent that Operating Expenses are lower than anticipated, any overage would be maintained in an operating account for future Operating Expenses and/or Distributable Cash. The Company estimates the Cash Reserves for Operating Expenses for Series Grand Traverse Bay 19 will last through April 2023.
(4) Operating Expenses may also include Prepaid Expenses which are costs incurred prior to the offering of the Underlying Asset, including, but not limited to costs associated with the initial acquisition of the Asset, twenty-four months of initial training expenses, vet checks, blood stock fees, etc. related to the pre-offering operation of the Underlying Asset. To the extent that Prepaid Expenses are lower than anticipated, any overage would be maintained in an operating account for future Operating Expenses and/or Distributable Cash which occur after acquisition of the Underlying Asset.

 

The Company acquired the 75% interest in Grand Traverse Bay 19 from the Horse Seller for a total cost of $150,000.00 (the “Asset Cost”) exclusive of agent fees and expenses as part of the auction.

 

The allocation of the net proceeds of the Series Grand Traverse Bay 19 Offering set forth above represents our intentions based upon our current plans and assumptions regarding industry and general economic conditions, our future revenues and expenditures. The amounts and timing of our actual expenditures will depend upon numerous factors, including market conditions, cash generated by our operations, business developments, and related rate of growth. The Manager reserves the right to modify the use of proceeds based on the factors set forth above. In the event that less than the Maximum Series Grand Traverse Bay 19 Interests are sold in connection with the Series Grand Traverse Bay 19 Offering, the Manager may pay, and not seek reimbursement for Offering Expenses and Upkeep Fees.

 

In the event that less than the “Cash Portion of the Asset Cost” of a series, including Series Grand Traverse Bay 19, is raised, (i) the Manager and/or its affiliates may exercise their right to purchase interests in the series on the same terms and conditions as the Investors, (ii) if such Underlying Asset was originally acquired by the Company or an affiliate pursuant to a Profit Participation Convertible Promissory Note or similar instrument, such party may exercise its conversion rights, and/or (iii) the series may obtain a loan from the Manager, affiliates or third parties to obtain sufficient working capital to operate the underlying asset.

 

The purchase price of Grand Traverse Bay 19 includes reserves for administrative and insurance Operating Expenses through April 2023 but does not include reserves for Upkeep Fees. The Company anticipates that Grand Traverse Bay 19 may begin racing and, thus, generating revenue in or about September 2021. Until such time, the Manager or affiliates plan to incur liabilities related to Upkeep Fees on behalf of the Series and will be entitled to reimbursement of such amount only upon a sale of the Underlying Asset or a dissolution or termination of such Series and not from Distributable Cash (as defined below) from future revenues generated by such Series (“Operating Expenses Reimbursement Obligation(s)”).

 

Should Grand Traverse Bay 19 need more time than anticipated in training or fails to generate sufficient revenues as expected, the Manager may loan the Series money from time-to-time to cover operating expenses or sell additional interests as described above. The Company may update racing start dates and reserve contingency timelines based on the circumstances of each race horse and, as such, actual timelines are subject to change.

 

 

 

 55 

 

 

USE OF PROCEEDS – SERIES OUR MISS JONES 19

 

We estimate that the gross proceeds of the Series Our Miss Jones 19 Offering will be $187,200.00 and assumes the full amount of the Series Our Miss Jones 19 Offering is sold, and will be used as follows:

 

  Dollar Amount Percentage of
Gross Cash Proceeds
Uses    
Cash Portion of the Asset Cost $60,000.00 32.05%
Brokerage Fee (1) $1,872.00 1.000%
Due Diligence Fee $28,080.00 15.00%
Offering Expenses (None) (2) $0.00 0.00%
Operating Expenses (including Prepaid Expenses but Excluding Upkeep Fees) (3)(4) $97,248.00 51.95%
Total Fees and Expenses $127,200.00 67.95%
Total Proceeds $187,200.00 100.00%

_______________________

(1) Calculation of Brokerage Fee excludes proceeds from the sale of Interests to the Manager, its affiliates, or the Horse Seller, if any.
(2) Solely in connection with the offering of the Series Our Miss Jones 19 Interests, the Manager has assumed and will not be reimbursed for Offering Expenses.
(3) To the extent that Operating Expenses are lower than anticipated, any overage would be maintained in an operating account for future Operating Expenses and/or Distributable Cash. The Company estimates the Cash Reserves for Operating Expenses for Series Our Miss Jones 19 will last through May 2023.
(4) Operating Expenses may also include Prepaid Expenses which are costs incurred prior to the offering of the Underlying Asset, including, but not limited to costs associated with the initial acquisition of the Asset, twenty-four months of initial training expenses, vet checks, blood stock fees, etc. related to the pre-offering operation of the Underlying Asset. To the extent that Prepaid Expenses are lower than anticipated, any overage would be maintained in an operating account for future Operating Expenses and/or Distributable Cash which occur after acquisition of the Underlying Asset.

 

The Company acquired the 60% interest in Our Miss Jones 19 from the Horse Seller for a total cost of $60,000.00 (the “Asset Cost”) exclusive of agent fees and expenses as part of the auction.

 

The allocation of the net proceeds of the Series Our Miss Jones 19 Offering set forth above represents our intentions based upon our current plans and assumptions regarding industry and general economic conditions, our future revenues and expenditures. The amounts and timing of our actual expenditures will depend upon numerous factors, including market conditions, cash generated by our operations, business developments, and related rate of growth. The Manager reserves the right to modify the use of proceeds based on the factors set forth above. In the event that less than the Maximum Series Our Miss Jones 19 Interests are sold in connection with the Series Our Miss Jones 19 Offering, the Manager may pay, and not seek reimbursement for Offering Expenses and Upkeep Fees.

 

In the event that less than the “Cash Portion of the Asset Cost” of a series, including Series Our Miss Jones 19, is raised, (i) the Manager and/or its affiliates may exercise their right to purchase interests in the series on the same terms and conditions as the Investors, (ii) if such Underlying Asset was originally acquired by the Company or an affiliate pursuant to a Profit Participation Convertible Promissory Note or similar instrument, such party may exercise its conversion rights, and/or (iii) the series may obtain a loan from the Manager, affiliates or third parties to obtain sufficient working capital to operate the underlying asset.

 

The purchase price of Our Miss Jones 19 includes reserves for administrative and insurance Operating Expenses through May 2023 but does not include reserves for Upkeep Fees. The Company anticipates that Our Miss Jones 19 may begin racing and, thus, generating revenue in or about August 2021. Until such time, the Manager or affiliates plan to incur liabilities related to Upkeep Fees on behalf of the Series and will be entitled to reimbursement of such amount only upon a sale of the Underlying Asset or a dissolution or termination of such Series and not from Distributable Cash (as defined below) from future revenues generated by such Series (“Operating Expenses Reimbursement Obligation(s)”).

 

Should Our Miss Jones 19 need more time than anticipated in training or fails to generate sufficient revenues as expected, the Manager may loan the Series money from time-to-time to cover operating expenses or sell additional interests as described above. The Company may update racing start dates and reserve contingency timelines based on the circumstances of each race horse and, as such, actual timelines are subject to change.

 

 

 

 56 

 

 

USE OF PROCEEDS – SERIES MARGARITA FRIDAY 19

 

We estimate that the gross proceeds of the Series Margarita Friday 19 Offering will be $332,000.00 and assumes the full amount of the Series Margarita Friday Bay 19 Offering is sold, and will be used as follows:

 

  Dollar Amount Percentage of
Gross Cash Proceeds
Uses    
Cash Portion of the Asset Cost $110,000.00 33.13%
Brokerage Fee (1) $3,320.00 1.000%
Due Diligence Fee $49,800.00 15.00%
Offering Expenses (None) (2) $0.00 0.00%
Operating Expenses (including Prepaid Expenses but Excluding Upkeep Fees) (3)(4) $168,880.00 50.87%
Total Fees and Expenses $222,000.00 66.87%
Total Proceeds $332,000.00 100.00%

_______________________

(1) Calculation of Brokerage Fee excludes proceeds from the sale of Interests to the Manager, its affiliates, or the Horse Seller, if any.
(2) Solely in connection with the offering of the Series Margarita Friday 19 Interests, the Manager has assumed and will not be reimbursed for Offering Expenses.
(3) To the extent that Operating Expenses are lower than anticipated, any overage would be maintained in an operating account for future Operating Expenses and/or Distributable Cash. The Company estimates the Cash Reserves for Operating Expenses for Series Margarita Friday 19 will last through May 2023.
(4) Operating Expenses may also include Prepaid Expenses which are costs incurred prior to the offering of the Underlying Asset, including, but not limited to costs associated with the initial acquisition of the Asset, twenty-four months of initial training expenses, vet checks, blood stock fees, etc. related to the pre-offering operation of the Underlying Asset. To the extent that Prepaid Expenses are lower than anticipated, any overage would be maintained in an operating account for future Operating Expenses and/or Distributable Cash which occur after acquisition of the Underlying Asset.

 

The Company acquired the 100% interest in Margarita Friday 19 from the Horse Seller for a total cost of $110,000.00 (the “Asset Cost”) exclusive of agent fees and expenses as part of the auction.

 

The allocation of the net proceeds of the Series Margarita Friday 19 Offering set forth above represents our intentions based upon our current plans and assumptions regarding industry and general economic conditions, our future revenues and expenditures. The amounts and timing of our actual expenditures will depend upon numerous factors, including market conditions, cash generated by our operations, business developments, and related rate of growth. The Manager reserves the right to modify the use of proceeds based on the factors set forth above. In the event that less than the Maximum Series Margarita Friday 19 Interests are sold in connection with the Series Margarita Friday 19 Offering, the Manager may pay, and not seek reimbursement for Offering Expenses and Upkeep Fees.

 

In the event that less than the “Cash Portion of the Asset Cost” of a series, including Series Margarita Friday 19, is raised, (i) the Manager and/or its affiliates may exercise their right to purchase interests in the series on the same terms and conditions as the Investors, (ii) if such Underlying Asset was originally acquired by the Company or an affiliate pursuant to a Profit Participation Convertible Promissory Note or similar instrument, such party may exercise its conversion rights, and/or (iii) the series may obtain a loan from the Manager, affiliates or third parties to obtain sufficient working capital to operate the underlying asset.

 

The purchase price of Margarita Friday 19 includes reserves for administrative and insurance Operating Expenses through May 2023 but does not include reserves for Upkeep Fees. The Company anticipates that Margarita Friday 19 may begin racing and, thus, generating revenue in or about September 2021. Until such time, the Manager or affiliates plan to incur liabilities related to Upkeep Fees on behalf of the Series and will be entitled to reimbursement of such amount only upon a sale of the Underlying Asset or a dissolution or termination of such Series and not from Distributable Cash (as defined below) from future revenues generated by such Series (“Operating Expenses Reimbursement Obligation(s)”).

 

Should Margarita Friday 19 need more time than anticipated in training or fails to generate sufficient revenues as expected, the Manager may loan the Series money from time-to-time to cover operating expenses or sell additional interests as described above. The Company may update racing start dates and reserve contingency timelines based on the circumstances of each race horse and, as such, actual timelines are subject to change.

 

 

 

 57 

 

 

USE OF PROCEEDS – SERIES QUEEN AMIRA 19

 

We estimate that the gross proceeds of the Series Queen Amira 19 Offering will be $330,000.00 and assumes the full amount of the Series Queen Amira 19 Offering is sold, and will be used as follows:

 

  Dollar Amount Percentage of
Gross Cash Proceeds
Uses    
Cash Portion of the Asset Cost $120,000.00 36.36%
Brokerage Fee (1) $3,300.00 1.000%
Due Diligence Fee $49,500.00 15.00%
Offering Expenses (None) (2) $0.00 0.00%
Operating Expenses (including Prepaid Expenses but Excluding Upkeep Fees) (3)(4) $157,200.00 47.64%
Total Fees and Expenses $210,000.00 63.64%
Total Proceeds $330,000.00 100.00%

_______________________

(1) Calculation of Brokerage Fee excludes proceeds from the sale of Interests to the Manager, its affiliates, or the Horse Seller, if any.
(2) Solely in connection with the offering of the Series Queen Amira 19 Interests, the Manager has assumed and will not be reimbursed for Offering Expenses.
(3) To the extent that Operating Expenses are lower than anticipated, any overage would be maintained in an operating account for future Operating Expenses and/or Distributable Cash. The Company estimates the Cash Reserves for Operating Expenses for Series Queen Amira 19 will last through May 2023.
(4) Operating Expenses may also include Prepaid Expenses which are costs incurred prior to the offering of the Underlying Asset, including, but not limited to costs associated with the initial acquisition of the Asset, twenty-four months of initial training expenses, vet checks, blood stock fees, etc. related to the pre-offering operation of the Underlying Asset. To the extent that Prepaid Expenses are lower than anticipated, any overage would be maintained in an operating account for future Operating Expenses and/or Distributable Cash which occur after acquisition of the Underlying Asset.

 

The Company acquired the 100% interest in Queen Amira 19 from the Horse Seller for a total cost of $120,000.00 (the “Asset Cost”) exclusive of agent fees and expenses as part of the auction.

 

The allocation of the net proceeds of the Series Queen Amira 19 Offering set forth above represents our intentions based upon our current plans and assumptions regarding industry and general economic conditions, our future revenues and expenditures. The amounts and timing of our actual expenditures will depend upon numerous factors, including market conditions, cash generated by our operations, business developments, and related rate of growth. The Manager reserves the right to modify the use of proceeds based on the factors set forth above. In the event that less than the Maximum Series Queen Amira 19 Interests are sold in connection with the Series Queen Amira 19 Offering, the Manager may pay, and not seek reimbursement for Offering Expenses and Upkeep Fees.

 

In the event that less than the “Cash Portion of the Asset Cost” of a series, including Series Queen Amira 19, is raised, (i) the Manager and/or its affiliates may exercise their right to purchase interests in the series on the same terms and conditions as the Investors, (ii) if such Underlying Asset was originally acquired by the Company or an affiliate pursuant to a Profit Participation Convertible Promissory Note or similar instrument, such party may exercise its conversion rights, and/or (iii) the series may obtain a loan from the Manager, affiliates or third parties to obtain sufficient working capital to operate the underlying asset.

 

The purchase price of Queen Amira 19 includes reserves for administrative and insurance Operating Expenses through May 2023 but does not include reserves for Upkeep Fees. The Company anticipates that Queen Amira 19 may begin racing and, thus, generating revenue in or about October 2021. Until such time, the Manager or affiliates plan to incur liabilities related to Upkeep Fees on behalf of the Series and will be entitled to reimbursement of such amount only upon a sale of the Underlying Asset or a dissolution or termination of such Series and not from Distributable Cash (as defined below) from future revenues generated by such Series (“Operating Expenses Reimbursement Obligation(s)”).

 

Should Queen Amira 19 need more time than anticipated in training or fails to generate sufficient revenues as expected, the Manager may loan the Series money from time-to-time to cover operating expenses or sell additional interests as described above. The Company may update racing start dates and reserve contingency timelines based on the circumstances of each race horse and, as such, actual timelines are subject to change.

 

 

 

 58 

 

 

USE OF PROCEEDS – SERIES SALUTE TO AMERICA

 

We estimate that the gross proceeds of the Series Salute to America Offering will be $273,000.00 and assumes the full amount of the Series Salute to America Offering is sold, and will be used as follows:

 

  Dollar Amount Percentage of
Gross Cash Proceeds
Uses    
Cash Portion of the Asset Cost $80,000.00 29.30%
Brokerage Fee (1) $2,730.00 1.000%
Due Diligence Fee $40,950.00 15.00%
Offering Expenses (None) (2) $0.00 0.00%
Operating Expenses (including Prepaid Expenses but Excluding Upkeep Fees) (3)(4) $149,320.00 54.70%
Total Fees and Expenses $193,000.00 70.70%
Total Proceeds $273,000.00 100.00%

_______________________

(1) Calculation of Brokerage Fee excludes proceeds from the sale of Interests to the Manager, its affiliates, or the Horse Seller, if any.
(2) Solely in connection with the offering of the Series Salute to America Interests, the Manager has assumed and will not be reimbursed for Offering Expenses.
(3) To the extent that Operating Expenses are lower than anticipated, any overage would be maintained in an operating account for future Operating Expenses and/or Distributable Cash. The Company estimates the Cash Reserves for Operating Expenses for Series Salute to America will last through May 2023.
(4) Operating Expenses may also include Prepaid Expenses which are costs incurred prior to the offering of the Underlying Asset, including, but not limited to costs associated with the initial acquisition of the Asset, twenty-four months of initial training expenses, vet checks, blood stock fees, etc. related to the pre-offering operation of the Underlying Asset. To the extent that Prepaid Expenses are lower than anticipated, any overage would be maintained in an operating account for future Operating Expenses and/or Distributable Cash which occur after acquisition of the Underlying Asset.

 

The Company acquired the 100% interest in Salute to America from the Horse Seller for a total cost of $80,000.00 (the “Asset Cost”) exclusive of agent fees and expenses as part of the auction.

 

The allocation of the net proceeds of the Series Salute to America Offering set forth above represents our intentions based upon our current plans and assumptions regarding industry and general economic conditions, our future revenues and expenditures. The amounts and timing of our actual expenditures will depend upon numerous factors, including market conditions, cash generated by our operations, business developments, and related rate of growth. The Manager reserves the right to modify the use of proceeds based on the factors set forth above. In the event that less than the Maximum Series Salute to America Interests are sold in connection with the Series Salute to America Offering, the Manager may pay, and not seek reimbursement for Offering Expenses and Upkeep Fees.

 

In the event that less than the “Cash Portion of the Asset Cost” of a series, including Series Salute to America, is raised, (i) the Manager and/or its affiliates may exercise their right to purchase interests in the series on the same terms and conditions as the Investors, (ii) if such Underlying Asset was originally acquired by the Company or an affiliate pursuant to a Profit Participation Convertible Promissory Note or similar instrument, such party may exercise its conversion rights, and/or (iii) the series may obtain a loan from the Manager, affiliates or third parties to obtain sufficient working capital to operate the underlying asset.

 

The purchase price of Salute to America includes reserves for administrative and insurance Operating Expenses through May 2023 but does not include reserves for Upkeep Fees. The Company anticipates that Salute to America may begin racing and, thus, generating revenue in or about October 2021. Until such time, the Manager or affiliates plan to incur liabilities related to Upkeep Fees on behalf of the Series and will be entitled to reimbursement of such amount only upon a sale of the Underlying Asset or a dissolution or termination of such Series and not from Distributable Cash (as defined below) from future revenues generated by such Series (“Operating Expenses Reimbursement Obligation(s)”).

 

Should Salute to America need more time than anticipated in training or fails to generate sufficient revenues as expected, the Manager may loan the Series money from time-to-time to cover operating expenses or sell additional interests as described above. The Company may update racing start dates and reserve contingency timelines based on the circumstances of each race horse and, as such, actual timelines are subject to change.

 

 

 

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USE OF PROCEEDS – SERIES DESIRE STREET 19

 

We estimate that the gross proceeds of the Series Desire Street 19 Offering will be $205,020.00 and assumes the full amount of the Series Desire Street 19 Offering is sold, and will be used as follows:

 

  Dollar Amount Percentage of
Gross Cash Proceeds
Uses    
Cash Portion of the Asset Cost $81,600.00 39.80%
Brokerage Fee (1) $2,050.20 1.000%
Due Diligence Fee $30,753.00 15.00%
Offering Expenses (None) (2) $0.00 0.00%
Operating Expenses (including Prepaid Expenses but Excluding Upkeep Fees) (3)(4) $90,616.80 44.20%
Total Fees and Expenses $123,420.00 60.20%
Total Proceeds $205,020.00 100.00%

_______________________

(1) Calculation of Brokerage Fee excludes proceeds from the sale of Interests to the Manager, its affiliates, or the Horse Seller, if any.
(2) Solely in connection with the offering of the Series Desire Street 19 Interests, the Manager has assumed and will not be reimbursed for Offering Expenses.
(3) To the extent that Operating Expenses are lower than anticipated, any overage would be maintained in an operating account for future Operating Expenses and/or Distributable Cash. The Company estimates the Cash Reserves for Operating Expenses for Series Desire Street 19 will last through May 2023.
(4) Operating Expenses may also include Prepaid Expenses which are costs incurred prior to the offering of the Underlying Asset, including, but not limited to costs associated with the initial acquisition of the Asset, twenty-four months of initial training expenses, vet checks, blood stock fees, etc. related to the pre-offering operation of the Underlying Asset. To the extent that Prepaid Expenses are lower than anticipated, any overage would be maintained in an operating account for future Operating Expenses and/or Distributable Cash which occur after acquisition of the Underlying Asset.

 

The Company acquired the 51% interest in Desire Street 19 from the Horse Seller for a total cost of $81,600.00 (the “Asset Cost”) exclusive of agent fees and expenses as part of the auction.

 

The allocation of the net proceeds of the Series Desire Street 19 Offering set forth above represents our intentions based upon our current plans and assumptions regarding industry and general economic conditions, our future revenues and expenditures. The amounts and timing of our actual expenditures will depend upon numerous factors, including market conditions, cash generated by our operations, business developments, and related rate of growth. The Manager reserves the right to modify the use of proceeds based on the factors set forth above. In the event that less than the Maximum Series Desire Street 19 Interests are sold in connection with the Series Desire Street 19 Offering, the Manager may pay, and not seek reimbursement for Offering Expenses and Upkeep Fees.

 

In the event that less than the “Cash Portion of the Asset Cost” of a series, including Series Desire Street 19, is raised, (i) the Manager and/or its affiliates may exercise their right to purchase interests in the series on the same terms and conditions as the Investors, (ii) if such Underlying Asset was originally acquired by the Company or an affiliate pursuant to a Profit Participation Convertible Promissory Note or similar instrument, such party may exercise its conversion rights, and/or (iii) the series may obtain a loan from the Manager, affiliates or third parties to obtain sufficient working capital to operate the underlying asset.

 

The purchase price of Desire Street 19 includes reserves for administrative and insurance Operating Expenses through May 2023 but does not include reserves for Upkeep Fees. The Company anticipates that Desire Street 19 may begin racing and, thus, generating revenue in or about October 2021. Until such time, the Manager or affiliates plan to incur liabilities related to Upkeep Fees on behalf of the Series and will be entitled to reimbursement of such amount only upon a sale of the Underlying Asset or a dissolution or termination of such Series and not from Distributable Cash (as defined below) from future revenues generated by such Series (“Operating Expenses Reimbursement Obligation(s)”).

 

Should Desire Street 19 need more time than anticipated in training or fails to generate sufficient revenues as expected, the Manager may loan the Series money from time-to-time to cover operating expenses or sell additional interests as described above. The Company may update racing start dates and reserve contingency timelines based on the circumstances of each race horse and, as such, actual timelines are subject to change.

 

 

 

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DESCRIPTION OF LAFORGIA

(F.K.A. LOST EMPIRE 19)

 

Summary Overview

 

  · Laforgia is a 2019 Colt of Into Mischief (Sire) and Lost Empire (Dam).
  · Laforgia was foaled on April 13, 2019.  
  · Laforgia has a limited track record under which to assess its performance.
  · Current horse value set at $450,000 with the Company acquiring a 51% stake in Laforgia acquired via loan from the Manager.

  

Co-Ownership Description

 

As set forth in the Equine Co-Ownership and Acquisition Agreement for Laforgia, the Company will hold a 51.0% stake in Laforgia’s co-ownership group. The Manager will serve as the syndicate/co-ownership manager and will have the right to assign the racing manager, training schedule, and other day-to-day rights. The co-owners (which, for the avoidance of doubt, are not the series members) will have voting rights as it relates to Laforgia related to selling the horse, breeding the horse, gelding the horse, marketing and sponsorships and racing in claiming races. When Laforgia moves into its stallion career, the co-owners will be required to provide consent on fees, major expenses and final sale.

 

In the event the horse wins a “Grade 1” race in in the United States on a dirt surface only, then the Horse Seller shall pay the co-ownership a one-time bonus of the sum of $5,000,000 within thirty days after the winner’s purse has been distributed to the co-ownership which sum shall be divided pro rata among the co-owners within 21 days after receipt by the co-ownership.

 

The above bonus will only serve as a nonrefundable advance on the expected increase in the horse’s value as a stallion prospect and the Horse Seller shall be entitled to a credit equal to the bonus advanced from the co-ownership upon a final sale of the horse. The re-payment of the bonus will be first priority along with re-payment of training fee expenses incurred by Horse Seller on behalf of the series before any distributions made to co-owners, and, eventually, the series and its members.

 

The bonus will be void and shall not be due or owing if the decision is made to geld the horse prior to winning the Grade 1 race in the United States on a dirt surface.

 

In the event that the bonus is earned and actually paid by Horse Seller, the horse shall retire from racing after the Breeders’ Cup races of its three year old season, unless the co-owners (not the series members) vote by unanimous consent to continue racing into the four year old season.

 

Spendthrift is the co-owner and Horse Seller for Laforgia. On March 17, 2020, an affiliate of Spendthrift became a majority stockholder in Experiential Squared, Inc., the Manager of the Company. Laforgia was originally acquired by Spendthrift at auction and the auction price (plus out of pocket expenses incurred) is the horse value upon which the Company's 51.0% stake was valued. The purchase price for Laforgia is payable to Spendthrift as the Horse Seller. In addition, each co-owner pays a proportionate share of co-ownership expenses for the mutual benefit of the co-owners. On occasion, such expenses may be payable to Spendthrift.

 

 

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Asset Description

 

 

 

 

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DESCRIPTION OF PROVOCATEUR

(F.K.A. CAYALA 19)

 

Summary Overview

 

  · Provocateur is a 2019 Colt of Into Mischief (Sire) and Cayala (Dam).
  · Provocateur was foaled on April 18, 2019.
  · Provocateur has a limited track record under which to assess its performance.
  · Current horse value set at $600,000 with the Company acquiring a 51% stake in Provocateur acquired via loan from the Manager.

  

Co-Ownership Description

 

As set forth in the Equine Co-Ownership and Acquisition Agreement for Provocateur, the Company will hold a 51.0% stake in Provocateur’s co-ownership group with 41% held in this Series Cayala 19 and 10% held in Series Future Stars Stable. The Manager will serve as the syndicate/co-ownership manager and will have the right to assign the racing manager, training schedule, and other day-to-day rights. The co-owners (which, for the avoidance of doubt, are not the series members) will have voting rights as it relates to Provocateur related to selling the horse, breeding the horse, gelding the horse, marketing and sponsorships and racing in claiming races. When Provocateur moves into its stallion career, the co-owners will be required to provide consent on fees, major expenses and final sale.

 

In the event the horse wins a “Grade 1” race in in the United States on a dirt surface only, then the Horse Seller shall pay the co-ownership a one-time bonus of the sum of $5,000,000 within thirty days after the winner’s purse has been distributed to the co-ownership which sum shall be divided pro rata among the co-owners within 21 days after receipt by the co-ownership.

 

The above bonus will only serve as a nonrefundable advance on the expected increase in the horse’s value as a stallion prospect and the Horse Seller shall be entitled to a credit equal to the bonus advanced from the co-ownership upon a final sale of the horse. The re-payment of the bonus will be first priority along with re-payment of training fee expenses incurred by Horse Seller on behalf of the series before any distributions made to co-owners, and, eventually, the series and its members.

 

The bonus will be void and shall not be due or owing if the decision is made to geld the horse prior to winning the Grade 1 race in the United States on a dirt surface.

 

In the event that the bonus is earned and actually paid by Horse Seller, the horse shall retire from racing after the Breeders’ Cup races of its three year old season, unless the co-owners (not the series members) vote by unanimous consent to continue racing into the four year old season.

 

Spendthrift is the co-owner and Horse Seller for Provocateur. On March 17, 2020, an affiliate of Spendthrift became a majority stockholder in Experiential Squared, Inc., the Manager of the Company. Provocateur was originally acquired by Spendthrift at auction and the auction price (plus out of pocket expenses incurred) is the horse value upon which the Company's 51.0% stake was valued. The purchase price for Provocateur is payable to Spendthrift as the Horse Seller. In addition, each co-owner pays a proportionate share of co-ownership expenses for the mutual benefit of the co-owners. On occasion, such expenses may be payable to Spendthrift.

 

 

 

 

 

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Asset Description

 

 

 

 

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DESCRIPTION OF SACRED BEAUTY

(F.K.A. CONSECRATE 19)

 

 

Summary Overview

 

  · Sacred Beauty is a 2019 Filly of Classic Empire (Sire) and Consecrate (Dam).
  · Sacred Beauty was foaled on March 10, 2019.  
  · Sacred Beauty has a limited track record under which to assess its performance.
  · Current horse value set at $80,000 with the Company acquiring a 51% stake in Sacred Beauty acquired via loan from the Manager.

  

Co-Ownership Description

 

As set forth in the Equine Co-Ownership and Acquisition Agreement for Sacred Beauty, the Company will hold a 51.0% stake in Sacred Beauty’s co-ownership group with 41% held in this Series Consecrate 19 and 10% held in Series Future Stars Stable. The Manager will serve as the syndicate/co-ownership manager and will have the right to assign the racing manager, training schedule, and other day-to-day rights. The co-owners (which, for the avoidance of doubt, are not the series members) will have voting rights as it relates to Sacred Beauty related to selling the horse, breeding the horse, gelding the horse, marketing and sponsorships and racing in claiming races. When Sacred Beauty moves into its broodmare career, the co-owners will be required to provide consent on fees, major expenses and final sale.

 

In the event the horse wins a “Grade 1” race in in the United States, then the Horse Seller shall pay the co-ownership a one-time bonus of the sum of $500,000 within thirty days after the win is declared official. In the event the horse wins a “Grade 2” race in the United States, then the Horse Seller shall pay the co-ownership a one-time bonus of the sum of $250,000 within thirty days after the win is declared official. In the event the horse wins a “Grade 3” race in the United States, then the Horse Seller shall pay the co-ownership a one-time bonus of the sum of $100,000 within thirty days after the win is declared official. The total bonus will be capped at $500,000.

 

The above bonus will only serve as a nonrefundable advance on the expected increase in the horse’s value as a broodmare prospect and the Horse Seller shall be entitled to a credit equal to the bonus advanced from the co-ownership upon a final sale of the horse. The re-payment of the bonus will be first priority along with re-payment of training fee expenses incurred by Horse Seller on behalf of the series before any distributions made to co-owners, including the series and its members.

  

In the event that the bonus is earned and actually paid by Horse Seller, the horse shall retire from racing after the Breeders’ Cup races of its three year old season, unless the co-owners (not the series members) vote by unanimous consent to continue racing into the four year old season.

 

Spendthrift is the co-owner and Horse Seller for Sacred Beauty. On March 17, 2020, an affiliate of Spendthrift became a majority stockholder in Experiential Squared, Inc., the Manager of the Company. Sacred Beauty was originally acquired by Spendthrift at auction and the auction price (plus out of pocket expenses incurred) is the horse value upon which the Company's 51.0% stake was valued. The purchase price for Sacred Beauty is payable to Spendthrift as the Horse Seller. In addition, each co-owner pays a proportionate share of co-ownership expenses for the mutual benefit of the co-owners. On occasion, such expenses may be payable to Spendthrift.

 

 

 

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Asset Description 

 

 

 

 

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DESCRIPTION OF FUTURE STARS STABLE

 

Summary Overview

 

Man Among Men 

  · Man Among Men is a 2019 Colt of War Front (Sire) and Key To My Heart (Dam).
  · Man Among Men was foaled on February 18, 2019.  
  · Man Among Men has a limited track record under which to assess its performance.
  · Current horse value set at $360,000 with the Series acquiring a 10% stake in Man Among Men acquired via loan from the Manager.

  

 

Frosted Oats

  · Frosted Oats is a 2019 Filly of Frosted (Sire) and More Oats Please (Dam).
  · Frosted Oats was foaled on February 26, 2019.  
  · Frosted Oats has a limited track record under which to assess its performance.
  · Current horse value set at $250,000 with the Series acquiring a 10% stake in Frosted Oats acquired via loan from the Manager.

  

 

Infinite Empire (f.k.a. Tapitry 19)

  · Infinite Empire is a 2019 Filly of Empire Maker (Sire) and Tapitry (Dam).
  · Infinite Empire was foaled on January 29, 2019.  
  · Infinite Empire has a limited track record under which to assess its performance.
  · Current horse value set at $360,000 with the Series acquiring a 10% stake in Infinite Empire acquired via loan from the Manager.

  

 

Sixtythreecaliber (f.k.a. Classofsixtythree 19)

  · Sixtythreecaliber is a 2019 Filly of Gun Runner (Sire) and Classofsixtythree (Dam).  
  · Sixtythreecaliber was foaled on May 5, 2019.  
  · Sixtythreecaliber has a limited track record under which to assess its performance.
  · Current horse value set at $250,000 with the Series acquiring a 10% stake in Sixtythreecaliber acquired via loan from the Manager.

  

Provocateur (f.k.a. Cayala 19)

  · Provocateur is a 2019 Colt of Into Mischief (Sire) and Cayala (Dam).
  · Provocateur was foaled on April 18, 2019.  
  · Provocateur has a limited track record under which to assess its performance.
  · Current horse value set at $600,000 with the Series acquiring a 10% stake in Provocateur acquired via loan from the Manager.

  

 

A Mo Reay (f.k.a. Margaret Reay 19)

  · A Mo Reay is a Filly of Uncle Mo (Sire) and Margaret Reay (Dam).
  · A Mo Reay was foaled on March 22, 2019.    
  · A Mo Reay has a limited track record under which to assess its performance.
  · Current horse value set at $400,000 with the Series acquiring a 10% stake in A Mo Reay acquired via loan from the Manager.

 

 

 

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Can’t Hush This (f.k.a. Awe Hush 19)

  · Can’t Hush This is a 2019 Colt of Not This Time (Sire) and Awe Hush (Dam).
  · Can’t Hush This was foaled on April 10, 2019.   
  · Can’t Hush This has a limited track record under which to assess its performance.
  · Current horse value set at $220,000 with the Series acquiring a 10% stake in Can’t Hush This acquired via loan from the Manager.

 

 

Above Suspicion (f.k.a. Exonerated 19)

  · Above Suspicion is a 2019 Filly of Honor Code (Sire) and Exonerated (Dam).
  · Above Suspicion was foaled on April 21, 2019.  
  · Above Suspicion has a limited track record under which to assess its performance.
  · Current horse value set at $210,000 with the Company acquiring a 51% stake in Above Suspicion acquired via loan from the Manager.

 

 

Ancient Royalty (f.k.a. Speightstown Belle 19)

 

On April 26, 2021, Ancient Royalty, one of the underlying assets of Series Future Stars Stable, died. The Company held mortality insurance on Ancient Royalty. See the Company’s Form 1-U filed with the SEC on April 30, 2021. Due to the value of mortality insurance and the large volume of other assets in Series Future Stars Stable, the Series Future Stars Stable Offering will remain active.

 

 

Sacred Beauty (f.k.a. Consecrate 19)

  · Sacred Beauty is a 2019 Filly of Classic Empire (Sire) and Consecrate (Dam).
  · Sacred Beauty was foaled on March 10, 2019.    
  · Sacred Beauty has a limited track record under which to assess its performance.
  · Current horse value set at $80,000 with the Series acquiring a 10% stake in Sacred Beauty acquired via loan from the Manager.

  

 

Inalattetrouble (f.k.a. Latte Da 19)

  · Inalattetrouble is a 2019 Filly of Into Mischief (Sire) and Latte Da (Dam).
  · Inalattetrouble was foaled on April 13, 2019.  
  · Inalattetrouble has a limited track record under which to assess its performance.
  · Current horse value set at $195,000 with the Series acquiring a 10% stake in Inalattetrouble acquired via loan from the Manager.

  

 

Dolce Notte (f.k.a. Midnight Sweetie 19)

  · Dolce Notte is a 2019 Filly of Bernardini (Sire) and Midnight Sweetie (Dam).
  · Dolce Notte was foaled on March 10, 2019.  
  · Dolce Notte has a limited track record under which to assess its performance.
  · Current horse value set at $180,000 with the Series acquiring a 10% stake in Dolce Notte acquired via loan from the Manager.  

  

 

Lookwhogotlucky (f.k.a. Ambleside Park 19)

  · Lookwhogotlucky is a 2019 Colt of Lookin At Lucky (Sire) and Ambleside Park (Dam).
  · Lookwhogotlucky was foaled on April 5, 2019.  
  · Lookwhogotlucky has a limited track record under which to assess its performance.
  · Current horse value set at $115,000 with the Series acquiring a 10% stake in Lookwhogotlucky acquired via loan from the Manager.

 

 

 

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Quantum Theory (f.k.a. Athenian Beauty 19)

  · Quantum Theory is a 2019 Colt of Connect (Sire) and Athenian Beauty (Dam).
  · Quantum Theory was foaled on January 28, 2019.  
  · Quantum Theory has a limited track record under which to assess its performance.
  · Current horse value set at $50,000 with the Series acquiring a 10% stake in Quantum Theory acquired via loan from the Manager.

 

Co-Ownership Description

 

Man Among Men

 

As set forth in the Equine Co-Ownership and Acquisition Agreement for Man Among Men, the Company will hold a 51.0% stake in Man Among Men’s co-ownership group. The Manager will serve as the syndicate/co-ownership manager and will have the right to assign the racing manager, training schedule, and other day-to-day rights. The co-owners (which, for the avoidance of doubt, are not the series members) will have voting rights as it relates to Man Among Men related to selling the horse, breeding the horse, gelding the horse, marketing and sponsorships and racing in claiming races. When Man Among Men moves into its broodmare career, the co-owners will be required to provide consent on fees, major expenses and final sale.

 

In the event the horse wins a “Grade 1” race in in the United States on a dirt surface only, then the Horse Seller shall pay the co-ownership a one-time bonus of the sum of $5,000,000 within thirty days after the winner’s purse has been distributed to the co-ownership which sum shall be divided pro rata among the co-owners within 21 days after receipt by the co-ownership.

 

The above bonus will only serve as a nonrefundable advance on the expected increase in the horse’s value as a stallion prospect and the Horse Seller shall be entitled to a credit equal to the bonus advanced from the co-ownership upon a final sale of the horse. The re-payment of the bonus will be first priority along with re-payment of training fee expenses incurred by Horse Seller on behalf of the series before any distributions made to co-owners, and, eventually, the series and its members.

 

The bonus will be void and shall not be due or owing if the decision is made to geld the horse prior to winning the Grade 1 race in the United States on a dirt surface.

 

In the event that the bonus is earned and actually paid by Horse Seller, the horse shall retire from racing after the Breeders’ Cup races of its three year old season, unless the co-owners (not the series members) vote by unanimous consent to continue racing into the four year old season.

 

Spendthrift is the co-owner and Horse Seller for Man Among Men. On March 17, 2020, an affiliate of Spendthrift became a majority stockholder in Experiential Squared, Inc., the Manager of the Company. Man Among Men was originally acquired by Spendthrift at auction and the auction price (plus out of pocket expenses incurred) is the horse value upon which the Company's 51.0% stake was valued. The purchase price for Man Among Men is payable to Spendthrift as the Horse Seller. In addition, each co-owner pays a proportionate share of co-ownership expenses for the mutual benefit of the co-owners. On occasion, such expenses may be payable to Spendthrift.

 

Frosted Oats

 

As set forth in the Equine Co-Ownership and Acquisition Agreement for Frosted Oats, the Company will hold a 51.0% stake in Frosted Oats’ co-ownership group. The Manager will serve as the syndicate/co-ownership manager and will have the right to assign the racing manager, training schedule, and other day-to-day rights. The co-owners (which, for the avoidance of doubt, are not the series members) will have voting rights as it relates to Frosted Oats related to selling the horse, breeding the horse, gelding the horse, marketing and sponsorships and racing in claiming races. When Frosted Oats moves into its broodmare career, the co-owners will be required to provide consent on fees, major expenses and final sale.

 

 

 

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In the event the horse wins a “Grade 1” race in in the United States, then the Horse Seller shall pay the co-ownership a one-time bonus of the sum of $500,000 within thirty days after the win is declared official. In the event the horse wins a “Grade 2” race in the United States, then the Horse Seller shall pay the co-ownership a one-time bonus of the sum of $250,000 within thirty days after the win is declared official. In the event the horse wins a “Grade 3” race in the United States, then the Horse Seller shall pay the co-ownership a one-time bonus of the sum of $100,000 within thirty days after the win is declared official. The total bonus will be capped at $500,000.

 

The above bonus will only serve as a nonrefundable advance on the expected increase in the horse’s value as a broodmare prospect and the Horse Seller shall be entitled to a credit equal to the bonus advanced from the co-ownership upon a final sale of the horse. The re-payment of the bonus will be first priority along with re-payment of training fee expenses incurred by Horse Seller on behalf of the series before any distributions made to co-owners, including the series and its members.

  

In the event that the bonus is earned and actually paid by Horse Seller, the horse shall retire from racing after the Breeders’ Cup races of its three year old season, unless the co-owners (not the series members) vote by unanimous consent to continue racing into the four year old season.

 

Spendthrift is the co-owner and Horse Seller for Frosted Oats. On March 17, 2020, an affiliate of Spendthrift became a majority stockholder in Experiential Squared, Inc., the Manager of the Company. Frosted Oats was originally acquired by Spendthrift at auction and the auction price (plus out of pocket expenses incurred) is the horse value upon which the Company's 51.0% stake was valued. The purchase price for Frosted Oats is payable to Spendthrift as the Horse Seller. In addition, each co-owner pays a proportionate share of co-ownership expenses for the mutual benefit of the co-owners. On occasion, such expenses may be payable to Spendthrift.

  

Infinite Empire (f.k.a. Tapitry 19)

 

As set forth in the Equine Co-Ownership and Acquisition Agreement for Infinite Empire, the Company will hold a 51.0% stake in Infinite Empire’s co-ownership group. The Manager will serve as the syndicate/co-ownership manager and will have the right to assign the racing manager, training schedule, and other day-to-day rights. The co-owners (which, for the avoidance of doubt, are not the series members) will have voting rights as it relates to Infinite Empire related to selling the horse, breeding the horse, gelding the horse, marketing and sponsorships and racing in claiming races. When Infinite Empire moves into its broodmare career, the co-owners will be required to provide consent on fees, major expenses and final sale.

 

In the event the horse wins a “Grade 1” race in in the United States, then the Horse Seller shall pay the co-ownership a one-time bonus of the sum of $500,000 within thirty days after the win is declared official. In the event the horse wins a “Grade 2” race in the United States, then the Horse Seller shall pay the co-ownership a one-time bonus of the sum of $250,000 within thirty days after the win is declared official. In the event the horse wins a “Grade 3” race in the United States, then the Horse Seller shall pay the co-ownership a one-time bonus of the sum of $100,000 within thirty days after the win is declared official. The total bonus will be capped at $500,000.

 

The above bonus will only serve as a nonrefundable advance on the expected increase in the horse’s value as a broodmare prospect and the Horse Seller shall be entitled to a credit equal to the bonus advanced from the co-ownership upon a final sale of the horse. The re-payment of the bonus will be first priority along with re-payment of training fee expenses incurred by Horse Seller on behalf of the series before any distributions made to co-owners, including the series and its members.

  

In the event that the bonus is earned and actually paid by Horse Seller, the horse shall retire from racing after the Breeders’ Cup races of its three year old season, unless the co-owners (not the series members) vote by unanimous consent to continue racing into the four year old season.

 

Spendthrift is the co-owner and Horse Seller for Infinite Empire. On March 17, 2020, an affiliate of Spendthrift became a majority stockholder in Experiential Squared, Inc., the Manager of the Company. Infinite Empire was originally acquired by Spendthrift at auction and the auction price (plus out of pocket expenses incurred) is the horse value upon which the Company's 51.0% stake was valued. The purchase price for Infinite Empire is payable to Spendthrift as the Horse Seller. In addition, each co-owner pays a proportionate share of co-ownership expenses for the mutual benefit of the co-owners. On occasion, such expenses may be payable to Spendthrift.

 

 

 

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Sixtythreecaliber (f.k.a. Classofsixtythree 19)

 

As set forth in the Equine Co-Ownership and Acquisition Agreement for Sixtythreecaliber, the Company will hold a 60.0% stake in Sixtythreecaliber’s co-ownership group. The Manager will serve as the syndicate/co-ownership manager and will have the right to assign the racing manager, training schedule, and other day-to-day rights. The co-owners (which, for the avoidance of doubt, are not the series members) will have voting rights as it relates to Sixtythreecaliber related to selling the horse, breeding the horse, gelding the horse, marketing and sponsorships and racing in claiming races. When Sixtythreecaliber moves into its broodmare career, the co-owners will be required to provide consent on fees, major expenses and final sale.

 

In the event the horse wins a “Grade 1” race in in the United States, then the Horse Seller shall pay the co-ownership a one-time bonus of the sum of $500,000 within thirty days after the win is declared official. In the event the horse wins a “Grade 2” race in the United States, then the Horse Seller shall pay the co-ownership a one-time bonus of the sum of $250,000 within thirty days after the win is declared official. In the event the horse wins a “Grade 3” race in the United States, then the Horse Seller shall pay the co-ownership a one-time bonus of the sum of $100,000 within thirty days after the win is declared official. The total bonus will be capped at $500,000.

 

The above bonus will only serve as a nonrefundable advance on the expected increase in the horse’s value as a broodmare prospect and the Horse Seller shall be entitled to a credit equal to the bonus advanced from the co-ownership upon a final sale of the horse. The re-payment of the bonus will be first priority along with re-payment of training fee expenses incurred by Horse Seller on behalf of the series before any distributions made to co-owners, including the series and its members.

  

In the event that the bonus is earned and actually paid by Horse Seller, the horse shall retire from racing after the Breeders’ Cup races of its three year old season, unless the co-owners (not the series members) vote by unanimous consent to continue racing into the four year old season.

 

Spendthrift is the co-owner and Horse Seller for Sixtythreecaliber. On March 17, 2020, an affiliate of Spendthrift became a majority stockholder in Experiential Squared, Inc., the Manager of the Company. Sixtythreecaliber was originally acquired by Spendthrift at auction and the auction price (plus out of pocket expenses incurred) is the horse value upon which the Company's 60.0% stake was valued. The purchase price for Sixtythreecaliber is payable to Spendthrift as the Horse Seller. In addition, each co-owner pays a proportionate share of co-ownership expenses for the mutual benefit of the co-owners. On occasion, such expenses may be payable to Spendthrift.

  

Provocateur (f.k.a. Cayala 19)

 

As set forth in the Equine Co-Ownership and Acquisition Agreement for Provocateur, the Company will hold a 51.0% stake in Provocateur’s co-ownership group. The Manager will serve as the syndicate/co-ownership manager and will have the right to assign the racing manager, training schedule, and other day-to-day rights. The co-owners (which, for the avoidance of doubt, are not the series members) will have voting rights as it relates to Provocateur related to selling the horse, breeding the horse, gelding the horse, marketing and sponsorships and racing in claiming races. When Provocateur moves into its broodmare career, the co-owners will be required to provide consent on fees, major expenses and final sale.

 

In the event the horse wins a “Grade 1” race in in the United States on a dirt surface only, then the Horse Seller shall pay the co-ownership a one-time bonus of the sum of $5,000,000 within thirty days after the winner’s purse has been distributed to the co-ownership which sum shall be divided pro rata among the co-owners within 21 days after receipt by the co-ownership.

 

The above bonus will only serve as a nonrefundable advance on the expected increase in the horse’s value as a stallion prospect and the Horse Seller shall be entitled to a credit equal to the bonus advanced from the co-ownership upon a final sale of the horse. The re-payment of the bonus will be first priority along with re-payment of training fee expenses incurred by Horse Seller on behalf of the series before any distributions made to co-owners, and, eventually, the series and its members.

 

The bonus will be void and shall not be due or owing if the decision is made to geld the horse prior to winning the Grade 1 race in the United States on a dirt surface.

 

 

 

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In the event that the bonus is earned and actually paid by Horse Seller, the horse shall retire from racing after the Breeders’ Cup races of its three year old season, unless the co-owners (not the series members) vote by unanimous consent to continue racing into the four year old season.

 

Spendthrift is the co-owner and Horse Seller for Provocateur. On March 17, 2020, an affiliate of Spendthrift became a majority stockholder in Experiential Squared, Inc., the Manager of the Company. Provocateur was originally acquired by Spendthrift at auction and the auction price (plus out of pocket expenses incurred) is the horse value upon which the Company's 51.0% stake was valued. The purchase price for Provocateur is payable to Spendthrift as the Horse Seller. In addition, each co-owner pays a proportionate share of co-ownership expenses for the mutual benefit of the co-owners. On occasion, such expenses may be payable to Spendthrift.

 

A Mo Reay (f.k.a.Margaret Reay 19)

 

As set forth in the Equine Co-Ownership and Acquisition Agreement for A Mo Reay, the Company will hold a 51.0% stake in A Mo Reay’s co-ownership group. The Manager will serve as the syndicate/co-ownership manager and will have the right to assign the racing manager, training schedule, and other day-to-day rights. The co-owners (which, for the avoidance of doubt, are not the series members) will have voting rights as it relates to A Mo Reay related to selling the horse, breeding the horse, gelding the horse, marketing and sponsorships and racing in claiming races. When A Mo Reay moves into its broodmare career, the co-owners will be required to provide consent on fees, major expenses and final sale.

 

In the event the horse wins a “Grade 1” race in in the United States, then the Horse Seller shall pay the co-ownership a one-time bonus of the sum of $500,000 within thirty days after the win is declared official. In the event the horse wins a “Grade 2” race in the United States, then the Horse Seller shall pay the co-ownership a one-time bonus of the sum of $250,000 within thirty days after the win is declared official. In the event the horse wins a “Grade 3” race in the United States, then the Horse Seller shall pay the co-ownership a one-time bonus of the sum of $100,000 within thirty days after the win is declared official. The total bonus will be capped at $500,000.

 

The above bonus will only serve as a nonrefundable advance on the expected increase in the horse’s value as a broodmare prospect and the Horse Seller shall be entitled to a credit equal to the bonus advanced from the co-ownership upon a final sale of the horse. The re-payment of the bonus will be first priority along with re-payment of training fee expenses incurred by Horse Seller on behalf of the series before any distributions made to co-owners, including the series and its members.

  

In the event that the bonus is earned and actually paid by Horse Seller, the horse shall retire from racing after the Breeders’ Cup races of its three year old season, unless the co-owners (not the series members) vote by unanimous consent to continue racing into the four year old season.

 

Spendthrift is the co-owner and Horse Seller for A Mo Reay. On March 17, 2020, an affiliate of Spendthrift became a majority stockholder in Experiential Squared, Inc., the Manager of the Company. A Mo Reay was originally acquired by Spendthrift at auction and the auction price (plus out of pocket expenses incurred) is the horse value upon which the Company's 51.0% stake was valued. The purchase price for A Mo Reay is payable to Spendthrift as the Horse Seller. In addition, each co-owner pays a proportionate share of co-ownership expenses for the mutual benefit of the co-owners. On occasion, such expenses may be payable to Spendthrift.

 

Above Suspicion (f.k.a. Exonerated 19)

 

As set forth in the Equine Co-Ownership and Acquisition Agreement for Above Suspicion, the Company will hold a 51.0% stake in Above Suspicion’s co-ownership group. The Manager will serve as the syndicate/co-ownership manager and will have the right to assign the racing manager, training schedule, and other day-to-day rights. The co-owners (which, for the avoidance of doubt, are not the series members) will have voting rights as it relates to Above Suspicion related to selling the horse, breeding the horse, gelding the horse, marketing and sponsorships and racing in claiming races. When Above Suspicion moves into its broodmare career, the co-owners will be required to provide consent on fees, major expenses and final sale.

 

 

 

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In the event the horse wins a “Grade 1” race in in the United States, then the Horse Seller shall pay the co-ownership a one-time bonus of the sum of $500,000 within thirty days after the win is declared official. In the event the horse wins a “Grade 2” race in the United States, then the Horse Seller shall pay the co-ownership a one-time bonus of the sum of $250,000 within thirty days after the win is declared official. In the event the horse wins a “Grade 3” race in the United States, then the Horse Seller shall pay the co-ownership a one-time bonus of the sum of $100,000 within thirty days after the win is declared official. The total bonus will be capped at $500,000.

 

The above bonus will only serve as a nonrefundable advance on the expected increase in the horse’s value as a broodmare prospect and the Horse Seller shall be entitled to a credit equal to the bonus advanced from the co-ownership upon a final sale of the horse. The re-payment of the bonus will be first priority along with re-payment of training fee expenses incurred by Horse Seller on behalf of the series before any distributions made to co-owners, including the series and its members.

 

In the event that the bonus is earned and actually paid by Horse Seller, the horse shall retire from racing after the Breeders’ Cup races of its three year old season, unless the co-owners (not the series members) vote by unanimous consent to continue racing into the four year old season.

 

Spendthrift is the co-owner and Horse Seller for Above Suspicion. On March 17, 2020, an affiliate of Spendthrift became a majority stockholder in Experiential Squared, Inc., the Manager of the Company. Above Suspicion was originally acquired by Spendthrift at auction and the auction price (plus out of pocket expenses incurred) is the horse value upon which the Company's 51.0% stake was valued. The purchase price for Above Suspicion is payable to Spendthrift as the Horse Seller. In addition, each co-owner pays a proportionate share of co-ownership expenses for the mutual benefit of the co-owners. On occasion, such expenses may be payable to Spendthrift.

 

Sacred Beauty (f.k.a. Consecrate 19)

 

As set forth in the Equine Co-Ownership and Acquisition Agreement for Sacred Beauty, the Company will hold a 51.0% stake in Sacred Beauty’s co-ownership group. The Manager will serve as the syndicate/co-ownership manager and will have the right to assign the racing manager, training schedule, and other day-to-day rights. The co-owners (which, for the avoidance of doubt, are not the series members) will have voting rights as it relates to Sacred Beauty related to selling the horse, breeding the horse, gelding the horse, marketing and sponsorships and racing in claiming races. When Sacred Beauty moves into its broodmare career, the co-owners will be required to provide consent on fees, major expenses and final sale.

 

In the event the horse wins a “Grade 1” race in in the United States, then the Horse Seller shall pay the co-ownership a one-time bonus of the sum of $500,000 within thirty days after the win is declared official. In the event the horse wins a “Grade 2” race in the United States, then the Horse Seller shall pay the co-ownership a one-time bonus of the sum of $250,000 within thirty days after the win is declared official. In the event the horse wins a “Grade 3” race in the United States, then the Horse Seller shall pay the co-ownership a one-time bonus of the sum of $100,000 within thirty days after the win is declared official. The total bonus will be capped at $500,000.

 

The above bonus will only serve as a nonrefundable advance on the expected increase in the horse’s value as a broodmare prospect and the Horse Seller shall be entitled to a credit equal to the bonus advanced from the co-ownership upon a final sale of the horse. The re-payment of the bonus will be first priority along with re-payment of training fee expenses incurred by Horse Seller on behalf of the series before any distributions made to co-owners, including the series and its members.

  

In the event that the bonus is earned and actually paid by Horse Seller, the horse shall retire from racing after the Breeders’ Cup races of its three year old season, unless the co-owners (not the series members) vote by unanimous consent to continue racing into the four year old season.

 

Spendthrift is the co-owner and Horse Seller for Sacred Beauty. On March 17, 2020, an affiliate of Spendthrift became a majority stockholder in Experiential Squared, Inc., the Manager of the Company. Sacred Beauty was originally acquired by Spendthrift at auction and the auction price (plus out of pocket expenses incurred) is the horse value upon which the Company's 51.0% stake was valued. The purchase price for Sacred Beauty is payable to Spendthrift as the Horse Seller. In addition, each co-owner pays a proportionate share of co-ownership expenses for the mutual benefit of the co-owners. On occasion, such expenses may be payable to Spendthrift.

 

 

 

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Inalattetrouble (f.k.a. Latte Da 19)

 

As set forth in the Equine Co-Ownership and Acquisition Agreement for Inalattetrouble, the Company will hold a 51.0% stake in Inalattetrouble’s co-ownership group. The Manager will serve as the syndicate/co-ownership manager and will have the right to assign the racing manager, training schedule, and other day-to-day rights. The co-owners (which, for the avoidance of doubt, are not the series members) will have voting rights as it relates to Inalattetrouble related to selling the horse, breeding the horse, gelding the horse, marketing and sponsorships and racing in claiming races. When Inalattetrouble moves into its broodmare career, the co-owners will be required to provide consent on fees, major expenses and final sale.

 

In the event the horse wins a “Grade 1” race in in the United States, then the Horse Seller shall pay the co-ownership a one-time bonus of the sum of $500,000 within thirty days after the win is declared official. In the event the horse wins a “Grade 2” race in the United States, then the Horse Seller shall pay the co-ownership a one-time bonus of the sum of $250,000 within thirty days after the win is declared official. In the event the horse wins a “Grade 3” race in the United States, then the Horse Seller shall pay the co-ownership a one-time bonus of the sum of $100,000 within thirty days after the win is declared official. The total bonus will be capped at $500,000.

 

The above bonus will only serve as a nonrefundable advance on the expected increase in the horse’s value as a broodmare prospect and the Horse Seller shall be entitled to a credit equal to the bonus advanced from the co-ownership upon a final sale of the horse. The re-payment of the bonus will be first priority along with re-payment of training fee expenses incurred by Horse Seller on behalf of the series before any distributions made to co-owners, including the series and its members.

  

In the event that the bonus is earned and actually paid by Horse Seller, the horse shall retire from racing after the Breeders’ Cup races of its three year old season, unless the co-owners (not the series members) vote by unanimous consent to continue racing into the four year old season.

 

Spendthrift is the co-owner and Horse Seller for Inalattetrouble. On March 17, 2020, an affiliate of Spendthrift became a majority stockholder in Experiential Squared, Inc., the Manager of the Company. Inalattetrouble was originally acquired by Spendthrift at auction and the auction price (plus out of pocket expenses incurred) is the horse value upon which the Company's 51.0% stake was valued. The purchase price for Inalattetrouble is payable to Spendthrift as the Horse Seller. In addition, each co-owner pays a proportionate share of co-ownership expenses for the mutual benefit of the co-owners. On occasion, such expenses may be payable to Spendthrift.

 

Dolce Notte (f.k.a. Midnight Sweetie 19)

 

As set forth in the Equine Co-Ownership and Acquisition Agreement for Dolce Notte, the Company will hold a 51.0% stake in Dolce Notte’s co-ownership group. The Manager will serve as the syndicate/co-ownership manager and will have the right to assign the racing manager, training schedule, and other day-to-day rights. The co-owners (which, for the avoidance of doubt, are not the series members) will have voting rights as it relates to Dolce Notte related to selling the horse, breeding the horse, gelding the horse, marketing and sponsorships and racing in claiming races. When Dolce Notte moves into its broodmare career, the co-owners will be required to provide consent on fees, major expenses and final sale.

 

In the event the horse wins a “Grade 1” race in in the United States, then the Horse Seller shall pay the co-ownership a one-time bonus of the sum of $500,000 within thirty days after the win is declared official. In the event the horse wins a “Grade 2” race in the United States, then the Horse Seller shall pay the co-ownership a one-time bonus of the sum of $250,000 within thirty days after the win is declared official. In the event the horse wins a “Grade 3” race in the United States, then the Horse Seller shall pay the co-ownership a one-time bonus of the sum of $100,000 within thirty days after the win is declared official. The total bonus will be capped at $500,000.

 

The above bonus will only serve as a nonrefundable advance on the expected increase in the horse’s value as a broodmare prospect and the Horse Seller shall be entitled to a credit equal to the bonus advanced from the co-ownership upon a final sale of the horse. The re-payment of the bonus will be first priority along with re-payment of training fee expenses incurred by Horse Seller on behalf of the series before any distributions made to co-owners, including the series and its members.

 

 

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In the event that the bonus is earned and actually paid by Horse Seller, the horse shall retire from racing after the Breeders’ Cup races of its three year old season, unless the co-owners (not the series members) vote by unanimous consent to continue racing into the four year old season.

 

Spendthrift is the co-owner and Horse Seller for Dolce Notte. On March 17, 2020, an affiliate of Spendthrift became a majority stockholder in Experiential Squared, Inc., the Manager of the Company. Dolce Notte was originally acquired by Spendthrift at auction and the auction price (plus out of pocket expenses incurred) is the horse value upon which the Company's 51.0% stake was valued. The purchase price for Dolce Notte is payable to Spendthrift as the Horse Seller. In addition, each co-owner pays a proportionate share of co-ownership expenses for the mutual benefit of the co-owners. On occasion, such expenses may be payable to Spendthrift.

 

Lookwhogotlucky (f.k.a. Ambleside Park 19)

 

As set forth in the Equine Co-Ownership and Acquisition Agreement for Lookwhogotlucky, the Company will hold a 51.0% stake in Lookwhogotlucky’s co-ownership group. The Manager will serve as the syndicate/co-ownership manager and will have the right to assign the racing manager, training schedule, and other day-to-day rights. The co-owners (which, for the avoidance of doubt, are not the series members) will have voting rights as it relates to Lookwhogotlucky related to selling the horse, breeding the horse, gelding the horse, marketing and sponsorships and racing in claiming races. When Lookwhogotlucky moves into its broodmare career, the co-owners will be required to provide consent on fees, major expenses and final sale.

  

Spendthrift is the co-owner and Horse Seller for Lookwhogotlucky. On March 17, 2020, an affiliate of Spendthrift became a majority stockholder in Experiential Squared, Inc., the Manager of the Company. Lookwhogotlucky was originally acquired by Spendthrift at auction and the auction price (plus out of pocket expenses incurred) is the horse value upon which the Company's 51.0% stake was valued. The purchase price for Lookwhogotlucky is payable to Spendthrift as the Horse Seller. In addition, each co-owner pays a proportionate share of co-ownership expenses for the mutual benefit of the co-owners. On occasion, such expenses may be payable to Spendthrift.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Asset Description

 

 

 

 

 

 

 

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DESCRIPTION OF COLLUSION ILLUSION

 

Summary Overview

 

  · Collusion Illusion is a 2017 Colt of Twirling Candy (Sire) and Natalie Grace (Dam).
  · Collusion Illusion was foaled on January 27, 2017.
  · Collusion Illusion has a limited track record under which to assess its performance.
  · Current horse value set at $2,200,000 with the Company acquiring a 25% stake in Collusion Illusion acquired via loan from the Manager.

  

Co-Ownership Description

 

As set forth in the Equine Co-Ownership and Acquisition Agreement for Collusion Illusion, the Company will hold a 25% stake in Collusion Illusion's co-ownership group. The syndicate/co-ownership manager will have the right to assign the racing manager, training schedule, breeding and other day-to-day rights, but the Company will have certain major decision rights as it relates to Collusion Illusion, including limitations on the scope of authorized actions of the Manager, veterinary inspections, title inspection rights, appraisal rights and extensive information rights on expenses and operations of the horse, anti-dilution rights, right of first refusal (ROFR) rights, full ownership privileges, no claiming races without consent, removal of racing manager through co-ownership vote, insurance discretion, expense payment obligations, consultation on certain sale rights and more. As a minority owner and non-syndicate manager of Collusion Illusion, the Company has less operational control over Collusion Illusion than other series in which we have a majority interest but is still heavily involved with the ownership and development of the horse.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Asset Description

 

 

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DESCRIPTION OF MONOMOY GIRL

 

Summary Overview

 

  · Monomoy Girl is a 2017 Filly of Tapizar (Sire) and Drumette (Dam).
  · Monomoy Girl was foaled on March 26, 2017.  
  · Monomoy Girl has a limited track record under which to assess its performance.
  · Current racing value set at $588,235.30 with the Company acquiring a 51% lessee interest in Monomoy Girl acquired via loan from the Manager.

  

Racing Lease Description

 

As set forth in the Racing Lease Agreement for Monomoy Girl, the Company will hold a 51.0% lessee interest in Monomoy Girl. The lease period is after conclusion of the 2021 Breeders’ Cup and entitles the Series to the racing rights to the horse for the lease period in exchange for the Lease Fee. The Manager will have voting rights as it relates to Monomoy Girl related to retiring the horse, racing outside of a set circuit, veterinary care over $5,000, trainers and the right to remove the racing manager at any time (subject to termination of the lease). Pursuant to that certain Amendment No. 1 to the Racing Lease Agreement with respect to Monomoy Girl, the Company is now the manager of Monomoy Girl.

 

As the lessee of a racehorse, the individual Series will receive a percentage of the purse winnings that is equal to its lessee percentage, as well as other revenue-generating events as well as marketing and advertising related revenues. Similar to the Co-Ownership arrangements, the individual Series in the Lease Agreement will be responsible for the expenses of the racehorse at a rate equal to its lessee percentage. These expenses will often be payable directly by the Series. At the end of such lease term, however, the ownership rights in the horse revert back to the horse owner along with the obligation to cover any future expenses associated with such horse with no future rights to the sale proceeds or breeding rights of the horse.

 

In the event that the horse owner intends to retire the horse and elects to terminate the Lease Agreement due to health, breeding or economic interest concerns, the pro rata portion of the Lease Fee remaining on the Series will be re-paid to the Series.

 

The Company’s intent with racing leases is to capture the value of the racing career of said horse without the complexities, time and expense associated with the purchase, sale or breeding of a horse outside of its useful racing life.

 

Spendthrift is the owner and lessor of Monomoy Girl. An affiliate of Spendthrift is a majority stockholder in Experiential Squared, Inc., the Manager of the Company. Monomoy Girl was originally acquired by Spendthrift at auction and the auction price (plus out of pocket expenses incurred, future race earnings potential for the lease period (including historical past performances and race earnings), and a discount to the sales price due to the Company’s lack of future breeding/resale rights in the horse) is the horse value upon which the Company's 51.0% stake was valued. The Lease Fee for Monomoy Girl is payable to Spendthrift as the horse owner. In addition, each of the Series and Spendthrift pays a proportionate share of expenses for the mutual benefit of the horse. On occasion, such expenses may be payable to Spendthrift.

  

 

 

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Asset Description

 

 

 

 

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DESCRIPTION OF GOT STORMY

 

Summary Overview

 

  · Got Stormy is a 2015 Filly of Get Stormy (Sire) and Super Phoebe (Dam).
  · Got Stormy was foaled on February 1, 2015.  
  · Got Stormy has a limited track record under which to assess its performance.
  · Current racing value set at $245,098.04 with the Company acquiring a 51% lessee interest in Got Stormy acquired via loan from the Manager.

  

Racing Lease Description

 

As set forth in the Racing Lease Agreement for Got Stormy, the Company will hold a 51.0% lessee interest in Got Stormy. The lease period is after conclusion of the 2021 Breeders’ Cup and entitles the Series to the racing rights to the horse for the lease period in exchange for the Lease Fee. The Manager will have voting rights as it relates to Got Stormy related to retiring the horse, racing outside of a set circuit, veterinary care over $5,000, trainers and the right to remove the racing manager at any time (subject to termination of the lease). Pursuant to that certain Amendment No. 1 to the Racing Lease Agreement with respect to Got Stormy, the Company is now the manager of Got Stormy.

 

As the lessee of a racehorse, the individual Series will receive a percentage of the purse winnings that is equal to its lessee percentage, as well as other revenue-generating events as well as marketing and advertising related revenues. Similar to the Co-Ownership arrangements, the individual Series in the Lease Agreement will be responsible for the expenses of the racehorse at a rate equal to its lessee percentage. These expenses will often be payable directly by the Series. At the end of such lease term, however, the ownership rights in the horse revert back to the horse owner along with the obligation to cover any future expenses associated with such horse with no future rights to the sale proceeds or breeding rights of the horse.

 

In the event that the horse owner intends to retire the horse and elects to terminate the Lease Agreement due to health, breeding or economic interest concerns, the pro rata portion of the Lease Fee remaining on the Series will be re-paid to the Series.

 

The Company’s intent with racing leases is to capture the value of the racing career of said horse without the complexities, time and expense associated with the purchase, sale or breeding of a horse outside of its useful racing life.

 

Spendthrift is the owner and lessor of Got Stormy. An affiliate of Spendthrift is a majority stockholder in Experiential Squared, Inc., the Manager of the Company. Got Stormy was originally acquired by Spendthrift at auction and the auction price (plus out of pocket expenses incurred, future race earnings potential for the lease period (including historical past performances and race earnings), and a discount to the sales price due to the Company’s lack of future breeding/resale rights in the horse) is the horse value upon which the Company's 51.0% stake was valued. The Lease Fee for Got Stormy is payable to Spendthrift as the horse owner. In addition, each of the Series and Spendthrift pays a proportionate share of expenses for the mutual benefit of the horse. On occasion, such expenses may be payable to Spendthrift.

 

 

 

 

 

 

 

 

 

 

 

 

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Asset Description

 

 

 

 

 

 

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DESCRIPTION OF SOCIAL DILEMMA

 

Summary Overview

 

  · Social Dilemma is a 2018 Filly of Medaglia d’Oro (Sire) and Singing Kitty (Dam).
  · Social Dilemma was foaled on January 29, 2019.  
  · Social Dilemma has a limited track record under which to assess its performance.
  · Current horse value set at $49,019.61 with the Company acquiring a 51% lessee interest in Social Dilemma acquired via loan from the Manager.

  

Racing Lease Description

 

As set forth in the Racing Lease Agreement for Social Dilemma, the Company will hold a 51.0% lessee interest in Social Dilemma. The lease period is after conclusion of the 2021 Breeders’ Cup and entitles the Series to the racing rights to the horse for the lease period in exchange for the Lease Fee. The Manager will have voting rights as it relates to Social Dilemma related to retiring the horse, racing outside of a set circuit, veterinary care