Current as of January 2020
DO NOT DUPLICATE OR DISTRIBUTE Offering Document Number:______Name of Recipient:______
Modern Wax Fund Manager, LLC a Delaware limited liability company comprised of Attic Investments, LLC a Delaware limited liability company
and Frontline Collectibles, Inc. (d/b/a Blowout Cards) a New York corporation
Presents this Confidential Private Placement Memorandum for the Offering of $1,575,000 of Units
of
Modern Wax Fund, LLC a Delaware limited liability company
Modern Wax Fund Manager, LLC 8745 Gary Burns Dr. Suite 160 #174 Frisco, Texas 75034 (949) 351-7585
Contacts: David Arons, Manager of Wax Fund Manager, LLC Telephone (949) 351-7585 Email: [email protected] www.atticinvestments.com
ALL INFORMATION CONTAINED IN THIS PRIVATE PLACEMENT MEMORANDUM IS CONFIDENTIAL AND THE PROPERTY OF ATTIC INVESTMENTS, LLC (THE “MANAGER”, “WE” OR “US”) AND ITS AFFILIATES. BY ACCEPTING DELIVERY, YOU AGREE THAT YOU WILL NOT DIVULGE OR DISTRIBUTE ANY OF THE CONTENTS OF THIS DOCUMENT TO ANYONE OTHER THAN PROFESSIONALS YOU RETAIN TO EVALUATE THE UNITS OFFERED, WITHOUT WRITTEN PERMISSION OF THE MANAGER; AND FURTHER, YOU AGREE TO INFORM ANY PROFESSIONALS YOU RETAIN OF THE CONFIDENTIAL NATURE OF THESE DOCUMENTS. YOU ALSO AGREE TO DESTROY THESE MATERIALS IN THE EVENT YOU ELECT NOT TO ACQUIRE UNITS. IF YOU DO NOT AGREE TO BE BOUND BY THESE CONFIDENTIALITY AGREEMENTS, PLEASE DO NOT COPY OR DISTRIBUTE ANY OF THESE DOCUMENTS AND RETURN THIS PRIVATE PLACEMENT MEMORANDUM AND ALL ATTACHMENTS IMMEDIATELY.
THE VALUE OF THE UNITS IS HIGHLY SPECULATIVE. AN INVESTMENT IN ATTIC INVESTMENTS – TANGIBLE ALTERNATIVE ASSET TRADING CARD FUND #1, LLC (THE “FUND”) INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD NOT INVEST IF YOU CANNOT AFFORD THE LOSS OF YOUR ENTIRE INVESTMENT. SEE “RISK FACTORS.” THE OFFER AND SALE OF THE UNITS IS INTENDED TO BE EXEMPT FROM THE SECURITIES REGISTRATION PROVISIONS OF FEDERAL AND STATE SECURITIES LAWS. THE UNITS ARE OFFERED ONLY TO ACCREDITED INVESTORS. THE FUND HAS NOT AND WILL NOT BE REGISTERED UNDER THE INVESTMENT COMPANY ACT. THE SECURITIES BEING OFFERED HAVE NOT BEEN REGISTERED WITH THE FLORIDA OFFICE OF FINANCIAL REGULATION. TABLE OF CONTENTS
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INVESTOR INFORMATION...... 3 SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS ...... 6 INVESTOR SUITABILITY STANDARDS ...... 7 EXECUTIVE SUMMARY / SUMMARY OF THE COMPANY AND THE OFFERING ...... 9 RISK FACTORS ...... 15 INVESTMENT OBJECTIVES AND CRITERIA ...... 18 USE OF PROCEEDS FROM THE SECURITIES OFFERING ...... 18 ASSET ALLOCATION ...... 19 SPONSOR ...... 21 SELECTED FINANCIAL DATA / FEES ...... 21 FINANCIAL PROJECTIONS ...... 23 EXHIBITS ...... 24 Exhibit A – Assets Exhibit B – Purchase Option Agreement
INVESTOR INFORMATION
The Units are speculative securities. Please read this entire confidential private placement memorandum (this “Memorandum”), including the attached exhibits. They contain information you should know before purchasing any securities under this private placement offering (this “Offering”). In making an investment decision, investors must rely on their own examination of us and the terms of this Offering, including the merits and risks involved.
The Offering of these securities has not been registered with the U.S. Securities and Exchange Commission under the Securities Act of 1933 (the “Act”), and is made pursuant to Section 4(a)(2) of the Act as a transaction by an issuer not involving any public offering as defined in Section 501(a) of Regulation D of the Act, and the private placement exemption provided by Rule 506(c) thereunder. Furthermore, this Memorandum has not been submitted to or reviewed, recommended, approved, or disapproved by any federal or state securities commission or regulatory authority. As a consequence, such securities will be required to be held indefinitely, unless they are subsequently registered under the Act or an exemption from such registration is available. We are not under any obligation to register the securities under the Act or to comply with any exemption under the Act. These securities are offered only to investors whom Attic Investments, LLC (the “Manager”), in its discretion, deems to be suitable.
The information contained in this Memorandum is furnished on a confidential basis for use only by a potential investor and by his, her, or its representatives and advisors. By accepting this Memorandum, each investor and his, her, or its representatives and advisors agree that they will not transmit, reproduce, or make available to any other person this Memorandum or any exhibits or other documents supplied in connection therewith.
Prior to making an investment decision respecting the securities offered hereby, a prospective investor should carefully review and consider the contents of this Memorandum. Prospective investors are urged to make arrangements with the Manager to inspect any document referred to in this Memorandum and other data relating to this Offering. The officers of the Manager are available to discuss with prospective investors any matter set forth in this Memorandum or any other matter relating to the securities offered hereby and to provide copies of any documents in order that prospective investors and their representatives and advisors may have available to them all information, financial and otherwise, relating to this prospective investment.
No person has been authorized in connection with this Memorandum to give any information or to make any representation other than those contained in this Memorandum, except as is made available by the Manager pursuant to the above undertakings. This Memorandum does not constitute an offer or solicitation to any person to whom it is unlawful to make such an offer or solicitation. Neither the delivery of this Memorandum nor any sale hereunder shall under any circumstances create an implication that there has been no change in our affairs since the date hereof.
Prospective investors are not to construe the contents of this Memorandum or any prior or subsequent communication from the Fund or from the Manager, their Affiliates (as defined in the Operating Agreement), and employees or any professional associated with this Offering as legal or tax advice. Each prospective investor should consult his, her, or its own counsel and accountant as to legal, tax and related matters concerning his, her, or its investment. No representation or warranties of any kind are intended or should be inferred with respect to the economic return or the tax consequences, which may accrue from investment in the securities. No assurance can be given that existing tax laws will not be changed or interpreted adversely. If the tax laws are changed or interpreted adversely, holders of our securities could fail to realize all or a portion of the economic or tax benefits contemplated herein.
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Reference should be made to information, documents, and exhibits furnished herewith or by the Manager on request for the complete information concerning the rights and obligations of the parties thereto. Certain provisions of the Operating Agreement and other exhibits are summarized in this Memorandum, but it should not be assumed that the summaries are complete.
Some of the information in this Memorandum may contain forward-looking statements. Such statements can be identified by the use of forward-looking words such as “may,” “anticipate,” “estimate,” “continue” or other similar words. These statements discuss future expectations, contain projections of results of operations or of financial conditions, or state other forward-looking information. When considering such forward-looking statements, prospective investors should keep in mind the Risk Factors and other cautionary statements in this Memorandum. Although the Fund and the Manager believe that the projections reflected in such forward- looking statements are based on reasonable assumptions, there are certain factors, in addition to these Risk Factors and cautionary statements, such as general economic conditions, local real estate conditions, adequacy of reserves, or weather and other natural occurrences that might cause a difference between actual results and those forward-looking statements.
Investors must meet certain qualifications. The securities will be sold only to “Accredited Investors” as that term is defined in Rule 501(a) of Regulation D of the Act which qualification must be verified by additional documentation. We reserve the right to reject any subscription in whole or in part in our sole and respective discretion. See “Investor Suitability Standards.”
These securities are being offered subject to acceptance, prior sale and withdrawal, cancellation or modification of this Offering at any time without notice.
No dealer, salesman or any other person has been authorized to give any information or to make any representations other than those contained in this Memorandum, and, if any other information or representation is given or made, such information and representations must not be relied upon. This Memorandum does not constitute an offer to sell or a solicitation of an offer to buy any of the securities offered hereby in any state to any person to whom it is unlawful to make such offer. Neither the delivery of this Memorandum nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the Fund since the respective dates at which information is given herein, or the date hereof. However, if any material change occurs while this Memorandum is required by law to be delivered, this Memorandum will be amended or supplemented accordingly with respect to any investors who have not previously subscribed to Units.
FOR ALASKA INVESTORS: IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE ISSUER AND THE TERMS OF THIS OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
FOR ARIZONA INVESTORS: A LEGEND REGARDING RESALE RESTRICTIONS SHALL BE CONSPICUOUSLY SET FORTH ON THE FRONT OF ANY CERTIFICATE THAT REPRESENTS A SECURITY ISSUED OR RESOLD IN ACCORDANCE WITH THIS RULE. ANY CERTIFICATE LEGEND SHALL NO LONGER BE REQUIRED ON THE TERMINATION OF ANY RESALE RESTRICTIONS IN ACCORDANCE WITH THIS SECTION OR 12 MONTHS AFTER THE INITIAL PURCHASE FROM THE ISSUER, WHICHEVER OCCURS FIRST.
Page 4 DMS 15409407.8 FOR CALIFORNIA INVESTORS: IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THIS SECURITY, OR ANY INTEREST THEREIN, OR TO RECEIVE ANY CONSIDERATION THEREFOR, WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA, EXCEPT AS PERMITTED IN THE COMMISSIONER'S RULES.
FOR CONNECTICUT INVESTORS: THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE BANKING COMMISSIONER OF THE STATE OF CONNECTICUT NOR HAS THE COMMISSIONER PASSED UPON THE ACCURACY OR ADEQUACY OF THE OFFERING. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
FOR FLORIDA INVESTORS: THE UNITS REFERRED TO HEREIN WILL BE SOLD TO, AND ACQUIRED BY, THE HOLDER IN A TRANSACTION EXEMPT UNDER SECTION 517.061 OF THE FLORIDA SECURITIES ACT. IN ADDITION, ALL FLORIDA RESIDENTS SHALL HAVE THE PRIVILEGE OF VOIDING A PURCHASE WITHIN THREE (3) DAYS AFTER THE FIRST TENDER OF CONSIDERATION IS MADE BY SUCH PURCHASER TO THE ISSUER, AN AGENT OF THE ISSUER OR AN ESCROW AGENT OR WITHIN THREE (3) DAYS AFTER THE AVAILABILITY OF THAT PRIVILEGE IS COMMUNICATED TO SUCH PURCHASER, WHICHEVER OCCURS LATER.
FOR GEORGIA INVESTORS: THESE SECURITIES HAVE BEEN ISSUED OR SOLD IN RELIANCE ON PARAGRAPH (13) OF CODE SECTION 10-5-9 OF THE GEORGIA SECURITIES ACT OF 1973, AND MAY NOT BE SOLD OR TRANSFERRED EXCEPT IN A TRANSACTION WHICH IS EXEMPT UNDER SUCH ACT OR PURSUANT TO AN EFFECTIVE REGISTRATION UNDER SUCH ACT.
FOR MINNESOTA INVESTORS: THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE MINNESOTA DEPARTMENT OF COMMERCE NOR HAS THE DIVISION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
FOR MISSISSIPPI INVESTORS: IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE PERSON OR ENTITY CREATING THE SECURITIES AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY GENERALLY NOT BE TRANSFERRED OR RESOLD FOR A PERIOD OF ONE (1) YEAR. INVESTORS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
FOR NEW YORK INVESTORS: THIS MEMORANDUM HAS NOT BEEN REVIEWED BY THE ATTORNEY GENERAL PRIOR TO ITS ISSUANCE AND USE. THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
FOR NORTH CAROLINA INVESTORS: THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
FOR NORTH DAKOTA INVESTORS: THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES COMMISSIONER OF THE STATE OF NORTH DAKOTA NOR HAS THE COMMISSIONER PASSED UPON THE ACCURACY OR ADEQUACY OF THIS MEMORANDUM. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
FOR PENNSYLVANIA INVESTORS: THESE SECURITIES ARE RESTRICTED FOR 12 MONTHS AFTER THE DATE OF PURCHASE EXCEPT IN ACCORDANCE WITH §204.011 UNDER TITLE 10 OF THE PENNSYLVANIA CODE.
Page 5 DMS 15409407.8 FOR TEXAS INVESTORS: THE SECURITIES OFFERED HEREUNDER HAVE NOT BEEN REGISTERED UNDER APPLICABLE TEXAS SECURITIES LAWS AND, THEREFORE, ANY PURCHASER THEREOF MUST BEAR THE ECONOMIC RISK OF THE INVESTMENT FOR AN INDEFINITE PERIOD OF TIME BECAUSE THE SECURITIES CANNOT BE RESOLD UNLESS THEY ARE SUBSEQUENTLY REGISTERED UNDER SUCH SECURITIES LAWS OR AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE. FURTHER, PURSUANT TO §109.13 UNDER THE TEXAS SECURITIES ACT, THE OPERATOR IS REQUIRED TO APPRISE PROSPECTIVE INVESTORS OF THE FOLLOWING: A LEGEND SHALL BE PLACED, UPON ISSUANCE, ON CERTIFICATES REPRESENTING SECURITIES PURCHASED HEREUNDER, AND ANY PURCHASER HEREUNDER SHALL BE REQUIRED TO SIGN A WRITTEN AGREEMENT THAT HE WILL NOT SELL THE SUBJECT SECURITIES WITHOUT REGISTRATION UNDER APPLICABLE SECURITIES LAWS, OR EXEMPTIONS THEREFROM.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Memorandum contains forward-looking statements within the meaning of the federal securities laws, which involve risks and uncertainties. These forward-looking statements are not historical facts but rather are based on current expectations, estimates, and projections about our industry, our beliefs, and assumptions. We use words such as “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates” and variations of these words and similar expressions to identify forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties, and other factors, some of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. These risks and uncertainties include those described in “Risk Factors” and elsewhere in this Memorandum. You should not place undue reliance on these forward-looking statements, which reflect our management’s view only as of the date of this Memorandum. We undertake no obligation to update these statements or to release publicly the result of any revision to the forward-looking statements to reflect events or circumstances after the date of this Memorandum or to reflect the occurrence of unanticipated events.
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INVESTOR SUITABILITY STANDARDS
Prospective investors should consider carefully each of the risks associated with this Offering, particularly those described in “Risk Factors.” In view of these risks, this Offering is available only to investors who have substantial net worth and no need for liquidity in their investments. We, in reliance upon the criteria set forth in Rule 501(a) promulgated under the Act, have established investor suitability standards for investors. Units will be sold only to an investor who: 1. represents that such investor is acquiring the Units for such investor’s own account, for investment only not with a view to the resale or distribution thereof; 2. acknowledges that the right to transfer the Units will be restricted by the Act, applicable state securities laws and certain contractual restrictions, and that the investor’s ability to do so will be restricted by the absence of an active market for our Units; and 3. represents that such investor qualifies as one or more of the following: a. an organization described in Section 501(c)(3) of the Internal Revenue Code, corporation, business trust, or partnership, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of $5,000,000; b. a director, executive officer, or general partner of the issuer of the securities being offered or sold, or any director, executive officer, or general partner of a general partner of that issuer; c. a natural person whose individual net worth, or joint net worth with that person’s spouse, at the time of his or her purchase exceeds $1,000,000 (exclusive of principal residence); d. a natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with that person’s spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year; e. a trust with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a sophisticated person as described in Rule 506(b)(2)(h); or f. an entity in which all of the equity owners are accredited investors.
All investors must verify their Accredited Investor status with a designated third party not directly affiliated with the Fund or the Manager and the Manager will only be notified whether or not the prospective investor meets Accredited Investor status and no other detail beyond. There are several ways to verify Accredited Investor status. Note that this list is not exhaustive and if a prospective investor cannot provide one of the following documents, we may be able to work with the prospective investor to verify Accredited Investor status in some other way:
For Accredited Investors under the net worth standard: One or more of the following types of documents dated within three months of investment: - For assets: bank statements, brokerage statements, and other statements of securities holdings, certificates of deposit, tax assessments, and appraisal reports issued by independent third parties; and - For liabilities: a consumer report from at least one of the nationwide consumer reporting agencies or written representation from the investor that all liabilities necessary to determine net worth have been disclosed.
For Accredited Investors under the income standard: - Any IRS form that reports the investor’s income for the two most recent years (e.g., Form W-2, Form 1099, Schedule K-l to Form 1065; Form 1040); and
Page 7 DMS 15409407.8 - A written representation from the investor that he, she, or it has a reasonable expectation of reaching the income level necessary to qualify as an Accredited Investor during the year of investment.
For any other Accredited Investor: A written confirmation from one or more of the following persons or entities that such person or entity has taken reasonable steps within the prior three months to verify that the investor is an Accredited Investor: - A registered broker-dealer; - Registered federal or state investment adviser; - A licensed attorney who is in good standing in all jurisdictions where he or she is admitted to practice law; - A certified public accountant who is in good standing in the place of his or her residence or principal office; - A certified financial planner; or - Another licensed professional.
NOTE: Where an individual investor and his or her spouse are jointly qualifying for Accredited Investor status, any documents required above are required with respect to both the investor and his or her spouse. Investors will be required to make certain representations and to satisfy certain other standards of suitability and conditions, which are set forth in a Subscription Agreement that must be executed by all investors in this Offering. The suitability standards referred to above are minimum requirements; the satisfaction of such standards does not mean that investment in us is a suitable investment for an investor. In addition, we may revoke the offer made herein and refuse to sell any Units to a prospective investor for any other reason whatsoever, even if such investor returns a Subscription Agreement containing appropriate representations, and verification documents.
Page 8 DMS 15409407.8 EXECUTIVE SUMMARY / SUMMARY OF THE COMPANY AND THE OFFERING
The following is a summary of the pertinent facts and highlights from the material contained in this Memorandum. More detailed information with respect to the Offering may be found in the remainder of this Memorandum. Reference is made to the Operating Agreement for the definition of capitalized terms used in the following summary and elsewhere in this Memorandum.
This executive summary highlights certain investment considerations relating to the Units in the Fund. It is not a substitute for reading this Memorandum. This executive summary is subject to and qualified by the more detailed information appearing later in this Memorandum, including “Risk Factors” beginning on page 15.
“Fund”: Modern Wax Fund, LLC.
“Manager”: The Manager, Modern Wax Fund Manager, LLC is a joint venture between Attic Investments, LLC, (“Attic”) a Delaware limited liability company and Frontline Collectibles, Inc. (“Blowout”), a New York corporation doing business as Blowout Cards. The Manager has overall responsibility for the management of the Fund and its investments. The Manager is controlled day to day by David Arons of Attic; however, no assets may be sold, or distributions made without the approval of the executive team of Blowout Cards.
Fund Investment Objectives: The Fund has secured through an Option to Purchase Agreement (the “OPA”) approximately $3 million of factory sealed or professionally authenticated unopened product of trading cards in the form of boxes and cases, which the Manager will purchase in exchange for $1,430,878 of cash and a 50% equity interest in the Fund. The Fund intends to close on this purchase at the end of the Offering Period (the “Closing”) and then sell 25% of the assets in years 4-7 following the Closing. The Fund is targeting an annualized return of 12% - 18% to the Members. The Fund will not invest in anything other than the Assets but may hold a minimal holding of cash to cover operating costs. The Fund intends to operate with the utmost integrity and views the duty to investors no different than any other type of similarly sized private equity investment fund.
Fund Assets: The Fund will consist of the assets listed in Exhibit A (the “Assets”). The Assets consist of unopened boxes and cases of sports or entertainment trading cards ranging from 1986 to 2019. The Assets are being purchased from Blowout. Blowout does business under the name of Blowout Cards (www.blowoutcards.com), one of the leading online retailers of unopened trading card product. All of the Assets produced in the 2000’s have been in the possession of Blowout, since delivery from manufacturer/distributor and any box pre-2000 are either factory sealed or authenticated by a third party source.
The Assets could be considered to fit into two tiers with many assets meeting the standard for both tiers.
• First Tier - Product that contains some of the most sought-after cards in the hobby. These would be product that contains rookie cards, autographed cards or key parallels of players such as Michael Jordan, Tom Brady, Peyton Manning, Derek Jeter, Mike Trout, Sydney Crosby, Kobe Bryant and Lebron James. These are players that are either retired or close to retirement and the desirability of their cards is cemented in the industry.
• Second Tier - The second tier would be considered the more recently issued product that contains key cards of younger active players such as Pat Mahomes, Ronald Acuna Jr., Juan Soto, Kawhi Leonard, Zion Williamson, Lamar Jackson, Luka Donic, Conner McDavid, Trae Young, Jimmy Garappolo and Giannis Antetokounmpo among others. Not all of the players in these products will continue down the Hall of Fame/Superstardom path but some of them will and there will also be the emergence of players not currently considered superstars.
Page 9 DMS 15409407.8 Seller of the Assets: Blowout runs Blowout Cards (www.blowoutcards.com) one of the leading online retailers of unopened product. Blowout, also a member of the Manager, and will retain 50% of the ownership of the Assets via 50% ownership of the Units in the Fund. The purchase of the Assets will occur simultaneously with the closing of the Fund. A final and executed copy of the Option to Purchase Agreement is attached as Exhibit B.
Offering: The Fund will consist of 126 equity interest units valued at $25,000 per unit (each, a “Unit”). Only half of the Units will be made available in this Offering as the Manager will retain a 50% ownership interest in the Fund in exchange for its in-kind contribution of the Assets. The Units will be offered solely to investors who qualify as “Accredited Investors”, as such term is defined under Regulation D of the Act, whose status is verified as such. See “Investor Suitability Standards.”
Size of the Fund: The Fund is seeking to raise $1,575,000.
Closing: The Fund will have only one Closing which will occur once the Fund is fully subscribed. Prior to the Closing, the Manager may hold investments and signed subscription documents in escrow. Upon Closing, the Manager will deliver written confirmation of closing, which will include a counter-signed Subscription Agreement and details regarding each investor’s ownership interest (the “Member”).
Manager’s Capital Contribution: The Manager will contribute the Assets to the Fund and will retain a 50% equity ownership interest in the Fund. The Manager also reserves the right to purchase additional Units at a cost of $25,000 per Unit.
Offering Period: The Offering Period shall be open until all the Units are committed to or the Manager terminates this Offering, but shall not exceed one year from the date of this Memorandum.
Fund Investment Strategy: The Assets have been chosen based on their hobby significance, brand strength, growth potential and spread across the various sports and years that the Manager believes best represent the overall modern trading card market. The Assets are being acquired at fair market value at the time the OPA was executed. Fair market value means the price to the Fund is at the price which any member of the public could have purchased the Assets. This price was checked against the asking price not only through Blowout Cards, but across multiple online retailers as well as eBay. It should be noted that on platforms such as eBay some of the higher priced items sell for less when they do not come from well-known sellers of unopened product, such as Blowout Cards. Additionally, for certain products a sealed case will carry a premium over individual boxes. Some of the Assets are not readily available and in these instances the Manager compared price to historical sales and market performance since those sales occurred. The Fund will strategically sell 25% of the Assets per year starting in year 4 with a full exit by the end of year 7. The Assets chosen for sale will either be strategic or to partially liquidate a product with multiple assets. The Manager will also closely monitor the existing and emerging sale platforms discussed in the ‘Sale of Assets’ section of this Memorandum to take advantage of opportunities to add value beyond the auction market value of the Asset.
Term: The Fund intends to liquidate the underlying Assets evenly over years 4–7 although market conditions could extend or accelerate that timeline.
Use of Proceeds: The Fund will raise $1,575,000 of which the majority will be used to complete the acquisition of the Assets. The remaining proceeds will be used to cover establishment costs and to establish an operating cash reserve. Complete detail of the use of proceeds is in the Sources and Uses table in this Memorandum.
Page 10 DMS 15409407.8 Asset Acquisition: The Fund currently has an option agreement with Blowout to purchase the Assets identified in Exhibit A for a price of $3,005,877.95. The OPA expires on February 29, 2020. The purchase price of the Assets in the OPA were determined in November 2019. There will likely be movement in price of some of the Assets by the time the Fund closes. The Manager will evaluate the total impact of these price changes and so long as the Assets have a minimum current fair market value (in the sole discretion of the Manager) of $3,000,000 the Fund will continue with the purchase. Should the cumulative changes of all the underlying asset prices be below $3,000,000, the Manager will either renegotiate the purchase price or notify the potential Members with the current estimated value and give each Member the opportunity to withdraw its subscription.
Liquidity: Members will have the option to sell their interest to Blowout at a purchase price of at least $20,000 per Unit at any time pursuant to an agreement to be executed in connection with each Member’s subscription (the “Liquidity Agreement”).
Storage and Insuring the Assets: The Assets will continue to be stored in a facility owned and controlled by Blowout, located in Virginia. The Fund will pay a nominal fee of $500 per month to Blowout for the storage of the Assets. The Assets will be insured as owned by the Fund, with the Fund as a named insured party on the insurance policy. The Fund will either have a separate insurance policy from Blowout or be covered under the umbrella policy of Blowout so long as it meets the Fund’s requirements. The Fund anticipates an annual premium of 0.30% of the market value of the Assets. The market value of the Assets will be determined quarterly to ensure the Fund is fully insured for the current market value.
Use of Leverage: The Fund does not intend to utilize any leverage. The Manager may loan the Fund money from time to time to cover operating costs when there are not enough operating reserves in the Fund. The Manager may also defer any fees owed to Manager or its affiliates and such deferred fees will be considered a liability on the books of the Fund. In either instance the Manager will charge the lowest interest permitted under applicable law, e.g., Applicable Federal Rate to the Fund.
Preferred Return: An 8% annual, compounding, and cumulative preferred return will accrue on all Member capital contributions (the “Preferred Return”) starting at Fund closing. The Preferred Return is not guaranteed; however, it will take priority above any value awarded to the Manager in the Fund for Promote/Carried Interest.
Promote/Waterfall: Once the Members have earned the Preferred Return, the Manager will be entitled to 20% of any distributions until the Member has earned a 12% annualized return. If Members receive an annualized return between 12.01% and 18%, the Manager will be entitled to 40% of the distributions. Any distributions to Members over an annualized return of 18%, both the Members and the Manager will receive a 50% distribution.
Timing of Asset Sales: The Manager is projecting that 25% of the Assets be sold in each of years 4-7; however, the Manager will have the right to accelerate or delay sales from this projected timeline. The Manager will have the sole authority to decide the timing of the sale of the Assets and the method of the sale so long as they fall within the parameters laid out in the Fund documents.
Sale of Assets: The Manager intends to explore multiple sources/platforms to sell the Assets. All sales must be transparent and open to competitive bidding. The sources/platforms listed below are subject to change, or growth in number, should the marketplace evolve. Management hopes to sell the Assets at the top or above the estimated value range of an Asset by strategically utilizing some of the evolving platforms listed below.
• Online Listings – These would entail utilizing an online platform like eBay to auction the Assets.
Page 11 DMS 15409407.8 Online listings have fees that are the seller’s responsibility. It is anticipated these fees would be in the 10-12% range. Online listings would be ideal for the more common Assets that trade frequently.
• Live auction houses – These will be a great source to sell the higher end items. The auction houses have a network of clients, advertising and prestige that can help obtain top dollar. At these live auction houses, the buyer pays the fee through a buyer’s premium. The Fund may be able to leverage the variety of its holdings and name to brand the auction garnering its own marketing emphasis.
• Crowdfunding/Fractional Ownership Platforms – The platforms for selling fractional shares of an asset as an investment vehicle are starting to gain steam. Rally Rd. has already proven through a limited number of sports offerings that people are willing to pay a premium to own a fraction of something they could not fully afford. Out of the limited offerings offered via this platform to date it appears that the premium fractional shareholders are willing to pay approximately 30% above true auction market value. The Manager will be monitoring the developments in this market and may choose to sell the Assets via this method. This fractional structure will also give the Manager the flexibility to sell only a portion of an Asset at a time while holding the remaining fractional units to be sold in the future.
• Breakers – Another platform that has exploded over the past 5 years has been online breakers. These individuals, or groups, buy unopened product then charge a fee to those interested in participating and the fee either buys you a team, a player, or a randomized position. The breaks are done live over the internet and purchasers are mailed the cards entitled to them. The economics work so that the sum of the individual fees is greater than the cost of the product. The Fund may choose to enter an economic relationship with a breaker where an asset is purchased from the Fund and the Fund also shares in the profits of that breaker.
• Breaking Product into Smaller Units – The Manager will evaluate breaking down a product into smaller units to sell individually for a gain. This would be done by providing a sealed box/case to PSA for grading of the individual packs inside. For example, if a 2011 Topps Update box that contains 36 packs and the box is worth $6,500 that would place a value of $180.56 a pack and an estimated cost to grade a pack is $20 from PSA. A graded pack of the product sells for $250, the Manager may choose to get all 36 packs graded to sell at $250 each for $9,000 total which is approximately $1,780 more than the sealed box would have sold for after netting out costs.
Governance: The Manager will have the sole governing authority over the Fund, subject to certain actions that require approval of the Members.
Valuation: The Manager intends to determine the Fund’s Net Asset Value (the “NAV”) through the sales comparable basis and provide such valuation on a quarterly basis. The NAV is only for information purposes and will be provided to the Members within 20 business days of the end of the first full calendar quarter following closing of this Offering. Should there not be enough transaction of certain Assets to accurately provide a valuation based on sales comparable basis, the Manager will estimate valuation based on the change in valuation of the key cards contained in the product. Other factors that may be considered are the valuation assigned by the insurance company or the accounting firm engaged.
Broker Dealer: The Fund shall not pay any fees to broker-dealers in connection with the Offering.
Page 12 DMS 15409407.8 Management Fees: The Manager will receive an annual management fee of $18,000 from the Fund (the “Annual Management Fee”) payable quarterly and may be paid out of current cash flow, disposition proceeds of the Fund.
In connection with the Closing, the Manager will receive a one-time payment (the “Closing Fee”) of $25,000.
The Annual Management Fee, the Closing Fee and any other fees payable to the Manager as described in the Memorandum are referred to as the “Management Fees”.
Organizational Expenses: The Fund will bear all legal and other expenses incurred in connection with the formation of the Fund and the offering of the Units, up to an amount not to exceed $60,000 of total fund subscriptions. Organizational expenses in excess of this amount, will be paid by the Fund but borne by the Manager through a 50% offset against the Management Fees.
Other Expenses: The Manager will pay all normal operating expenses incidental to the provision of the day-to-day administrative services to the Fund, including its own overhead. The Fund will pay all costs, expenses and liabilities in connection with its operations, including fees, costs and expenses related to consummated and unconsummated investments; taxes; fees and expenses of accountants and counsel; litigation expenses; and other extraordinary expenses.
Removal of Manager: If the Manager or its members are found to have engaged in certain disabling conduct, a super-majority in interest of the Members may elect to remove the Manager or the Principal.
Reports/Annual Meeting: Annual and quarterly unaudited financial statements of the Fund, and quarterly progress reports on the Fund, will be provided to each Member. U.S. federal income tax information will be provided annually. The Fund may choose to hold annual meetings to provide Members with the opportunity to review and discuss with the Manager the Fund’s investment activities and assets.
Exculpation and Indemnification: Subject to applicable law, neither the Manager, Attic, Blowout, their respective affiliates or managers, directors, officers, partners, members, shareholders, employees or agents of each of them (each, a “Covered Person”) will be liable to the Fund or the Members for any good faith act or omission of such person relating to the Fund, except for any such act or omission constituting gross negligence, fraud, willful malfeasance or reckless disregard of duties by such Covered Person. Subject to applicable law, the Fund will indemnify each Covered Person against all claims, damages, liabilities, costs and expenses, including legal fees, to which such Covered Person may be or become subject by reason of such Covered Person’s activities on behalf of the Fund, or otherwise relating to the Operating Agreement, except to the extent that such claims, damages, liabilities, costs or expenses are determined to have resulted from such Covered Person’s own gross negligence, fraud, willful malfeasance or reckless disregard of duties.
Tax Considerations: The Fund will be structured to be treated as a partnership for U.S. federal income tax purposes. As a partnership, the Fund generally will not be subject to U.S. federal income tax, and each Member subject to U.S. federal income tax will be required to include in computing its U.S. federal income tax liability its allocable share of the items of income, gain, loss and deduction of the Fund, regardless of whether and to what extent distributions are made by the Fund to such Member. The taxation of partners and partnerships is extremely complex. Each prospective investor is urged to consult his, her or its own tax advisor as to the tax consequences of an investment in the Fund. This summary is not intended or written to be used, and cannot be used, by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer under U.S. federal tax law. This summary was written to support the promotion or marketing of the Fund. Each taxpayer should seek advice based on the taxpayer’s
Page 13 DMS 15409407.8 particular circumstances from an independent tax advisor.
ERISA Considerations: Investment in the Fund is open to institutions, including pension plans, subject to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). To avoid having the Assets deemed to be “plan assets” for purposes of ERISA, the Manager intends either (a) to operate the Fund so as to qualify the Fund as a “venture capital operating company” (within the meaning of Department of Labor regulations) or (b) to limit investment in the Fund by “benefit plan investors” (within the meaning of Department of Labor regulations as modified by section 3(42) of ERISA) to less than 25% of each class of equity interests in the Fund. Each prospective investor subject to ERISA is urged to consult its own advisors as to the provisions of ERISA applicable to an investment in the Fund.
Legal Counsel to the Manager: Barnes & Thornburg LLP will act as counsel to the Fund and the Manager in connection with the formation of the Fund and the securities offered and transactions contemplated hereby. Barnes & Thornburg LLP is not representing the investors in connection with the Fund. This Memorandum was prepared based on information furnished by the Manager and Barnes & Thornburg LLP has not independently verified such information.
Page 14 DMS 15409407.8 RISK FACTORS
Prospective investors are cautioned that there can be no assurance as to any capital appreciation, return of capital or liquidity of this investment. Before making a decision to purchase the Units offered hereby, prospective investors should carefully consider the risks and uncertainties described below. While the Fund believes these risks and uncertainties are most important for investors to consider, other risks and uncertainties may affect the Fund and its business. If any of the following risks materialize, the Fund’s business, financial condition or results of operations would likely suffer. In these circumstances, the value of the Units could decline, and an investor could lose all or part of the money paid to purchase Units. Prospective investors should retain their own professional advisors to review and evaluate the economic, tax, legal and other consequences of an investment in the Fund. Prospective investors should not construe the contents of this Memorandum or any other information furnished by the Fund or its Manager as investment, legal, accounting or tax advice. Capitalized terms used in this Section and not otherwise defined in this Memorandum shall have the meanings ascribed to such terms in the Operating Agreement. Prospective investors of the Fund should, in addition to the other matters discussed in this Memorandum, pay particular attention to the following matters:
Fund’s Limited Operating History: An investment in the Fund should be considered a speculative investment. The Fund is a Delaware limited liability company formed for the business purpose described herein. As of the date of this Memorandum, the Fund has no operating history.
Conflicts of Interest: The Assets are being acquired from a member of the Fund’s managing entity. The specific assets and the price paid for them is disclosed in Exhibit A. The prices are deemed to be fair market value at time of contract execution per both members of the managing entity; however, some of these assets are rare, high priced and infrequently trade in the open marketplace. This creates a conflict of interest between Blowout and the Fund. Attic and the Manager have taken reasonable precautions to verify the fair market value of the Assets; however, the value of the Assets is speculative in nature and impossible to accurately determine in this scenario.
Sale Fees: Fees may be incurred by the Fund during the sale process either through fees charged by third party selling platforms or legal, regulatory or marketing fees. The platforms in which the seller bears the sales fees the overall fees can be as high as 15% but it is anticipated the Assets in the Fund would average about 10%. The Fund may look to minimize, or offset, the cost of sales by selling through platforms where the buyer bears the fee or methods that may garnish a premium such as fractional ownership or an arrangement with breakers.
Value: The only economic value of the Assets in the Fund is what a buyer is willing to pay for them. There is no intrinsic value or future income stream associated with these Assets. The risk exists that the market for trading cards, or in particular unopened product of trading cards, declines in both price and number of buyers. While the Manager’s fiduciary duty is to preserve existing value and pursue additional value growth in the Fund, there is no guarantee or promise that this will happen. Given the illiquidity of the Units, and the risk of a future decrease in value, this investment should not be made if the investor thinks they might need some or all of this money for another purpose in the next five years.
Economic: The correlation to certain conditions in the economy is hard to quantitate. Given that this is the first known fund to represent unopened product of trading cards as an alternative tangible asset adds to the uncertainty as to how the Fund will perform relative to other economic indicators. For example, it could be that this Asset performs worse if the luxury home market declines while a decrease in the unemployment rate may not correlate to an increase in prices. Additionally, there are socio-economic risks with alternative tangible assets as well. Over the past 20 years, the wine industry as an investment, has flourished while the stamp market has not experienced any meaningful growth in recent years. It is
Page 15 DMS 15409407.8 assumed that the value of trading cards will be affected by overall economic conditions; however, there is no data available to properly correlate if the value of the cards will decrease more, the same or actually outperform (outperform could mean losing less value) than comparable assets.
Competition: The Manager believes that this is the first of many funds that will be put together treating trading cards as an alternative tangible asset class. Additionally, there are other investment vehicles being created such as fractional ownership like Rally Rd., or additional marketplaces for cards like StockX’s recent expansion into trading cards. There are multiple other individuals or groups exploring or in some stage of establishing trading card based alternative tangible asset funds or other investment vehicles. The likelihood of a fund being able to acquire $3M of the most desired unopened product such as this Fund is not likely; however, if the increase in competition is not also met with an increase in money allocated to the industry by investors or hobbyist competition could negatively affect the overall market. The Manager feels there is more than enough room in this space for multiple funds, competitors or other investment vehicles and welcomes any competition with the belief that any new investment and exposure will likely benefit the industry overall and improve its reputation as a viable asset class.
Volatility: The Assets that the Fund will hold are of limited supply and the only assets in the industry that have a decreasing supply. They are therefore subject to quick, material movements with the inflow of new dollars or lack of new dollars. So long as the overall trading card market continues to see an inflow of new investment dollars, the possibility of a dramatic increase to the price of ‘Blue Chip’ assets of limited quantity for no underlying fundamental reason aside from an increase in demand exists.
Fund Liquidity: No market exists for the Units on the secondary market and it is not anticipated that a market for Units in this Fund will develop. Members who own Units may be permitted to sell their Units to other current Members or third parties with prior approval from the Manager. The Manager will only withhold approval if such a sale will trigger additional costs or ongoing filings to the Fund going forward and any additional costs incurred by the Fund for such transaction will be the responsibility of the seller or if another reasonable business reason exists in the sole discretion of the Manager. Consequently, Members may not be able to liquidate their investment in the event of emergency or for any other reason, and Units may not be readily accepted as collateral for a loan. In addition, the transfer of a Unit may result in adverse tax consequences for the transferor. Additionally, while Blowout will enter into the Liquidity Agreement with each Member pursuant to which Blowout will agree to purchase all of a Member’s Units at Member’s option at any time; the Manager nor the Fund can guarantee performance under the Liquidity Agreement as the Manager nor the Fund has any control over Blowout or its shareholders or directors.
Securities Laws: This Offering has not been, and will not be, registered under the Act or the securities laws of any state. The Members will not have any of the protections afforded by applicable federal and state securities laws (including the Investment Company Act of 1940 or the Investment Advisors Act of 1940) in registered or qualified offerings and must evaluate the adequacy of the disclosure and the fairness of the terms of this Offering without the benefit of prior review by any regulatory authority. If this Offering is deemed to be a public offering that requires registration, and if no exemption from such registration requirements is found to be available, the sale of the Units may be a violation of applicable federal and state securities laws. If the sale of the Units is found to be a violation of such laws, each Member would have the right to rescind his or her purchase of the Units and have the purchase price refunded in full. Such rescissions could have a material adverse effect on the Fund’s financial condition and performance.
Manager: The Manager will be vested with full authority as the Manager that oversees the Fund’s operations. The Members will have no recourse should the Manager exercise poor judgment such as choosing certain Assets to liquidate so long as none of the criteria and covenants of the Fund are violated.
Page 16 DMS 15409407.8 Should the Manager act in a way that decreases trust or hurts reputation, it may affect the Fund’s reputation but should have no effect on the underlying Assets. The Manager, as Manager, can be removed by the Members for negligent or bad acts to be further defined in the Operating Agreement. The Manager is currently, and plans to remain, an active purchaser and seller of trading cards and unopened product.
Tax Issues: This Memorandum does not discuss the tax treatment that may be anticipated to result from the ownership of the Units. The tax consequences arising from the payment of distributions, if any, on the Units, may be material to your decision to purchase the Units offered hereby.
YOU SHOULD CONSULT YOUR OWN TAX ADVISOR AS TO THE TAX TREATMENT THAT MAY BE ANTICIPATED TO RESULT FROM THE OWNERSHIP OR DISPOSITION OF THE UNITS PURCHASED IN THIS OFFERING, INCLUDING THE APPLICATION OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, AS WELL AS FOREIGN, STATE OR LOCAL TAX LAWS OR ESTATE AND GIFT TAX CONSIDERATIONS.
* * * * * Prospective investors should carefully consider, among other factors, the risks described above, each of which could have an adverse effect on the value of the Units. There can be no assurance that the Fund will achieve its investment objectives or that the Members will receive any return on, or the return of, their invested capital. An investment in the Fund involves certain risks and considerations that investors should evaluate before making a decision to invest. Prospective investors are encouraged to consult their legal, financial and tax advisors and to review this Memorandum prior to committing to invest in the Fund.
Page 17 DMS 15409407.8 INVESTMENT OBJECTIVES AND CRITERIA
The Fund intends to close on the purchase valuable unopened product of “blue chip” trading cards at a purchase price of $3,005,877.95 (half cash and half equity in the Fund) to hold and sell over a span of up to 7 years and benefit from an increase in their value, and the Manager believes the current fair market value of the Assets is at least equal to this purchase price, if not higher. The subjects of these trading cards range from sports and entertainment/other. The Fund intends to remove the emotional portion of the asset class and let the data and identifiable trends guide investments as they would with any other asset class run by a professional fund manager. Overall investment in trading cards in both the value of the cards and the number of individuals involved has been steadily increasing and the Manager feels the asset class is now mature enough to justify Fund level investments, similar to what happened with wine approximately a decade ago.
USE OF PROCEEDS FROM THE SECURITIES OFFERING
The proceeds from the offering will be used to purchase 50% of the Assets per the Option to Purchase Agreement, placement fee to the Manager, legal, regulatory costs and other organizational expenses with the remainder to be a cash reserve to be used as working capital to cover future operating expenses.
Sources & Uses Sources New Equity From Sale of 63 Shares $1,575,000 In Kind Contribution $1,575,000 Total Sources $3,150,000
Uses In-Kind Contribution by Blowout $1,575,000 Remaining Cash Portion of Asset Purchase $1,430,878 Placement Fee $25,000 Legal/Establishment/Regulatory Costs $60,000 Cash Reserve $59,122 Total Uses $3,150,000
Page 18 DMS 15409407.8 ASSET ALLOCATION
Below are various tables and charts that break down the Assets to be acquired by the Fund by certain categories.
Page 19 DMS 15409407.8
Page 20 DMS 15409407.8 SPONSOR
The Manager: Modern Wax Fund Manager, LLC, a Delaware limited liability company, is a joint venture between Attic Investments, LLC, a wholly owned Delaware limited liability company controlled by David Arons, CFA and Frontline Collectibles Inc., a New York registered company that does business as Blowout Cards and will be represented by Thomas Fish.
SELECTED FINANCIAL DATA / FEES
Below is a detailed description of fees and expenses the Fund may incur:
Costs Related to Establishment of the Fund and Closing Fees:
Initial Costs Placement Fee as % of Fund Size 0.79% Placement Fee Nominal Amount $25,000 Legal/Establishment/Regulatory Costs $60,000
Closing Fees – In connection with the Closing, the Manager will receive a one-time payment (a “Closing Fee”) of $25,000.
Additional Expenses Related to Establishment of the Fund – Proceeds will be used to pay for the expenses of organization associated with this Offering that could include legal, marketing, website setup, registration/filing, banking and professional fees. Some of these may come in the form of a reimbursement to the Manager if the cost was already incurred. These expenses are not expected to exceed $60,000.
Broker Dealer Fees/Costs – The Manager does not intend to utilize a broker dealer or the broker dealer network to obtain fund subscriptions. Therefore, there are no expected fees related to broker dealers.
Sales Tax – The Fund will be a licensed reseller in the state of Virginia exempting it from Sales Tax for the acquisition of the Assets.
Operating Fees/Costs:
Operating Expenses Annual Management Fee (% of Original Fund) 0.57% Annual Management Fee Nominal $18,000 Accounting/Audit per year $20,000 Accounting/Audit annual increase 2.5% Storage Fee Per Month $500 Insurance 0.30% Online Interface Per Month $250
Page 21 DMS 15409407.8 Accounting/Reporting – A CPA firm will provide quarterly financial statements based on accrual accounting and prepare all tax documents. Quarterly reports will be sent to investors by the Manager. It is estimated the CPA firm costs would average $20,000 per year.
Insurance – An estimated fee of 0.30% will be to cover a policy that names the Fund as the asset owner and will be based on quarterly market value.
Storage – The Fund will pay Blowout a fee of $500 a month to store the Assets at their facility in Virginia.
Online Interface – The estimated cost for a secure website with account logins to track the Fund’s holdings/progress is $250 a month
Management Fees – The Manager will receive an Annual Management Fee from the Fund of $18,000. The Annual Management Fee will be payable quarterly and may be paid out of current cash flow, loans from the Manager or disposition proceeds of the Fund.
Registration/Filing Fees – Any registration or filing fees required by any federal or state entity.
Debt Costs – The Fund does not intend to utilize any debt.
Asset Sales Costs/Fees – Any fees incurred will be netted out of the sales proceeds that are eligible for distribution, which may range from 0% to 10%.
Page 22 DMS 15409407.8 FINANCIAL PROJECTIONS
The Fund is targeting a 12%-18% annualized return to Members. Below are Financial Projections that reflect a 12% and 18% return to Members. This return is a projected target and is not guaranteed. Additional financial projections are included in Exhibit C.
12% Annual Return to Members
18% Annual Return to Members
Page 23 DMS 15409407.8
EXHIBITS
Exhibit A – Assets
Page 24 DMS 15409407.8 TYPE Product Portfolio Units BASEBALL 1993 Bowman Baseball Hobby Box 24 BASEBALL 1993 Topps Finest Baseball Hobby Box 1 BASEBALL 1993 Upper Deck SP Baseball Hobby Box 1 BASEBALL 2009 Bowman Draft Picks & Prospects Baseball Hobby Box 1 BASEBALL 2010 Bowman Platinum Baseball Hobby Box 12 BASEBALL 2010 Bowman Sterling Baseball Hobby Box 1 BASEBALL 2011 Bowman Chrome Baseball Hobby Box 12 BASEBALL 2011 Bowman Draft Picks & Prospects Baseball Hobby Box 24 BASEBALL 2011 Bowman Sterling Baseball Hobby Box 1 BASEBALL 2011 Topps Finest Baseball Hobby Box 1 BASEBALL 2011 Topps Update Series Baseball Hobby Box 1 BASEBALL 2011 Topps Update Series Baseball Jumbo HTA Box 1 BASEBALL 2011 Topps Value Baseball Box 20 BASEBALL 2013 Bowman Baseball Hobby Box 1 BASEBALL 2013 Bowman Baseball Jumbo (HTA) Box 8 BASEBALL 2013 Bowman Draft Picks & Prospects Baseball Hobby Box 60 BASEBALL 2013 Bowman Sterling Baseball Hobby Box 40 BASEBALL 2013 Topps Heritage High Number Baseball Complete Set 24 BASEBALL 2013 Topps Update Series Baseball Hobby Box 24 BASEBALL 2014 Bowman Baseball Hobby Box 1 BASEBALL 2014 Bowman Baseball Jumbo (HTA) Box 16 BASEBALL 2014 Bowman Chrome Baseball Hobby Box 60 BASEBALL 2014 Bowman Chrome Baseball *Jumbo* HTA Box 40 BASEBALL 2014 Bowman Draft Picks & Prospects Baseball Hobby Box 60 BASEBALL 2014 Bowman Draft Picks & Prospects Baseball *Jumbo* (HTA) Box 16 BASEBALL 2014 Bowman Draft Picks & Prospects Baseball *SUPER Jumbo* Box 12 BASEBALL 2014 Bowman Sterling Baseball Hobby Box 60 BASEBALL 2014 Topps Heritage High Number Baseball Complete Set 48 BASEBALL 2014 Topps Update Series Baseball Hobby Box 60 BASEBALL 2014 Topps Update Series Baseball Jumbo HTA Box 30 BASEBALL 2015 Bowman Baseball Hobby Box 60 BASEBALL 2015 Bowman Baseball *Jumbo* (HTA) Box 40 BASEBALL 2015 Bowman's Best Baseball Hobby Box 40 BASEBALL 2015 Bowman Chrome Baseball Hobby Box 60 BASEBALL 2015 Bowman Chrome Baseball *Jumbo* HTA Box 16 BASEBALL 2015 Bowman Draft Picks & Prospects Baseball Hobby Box 60 BASEBALL 2015 Bowman Draft Picks & Prospects Baseball *Jumbo* Box 40 BASEBALL 2015 Bowman Draft Picks & Prospects Baseball *SUPER Jumbo* Box 30 BASEBALL 2015 Topps Update Series Baseball Hobby Box 60 BASEBALL 2015 Topps Update Series Baseball *Jumbo* Box 6 BASEBALL 2016 Bowman Baseball Hobby Box 60 BASEBALL 2016 Bowman Baseball *Jumbo* HTA Box 40 BASEBALL 2016 Bowman's Best Baseball Hobby Box 40 BASEBALL 2016 Bowman Chrome Baseball Hobby Box 60 BASEBALL 2016 Bowman Chrome Baseball ^Vending^ Box 60 BASEBALL 2016 Bowman Draft Picks & Prospects Baseball ^Jumbo^ Box 40 BASEBALL 2016 Bowman Draft Picks & Prospects Baseball SUPER Jumbo Box 30 BASEBALL 2016 Topps Chrome Baseball Sapphire Edition Complete Set 1 BASEBALL 2016 Topps Update Series Baseball Hobby Box 60 BASEBALL 2016 Topps Update Series Baseball ^Jumbo^ Box 30 BASEBALL 2017 Bowman Baseball Hobby Box 60 BASEBALL 2017 Bowman Baseball ^Jumbo HTA^ Box 40 BASEBALL 2017 Bowman's Best Baseball Hobby Box 40 BASEBALL 2017 Bowman Chrome Baseball Mini Factory Set 40 BASEBALL 2017 Bowman Chrome Baseball Hobby Box 60 BASEBALL 2017 Bowman Chrome Baseball HTA Choice Box 60 BASEBALL 2017 Bowman Draft Baseball SUPER Jumbo Box 30 BASEBALL 2017 Bowman Draft Baseball Jumbo Box 40 BASEBALL 2017 Topps Chrome Baseball Sapphire Edition Complete Set 1 BASEBALL 2017 Topps Heritage HIGH Number Baseball Hobby Box 60 BASEBALL 2017 Topps Chrome UPDATE Mega Box Baseball - Box 80 BASEBALL 2017 Topps Update Series Baseball Hobby Box 60 BASEBALL 2017 Topps Update Series Baseball ^Jumbo^ Box 30 BASEBALL 2018 Bowman Baseball Hobby Box 60 BASEBALL 2018 Bowman Baseball Jumbo HTA Box 40 BASEBALL 2018 Bowman's Best Baseball Hobby Box 40 BASEBALL 2018 Bowman Chrome Baseball Hobby Box 60 BASEBALL 2018 Bowman Chrome Baseball HTA Choice Box 60 BASEBALL 2018 Bowman Draft Baseball SUPER Jumbo Box 30 BASEBALL 2018 Bowman Draft Baseball Jumbo Box 40 BASEBALL 2018 Topps On-Demand 3D Baseball Box 20 TYPE Product Portfolio Units BASEBALL 2018 Topps Chrome Baseball Sapphire Edition Box 5 BASEBALL 2018 Topps Heritage HIGH Number Baseball Hobby Box 60 BASEBALL 2018 Topps Chrome UPDATE Mega Box Baseball - Box 80 BASEBALL 2018 Topps On-Demand Mini Baseball Box 20 BASEBALL 2018 Topps Transcendent Collection Baseball Hobby Box 1 BASEBALL 2018 Topps Update Series Baseball ^Blaster^ Box 64 BASEBALL 2018 Topps Update Series Baseball Hobby Box 60 BASEBALL 2018 Topps Update Series Baseball ^Jumbo^ Box 30 BASEBALL 2018 Topps Update Series Baseball ^FAT PACK^ Case 5 BASEBALL 2019 Bowman Baseball Hobby Box 60 BASEBALL 2019 Bowman Baseball Jumbo HTA Box 40 BASEBALL 2019 Bowman Chrome Baseball Hobby Box 60 BASEBALL 2019 Bowman Chrome Baseball HTA Choice Box 60 BASEBALL 2019 Bowman Sterling Baseball Hobby Box 60 BASEBALL 2019 Topps Chrome Baseball Sapphire Edition Box 320 BASEBALL 2019 Topps Heritage HIGH Number Baseball Hobby Box 60 BASEBALL 2019 Topps Series 2 Baseball Hobby Box 60 BASEBALL 2019 Topps Series 2 Baseball Jumbo HTA Box 30 BASEBALL 2019 Topps Update Series Baseball Hobby Box 60 BASEBALL 2019 Topps Update Series Baseball ^Jumbo^ Box 40
BASKETBALL 1986/87 Fleer Basketball Hobby Box 1 BASKETBALL 1996/97 Bowman's Best Basketball Hobby Box 1 BASKETBALL 1996/97 Fleer Skybox E-X 2000 Basketball Hobby Box 1 BASKETBALL 1996/97 Topps Chrome Basketball Hobby Box 1 BASKETBALL 1997/98 Bowman's Best Basketball Hobby Box 1 BASKETBALL 1997/98 Skybox Metal Universe Championship Preview Basketball Hobby Box 1 BASKETBALL 1997/98 Topps Chrome Basketball Hobby Box 1 BASKETBALL 1997/98 Topps Finest Series 1 Basketball Hobby Box 1 BASKETBALL 1998/99 Bowman's Best Basketball Hobby Box 1 BASKETBALL 1998/99 Fleer Flair Showcase Basketball Hobby Box 1 BASKETBALL 1998/99 Topps Chrome Basketball Hobby Box 1 BASKETBALL 1998/99 Upper Deck MJ Access Basketball Hobby Box 1 BASKETBALL 1998/99 Upper Deck SP Authentic Basketball Hobby Box 1 BASKETBALL 2003/04 Bowman Signature Basketball Hobby Box 1 BASKETBALL 2003/04 Topps Chrome Basketball Hobby Box 4 BASKETBALL 2003/04 Topps Contemporary Collection Basketball Hobby Box 1 BASKETBALL 2003/04 Topps Finest Basketball Hobby Box 1 BASKETBALL 2003/04 Upper Deck Rookie Exclusives Basketball Hobby Box 1 BASKETBALL 2003/04 Upper Deck SPx Basketball Hobby Box 1 BASKETBALL 2007/08 Topps Basketball Hobby Box 1 BASKETBALL 2007/08 Topps Chrome Basketball Hobby Box 1 BASKETBALL 2007/08 Upper Deck SP Authentic Basketball Hobby Box 1 BASKETBALL 2008/09 Topps Chrome Basketball Hobby Box 1 BASKETBALL 2008/09 Upper Deck SP Authentic Basketball Hobby Box 1 BASKETBALL 2008/09 Upper Deck SP Rookie Threads Basketball Hobby Box 1 BASKETBALL 2008/09 Upper Deck SPx Basketball Hobby Box 1 BASKETBALL 2012/13 Panini Contenders Basketball Hobby Box 60 BASKETBALL 2012/13 Panini Flawless Basketball Hobby Box 10 BASKETBALL 2012/13 Panini Gold Standard Basketball Hobby Box 50 BASKETBALL 2012/13 Panini Immaculate Basketball Hobby Box 12 BASKETBALL 2012/13 Panini Limited Basketball Hobby Box 70 BASKETBALL 2012/13 Panini National Treasures Basketball Hobby Box 15 BASKETBALL 2012/13 Panini Preferred Basketball Hobby Box 10 BASKETBALL 2012/13 Panini Prizm Basketball Hobby Box 48 BASKETBALL 2012/13 Panini Prizm Basketball *Retail* Box 40 BASKETBALL 2012/13 Panini Select Basketball Hobby Box 60 BASKETBALL 2012/13 Panini Totally Certified Basketball Hobby Box 60 BASKETBALL 2012/13 Upper Deck Exquisite Collection Basketball Hobby Box 3 BASKETBALL 2013/14 Panini Basketball Hobby Box 60 BASKETBALL 2013/14 Panini Court Kings Basketball Hobby Box 75 BASKETBALL 2013/14 Panini Crusade Basketball Hobby Box 75 BASKETBALL 2013/14 Panini Elite Basketball Hobby Box 60 BASKETBALL 2013/14 Panini Flawless Basketball Hobby Box 10 BASKETBALL 2013/14 Panini Gold Standard Basketball Hobby Box 10 BASKETBALL 2013/14 Panini NBA Hoops Basketball Jumbo Box 60 BASKETBALL 2013/14 Panini Immaculate Basketball Hobby Box 12 BASKETBALL 2013/14 Panini National Treasures Basketball Hobby Box 6 BASKETBALL 2013/14 Panini Pinnacle Basketball Jumbo Box 60 BASKETBALL 2013/14 Panini Preferred Basketball Hobby Box 50 BASKETBALL 2013/14 Panini Prestige Basketball Hobby Box 60 TYPE Product Portfolio Units BASKETBALL 2013/14 Panini Prizm Basketball Hobby Box 48 BASKETBALL 2013/14 Panini Spectra Basketball Hobby Box 8 BASKETBALL 2013/14 Panini Timeless Treasures Basketball Hobby Box 80 BASKETBALL 2013/14 Panini Titanium Basketball Hobby Box 80 BASKETBALL 2013/14 Panini Totally Certified Basketball Hobby Box 60 BASKETBALL 2013/14 Upper Deck Exquisite Collection Basketball Hobby Box 3 BASKETBALL 2013/14 Upper Deck SP Authentic Basketball Hobby Box 12 BASKETBALL 2014/15 Panini Eminence Basketball Hobby Box 1 BASKETBALL 2014/15 Panini Excalibur Premium Basketball Box 60 BASKETBALL 2014/15 Panini Flawless Basketball Hobby Box 2 BASKETBALL 2014/15 Panini National Treasures Basketball Hobby Box 15 BASKETBALL 2014/15 Panini Prizm Basketball Hobby Box 60 BASKETBALL 2014/15 Panini Prizm Basketball *Jumbo* Box 40 BASKETBALL 2014/15 Upper Deck SP Authentic Basketball Hobby Box 60 BASKETBALL 2015/16 Panini Flawless Basketball Hobby Box 10 BASKETBALL 2015/16 Panini Immaculate Basketball Hobby Box 30 BASKETBALL 2015/16 Panini National Treasures Basketball Hobby Box 20 BASKETBALL 2015/16 Panini Prizm Basketball Hobby Box 60 BASKETBALL 2015/16 Panini Prizm Basketball *Jumbo* Box 24 BASKETBALL 2015/16 Panini Revolution Basketball Hobby Box 80 BASKETBALL 2015/16 Panini Select Basketball Hobby Box 60 BASKETBALL 2016/17 Panini Donruss Optic Basketball Hobby Box 60 BASKETBALL 2016/17 Panini Flawless Basketball Hobby Box 2 BASKETBALL 2016/17 Panini Immaculate Basketball Hobby Box 25 BASKETBALL 2016/17 Panini National Treasures Basketball Hobby Box 20 BASKETBALL 2016/17 Panini Prizm Basketball Jumbo HTA Box 24 BASKETBALL 2016/17 Panini Prizm Mosaic Basketball Box 50 BASKETBALL 2016/17 Panini Revolution Basketball Hobby Box 80 BASKETBALL 2016/17 Panini Select Basketball Hobby Box 60 BASKETBALL 2017/18 Panini Contenders Basketball Hobby Box 24 BASKETBALL 2017/18 Panini Donruss Optic Basketball Hobby Box 60 BASKETBALL 2017/18 Panini Flawless Basketball Hobby Box 10 BASKETBALL 2017/18 Panini Immaculate Basketball Hobby Box 25 BASKETBALL 2017/18 Panini Impeccable Basketball Box 15 BASKETBALL 2017/18 Panini Kobe Eminence Basketball Hobby Box 1 BASKETBALL 2017/18 Panini National Treasures Basketball Hobby Box 20 BASKETBALL 2017/18 Panini Opulence Basketball Hobby Box 15 BASKETBALL 2017/18 Panini Prizm Basketball Hobby Box 60 BASKETBALL 2017/18 Panini Prizm Basketball ^Retail^ Box 80 BASKETBALL 2017/18 Panini Prizm Basketball Super Value Rack Box 80 BASKETBALL 2017/18 Panini Prizm Mosaic Basketball Box 60 BASKETBALL 2017/18 Panini Revolution Basketball Hobby Box 80 BASKETBALL 2017/18 Panini Select Basketball Hobby Box 60 BASKETBALL 2017/18 Upper Deck Supreme Hard Court Basketball Hobby Box 50 BASKETBALL 2018/19 Panini Contenders Basketball Hobby Box 60 BASKETBALL 2018/19 Panini Contenders Optic Basketball Hobby Box 80 BASKETBALL 2018/19 Panini Donruss Optic Basketball Hobby Box 60 BASKETBALL 2018/19 Panini Donruss Optic Basketball ^Fast Break^ Hobby Box 80 BASKETBALL 2018/19 Panini Flawless Basketball Hobby Box 10 BASKETBALL 2018/19 Panini Immaculate Basketball Hobby Box 50 BASKETBALL 2018/19 Panini Impeccable Basketball Hobby Box 15 BASKETBALL 2018/19 Panini National Treasures Basketball Hobby Box 20 BASKETBALL 2018/19 Panini Prizm Choice Basketball Box 60 BASKETBALL 2018/19 Panini Prizm Basketball Hobby Box 60 BASKETBALL 2018/19 Panini Revolution Basketball Hobby Box 80 BASKETBALL 2018/19 Panini Select Basketball Hobby Box 60 BASKETBALL 2019/20 Panini Immaculate Collegiate Basketball Hobby Box 25 BASKETBALL 2019/20 Panini Prizm Collegiate Draft Picks Basketball Hobby Box 80
FOOTBALL 1998 Bowman Chrome Football Hobby Box 1 FOOTBALL 2000 Upper Deck SP Authentic Football Hobby Box 1 FOOTBALL 2001 Topps Chrome Football Hobby Box 1 FOOTBALL 2012 Panini Contenders Football Hobby Box 12 FOOTBALL 2012 Panini National Treasures Football Hobby Box 4 FOOTBALL 2012 Panini Prizm Football Hobby Box 12 FOOTBALL 2012 Panini Prizm Football *Retail* Box 20 FOOTBALL 2013 Panini Prizm Football Hobby Box 60 FOOTBALL 2014 Bowman Chrome Football Hobby Box 50 FOOTBALL 2014 Panini National Treasures Football Hobby Box 20 FOOTBALL 2014 Panini Prizm Football Hobby Box 60 FOOTBALL 2014 Panini Select Football Hobby Box 70 TYPE Product Portfolio Units FOOTBALL 2014 Topps Chrome Football Hobby Box 60 FOOTBALL 2015 Panini Contenders Football Hobby Box 60 FOOTBALL 2015 Panini Flawless Football Hobby Box 10 FOOTBALL 2015 Panini Prizm Football Hobby Box 60 FOOTBALL 2015 Panini Prizm Football *Jumbo* Box 60 FOOTBALL 2015 Topps Chrome Football Hobby Box 60 FOOTBALL 2016 Panini Contenders Football Hobby Box 60 FOOTBALL 2016 Panini Donruss Optic Football Hobby Box 60 FOOTBALL 2016 Panini Flawless Football Hobby Box 2 FOOTBALL 2016 Panini Immaculate Football Hobby Box 36 FOOTBALL 2016 Panini National Treasures Football Hobby Box 20 FOOTBALL 2016 Panini Prizm Football Jumbo Box 24 FOOTBALL 2017 Panini Contenders Football Hobby Box 48 FOOTBALL 2017 Panini Contenders Optic Football Box 80 FOOTBALL 2017 Panini Donruss Optic Football Hobby Box 60 FOOTBALL 2017 Panini Flawless Football Hobby Box 1 FOOTBALL 2017 Panini Immaculate Football Hobby Box 30 FOOTBALL 2017 Panini National Treasures Football Hobby Box 16 FOOTBALL 2017 Panini Origins Football Hobby Box 16 FOOTBALL 2017 Panini Prizm Football Hobby Box 60 FOOTBALL 2017 Panini Select Football Hobby Box 12 FOOTBALL 2018 Panini Contenders Football Hobby Box 60 FOOTBALL 2018 Panini Contenders Optic Football Hobby Box 60 FOOTBALL 2018 Panini Donruss Optic Football Hobby Box 60 FOOTBALL 2018 Panini Flawless Football Hobby Box 10 FOOTBALL 2018 Panini National Treasures Football Hobby Box 20 FOOTBALL 2018 Panini Obsidian Football Hobby Box 60 FOOTBALL 2018 Panini One Football Hobby Box 80 FOOTBALL 2018 Panini Origins Football Hobby Box 80 FOOTBALL 2018 Panini Prizm Football Hobby Box 60 FOOTBALL 2018 Panini Select Football Hobby Box 60 FOOTBALL 2018 Panini Spectra Football Hobby Box 16 FOOTBALL 2019 Panini Impeccable Football Hobby Box 15
GOLF 2001 Upper Deck SP Authentic Golf Hobby Box 60 HOCKEY 2015/16 Upper Deck The Cup Hockey Hobby Box 6 HOCKEY 2016/17 Upper Deck The Cup Hockey Hobby Box 12 HOCKEY 2017/18 Upper Deck The Cup Hockey Hobby Box 15 HOCKEY 2018/19 Upper Deck The Cup Hockey Hobby Box 3 ENTERTAINMENT 2011 Leaf Family Guy Seasons 3,4 & 5 Trading Cards Box 24 ENTERTAINMENT 2018 Topps Stranger Things Season One Hobby Box 12 ENTERTAINMENT Game of Thrones Inflexions (Rittenhouse) - Box 20 ENTERTAINMENT Game of Thrones Inflexions ^International Edition^ (Rittenhouse) - Box 20 ENTERTAINMENT Game of Thrones Season One Trading Cards (Rittenhouse) - Box 12 ENTERTAINMENT Game of Thrones Season Four Trading Cards (Rittenhouse) - Box 24 ENTERTAINMENT Game of Thrones Season Six Trading Cards (Rittenhouse) - Box 24 ENTERTAINMENT Game of Thrones Season Seven Trading Cards (Rittenhouse) - Box 24 ENTERTAINMENT Game of Thrones Valyrian Steel Trading Cards (Rittenhouse) - Box 40 ENTERTAINMENT Topps Garbage Pail Kids Chrome Series 1 Hobby Box 12 UFC 2009 Topps UFC Round 1 Trading Cards Hobby Box 1 SOCCER 2016 Panini Flawless Soccer Hobby Box 2 SOCCER 2018/19 Panini Immaculate Soccer Hobby Box 6 SOCCER 2018 Panini National Treasures Soccer Hobby Box 20
Portfolio Holdings By Type (%)
3.15%
20.27% 31.84%
44.74%
Baseball Basketball Football Other Exhibit B – Assignable Asset Acquisition Agreement
DocuSign Envelope ID: 62A0C9D2-AF6D-4F1B-910C-F4766A72A6BE
OPTION TO PURCHASE AGREEMENT
This Option to Purchase Agreement (this “Agreement”) is entered into between Modern Wax Fund Manager, LLC (the “Optionee”) and Frontline Collectables, Inc. (the “Company”; collectively with the Optionee and the Company and their respective successors and assigns, the “Parties,” each a “Party”) with an effective date of December 19, 2019 (the “Date of Grant”).
1. Option. An option to purchase (the “Option”) 100% of the Company’s ownership interests in those assets as described on Schedule 1 (attached to and made a part of this Agreement by this reference; the “Option Assets”) is hereby granted to the Optionee. The Parties agree that upon exercise of this Option as permitted hereunder, Optionee will become a 100% owner of and undivided title to the Option Assets.
2. Option Consideration. The Parties each acknowledge that the Company and the Optionee are entering into this Agreement for adequate, good and valuable consideration including the promises set forth herein. The Parties acknowledge that the Company is a member of the Optionee, and the Parties formed the Company for the purpose of conducting business together.
3. Exercise of Option. This Option shall be exercisable as follows:
(a) Schedule of Rights to Exercise. This Option is fully exercisable anytime upon the Date of Grant.
(b) Method of Exercise. This Option shall be exercisable by:
(i) delivery of a written notice executed by the Optionee delivered to the Company which shall state the Optionee’s election to exercise the Option (the “Option Exercise Notice”); and
(ii) the delivery of the Option Purchase Price pursuant to Section 7 below by Optionee to Company within fifteen (15) days of the delivery of the Option Exercise Notice to the Company.
4. Transferability of Agreement. This Agreement shall be assignable or transferable by Optionee (i) to any affiliate or subsidiary of Optionee without the consent of the Company, and/or (ii) to a third party only with the consent of the Company which shall not be unreasonably withheld or delayed. Neither the Option nor the Option Assets covered hereby are subject to lien, attachment, execution or similar process, except with the prior consent of the Optionee. Notwithstanding the foregoing, this Agreement is transferable to that certain company to be formed by the Optionee for the purpose of holding the Option Assets (the “Fund”).
5. Term of Agreement. Unless otherwise extended by written agreement of the Parties, this Agreement and the Option shall terminate on February 29, 2019.
6. Administration. Upon the Optionee’s exercise of the Option in accordance with the terms of Section 3 (b), the Company agrees to promptly take all necessary actions to effectuate the transfer of the Option Assets, including, but not limited to, the delivery of such documentation or Option Assets to Optionee as reasonably necessary to carry-out the intent of this Agreement. DocuSign Envelope ID: 62A0C9D2-AF6D-4F1B-910C-F4766A72A6BE
7. Option Purchase Price. The “Option Purchase Price” is:
(a) 50% equity interest in the Fund (the “Fund Equity Consideration”); and
(b) $1,430,878
For the avoidance of doubt, if Wax Fund Manager, LLC is the Optionee at the time of exercise, then it shall (as the sole manager of the Fund) cause the Fund to issue the Fund Equity Consideration and if the Fund is the Optionee at the time of exercise, Wax Fund Manager, LLC, hereby agrees to cause the Fund to issue the Fund Equity Consideration in connection with the exercise of this Option.
For financial accounting and tax purposes the issuance of the Fund Equity Consideration shall be a result of a capital contribution of the Option Assets to the Fund.
8. Miscellaneous.
(a) Notices. Notices to be given to a Party pursuant to this Agreement shall be in writing and directed to the address of such Party indicated below, or such other address as furnished to the other Party in writing.
(b) Governing Law and Venue. This Agreement will be governed by the procedural and substantive laws of the State of Delaware, without regard to its conflicts of laws principles. This Agreement has been entered into in Delaware, and it shall be performable for all purposes in Delaware. Any action or proceeding against any Party under or in connection with this Agreement or any part thereof may be brought in any state or federal court in Delaware or Texas.
(c) Modification. This Agreement may be modified only by a written instrument duly executed by an authorized representative of both Parties.
(d) Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective heirs, successors, and assigns.
(e) No Waiver. The failure of a Party to enforce any provision of this Agreement shall not constitute a waiver or such provision or the right of such Party to enforce such provision or any other provision.
(f) Severability. If any provision of this Agreement is held to be illegal, invalid or unenforceable under any present or future law, and if the rights or obligations of any Party will not be materially and adversely affected thereby, (a) such provision will be fully severable, (b) this Agreement will be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part hereof, (c) the remaining provisions of this Agreement will remain in full force and effect and will not be affected by the illegal, invalid or unenforceable provision or by its severance here from and (d) in lieu of such illegal, invalid or unenforceable provision, there will be added as a part of this Agreement a legal, valid and enforceable provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible so as to put into effect the original underlying intent of the Parties.
[DMS 15389038.3] PAGE 2 DocuSign Envelope ID: 62A0C9D2-AF6D-4F1B-910C-F4766A72A6BE
(g) Construction. Each of the Parties hereto acknowledges that it has had the benefit of legal counsel of its own choice and has been afforded an opportunity to review this Agreement with its legal counsel and that this Agreement shall be construed as if jointly drafted by each of the Parties hereto. The Parties further agree that the recitals to this Agreement are an integral part of and contain material terms of this Agreement.
(h) Headings. The headings, captions and arrangements used in this Agreement are for convenience only and shall not affect the interpretation of this Agreement.
(i) Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
(j) Entire Agreement. Both Parties acknowledge that they have read, understand and agree to be bound by this Agreement, and that this Agreement is the complete and exclusive statement of the agreement between the parties regarding the subject matter hereof, which supersedes all proposals, oral or written, and all other communications between the Parties relating to such subject matter.
[REMAINDER OF PAGE IS LEFT INTENTIONALLY BLANK; SIGNATURE PAGE(S) FOLLOW]
[DMS 15389038.3] PAGE 3 DocuSign Envelope ID: 62A0C9D2-AF6D-4F1B-910C-F4766A72A6BE
COMPANY:
FRONTLINE COLLECTABLES, INC.
By: Name: Thomas Fish Title: President & Authorized Signer Address: 11 Acacia Ln. Sterling, VA 20166
OPTIONEE:
MODERN WAX FUND MANAGER, LLC
By: Name: David Arons Title: Manager Address:8745 Gary Burns Dr. Ste. 160 #174 Frisco, TX 75034
Signature Page to Option to Purchase Agreement DocuSign Envelope ID: 62A0C9D2-AF6D-4F1B-910C-F4766A72A6BE
DESCRIPTION OF OPTION ASSETS
[See attached]
Signature Page to Option to Purchase Agreement DocuSign Envelope ID: 62A0C9D2-AF6D-4F1B-910C-F4766A72A6BE
TYPE Product Portfolio Units Unit Market Total Market Holding (%) BASEBALL 2009 Bowman Draft Picks & Prospects Baseball Hobby Box 1 $5,150.00 $5,150.00 0.171% BASEBALL 2010 Bowman Platinum Baseball Hobby Box 12 $600.00 $7,200.00 0.240% BASEBALL 2010 Bowman Sterling Baseball Hobby Box 1 $350.00 $350.00 0.012% BASEBALL 2011 Bowman Chrome Baseball Hobby Box 12 $949.95 $11,399.40 0.379% BASEBALL 2011 Bowman Draft Picks & Prospects Baseball Hobby Box 24 $550.00 $13,200.00 0.439% BASEBALL 2011 Bowman Sterling Baseball Hobby Box 1 $1,800.00 $1,800.00 0.060% BASEBALL 2011 Topps Finest Baseball Hobby Box 1 $1,400.00 $1,400.00 0.047% BASEBALL 2011 Topps Update Series Baseball Hobby Box 1 $6,500.00 $6,500.00 0.216% BASEBALL 2011 Topps Update Series Baseball Jumbo HTA Box 1 $6,500.00 $6,500.00 0.216% BASEBALL 2011 Topps Value Baseball Box 20 $800.00 $16,000.00 0.532% BASEBALL 2013 Bowman Baseball Hobby Box 1 $125.00 $125.00 0.004% BASEBALL 2013 Bowman Baseball Jumbo (HTA) Box 8 $400.00 $3,200.00 0.106% BASEBALL 2013 Bowman Draft Picks & Prospects Baseball Hobby Box 60 $329.95 $19,797.00 0.659% BASEBALL 2013 Bowman Sterling Baseball Hobby Box 40 $525.00 $21,000.00 0.699% BASEBALL 2013 Topps Heritage High Number Baseball Complete Set 24 $200.00 $4,800.00 0.160% BASEBALL 2013 Topps Update Series Baseball Hobby Box 24 $284.95 $6,838.80 0.228% BASEBALL 2014 Bowman Baseball Hobby Box 1 $185.00 $185.00 0.006% BASEBALL 2014 Bowman Baseball Jumbo (HTA) Box 16 $380.00 $6,080.00 0.202% BASEBALL 2014 Bowman Chrome Baseball Hobby Box 60 $179.95 $10,797.00 0.359% BASEBALL 2014 Bowman Chrome Baseball *Jumbo* HTA Box 40 $334.95 $13,398.00 0.446% BASEBALL 2014 Bowman Draft Picks & Prospects Baseball Hobby Box 60 $68.95 $4,137.00 0.138% BASEBALL 2014 Bowman Draft Picks & Prospects Baseball *Jumbo* (HTA) Box 16 $176.95 $2,831.20 0.094% BASEBALL 2014 Bowman Draft Picks & Prospects Baseball *SUPER Jumbo* Box 12 $210.00 $2,520.00 0.084% BASEBALL 2014 Bowman Sterling Baseball Hobby Box 60 $399.95 $23,997.00 0.798% BASEBALL 2014 Topps Heritage High Number Baseball Complete Set 48 $349.95 $16,797.60 0.559% BASEBALL 2014 Topps Update Series Baseball Hobby Box 60 $225.00 $13,500.00 0.449% BASEBALL 2014 Topps Update Series Baseball Jumbo HTA Box 30 $310.00 $9,300.00 0.309% BASEBALL 2015 Bowman Baseball Hobby Box 60 $83.95 $5,037.00 0.168% BASEBALL 2015 Bowman Baseball *Jumbo* (HTA) Box 40 $176.95 $7,078.00 0.235% BASEBALL 2015 Bowman's Best Baseball Hobby Box 40 $124.95 $4,998.00 0.166% BASEBALL 2015 Bowman Chrome Baseball Hobby Box 60 $294.95 $17,697.00 0.589% BASEBALL 2015 Bowman Chrome Baseball *Jumbo* HTA Box 16 $550.00 $8,800.00 0.293% BASEBALL 2015 Bowman Draft Picks & Prospects Baseball Hobby Box 60 $85.00 $5,100.00 0.170% BASEBALL 2015 Bowman Draft Picks & Prospects Baseball *Jumbo* Box 40 $210.00 $8,400.00 0.279% BASEBALL 2015 Bowman Draft Picks & Prospects Baseball *SUPER Jumbo* Box 30 $374.95 $11,248.50 0.374% BASEBALL 2015 Topps Update Series Baseball Hobby Box 60 $160.00 $9,600.00 0.319% BASEBALL 2015 Topps Update Series Baseball *Jumbo* Box 6 $180.00 $1,080.00 0.036% BASEBALL 2016 Bowman Baseball Hobby Box 60 $224.95 $13,497.00 0.449% BASEBALL 2016 Bowman Baseball *Jumbo* HTA Box 40 $450.00 $18,000.00 0.599% BASEBALL 2016 Bowman's Best Baseball Hobby Box 40 $290.00 $11,600.00 0.386% BASEBALL 2016 Bowman Chrome Baseball Hobby Box 60 $550.00 $33,000.00 1.098% BASEBALL 2016 Bowman Chrome Baseball ^Vending^ Box 60 $600.00 $36,000.00 1.198% BASEBALL 2016 Bowman Draft Picks & Prospects Baseball ^Jumbo^ Box 40 $469.95 $18,798.00 0.625% BASEBALL 2016 Bowman Draft Picks & Prospects Baseball SUPER Jumbo Box 30 $600.00 $18,000.00 0.599% BASEBALL 2016 Topps Chrome Baseball Sapphire Edition Complete Set 1 $1,999.95 $1,999.95 0.067% BASEBALL 2016 Topps Update Series Baseball Hobby Box 60 $60.00 $3,600.00 0.120% BASEBALL 2016 Topps Update Series Baseball ^Jumbo^ Box 30 $90.00 $2,700.00 0.090% BASEBALL 2017 Bowman Baseball Hobby Box 60 $400.00 $24,000.00 0.798% BASEBALL 2017 Bowman Baseball ^Jumbo HTA^ Box 40 $800.00 $32,000.00 1.065% BASEBALL 2017 Bowman's Best Baseball Hobby Box 40 $176.95 $7,078.00 0.235% BASEBALL 2017 Bowman Chrome Baseball Mini Factory Set 40 $113.95 $4,558.00 0.152% BASEBALL 2017 Bowman Chrome Baseball Hobby Box 60 $239.95 $14,397.00 0.479% BASEBALL 2017 Bowman Chrome Baseball HTA Choice Box 60 $299.95 $17,997.00 0.599% BASEBALL 2017 Bowman Draft Baseball SUPER Jumbo Box 30 $499.95 $14,998.50 0.499% BASEBALL 2017 Bowman Draft Baseball Jumbo Box 40 $444.95 $17,798.00 0.592% BASEBALL 2017 Topps Chrome Baseball Sapphire Edition Complete Set 1 $2,299.95 $2,299.95 0.077% BASEBALL 2017 Topps Heritage HIGH Number Baseball Hobby Box 60 $107.95 $6,477.00 0.215% BASEBALL 2017 Topps Chrome UPDATE Mega Box Baseball - Box 80 $60.00 $4,800.00 0.160% BASEBALL 2017 Topps Update Series Baseball Hobby Box 60 $100.00 $6,000.00 0.200% BASEBALL 2017 Topps Update Series Baseball ^Jumbo^ Box 30 $140.00 $4,200.00 0.140% BASEBALL 2018 Bowman Baseball Hobby Box 60 $164.95 $9,897.00 0.329% BASEBALL 2018 Bowman Baseball Jumbo HTA Box 40 $319.95 $12,798.00 0.426% BASEBALL 2018 Bowman's Best Baseball Hobby Box 40 $169.95 $6,798.00 0.226% BASEBALL 2018 Bowman Chrome Baseball Hobby Box 60 $219.95 $13,197.00 0.439% BASEBALL 2018 Bowman Chrome Baseball HTA Choice Box 60 $294.95 $17,697.00 0.589% BASEBALL 2018 Bowman Draft Baseball SUPER Jumbo Box 30 $404.95 $12,148.50 0.404% BASEBALL 2018 Bowman Draft Baseball Jumbo Box 40 $329.95 $13,198.00 0.439% BASEBALL 2018 Topps On-Demand 3D Baseball Box 20 $179.95 $3,599.00 0.120% BASEBALL 2018 Topps Chrome Baseball Sapphire Edition Box 5 $1,699.95 $8,499.75 0.283% BASEBALL 2018 Topps Heritage HIGH Number Baseball Hobby Box 60 $134.95 $8,097.00 0.269% BASEBALL 2018 Topps Chrome UPDATE Mega Box Baseball - Box 80 $80.00 $6,400.00 0.213% BASEBALL 2018 Topps On-Demand Mini Baseball Box 20 $74.95 $1,499.00 0.050% BASEBALL 2018 Topps Transcendent Collection Baseball Hobby Box 1 $23,999.95 $23,999.95 0.798% BASEBALL 2018 Topps Update Series Baseball ^Blaster^ Box 64 $44.95 $2,876.80 0.096% BASEBALL 2018 Topps Update Series Baseball Hobby Box 60 $245.00 $14,700.00 0.489% BASEBALL 2018 Topps Update Series Baseball ^Jumbo^ Box 30 $350.00 $10,500.00 0.349% BASEBALL 2018 Topps Update Series Baseball ^FAT PACK^ Case 5 $1,999.95 $9,999.75 0.333% BASEBALL 2019 Bowman Baseball Hobby Box 60 $165.95 $9,957.00 0.331% BASEBALL 2019 Bowman Baseball Jumbo HTA Box 40 $364.95 $14,598.00 0.486% DocuSign Envelope ID: 62A0C9D2-AF6D-4F1B-910C-F4766A72A6BE
TYPE Product Portfolio Units Unit Market Total Market Holding (%) BASEBALL 2019 Bowman Chrome Baseball Hobby Box 60 $123.95 $7,437.00 0.247% BASEBALL 2019 Bowman Chrome Baseball HTA Choice Box 60 $184.95 $11,097.00 0.369% BASEBALL 2019 Bowman Sterling Baseball Hobby Box 60 $214.95 $12,897.00 0.429% BASEBALL 2019 Topps Chrome Baseball Sapphire Edition Box 320 $219.95 $70,384.00 2.342% BASEBALL 2019 Topps Heritage HIGH Number Baseball Hobby Box 60 $83.95 $5,037.00 0.168% BASEBALL 2019 Topps Series 2 Baseball Hobby Box 60 $100.00 $6,000.00 0.200% BASEBALL 2019 Topps Series 2 Baseball Jumbo HTA Box 30 $174.95 $5,248.50 0.175% BASEBALL 2019 Topps Update Series Baseball Hobby Box 60 $94.95 $5,697.00 0.190% BASEBALL 2019 Topps Update Series Baseball ^Jumbo^ Box 40 $144.95 $5,798.00 0.193% BASEBALL 1993 Bowman Baseball Hobby Box 24 $80.00 $1,920.00 0.064% BASEBALL 1993 Topps Finest Baseball Hobby Box 1 $750.00 $750.00 0.025% BASEBALL 1993 Upper Deck SP Baseball Hobby Box 1 $2,600.00 $2,600.00 0.086% BASKETBALL 2003/04 Bowman Signature Basketball Hobby Box 1 $500.00 $500.00 0.017% BASKETBALL 2003/04 Topps Chrome Basketball Hobby Box 4 $3,600.00 $14,400.00 0.479% BASKETBALL 2003/04 Topps Contemporary Collection Basketball Hobby Box 1 $1,000.00 $1,000.00 0.033% BASKETBALL 2003/04 Topps Finest Basketball Hobby Box 1 $1,200.00 $1,200.00 0.040% BASKETBALL 2003/04 Upper Deck Rookie Exclusives Basketball Hobby Box 1 $500.00 $500.00 0.017% BASKETBALL 2003/04 Upper Deck SPx Basketball Hobby Box 1 $1,500.00 $1,500.00 0.050% BASKETBALL 2007/08 Topps Basketball Hobby Box 1 $165.00 $165.00 0.005% BASKETBALL 2007/08 Topps Chrome Basketball Hobby Box 1 $1,300.00 $1,300.00 0.043% BASKETBALL 2007/08 Upper Deck SP Authentic Basketball Hobby Box 1 $500.00 $500.00 0.017% BASKETBALL 2008/09 Topps Chrome Basketball Hobby Box 1 $1,000.00 $1,000.00 0.033% BASKETBALL 2008/09 Upper Deck SP Authentic Basketball Hobby Box 1 $450.00 $450.00 0.015% BASKETBALL 2008/09 Upper Deck SP Rookie Threads Basketball Hobby Box 1 $400.00 $400.00 0.013% BASKETBALL 2008/09 Upper Deck SPx Basketball Hobby Box 1 $400.00 $400.00 0.013% BASKETBALL 2012/13 Panini Contenders Basketball Hobby Box 60 $249.95 $14,997.00 0.499% BASKETBALL 2012/13 Panini Flawless Basketball Hobby Box 10 $3,000.00 $30,000.00 0.998% BASKETBALL 2012/13 Panini Gold Standard Basketball Hobby Box 50 $299.95 $14,997.50 0.499% BASKETBALL 2012/13 Panini Immaculate Basketball Hobby Box 12 $750.00 $9,000.00 0.299% BASKETBALL 2012/13 Panini Limited Basketball Hobby Box 70 $114.95 $8,046.50 0.268% BASKETBALL 2012/13 Panini National Treasures Basketball Hobby Box 15 $1,250.00 $18,750.00 0.624% BASKETBALL 2012/13 Panini Preferred Basketball Hobby Box 10 $399.95 $3,999.50 0.133% BASKETBALL 2012/13 Panini Prizm Basketball Hobby Box 48 $1,799.95 $86,397.60 2.874% BASKETBALL 2012/13 Panini Prizm Basketball *Retail* Box 40 $1,299.95 $51,998.00 1.730% BASKETBALL 2012/13 Panini Select Basketball Hobby Box 60 $334.95 $20,097.00 0.669% BASKETBALL 2012/13 Panini Totally Certified Basketball Hobby Box 60 $119.95 $7,197.00 0.239% BASKETBALL 2012/13 Upper Deck Exquisite Collection Basketball Hobby Box 3 $2,400.00 $7,200.00 0.240% BASKETBALL 2013/14 Panini Basketball Hobby Box 60 $89.95 $5,397.00 0.180% BASKETBALL 2013/14 Panini Court Kings Basketball Hobby Box 75 $199.95 $14,996.25 0.499% BASKETBALL 2013/14 Panini Crusade Basketball Hobby Box 75 $149.95 $11,246.25 0.374% BASKETBALL 2013/14 Panini Elite Basketball Hobby Box 60 $189.95 $11,397.00 0.379% BASKETBALL 2013/14 Panini Flawless Basketball Hobby Box 10 $3,000.00 $30,000.00 0.998% BASKETBALL 2013/14 Panini Gold Standard Basketball Hobby Box 10 $350.00 $3,500.00 0.116% BASKETBALL 2013/14 Panini NBA Hoops Basketball Jumbo Box 60 $174.95 $10,497.00 0.349% BASKETBALL 2013/14 Panini Immaculate Basketball Hobby Box 12 $1,399.95 $16,799.40 0.559% BASKETBALL 2013/14 Panini National Treasures Basketball Hobby Box 6 $4,000.00 $24,000.00 0.798% BASKETBALL 2013/14 Panini Pinnacle Basketball Jumbo Box 60 $149.95 $8,997.00 0.299% BASKETBALL 2013/14 Panini Preferred Basketball Hobby Box 50 $289.95 $14,497.50 0.482% BASKETBALL 2013/14 Panini Prestige Basketball Hobby Box 60 $143.95 $8,637.00 0.287% BASKETBALL 2013/14 Panini Prizm Basketball Hobby Box 48 $1,599.95 $76,797.60 2.555% BASKETBALL 2013/14 Panini Spectra Basketball Hobby Box 8 $700.00 $5,600.00 0.186% BASKETBALL 2013/14 Panini Timeless Treasures Basketball Hobby Box 80 $124.95 $9,996.00 0.333% BASKETBALL 2013/14 Panini Titanium Basketball Hobby Box 80 $158.95 $12,716.00 0.423% BASKETBALL 2013/14 Panini Totally Certified Basketball Hobby Box 60 $199.95 $11,997.00 0.399% BASKETBALL 2013/14 Upper Deck Exquisite Collection Basketball Hobby Box 3 $2,200.00 $6,600.00 0.220% BASKETBALL 2013/14 Upper Deck SP Authentic Basketball Hobby Box 12 $300.00 $3,600.00 0.120% BASKETBALL 2014/15 Panini Eminence Basketball Hobby Box 1 $6,000.00 $6,000.00 0.200% BASKETBALL 2014/15 Panini Excalibur Premium Basketball Box 60 $124.95 $7,497.00 0.249% BASKETBALL 2014/15 Panini Flawless Basketball Hobby Box 2 $1,600.00 $3,200.00 0.106% BASKETBALL 2014/15 Panini National Treasures Basketball Hobby Box 15 $999.95 $14,999.25 0.499% BASKETBALL 2014/15 Panini Prizm Basketball Hobby Box 60 $399.95 $23,997.00 0.798% BASKETBALL 2014/15 Panini Prizm Basketball *Jumbo* Box 40 $599.95 $23,998.00 0.798% BASKETBALL 2014/15 Upper Deck SP Authentic Basketball Hobby Box 60 $300.00 $18,000.00 0.599% BASKETBALL 2015/16 Panini Flawless Basketball Hobby Box 10 $2,000.00 $20,000.00 0.665% BASKETBALL 2015/16 Panini Immaculate Basketball Hobby Box 30 $569.95 $17,098.50 0.569% BASKETBALL 2015/16 Panini National Treasures Basketball Hobby Box 20 $1,049.95 $20,999.00 0.699% BASKETBALL 2015/16 Panini Prizm Basketball Hobby Box 60 $400.00 $24,000.00 0.798% BASKETBALL 2015/16 Panini Prizm Basketball *Jumbo* Box 24 $550.00 $13,200.00 0.439% BASKETBALL 2015/16 Panini Revolution Basketball Hobby Box 80 $60.00 $4,800.00 0.160% BASKETBALL 2015/16 Panini Select Basketball Hobby Box 60 $199.95 $11,997.00 0.399% BASKETBALL 2016/17 Panini Donruss Optic Basketball Hobby Box 60 $140.00 $8,400.00 0.279% BASKETBALL 2016/17 Panini Flawless Basketball Hobby Box 2 $1,700.00 $3,400.00 0.113% BASKETBALL 2016/17 Panini Immaculate Basketball Hobby Box 25 $449.95 $11,248.75 0.374% BASKETBALL 2016/17 Panini National Treasures Basketball Hobby Box 20 $924.95 $18,499.00 0.615% BASKETBALL 2016/17 Panini Prizm Basketball Jumbo HTA Box 24 $750.00 $18,000.00 0.599% BASKETBALL 2016/17 Panini Prizm Mosaic Basketball Box 50 $89.95 $4,497.50 0.150% BASKETBALL 2016/17 Panini Revolution Basketball Hobby Box 80 $64.95 $5,196.00 0.173% BASKETBALL 2016/17 Panini Select Basketball Hobby Box 60 $199.95 $11,997.00 0.399% BASKETBALL 2017/18 Panini Contenders Basketball Hobby Box 24 $199.95 $4,798.80 0.160% DocuSign Envelope ID: 62A0C9D2-AF6D-4F1B-910C-F4766A72A6BE
TYPE Product Portfolio Units Unit Market Total Market Holding (%) BASKETBALL 2017/18 Panini Donruss Optic Basketball Hobby Box 60 $100.00 $6,000.00 0.200% BASKETBALL 2017/18 Panini Flawless Basketball Hobby Box 10 $1,899.95 $18,999.50 0.632% BASKETBALL 2017/18 Panini Immaculate Basketball Hobby Box 25 $600.00 $15,000.00 0.499% BASKETBALL 2017/18 Panini Impeccable Basketball Box 15 $499.95 $7,499.25 0.249% BASKETBALL 2017/18 Panini Kobe Eminence Basketball Hobby Box 1 $6,499.95 $6,499.95 0.216% BASKETBALL 2017/18 Panini National Treasures Basketball Hobby Box 20 $1,324.95 $26,499.00 0.882% BASKETBALL 2017/18 Panini Opulence Basketball Hobby Box 15 $569.95 $8,549.25 0.284% BASKETBALL 2017/18 Panini Prizm Basketball Hobby Box 60 $374.95 $22,497.00 0.748% BASKETBALL 2017/18 Panini Prizm Basketball ^Retail^ Box 80 $124.95 $9,996.00 0.333% BASKETBALL 2017/18 Panini Prizm Basketball Super Value Rack Box 80 $199.95 $15,996.00 0.532% BASKETBALL 2017/18 Panini Prizm Mosaic Basketball Box 60 $119.95 $7,197.00 0.239% BASKETBALL 2017/18 Panini Revolution Basketball Hobby Box 80 $74.95 $5,996.00 0.199% BASKETBALL 2017/18 Panini Select Basketball Hobby Box 60 $194.95 $11,697.00 0.389% BASKETBALL 2017/18 Upper Deck Supreme Hard Court Basketball Hobby Box 50 $269.95 $13,497.50 0.449% BASKETBALL 2018/19 Panini Contenders Basketball Hobby Box 60 $220.00 $13,200.00 0.439% BASKETBALL 2018/19 Panini Contenders Optic Basketball Hobby Box 80 $112.95 $9,036.00 0.301% BASKETBALL 2018/19 Panini Donruss Optic Basketball Hobby Box 60 $220.00 $13,200.00 0.439% BASKETBALL 2018/19 Panini Donruss Optic Basketball ^Fast Break^ Hobby Box 80 $58.95 $4,716.00 0.157% BASKETBALL 2018/19 Panini Flawless Basketball Hobby Box 10 $1,974.95 $19,749.50 0.657% BASKETBALL 2018/19 Panini Immaculate Basketball Hobby Box 50 $580.00 $29,000.00 0.965% BASKETBALL 2018/19 Panini Impeccable Basketball Hobby Box 15 $634.95 $9,524.25 0.317% BASKETBALL 2018/19 Panini National Treasures Basketball Hobby Box 20 $1,200.00 $24,000.00 0.798% BASKETBALL 2018/19 Panini Prizm Choice Basketball Box 60 $249.95 $14,997.00 0.499% BASKETBALL 2018/19 Panini Prizm Basketball Hobby Box 60 $300.00 $18,000.00 0.599% BASKETBALL 2018/19 Panini Revolution Basketball Hobby Box 80 $81.95 $6,556.00 0.218% BASKETBALL 2018/19 Panini Select Basketball Hobby Box 60 $174.95 $10,497.00 0.349% BASKETBALL 2019/20 Panini Immaculate Collegiate Basketball Hobby Box 25 $924.95 $23,123.75 0.769% BASKETBALL 2019/20 Panini Prizm Collegiate Draft Picks Basketball Hobby Box 80 $289.95 $23,196.00 0.772% BASKETBALL 1986/87 Fleer Basketball Hobby Box 1 $60,000.00 $60,000.00 1.996% BASKETBALL 1996/97 Bowman's Best Basketball Hobby Box 1 $525.00 $525.00 0.017% BASKETBALL 1996/97 Fleer Skybox E-X 2000 Basketball Hobby Box 1 $2,200.00 $2,200.00 0.073% BASKETBALL 1996/97 Topps Chrome Basketball Hobby Box 1 $2,500.00 $2,500.00 0.083% BASKETBALL 1997/98 Bowman's Best Basketball Hobby Box 1 $400.00 $400.00 0.013% BASKETBALL 1997/98 Skybox Metal Universe Championship Preview Basketball Hobby Box 1 $2,400.00 $2,400.00 0.080% BASKETBALL 1997/98 Topps Chrome Basketball Hobby Box 1 $350.00 $350.00 0.012% BASKETBALL 1997/98 Topps Finest Series 1 Basketball Hobby Box 1 $250.00 $250.00 0.008% BASKETBALL 1998/99 Bowman's Best Basketball Hobby Box 1 $300.00 $300.00 0.010% BASKETBALL 1998/99 Fleer Flair Showcase Basketball Hobby Box 1 $800.00 $800.00 0.027% BASKETBALL 1998/99 Topps Chrome Basketball Hobby Box 1 $300.00 $300.00 0.010% BASKETBALL 1998/99 Upper Deck MJ Access Basketball Hobby Box 1 $500.00 $500.00 0.017% BASKETBALL 1998/99 Upper Deck SP Authentic Basketball Hobby Box 1 $550.00 $550.00 0.018% FOOTBALL 2000 Upper Deck SP Authentic Football Hobby Box 1 $1,800.00 $1,800.00 0.060% FOOTBALL 2001 Topps Chrome Football Hobby Box 1 $530.00 $530.00 0.018% FOOTBALL 2012 Panini Contenders Football Hobby Box 12 $449.95 $5,399.40 0.180% FOOTBALL 2012 Panini National Treasures Football Hobby Box 4 $875.00 $3,500.00 0.116% FOOTBALL 2012 Panini Prizm Football Hobby Box 12 $125.00 $1,500.00 0.050% FOOTBALL 2012 Panini Prizm Football *Retail* Box 20 $80.00 $1,600.00 0.053% FOOTBALL 2013 Panini Prizm Football Hobby Box 60 $74.95 $4,497.00 0.150% FOOTBALL 2014 Bowman Chrome Football Hobby Box 50 $67.95 $3,397.50 0.113% FOOTBALL 2014 Panini National Treasures Football Hobby Box 20 $875.00 $17,500.00 0.582% FOOTBALL 2014 Panini Prizm Football Hobby Box 60 $114.95 $6,897.00 0.229% FOOTBALL 2014 Panini Select Football Hobby Box 70 $119.95 $8,396.50 0.279% FOOTBALL 2014 Topps Chrome Football Hobby Box 60 $71.95 $4,317.00 0.144% FOOTBALL 2015 Panini Contenders Football Hobby Box 60 $144.95 $8,697.00 0.289% FOOTBALL 2015 Panini Flawless Football Hobby Box 10 $1,199.95 $11,999.50 0.399% FOOTBALL 2015 Panini Prizm Football Hobby Box 60 $71.95 $4,317.00 0.144% FOOTBALL 2015 Panini Prizm Football *Jumbo* Box 60 $107.95 $6,477.00 0.215% FOOTBALL 2015 Topps Chrome Football Hobby Box 60 $88.95 $5,337.00 0.178% FOOTBALL 2016 Panini Contenders Football Hobby Box 60 $325.00 $19,500.00 0.649% FOOTBALL 2016 Panini Donruss Optic Football Hobby Box 60 $249.95 $14,997.00 0.499% FOOTBALL 2016 Panini Flawless Football Hobby Box 2 $1,500.00 $3,000.00 0.100% FOOTBALL 2016 Panini Immaculate Football Hobby Box 36 $349.95 $12,598.20 0.419% FOOTBALL 2016 Panini National Treasures Football Hobby Box 20 $774.95 $15,499.00 0.516% FOOTBALL 2016 Panini Prizm Football Jumbo Box 24 $499.95 $11,998.80 0.399% FOOTBALL 2017 Panini Contenders Football Hobby Box 48 $1,049.95 $50,397.60 1.677% FOOTBALL 2017 Panini Contenders Optic Football Box 80 $319.95 $25,596.00 0.852% FOOTBALL 2017 Panini Donruss Optic Football Hobby Box 60 $474.95 $28,497.00 0.948% FOOTBALL 2017 Panini Flawless Football Hobby Box 1 $475.00 $475.00 0.016% FOOTBALL 2017 Panini Immaculate Football Hobby Box 30 $999.95 $29,998.50 0.998% FOOTBALL 2017 Panini National Treasures Football Hobby Box 16 $3,000.00 $48,000.00 1.597% FOOTBALL 2017 Panini Origins Football Hobby Box 16 $274.95 $4,399.20 0.146% FOOTBALL 2017 Panini Prizm Football Hobby Box 60 $925.00 $55,500.00 1.846% FOOTBALL 2017 Panini Select Football Hobby Box 12 $600.00 $7,200.00 0.240% FOOTBALL 2018 Panini Contenders Football Hobby Box 60 $359.95 $21,597.00 0.718% FOOTBALL 2018 Panini Contenders Optic Football Hobby Box 60 $142.95 $8,577.00 0.285% FOOTBALL 2018 Panini Donruss Optic Football Hobby Box 60 $185.95 $11,157.00 0.371% FOOTBALL 2018 Panini Flawless Football Hobby Box 10 $2,250.00 $22,500.00 0.749% FOOTBALL 2018 Panini National Treasures Football Hobby Box 20 $1,099.95 $21,999.00 0.732% FOOTBALL 2018 Panini Obsidian Football Hobby Box 60 $284.95 $17,097.00 0.569% DocuSign Envelope ID: 62A0C9D2-AF6D-4F1B-910C-F4766A72A6BE
TYPE Product Portfolio Units Unit Market Total Market Holding (%) FOOTBALL 2018 Panini One Football Hobby Box 80 $189.95 $15,196.00 0.506% FOOTBALL 2018 Panini Origins Football Hobby Box 80 $164.95 $13,196.00 0.439% FOOTBALL 2018 Panini Prizm Football Hobby Box 60 $289.95 $17,397.00 0.579% FOOTBALL 2018 Panini Select Football Hobby Box 60 $334.95 $20,097.00 0.669% FOOTBALL 2018 Panini Spectra Football Hobby Box 16 $499.95 $7,999.20 0.266% FOOTBALL 2019 Panini Impeccable Football Hobby Box 15 $564.95 $8,474.25 0.282% FOOTBALL 1998 Bowman Chrome Football Hobby Box 1 $200.00 $200.00 0.007% GOLF 2001 Upper Deck SP Authentic Golf Hobby Box 60 $299.95 $17,997.00 0.599% HOCKEY 2015/16 Upper Deck The Cup Hockey Hobby Box 6 $1,500.00 $9,000.00 0.299% HOCKEY 2016/17 Upper Deck The Cup Hockey Hobby Box 12 $650.00 $7,800.00 0.259% HOCKEY 2017/18 Upper Deck The Cup Hockey Hobby Box 15 $389.95 $5,849.25 0.195% HOCKEY 2018/19 Upper Deck The Cup Hockey Hobby Box 3 $525.00 $1,575.00 0.052% ENTERTAINMENT 2011 Leaf Family Guy Seasons 3,4 & 5 Trading Cards Box 24 $200.00 $4,800.00 0.160% ENTERTAINMENT 2018 Topps Stranger Things Season One Hobby Box 12 $54.95 $659.40 0.022% ENTERTAINMENT Game of Thrones Inflexions (Rittenhouse) - Box 20 $129.95 $2,599.00 0.086% ENTERTAINMENT Game of Thrones Inflexions ^International Edition^ (Rittenhouse) - Box 20 $179.95 $3,599.00 0.120% ENTERTAINMENT Game of Thrones Season One Trading Cards (Rittenhouse) - Box 12 $325.00 $3,900.00 0.130% ENTERTAINMENT Game of Thrones Season Four Trading Cards (Rittenhouse) - Box 24 $100.00 $2,400.00 0.080% ENTERTAINMENT Game of Thrones Season Six Trading Cards (Rittenhouse) - Box 24 $75.00 $1,800.00 0.060% ENTERTAINMENT Game of Thrones Season Seven Trading Cards (Rittenhouse) - Box 24 $75.00 $1,800.00 0.060% ENTERTAINMENT Game of Thrones Valyrian Steel Trading Cards (Rittenhouse) - Box 40 $299.95 $11,998.00 0.399% ENTERTAINMENT Topps Garbage Pail Kids Chrome Series 1 Hobby Box 12 $175.00 $2,100.00 0.070% UFC 2009 Topps UFC Round 1 Trading Cards Hobby Box 1 $449.95 $449.95 0.015% SOCCER 2016 Panini Flawless Soccer Hobby Box 2 $2,500.00 $5,000.00 0.166% SOCCER 2018/19 Panini Immaculate Soccer Hobby Box 6 $499.95 $2,999.70 0.100% SOCCER 2018 Panini National Treasures Soccer Hobby Box 20 $419.95 $8,399.00 0.279% TOTAL 9202 $3,005,877.95 100.00%
Portfolio Holdings By Type (%)
3.15%
20.27% 31.84% Type Items Portfolio Units Total Market Holding (%) Baseball 91 3619 $ 956,965.15 31.84% Basketball 108 3519 $ 1,344,882.85 44.74% 44.74% Football 45 1727 $ 609,304.65 20.27% Other 19 337 $ 94,725.30 3.15% TOTAL 263 9202 $ 3,005,877.95 100.00%
Baseball Basketball Football Other Exhibit C –Additional Financial Scenarios