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StartEngine Collectibles Fund I LLC – ‘1-SA’ for 6/30/22

On:  Friday, 9/23/22, at 3:43pm ET   ·   For:  6/30/22   ·   Accession #:  1104659-22-102649

Previous ‘1-SA’:  ‘1-SA/A’ on 11/5/21 for 6/30/21   ·   Next & Latest:  ‘1-SA’ on 9/25/23 for 6/30/23   ·   6 References:   To:  StartEngine Collectibles Fund I LLC – ‘1-A POS’ on 7/25/22 To:  StartEngine Collectibles Fund I LLC – ‘1-A POS’ on 2/23/22 To:  StartEngine Collectibles Fund I LLC – ‘1-A POS’ on 1/12/22 To:  StartEngine Collectibles Fund I LLC – ‘1-A POS’ on 12/8/21 To:  StartEngine Collectibles Fund I LLC – ‘1-A/A’ on 7/22/21 To:  StartEngine Collectibles Fund I LLC – ‘1-A’ on 1/20/21 

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  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 9/23/22  StartEngine Collectibles Fd I LLC 1-SA        6/30/22    1:569K                                   Toppan Merrill/FA

Document/Exhibit                   Description                      Pages   Size 

 1: 1-SA        Semi-Annual Report or Special Financial Report      HTML    568K 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 1-SA

AMENDED SPECIAL FINANCIAL REPORT PURSUANT TO REGULATION A

For the semiannual period ended June 30, 2022

StartEngine Collectibles Fund I LLC

(Exact name of issuer as specified in its charter)

3900 W ALAMEDA AVE., SUITE 1200
BURBANK, CALIFORNIA 91505
(Full mailing address of principal executive offices)

(949) 415-8730
Issuer’s telephone number, including area code

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

The information contained in this report may contain certain forward-looking statements that are subject to various risks and uncertainties. Forward-looking statements are generally identifiable by use of forward-looking terminology such as “may,” “will,” “should,” “potential,” “intend,” “expect,” “outlook,” “seek,” “anticipate,” “estimate,” “approximately,” “believe,” “could,” “project,” “predict,” or other similar words or expressions. Forward-looking statements are based on certain assumptions, discuss future expectations, describe future plans and strategies, or state other forward-looking information. Our ability to predict future events, actions, plans or strategies is inherently uncertain and actual outcomes could differ materially from those set forth or anticipated in our forward-looking statements. You are cautioned not to place undue reliance on any of these forward-looking statements.

Overview

StartEngine Collectibles Fund I LLC (“we”, “us”, “our”, or “the company”) is a series limited liability company formed on October 14, 2020, pursuant to Section 18-215 of the Delaware Limited Liability company Act, or the LLC Act.

As a series limited liability company, title to our underlying assets will be held by, or for the benefit of, the applicable series of interests. The company has been engaged primarily in acquiring and managing underlying assets, which are “collectibles” – generally, assets of limited quantity that have a perceived or demonstrated value (e.g., fine art, wine, watches, trading cards and comics). Each series can own one type of assets or a variety of assets. StartEngine Assets LLC (our “Manager” or “Managing Member”) is the Administrative Manager for the company and each series, the Asset Manager for each series and the managing member of the company.

We offer and sell interests under Regulation A, promulgated under the Securities Act of 1933, as amended (the “Securities Act”), in a number of separate individual series, and investors in any series acquire a proportional share of income and liabilities as they pertain to a particular series.

As at September 23, 2022, the following series have been authorized by the company:

* This series offering has not yet closed as of the date of this report.

Operating Results

As of June 30, 2022, the company has authorized 40 series, of which 7 were closed. Two series closed subsequent to June 30, 2022.

Revenues

Revenues are generated at the series level. As of June 30, 2022, the series have not generated any revenue.

Operating Expenses

For our series, the Managing Member will not seek reimbursement for most operating expenses, including those incurred in the ordinary course of business (e.g., storage, insurance, legal and financial costs). Our Managing Member intends to assume the cost of all the operating expenses including the operating expenses incurred during the six-month period ended June 30, 2022.

As the Managing Member will assume all expenses there are no expenses allocated to the series.

At the closing of each series, the series purchases the underlying assets from the Manager. The fees for the underlying assets to Manager include the amount the Manager paid for the asset in addition to a sourcing fee of up to 25% of the of the amount paid for the underlying asset (up to approximately 20% of the gross offering proceeds) for the relevant series. See the Offering Statement for additional information regarding the sourcing fee.

Other Expenses

We incurred no other expenses for the six months ended June 30, 2022, or the six months ended June 30, 2021.

Net Loss

As a result of the cumulative effect of the foregoing factors, the company generated a net loss of $12,500 for the six months ended June 30, 2022.

Liquidity and Capital Resources

For the Series established in 2021, the Administrative Manager has chosen not to allocate costs to each Series.

In the normal course of business, the Series have and will acquire underlying assets from the Manager in exchange for cash or promissory notes, which may or may not be interest bearing. Because these are related party transactions, no guarantee can be made that the terms of the arrangements are at arm’s length.

The company’s Administrative Manager intends to establish other companies that intend to raise funds and operate under their intended business plan. Although there are no transactions with related entities other than described above, the Administrative Manager is able to influence the company’s operations for the benefit of other companies under its control.

Asset Liquidity

The amount of time that a series will hold and manage all its assets will vary depending on the type of assets being acquired by the series. We anticipate holding our assets for the following time frames:

For all of our assets, we intend to pay distributions to the extent we sell some or all of our assets. Otherwise, liquidity for investors would be obtained by transferring their interests in a series.

We intend to list our securities on StartEngine Secondary, an alternative trading system or “ATS,” operated by an affiliate of the Managing Member and Administrative Manager of our company, StartEngine Primary LLC.  However, this ATS is a new entrant to the market, and there is no guarantee that there will be frequent trading on the ATS and, specifically, trading of our shares. Further, even if there is trading, there may be no guarantee that anyone would be interested in purchasing the shares you have purchased in this offering at your desired price or any price at all.

Cash and Cash Equivalent Balances

As of June 30, 2021, the company’s cash and cash equivalents was $13,973. The cash equivalents at this point are deposits held in escrow for different series that spanned over the period end date. All of the cash equivalents have an equivalent payment that cancels this amount. As of June 30, 2022, the cash and cash equivalents were for Series Wine #2016CHAM ($5,160) and Series Sports #JAMESREFRACTOR ($8,813).

Trends

We believe there is an opportunity to use our platform to: (i) make the alternative asset markets more liquid and transparent for investors of all means and backgrounds and (ii) capture the shifting tastes of millennial retail investors.

Despite their size, the alternative assets markets that we invest in, including fine art, wine, watches, trading cards, comics, cars, memorabilia, are complex and often misunderstood due to their opaque nature. Unlike traditional asset classes such as equities or fixed income, there is a lack of transparency due to the limited publicly available data. The markets tend to be made and largely executed through private transactions, making it difficult for outsiders to gain insight.

Further, the 2018 U.S. Trust Insights on Wealth and Worth survey on wealthy household’s found that while baby boomers and older investors rely primarily on traditional stocks and bonds, younger investors, especially millennials, are more likely to incorporate alternative strategies into their investment portfolios. Millennials allocate 17% to alternatives and assets other than stocks, bonds and cash. It also found that 61% of millennial investors think it is not possible to achieve above-average returns by investing solely in stocks and bonds anymore and are looking for alternative investments. For example, the report showed that millennials are the fastest growing segment of art collectors, up 8% year-over-year and comprising 36% of total respondents. We believe these shifts in millennial investing tastes suggest there will be more interest in investing in alternative assets. We believe we are uniquely suited to capitalize on this increased interest, potentially leading to more capital for the company to work with, providing it with increased buying power and other advantages related to economies of scale, and ultimately providing greater value to investors in our company moving forward.

None.

The accompanying semiannual consolidated financial statements are unaudited and have been prepared in accordance with the instructions to Form 1-SA. Therefore, they do not include all information and footnotes necessary for a complete presentation of financial position, results of operations, cash flows, and stockholders’ equity in conformity with accounting principles generally accepted in the United States of America. Except as disclosed herein, there has been no material change in the information disclosed in the notes to the consolidated financial statements included in the company’s Annual Report on Form 1-K for the year ended December 31, 2021. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included, and all such adjustments are of a normal recurring nature. Operating results for the six months ended June 30, 2022, are not necessarily indicative of the results that can be expected for the year ending December 31, 2022.

STARTENGINE COLLECTIBLES FUND I LLC

FINANCIAL STATEMENTS

(UNAUDITED)

STARTENGINE COLLECTIBLES FUND I LLC
CONSOLIDATED BALANCE SHEETS AS OF JUNE 30, 2022 and DECEMBER 31, 2021 (Unaudited)

See Accompanying Notes to the Financial Statements

STARTENGINE COLLECTIBLES FUND I LLC
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE PERIOD FROM JANUARY 1, 2022, TO
JUNE 30, 2022 (Unaudited)

See Accompanying Notes to the Financial Statements

STARTENGINE COLLECTIBLES FUND I LLC
CONSOLIDATED STATEMENT OF MEMBER’S EQUITY
FOR THE PERIOD FROM JANUARY 1, 2022, TO
JUNE 30, 2022 (Unaudited)

See Accompanying Notes to the Financial Statements

STARTENGINE COLLECTIBLES FUND I LLC
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM
JANUARY 1, 2022, TO
JUNE 30, 2022 (Unaudited)