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Collectable Sports Assets, LLC – ‘1-K’ for 12/31/20 – ‘PART II’

On:  Wednesday, 5/5/21, at 12:34pm ET   ·   For:  12/31/20   ·   Accession #:  1104659-21-61533

Previous ‘1-K’:  None   ·   Next:  ‘1-K’ on 5/3/22 for 12/31/21   ·   Latest:  ‘1-K/A’ on 6/22/23 for 12/31/22   ·   14 References:   To:  Collectable Sports Assets, LLC – ‘1-A POS’ on 4/21/21 To:  Collectable Sports Assets, LLC – ‘1-A POS’ on 3/15/21 To:  Collectable Sports Assets, LLC – ‘1-A POS’ on 2/1/21 To:  Collectable Sports Assets, LLC – ‘1-A POS’ on 12/30/20 To:  Collectable Sports Assets, LLC – ‘1-A POS’ on 12/11/20 To:  Collectable Sports Assets, LLC – ‘1-A POS’ on 11/6/20 To:  Collectable Sports Assets, LLC – ‘1-A POS’ on 10/16/20 To:  Collectable Sports Assets, LLC – ‘1-A POS’ on 9/30/20 To:  Collectable Sports Assets, LLC – ‘253G2’ on 9/25/20 To:  Collectable Sports Assets, LLC – ‘1-A POS’ on 9/16/20 To:  Collectable Sports Assets, LLC – ‘1-U’ on 9/1/20 for 8/28/20 To:  Collectable Sports Assets, LLC – ‘1-A/A’ on 7/13/20 To:  Collectable Sports Assets, LLC – ‘1-A/A’ on 5/8/20 To:  Collectable Sports Assets, LLC – ‘1-A’ on 3/13/20 

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

 5/05/21  Collectable Sports Assets, LLC    1-K        12/31/20    3:826K                                   Toppan Merrill/FA

Document/Exhibit                   Description                      Pages   Size 

 1: 1-K         Annual Report or Special Financial Report --        HTML      3K 
                primary_doc.xml                                                  
 2: PART II     Annual Report - Part II                             HTML    433K 
 3: EX1K-9 ACCT LTR  Exhibit 9                                      HTML      5K 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 1-K

ANNUAL REPORT PURSUANT TO REGULATION A

For the fiscal year ended:

December 31, 2020

COLLECTABLE SPORTS ASSETS, LLC

(Exact name of issuer as specified in its charter)

333 Westchester Ave., Suite W2100, White Plains, NY, 10604

(Full mailing address of principal executive offices)

(914) 372-7337
(Issuer’s telephone number, including area code)

www.collectable.com
(Issuer’s website)

SERIES#RUTHGEHRIGBALL; SERIES #CURRYBASKET; SERIES #LEBRONROOKIE; SERIES #MANTLEMINT1953; SERIES #JORDANPSA10; SERIES #MAHOMESROOKIE; SERIES #JACKIEROBINSONAUTOBAT; SERIES #ALIWBCBELT.

(Securities issued pursuant to Regulation A)

Table of Contents

In this Annual Report, references to “we,” “us,” “our,” “Collectable Sports Assets,” or the “Company” mean Collectable Sports Assets, LLC, a Delaware series limited liability company.

THIS ANNUAL REPORT MAY CONTAIN “FORWARD-LOOKING” STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. FORWARD LOOKING STATEMENTS IN THIS REPORT INCLUDES INFORMATION RELATING TO, AMONG OTHER THINGS, THE COMPANY, ITS BUSINESS PLAN AND STRATEGY, AND ITS INDUSTRY. THESE FORWARD-LOOKING STATEMENTS ARE BASED ON THE BELIEFS OF, ASSUMPTIONS MADE BY, AND FORWARD-LOOKING INFORMATION GENERALLY CAN BE IDENTIFIED BY FORWARD-LOOKING TERMINOLOGY, SUCH AS “ESTIMATE,” “PROJECT,” “BELIEVE,” “ANTICIPATE,” “INTEND,” “EXPECT” AND SIMILAR EXPRESSIONS OR THE NEGATIVE THEREOF. THESE STATEMENTS REFLECT MANAGEMENT’S CURRENT VIEWS WITH RESPECT TO FUTURE EVENTS AND ARE SUBJECT TO RISKS AND UNCERTAINTIES THAT COULD CAUSE THE COMPANY’S ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTAINED IN THE FORWARD-LOOKING STATEMENTS, SUCH AS GENERAL ECONOMIC CONDITIONS AND THE MARKET FOR COLLECTABLE SPORTS MEMORABILIA. INVESTORS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE ON WHICH THEY ARE MADE. WE HEREBY EXPRESSLY DISCLAIM ANY INTENTION TO UPDATE ANY FORWARD-LOOKING INFORMATION CONTAINED IN THIS REPORT UNLESS REQUIRED BY LAW TO DO SO.

Item 1. Description of Business

Overview

The collectible sports memorabilia market, a multi-billion-dollar industry is characterized by: (i) a small number of collectors who have the financial means to acquire and financially benefit from blue-chip sports assets and (ii) a large number of sports memorabilia enthusiasts who have equivalent knowledge and passion for such assets, but with limited or no current mechanisms to benefit financially from or enjoy certain benefits of ownership of the assets  in the highest value segment. This dichotomy and the disproportionate access to the upper end of the market have resulted in the creation of significant latent demand from the enthusiast community to participate more meaningfully in an asset class that, to date, they have passively watched deliver returns to a select group of individual collectors.  Furthermore, those who can afford ownership of blue-chip collectible assets are often faced with purchasing barriers such as: high fees and minimums from auction houses and gatekeepers, lack of transparency from sellers or dealers, questionable authentication of items, asset hoarding by collectors, and even poor discoverability and filterability from established marketplaces. Simply put, the costs of investing in this asset class are high and transaction volumes are low with few options for liquidity, resulting in longer holding periods. As a result, the opportunity to build wealth in this asset class remains largely inaccessible to most.

We believe that Collectable Sports Assets, LLC is the solution to this problem. In creating fractional ownership investment opportunities for collectibles, we aim to provide accessibility, enhanced security, increased socialization and community, and a fully regulated approach to memorabilia ownership.

We have targeted and plan continue to target the acquisition or consignment of sports collectible assets ranging in price anywhere from $10,000 to $20,000,000. Our mission is to democratize wealth accumulation within this asset class by providing access, liquidity and transparency within the class.

Market Opportunity

Collectable Sports Assets, LLC has focused and intends to predominantly focus on the blue-chip sports memorabilia niche. According to proprietary research and cross-referenced with a study conducted by Charles River Ventures, the United States sports memorabilia market amounts to $5.4 billion annually, including total gross merchandise value (GMV) from eBay, independent auction houses, online retail venues, and other sources.  Excluded in the calculation were anything relating to sports apparel or mass-produced sports items that may be confused with unique memorabilia. The calculation also does not include the value of modern sports cards, a conservative approach that may be amended due to the valuations of contemporary sports memorabilia stabilizing and improving in recent years.

As recently as 2017, the following statistics provided a view of the sports memorabilia breakdown:

The collectible sports memorabilia market is opaque and fragmented. We believe there is a significant opportunity for any company that can develop a platform to make the market more liquid and transparent for investors of all means and backgrounds, and thus increase participation in the asset class overall.

According to Forbes and Boxes CEO Richard Engel, there are over 200 million collectors of varying types worldwide, and 33% of collectors either currently own or have previously owned at least one sports collectible in their lifetimes. As such, the overall market on trading cards and sports memorabilia could reach 67 million people.

We expect the sports collectibles market to grow and present unique opportunities moving forward as a result of demand stemming from investors looking for an uncorrelated alternative asset class and an increase in global wealth. We believe that the sports collectibles market is well-positioned to drive growth in the upcoming years.

Furthermore, demand for sports collectibles continues to accumulate. Despite deemed “the most populist of passion assets”, the bulk of the wealth in the industry centers around the domestic baby boomers. Yet, the sports collectibles industry continues to experience tailwinds from millennial and foreign buyers. According to the Wall Street Journal, millennial and members of Generation Z are attracted to sports memorabilia because their familiarity with sports makes collecting “more digestible as a passion and hobby.” Foreign buyers have been jumping into the market due to the proliferation and success of international sports stars, such as Yao Ming of China and Luka Doncic of Slovenia.

We believe the overall macroeconomic environment remains favorable for high performing alternative asset classes, including art and collectibles. Interest rates are expected to remain moderate (albeit rising) across most developed economies and returns in traditional asset classes such as stocks and investment grade bonds may remain volatile. In addition to the increased transparency generally across alternative asset classes, we believe that these factors will support the trend for investors to seek returns in alternative assets, which are expected to continue to make these a more permanent component of investment strategies broadly.

Mission

The Company’s mission is to leverage technology and design, modern business models influenced by the sharing economy, and advancements in the financial regulatory environment to democratize the asset class. The Company aims to provide enthusiasts with access to the market by enabling them to create a diversified portfolio of equity interests in the highest quality collectible assets through a seamless investment experience. As well, we expect to provide at some point the opportunity for Investors to participate in a unique collective ownership experience, including museum or retail locations and social events, as part a premium membership program that we intend to develop. The objective is to use revenue generated from these premium pembership programs to fund the highest caliber of care for the memorabilia or collectable assets (the “Underlying Asset”) in the collection, which we expect ultimately to be offset by meaningful economies of scale in the form of lower costs for collection level insurance, maintenance contracts and storage facilities, which could lead to the potential generation of free cash flow distributions to Investors in the Underlying Assets.  Our Manager, CS Asset Manager, LLC, (the “Manager or Asset Manager”) however in its discretion may maintain free cash flow funds in a deposit account or an investment account for the benefit of the various series that we have issued.

Collectors and dealers interested in selling their sports memorabilia are expected to benefit from greater liquidity, lower transaction costs and overhead, and a higher degree of transparency as compared to traditional methods of transacting such assets. Auction and consignment models may include upwards of ~20% of asset value in transaction costs, as well as meaningful overhead in terms of asset preparation, shipping and marketing costs, and time value. The Company thus aims to align the interests of buyers and sellers, while opening the market to a significantly larger number of participants than was previously possible, thereby driving market appropriate valuations and greater liquidity.

Business of the Company

An investment in any series of LLC interests (a “Series”) issued by the Company represents an investment in that particular Series and, indirectly, in the sports collectible asset owned by that series and does not represent an investment in the Company or the Manager generally. We do not anticipate that any Series will own any assets other than the Underlying Asset associated with such Series. However, we expect that the operations of the Company, including the issuance of additional Series and their acquisition of additional assets, will benefit investors by enabling each Series to benefit from economies of scale and by allowing investors to enjoy the Company’s Underlying Asset collection through premium membership programs that we intend to develop. We anticipate that the Company’s core competency will be the identification, acquisition, marketing and management of Underlying Assets for the benefit of the Investors. The Company, with the support of the Manager and its affiliates, aims to provide:

We believe that a core principle of sports memorabilia asset collecting should be the enjoyment of the assets. As such, one of the goals of the Premium Membership Programs will be to operate the asset profitably (i.e., generate revenues in excess of Series operating expenses through the Premium Membership Programs within mandated usage guidelines) while maintaining exemplary maintenance standards to support the potential generation of financial returns for Investors in each Series. The Premium Membership Programs, with appropriate controls and incentives, and active monitoring by the Manager or Asset Manager, should enable a highly differentiated and enjoyable shared collecting experience while providing for premium care for assets in the Company’s collection. To the extent the Manager or Asset Manager consider it beneficial to investors, we plan to include all the Underlying assets, in the sole discretion of the Manager, in any Premium Membership Programs that we develop. Our objective is to become a leading marketplace for investing in quality memorabilia assets and to provide investors with financial returns commensurate with returns in the assets , to enable deeper and more meaningful participation by collectible asset enthusiasts in the hobby, to provide experiential and social benefits comparable to those of a world-class memorabilia asset collector, and to manage the collection in a manner that provides exemplary care to the assets and offers potential returns for Investors.

Competition

Although the Company’s business model is somewhat new to the memorabilia and collectibles industry, there is potentially significant competition for the Underlying Assets, which the Company securitizes through its offerings, from many different market participants. While the majority of transactions continue to be peer-to-peer with very limited public information, other market players such as memorabilia and collectibles dealers and auction houses continue to play an increasing role.

Most of our current and potential competitors in the memorabilia and collectibles industry, such as dealers and auction houses, have significantly greater financial, marketing and other resources than we do and may be able to devote greater resources sourcing the Underlying Assets that the Company competes for. In addition, almost all these competitors, in particular the auction houses, have longer operating histories and greater name recognition than we do and are focused on a more established business model.

There are also other start-up models around shared ownership of memorabilia and collectibles, developing in the industry, which will result in additional competition for Underlying Assets, including models which securitize ownership through the regulated securities market.

With the continued increase in popularity of the memorabilia and collectibles market, we expect competition for the Underlying Assets to intensify in future. Increased competition may lead to increased memorabilia and collectibles prices, which will reduce the potential value appreciation that Interest Holders may be able to achieve by owning Interests in the Company’s Offerings and will decrease the number of high-quality assets the Company can securitize.

In addition, there are companies that are developing crowd funding models for other alternative asset classes such as racehorses, art or wine, who may decide to enter the memorabilia and collectibles as well.

Customers

We target the broader U.S. memorabilia and collectibles enthusiast and the 83.1 million U.S. millennial market (based on 2015 figures by the U.S. Census Bureau) as our key customer bases. The customers of the Company are the Investors in each Series that has closed an Offering. As of the date of this filing, the Company has closed (8) eight Offerings in 2020 and (54) fifty-four Offerings in 2021.

Manager

The Operating Agreement designates the “Manager”, CS Asset Manager, LLC as the managing member of the Company. CS Asset Manager, LLC is owned by Collectable Technologies, Inc. The Manager will generally not be entitled to vote on matters submitted to the Interest Holders. The Manager will not have any distribution, redemption, conversion or liquidation rights by virtue of its status as the Manager.

The Operating Agreement further provides that the Manager, in exercising its rights in its capacity as the managing member, will be entitled to consider only such interests and factors as it desires, including its own interests, and will have no duty or obligation (fiduciary or otherwise) to give any consideration to any interest of or factors affecting the Company, any Series or any of the interest holders and will not be subject to any different standards imposed by the Operating Agreement, the LLC Act or under any other law, rule or regulation.

In the event the Manager resigns as managing member of the Company, the holders of a majority of all interests of the Company may elect a successor managing member. Holders of interests in each Series of the Company have the right to remove the Manager as manager of the Company, by a vote of two-thirds of the holders of all interests in each Series of the Company (excluding the Manager), in the event the Manager is found by a non-appealable judgment of a court of competent jurisdiction to have committed fraud in connection with a Series of the Company. If so convicted, the Manager shall call a meeting of all holders of every Series of within 30 calendar days of such non-appealable judgment at which the holders may vote to remove the Manager as manager of the Company and each Series. If the Manager fails to call such a meeting, any Interest Holder will have the authority to call such a meeting. [ In the event of its removal, the Manager shall be entitled to receive all amounts that have accrued and are due and payable to it. If the holders vote to terminate and dissolve the Company (and therefore the Series), the liquidation provisions of the operating agreement shall apply.] The operating agreement and all amendments are filed (or incorporated by reference as exhibits to this report). In the event the Manager is removed as manager of the Company, it shall also immediately cease to be manager of any Series.

Advisory Board

The Manager has assembled an Advisory Board to assist the Manager in identifying and acquiring the Underlying Assets, to assist the Manager in managing the Underlying Assets and to advise the Manager and certain other matters associated with the business of the Company and the various Series . The members of the Advisory Board are not managers or officers of the Company or any Series and do not have any fiduciary or other duties to the interest holders of any Series.

Operating Expenses

Each Series is only responsible for the operating expenses associated with such Series, as determined by the Manager and not the operating expenses related to any other Series. Upon the closing of an offering for a Series, the Series will be responsible for the following costs and expenses attributable to the activities of the Company related to the Series:

The Manager or Asset Manager has agreed to pay and not be reimbursed for operating expenses incurred prior to the Closing of any of the Series.  The Manager or Asset Manager will bear its own expenses of an ordinary nature, including all costs and expenses on account of rent (other than for storage of the Underlying Asset), supplies, secretarial expenses, stationery, charges for furniture, fixtures and equipment, payroll taxes, remuneration and expenses paid to employees and utilities expenditures (excluding utilities expenditures in connection with the storage of the Underlying assets).

If the operating expenses for a particular Series exceed the amount of revenues generated from the Underlying Asset of such Series and cannot be covered by any operating expense reserves on the balance sheet of the Series, the Manager or Asset Manager may (a) pay such operating expenses and not seek reimbursement, (b) loan the amount of the operating expenses to the Series, on which the Manager or Asset Manager may impose a reasonable rate of interest, and be entitled to reimbursement of such amount from future gains generated by the Underlying Asset related to such Series, and, or (c) cause additional Interests to be issued in the Series in order to cover such additional amounts.

Indemnification of the Manager and its affiliates

The operating agreement provides that none of the Manager, or its affiliates, the Asset Manager, nor any current or former directors, officers, employees, partners, shareholders, members, controlling persons, agents or independent contractors of the Manager, members of the Advisory Board, nor persons acting at the request of the Company in certain capacities with respect to other entities (collectively, the “Indemnified Parties”) will be liable to the Company, any Series or any interest holders for any act or omission taken by the Indemnified Parties in connection with the business of the Company or any Series that has not been determined in a final, non-appealable decision of a court, arbitrator or other tribunal of competent jurisdiction to constitute fraud, willful misconduct or gross negligence.

Each Series will indemnify the Indemnified Parties out of its assets against all liabilities and losses (including amounts paid in respect of judgments, fines, penalties or settlement of litigation, including legal fees and expenses) to which they become subject by virtue of serving as Indemnified Parties with respect to the Company or the applicable Series and with respect to any act or omission that has not been determined by a final, non-appealable decision of a court, arbitrator or other tribunal of competent jurisdiction to constitute fraud, willful misconduct or gross negligence.

Management Fee

As consideration for managing each Underlying Asset, the Manager or Asset Manager will be paid an annual Management Fee pursuant to the Asset Management Agreement, equal to up to 50% of any available Free Cash Flow generated by a Series for such six-month period. The Management Fee will only become payable if there are sufficient proceeds to distribute Free Cash Flow, as defined, to the interest holders.

Asset Selection

Each of the assets that we offer will be sourced by our expert investment committee and will satisfactorily meet our four BASE criteria: Benchmarks, Authenticity, Significance, Earnings Potential. For each criterion, we will examine the following factors:

It is our objective to acquire a diverse collection of top tier sports collectibles. We will pursue investments opportunistically whenever we can leverage our industry-specific knowledge, unique sourcing angle or our relationships to bring compelling investment opportunities to investors. We aim to acquire only the highest of caliber assets and to appropriately maintain, monitor and manage the collection for continued value appreciation and to enable respectful enjoyment and utilization by the investors and potential losses.

We anticipate that our Advisory Board will assist in the identification of memorabilia assets and in finding and identifying storage, maintenance specialists and other related service providers. This will give the Company access to the highest quality assets and balanced information and decision making from information collected across a diverse set of constituents in the Asset Class, as well as a network of partners to ensure the highest standards of care for the Underlying Assets.

Our asset selection criteria were established by the Manager or Asset Manager and in the future with the consultation of members of the Company’s Advisory Board and are continually influenced by Investor demand and current industry trends. The criteria are subject to change from time to time in the sole discretion of the Manager. Although we cannot guarantee positive investment returns on the Underlying Assets we acquire, we endeavor to select assets that are projected to generate positive return on investment, primarily based upon the asset’s value appreciation potential as well as value preservation potential. The Manager or Asset Manager, with guidance from the members of the Company’s Advisory Board, will endeavor to only select assets with known ownership history, certificates of authenticity, and highest possible quality grades, to the extent that such metrics exist in a particular sub-sector (e.g., trading cards) and other related records. The Manager or Asset Manager, with guidance from members of the Company’s Advisory Board, also considers the condition of the assets, historical significance, ownership history and provenance, the historical valuation of the specific asset or comparable assets and our ability to relocate the asset to offer tangible experiences to Investors. The Manager or Asset Manager, with guidance from members of the Company’s Advisory Board, will review asset selection criteria at least annually. The Manager or Asset Manager intends to seek approval from the Advisory Board for any major deviations from these criteria.

Through the Company’s network, the Manager or Asset Manager and Advisory Board, we believe that we will be able to identify and acquire Underlying Assets of the highest quality and known provenance, as well as examples of potential “future classics,” and obtain proprietary access to limited production runs, with the intent of driving returns for Investors in the Series of Interests that owns the applicable asset. We aim to bring together a significantly larger number of potential buyers with asset sellers than traditional auction houses or dealers are able to achieve. Through this process, we believe we can source and syndicate Underlying Assets more efficiently than the traditional method in the asset class and with significantly lower transaction and holding costs.

Asset Acquisition

The Company plans to acquire Underlying Assets through various methods:

In the case where an Underlying Asset is acquired prior to the launch or closing, as the case may be, of the offering process for the related Series, the proceeds from the associated offering, net of any brokerage fee, offering expenses or other acquisition expenses or sourcing fee, may be used, in whole or in part, to reimburse the Company for the acquisition of the Underlying Asset or repay any loans made to the Company, plus applicable interest, to acquire such Underlying Asset.

Sometimes, rather than pre-purchasing an Underlying Asset before the closing of an offering, the Company may negotiate with asset sellers for the exclusive right to market an Underlying Asset to Investors for a period of time (the “Exclusivity Period”). The Company plans to achieve this by pre-negotiating a purchase price (or desired amount of liquidity) and entering into an asset purchase agreement or a purchase option agreement with an asset seller for an Underlying Asset, which would close simultaneously upon the closing of the offering of interests in the Series associated with that Underlying Asset. Then, upon closing a successful offering, the asset seller would be compensated with a combination of cash proceeds from the offering and, if elected, equity ownership in the Series associated with the Underlying Asset (as negotiated in the agreement for such Underlying Asset).

Additional details on the acquisition method for each Underlying Asset can be found in the Offering Circulars of each respective Series.

Asset Liquidity

The Company intends to hold and manage all the assets indefinitely. Liquidity for investors would be obtained principally through increases in the value if Underlying Assets and monetization (i.e., sale) of those assets. Investors also could realize liquidity by transferring their Interests in a Series, although there is no assurance that any secondary market, if one were to develop, would continue to exist for any period of time. Should an offer to liquidate an Underlying Asset materialize and be in the best interest of the investors, as determined by the Manager, the Manager, with guidance from the Advisory Board will consider the merits of such offers on a case-by-case basis and potentially sell the asset. Furthermore, should an Underlying Asset become obsolete (e.g., due to lack of investor demand for its Interests) or suffer from a catastrophic event, the Manager may choose to sell the asset. As a result of a sale under any circumstances, the Manager would distribute the proceeds of such sale (together with any insurance proceeds in the case of a catastrophic event covered under the asset’s insurance contract) to the Interest Holders of the applicable Series (after payment of any accrued liabilities or debt, including but not limited to balances outstanding for any operating expenses, on the Underlying Asset or of the Series at that time).

Facilities

The Manager intends to operate the Company and manage the collection in a manner that will focus on the ongoing security of all Underlying Assets. The Manager will store the Underlying Assets, along with other assets, in a professional facility and in accordance with standards commonly expected when managing Underlying Assets of equivalent value and always as recommended by the Advisory Board.

Legal Proceedings

None of the Company, any Series, the Manager or Asset Manager or any director or executive officer of the Manager or Asset Manager is presently subject to any material legal proceedings.

(d) For offerings of limited partnership or limited liability company interests, an issuer must comply with the Commission’s interpretive views on substantive disclosure requirements set forth in Securities Act Release No. 6900 (June 17, 1991).

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The Company was founded on January 16, 2020 and began developing its technology platform (“Platform”), making business agreements, and acquiring consignable assets to support the business model.  The Company launched its operations in September 2020. Since that time, the Company has begun acquiring assets to consign, has successfully crowdfunded over 75 Series offerings, and completely sold five (5) items off the platform.

The table below shows the series that closed as of December 31, 2020.

The table below shows the series that have closed in 2021, as of the date of this filing.

The success of the public offerings to date has led to a greater-than-expected supply of items to be consigned on the platform. Additionally, since launching, the registered user-base exceeds 30,000 users, with over 5,000 having participated in at least one auction.

Financial Obligations

The company has no outstanding lines of credit. However, there exists obligations to Collectable Technologies, Inc. (“CTI”) for monies paid on behalf of the Company.  These liabilities are adequately covered by monies currently held in escrow awaiting final closing.

Future Prospects

There are a few factors that could impact our operating results going forward including the Manager’s ability to:

COVID-19

The extent to which COVID-19 may impact our results will depend on future developments, which are highly uncertain and cannot be predicted as of the date of this report, including new information that may emerge concerning the severity of the pandemic and steps taken to contain the pandemic or treat its impact, among others. Nevertheless, the pandemic; the current financial, economic and capital markets environment; and future developments in the global supply chain and other areas present material uncertainty and risk with respect to our performance, financial condition, results of operations and cash flows.

The COVID-19 outbreak and resulting economic uncertainty may impact the value of value of collectables and the underlying assets. The extent of the impact and effects of the recent outbreak of the coronavirus (COVID-19) on the operation and financial performance of our business are unknown. However, the Company does not expect that the outbreak will have a material adverse effect on our business or financial results at this time.

Operating Results

The company launched its first Series offering in September 2020.  As of December 31, 2020, the Platform had hosted crowdfunded offerings on 22 Series, of which eight (8) had closed escrow, and of the eight, two (2) items sold off the platform in their entirety.  The other Series offerings subsequently closed escrow in 2021.

The success of the public offerings to date has led to a greater-than-expected supply of items to be consigned on the platform.  Additionally, since launching, the registered user-base exceeds 30,000 users, with over 5,000 having participated in at least one offering.

The Company sold two (2) Underlying Assets held for sale for a price of $252,500 and a Net Gain on Sale of Assets of $86,698 during the period ended December 31, 2020

Operating Capital

Management considers operating capital on hand to be sufficient for the current growth plans, however we recognize the need for continued outside investment to accelerate and expand growth in 2021 and beyond.

Item 3. Directors and Officers

The following individuals constitute the Board of Directors, executive management and significant employees of the Collectable Technologies, Inc., the sole members of the Manager or Asset Manager:

Background of Officers of the Manager

The following is a brief summary of the background of each director and executive officer of the Manager:

Jason Epstein. Mr. Epstein is a serial entrepreneur and co-founder of Collectable Technologies, Inc (“CTI”). (successor to the assets and liabilities of Collectable.com, Inc.), the ultimate parent organization to Collectable Sports Assets, LLC and the Manager. The collectable application provides sports collectors access to historical auction pricing and real-time data on current auctions. With over 2 million historical sales dating back to 1999 and over two dozen auction house customers, we believe that our collectable application (“Collectable’) publishes one of the broadest and most comprehensive data set of historical prices and active auction listings in the industry.

Ezra Levine. Mr. Levine is a seasoned public and private markets investor and operator. Mr. Levine has served as the Chief Strategy Officer and Chief Financial Officer of The Spring League, the premier developmental league and scouting event for professional football talent since 2017. He also served as Portfolio Manager at Hilltop Park Associates, a hedge fund, managing investments in the Sports, Media, Entertainment and Consumer industries. He also has served as an advisor and consultant to numerous businesses. He holds a B.A. from the University of Michigan in American Studies and an MBA from NYU Stern School of Business with a concentration in General Management and Finance.

Ross Schimel – Mr. Schimel is the Co-Founder and Managing Partner of FuturesMedia. Prior, he served as a Portfolio Manager at Diamondback Capital hedge fund and former head of JNK Securities Energy Division. Schimel graduated from the University of Michigan and is a CFA Charter Holder.

There are no arrangements or understandings known to us pursuant to which any director was or is to be selected as a director or nominee. There are no agreements or understandings for any executive officer or director to resign at the request of another person and no officer or director is acting on behalf of nor will any of them act at the direction of any other person.

There are no family relationships between any director, executive officer, person nominated or chosen to become a director or executive officer or any significant employee.

Compensation of Directors and Executive Officers

Compensation of Directors and Executive Officers

We do not currently have any employees, nor do we currently intend to hire any employees who will be compensated directly by the Company. Each of the executive officers of the Manager manage our day-to-day affairs, oversee the review, selection and recommendation of investment opportunities, service acquired investments and monitor the performance of these investments to ensure that they are consistent with our investment objectives. Each of these individuals receives compensation for his or her services, including services performed for us on behalf of the Manager, from our manager. Although we will indirectly bear some of the costs of the compensation paid to these individuals, through fees we pay to the Manager, we do not intend to pay any compensation directly to these individuals.

Compensation of the Manager

The Manager or Asset Manager may receive sourcing fees and reimbursement for costs incurred relating to the offerings described herein and other offerings (e.g., offering expenses and acquisition expenses). Neither the Manager or Asset Manager nor its affiliates will receive any selling commissions or dealer manager fees in connection with the offer and sale of the Interests.

The Manager or Asset Manager receives Sourcing Fees for each offering for Series of Interests in the Company that closes. During 2020, the Manager received $62,860.00 in Sourcing Fees for eight (8) Series that were closed. During 2020, the manager also received 4,405 shares in non-cash compensation with a value of $102,590.

In addition, should a Series’ proceeds exceed its ongoing operating expenses and various other potential financial obligations of the Series, the Manager in its capacity as Asset Manager may receive a management fee. To date, no management fees have been paid by any Series and we do not expect to pay any management fees in Fiscal Year 2021.

Item 4. Security Ownership of Management and Certain Securityholders

The Company is managed by the Manager. The address of the Manager is 333 Westchester Avenue, Suite W2100, White Plains, NY 10604. As of the date of this filing, the Company has no voting securities issued and outstanding.

The following table sets forth information with respect to the number of units of each of our Series beneficially owned by our officers as of May 5, 2021.

The following table sets forth information with respect to the number of units of each of our Series beneficially owned by the Manager and by all persons who beneficially own more than ten percent of any Series as of May 5, 2021.

Item 5. Interest of Management and Others in Certain Transactions

Among the items offered to the public through the Collectable platform, thirteen (13) items came from the collection of Collectable Founder and President, Jason Epstein through a business entity, Zev Partners.  Of these items, three (3) items closed in 2020, with total consignment payments of $138,500.

Subsequently, in 2021, Jason Epstein through a business entity, Zev Partners, has been paid $102,000 for (3) three items of the (10) ten remaining items awaiting the close of escrow.

Item 6. Other Information

None

Item 7. Financial Statements

INDEX TO FINANCIAL STATEMENTS

INDEPENDENT AUDITORS’ REPORT

To the Members and Board of Directors of
Collectable Sports Assets, LLC

White Plains, New York

We have audited the accompanying consolidated financial statements of Collectable Sports Assets, LLC (the "Company"), which comprise the consolidated balance sheets on a consolidated basis and for each listed Series as of December 31, 2020, and the related consolidated statements of operations, changes in members' equity, and cash flows on a consolidated basis and for each listed Series for the period from January 16, 2020 (inception) through December 31, 2020, and the related notes to the consolidated financial statements.

Management's Responsibility for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements on a consolidated basis and for each listed Series in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these consolidated financial statements on a consolidated basis and for each listed Series based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Collectable Sports Assets, LLC and each listed Series as of December 31, 2020, and the results of their operations and their cash flows of the Company and each listed Series for the period from January 16, 2020 (inception) through December 31, 2020 in accordance with accounting principles generally accepted in the United States of America.

/s/ Frazier & Deeter, LLC

Atlanta, Georgia

May 5, 2021

COLLECTABLE SPORTS ASSETS, LLC

CONSOLIDATED BALANCE SHEETS

AS OF DECEMBER 31, 2020

See accompanying notes, which are an integral part of these financial statements.

COLLECTABLE SPORTS ASSETS, LLC

CONSOLIDATED BALANCE SHEETS

AS OF DECEMBER 31, 2020

See accompanying notes, which are an integral part of these financial statements.

COLLECTABLE SPORTS ASSETS, LLC

CONSOLIDATED BALANCE SHEETS

AS OF DECEMBER 31, 2020

See accompanying notes, which are an integral part of these financial statements.

COLLECTABLE SPORTS ASSETS, LLC

CONSOLIDATED BALANCE SHEETS

AS OF DECEMBER 31, 2020

See accompanying notes, which are an integral part of these financial statements.

COLLECTABLE SPORTS ASSETS, LLC

STATEMENTS OF OPERATIONS

FOR THE PERIOD FROM JANUARY 16, 2020 (INCEPTION) TO DECEMBER 31, 2020

See accompanying notes, which are an integral part of these financial statements.

COLLECTABLE SPORTS ASSETS, LLC

STATEMENTS OF OPERATIONS

FOR THE PERIOD FROM JANUARY 16, 2020 (INCEPTION) TO DECEMBER 31, 2020

See accompanying notes, which are an integral part of these financial statements.

COLLECTABLE SPORTS ASSETS, LLC

CONSOLIDATED STATEMENTS OF CHANGES IN MEMBERS’ EQUITY

FOR THE PERIOD FROM JANUARY 16, 2020 (INCEPTION) TO DECEMBER 31, 2020

See accompanying notes, which are an integral part of these financial statements.

COLLECTABLE SPORTS ASSETS, LLC

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE PERIOD FROM JANUARY 16, 2020 (INCEPTION) TO DECEMBER 31, 2020

See accompanying notes, which are an integral part of these financial statements.

COLLECTABLE SPORTS ASSETS, LLC

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE PERIOD FROM JANUARY 16, 2020 (INCEPTION) TO DECEMBER 31, 2020