SEC – ‘UPLOAD’ from 11/20/19 re: Masterworks 004, LLC – ‘TEXT-EXTRACT’

On:  Wednesday, 11/20/19, at 3:41pm ET   ·   Delayed-Release:  Filing ¶  –  Release Delayed to:  1/17/20   ·   Accession #:  0-19-15668

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Delayed-Release Comment or Other Letter from the SEC
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: LETTER      Comment or Other Letter from the SEC                 PDF     31K 
 2: TEXT-EXTRACT  Comment or Other Letter from the SEC (PDF Text)      3±    16K 

‘TEXT-EXTRACT’   —   Comment or Other Letter from the SEC (PDF Text)

                                                           November 20, 2019

Scott W. Lynn                                                                   
Chief Executive Officer                                                         
Masterworks 004, LLC                                                            
497 Broome Street                                                               
New York, New York 10013                                                        

Re: Masterworks 004, LLC                                          
Offering Statement on Form 1-A                            
Filed October 21, 2019                                    
File No. 024-11099                                        

Dear Mr. Lynn:                                                                  

We have reviewed your offering statement and have the following   
comments. In some of                                                            
our comments, we may ask you to provide us with information so we may better    
understand your                                                                 
disclosure.                                                                     

   Please respond to this letter by amending your offering statement and
providing the                                                                   
requested information. If you do not believe our comments apply to your facts   
and                                                                             
circumstances or do not believe an amendment is appropriate, please tell us why 
in your                                                                         
response. After reviewing any amendment to your offering statement and the      
information you                                                                 
provide in response to these comments, we may have additional comments.         

Form 1-A filed October 21, 2019                                                 

Plan of Distribution                                                            
Offering Period and Expiration Date, page 32                                    

1.     Please revise your disclosure in this section to state that the Offering 
Circular on Form 1-                                                             
A for Masterworks.002 has been qualified.                         
Description of Business                                                         
Acquisition of the Painting , page 39                                           

2.     We note your disclosure that Masterworks has agreed to purchase the      
Painting at a public                                                            
    auction held by Christie's International PLC, on October 4, 2019, "but
the sale has not yet                                                            
closed." Please file the purchase agreement with Christie's       
International and disclose any                                                  
 material terms regarding the purchase agreement. In this regard, it
appear that Exhibit 6.3                                                         
    includes general terms and conditions of sale for Christie's, but does
not include the                                                                 
    purchase agreement. We also note that Exhibit 6.3 states that "payment
is due no later                                                                 
Scott W. Lynn                                                                 
FirstName LastNameScott W. Lynn                                                 
Masterworks 004, LLC                                                            
Comapany 20, 2019                                                               
November NameMasterworks 004, LLC                                               
November 20, 2019 Page 2                                                        
Page 2                                                                          
FirstName LastName                                                              
       than by the end of the seventh calendar day following the date of the
auction," and that                                                              
  purchased property must be collected within thirty days from the
auction, suggesting the                                                         
    purchase should have already been closed given the auction date of
October 4, 2019.                                                                
Please advise.                                                

    As a related matter, please also revise your statement that "[t]he
acquisition of the                                                              
      Painting from Christie's will occur concurrently with the closing of
this offering," as it                                                           
        appears that the purchase of the Painting from Christie's has to occur
by January 2, 2020,                                                             
but the offering may close after such date if it is not fully 
subscribed. In this regard, we                                                  
   note your disclosure that "[i]f this Offering is fully subscribed
prior to January 2, 2020,                                                       
$989,723 of the proceeds of this Offering will be used as     
consideration for the acquisition                                               
   of the Painting from Christie's...[i]f this Offering is not fully
subscribed prior to January                                                     
    2, 2020...Masterworks will advance us all of the funds required to
acquire the Painting."                                                          
Critical Accounting Policies and Estimates, page 49                             

3.       We note your disclosure that following the closing of the Offering,    
title to the Painting                                                           
        will be contributed to a segregated portfolio of Masterworks Cayman in
exchange for                                                                    
      shares of that segregated portfolio. We also understand the Painting
will be the only asset                                                          
     of the segregated portfolio and you will be the only shareholder of
that segregated                                                                 
      portfolio. Please tell us and disclose how you intend to account for
your shares in this                                                             
    segregated portfolio of Masterworks Cayman as well as the basis in
GAAP for your                                                                   
accounting.                                                   
Management's Discussion and Analysis of Financial Condition and Results of      
Operations,, page                                                               
49                                                                              

4.       We note your explanation as to why your audited financial statements   
are omitted from                                                                
        the filing. In light of your reliance on the Administrator to maintain
sufficient capital                                                              
    resources to pay your fees, costs and expenses and your disclosure
that the administrator's                                                        
        capital resources and sources of liquidity will be relied upon by your
auditors in                                                                     
        determining your likely ability to continue as a going concern, please
tell us your                                                                    
        consideration of whether the financial statements of the Administrator
should be included                                                              
      in your offering circular as well as in your future periodic filings
(along with your audited                                                        
      financial statements) for an adequate presentation of your financial
condition.                                                                      
       We will consider qualifying your offering statement at your request. If
a participant in                                                                
your offering is required to clear its compensation arrangements with FINRA,    
please have                                                                     
FINRA advise us that it has no objections to the compensation arrangements      
prior to                                                                        
qualification.                                                                  

     We remind you that the company and its management are responsible for
the accuracy                                                                    
and adequacy of their disclosures, notwithstanding any review, comments, action 
or absence of                                                                   
action by the staff. We also remind you that, following qualification of your   
Form 1-A, Rule 257                                                              
of Regulation A requires you to file periodic and current reports, including a  
Form 1-K which                                                                  
Scott W. Lynn                                                                 
Masterworks 004, LLC                                                            
November 20, 2019                                                               
Page 3                                                                          

will be due within 120 calendar days after the end of the fiscal year covered   
by the report.                                                                  

      You may contact Robyn Manuel, Staff Accountant at 202-551-3823 or Bill
Thompson,                                                                       
Accounting Branch Chief, at 202-551-3344 if you have questions regarding        
comments on the                                                                 
financial statements and related matters. Please contact Scott Anderegg, Staff  
Attorney, at 202-                                                               
551-3342 or Jennifer L pez-Molina, Staff Attorney at 202-551-3792 with any      
other questions.                                                                

FirstName LastNameScott W. Lynn                              Sincerely,         
Comapany NameMasterworks 004, LLC                                               
                                                     Division of
Corporation Finance                                                             
November 20, 2019 Page 3                                     Office of Trade &  
Services                                                                        
FirstName LastName                                                              

Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘UPLOAD’ Filing		Date		Other Filings
Release Delayed to:		1/17/20		CORRESP,  UPLOAD
		1/2/20		UPLOAD
Filed on:		11/20/19		UPLOAD
		10/21/19		1-A,  UPLOAD
		10/4/19		UPLOAD
				List all Filings

1 Previous Filing that this Filing References

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

10/21/19  Masterworks 004, LLC              1-A        10/18/19   11:26M                                    M2 Compliance LLC/FA