|1||We are giving investors an opportunity to own a high quality stable of homebred racehorses|
|2||Max Player has run in the classic races in 2020 and will run in the Preakness.|
|3||You can buy shares (please invest in $110 increments) for anyone who is a fan of horse racing - family or friends|
|4||All three thoroughbreds have strong pedigrees on both sides of their families.|
|5||Owners of 5% of Annestes Thoroughbreds will have a right of first offer in a sale of any of the horses|
|6||Limited opportunity to own equity and partner with some of the most successful names in the industry|
|7||We are different then the industry's syndicate models and do not charge a markup to our investors|
|8||Investors will have access to content on the SportBLX site and be eligible for unique on-track experiences|
Horse racing is a culture that I love to be near. It is not just the speed of the athletes, but also the competition between stables. Never had I imagined that I could invest in several of these great horses. To have the ability to be a part owner alongside George Hall, who has a proven track record of finding and training great thoroughbreds, was an opportunity I could not pass on. Whether it is Max Player or the next one in the stable, I trust K&G to have them ready. A little bit about myself, I am an established investor and licensed attorney my career has spanned over three decades having held senior level positions within investment management and hedge funds, private legal practice and real estate.
The company owns several horses, all homebred on Annestes Farm in Versailles, Kentucky. This provides investors with diversity and multiple opportunities for breeding as well as on-track excitement. The portfolio is led by Max Player a well-bred three-year old son of Honor Code. Ownership in Annestes Thoroughbreds gives investors a shot at being part of the Thoroughbred Racing experience.
The company will initially purchase interests in several racehorses, all homebred on Annestes Farms by K&G Stables LLC. Max Player, a three-year old colt by Honor Code colt out of Fools in Love (by: Not For Love), is the winner of the G3 Withers Stakes, third place finisher in the G1 Belmont Stakes and third place finisher in the G1 Travers Stakes. Max Player is headed to the classic races in the balance of 2020. Swingman, a two-year old colt by Tonalist out of Eternal Grace (by: Gilded Time), is in training and being pointed to the races in the fall of 2020. An unnamed weanling colt by Midnight Lute are on the farm (the appraisals are set forth as an attachment on the site).
Please note in late September 2020, the Unnamed Filly previously owned in part by Annestes Thoroughbreds was sold for profit, and Annestes Thoroughbreds realized its pro rata share of the proceeds.
The company capital raise is being done at $110 per share with a minimum purchase of two shares.. The Company will also purchase additional interests in horses for racing and breeding .
HOW DOES IT WORK?
Annestes Thoroughbreds intends on raising capital to grow its roster of bloodstock and support its operations. The majority owner of Max Player, Swingman, the filly, and colt will contribute interests in each of these horses in exchange for cash and stock. Pro forma for the minimum offering size, interests in Max Player will comprise a majority of the non-cash enterprise value of the company. Use of proceeds from the offering will be to buy producing mares and fund stallion fees, and progeny can be sold or raced. Please note in late September 2020, the Unnamed Filly previously owned in part by Annestes Thoroughbreds was sold for profit, and Annestes Thoroughbreds realized its pro rata share of the proceeds.
Money raised from this offering will be used to purchase additional interests in racehorses for racing and breeding in addition to paying expenses arising from the training, care, and other typical expenses necessary to manage a horse. If applicable, the remaining offering proceeds will be used to build the company’s cash reserves. Investors are entitled to a share of revenue from racing, breeding, and all other sources of revenue generated by each horse. Additionally, excess cash received from purses may be used to make distributions to shareholders and/or purchase additional horses (investors will earn an equity stake in any additional horses).
Led by George E. Hall and farm manager, Dale Holly, Annestes Thoroughbreds has had a long history of success breeding horses on Annestes Farms and monetizing their values in the auction ring and campaigning them on the racetrack. Of the 89 horses bred, 60 were winners (67.41% versus the industry average of 45.33%), 7 were winners in Stakes Races (7.86% versus the industry average of 2.63%), and 5 were winners in Graded Stakes Races (5.61% versus the industry average of 0.77%). Notable homebred runners include: Pants on Fire out of Cabo De Noche (by: Jump Start) who won the Grade 2 Louisiana Derby, started in the Kentucky Derby, placed in the G1 Breeder’s Cup Dirt Mile and earned $1.6 million, and stakes winners Calamity Kate ($621k earnings), My Adonis ($531k earnings), and Max Player ($373k life to date earnings). Notable yearling sales include Seahenge (sold for $750k), Guarded Secret (sold for $450k), Babeau (sold for $400k), and Capetown Lady (sold for $300k).
Annestes Thoroughbreds has financial statements ending July 9 2020. Our cash in hand is $25,000, as of September 2020. Over the three months prior, revenues averaged $0/month, cost of goods sold has averaged $0/month, and operational expenses have averaged $0/month.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes and other financial information included elsewhere in this offering. Some of the information contained in this discussion and analysis, including information regarding the strategy and plans for our business, includes forward-looking statements that involve risks and uncertainties. You should review the "Risk Factors" section for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
Annestes Thoroughbreds Inc.’s goal is to bring the thrill of thoroughbred ownership (both breeding and racing) to the everyday person. The company will owns a percentage of each of Max Player, Swingman, and an Unnamed Colt by Midnight Lute. Max Player is headed to the Preakness Stakes as his next race.
We would like the company to be a powerhouse in the racing and breeding industries executing our mission to innovate and bring new owners into the sport. With Max Player's recent third place finish in the Belmont Stakes and Travers our farm has already gained significant traction in the racing industry. Besides owning runners in stakes races, we would like to have an established band of broodmares and stallion prospects to expose investors to the breeding business on the farm.
Given the Company’s limited operating history, the Company cannot reliably estimate how much revenue it will receive in the future, if any.
Annestes Thoroughbreds Inc was incorporated in the State of Delaware in July 2020. SportBLX Thoroughbreds Corp. and Annestes Thoroughbreds Inc. will have common ownership in some of the horses identified in “Portfolio.” Annestes Thoroughbreds Inc.’s goal is to bring the thrill of thoroughbred ownership (both breeding and racing) to the everyday person. The Company will initially purchase interests in several racehorses, all homebred on Annestes Farms by K&G Stables LLC. The corporation will own a percentage of each of Max Player, Swingman, an Unnamed Munnings Filly and an Unnamed Colt. Max Player is headed to the classic races in the balance of 2020.
SportBLX is a web-based portal that allows fans and investors to own unique assets in sports. Annestes Thoroughbreds is a company which owns a portfolio of racehorses and is selling shares through SportBLX and Wefunder. Swingman Thoroughbred is a company which owns interests in a single horse, Swingman, and is selling shares through SportBLX and Wefunder. Both Annestes Thoroughbreds and Swingman Thoroughbred are externally managed by K&G Stables LLC which is owned by George Hall, an executive of Annestes Thoroughbreds. John Hall, director of Annestes Thoroughbreds, is also a director of Swingman Thoroughbred.
Since then, we have:
Historical Results of Operations
Our company was organized in July 2020 and has limited operations upon which prospective investors may base an evaluation of its performance.
Liquidity & Capital Resources
After the conclusion of this Offering, should we hit our minimum funding target, our projected runway is 12 months before we need to raise further capital.
We plan to use the proceeds as set forth in this Form C under "Use of Funds". We don’t have any other sources of capital in the immediate future.
We will likely require additional financing in excess of the proceeds from the Offering in order to perform operations over the lifetime of the Company. We plan to raise capital in 12 months. Except as otherwise described in this Form C, we do not have additional sources of capital other than the proceeds from the offering. Because of the complexities and uncertainties in establishing a new business strategy, it is not possible to adequately project whether the proceeds of this offering will be sufficient to enable us to implement our strategy. This complexity and uncertainty will be increased if less than the maximum amount of securities offered in this offering is sold. The Company intends to raise additional capital in the future from investors. Although capital may be available for early-stage companies, there is no guarantee that the Company will receive any investments from investors.
Runway & Short/Mid Term Expenses
Annestes Thoroughbreds Inc cash in hand is $25,000, as of September 2020. Over the last three months, revenues have averaged $0/month, cost of goods sold has averaged $0/month, and operational expenses have averaged $0/month, for an average burn rate of $0 per month. Our intent is to be profitable in 6 months.
There are no material changes or trends in our finances or operations that occurred since the date that our financials cover.
Capital will come into the entity from Horse racing purse, sale of horses at auction or from capital raise. There is currently a REG D offering running with $16,680 escrow, however the escrow account has not been close as of this date.
This is a very young company.
Our future success depends on the efforts of a small management team. The loss of services of the members of the management team may have an adverse effect on the company. There can be no assurance that we will be successful in attracting and retaining other personnel we require to successfully grow our business.
The company’s performance is entirely dependent upon the performance and sale of the horses that are purchased or bred by the Company
Valuation of Horses.
Not all the horses to be owned by the company have been selected, and management may pick horses that fail to perform.
Not all of the horses have been assigned to a specific trainer.
George Hall is a part-time officer. As such, it is likely that the company will not make the same progress as it would if that were not the case.
The company will be required to pay trainer fees and other expenses with respect to the horses whether or not any of its horses win any races.
The valuation of racehorses is a highly speculative matter and the market for racehorses is extremely volatile. If the valuation of the company’s horses decreases, the company will still be responsible for the expenses of maintaining, training and racing its horses at lower level races or smaller venues, which could negatively impact the revenues from the horse.
There can be no assurances that the performance or value of any horse owned by the company will not decrease in the future, which may have an adverse impact on the company’s activities and financial position.
The cost of racing is unpredictable and speculative and may negatively impact the company’s ability to generate revenue.
If a horse is unsuccessful in racing, becomes sick or injured, the company’s revenue will be adversely affected.
Horse racing could be subjected to restrictive regulation or banned entirely, which could adversely affect the conduct of the company's business.
A decrease in average attendance at races coupled with increasing costs could jeopardize the continued existence of certain racetracks which could negatively impact the company's operations.
The company may purchase insurance on its horses, which could require company resources to be spent to insure any losses from the death or injury of a horse, or not, which could result in significant costs and potential loss of investment.
Industry practices and structures have developed which may not be attributable solely to profit-maximizing, economic decision-making which may have an adverse impact on the company's business.
The company may only own a minority interest in a horse and thus it may not have sufficient control regarding the training or racing of that horse.
Competitive interests and other factors can have unforeseen consequences.
The company depends on a small management team and may need to hire more people to be successful.
The offering price has been arbitrarily set by the company.
Impact of non-compliance with regulations.
Investors in this offering may not be entitled to a jury trial with respect to claims arising under the subscription agreement and claims where the forum selection provision is applicable, which could result in less favorable outcomes to the plaintiff(s) in any such action.
Investors' interests may be diluted
Control of the company is in the hands of K&G
The company has no intention of paying dividend payments on a regular schedule as revenues are irregular, seasonal, and unpredictable.
The exclusive forum provision in the company’s Certificate of Incorporation may have the effect of limiting an investor’s ability to bring legal action against the company and could limit an investor’s ability to obtain a favorable judicial forum for disputes.
The provisions of Section 12(g) of the Securities Exchange Act may result in our having to limit transfers of the Shares.
The impact of COVID-19 on horse breeding and horseracing may have a material impact on our business and ability to operate profitably.
The current pandemic and spread of SARS CoV-2, the virus responsible for COVID-19, has had a dramatic impact on the horseracing industry as well as breeding and training of racehorse. Initially many race tracks closed and races were cancelled. As racetracks re-open, they are subject to various social distancing and other protocols that will have the effect of reducing attendance and limiting the activities and movement of jockeys, owners and trainers. Similar safety protocols have been implemented for breeding and training facilities. These restrictions and safety protocols are likely to increase the costs of breeding, owning and managing our horses and may reduce purse prizes and sale prices for horses.
Investors will have to subscribe to multiple agreements in order to invest in this offering.
In order to invest in this offering, investors agree to become a party to the Subscription Agreement with the company, and the Custodian and Voting Agreement available here: https://wefunder.com/legal/custodian (the “Custodian and Voting Agreement”), under which XX Investments, LLC (the “Custodian”) will hold title of the securities for the benefit of the investor. The company has chosen to participate in this program offered by Wefunder as a means of simplifying communications with investors and to help facilitate future liquidity. Further, transferees will be required to become parties to the Custodian and Voting Agreement.
As part of the Custodian and Voting Agreement, Investors will grant the Custodian the right to vote their shares purchased in this offering.
The Custodian will vote the shares as directed by a “Lead Investor” appointed by the company who is supposed to represent the interests of investors. This means that investors in this offering will not have the right to vote for any matters submitted to them for a vote. Instead, that right will be granted to the Custodian, and [its affiliate], the Lead Investor.
No regulator has given their approval of the form of the arrangement with the Custodian.
The company has relied on representations by Wefunder regarding the legality of the arrangement with the Custodian. If during this offering, or in subsequent securities offerings by the company for which require regulatory review, the arrangement with the Custodian is challenged, the company may incur costs to unwind the arrangement by either transferring title to the securities from the Custodian to investors, or by engaging a different custodian.
You will not hold title to the purchased securities, instead, title will be held by the Custodian.
Under the terms of the Custodian and Voting Agreement, title to the shares in this offering will be held by the Custodian for your benefit. By holding custody of the title to the shares it means that the Custodian will be required to engage in business practices that protect your interests as the beneficial owner of the shares. The shares are not protected by insurance, and it is unclear what protections are available if the Custodian enters into bankruptcy proceedings in which creditors assert rights to shares for which you are the beneficial owner.
Already have a Wefunder account? Login
Don't have a Wefunder account? Signup