|1||Become an owner in the largest professional ultimate league playing a globally popular action sport|
|2||Ultimate is the sport of today's generation; socially conscious, engaged, inclusive, fun|
|3||TV deal places us in 57 million households with Fox Sports & AUDL.tv access to 60 million Roku subs|
|4||Deeply engaged digital media following of over 700,000 love our highlights and player story-telling|
|5||Young, socially conscious fans are valued by brands reaching out to Millennial and Gen Z audiences|
|6||Exciting, affordable and family friendly games and events with accessible players|
|7||We are developing a live prized-based mobile game & console based video game to engage our audience|
|8||@MKBHD is a star, Super Bowl Champ Ronnie Lott is advisor & Bill Nye the Science Guy has invested!|
A lot of us dream of becoming an owner of a professional sports team. But now is your rare opportunity to invest in an entire professional sports league, one that is on the brink of becoming the next big team action sport for everyone. As an AUDL owner, you can become a leader in the vibrant, passionate and socially conscious Ultimate community.
The American Ultimate Disc League (AUDL) is the world's largest professional league for Ultimate, one of today's fastest-growing participation sports. Ultimate is a fast-paced, non-contact team sport celebrated for its airborne acrobatics – making it a veritable highlight factory for fans.
The AUDL was formed in 2012 to introduce and showcase our talented athletes and precision play to an expanded audience. Our 800 players generate endless "wow" moments while authentically representing the changing values of today’s society. Our audience enjoys our exciting, affordable, family friendly events, gobble up our highlights and video features on social media and watch our full-length games on TV or online. If you're a sports fan, you've likely seen our highlights on ESPN’s Sports Center Top10, Bleacher Report or other leading sports shows.
We have learned so much in the past six months about how important sports are to our lifestyle and daily well-being. At the same time, we recognize that many things will need to change to satisfy our future customers. The AUDL is excited to embrace the new world of pro sports which is fully integrating technology, gaming and data as part of the fan experience. We want our live entertainment to go beyond the field of play and to become a multi-sensory experience that attracts new fans to our league.
Ultimate is estimated to be played by 8 million people globally. Your Lead Investor, Bill Nye, the Science Guy, was a pioneering Ultimate player at Cornell and has remained a passionate player and fan. Bill has invested $35,000 in two previous AUDL financing rounds and as your Lead Investor, he will be investing again alongside you on the same terms in this offering. He is an avid supporter of Ultimate and predicts that Ultimate is going to be really, really big!
The AUDL actively promotes inclusion and diversity in our sport. We are currently investing in the work required to introduce Ultimate to new communities who we anticipate will be excited by our low-cost and accessible sport that promotes fair play, mutual respect, dispute resolution, and a healthy lifestyle.
We hope to be a positive catalyst, along with international organizing bodies, womxn Ultimate leagues and like-minded stakeholders, to introduce an entirely new and more diverse generation of young athletes to our sport. Ultimate is accessible to anyone and we think Ultimate can become THE next big team action sport for everyone.
We currently have 22 teams operating in the US and Canada. Our athletes do not currently play in the AUDL for large amounts of money but are passionate to have their skills seen and appreciated through the broadcast and social media platforms we have developed.
Our players are mostly college graduates, some are YouTube stars, mobile game developers, or software designers. One may live right next door. They are future thought and business leaders and stand united for greater inclusion and social justice and are bound by their love of the sport of Ultimate and the values it represents.
The global pandemic has proven how important live sports are to our society and the positive impact that sports can have on our overall sense of health and well-being. As we begin to recover from this period of personal isolation and stress, the AUDL is well positioned to be a leading pro sports league able to adapt to player and fan sentiment helping them feel safe and comfortable as they return to live, outdoor entertainment events.
The AUDL generates revenues from the sale of new team territories, media rights and advertising, video streaming subscriptions, media services, national sponsorships, licensing of data and images, tickets and concessions from league run events such as the Championship Weekend and All-star Game and the online sale of merchandise on the AUDL store.
We have achieved $2.25 million in revenues since inception and have raised $5.95 million to date to grow professional Ultimate. We have developed a very efficient and low-cost professional sports business model. In 2019, revenues increased 60% over the previous year.
Due to the COVID-19 pandemic, the AUDL cancelled the 2020 season. This led to a material decrease in sponsorship billings, revenues from AUDL.tv subscriptions and ticket and merchandise sales from our events. However, our pipeline of new and renewing sponsorship agreements, new products and increased team services support a 2021 revenue outlook of over $1.0 million. This outlook would translate into 2021 revenue growth triple that of 2020 (the summer season just cancelled) and a 46% increase over normalized 2019 revenues.
New Business Lines
In November 2019, the AUDL formed a majority owned subsidiary, called UltiX Technology, LLC (UltiX). This new business was created to bring together industry leading expertise and partnerships as a developer of sports data collection, fan applications and video games. UltiX plans to offer new software products to monetize its AUDL licensed data and applications to further expand and engage the AUDL audience.
On October 1, 2020 the Company closed the purchase of a majority membership interest in a leading disc sports video production company, Fulcrum Media Group, LLC. This acquisition will serve to reduce our live game production costs and increase revenues in related disc sports event productions.
Social Media Growth
Most of us have missed live sports and the Ultimate community is eager to get back to play. Even with the absence of a 2020 season, the AUDL increased its social media followers rapidly during the past 12-month period as more fans engaged with our entertaining content, "best of" game rebroadcasts and new shows.
Over the past six months we have continued to build our base of over 700,000 engaged social media followers. We currently have over 2 million annual page views of our website and 10 million minutes of Facebook video viewed each year.
Key Growth Key Drivers for the AUDL
Sports Media Rights - A $20.9 Billion Market
Total US Pro Sports Media Rights Revenues in 2019 were $20.9 billion, growing at a 4.6% CAGR through 2023, according to PWC. The major disruption caused by COVID-19 turned 2020 into a unique period for all professional sports leagues and it will certainly have a material impact on this outlook.
The AUDL is targeting the growing interest in the sports market segment known as "participation sports", ones where fans casually play the sport but also love to watch top stars play at a competitive level. American Cornhole League is a good example of a league that has recently gained significant media traction.
In 2020, the AUDL signed a new multi-year national TV broadcast contract with Fox Sports. The AUDL Game of the Week will air on Wednesday nights and during other rebroadcast times from April-July on FS2. Fox Sports provides the league with advertising inventory that can be used to promote our products or those of our sponsors.
We launched our new AUDL.tv streaming service in 2019 and captured almost 2,000 paying subscribers with an estimated average customer lifetime value of $80 per sub. AUDL.tv is now available to over 60 million Roku subscribers around the world.
Management expects that total revenues from AUDL media rights will triple in 2021 as we focus on promoting our AUDL.tv streaming service and add new in-game experiences.
In May 2020, we produced a nine-episode series called "Ultimate Greatness" which is being aired in over 80 countries around the world, including in Spanish on ESPN in Mexico, Latin America and South America.
All these media platforms generate broad awareness and provide an opportunity to attract new sponsors and develop advertising sales opportunities.
National Pro Sports Sponsorships - $17.8 Billion Market
Total 2019 US Pro Sports Sponsorship Revenues were $17.8 billion, growing at a 3.8.% CAGR through 2023, according to PWC. The AUDL has established a multi-year relationship with an experienced sports sales agency that represents our extensive in-game activations, digital presence and advertising inventory to national brands across the US. This successful relationship is based on a monthly retainer and performance-based sales incentives.
We signed our largest partnership contract in 2018, a national agreement with Deschutes Brewery as presenting sponsor. This is a 3-year deal valued in the low to mid six-figures. Other new national sponsors are currently showing strong interest in reaching our attractive audience. Annual revenues from a new sponsor typically represent a mid-five-figure to low six-figure contract.
The AUDL appeals to brands seeking sports properties that are inexpensive, fresh and specifically target the attractive Gen Z and Millennial demographic. Based the current pipeline of opportunities, management hopes that total national sponsorships may approximately double in the 2021 fiscal period over the record levels achieved in 2019.
Sports Data, Statistics and Gaming - A $150 Billion US Market
The explosion of legalized online sports betting in the US is changing the sports media landscape. It is expected that 80% of Americans will live in states where sports betting is legal by 2024, according to CNBC. We recognize that not all fans feel comfortable betting on sports but prized-based fan pool games and fantasy leagues are very popular ways to engage our audience and introduce new fans.
To drive further fan awareness and engagement, the AUDL has co-developed a proprietary stats application and has eight years of historical data that can be accessed through our API by leading fantasy and other online betting platforms. We have developed a prize-based fan game called Play10 that will feature live “in-game questions” during our Game of the Week broadcasts. We are also developing potential new revenue producing partnerships with several sports betting platforms.
On September 29, 2020, the AUDL entered into a Collaboration Agreement with UltiX Technology, LLC to develop a prototype for the world’s only console based Ultimate video game to further engage our audience and grow revenues. The league will be paid a license fee for the use of its images and brands and will earn royalties on future revenue in the event the video game achieves commercial success.
Professional Sports is a Market in Transition
Sports enthusiasts are evolving, and some professional leagues aren’t adapting fast enough. Younger players are turning away from the violent nature of football. The risk of head trauma has caused youth football participation rates to plummet. Baseball, meanwhile, is too slow and methodical to capture the imagination of many younger players and viewers.
The explosive growth of online content providers, and the major shift to video streaming, have made live sports programming more valuable than ever. The rights to broadcast global tier-one sports has become cost prohibitive for many networks. The AUDL provides a cost-effective way to access new programming that appeals to advertisers seeking to reach our attractive demographic. Online sports betting and fan games will further transform the experience of watching live sports and help introduce many new fans to our sport.
COVID-19 will have a lasting impact on professional sports. The AUDL has a very low-cost business model and can adapt to smaller in-person attendance because we control all live broadcasts for our games. This will allow us to monetize our events in different ways and create new fan experiences. Even if fans are uncomfortable returning to outdoor events in the short term, the AUDL can continue to grow.
Youth Development and Increasing Diversity
AUDL will encourage grassroots growth in Ultimate through youth tournaments and clinics. We will actively seek out new communities for our sport, building a pipeline of diverse, talented players and new fans.
The AUDL created the Inclusion Initiative in July 2019 to focus on diversity and inclusion in our sport and business.
We believe it’s important to extend that work into a non-profit foundation called Inclusion, Diversity and Education in Action (IDEA) whose mission is to promote engagement and education in the AUDL and the broader community.
We plan to fund the foundation through direct contributions from the AUDL operating budget, corporate partnerships and opportunities for our fans through matching programs. The foundation will financially support active partnerships and activities that will proactively engage minority communities.
This is the American Ultimate Disc League's second Equity Crowdfunding Offer under REG CF. We want to dramatically increase our investor base with Wefunder and hope you decide to join our team as an owner to advocate our mission to new fans and business partners across the US and around the world.
We are offering a 15% discount to investors who invest the first $100,000 and some great Perks starting at the $250 investment level.
American Ultimate Disc League has financial statements ending September 30 2019. Our cash in hand is $242,464.48, as of August 2020. Over the three months prior, revenues averaged $10,000/month, cost of goods sold has averaged $5,000/month, and operational expenses have averaged $32,000/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.
The AUDL is the world's largest professional Ultimate league, featuring one of today's fastest growing participation sports. Ultimate is a fast-paced, non-contact team sport celebrated for its precision passing and airborne acrobatics - making it a veritable highlight factory for fans. The AUDL was created to grow professional Ultimate by providing a platform for its talented athletes to showcase their skills and support today’s important social issues. Ultimate can become the next big sport.
In five years, we hope to expand to more major markets in the US and Canada. We can also take our low-cost model to Europe, South America & Asia to create a global platform for professional Ultimate. Imagine watching the "World Cup" of Ultimate as pro teams compete for their country. Ultimate is being considered for inclusion in the 2028 LA Olympic Games, providing a further catalyst for the sport among young players and fans. We want our players to be seen on TV and online and be recognized for their talent around the world. These projections cannot be guaranteed.
American Ultimate Disc League, LLC was incorporated in the State of Delaware in January 2013.
Since then, we have:
Historical Results of Operations
Related Party Transaction
Refer to Question 26 of this Form C for disclosure of all related party transactions.
Liquidity & Capital Resources
To-date, the company has been financed with $709,504 in debt, $4,255,005 in equity, and $1,000,000 in convertibles.
After the conclusion of this Offering, should we hit our minimum funding target, our projected runway is 8 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 18 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
American Ultimate Disc League, LLC cash in hand is $242,464.48, as of August 2020. Over the last three months, revenues have averaged $10,000/month, cost of goods sold has averaged $5,000/month, and operational expenses have averaged $32,000/month, for an average burn rate of $27,000 per month. Our intent is to be profitable in 30 months.
Due to the COVID-19 pandemic, we needed to cancel the 2020 AUDL Season. Therefore our sponsorship billings, revenues from AUDL.tv subscriptions and ticket and merchandise sales from our events have been significantly curtailed. The past 3 months are typically our largest revenue months of the fiscal year and these results do not represent our normal business activity in a non COVID impacted period. We expect a drop of approximately 55% in total revenues in fiscal year 2020. However believe our pipeline of net new and renewal sponsorships, new products and incremental team services support a 2021 revenue forecast of $1.05 million. This outlook would translate into 2021 revenue growth that will exceed 2019 revenues by approximately 45%. These figures cannot be guaranteed.
We expect $400,000 of revenue, comprised of Team Fees, AUDL.tv Subscriptions, Production fees, Sponsorship and Licensing revenues in the next 6 months. We expect $550,000 of expenses in the next six months comprised of sponsorship acquisition costs, salaries, rent, equipment leases, insurance and office expenses. These projections cannot be guaranteed.
For additional sources of capital, current Members have historically continued to re-invest in the business in the form of equity and debt.
This Investment is Highly Speculative
An investment in American Ultimate Disc League, LLC (“AUDL” or the “Company”), involves a high degree of risk, including, without limitation, the risks described below. Before making an investment decision, each investor should carefully consider all the risks described herein, and may wish to consult with an independent financial advisor before making an investment in the Company. If any of the risk events discussed below actually occur, the Company’s business, financial condition, and results of operations could be materially and adversely impacted. If this were to happen, the value of the Company could decline significantly, resulting in a loss of all or a part of a subscriber’s the investment. The risk factors described below represent risks that management has identified; however, the list is not exclusive and an investor should assume that there are other risks that may affect the 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 is also provided with management services from its elected Executive Council of team owners and their continued contribution of services at no cost is vital to the ongoing operations of the business.
Forward Looking Statements
The information and discussions set forth in this Disclosure includes certain forward-looking statements that involve risks, uncertainties and assumptions. The forward-looking statements relate to the Company’s beliefs, intentions, plans and strategies regarding the future. These statements may be identified by the use of words such as “intends,” “plans,” “anticipates,” “expects” and similar expressions. AUDL’s actual results could differ materially from those discussed in the forward-looking statements. A wide range of factors could materially affect future developments and performance. In addition to the factors affecting specific business operations identified in connection with the description of these operations elsewhere in this Disclosure, the most significant factors affecting the Company’s operations include the following:
The Company Has a Limited Operating History.
AUDL is a limited liability company formed under the laws of the State of Delaware in 2013. AUDL was formed to acquire and develop an existing “Ultimate Disc” sports league with limited operations, limited franchise teams, and a small fan base. Because AUDL is in a development and growth stage, its business is subject to all the risks inherent in a newer business enterprise. Also, there is a limited operating history and limited historical financial information available for an investor to consider in connection with evaluating the Company’s business and prospects. When making an investment decision, each investor should consider the risks, expenses, and difficulties that AUDL may encounter as a developing company
Lack of Diversification Could Cause Investors to Lose All or Some of Their Investment.
AUDL’s business is based primarily on the production and licensing of sports content and procurement of sponsorships and running events related to the sport of Ultimate Disc. The Company is beginning to develop related lines of business but these business lines are at a nascent stage and are not a source of current revenue. If the Company is unable to increase the fan base for the sport of Ultimate Disc, it will not achieve profitability. The lack of business diversification could cause investors to lose all or some of their investment if the Company is unable to generate revenues from the sport of Ultimate Disc since it does not expect to have non related lines of business or alternative revenue sources
COVID 19 has Impacted U.S. and Canadian Economic Conditions and Could Have an Adverse Effect on the Profitability of Some, or All, of the Business.
Consumer spending on sports entertainment events is discretionary, meaning that it can be cut from an individual’s budget without impacting their essential shelter, food, and transportation requirements. When there is a decline in employment and overall economic activity, discretionary spending is typically the first to be eliminated. Therefore, a downturn in the economy could have a disproportionately negative impact on attendance at AUDL franchise sporting events. A decline in attendance at franchise games will not only reduce AUDL revenue, but will also impact other revenue sources, such as sales of licensed team merchandise and subscriptions. Finally, a reduction in the fan base could impact television marketing and sponsorships revenues
COVID 19 has Impacted Consumer Sentiment and Could Reduce Attendance at Public Sporting Events to Adversely Impact the Profitability of AUDL’s Business.
AUDL’s business model is dependent on promoting the sport of Ultimate Disc and developing a fan base attending team events. Consumer sentiment during COVID 19 may impact attendance at outdoor stadium events. Therefore, the success of the business model depends on the Company’s ability to (a) market AUDL franchisee teams, (b) generate attendance at AUDL franchisee games, (c) develop a merchandize branding program, (d) secure marketing, sponsorship and media agreements, and (e) maintain consumer interest in the sport.
Increased Competitive Pressures May Reduce Company Revenues or Increase Costs.
AUDL competes with larger and more established sports leagues. The principal competitors in the sports entertainment industry have longer operating histories, larger fan bases, greater name recognition, and significantly greater financial, technical, marketing, customer service, public relations, distribution and other resources. Increased competition may divert consumers from one form of sporting events to more popular forms of sporting events and entertainment, which could reduce AUDL’s revenue or increase its marketing costs. Such competition may also reduce, or limit growth in pricing for sporting events and products, including advertising rates and long-term sponsorship fees, and prices for merchandise from which the Company derives license revenues. Competition for the acquisition of resources can also increase the cost of producing consumer products
The Seasonality of AUDL’S Business Could Exacerbate Negative Impacts on its Operations.
The sport of Ultimate Disc is typically played in outside venues and is subject to seasonal variations. Therefore, revenues from AUDL sporting events will fluctuate with changes in attendance and venue occupancy resulting from the seasonal nature of the sport and the location of the AUDL teams and events it operates directly. Peak attendance at games and venue occupancy generally occur during the spring and summer months
There Can Be No Assurance that AUDL Will Ever Operate Profitably.
THE COMPANY CURRENTLY OPERATES AT A LOSS.
The ability to achieve profitability is contingent on a number of factors, including, without limitation,
(a) increasing in consumer awareness and acceptance of the sport of Ultimate Disc,
(b) fielding competitive teams,
(c) securing media license fees and sponsorship revenue, and (d) retaining a qualified management team.
There is no assurance that the Company will realize all or any portion of its business plan. If the Company is not successful in the execution of its business plan and current strategies, the Company’s business, results of operations, and financial condition will be materially adversely affected. If the Company continues to operate at a loss, it will require additional funding or will be forced to cease operations. In either event, the value of an investment in the Company could be substantially diminished or become worthless.
The Company Relies on the Financial and Managerial Capabilities of its Team Owners
Each team is independently owned and operated under the terms the AUDL Operating Agreement. The financial and managerial capabilities of the teams owners vary and some teams may not be able to continue to operate in the long term. In the event of a team default, the league has historically assumed responsibility to operate the team and seek new ownership groups to independently operate the team. Although the AUDL has been successful in finding qualified new team ownership groups, there is no assurance that this will continue in the future which would cause an increased financial responsibility for expenses which could adversely impact future profitability
There Is No Firm Commitment to Purchase the Units of Membership Interest Being Offered and as a Result Initial Investors Assume Additional Risk.
This is a best efforts, $100,000.08 minimum offering, of Series C Common Units of Membership Interest (“Units”) in the Company. There is no commitment by anyone to purchase any of the Units being offered, with the exception of the lead investor.
The Company cannot give any assurance that any or all of the Units will be sold. There is a minimum offering of $100,000.08. As long as the minimum offering threshold is met, the Company will retain any amount of proceeds received from the sale of the Units up to the offering maximum. Moreover, there is no assurance that the estimate of the Company’s future liquidity needs is accurate or that new business development or other unforeseen events will not occur, resulting in the need to raise additional funds. As this offering is a best efforts financing, there is noassurance that this financing will be completed or that any future financing will be affected. Initial investors assume additional risk on whether the offering will be fully subscribed and how the Company will utilize the proceeds
The Company May Require Additional Financing.
Even if the Company receives and accepts subscriptions for the entire Offering, the Company may need to raise additional capital to fund its current business plan and future operations. Also, the Company’s plans may change over time based on market acceptance. Such changes may require more financing than currently planned. Additional financing may not be available, or may be only available on unfavorable terms. If the Company incurs debt financing, cash flows may be inadequate to service or repay the debt, and bankruptcy could result. If the Company cannot raise adequate funds to satisfy its capital requirements, the Company may need to significantly alter or limit its operations. The Company’s future capital requirements depend upon many factors, including, but not limited to:
• The extent to which the Company can generate income from television rights, product licensing agreements, franchise royalties, mechanize sales and sponsors;
• The acceptance of Ultimate Disc as a national sport outside the ultimate community;
• The expansion of AUDL and the licensing of new franchisees;
• Overhead expenditures; and
• Fixed capital requirements
The Executive Team and Series A Members May Significantly Influence Matters To Be Voted On, And Their Interests May Differ From, Or Be Adverse To, the Interests of the Series C Members.
The Series C Common Units will have voting rights. A majority of the Series A Common Units are held by limited number of investors who essentially control the Company through their ownership of a majority of the outstanding Series A Common Units. Accordingly, the holders of a majority of the outstanding Series A Common Units possess significant influence over the Company on matters submitted to the Members for approval, including the election of directors, mergers, consolidations, the sale of all or substantially all of our assets, and also the power to prevent or cause a change in control.
The Securities Being Offered are Restricted Series C Common Units and Will Be Illiquid.
The Company offering Series C Common Units of Membership Interest based on an exemption from registration under the Securities Act which imposes substantial restrictions on the transfer of such securities. All certificates which evidence the Units will be inscribed with a printed legend which clearly describes the applicable restrictions on transfer or resale by the owner thereof. Accordingly, each investor should be aware of the long-term illiquid nature of his/her investment. In no event may such securities be sold, pledged, hypothecated, assigned or otherwise transferred unless such securities are registered under the Securities Act and applicable state securities laws or we received an opinion of counsel that an exemption from registration is available with respect thereto. Rule 144, the primary exemption for resales of restricted securities is only available for securities of issuers providing current information to the public. While the Company will be required to make such information available should it conduct an initial public offering, and assuming such public offering is in fact successfully carried out, the Company does not currently make such information available, precluding reliance on Rule 144. Thus, each investor should be prepared to bear the risk of such investment for an indefinite period of time
There Is Currently No Market for the Series C Common Units, and There is No Expectation that a Market Will Develop in The Foreseeable Future Making an Investment In the Series C Common Units Illiquid.
There is currently no market for the units of Membership Interest in Company. We do not expect that a market will develop at any time in the foreseeable future. The lack of a market may impair the ability to sell the Series C Common Units at the time investors wish to sell them or at a price considered to be reasonable. If a market develops, the Company expects that it would be extremely volatile
The Offering Price of the Series C Common Units Was Arbitrarily Determined; There Has Been No Independent Valuation of the Series C Common Units, Which Means That the Series C Common Units May Be Worth Less Than the Purchase Price.
The offering price of the Series C Common Units has been arbitrarily determined by Company’s management, without independent valuation, based on estimates of the price that purchasers of speculative securities, such as the Series C Common Units, will be willing to pay considering the nature of the Company and its capital structure, the experience of the officers and directors, and the market conditions for the sale of equity securities in similar companies.
The offering price of the shares bears no relationship to the Company’s assets, earnings, or book value, or any other objective standard of value. Therefore, the Series C Common Units may have a value significantly less than the offering price, and Series C Common Units may never obtain a value equal to or greater than the offering price
Currently, AUDL is not involved in any legal proceedings; however, legal matters may arise in the future which may adversely affect the Company’s financial performance.
Karen Steadman 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.
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