UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 1-U
CURRENT REPORT
Pursuant to Regulation A of the Securities Act of 1933
April 25, 2024
Date of Report: (Date of earliest event reported)
MASTERWORKS VAULT 3, LLC
(Exact name of issuer as specified in its charter)
Delaware | 93-1920406 | |
State of other jurisdiction of incorporation or organization |
(I.R.S. Employer Identification No.) |
225 Liberty Street, 29th Floor
New York, New York 10281
(Full mailing address of principal executive offices)
(203) 518-5172
(Issuer’s telephone number, including area code)
www.masterworks.com
(Issuer’s website)
Series 325 Class A Ordinary Shares; Series 327 Class A Ordinary Shares; Series 330 Class A Ordinary Shares; Series 332 Class A Ordinary Shares; Series 334 Class A Ordinary Shares; Series 337 Class A Ordinary Shares; Series 349 Class A Ordinary Shares; Series 371 Class A Ordinary Shares; Series 373 Class A Ordinary Shares; Series 375 Class A Ordinary Shares; Series 384 Class A Ordinary Shares; Series 388 Class A Ordinary Shares; Series 390 Class A Ordinary Shares; Series 398 Class A Ordinary Shares
(Securities issued pursuant to Regulation A)
Item 1. Fundamental Changes
As previously disclosed by Masterworks Vault 3, LLC (the “Company”) in its Current Report on Form 1-U as filed with the SEC on March 8, 2024, on March 7, 2024, Level & Co. Gallery, LLC, on behalf of Series 375 of the Company (“Series 375”) and the 375 Segregated Portfolio of Masterworks Cayman, SPC, sold the artwork created by Lynette Yiadom-Boakye owned by Series 375 (the “Artwork”) for a guaranteed amount in cash to an unaffiliated buyer, pursuant to a Guarantee and Consignment Agreement (the “Agreement”). A copy of the Agreement is incorporated by reference herein, as Exhibit 6.1 hereto, from the Company’s Current Report on Form 1-U as filed with the SEC on February 6, 2024.
On April 22, 2024, the parties consummated the transactions contemplated by the Guarantee and Consignment Agreement and title of the Painting passed to the Buyer. After allocating costs and expenses incurred in connection with the transaction and winding up and amounts in respect of profit sharing interests represented by Class B ordinary shares, record holders of the Series 375’s Class A ordinary shares will receive a distribution in the amount of approximately $23.33 per Class A share and a net annualized return of 47.8%. “Net annualized return” refers to the annualized internal rate of return, or IRR, net of all fees and costs, to holders of Class A shares from the primary offering, calculated from the final closing date of such offering to the date the sale is consummated. A detailed breakdown of the IRR calculation is attached to this Form 1-U as Exhibit 99.1.
Once Series 375 completes the distribution, the Company will commence the process of winding up and dissolving Series 375 in accordance with its Second Amended and Restated Operating Agreement.
Safe Harbor Statement
This Current Report on Form 1-U contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934. You can identify these forward-looking statements by the use of words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “projects,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties, including those described under the section entitled “Risk Factors” in our most recent Offering Circular filed with the Securities and Exchange Commission (“SEC”), as such factors may be updated from time to time in our periodic filings and offering circular supplements filed with the SEC, which are accessible on the SEC’s EDGAR website. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in our filings with the SEC. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.
Exhibit Index
SIGNATURES
Pursuant to the requirements of Regulation A, the issuer has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
MASTERWORKS VAULT 3, LLC | ||
By: | /s/ Joshua B. Goldstein | |
Name: | Joshua B. Goldstein | |
Title: | General Counsel |
Date: April 25, 2024