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, 2023

COLLECTABLE SPORTS ASSETS, LLC

(Exact name of issuer as specified in its charter)

484 Broome St., New York, NY 10013

(Full mailing address of principal executive offices)

(916) 586-7216
(Issuer’s telephone number, including area code)

www.collectable.com
(Issuer’s website)

(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 this asset class in the highest value segment. This dichotomy and disproportionate access to the upper end of the market creates latent demand from the enthusiast community to participate more meaningfully in the upper end of the collectibles market. 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.

In creating fractional ownership investment opportunities for collectibles, Collectable aims to provide accessibility and a fully regulated approach to memorabilia investing.

Market Opportunity

Collectable Sports Assets, LLC has focused predominantly on the sports memorabilia niche.

The collectible sports memorabilia market is opaque and fragmented. We believe there is an opportunity for a 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.

We expect the sports collectibles market to present unique opportunities stemming from hobbyists and investors looking for an uncorrelated alternative asset class.

We believe the overall macroeconomic environment remains favorable for the top-end of these alternative asset classes, including art and collectibles which have historically retained their value over time.

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 access to the asset class The Company aims to provide investors with access to the market by enabling them to create a diversified portfolio of equity interests in the highest quality Collectable Assets through a seamless investment experience.

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 Underlying 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. 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:

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, auction houses in particular, 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 the future. Increased competition may lead to increased memorabilia and collectibles prices, which will increase the potential value appreciation that interest holders may be able to achieve by owning Interests in the Company’s offerings and will increase 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 investor and the 83.1 million U.S. millennial market (based on 2015 figures by the U.S. Census Bureau) as our key customer bases. Customers may browse the inventory of investable assets and read available content related to each new offering without investing. A customer of the Company may become an Investor in a Series by purchasing interests in that offering.

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 of Interests 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 addition, the Operating Agreement provides that the Manager will not have any duty (including any fiduciary duty) to the Company, or any Series or any of the interest holders.

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 Interests or the Company. If so convicted, the Manager shall call a meeting of all holders of every Series of Interests 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 evaluating 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 of Interests. 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 directly 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, sometimes referred to as the “Asset Manager” in some documents, has agreed to pay for all Operating Expenses incurred prior and post to the Closing of any of the Series. The 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 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 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, 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 may be paid a monthly Management Fee pursuant to the Asset Management Agreement. On applicable offerings closing escrow after May 15, 2022, the Manager may assess a Management Fee of not more than 2% of the Carrying Value of the Collectable Asset. The Carrying Value is calculated monthly based upon the Series’ volume weighted average price (VWAP) value over the preceding month. This only applies to months where the Series was trading for the entirety of the month.

Disposition Fee

The Manager may assess a disposition fee upon the successful sale of an underlying asset of a Series of up to 5% of the gross sale proceeds received by Collectable.

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 quality 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 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, 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, 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, with guidance from members of the Company’s Advisory Board, will review asset selection criteria at least annually. The Manager intends to seek approval from the Advisory Board for any major deviations from these criteria.

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.

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

Asset Liquidity

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. Additionally, the Manager may seek liquidity for certain assets by soliciting sales or entering an asset for auction. In February of 2021, the Company launched secondary trading for Collectable Assets on the ATS platform of Templum Markets and DriveWealth, LLC. Liquidity for investors may be obtained through this platform, when available, offering investors live bids and offers during trading hours designed to match the US equity markets. Liquidity has also been obtained through outright purchases of the underlying asset to the offering, effectively retiring the offering from the Collectable platform. 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 under any Operating Expenses Reimbursement Obligation, 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

Discussion of the any pending or threatened litigation is presented in Note 7 to the Financial Statements and is incorporated by reference herein.

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

During 2022, the Company continued to acquire assets to consign and successfully closed escrow on (71) seventy-one Reg A offerings and (1) one Reg D offering and sold (14) fourteen assets off the platform.

In 2023, the Company continued to operate the secondary trading function of the platform. It did not issue any new offerings.

The table below shows the Reg A Series that have closed as of December 31, 2022.

No new Series have closed escrow in 2023.

Impaired Assets

The Manager annually evaluates each asset’s carrying value compared to the current market value of the asset to determine if an adjustment is needed to be recorded, in accordance with the accounting principles generally accepted in the United States of America. To measure the value of the assets and test for impairment the Company uses the market capitalization based on the VWAP (Volume Weighted Average Price).

The following table sets forth the Series which met the criteria for impairment in 2022 and 2023. In 2022, (169) one hundred and sixty-nine items recorded a total impairment of $13,001,234, and in 2023, (91) ninety-one items recorded a total impairment of $5,551,436.