As filed with the Securities and Exchange Commission on November 24, 2015

Registration No. 333‑  

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S‑1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

FANTEX, INC.

(Exact Name of Registrant as Specified in Its Charter)

Fantex, Inc.

330 Townsend Street, Suite 234

San Francisco, CA 94107

(415) 592‑5950

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Cornell “Buck” French

Chief Executive Officer

Fantex, Inc.

330 Townsend Street, Suite 234

San Francisco, California 94107

(415) 592‑5950

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Approximate date of commencement of proposed sale to the public:

As soon as practicable after this Registration Statement is declared effective.

If any of the securities being registered on this form are offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, as amended (the “Securities Act”), check the following box. ☒ 

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this Form is a post‑effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this Form is a post‑effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non‑accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b‑2 of the Exchange Act. (Check one):

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

PRELIMINARY PROSPECTUS

Minimum Offering of 1,984,000 Units

Maximum Offering of 2,182,400 Units

Fantex Sports Portfolio 1 Units

We and the selling stockholders are offering hereby, on a best efforts basis, a minimum of 1,984,000 Fantex Sports Portfolio 1 Units (each, a “Unit” and together, the “Units”) and a maximum of 2,182,400 Units.  We expect the initial public offering price of the Units to be between $12.50 and $14.50 per Unit.  Until the underwriters sell at least 1,984,000 Units, funds received from the offering will be deposited into an interest bearing escrow account pending the closing of the offering in accordance with Rule 15c2‑4 of the Securities Exchange Act of 1934, as amended. If the underwriters do not sell at least 1,984,000 Units within 30 days after the date this registration statement becomes effective with the Securities and Exchange Commission, all funds will be promptly returned to investors with interest and without deduction. Each Unit consists of 0.047 shares of Fantex Series Vernon Davis Convertible Tracking Stock (“Fantex Series Vernon Davis”), 0.127 shares of Fantex Series EJ Manuel Convertible Tracking Stock (“Fantex Series EJ Manuel”), 0.040 shares of Fantex Series Mohamed Sanu Convertible Tracking Stock (“Fantex Series Mohamed Sanu”), 0.277 shares of Fantex Series Alshon Jeffery Convertible Tracking Stock (“Fantex Series Alshon Jeffery”), 0.117 shares of Fantex Series Michael Brockers Convertible Tracking Stock (“Fantex Series Michael Brockers”), 0.089 shares of Fantex Series Jack Mewhort Convertible Tracking Stock (“Fantex Series Jack Mewhort”) and 0.683 shares of Fantex Series Professional Sports Convertible Tracking Stock (“Fantex Series Professional Sports”). A Unit cannot be separated into its component parts at any time. In this prospectus, we sometimes refer to the convertible tracking stocks that comprise the Units as the “Unit Tracking Stocks,” and to our convertible tracking stocks more generally as our “tracking stocks.”

As part of the Units offered, we are offering an aggregate of 1,355,028 shares of Fantex Series Professional Sports, and as part of the Units offered, the selling stockholders are offering an aggregate of 93,140 shares of Fantex Series Vernon Davis, 252,667 shares of Fantex Series EJ Manuel, 80,331 shares of Fantex Series Mohamed Sanu, 549,085 shares of Fantex Series Alshon Jeffery, 232,630 shares of Fantex Series Michael Brockers and 175,940 shares of Fantex Series Jack Mewhort. We will not receive any proceeds from the shares of Fantex Series Vernon Davis, Fantex Series EJ Manuel, Fantex Series Mohamed Sanu, Fantex Series Alshon Jeffery, Fantex Series Michael Brockers and Fantex Series Jack Mewhort  included in the Units, or 44.9% of the proceeds from this offering, and the selling stockholders will not receive any proceeds from the shares of Fantex Series Professional Sports included in the Units, or 55.1% of the proceeds from this offering. 

There is no established trading market for these Units. We intend to apply to list the Units on the NASDAQ Capital Market under the symbol “FXSP.” Shares of our Fantex Series Vernon Davis, Fantex Series EJ Manuel, Fantex Series Mohamed Sanu, Fantex Series Alshon Jeffery, Fantex Series Michael Brockers and Fantex Series Jack Mewhort are quoted on the website of our affiliated broker-dealer, Fantex Brokerage Services, LLC (“FBS”), under the symbols “VNDSL,” “EJMLL,” “SANUL,” “JEFFL,” “BRKSL” and “JKMTL,” respectively. On November 13, 2015, the last reported sales prices of Fantex Series Vernon Davis, Fantex Series EJ Manuel, Fantex Series Mohamed Sanu, Fantex Series Alshon Jeffery, Fantex Series Michael Brockers and Fantex Series Jack Mewhort on the FBS alternative trading system were $8.00 per share, $7.00 per share, $10.00 per share, $11.00 per share, $9.00 per share and $11.00 per share, respectively.

The securities that are included in the Units are tracking stocks. Neither our tracking stocks nor the Units represent an interest in a separate legal entity. Each of our tracking stocks is intended to track and reflect the separate economic performance of one or more specific brand contracts we have signed with an athlete, entertainer or other high profile individual. However, holders of any Units or tracking stocks will not have a direct investment in the associated brand, brand contract or individual. Rather, an investment in a tracking stock, including through purchase of any Units, will represent an ownership interest in our company as a whole, which will expose holders to additional risks associated with any individual tracking stock that exists at the time of any investment or that we may establish and issue in the future. Our contract parties are, and we expect they will continue to be, individuals and legal entities that are separate and independent from us, with separate ownership, management and operations. The creation or issuance of a tracking stock or Unit will not result in an actual transfer of our assets or the creation of a separate legal entity.

This is also an offering of shares of our platform common stock into which the shares of the Unit Tracking Stocks are convertible. References in this prospectus to an offering of Units shall be deemed also to include the underlying shares of platform common stock into which the shares of our Unit Tracking Stocks are convertible. The platform common stock is intended to track and reflect the economic performance of all of our tracking stocks currently existing and those we may issue in the future. We will attribute to our tracking stocks and the platform common stock certain assets and expenses, including in certain cases expenses related to other series of common stock of Fantex that may be issued from time to time in the future. Our board of directors at its sole discretion may convert the shares of any tracking stock, including the Unit Tracking Stocks that comprise the Units, into platform common stock at any time following the two year anniversary of the filing of a certificate of designations creating that tracking stock. See “Description of Capital Stock” and “Management and Attribution Policies” included or incorporated by reference in this prospectus.

Holders of shares of our platform common stock and any of our tracking stocks, including through the purchase of Units, are each entitled to one vote per whole share of tracking stock held and fractional votes for fractional shares held (whether directly or through the Unit). Following the consummation of this offering, Fantex Holdings, Inc. (“Fantex Holdings”), our parent company, will hold all 100,000,000 outstanding shares of our platform common stock, and thus will hold substantially all of the voting power of our outstanding common stock.

Certain persons are prohibited from purchasing or beneficially owning Units. If such persons purchase or beneficially own Units, we will have the right, under certain circumstances, to restrict such persons from purchasing or transferring Units and to redeem all (or less than all in our sole discretion) of the shares of tracking stock that comprise the Units owned by such person at a price per share equal to par value, or $0.0001 per share. For further information, please see the sections entitled “Description of Capital Stock” and “Risk Factors.”

We are an “emerging growth company,” as that term is used in the Jumpstart Our Business Startups Act of 2012, and, as such, we are subject to reduced public company reporting requirements. See “Prospectus Summary—Implications of Being an Emerging Growth Company.” We have not generated profits and have substantially relied on money obtained from our parent, Fantex Holdings, to conduct our operations.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

In the event that the underwriters locate qualified purchasers for at least 1,984,000 Units, we and the selling stockholders have granted the underwriters an option for a period of 30 days from the date of the prospectus to purchase up to 198,400 additional Units at the initial public offering price, less the underwriting discounts and commissions

This offering is highly speculative and the securities involve a high degree of risk. Investing in Units should be considered only by persons who can afford the loss of their entire investment. See “Risk Factors” beginning on page 21.

This offering will terminate upon the earlier to occur of (i) 30 days after this registration statement becomes effective with the Securities and Exchange Commission, or (ii) the date on which all shares offered hereby have been sold.

TABLE OF CONTENTS

We have not, the selling stockholders have not and the underwriters have not, authorized anyone to provide you with any information other than that contained in this prospectus or in any free writing prospectus we may authorize to be delivered or made available to you. Neither we, the selling stockholders nor the underwriters take responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. We and the selling stockholders are offering to sell, and seeking offers to buy, Units only in jurisdictions where offers and sales are permitted. The information in this prospectus is complete and accurate only as of November 24, 2015 regardless of the time of delivery of this prospectus or any sale of Units. Our business, financial condition, results of operations and prospects may have changed since that date. We are not, and the underwriters are not, making an offer of these securities in any jurisdiction where the offer thereof is not permitted.

This prospectus has been prepared by Fantex and may be used by FBS in connection with offers and sales of these securities in secondary market transactions in these securities, including market‑making transactions as may be effected from time to time. However, FBS is not obligated to make a market in the Units and if it does so, it may discontinue any market‑making at any time without notice, in its sole discretion. If FBS decides to make a market in the Units, it will amend its Form ATS filed with the Securities and Exchange Commission (the “SEC”), to reflect such change. To the extent FBS chooses to act as a market‑maker, it may act as principal or agent in such transactions, including as agent for the counterparty when acting as principal or as agent for both counterparties, and may receive compensation in the form of discounts and commissions, including from both counterparties, when it acts as agent for both. Such sales will be made at prevailing market prices at the time of sale, at prices related thereto or at negotiated prices. Fantex and the selling stockholders will not receive any proceeds from such secondary market offers and sales. All such transactions with respect to these securities that are made pursuant to a prospectus after the effectiveness of the registration statement of which this prospectus is a part are being made solely pursuant to this prospectus, as it may be supplemented from time to time. This delivery requirement is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

Neither we, the selling stockholders, nor the underwriters have undertaken any efforts to qualify this offering for offers to investors in any jurisdiction outside the United States. Investors must have a U.S. mailing address (other than a P.O. Box) and a U.S. social security number and/or a U.S. tax identification number to be eligible to participate in this offering. 

WHERE YOU CAN FIND MORE INFORMATION; INFORMATION INCORPORATED BY REFERENCE

Available Information

We have filed with the SEC a registration statement on Form S‑1 under the Securities Act of 1933, as amended (the “Securities Act”), with respect to the Units being offered by this prospectus. This prospectus, which constitutes part of that registration statement, does not contain all of the information set forth in the registration statement or the exhibits and schedules that are part of the registration statement. Some items included in the registration statement are omitted from the prospectus in accordance with the rules and regulations of the SEC. For further information with respect to us and the Units offered in this prospectus, we refer you to the registration statement and the accompanying exhibits and schedules. Statements contained in this prospectus regarding the contents of any contract, agreement or any other document to which reference is made are summaries of the material terms of these contracts, agreements or other documents. With respect to each of these contracts, agreements or other documents filed as an exhibit to the registration statement, reference is made to such exhibit for a more complete description of the matter involved.

A copy of the registration statement and the accompanying exhibits and schedules and any other document we file may be inspected without charge at the public reference facilities maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549 and copies of all or any part of the registration statement may be obtained from such office upon the payment of the fees prescribed by the SEC. The public may obtain information on the operation of the public reference facilities in Washington, D.C. by calling the SEC at 1‑800‑SEC‑0330. Our filings with the SEC are available to the public from the SEC’s website at www.sec.gov.

We are subject to the information and periodic reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), applicable to a company with securities registered pursuant to Section 12 of the Exchange Act. In accordance therewith, we file proxy statements, periodic information and other information with the SEC. All documents filed with the SEC are available for inspection and copying at the public reference room and website of the SEC referred to above. We maintain a website at www.fantexbrands.com. You may access our reports, proxy statements and other information free of charge at this website as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC. The information contained in, or that can be accessed through, our website is not incorporated by reference and is not a part of this prospectus, except as specifically stated below.

Information Incorporated by Reference

The SEC allows us to “incorporate by reference” information into this prospectus, which means we can disclose important information to you by referring you to another document filed separately with the SEC. The information incorporated by reference is considered to be part of this prospectus. The following documents filed with the SEC are hereby incorporated by reference in this prospectus:

We will provide without charge to each person, including any beneficial owner, to whom this prospectus is delivered, upon his or her written or oral request, a copy of any or all of the reports or documents referred to above that have been incorporated by reference into this prospectus, excluding exhibits to those documents unless they are specifically incorporated by reference into those documents. You may request a copy of these filings, by contacting:

Fantex, Inc.

330 Townsend Street,  Suite 234

San Francisco, CA 94107

Telephone: (415) 592‑5950

Attention: Investor Relations

You may also access these filings on our website at www.fantexbrands.com. We do not incorporate the information on our website into this prospectus and you should not consider any information on, or that can be accessed through, our website as part of this prospectus, other than those filings with the SEC that we specifically incorporate by reference into this prospectus.

PROSPECTUS SUMMARY

The following summary highlights certain information about us and this offering contained or incorporated by reference in this prospectus and is qualified in its entirety by the more detailed information and financial statements included elsewhere or incorporated by reference in this prospectus. This summary does not contain all of the information that may be important to you. You should read and carefully consider the following summary together with the entire prospectus, including the documents incorporated by reference herein, before deciding to invest in our Fantex Sports Portfolio 1 Units. Some of the statements in this prospectus constitute forward‑looking statements that involve risks and uncertainties. See “Special Note Regarding Forward‑Looking Statements and Industry Data.” Our actual results could differ materially from those anticipated in such forward‑looking statements as a result of certain factors, including those discussed in the “Risk Factors” and other sections of this prospectus and in the information incorporated by reference herein.

We are a company whose focus is on acquiring minority interests in the future income of professional athletes and assisting such individuals in growing these income streams. We focus our business on three core areas:

We currently have brand contracts with Vernon Davis, EJ Manuel, Mohamed Sanu, Alshon Jeffery, Michael Brockers, Jack Mewhort, Kendall Wright, Andrew Heaney,  Terrance Williams and Ryan Shazier, as discussed elsewhere or incorporated by reference in this prospectus. We intend to enter into additional brand contracts in the future with other individuals with the potential to generate significant brand income, and in some cases, with the affiliates of these individuals, whom we refer to, together with the individual, as the contract party. We are actively pursuing these additional brand contracts, but as of the date of this prospectus we have no current commitments to enter into any such additional brand contracts. All of our brand contracts, including those that we enter into in the future with other contract parties, are or are expected to be contingent upon obtaining financing to fund the acquisition of the minority interest in the respective brands, and we intend to finance the acquisition of additional brands through the issuance of additional tracking stocks and/or Units comprised of tracking stocks, linked to the value of such brands.

Evaluation, Acquisition and Enhancement of Brands

Prior to entering into a brand contract, we conduct a detailed evaluation of the brand and the contract party to determine whether, in our opinion, the brand would be a suitable brand with the potential to generate significant brand income based on the criteria set forth below. We consider a brand to be a distillation of a complex set of associations people make with respect to an individual, including athletic performance, appearance, history and personal story, products or services such individual is associated with, public statements or positions on matters of public concern, how an individual acts or the image such individual projects to the world. We seek brands that convey images and associations that we believe will be recognized and valued in the marketplace.

As part of our brand evaluation, we review the brand’s reputation and relative standing in its principal field, such as a professional athlete in the National Football League (the “NFL”) or Major League Baseball (“MLB”), collect and analyze widely followed statistics, review existing contracts and potential for future contracts, assess the character and reputation of the contract party, assess potential future cash flow expected to be generated by the contract party as well as examine the brand’s current positioning and marketing footprint (such as, for example, if they are on social media, the reach (number of followers), engagement level (participation level of followers), and potential for growth). This evaluation provides a framework to develop further marketing strategies to aid us in our efforts to enhance the value of the brand.

We believe we have extensive industry contacts among the board of directors, employees, consultants and advisors of our company and our affiliates, our parent company, Fantex Holdings Inc. (“Fantex Holdings” or “our

parent”) and Fantex Brokerage Services, LLC (“FBS”), which we utilize to access individuals and brands that meet our criteria. Through our contacts we seek to establish working relationships with these brands and their key advisors to begin the process of educating them about our business and the benefits of a brand contract and a continuing relationship. We enter into an arm’s‑length negotiation primarily to finalize a purchase price, our percentage of the contract party’s brand income (“acquired brand income” or “ABI”), and the scope of brand income, including whether or not there would be any specific exclusions. We do, however, have limited experience in evaluating and entering into similar contracts with athletes, entertainers and other high‑profile individuals because we are pioneering a new business model and to date we have only entered into a small number of brand contracts.

We believe that developing a diverse portfolio of global brands will enable us to increase brand reach across our portfolio and allow us to provide unique insights that contract parties may employ to increase consumer awareness of their brands and our brands more generally. We believe that our combined efforts could lead to increased consumer engagement with the brands by optimizing message delivery, including driving engagement through the use of content developed by us or third parties. We seek to aid our brands in fostering positive brand associations in order to create a unique position in the marketplace that is independent of their primary occupation as a professional athlete. We believe this will drive greater engagement with a connected audience and lead to greater longevity of the brands. We also believe that investors in a tracking stock linked to one or more brands are more likely to be consumer advocates for those brands. Investors in a tracking stock would have an economic interest in the growth of the associated brand, and therefore we believe they may be more likely to follow and share brand information and be more active promoters of the associated brand than other fans or social network followers of the brand. However, we have no history to demonstrate, and we can make no assurances, that any of our investors will in fact actively promote the associated brand.

In addition to our services intended to help optimize the reach of the brand, we intend to provide advice to contract parties based on our experience that would aid them in obtaining more attractive terms in their negotiations with future sponsors. We believe that our proprietary internal data and our marketing insights will assist our contract parties to more accurately evaluate their brand value in the marketplace and potentially increase future endorsement amounts and brand longevity post career.

We note, however, that we have no contractual obligation to the contract party to engage in any of these activities that may enhance the value of our brands, and the contract party has no contractual obligation to act on any advice that we may provide. Brand development is a long‑term strategy, and any investment we may make to promote our acquired brands will be for long‑ or medium‑term results and would not be expected to increase brand income in the near‑term, if at all. Moreover, as with other forms of marketing and brand enhancement strategies, the impact of our efforts on brand value may be difficult to determine objectively. Even if our promotion activities increase the endorsement income to a contract party, they may nonetheless have a negative impact on the market value of shares of the associated tracking stock because we will only receive a portion of any increased brand income. For example, because the ABI under our typical brand contract is 10% of brand income, our promotion efforts must produce brand income equal to at least ten times our costs for such promotion efforts in order to return our investment.

If our brand enhancement strategy is unsuccessful, or if a contract party chooses not to accept any brand enhancement assistance from us, then the success of any brands we acquire will be entirely dependent upon the efforts of the contract party. In addition, our contract parties are neither affiliate, directors, officers or employees of our company and consequently our contract parties owe no fiduciary duties to us or any of our stockholders, and have no obligation to take any action whatsoever to enhance the value of their brand.

Our Tracking Stocks

We currently have brand contracts with each of the following contract parties:

Conversion into Platform Common Stock

Our platform common stock is intended to track and reflect the economic performance of all of our tracking stocks by having a small percentage of ABI from these tracking stocks attributed to it. In addition, to the extent not attributed to a particular tracking stock, our platform common stock will have attributed to it any of the direct liabilities, costs and expenses related to any of our offerings of our tracking stocks (other than underwriting discounts and commissions as applicable for any offering) or incurred by us or our parent in connection with any brand development activities prior to the consummation of the offering of any tracking stock.

Our board of directors may at any time following the two‑year anniversary of the filing of a certificate of designations creating a new tracking stock and convert such tracking stock into fully paid and non‑assessable shares of our platform common stock at a conversion ratio to be determined by dividing the fair value of a share of such tracking stock by the fair value of a share of our platform common stock.

The Units

We are offering 1,984,000 Units in this offering. Each Unit has an assumed purchase price of $13.50 (the midpoint of the estimated offering price range set forth on the front cover of the prospectus) and consists of 0.047 shares of Fantex Series Vernon Davis, 0.127  shares of Fantex Series EJ Manuel, 0.040 shares of Fantex Series Mohamed Sanu, 0.277 shares of Fantex Series Alshon Jeffery, 0.117 shares of Fantex Series Michael Brockers, 0.089 shares of Fantex Series Jack Mewhort and 0.683 shares of Fantex Series Professional Sports. Holders of the Units will be entitled to all of the rights, preferences and privileges of holders of shares of the tracking stocks that comprise the Units, to the extent of their fractional interest in a whole share of such tracking stocks.  

We determined the aggregate offering price of the Units based on the following values attributed to each of the tracking stocks included in the Unit: 

The components of attributed net equity as of September 30, 2015 for each of the convertible tracking stocks included in the Unit are as follows:

The following table sets forth the fair value of the net assets included in the Unit as of September 30, 2015 and on a projected basis to estimate the increase in net present value of the brand contracts as of March 31, 2016 assuming:

For further discussion of the Units, please see the section entitled “Description of Capital Stock” beginning on page 177.

Our Brands

Vernon Davis Brand

Our brand contract with Vernon Davis entitles us to receive 10% of brand income for Vernon Davis from and after October 30, 2013. As consideration for the ABI under the brand contract, we paid Vernon Davis a one-time cash amount of $4.0 million upon the completion of the offering of Fantex Series Vernon Davis. We have no further financial obligation to Vernon Davis under the brand contract, other than certain indemnity obligations. The brand contract is intended to remain in effect indefinitely and, except as set forth in the brand contract, may be terminated only upon mutual agreement of Vernon Davis and us. If Vernon Davis resigns from the NFL within two years of the date of the completion of the offering of shares of Fantex Series Vernon Davis for any reason other than injury, illness or a medical condition, we may elect in our sole discretion to terminate the brand contract and he will be required to pay us approximately $4.21 million (net of any amounts previously paid to us by him pursuant to the brand contract), which includes a pro rata share of underwriting expenses from the initial public offering of Fantex Series Vernon Davis. We are also entitled to certain other ongoing information and audit rights. For a further description of our brand contract with Vernon Davis, please see “Business—Vernon Davis Brand—Vernon Davis Brand Contract.”

EJ Manuel Brand

Our brand contract with EJ Manuel entitles us to receive 10% of brand income for EJ Manuel from and after February 14, 2014. As consideration for the ABI under the brand contract, we paid EJ Manuel a one-time cash amount of $4.98 million upon the completion of the offering of Fantex Series EJ Manuel. We have no further financial obligation to EJ Manuel under the brand contract, other than certain indemnity obligations. The brand contract is intended to remain

in effect indefinitely and, except as set forth in the brand contract, may be terminated only upon mutual agreement of EJ Manuel and us. If EJ Manuel resigns from the NFL within two years of the date of the completion of the offering of shares of Fantex Series EJ Manuel for any reason other than injury, illness or a medical condition, we may elect in our sole discretion to terminate the brand contract and he will be required to pay us approximately $5.24 million (net of any amounts previously paid to us by him pursuant to the brand contract), which includes a pro rata share of underwriting expenses from the initial public offering of Fantex Series EJ Manuel. We are also entitled to certain other ongoing information and audit rights. For a further description of our brand contract with EJ Manuel, please see “Business—EJ Manuel Brand—EJ Manuel Brand Contract.”

Mohamed Sanu Brand

Our brand contract with Mohamed Sanu entitles us to receive 10% of brand income for Mohamed Sanu from and after May 14, 2014. As consideration for the ABI under the brand contract, we paid Mohamed Sanu a one-time cash amount of $1.56 million upon the completion of the offering of Fantex Series Mohamed Sanu. We have no further financial obligation to Mohamed Sanu under the brand contract, other than certain indemnity obligations. The brand contract is intended to remain in effect indefinitely and, except as set forth in the brand contract, may be terminated only upon mutual agreement of Mohamed Sanu and us. If Mohamed Sanu resigns from the NFL within two years of the date of the completion of the offering of shares of Fantex Series Mohamed Sanu for any reason other than injury, illness or a medical condition, we may elect in our sole discretion to terminate the brand contract and he will be required to pay us approximately $1.64 million (net of any amounts previously paid to us by him pursuant to the brand contract), which includes a pro rata share of underwriting expenses from the initial public offering of Fantex Series Mohamed Sanu. We are also entitled to certain other ongoing information and audit rights. For a further description of our brand contract with Mohamed Sanu, please see “Business—Mohamed Sanu Brand—Mohamed Sanu Brand Contract.”

Alshon Jeffery Brand

Our brand contract with Alshon Jeffery entitles us to receive 13% of brand income for Alshon Jeffery from and after September 7, 2014 with respect to brand income payable under Alshon Jeffery’s NFL player contracts, and from and after September 18, 2014 with respect to all other brand income. As consideration for the ABI under the brand contract, we paid Alshon Jeffery a one-time cash amount of $7.94 million upon the completion of the offering of Fantex Series Alshon Jeffery. We have no further financial obligation to Alshon Jeffery under the brand contract, other than certain indemnity obligations. The brand contract is intended to remain in effect indefinitely and, except as set forth in the brand contract, may be terminated only upon mutual agreement of Alshon Jeffery and us. If Alshon Jeffery resigns from the NFL within two years of the date of the completion of the offering of shares of Fantex Series Alshon Jeffery for any reason other than injury, illness or a medical condition, we may elect in our sole discretion to terminate the brand contract and he will be required to pay us approximately $8.36 million (net of any amounts previously paid to us by him pursuant to the brand contract), which includes a pro rata share of underwriting expenses from the initial public offering of Fantex Series Alshon Jeffery. We are also entitled to certain other ongoing information and audit rights. For a further description of our brand contract with Alshon Jeffery, please see “Business—Alshon Jeffery Brand—Alshon Jeffery Brand Contract.”

Michael Brockers Brand

Our brand contract with Michael Brockers entitles us to receive 10% of brand income for Michael Brockers from and after October 15, 2014. As consideration for the ABI under the brand contract, we paid Michael Brockers a one-time cash amount of $3.44 million upon the completion of the offering of Fantex Series Michael Brockers. We have no further financial obligation to Michael Brockers under the brand contract, other than certain indemnity obligations. The brand contract is intended to remain in effect indefinitely and, except as set forth in the brand contract, may be terminated only upon mutual agreement of Michael Brockers and us. If Michael Brockers resigns from the NFL within two years of the date of the completion of the offering of shares of Fantex Series Michael Brockers for any reason other than injury, illness or a medical condition, we may elect in our sole discretion to terminate the brand contract and he will be required to pay us approximately $3.62 million (net of any amounts previously paid to us by him pursuant to the brand contract), which includes a pro rata share of underwriting expenses from the initial public offering of Fantex

Series Michael Brockers. We are also entitled to certain other ongoing information and audit rights. For a further description of our brand contract with Michael Brockers, please see “Business—Michael Brockers Brand—Michael Brockers Brand Contract.”

Jack Mewhort Brand

Our brand contract with Jack Mewhort entitles us to receive 10% of brand income for Jack Mewhort after February 15, 2015. As consideration for the ABI under the brand contract, we paid Jack Mewhort a one-time cash amount of $2.52 million upon the completion of the offering of Fantex Series Jack Mewhort.  We have no further financial obligation to Jack Mewhort under the brand contract, other than certain indemnity obligations. The brand contract is intended to remain in effect indefinitely and, except as set forth under the brand contract, may be terminated only upon mutual agreement of Jack Mewhort and us. If Jack Mewhort resigns from the NFL within two years of the date of the completion of the offering of shares of Fantex Series Jack Mewhort for any reason other than injury, illness or medical condition, we may elect in our sole discretion to terminate the brand contract and he will be required to pay us approximately $2.68 million (net of any amounts previously paid to us by him pursuant to the brand contract),  which includes a pro rata share of underwriting expenses from the initial public offering of Fantex Series Jack Mewhort. We are also entitled to certain other ongoing information and audit rights. For a further description of our brand contract with Jack Mewhort, please see “Business—Jack Mewhort Brand—Jack Mewhort Brand Contract.”

Kendall Wright Brand

Our brand contract with Kendall Wright entitles us to receive 10% of brand income for Kendall Wright after December 1, 2014. As consideration for the ABI under the brand contract, we will pay Kendall Wright a one-time cash amount of $3.125 million contingent upon our ability to obtain financing, which we intend to do through this offering. We will have no further financial obligation to Kendall Wright under the brand contract once this payment has been made, other than certain indemnity obligations. The brand contract is intended to remain in effect indefinitely and, except as set forth in the brand contract, may be terminated only upon mutual agreement of Kendall Wright and us. If Kendall Wright resigns from the NFL within two years of the date of this offering for any reason other than injury, illness or medical condition, we may elect in our sole discretion to terminate the brand contract and he will be required to pay us approximately $3.32 million (net of any amounts previously paid to us by him pursuant to the brand contract),  which includes a pro rata share of underwriting expenses. We are also entitled to certain other ongoing information and audit rights. For a further description of our brand contract with Kendall Wright, please see “Business—Kendall Wright Brand—Kendall Wright Brand Contract.”

Andrew Heaney Brand

Our brand contract with Andrew Heaney entitles us to receive 10% of brand income for Andrew Heaney from and after January 1, 2015. As consideration for the ABI under the brand contract, we will pay Andrew Heaney a one-time cash amount of $3.34 million contingent upon our ability to obtain financing, which we intend to do through this offering. We will have no further financial obligation to Andrew Heaney under the brand contract once this payment has been made, other than certain indemnity obligations. The brand contract is intended to remain in effect indefinitely and, except as set forth in the brand contract, may be terminated only upon mutual agreement of Andrew Heaney and us. If Andrew Heaney resigns from MLB within two years of the date of this offering for any reason other than injury, illness or a medical condition, we may elect in our sole discretion to terminate the brand contract and he will be required to pay us approximately $3.59 million (net of any amounts previously paid to us by him pursuant to the brand contract), which includes a pro rata share of underwriting expenses. We are also entitled to certain other ongoing information and audit rights. For a further description of our brand contract with Andrew Heaney, please see “Business—Andrew Heaney Brand—Andrew Heaney Brand Contract.”

Terrance Williams Brand

Our brand contract with Terrance Williams entitles us to receive 10% of brand income for Terrance Williams from and after February 1, 2015. As consideration for the ABI under the brand contract, we will pay Terrance Williams a one-time cash amount of $3.06 million contingent upon our ability to obtain financing, which we intend to do through

this offering. We will have no further financial obligation to Terrance Williams under the brand contract once this payment has been made, other than certain indemnity obligations. The brand contract is intended to remain in effect indefinitely and, except as set forth in the brand contract, may be terminated only upon mutual agreement of Terrance Williams and us. If Terrance Williams resigns from the NFL within two years of the date of this offering for any reason other than injury, illness or a medical condition, we may elect in our sole discretion to terminate the brand contract and he will be required to pay us approximately $3.29 million (net of any amounts previously paid to us by him pursuant to the brand contract), which includes a pro rata share of underwriting expenses. We are also entitled to certain other ongoing information and audit rights. For a further description of our brand contract with Terrance Williams, please see “Business—Terrance Williams Brand—Terrance Williams Brand Contract.”

Ryan Shazier Brand

Our brand contract with Ryan Shazier entitles us to receive 10% of brand income for Ryan Shazier from and after September 1, 2015. As consideration for the ABI under the brand contract, we will pay Ryan Shazier a one-time cash amount of $3.11 million contingent upon our ability to obtain financing, which we intend to do through this offering. We will have no further financial obligation to Ryan Shazier under the brand contract once this payment has been made, other than certain indemnity obligations. The brand contract is intended to remain in effect indefinitely and, except as set forth in the brand contract, may be terminated only upon mutual agreement of Ryan Shazier and us. If Ryan Shazier resigns from the NFL within two years of the date of this offering for any reason other than injury, illness or a medical condition, we may elect in our sole discretion to terminate the brand contract and he will be required to pay us approximately $3.34 million (net of any amounts previously paid to us by him pursuant to the brand contract), which includes a pro rata share of underwriting expenses. We are also entitled to certain other ongoing information and audit rights. For a further description of our brand contract with Ryan Shazier, please see “Business— Ryan Shazier Brand— Ryan Shazier Brand Contract.”

Management Agreement

We have entered into a management agreement with our parent, pursuant to which our parent has agreed to provide us with management and administrative services, including providing and compensating our executive management and other personnel, as well as services relating to information technology support, brand management and other support operations, facilities, human resources, tax planning and administration, accounting, treasury and insurance. We have agreed to pay 5% of the amount of the gross cash received by us, if any, pursuant to our brand contracts during any quarterly period as remuneration for the services provided. The amount of gross cash received used to calculate this 5% fee will include any portion allocated to reduction in carrying value on our financial statements but will not take into account the changes in fair value of the brand contracts. As such, the service fee under the management agreement will be determined based on the total amount of actual cash received under the brand contracts in a given quarterly period prior to any adjustments for fair value and without regard to the expected cash receipts in such quarter as reflected in the financial statements for that quarter. To the extent we receive no cash for any period then we would not owe any fee for any services provided during that period. We may evaluate the service fee from time to time to assess the continued appropriateness of the percentage of our cash receipts upon which the service fee is calculated, in light of the services being provided by our parent at the time and cost of those services.

The agreement had an initial term through December 31, 2014 and was automatically renewed for a one-year term through December 31, 2015. It will continue to automatically renew for successive one‑year terms each December 31 unless either party provides written notice of its intent not to renew at least three months prior to such renewal. We may also terminate any specific service and/or the agreement, without penalty, with 30 days prior written notice to Fantex Holdings. Fantex Holdings may terminate any specific service and/or the agreement with 180 days prior written notice to us, but if we, using our commercially reasonable efforts, are unable to either perform the services ourselves or enter into a reasonable arrangement with a third party to perform the services that we are unable perform ourselves, then Fantex Holdings will continue to perform such services for an additional period of 180 days.

Risks Associated with Our Business

Our ability to implement our business strategy is subject to numerous risks and uncertainties. You should carefully consider all of the information set forth in this prospectus, including information incorporated by reference in this prospectus.

Conflicts of Interest

The offering is being conducted in accordance with the applicable provisions of Rule 5121 of the Conduct Rules of the Financial Industry Regulatory Authority, Inc. (“FINRA”). One of the underwriters, FBS, is deemed to have a “conflict of interest” under Rule 5121 because we are under common control with FBS, and we will receive a portion of the net proceeds of this offering. Accordingly, this offering will be made in compliance with the applicable provisions of Rule 5121, which requires, among other things, that a “qualified independent underwriter” participate in the preparation of, and exercise the usual standards of due diligence with respect to, the registration statement and this prospectus. UBS Securities LLC has agreed to act as the “qualified independent underwriter” (as defined by FINRA) for the offering and to undertake the legal responsibilities and liabilities of an underwriter under the Securities Act, specifically including performing due diligence investigations and reviewing and participating in the preparation of the registration statement of which this prospectus forms a part. UBS Securities LLC will not receive any additional fees for acting as “qualified independent underwriter.” Pursuant to FINRA Rule 5121, FBS will not confirm sales to accounts in which it exercises discretionary authority, if any, without the specific prior written approval of the account holder. See “Underwriting (Conflicts of Interest)—Conflicts of Interest.”

 Restrictions on the Purchase or Beneficial Ownership of Tracking Stocks 

We have entered into an agreement with MLB that requires us to, among other things, take steps designed to prohibit certain investors from purchasing or owning Fantex Series Professional Sports, including the incorporation of such ownership restrictions into the certificate of designations for the Fantex Series Professional Sports. These prohibited investors (“Prohibited Investors”) include persons who are (i) owners, officers, directors or employees of any MLB club or MLB related entity, or any family member or agent of the foregoing, and (ii) individuals who have been arrested in connection with, charged with, indicted for, or convicted or participating in (whether directly or indirectly) any illegal gambling activity or any illegal activity in connection with certain gaming enterprises (including any governmental body that exercises certain types of control over such individuals, and other affiliated persons and entities). Pursuant to the restrictions set forth in the certificate of designations for Fantex Series Professional Sports, any person who is a Prohibited Investor will be prohibited from purchasing or beneficially owning (whether directly or indirectly) Fantex Series Professional Sports. Because the Units include shares of Fantex Series Professional Sports, Prohibited Investors will likewise be prohibited from purchasing or beneficially owning Units. In addition, any person who opens or maintains a customer account with FBS (an “FBS Accountholder”) other than our affiliates or institutional investors, even if not a Prohibited Investor, is prohibited from beneficially owning more than 10% of the outstanding shares of Fantex Series Professional Sports (whether directly or through Units). If any Prohibited Investor purchases or otherwise comes to beneficially own Units or shares of Fantex Series Professional Sports, or any FBS Accountholder comes to beneficially own more than 10% of the outstanding shares of Fantex Series Professional Sports (whether directly or through ownership of the Units), we will have the right, under certain circumstances, to restrict the transfer of ownership of such securities, and to redeem in cash all of the shares of tracking stocks that comprise the Units at the par value of such tracking stocks, or $0.0001 per share. In addition, if we reasonably believe that the ownership of Units by any securityholder or proposed securityholder would violate the ownership restrictions on the Units, we will have the right to request information from such securityholder or proposed securityholder in order to determine whether such ownership does or would constitute a violation of these restrictions. See “Description of Capital Stock” and “Risk Factors.”

Corporate History

We were incorporated in Delaware on September 14, 2012 as a wholly‑owned subsidiary of Fantex Holdings. Fantex Holdings was incorporated in Delaware on April 9, 2012. Our principal executive offices are located at 330 Townsend Street, Suite 234 San Francisco, California 94107, and our telephone number is (415) 592‑5950. Our website

address is www.fantexbrands.com. The information on, or that can be accessed through, our website is not part of this prospectus. We have included our website address as an inactive textual reference only.

We have little operational history and limited assets and resources and to date we have relied on our parent to conduct our operations through its employees. From and after April 28, 2014, we have been operating under a management agreement with our parent, which we describe in more detail elsewhere in this prospectus (including documents incorporated by reference in this prospectus), but pursuant to which our parent provides us with certain management and administrative services, including providing and compensating our executive management and other personnel, as well as services relating to information technology support, brand management and other support operations, facilities, human resources, tax planning and administration, accounting, treasury and insurance. We will begin to assume management and administrative tasks at such time in the future as the actual cost of these services is less than our service fee to Fantex Holdings, which we do not anticipate would occur until we begin to receive significant cash flows from multiple brand contracts. However, if our parent is unable to perform any of the services that they are required to perform under the management agreement, due to financial difficulty or otherwise, then we may be forced to assume management and administrative tasks, and incur additional expenses, sooner than we anticipate. Until such time we will continue to rely on our parent to conduct our operations in accordance with the management agreement.

Implications of Being an Emerging Growth Company

As a company with less than $1.0 billion in revenue during our last fiscal year, we qualify as an “emerging growth company” as defined in the Jumpstart our Business Startups Act of 2012 (the “JOBS Act”). An emerging growth company may take advantage of specified reduced reporting and other burdens that are otherwise applicable generally to public companies. These provisions include:

We may take advantage of these provisions for up December 31, 2019, or such earlier time when we are no longer an emerging growth company. We would cease to be an emerging growth company on the earlier of (1) the last day of the fiscal year (a) in which we have more than $1.0 billion in annual revenues or (b) in which we have more than $700 million in market value of our capital stock held by non-affiliates, or (2) the date on which we issue more than $1.0 billion of non-convertible debt over a three-year period. We may choose to take advantage of some but not all of these reduced burdens. We have irrevocably taken advantage of other reduced reporting requirements in this prospectus, and we may choose to do so in future filings. To the extent we do, the information that we provide stockholders may be different than you might get from other public companies in which you hold equity interests.

THE OFFERING

The number of Units to be outstanding after this offering is based on no outstanding units as of September 30, 2015. The number of shares of our common stock to be outstanding after this offering is based on the following outstanding shares of our company as of September 30, 2015:

and excludes 7,500,000 shares of our platform common stock reserved for future issuance under our 2013 Equity Incentive Award Plan.

Except as otherwise indicated, all information in this prospectus assumes:

SUMMARY FINANCIAL AND OTHER DATA 

We have derived the following summary financial data from our audited financial statements appearing in our Annual Report on Form 10-K for the year ended December 31, 2014 and from the unaudited information appearing in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2015, both of which are incorporated by reference in this prospectus. Historical results are not necessarily indicative of the results that may be expected in the future. The summary financial data set forth below should be read together with the financial statements and the related notes to those statements and the statement captioned “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K and our Quarterly Report on Form 10-Q.

Statements of Operations and Balance Sheets

The table below presents our balance sheet as of September 30, 2015 and December 31, 2014:

Calculation of Net Income (Loss) for Our Platform Common Stock and the Outstanding Tracking Stocks:

Results of Operations

Nine months ended September 30, 2015 and 2014

We first began to generate income in the quarter ended June 30, 2014. The income generated from our brand contracts is based primarily on the change in fair market value of these contracts subsequent to their purchase. During the nine months ended September 30, 2015 and 2014, the change in fair value of our brand contract portfolio resulted in income of $287,930 and $463,110, respectively. The year-over-year change was primarily the result of acquiring additional contracts, the change in fair value of our brand contract portfolio resulting from the increase in present value of the brand contracts as the cash flows are brought closer to the present, and to a lesser extent from net gains resulting from the receipt of cash payments due to us under those contracts. In addition,  during the second quarter of 2015, we changed the estimates of certain cash flows under our brand contract with Alshon Jeffery, as described below.  Also, during the third quarters of 2015 and 2014, we changed the estimates of certain cash flows under our brand contract with EJ Manuel, as described below.

All of our contracts performed generally as anticipated in the nine months ended September 30, 2015 and 2014 except for our contracts with EJ Manuel and Alshon Jeffery.  

During the nine months ended September 30, 2015, we performed a revaluation of EJ Manuel’s brand contract based on lower estimated future endorsement income as a result of the impact of EJ Manuel not obtaining the starting quarterback position of the Buffalo Bills as previously projected in his endorsement income estimates. We also reviewed the fair value assumptions of his current and future NFL contracts including career length and the composition of the comparable contracts. We have concluded that as of September 30, 2015, these assumptions remain reasonable as his current comparable contracts include a representative mix of starting, journeymen and back-up quarterback comparable players. The changes in our estimates for the timing and amounts of these new cash of flows resulted in a reduction in estimated ABI of approximately $0.4 million during the nine months ended September 30, 2015. During the nine months ended September 30, 2014, we performed a revaluation of EJ Manuel’s brand contract based on lower estimated near term endorsement income as a result of the impact of EJ Manuel losing his starting quarterback position with the Buffalo Bills.  This revaluation resulted in a reduction in estimated ABI of approximately $0.3 million during the nine months ended September 30, 2014.

During the second quarter of 2015, we performed a revaluation of Alshon Jeffery’s brand contract based on the timing and terms of the anticipated renegotiation of his contract. The changes in our estimates for the timing and amounts of these new cash of flows as a result of this revaluation, resulted in an unrealized loss of approximately $1.8 million for the Alshon Jeffery Brand Contract recorded during the nine months ended September 30, 2015. This unrealized loss was partially offset by an increase in the net present value of expected cash flows from this brand contract of approximately $1.7 million during the nine months ended September 30, 2015.

For further information on the revaluation of the EJ Manuel and Alshon Jeffery Brand Contracts, see Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Quarterly Report on Form 10-Q for the three months ended September 30, 2015.

Operating expenses for the nine months ended September 30, 2015 and 2014 were $3.2 million and $3.1 million, respectively. These reflect costs incurred to develop and operate our business. All such costs to date except those under our management agreement with our Parent, have been allocated to us from our Parent. Expenses such as personnel and facility costs were primarily allocated based on the estimated number of full time equivalent (FTE) employees working on activities associated with us. All personnel costs were allocated based on an estimated percentage of time spent on our activities. Facility costs were allocated based on the FTE employees associated with us as a percentage of all employees of our Parent. All other costs were specifically identified and charged to us as determined by management. All estimates are deemed to be reasonable and reflect, in the best judgment of our management, the costs associated with our activities.

Years Ended December 31, 2014 and 2013

We first began to generate income in the quarter ended June 30, 2014. As such, our net loss from operations for the year ended December 31, 2013 was the result of the operating expenses associated with starting our business. For the year ended December 31, 2014, our net loss from operations increased by approximately $2.7 million compared to the prior year. This increase was primarily due to our updating the fair value of our brand contracts, following the 2014 NFL season in accordance with our valuation process, to account for the on-field performance of our contract parties. 

Due to EJ Manuel losing his starting quarterback job with the Buffalo Bills at the end of September 2014 and the corresponding impact on his on-field statistical performance in the 2014 NFL season, our estimate of the fair value of the brand contract with EJ Manuel declined by approximately $2.3 million. For further information on the revaluation of the EJ Manuel Brand Contract, the Vernon Davis Brand Contract and the Mohamed Sanu Brand Contract, see Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K.

In addition, total operating expenses increased to approximately $4.1 million in 2014 from approximately $3.6 million in 2014 primarily due to increases in personnel costs caused by an increase in the number of personnel and increases in marketing costs.

RISK FACTORS

Investing in our Fantex Sports Portfolio 1 Units involves a high degree of risk. Before making any decision to invest in Units, you should carefully consider the risks described below, together with the other information contained or incorporated by reference in this prospectus. The risks and uncertainties described or incorporated by reference in this prospectus are not the only ones we face. Additional risks and uncertainties that we are unaware of or that we believe are not material at this time could also materially adversely affect our business, financial condition or results of operations. You should also refer to our financial statements and the notes to those statements, which are incorporated by reference in this prospectus. See also the information contained under the heading “Special Note Regarding Forward-Looking Statements and Industry Data” immediately following these risk factors. If any of the events discussed in the risk factors below or incorporated by reference in this prospectus occur, it could have a material and adverse impact on our business, results of operations, financial condition and cash flows. If that were to happen, the trading price of the Units could decline, and you could lose all or part of your investment.

Throughout these Risk Factors, references to our tracking stocks, the holders of our tracking stocks and related terms shall be deemed to refer to and include the Units and holders of the Units to the extent appropriate based on the tracking stocks’ inclusion in the Units, except where a clearly contrary intention appears.

Risks Relating to Our Limited Operating History, Financial Position and Capital Needs

We have incurred significant losses since our inception and anticipate that we will continue to incur losses in the future.

We incorporated in Delaware in September 2012 as a wholly‑owned subsidiary of Fantex Holdings. We are currently in a start‑up phase and to date have relied on our parent to conduct our operations. We therefore have a very limited operating history. Investment in our company is highly speculative because it entails substantial upfront cost and significant risk that we may never become commercially viable. Our parent has incurred significant expenses on our behalf. Our parent is not obligated to continue to incur expenses on our behalf except as required under our management agreement with them, and we expect that we will incur significant expenses related to our ongoing operations. For the years ended December 31, 2014 and 2013, we reported a net loss of approximately $6.3 million and $3.6 million, respectively. For the nine months ended September 30, 2015, we reported a net loss of approximately $1.9 million and had accumulated losses since inception of approximately $13.5 million.

We expect to continue to incur losses for the foreseeable future, and we expect these losses to increase as we continue evaluating, targeting and accessing brands, negotiating the acquisition of minority interests in those brands that meet our criteria, and developing the infrastructure necessary to support our ongoing operations. We may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect our business. The size of our future net losses will depend, in part, on the rate of future growth of our expenses, the rate at which we are able to acquire brands that meet our criteria and the ability of our acquired brands to generate income and cash flow. Even if our brands generate cash flows they may not produce payments quickly enough to cover our expenses. If any individuals with whom we have or may contract in the future, fail to make payments in amounts we expect, or at all, we may never become profitable. Even if we achieve profitability in the future, we may not be able to sustain profitability in subsequent periods. Our expected future losses will have an adverse effect on our stockholders’ equity and working capital.

We have a very limited operating history, which may make it difficult for investors to evaluate the success of our business to date and to assess our future viability. Our business model also requires us to make substantial upfront payments to our contract parties in exchange for rights to future payments.

Our operations to date have been limited to organizing and staffing our company, evaluating, targeting and accessing brands that meet our criteria, negotiating the acquisition of minority interests in those brands, engaging in the registration process for the offering of shares of tracking stocks relating to our existing brand contracts and managing our brand contracts.

We have entered into 10 brand contracts. We intend to enter into additional brand contracts in the future with other contract parties and are actively pursuing these brand contracts, but we have no current commitments to enter into

another brand contract. Each of our brand contracts requires us to make an upfront cash payment, and we expect that any other brand contracts that we enter into in the future with other contract parties will also require us to make upfront payments, in return for the right to future payments based on our ABI.

Therefore, our business model requires us to make substantial upfront payments to our contract parties in exchange for rights to future payments. We will be at risk if for any reason we do not receive those future payments, or if they are less than we would need to be profitable or to offset our expenses. We have no history to demonstrate, and we can make no assurances, that our business model will be successful, or whether any of our brand contracts will be profitable. Consequently, it will be difficult for anyone to predict our future success, performance or viability, and more difficult than it would be if we had a longer operating history and/or successful brand contracts to judge the viability of our business model. Any such predictions may not be accurate or reliable.

We may not receive the cash amounts that we expect, or any at all, from our brand contracts with our contract parties or from any future brand contracts and we may never generate sufficient income to become profitable.

Our ability to generate income from the brand contracts and become profitable will depend, among other things, upon our ability to successfully evaluate, target and access brands that have the potential to generate significant brand income, acquire a minority interest in the brand income from these brands for an appropriate purchase price, aid our acquired brands in enhancing their value in amounts sufficient to provide a return on our investment, and enforce the brand contracts and collect our ABI with respect to these brands. Even if we are able to successfully do these and other things that are within our control there are numerous other factors, some of which are not within our control, that might impact our ability to generate income or cash flows or be profitable, including those discussed in these risk factors.

In addition, there are numerous risks and uncertainties associated with the brands in which we invest, including that the success of our brand contracts will depend upon the contributions, success and longevity of an individual in their primary occupation, such as an athlete in the NFL. Therefore, we are unable to predict the timing or amount of future cash receipts, or when or if we will be able to achieve or maintain profitability. Even if we are able to acquire, manage and develop brands as described above, we anticipate incurring significant costs associated with our efforts to achieve or maintain profitability. Further, we may not receive the cash amounts that we expect, or any at all, from any of our brand contracts.

Our business strategy depends in large part on our ability to build a robust platform of brands by entering into additional brand contracts. We may not be able to enter into additional brand contracts in the future, or enter into the number of additional brand contracts that we anticipate would be necessary to support our business model.

Our strategy of enhancing brand reach and brand value for our acquired brands depends in large part on our ability to build a robust platform of brands and benefit from economies of scale and an ability to cross‑pollinate and share best practices across our acquired brands. For example, any direct investment of resources that we make in any promotional activities relative to one brand contract must exceed a return that is at least approximately eight to ten times our investment in order to increase the value of such tracking stock. Thus, unless we achieve significant economies of scale in our ability to deliver brand enhancing value at a low cost across all our tracking stocks (by, for example, utilizing fixed, in‑house personnel rather than incurring out‑of‑pocket third party costs), then we will not likely be able to make investments at a cost that would allow for a positive return on our investment. Accordingly, we are actively pursuing additional brand contracts that we intend to enter into in the future. However, we have no current commitments to enter into another brand contract.