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Dash 3 Funding, LLC

Commercial Aircraft Engine Parts

Acquisition & Sale Program

$1,000,000

Min. investment - $10,000

12.0% Series A Participating Preferred

Consignment Program through June 30th, 2023

  • Dash 3 Funding, LLC (“Dash-3”) is acquiring an inventory pool of CFM56-3 engine parts (“Engine Parts”) originally purchased by Raven Capital Management, LLC (“Raven”) from Lufthansa Technik AG (“Lufthansa”), with an assessed fair market value of $20MM

  • Storage, warehousing, and sales of Engine Parts have historically been, and will continue to be, effected through a consignment agent in south Florida, Broward Aviation Services (“Broward”), who has sold $7.9MM of the Engine Parts from this inventory since 2014.*

  • The CFM56-3 aircraft engine is perfectly tailored to meet the needs of second-generation, short to medium range B-737-300/400/500 aircraft, with an estimated flying fleet of 600.

  • Average monthly sales of Engine Parts from 2014 through late 2020 was ~$106,000.*

* Past performance is not a guarantee of future results.

Dash 3 Funding, LLC, (the “Issuer” or “The Company”) is issuing $1,000,000 in Participating Preferred Membership Units (the “Equity”, or the “Security”) to fund the acquisition and consignment of an exclusive inventory of CFM56-3 parts (the “Engine Parts”).

By registering with Carofin, Members have access to more extensive due diligence materials, additional private investment opportunities, and can proceed with making an investment.

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Investment Considerations

1) Purpose of the Financing

  • Proceeds from financing will be used to opportunistically purchase and profitably sell Engine Repair Parts/Material

  • Consisting of CFM56-3 parts (the “Engine Parts”) through a consignment agent, Broward Aviation Services (“Broward”).

2) Issuer – Dash 3 Funding, LLC

  • Dash-3 is a single-purpose company established to purchase aircraft engine inventory. It is managed by Carolina Financial Group, LLC (“CFG”) with consulting services from Blu Miles Aviation Services, LLC (“BMAS”) utilizing Broward Aviation Services (“Broward”) as a sales consignee.

  • Inventory purchased by Dash-3 is comprised exclusively of CFM56-3 engine parts and material of Limited Parts (LLP) 23%, Non-Life Limited Parts 67% and expendable 8% (one-time-use) commercial engine parts. The CFM56-3 is flown on Boeing’s 737 Classic aircraft (B737-300, 400, 500).

  • Because of the overall commercial aircraft activity levels and the age of Raven Capital’s fund, these assets are available at a particularly attractive value. These Engine Parts are particularly valuable due to the documentation and quality associated with their certifications.

  • The Consignee, Broward Aviation Services LLC (“Broward”), has no overlap with the Boeing 737 inventory lot and has an established customer base that has generated over $7.9 million in sales to date from this inventory.

3) Security Description – Participating Preferred Equity

  • 12.0% annual cumulative preferred dividend, 36-month initial term.

  • Investors will receive a return of principal from 100% of Distributable Cash until a 12% IRR hurdle, 90% of Distributable Cash until a 15% IRR hurdle, and 80% thereafter. Excess Distributable Cash after the IRR hurdles are achieved will go the Managers.

  • A majority of principal payback is projected to occur during the initial program term, but depending on performance, a liquidation or a continuation of the program may be necessary for a full return of principal.  

4) Repayment

  • Preferred Dividend distributions and a return of capital will be generated through cash flow from operations – the sale of Engine Parts.

  • On or around June 30th, 2023, investors will be given options, to (i) liquidate the remaining inventory, (ii) continue the program in 6 month increments. BMAS reserves the right to acquire the remaining Engine Parts for $1.00 above the highest of three qualified liquidation offers.

5) Investment Risks

  • It is unknown when the commercial airline industry will return to normal levels or whether the pandemic has led to fundamentally lower levels of air transportation by business travelers and vacationers.

  • The commercial aircraft industry experienced a dramatically lower passenger activity worldwide during the first six months of 2020 due to the COVID-19 pandemic.

  • Sales are dependent on the performance of Broward and aided by BMAS.

*Internal Rate of Return (“IRR”) figures discussed in this Offering are utilized solely as contractual triggers governing distributions from the Issuer and should not be interpreted as projections or guarantees of performance. For more details on how Internal Rate of Return is calculated, please see the Best Interests & Other Disclosures section.

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Value Proposition

Business Opportunity

Exclusive inventory pool of in-demand CFM56-3 Engine Parts available at a substantial discount.

  • The Boeing B737 Classic (powered by CFM56-3 Engines) continues to be utilized widely for both cargo and passenger travel, with 600 operational aircraft out of a total fleet of 957.

  • The B737 Classic is a well-established aircraft in developing markets and continued fleet expansion is anticipated post COVID-19. The annual parts market for the CFM56-3 remains greater than $50M.

  • The types of acquired inventory are varied and allow for tailored use cases depending on market conditions – 23% Life Limited Parts (LLPs), 67% Non-Life Limited Parts (NLLPs), 8% Expendables.

  • Commercial Trace and Certification are tied to Lufthansa Technik, a recognized industry leader in quality and service.

  • There is little to no administrative or logistics cost to the acquisition - the inventory is warehoused, and the consignment agent contracted. Broward has sold $7.9MM of CFM56-3 parts from 2014-2020.

  • Dash-3 has an exclusive offer to purchase material from Raven at a discount.

Company Solution

Acquire the inventory and utilize industry expertise of BMAS to maximize return from the sale of Engine Parts.

  • Dash-3 will assume the consignment agreement with Broward Aviation Services (Broward) to manage the program and oversee material integrity.

  • Broward has all the relevant experience to successfully market, promote, and conduct the resale of the Dash-3 / CFM56-3 parts package.

  • The package consists of CFM56-3 Engine Parts this engine is flown on B737 Classic. The Dash-3 inventory has little or no overlap with the current Broward inventory.

  • BMAS will work with Broward to expand distribution and build material programs to accelerate the sale of material.

*AN INVESTMENT IN THE NOTES IS SPECULATIVE AND IS SUITABLE ONLY FOR PERSONS OF SUBSTANTIAL FINANCIAL MEANS WHO CAN AFFORD TO LOSE THEIR ENTIRE INVESTMENT AND HAVE NO NEED FOR LIQUIDITY IN THIS INVESTMENT. RETURNS CANNOT BE GUARANTEED. 

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Company Information

Introduction

Carolina Financial Group (“CFG”) in partnership with Blu Miles Aviation Service (“BMAS”) (collectively the “Managers”) is raising up to $1,000,000 in Participating Preferred Membership Units to acquire an inventory pool of CFM56-3 Engine Parts (“Engine Parts”) from Raven Capital Management, LLC (“Raven”). Relationship Diagram Proceeds from the financing will be used to acquire the Engine Parts (full detail available upon request), which has historically been, and will continue to be, sold by Broward Aviation Services (“Broward”), a consignment agent specializing in the distribution of aviation parts. CFG & BMAS will partner with Broward on the effective execution of the program.

Business Relationships

Management Team

Owners

Consignment Agent

Historical Performance

Historical Performance

Dash-3 is acquiring this inventory at a substantial discount due to the proprietary nature of the relationship between the Managers and Raven Capital. With average monthly net income (post-consignment fees) of $80,175 from 2014 to Q1 2021, average monthly sales of ~$106,000, and return towards pre-pandemic sales Dash-3 is confident in its ability to deliver an outsized return to investors due to resurgent market fundamentals and its intelligent, and active, sales strategy.

COVID-19 & Dash-3 Inventory

Overall Industry

  • Air cargo demand reached an all-time high in 2020 and continues to grow in 2021 (U.S. Domestic).
  • As vaccinations continue to be administered and states relax restrictions, passenger travel has begun to revert to pre-pandemic levels domestically and internationally. (IATA)
  • Read the full IATA April 2021 Industry Outlook here. Cargo Tonne

Specific to Dash-3

  • Domestically and internationally, B737 fleet sizes are small and widely distributed among different owners, requiring many collective decisions to affect market fundamentals for the Engine Parts.
  • As many of the B737 planes using by the CFM56-3 engine are located in smaller African and Asian countries, the impact of coronavirus (on usage and the resultant demand for Engine Parts) is centered around bi-lateral agreements between countries, allowing for passenger travel.
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Program Overview

Plan of Operations

Completed

  • Performed an independent analysis of the inventory and furnished an acceptable acquisition price.
  • Negotiated a Purchase Agreement between CFG and Raven detailing specifics of the acquisition, to be consummated upon successful funding of Dash-3.
  • Undertook an inspection visit to the Broward facility to examine quality and condition of Engine Parts.

Forward Plan

  • Raise $1,000,000 and consummate executed Purchase Agreement to acquire Engine Parts.
  • Assign contract with Broward as consignment agent for Dash 3 Funding, LLC.
  • Fund any ongoing expenses of Dash-3 (repairs, insurance, etc.)
  • Actively manage sales in partnership with Broward to maximize return.

Consignment Split & Investor Distributions

There will be a 75%/25% split on revenues generated from the sale of the Engine Parts between Dash-3 and Broward respectively, less repair and insurance operating expenses. Of the 75% received by Dash-3, 4% will be allocated to the Managers.

After a 12% IRR hurdle is achieved management will back-in for 10% of Distributable Cash. After a 15% IRR hurdle is achieved management will back-in for 20% of Distributable Cash. The chart above depicts investor distributions in each of the three scenarios.

IRR Hurdles

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Market Overview

CFM-56-3 Engines

Introduction

CFM’s product line includes six (6) engine models tailored to the aircraft applications they power. From the initial CFM56-2 to today's Tech Insertion CFM56-5B and CFM56-7B, these engines are the most sought-after in the aerospace industry. Spanning a thrust range of 18,500 to 34,000 pounds. CFM engines are the power behind more than 8,000 commercial and military aircraft.

The CFM56-3 turbofan, the first advanced derivative of the CFM56 family, is made to meet the needs of second-generation, short-to-medium range B-737-300/400/500 aircraft. Each 737 Classic is equipped with 2 CFM56-3 family engines. The CFM56-3 family covers a thrust range of 18,500 to 23,500 pounds and offers a fuel burn efficiency improved by 20% compared to previous low bypass engines. Engine

Types of CFM56-3 Engines

There are three models of CFM56-3: -3B1, -3B2 and -3C1. The parts used to repair and overhaul all three (3) models are highly compatible (roughly 99%). CFM56-3 engines average 10,000 hours on wing before requiring an overhaul. With the Time-On-Wing Core upgrade, this time is extended by 1,500 to 2,000 cycles to provide an improved average on wing time of 11,000 to 12,000 hours rather than 10,000 hours before an engine required overhaul.

“Focused Life Limit”

Shop visits can be organized between repairs, modifications, and overhauls. The focus of the shop visit is to build back or repair an engine to a “Focused Life Limit”. This Life Limit is driven by the lowest limiter of Life Limited Parts (LLP/ LLPs) and/or the engine restoration requirement of 7,000-10,000 cycles. Life limited parts are set by the OEM based upon the analysis in determining the individual part fatigue. A typical OEM overhaul with a service scope of a full restoration and new LLPs with a 10,000 cycle build scope can range between $1.7M and $2.5 M. The material component of the overhaul includes $1.3 to $1.5 million in LLPS - $250K to $350K in Non LLPS, and $150 – $200K in Expendables (total spend $1.7M to $2.1M).

Based upon the utilization model of the 737 classics, most operators do not want to build back an engine with 10,000 cycles and instead opt for a half-life (3500 to 4000 cycles) or less build and look for other innovative approaches to lower cost to meet their operational strategy. The material component for a half-life overhaul will range between $150K to $300K in LLPS - $100K to 250K in Non LLPS and $150 to $200K in Expendables (Total Spend: $350 -$750). These midlife engines sell for $875K - $1.5M. A 737 Classic Passenger aircraft will fly between 1,000 - 1,400 cycles a year and a cargo operator will fly between 600 - 1,000 cycles. Therefore, a mid-life engine with 3500 cycles on each wing for a passenger operator would fly between 2 - 3.5 years, and the cargo operator would fly between 3.5 - 5.8 years.

Model *BPR: Bypass Ratio

*OPR: Overall Pressure Ration

Boeing 737 Classic

The Boeing 737 Classics are narrow-body airliners produced by Boeing Commercial Airplanes and is second generation of the original Boeing 737-100/-200. Development of these planes began in 1979. The first variant the 737-300 first flew in February 1984 and entered service in December of that year. The stretched 737-400 first flew in February 1988 and entered service later that year. The shortest variant, the 737-500, first flew in June 1989 and entered service in 1990. The Boeing 737 Classics were produced from 1981-2000, the total number of aircraft produced is 1,988. Boeing replaced the classic with the 737-NG which in turn has been replaced by the 737-MAX.

Aircraft

The 737 Classic is an aging fleet and has seen large number of retirements and teardowns. There remains however, a significant number of Boeing 737 Classic aircraft still in operation. The estimated total fleet size is approximately 957 aircraft of which 814 are operated by passenger and cargo airlines, with 553 in use. The remaining 143 aircraft are with leasing companies, governments, and charter services primarily operating as small fleets in developing counties. The current estimated flying fleet is approximately 600 aircraft and as such, we do not see a considerable reduction during the 3-year window. As previously stated, the 737 Classic Passenger aircraft will fly between 1,000 and 1,400 cycles a year, whereas a cargo operator will fly between 600 and 1,000 cycles. Based upon the fleet size and utilization rate of the 737 Classics, we estimate 132 removes annually with 95 shop visits. Considering this estimation and in factoring in the service mix / different shop work scopes and customer objectives, we assess the Parts market to exceed $50 Million annually.

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Inventory Overview

Historical Performance

Raven purchased the CFM56-3 Engine Parts directly from Lufthansa Technik Airmotive Ireland in 2014 as a result of Lufthansa shutting down its Dublin-based operations. Broward Aviation Services (“Broward”) located in south Florida, is responsible for properly storing, cataloguing, insuring, and reporting on all sales of the Engine Parts. From late 2014 through late 2020, total gross sales were approximately $7.91 million – with average monthly gross sales in excess of $106,000 (excluding COVID-19, in excess of $115,00 on average per month). Over this same time frame, the number of parts sold was in excess 72,360 – with an average quantity of parts sold per month of approximately 975. As of the end of Dec 31, 2020, there are about 190,300 parts remaining in inventory. The inventory pool of Engine Parts includes both expendables (consumable) and rotables (repairable) made up of LIFE Limited and NON-LIFE Limited Parts – with over 95% of the inventory in a condition of serviceable or better. Historical performance is not a guarantee of future results. Historical performance is not a guarantee of future results.

Dash-3 Inventory Composition

The origins of this inventory and quality documents have their basis in Lufthansa Technik Airmotive Ireland (LHT-AI). Lufthansa Technik AG ('Lufthansa Engineering', often referred to simply as “LHT”) provides maintenance, completions, Repair and Overhaul (MRO) services for aircraft, and MRO services for engines and components. The Lufthansa Technik Group consists of 32 companies with more than 25,500 employees. It is a subsidiary of the Lufthansa Group. Lufthansa Technik, Airmotive Ireland operated as an MRO with US Federal Aviation Administration and European Union Aviation Safety Agency certificates. The certifications provide with the material, support the sale of New with trace for the OEM and Used with trace documents to Lufthansa Technik Airmotive Ireland.

The Table below identifies the trace: Trace Information *5436 Unique parts translate into 12,263 Lines

Dash-3 Inventory Assessment*

Many dimensions are considered when evaluating engine inventory and characterizing its future sales performance in comparison to the acquisition value. They include aircraft fleet applicability, source value validation, Certification and Documentation, mix of new use material, LLP, Non-LLP, and the mix of kits/high-dollar items (items <$10,000 at Source) and Sales Distribution:

Inventory Assessment

  • Fleet Assessment: Rating 6 of 10: Based on the 600 aircraft and the strong demand for 737 classic freights in the developing companies, the 737 Classic market is exceedingly small in comparisons to the 737NG or the A320 newer generation, but compares and operates favorably to B767, B757, B 747 and ATR.
  • Source Value: Rating 8 of 10: Based on the program sales and market data, we can validate 80% of the source data as a % of Catalogue List Price. (The Dash-3 inventory sales history provides a sold view of the CLP to FMV performance.)
  • Certification and Documentation: Rating 7.5 of 10: Based on the initial validation, we estimate that 100% of the new material has OEM certifications, and 50% of the used material has FAA/EASA certification with the other 50% having trace to (LHT-AI).
  • LLP/Non – LLP/Expendable Mix: Rating 6.5 of 10: 23.71% of the material value is LLP, 67.90% Not LLP and 8.39% are expendables.
  • New Material – Serviceable: Rating 7 of 10: 17% of the material value is new and 83% serviceable.
  • Kits/Modules and High-Dollar Items: Rating 7 of 10: Based upon the initial validation, this package has over $3.8M in high value kits and modules and 37-line items 13,698 parts.
  • Part Number with Sales History: Rating 7 of 10: Based upon the initial validation, this package has over $1.3M in material that has be previously sold at the same or alternative condition.
  • Overall Ranking: Rating 7 of 10: Any inventory ranking above a 5 is acceptable for purchase consideration.
  • Sales Distribution: Broward has 5 years of experience in selling this material. Program-to-date, they have sold $7.91M dollars. In general, Broward has all the relevant experience to successfully manage, market and promote, and conduct the resale of the Dash-3 Inventory and will be highly considered for this and other consignment projects. Broward is currently selling and managing this inventory in a secure environment and has no negative findings during annual audits from the current owner, Raven Capital.

*This inventory evaluation was performed by Blu Miles aviation Services, LLC, a party with a financial interest in the Dash 3 Funding transaction. BMAS will receive a fee equal to 3.5% of the acquisition price and 50% of managements fees and participations received by the Issuer’s Manager.

Dash-3 Inventory Composition

It is the opinion of Blu Miles Aviation Services., LLC, that the Current Fair Market Value (CFMV), 12-Month Orderly Liquidation Value (OLV) and the 6-Month Forced Liquidation Value (FLV) of the inventory are as follows:

Inventory Composition Notes:

  • 5436 Unique parts translate into 12,263 Lines
  • FMV with demand represents a 7-year period
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Management & Consulting Team

David V. Deal
Blu Miles Aviation Service
More Info
Bruce Roberts
Carolina Financial Group
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Financial Overview

Pro Forma Distributable Cash

Investor Cash Flows

Management Participation Figures illustrated above are solely hypothetical illustrations of mathematical principles flowing from contractual provisions in the Issuer’s Operating agreement and should not be interpreted as projections or guarantees of performance.

Model Assumptions

Revenue & Disposition Assumptions

The above pro forma financial projections represent expectations based on BMAS’ thorough diligence and modeling process with respect to the inventory of Engine Parts. Complex considerations on previous sales history, back-to-birth records, market fundamentals and more engendered a conservatively modeled cash flow stream.

The above cash flow projections include an optional liquidation of inventory at the end of the 36-month period. The value of this disposition is based on BMAS’ best estimates. Investment Assumptions

Operating Expenses Assumptions

The below items are projected based on BMAS’ extensive experience in managing similar inventories. CFG and BMAS management fees are also included. Operating Expenses Assumptions

Return Hurdle Assumptions

The following assumptions were made regarding return hurdles. Management begins to participate in 10% of distributable cash after investors have realized a 12% XIRR. After investors have realized a 15% XIRR, the Management Participation increases to 20% of Distributable Cash. Return Assumptions

*Figures illustrated above are solely hypothetical illustrations of mathematical principles flowing from contractual provisions in the Issuer’s Operating agreement and should not be interpreted as projections or guarantees of performance.

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Security Terms

Carofin, LLC (“Carofin”) is offering $1,000,000 of Series A Participating Preferred Units (the “Offering”, “Securities” or the “Series A Preferred”) by Dash 3 Funding, LLC. (“Dash-3” the “Company” or the “Issuer”). Proceeds from this Offering will be used for the acquisition of certain identified CFM56-3 Engine Parts

The Offering

Issuer

Dash 3 Funding, LLC (“Dash-3,” the “Issuer” or the “Company”), a single-purpose North Carolina limited liability company established by Carolina Financial Group, LLC specifically to support the acquisition, management, and sales of commercial engine parts from Raven Capital (the “Engine Parts”).

Securities Offered

12.0% participating preferred membership units in Dash 3 Funding, LLC (the “Preferred Interests”). The Preferred Interests are the only equity capital of the Issuer other than its initial common membership interest capital ($100). The Issuer will not incur any third-party debt or any other form of indebtedness other than trade payables incurred during the normal course of its business.

Offering Amount

$1,000,000 of Participating Preferred Membership Interest will be issued on a contingent basis.

Use of Proceeds

Following a minimum closing of $1,000,000, proceeds from this investment financing will be used to, acquire, transport and manage, on an ongoing basis, the Engine Parts. The Engine Parts will be procured following a final due diligence screening process conducted by the Managers (see below). A third-party assessment indicated a fair market value with no demand of $20MM Purchased Engine Parts will be acquired for a negotiated price of $900,000. A portion of the proceeds will also be used to pay the Placement Agent fee and other issuance expenses, as described below.

Investors

Investors qualified as an “Accredited Investor” as defined within Regulation D as promulgated by the U.S. Securities and Exchange Commission (the “Investors”). Holders of Preferred Interests offered hereby will also be Preferred Members of the Issuer (collectively, the “Preferred Members”).

The Manager

Carolina Financial Group, LLC (“CFG”) a North Carolina based limited liability company, shall serve as the Manager of the Issuer (the “Manager”).

MRO Consultant

Blue Miles Aviation Service, LLC (“BMAS”), based in Boca Raton, Florida, a consulting firm specializing in the commercial aircraft maintenance repair and overhaul industry. BMAS will receive a consulting retainer equal to 3.5% of the inventory lot purchase price, as well as 50% of the Management Fee, and 50% of any Manager Participation, as further defined herein.

Consignee

Broward Aviation Services, Inc. (“Broward”), a veteran commercial aircraft parts distributor with offices in Margate, Florida and Tucson, Arizona.

Minimum Subscription Amount

The minimum investment required by a Member is $10,000, although the Manager, reserves the right, in its sole discretion, to accept smaller subscriptions.

Escrow Account

The Company will establish an escrow account at an FDIC-insured banking institution (the “Custodian”). Under escrow instructions with the Custodian, all subscription amounts will be deposited into the escrow account until Dash-3 has received, and is prepared to accept, subscriptions for the entire minimum amount of $1,000,000, through a combination of Preferred Units offered hereby or other consideration (each an “Alternative Financing”). When this subscription amount has been reached, with or without the addition of Alternative Financings, the amounts previously deposited in escrow will be released to the Company (the “Closing”). If the Company does not receive subscriptions and/or Alternative financings equal to at least $1,000,000 prior to the termination date of this Offering, then at the termination date all funds on deposit in the escrow account will be returned to the corresponding subscribers, without interest.

Termination Date

The termination date for this Offering is set at July 15, 2021 but can be extended up to 60 days at the sole discretion of the Issuer.

Flow of Funds

Issuers Cashflows

All costs and expenses of the Issuer will be funded using proceeds of this financing, including but not limited to the acquisition of the Engine Parts, third-party consulting expenses and financing expenses. The SPV will acquire RCM Dash 3 Holdco LLC (“RCM”), and in turn, RCM’s consignment agreement (the “Consignment Agreement”) with Broward, for their management, promotion and sale. The Engine Parts are already stored at the Broward facility in Florida, and as such there will be no transportation or stocking expenses. There will be a 75%/25% split of all Engine Parts Net Sales Proceeds, as further defined herein, between the Issuer and Broward, as consignee. The 25% split covers material management, promotion, and distribution of the Engine Parts. Of the 75% retained by the Issuer, the Manager will be paid a 4% Management fee. From this 4%, BMAS will be paid a 2% management fee plus travel to the distribution center quarterly to ensure the ongoing performance and inventory integrity of the program until the end of the investment program. On June 30, 2023, and every six thereafter, upon the election of a 75% majority of the Members, the remaining inventory of Engine Parts may be sold to a third-party or the Consignment Agreement may be renewed. BMAS reserves the right to purchase the Engine Parts at a price $1 greater than the highest third-party bid received for the Engine Parts.

Distributions to Investors

The Issuer will make monthly distributions of Distributable Cash (defined below) using funds received from Engine Part sales by the consignee, if the Manager determines, in its sole discretion, that Distributable Cash is available to be distributed to the Investors. For these purposes, the following definitions shall apply: “Distributable Cash” is defined in the Operating Agreement as gross cash received by the Company from all sources other than Capital Contributions and reduced by the portion used (i) to pay Company operating expenses. “Liquidation Event” is defined in the Operating Agreement as the final sale of the Company’s Engine Parts. “Tier 1 Preferred Return” means an amount equal to a twelve percent (12%) per annum return on the Unreturned Capital of a Member, cumulative but not compounded. “Tier 2 Preferred Return” means an amount equal to a fifteen percent (15%) per annum return on the Unreturned Capital of a Member, cumulative but not compounded. “Unreturned Capital” is defined in the Operating Agreement as, for each Investor at any given time, the amount by which the aggregate Capital Contributions made by such Investor, if any, exceeds all distributions of Distributable Cash made to such Investor under the Operating Agreement, excluding amounts paid to such Member in respect of the Tier 1 Preferred Return. “Management Fee” means an amount equal to 4% of the Company’s aggregated gross revenues. In the event that the Manager makes a distribution of Distributable Cash, the Operating Agreement provides that the proceeds will be distributed to the Members in the following order of priority, with no distribution being made in any category set forth below until each preceding category has been satisfied in full: first, to the Members to the extent of their respective unpaid Tier 1 Preferred Return, on a pari passu basis; second, to the Manager to the extent of its Management Fee; third, to the Members with Unreturned Capital, on a pari passu basis, until the Unreturned Capital of each Member is reduced to zero; fourth, ninety percent (90%) to the Members to the extent of their respective unpaid Tier 2 Preferred Return, on a pari passu basis, and ten percent (10%) to the Manager; and thereafter, eighty percent (80%) to the Members and twenty percent (20%) to the Manager (collectively, the “Manager Participation”)

Consignment Terms

Payments

On or before the 25th of each month, the SPV will receive 75% of sales proceeds reduced by any repair costs associated with the sold goods, whether or not previously reimbursed to Broward (the “Net Sales Proceeds”)

Term Period

June 30, 2023, provided that those Members holding 51% of the Company’s Membership Units may elect to renew the Consignment agreement for six-month periods, indefinitely, or sell the Engine Parts in the market, provided that BMAS shall have the option to purchase the Engine Parts for $1 more than the highest third-party bid.

Treatment of Consigned Parts

To the extent that Broward owns or subsequently acquires any similar commercial engine part to the Engine Parts owned by the Issuer, Broward will be obliged to first offer the Engine Parts of the Issuer.

Options

On or before June 30, 2023, those Members holding 51% of the Company’s Membership Units shall decide whether to: (1) Extend the investment program, six months at a time, indefinitely; (2) Liquidate the remaining Engine Parts at market value, provided that BMAS shall have the option to purchase the remaining Engine Parts at $1 more than the assessed market value.

Insurance

At all times during the Term, Consignee shall, at its own expense (except as otherwise specified), effect and maintain: (1) A property insurance policy covering against all risks of loss or destruction of all Consigned Goods in an amount equal to the Appraised Value of the Consigned Goods but subject to a cap of $15,000,000 in the aggregate, with the Consignor included thereon as sole loss payee, where such insurance shall be with recognized companies satisfactory to the Consignor (with evidence of such insurance policy attached as Schedule B). For the avoidance of doubt, the cost associated with effecting and maintaining this property insurance policy shall be borne by both the Consignor (75.0%) and Consignee (25.0%); (2) An aviation products liability insurance policy in an amount not less than $25,000,000 each occurrence and in the aggregate, in accordance with aviation insurance industry standards and satisfactory to the Consignor (with evidence of such insurance policy attached as Schedule B). For the avoidance of doubt, the cost associated with effecting and maintaining this aviation products liability insurance policy shall be borne by both the Consignor (75.0%) and Consignee (25.0%).

Net Sales Proceeds

Net Sales Proceeds subject to the 75/25 Split equal any sales proceeds reduced by any repair costs associated with the sold goods, whether or not previously reimbursed to Broward.

Disposal of Nonsalable Material

Broward may from time to time send Dash-3 a list of parts which Broward has determined are not marketable due to obsolescence, are beyond economic repair, or not marketable for other reasons (the “Obsolete Parts”). Dash-3 will, within 20 days, direct Broward to dispose of such parts, at Dash-3’s expense, or continue to market and sell such parts.

Reporting

On or before the 10th day of each month, Broward shall provide to the Issuer a report, among others, of all sales of consigned goods during the preceding month, including the description and part number and/or serial number, repair costs incurred, if any, dollar amount, quantity customer, and all other details specific to the sale of each sold good.

Broward Default

The following events, among others, shall constitute an Event of Default under the Consignment Agreement: (i) failure of Consignee to pay any amount due under this Agreement within five (5) business days of the date when due and in the manner specified herein, unless any such amount is being disputed in good faith, in which case such failure shall be deemed a Consignee Event of Default only if it continues for thirty (30) days; (ii) failure of Consignee to perform or fulfill any other material promise, covenant, representation or agreement made herein in accordance with the terms hereof and such failure continues for five (5) business days after written notice from Consignor to Consignee specifying such breach; (iii) If Timothy Pine and/or Dennis Amaty shall cease to be involved in the daily operations as Consignor’s consignment agent and Consignee shall fail within sixty (60) days to replace such departed individual(s) with person(s) having equivalent management and industry experience and acceptable to Consignor; (iv) a petition against Consignee shall be filed in a proceeding or case under the Federal bankruptcy laws or other Federal insolvency laws as now or hereafter constituted, or any other applicable Federal bankruptcy, insolvency or other similar law, or a case is commenced under any such Federal law to appoint a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) of Consignee or for all or substantially all of its property, or to wind-up or liquidate its affairs, and in any of such cases, such petition or case shall not be withdrawn or dismissed within sixty (60) days thereafter; (v) any judgment, decree or order for relief shall be entered by a court having jurisdiction in respect of Consignee in an involuntary case under any applicable state bankruptcy, insolvency or other similar law, or appointing a sequestrator (or similar official) of Consignee or for all or substantially all of its property, or ordering the winding-up or liquidation of its affairs and any such judgment, decree or order shall continue unstayed and in effect for a period of sixty (60) days after the entry thereof; (vi) Consignee shall commence a voluntary case under the Federal bankruptcy laws, as now constituted or hereafter amended, or any other applicable Federal or State bankruptcy, insolvency, corporate winding up or reorganization provisions or other similar law, or Consignee shall consent to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other similar official) of Consignee or for all or substantially all of its property, or Consignee shall make any assignment for the benefit of creditors or shall generally fail to pay its debts when due; or (vii) a material adverse change shall have occurred in Consignee’s business or financial condition which, in Consignor’s opinion, would have a material adverse effect on Consignee’s ability to perform its obligations under this Agreement.

Information Rights

Allocation of Income, Expense, Gain and Loss

Income, expense, gain and loss generally will be allocated to the Members and the Manager in a manner consistent with the proceeds from the Issuer’s sale of Engine Parts.

Information Rights

So long as a Member holds Preferred Interests in the Issuer, the Member will receive standard financial reporting, including monthly, year-to-date, and annual income, balance sheet, and cash flow statements as compared to the current budget and compared to results for the comparable period for the prior year, and annual audited financial statements and his/her/its Schedule K-1 to the Issuer’s tax return.

Other Matters

Indemnification

The Issuer will indemnify the Manager, its principals, employees, officers, directors, and agents, as well as its advisors, accountants and attorneys to the fullest extent permitted by law against any cost, expense, judgment or liability reasonably incurred by or imposed upon it in connection with any action, suit or proceeding, except in the case of fraud or gross negligence.

Withdrawals & Transfers

Except as provided in the Operating Agreement, no Member may withdraw as an investor or sell, assign or transfer its referred Interests in the Issuer. The Preferred Interests are also subject to resale restrictions under applicable securities laws.

Manager Fees

The Manager Fees are paid monthly from income received by the Issuer to the CFG as Manager from the sale of Engine Parts to the extent that the Tier 1 Preferred Return has been paid in full up to the time the Manager Fee is paid. 50% of the manager Fee (2.0%) will be paid to BMAS for ongoing Engine Part monitoring and other Issuer support Additionally, the Manager has a yearly allowance of up to $5,000 for reasonable out of pocket expenses, such as the preparation of tax returns, Schedules K-1, securities filings, and banking fees. In the event that a majority in interest of the Members request audited financial statements, this allowance may be increased to cover such audit if the $5,000 allowance is insufficient.

Placement Agent Fees and Acquisition Fee

The Issuer is offering the Preferred Interests to investors through Carolina Financial Securities, LLC (the “Placement Agent”), a 75% subsidiary of CFG, on a “best efforts” basis and the Issuer shall pay the Placement Agent a five percent (5.0%) cash placement fee based upon the amount of capital raised in this offering. Additionally, BMAS will be paid an Acquisition Fee of three and one half percent (3.5%) percent of the total inventory lot purchase price (the “Acquisition Fee”). Additionally, CFG will receive 10% from any further cash distributions by the Issuer after Investors have received all the Tier 1 Preferred Return (12% cumulative, but not compounding) and the Investor’s Unreturned Capital equals $0 and 20% after the Tier 2 Preferred Return.

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Risk Factors

AN INVESTMENT IN THE SECURITIES IS SPECULATIVE AND IS SUITABLE ONLY FOR PERSONS OF SUBSTANTIAL FINANCIAL MEANS WHO CAN AFFORD TO LOSE THEIR ENTIRE INVESTMENT AND HAVE NO NEED FOR LIQUIDITY IN THIS INVESTMENT. AN INVESTMENT IN THE SECURITIES OFFERED HEREIN SHOULD NOT BE A MAJOR PART OF YOUR INVESTMENT PORTFOLIO. YOU SHOULD REVIEW THE RISKS OF THIS INVESTMENT WITH YOUR LEGAL OR FINANCIAL ADVISORS. THIS OFFERING INVOLVES SUBSTANTIAL RISKS. THESE RISKS INCLUDE, BY WAY OF ILLUSTRATION AND NOT LIMITATION, THE FOLLOWING: RISKS ASSOCIATED WITH THE FACT THAT THE MEMBERS WILL NOT HAVE THE RIGHT TO VOTE ON OR APPROVE MOST DECISIONS REGARDING THE BUSINESS AND, AS SUCH, WILL NOT BE IN CONTROL OF THEIR INVESTMENTS IN SECURITIES OF THE COMPANY AND THE BUSINESS; AND THE OPERATION OF THE COMPANY INVOLVES TRANSACTIONS BETWEEN THE COMPANY, THE MANAGER, AND THE OWNER WHICH MAY INVOLVE CONFLICTS OF INTEREST.
THE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT, AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM, AND WITH THE PRIOR CONSENT OF THE MANAGER, WHICH CONSENT MAY BE WITHHELD IN THE MANAGER’S SOLE DISCRETION. PROSPECTIVE INVESTORS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. SOME OF THE INFORMATION IN THIS PRESENTATION MAY CONTAIN “FORWARD-LOOKING” STATEMENTS. YOU CAN IDENTIFY SUCH STATEMENTS BY THE USE OF FORWARD-LOOKING WORDS SUCH AS “MAY,” “ANTICIPATE,” “ESTIMATE,” “COULD,” “SHOULD,” “WOULD,” “EXPECT,” “BELIEVE,” “WILL,” “PLAN,” “INTEND,” “PROJECT,” “PREDICT,” “POTENTIAL” OR OTHER SIMILAR WORDS. THESE TYPES OF STATEMENTS DISCUSS FUTURE EXPECTATIONS OR CONTAIN PROJECTIONS OR ESTIMATES WHICH MAY OR MAY NOT HAPPEN AS PROJECTED HEREIN. WHEN CONSIDERING SUCH FORWARD-LOOKING STATEMENTS, YOU SHOULD KEEP IN MIND THE RISK FACTORS LISTED BELOW, WHICH COULD CAUSE THE COMPANY’S ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTAINED IN ANY FORWARD-LOOKING STATEMENT.
YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS IN CONJUNCTION WITH THE OTHER INFORMATION ABOUT THE SECURITIES BEFORE PARTICIPATING IN THIS OFFERING. THE RISKS DISCUSSED IN THIS PRESENTATION CAN ADVERSELY AFFECT THE COMPANY’S OPERATION, OPERATING RESULTS, FINANCIAL CONDITION AND PROSPECTS FOR SUCCESS. THIS COULD CAUSE THE VALUE OF THE SECURITIES OFFERED HEREIN TO DECLINE AND COULD CAUSE YOU TO LOSE PART OR ALL OF YOU INVESTMENT. THE RISKS AND UNCERTAINTIES DESCRIBED BELOW ARE NOT THE ONLY ONES THE COMPANY FACES BUT DO REPRESENT THOSE RISKS AND UNCERTAINTIES KNOWN TO THE COMPANY AND THAT THE COMPANY BELIEVES ARE MATERIAL TO THE COMPANY’S FUTURE OPERATING PERFORMANCE.

A. Investment Related Risks

Speculative Investment

The Securities being offered should be considered a speculative investment. The ability of the Company to achieve its objectives may be determined by factors beyond its control that cannot be predicted at this time. Consequently, there can be no assurance that the Company’s efforts to continue its business operations will prove to be sufficient to enable the Company to generate the funds required to make distributions. Anyone investing in the Securities should do so only if they are financially able to sustain the loss of their entire investment and should recognize that such a possibility exists.

Dependence on the Airline Industry

The Issuer’s business is dependent on the airline industry’s need to repair its aircraft. If the airline industry’s need to have its aircraft repaired were greatly diminished, it could affect the Issuer’s ability to sell parts to third party maintenance, repair, and overhaul companies.

No Secondary Market for the Securities

As this security is a private transaction, there is currently no public market for the securities being offered herein. These Securities are not a publicly registered securities and will have no secondary sale liquidity.

Limited Operating History

Dash 3 Funding, LLC is an SPV founded for this transaction. While the management team and consignee are well established, there has not yet been a proof of concept for this transaction.

B. Industry-Related Risks

Demand related

Any substantial decline in the demand for products sold by the Issuer (such as parts related to specific, older airframes) including, but not limited to, the introduction of new technology or airframe types, may cause a decline in the market value of Issuer’s product and negatively impact the Issuer’s financial performance.

Price Volatility of Commercial Aircraft Parts

Pricing for commercial aircraft parts varies significantly depending on whether the certification for a given part has been properly maintained. While the consignee has represented that it has verified such certification and that its record systems are adequate regarding parts certifications, the maintenance of such documentation is critical to the value of the Engine Parts.

Pandemic and Epidemic Related Risks

The rapid spread of a contagious illness such as the coronavirus (COVID-19), or fear of such an event, can have a material adverse effect on the demand for worldwide air travel and therefore have a material adverse effect on the Issuer’s business and results of operations. Similarly, travel restrictions or operational issues resulting from the rapid spread of contagious illnesses may have a material adverse effect on the Issuer’s business and results of operations.

Quality & Safety of the Products

Success for the Issuer’s business depends, in part, on the quality and safety of the inventory lot products. If the products are found to be defective or unsafe, or if they otherwise fail to meet consumer’s standards, relationships with customers or consumers could suffer.

Regulatory Oversight

The Issuer’s projects are subject to international, federal, and state laws, as well as agencies including, but not limited to, the Department of Transportation and the Federal Aviation Administration. As with all airline-related industries, the Issuer’s projects are expected to have a variety of regulatory oversight as development proceeds. The Issuer and consignee intend to conduct their business activities in a compliant manner and in accordance with all applicable laws but may still be subject to accidents or other unforeseen events which may compromise its performance, and which may have adverse financial implications.

Changes in Laws, Regulations and Policies

Changes in the laws, regulations and policies including the interpretation or enforcement thereof, that are germane to the Issuer’s industry, can affect its business including changes in accounting standards, tax laws, data privacy as well as anti-corruption laws. Additionally, as the Consignee and issuer continue to sell and expand its international business, it may be subject to laws relating to selective distribution, environmental or climate change laws, trade accords and customs regulations could adversely affect the Issuer’s distribution endeavors.

Competition

The Issuer through the consignee competes with other engine part supply companies in the industry. Competitors include companies that may have greater financial and other resources than the Issuer. Additionally, these competitors may use pricing or other strategies to prevent the Issuer from achieving its business development objectives. This may have a material adverse impact on the financial position and prospects of the Issuer.

Prolonged Periods of Stagnant or Weak Economic Conditions

As a result of the discretionary nature of air travel, the airline industry has been cyclical and particularly sensitive to changes in economic conditions. During periods of unfavorable or volatile economic conditions in the global economy, demand for air travel can be significantly impacted as business and leisure travelers choose not to travel, seek alternative forms of transportation for short trips or conduct business through videoconferencing.

Management-Related Risks

Limited Investor Participation in Operations

The Investors will have limited ability to participate in any manner in the management of the Issuer or its day-to-day decisions. Neither the Investors nor the Issuer will have the ability to participate in any manner in the management of the Consignee or its day-to-day decisions.

Reliance on Key Personnel

Due to the nature of this opportunity, the SPV, has a significant reliance on the Consignee, Broward, as it is the only distributor and seller of the SPV’s inventory parts.

D. Offering-Related Risks

Acceptance of Investors on a First-Come, First-Serve Basis

The Issuer reserves the right to accept or reject any proposed investment in its sole discretion. Subject to this discretion, it intends to accept investments on a “first-come, first-served” basis, with the consequence that Investors will be allocated a portion of the total Offering, based upon the amounts they have committed, in the order in which such commitments have been accepted. The Issuer is not required to accept all commitments tendered to it. There is no assurance, therefore, that your commitment will necessarily be accepted in whole or in part by it should it raise more or less funds than are needed to make its investments.

Possibility of Material Differences Between Projected and Actual Results

The financial projections contained in this Offering Summary and any supplements represent the Issuer’s estimated results of operations. The financial projections have been prepared upon the basis of assumptions and estimates which may differ from actual events and/or circumstances.

Reliance on Aspects of the Offering

Potential investors should not rely exclusively on one aspect of the security structure, such as experience of the consignee of the Issuer or the collateral value of its inventory, when making an investment decision in order to participate in this Offering.

E. Federal Income Tax Risks

Lack of Rulings and Opinions; Possibility of IRS Challenge of the Issuer’s Tax Position

The Issuer has not requested and will not request any tax ruling from the IRS regarding the tax consequences of the Issuer’s activities. Accordingly, there is no certainty as to the tax consequences of participating in the Securities. The Issuer has not sought or obtained a legal opinion with respect to the tax treatment of the offering proceeds or issuance of the Securities. Accordingly, Investors are urged to consult your own tax advisor with respect to the federal and state tax consequences arising from participation in this Offering.

Risk of Audit to Investors

There is a possibility that the IRS will audit the Issuer’s income tax returns. If the Issuer’s income tax returns are audited, your return might also be audited.

Future Federal Income Tax Legislation and Regulations

No assurance can be given that the current Congress or any future Congress will not enact federal income tax legislation that could adversely affect the tax consequences of participating in the Securities.

F. Other Risks

Unforeseen Risks

In addition to the above risks, businesses are often subject to risks not foreseen or fully appreciated by management. Prospective investors reviewing this Offering Summary should keep in mind other possible risks that could be important to the success of their investment in the Securities.

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Best Interests & Other Disclosures

Important Disclosures

These securities have not been registered with the Securities and Exchange Commission (the “SEC” or the “Commission”), or with any state securities commission or any other regulatory authority. The securities are being offered in reliance upon an exemption from the registration requirement of federal and state securities laws and cannot be resold unless the securities are subsequently registered under such laws or unless an exemption from registration is available. Neither the SEC nor any other agency has passed on, recommended or endorsed the merits of this offering (this “Offering”) or the accuracy or adequacy of these confidential offering documents (the “Offering Package”). Any representation to the contrary is unlawful.

These securities are offered through Carofin, LLC, Member of FINRA/SIPC. Carolina Financial Securities is an affiliate of Carofin and both Broker-Dealers are affiliates of Carolina Financial Group, LLC. You may learn more about the services we offer and the details surrounding such services through our Customer Relationship Summary. Documents have been prepared by Carolina Financial Securities and have been reviewed and approved by the management of the Company. The information contained herein has not been independently verified and is dependent on information provided by the Company to Carolina Financial Securities, LLC.

Our firms seek to present vital capital with meaningful investment opportunities through the fundamental analysis of the businesses we seek to finance. Such analysis is usually conducted through a First Principles approach.

When we provide you with a recommendation, we have to act in your best interest and not put our interest ahead of yours. At the same time, the way we make money creates some conflicts with your interests. You should understand and ask us about these conflicts because they can affect the recommendations we provide you. Here are some examples to help you understand what this means:

Proprietary Products: Our firms will often present investments that are only available though them, which may result in a higher placement fee. The Firms will receive the placement fee regardless of your investment performing as expected.

Our firms offer brokerage services to accredited investors, exclusively through the sale of private placements. the offerings we bring to market are carefully selected, and any recommendation you may receive from us will be limited to these offerings. Therefore, we may be unable to adequately compare the risks and benefits of the offerings we bring to offerings presented by other financial professionals. While our firms will often present new investments and discuss such investment’s risks and benefits with you, the ultimate authority to make such investment rests solely with you.

Our firms do not hold any investor cash or securities, and securities offered by us often have no easily assessable market value, so our firms will not monitor the market value of your investment on an ongoing basis. The investments we present often require a minimum investment of $5,000 for equity offerings and $10,000 for debt offerings.

Fees and costs may reduce any amount of money you make on your investments over time. Our firms are mostly compensated through placement fees, which are payable by the issuer, meaning that the firms will be compensated by receiving a percentage of the funds raised in an offering, regardless of the investment performing as expected. Such placement fee is usually between 3% and 7% (please find the specific Placement Fee for this offering in the “Placement Agent Fees” section of the “Security Terms”. Given that different investments have different placement fees, we may often have a conflict of interest when presenting these investments to you. The Firms’ bankers are often compensated by receiving a percentage of the placement fee, and may have their own conflict of interest when presenting you with offerings they structure.

The information contained herein is for informational purposes only and is not intended for further distribution. The information does not constitute a complete description of any investment or investment performance. This document is in no way a solicitation nor is it an offer to sell securities nor is it advice or recommendation regarding any investment. The information is not directed to any person who is not believed to qualify under the definition of an Accredited Investor under the rules of Regulation D of the 1933 Securities and Exchange Act. No security listed in this document or otherwise offered through Carolina Financial Securities, LLC or Carofin, LLC may be purchased without prior receipt of a complete Private Placement Memorandum or other official offer to sell.

Due diligence materials related to this Issuer and the Offering are available to you through Carolina Financial Securities’ affiliated marketplace, Carofin. If you have not received your login information to access Carofin.com, please contact your company representative to have access granted.

The Company will not offer, sell or issue any Securities in any jurisdiction where it is unlawful to do so or where laws, rules, regulations or orders would require the Company, in its sole discretion, to incur costs, obligations or time delays disproportionate to the net proceeds the Company will realize from such offers, sales or issuances. Neither this Offering Package nor any subscription agreement shall constitute an offer to sell or a solicitation of an offer to purchase any Securities in any jurisdiction in which such transactions would be unlawful.

Private placements are high risk and illiquid investments. As with other investments, you can lose some or all of your investment. Nothing in this document should be interpreted to state or imply that past results indicate future performance, nor should it be interpreted that FINRA, the SEC or any other securities regulator approves of any of these securities. Additionally, there are no warranties expressed or implied as to accuracy, completeness, or results obtained from any information provided in this document. Investing in private securities transactions bears risk, in part due to the following factors: there is no secondary market for the securities; there is credit risk; where there is collateral as security for the investment, its value may be imped if it is sold. Please see the Private Placement Memorandum (PPM), and the complete list of contents of this Offering Package for a more detailed explanation of the securities Summary of Terms, Investor Suitability Standards, Confidentiality, Securities Matters and Risk Factors.

Caution Regarding Forward-Looking Statements

Certain statements in this Summary Offering Material may be “Forward-looking” in that they do not discuss historical facts but instead note future expectations, projections, intentions, or other items relating to the future. We caution you to be aware of the speculative nature of forward-looking statements as these statements are not guarantees of performance or results.

Forward-looking statements, which are generally prefaced by the words “may,” “anticipate,” “estimate,” “could,” “should,” “would,” “expect,” “believe,” “will,” “plan,” “project,” “intend,” and similar terms, are subject to known and unknown risks, uncertainties and other facts that may cause our actual results or performance to differ materially from those contemplated by the forward-looking statements.

Although these forward-looking statements reflect our good faith belief based on current expectations, estimates and projections about, among other things, the industry and the markets in which we operate, they are not guarantees of future performance. Whether actual results will conform to our expectations and predictions is subject to several known and unknown risks and uncertainties, including risks and uncertainties discussed in this Summary Offering Material.

Consequently, all the forward-looking statements made in this Summary Offering Material are qualified by these cautionary statements and there can be no assurance that the actual results anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, us or our business or operations. Risks, uncertainties, and factors that could cause actual results to differ materially from those projected are discussed in the “Risk Factors” section of this Summary Offering Material. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Considering these risks, uncertainties, and assumptions, the forward-looking events discussed in the Summary Offering Material might not occur.

Internal Rate of Return Considerations

Internal Rate of Return (IRR) is the discount rate at which the net present value of costs of the investment equals the net present value of the potential benefits of the investment. The formula for IRR is:

IRR Calculation

Where:

T = Holding Period

t = Each period

CFt = Cash Flow for each period

IRR = Internal Rate of Return

Although the Company’s projections are created from historical financial figures and expected growth, IRR projections are “forward-looking” in that they consider future expectations, projections, intentions, or other items relating to the future. We caution you to be aware of the speculative nature of forward-looking statements as these statements are not guarantees of performance or results. A higher IRR usually represents higher risk.

Any IRR figure in this document shall be used solely as a contractual trigger in the Company’s operating agreement, not as a projection or guarantee of performance.

State Securities Laws

The Company will not offer, sell or issue any securities in any jurisdiction where it is unlawful to do so or where laws, rules, regulations or orders would require the Company, in its sole discretion, to incur costs, obligations or time delays disproportionate to the net proceeds the Company will realize from such offers, sales or issuances. Neither this Offering Package nor any subscription agreement shall constitute an offer to sell or a solicitation of an offer to purchase any securities in any jurisdiction in which such transactions would be unlawful.