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Shelly they stole our idea.
https://fantex.com/
LMAO at the Risks section though. There's gotta be a better way to do this as a fantasy game.
Risks Associated with Fantex Inc.’s Business
Fantex Inc.’s ability to implement its business strategy is subject to numerous risks and uncertainties. Fantex faces many risks inherent in its business generally. You should carefully consider all of the information set forth in this prospectus and, in particular, the information under the heading ‘‘Risk Factors,’’ prior to making an investment in Fantex stocks. These risks include, among others, the following:
Risks Relating to Fantex Limited Operating History, Financial Position and Capital Needs
Fantex has incurred significant losses since its inception and anticipate that it will continue to incur losses in the future.
Fantex has a very limited operating history, which may make it difficult for you to evaluate the success of its business to date and to assess its future viability. Fantex’s business model also requires us to make substantial upfront payments to Fantex’s contract parties in exchange for rights to future payments.
Fantex may not receive the cash amounts that it expect, or any at all, from any current or future brand contracts and it may never generate sufficient income to become profitable.
Fantex’s business strategy depends in large part on its ability to build a robust platform of brands by entering into additional brand contracts. Fantex may not be able to enter into additional brand contracts in the future, or enter into the number of additional brand contracts that Fantex anticipates would be necessary to support its business model.
Fantex will need to obtain additional funding to acquire additional brands and it may also need additional funding to continue operations. If Fantex fail to obtain the necessary financing, or fail to become profitable or are unable to sustain profitability on a continuing basis, then Fantex may be unable to continue its operations at planned levels and Fantex may be forced to significantly delay, scale back or discontinue its operations.
Risks Relating to Fantex’s Brand Contracts and Fantex’s Business
Fantex’s principal source of cash flow for the foreseeable future will be derived from Fantex’s brand contracts.
Fantex has very limited experience managing brand contracts and Fantex has very limited historical performance data about its brand contracts.
Fantex’s cash received under its brand contracts will depend upon the continued satisfactory performance of the related contract party, and Fantex does not have any rights to require the contract party to take any actions to attract or maintain or otherwise generate brand income.
The contract party is neither Fantex’s affiliate, nor a director, officer or employee of Fantex’s company and owes no fiduciary duties to us or any of its stockholders. The contract party has no obligation to enhance the value of the brand or disclose harmful information to the stockholders.
Profitability of Fantex’s brand contracts may also depend upon the contract party’s ability to attract and maintain endorsements and attract and maintain other brand income generating activities.
Brand income may decrease due to factors outside the control of the contract party, such as an injury, illness, medical condition or death of the contract party, or due to other factors such as public scandal or other reputational harm to the contract party. In any such event, Fantex does not maintain any insurance against such an event, and it is likely that the brand income with respect to such brand contract will not return to its prior levels or may cease completely.
The contract party or other third parties may refuse or fail to make payments to us under the brand contracts.
Fantex’s brand contracts are not secured by any collateral or guaranteed or insured by any third party other than the contract party, and you must rely on Fantex to pursue remedies against the contract party in the event of any default.
The brand contract does not restrict the contract party from incurring unsecured or secured debt, nor does it impose any other financial restrictions on the contract party.
The financial and other information that it obtains from the contract party or other third parties may be inaccurate and may not accurately reflect the true financial position of the contract party, and the risk of default on the brand contract may be significant and may be higher than it anticipates.
Fantex’s due diligence procedures may not reveal all relevant information regarding a targeted brand acquisition and may result in an inaccurate assessment of the projected value of an acquired brand.
The valuation of Fantex’s brand contracts and expected ABI requires us to make material assumptions that may ultimately prove to be incorrect. In such an event, it could suffer significant losses that could materially and adversely affect its results of operations.
Failure of a contract party to adequately protect their intellectual property could injure the value of the contract party’s brand.
Fantex’s cash received under brand contracts may fluctuate due to seasonality.
An economic downturn and adverse economic conditions may harm a contract party’s earning potential.
Fantex’s ability to increase the value of any of its brands may be limited and its investments in the promotion of any of its brands may cause the market of its stock to decline.
Confidentiality agreements with employees and others may not adequately prevent disclosures of its proprietary information and confidential information of the contract party.
Changes in government policy, legislation or regulatory interpretations could cause Fantex’s business operations or offerings of tracking stocks to become subject to additional regulatory or legal requirements (including insurance and other regulations) that may adversely affect its business operations and ability to offer additional tracking stocks.
The leagues, team owners, players associations, endorsement partners, elected officials or others may take actions that could restrict its ability or make it more costly for us to enter into future brand contracts.
Fantex is dependent on Fantex’s management team, and the loss of any key member of this team may prevent us from implementing its business plan in a timely manner, or at all.
Risks Relating to Each of Fantex’s Contract Parties
Fantex’s ability to increase the value of its brands may be limited and its investments in the promotion of such brands may cause the market value of its stock to decline.
The value of Fantex’s brands is dependent upon the performance of, and to a lesser extent, the popularity of its contract parties.
Contract parties in the NFL or other similar organization could be negatively affected by an NFL work stoppage.
Contract parties in the NFL or other similar organization could be negatively affected by current and future rules of the NFL or other similar organization, including rules and standards of personal conduct which, if violated, could lead to fines and/or suspension or a permanent ban from the NFL or other similar organization.
There could be a decline in the popularity of the NFL or other similar organization and/or the team on which the contract party plays in the NFL or other similar organization, or a decline in the contract party’s popularity.
A contract party could cease playing football in the NFL at any time due to illness, injury or death, if he is dropped from a team and unable to secure a new contract, if he incurs negative publicity or if he is suspended or banned from the NFL.
The profitability of a contract party’s brand contract is substantially dependent upon the contract party to enter into additional high value NFL player contracts and on his ability to successfully attract and retain endorsements during his playing career and thereafter significantly in excess of the amounts he has attracted historically and/or generate other brand income after his playing career. If a contract party does enter into additional high-value NFL player contracts, there is no guarantee that any portion of such contracts will consist of guaranteed money.
In general Fantex has limited historical data upon which to base its valuation and projections of a contract party’s future earnings potential.
A contract party may suffer from injury, illness or medical condition; any injuries, illness or medical conditions of a contract party may affect the cash received by Fantex under the brand contract.
Future negative publicity could damage a contract party’s reputation and impair the value of his brand.
It is difficult to estimate with precision the projected future earnings of a contract party in football, football related activities, and other brand income because such estimation is necessarily based on future events that may or may not occur and that could change based on a number of factors that are hard to control. As a result, it is difficult to predict an accurate return on investment or rate of return in an investment in Fantex tracking stocks.
Risks Relating to Fantex’s Tracking Stock Structure
There are numerous risks you should be aware of with respect to how it intends to structure Fantex’s business and its proposed tracking stock structure.
A specified portion of the ABI associated with each of Fantex’s brand contracts will be attributed to its platform common stock rather than the associated tracking stock. Therefore each of Fantex’s tracking stocks will only partially reflect the economic performance of the associated brand contract and other assets and expenses of the associated tracking stock.
As a series of Fantex’s common stock, each of Fantex’s tracking stocks will be exposed to additional risks associated with its company as a whole, including any individual tracking stock that exists at the time of the offering or that it may establish and issue in the future.
Fantex could be required to use assets attributed to one tracking stock to pay liabilities attributed to another tracking stock.
The market price of Fantex’s tracking stocks may not reflect the intrinsic value or performance of the associated brand contract.
The market price of Fantex’s tracking stocks may be more volatile than other publicly traded common stock because of its unique capital structure.
Fantex’s capital structure may create conflicts of interest for its board of directors and management, which could have a material adverse effect on the market value of any of its tracking stocks.
Fantex’s parent and certain directors of its parent, as holders of its platform common stock and other series of its common stock, will have control over key decision making as a result of their control over a majority of its voting stock.
Ownership of Fantex’s platform common stock by its parent company and any of its officers or directors, may create, or appear to create, conflicts of interest with holders of its tracking stocks.
Fantex’s officers and directors may have a conflict of interest or appear to have a conflict since almost all of its officers are also officers of Fantex Holdings.
Fantex’s capital structure may decrease the amounts available for the payment of dividends to holders of its tracking stocks.
You may not have any remedies under Delaware law if the actions of its directors or officers adversely affect the market value of any of its tracking stocks.
Fantex may dispose of assets of the Fantex Series without your approval.
Holders of any of Fantex’s tracking stocks may not be adequately compensated if Fantex sells all or substantially all of the assets of the associated tracking stock.
Holders of any of Fantex’s tracking stocks may receive less consideration upon a sale of the assets attributed to the associated tracking stock than if that tracking stock were a separate company.
In the event of a liquidation of Fantex, holders of any of Fantex’s tracking stocks will not have a priority with respect to the assets attributed to the associated tracking stock remaining for distribution to stockholders.
Fantex’s board of directors may, in its sole discretion, elect to convert any of Fantex’s tracking stocks into Fantex’s platform common stock following the two-year anniversary of the filing of a certificate of designations creating such tracking stock, thereby changing the nature of your investment and possibly diluting your economic interest in Fantex or creating market uncertainty regarding the nature of your investment, any of which could result in a loss in value to holders of its tracking stocks.
Risks Relating to this Offering and the Offering Process
Fantex Series stocks are not a ‘‘covered security,’’ or otherwise exempt from the ‘‘blue sky’’ securities laws governing sales and purchases of Fantex Series Fantex Securities in each of the fifty states, and therefore Fantex must register in each state in which offers and sales will be made.
State securities laws may limit secondary trading, which may restrict the states in which and conditions under which you can sell shares of Fantex Securities.
Fantex expects that Fantex Inc.’s Initial public offerings will primarily attract individual investors, and therefore Fantex’s initial public offering price may not be sustainable if and when trading begins.
If you purchase shares of Fantex Series in an IPO your interest will be diluted to the extent of the difference between the initial public offering price per share of Fantex Series and attributed net tangible book value per share of Fantex Series immediately after this offering.
Fantex intends to issue additional tracking stocks, which would reduce then-existing investors’ percentage of ownership in Fantex and may dilute its share value.
Transaction costs for trades on the FBS alternative trading system, or ATS, could decrease the liquidity of your investment in Fantex Series.
Fantex compliance burdens and costs will be significant as a result of operating as a public company, particularly as a result of Fantex tracking stock structure. Fantex management will be required to devote substantial time to compliance matters.
If Fantex Series stocks is not treated as a class of common stock of Fantex, adverse federal income tax consequences will result.
Any Fantex Series may be adversely impacted by any non-performing brand contracts, whether or not such brand contracts are included in the assets attributed to any particular brand contract.
Risks Relating to Our Affiliate, FBS, and the FBS ATS
To own or trade Fantex Series, you must have a brokerage account with FBS and Fantex Series will be traded in the secondary market only through the FBS ATS.
The securities settlement process at FBS exposes it to certain risks specific to broker-dealers that clear their own trades, which include greater sanctions for errors vis-a-vis brokers that outsource these functions to third-party providers.
The FBS website and the FBS ATS are each operated on computer hardware that is currently located in a third-party Web hosting facility and there may be interruptions or delays in service that are out of FBS’s or the third party’s control, which may result in an inability to sell your shares.
If security measures at the FBS website and the FBS ATS are breached and unauthorized access is obtained to a customer’s data, the FBS ATS may be perceived as not being secure and customers may curtail or stop trading on the platform.
Risks Relating to the Latitude Given to Fantex Board and Fantex Holdings
Fantex’s board of directors and Fantex Holdings will have extraordinary latitude to make decisions without your consent, and any of these decisions may have a material and adverse effect on your investment. Fantex’s board of directors will make any such decision in accordance with its good faith business judgment that such decision is in the best interests of its company and the best interests of all of its stockholders as a whole. In certain circumstances, decisions of Fantex’s board of directors may also be subject to the approval of the conflicts committee. This may mean that Fantex’s board of directors may make a decision that is not necessarily in your best interest but that may be in the best interests of all of its stockholders as a whole. Significant decisions that may be made by Fantex Holdings or its board of directors without your consent include the following:
Voting. Holders of shares of Fantex’s tracking stocks and Fantex’s platform common stock are each entitled to one vote per share of such stock. Following the consummation of this offering, Fantex Holdings, Fantex’s parent company, will hold all 100,000,000 outstanding shares of Fantex’s platform common stock, and thus will hold substantially all of the voting power of Fantex’s outstanding common stock. As a result, Fantex’s parent, Fantex Holdings will have control over key decision making as a result of their control over a majority of Fantex’s voting stock, including, for example, election of Fantex’s board of directors and other major stockholder decisions, such as a whether or not to enter into a change of control of the Company.
Conversion. Fantex’s board of directors may, in its sole discretion, elect to convert any of its tracking stocks into its platform common stock following the two-year anniversary of the filing of a certificate of designations creating such tracking stock, thereby changing the nature of your investment and possibly diluting your economic interest in its company, which could result in a loss in value to holders of its tracking stocks.
Dividends. Fantex’s board of directors is permitted, but not required, to declare and pay dividends on its platform common stock or any of its tracking stocks. Fantex’s board of directors has discretion to declare a dividend on any series of common stock without declaring a dividend on any other series of its common stock, but not in excess of the available dividend amounts for each series. Fantex intend to pay cash dividends from time to time out of available cash for each tracking stock equal to an amount in excess of 20% of the ‘‘available dividend amount’’ for such tracking stock. Fantex’s board of directors may change its dividend policy at any time and from time to time. However, Fantex’s board of directors will not in any event change the definition of ‘‘available dividend amount’’ for any series of its common stock or declare dividends on any series of its common stock in excess of the ‘‘available dividend amount’’ for that series.
Sale of Brands. Fantex’s board of directors may in its discretion sell all or substantially all of the assets of a tracking stock. If Fantex do so (but not in connection with a sale of Fantex’s company as a whole), Fantex’s board of directors has the discretion to either pay a dividend to holders of the related tracking stock, redeem shares of the related tracking stock, convert the outstanding shares of the related tracking stock into platform common stock following the two-year anniversary of the filing of a certificate of designations creating such tracking stock, or they may choose any combination of the foregoing (however, they must choose one of these options). ---
"though time has passed, im still the future" (c) black thought
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