LUXESTREET INVESTMENT OFFERING

Business Model Summary

Luxestreet offering will be backed by a diversified portfolio of luxury timepiece repurchase contracts, which will be held in a separate (SPV), LS Income 1 LLC. We structure each transaction as a true sale, rather than a loan, and purchase timepiece at an average LTV of 65% to asset liquidation value. Our strong underwriting team conducts a diligent multi level valuation and appraisal of each luxury timepiece. We retain legal title and physical custody of each timepieces. Storing them in an insured, bonded warehouse. Dealers remit a monthly custodian fee of 1.5% for the option to buy back the timepiece at par before the end of the 12-month term. We have an established network of more than 100 dealers.

Offering Summary
Investment Type Secured Promissory Note
Term 3 year
Issuer LS Income 1, LLC
Early redemption 1-year min, redemption after 90-day notice
Offering amount Upto $10 Million
Minimum $10K
Interest Rate 12% Annually; Paid Monthly
Investor Qualification Accredited Investors only
Use of Proceeds Provide capital to commercial Dealers
Risk Provisions
  • 10% First-Loss Provision
  • 2-month interest reserve
  • Collateralized by Assets
Issuer D&O Insurance Offering insured by TigerMark (AXA XL)
diamonds

Funding Gap and Market Opportunity

  • Luxury timepieces Inventory Financing Gap + Shift to Online Platforms = Opportunity
  • The luxury timepiece market is worth $48.5B and is growing at 2.98% CAGR annually*.
  • Prior to COVID-19, there were 15,000 underfunded commercial dealers.
  • Due to digital transition, timepieces dealers are shifting from Brick & Mortar locations to digital eCommerce platforms. COVID-19 has only accelerated this shift.
  • Online retailers are reporting +50% growth in online luxury timepiece sales for 1Q2020**.
  • We are exploring partnerships with auction houses and online marketplaces such as Chrono24 and Ebay.
  • Tightening banking regulations have limited capital availability to the industry.

INDUSTRY FUNDING GAP DESPITE GROWTH

  • $48.5B - Global Market for Luxury Timepieces
  • $24.3B - Global Market for Luxury Timepieces > $50,000/timepiece. Approx. 50% of Global Market
  • $9.8B - US Market of Luxury Timepieces > $50,000/timepiece. Approx. 40% of Global Market >$50,000/timepiece

(1) Source: Statistia

(2) Knight Frank. (2020, March). The Wealth Report - The Global Perspective On Prime Property & Investment

Luxury Alternative Asset Class

LuxeStreet offers investors exposure to investment-grade luxury timepieces, which as most alternative asset classes, have historically retained their value during economic downturns and are uncorrelated to traditional asset classes. Luxury timepiece have also had a very low annualized volatility of 3.1% since 2005, compared to 16.5% annual volatility of the S&P 500 over the same period.

Correlation Matrix Luxury timepiece S&P 500 Barclays AGG Bond Index S&P GSCI Index Annualized Volatility***
Luxury timepieces** 1.000 -0.048 -0.252 -0.032 3.1%
S&P 500 -0.048 1.000 -0.054 0.062 16.5%
Barclays AGG -0.252 -0.054 1.000 0.686 2.9%
S&P GSCI -0.032 0.062 0.686 1.000 15.3%

Luxury timepieces have provided stable returns over time, having appreciated an average of 5.0% per year since 2005.

Annual Returns by Asset Class

LUXESTREET INVESTMENT PROCESS

APPLICATION
  • Network members seeking capital initiate an online financing application on our website.
  • Our online application includes asset description, images, and certificate of ownership.
OFFER
  • We review the application including asset condition, make and model, previous ownership, and financing offer.
  • If favorable, we will reply with a preliminary offer to purchase the asset.
VALUATION
  • The asset is then insured and securely transported for physical inspection
  • Our online application includes asset description, images, and certificate of ownership.
FUNDING

Upon agreement, funding of 65% of asset’s value is released to Dealer

STORAGE
  • A final contract is executed, and funds are released
  • The asset and its legal title are held in an insured, bonded storage facility
OPTION FEE

LuxeStreet assesses a monthly 1.5% custodial fee for maintenance of the asset and a pre-arranged buyback provision.

BUYBACK
SCENARIO 1

Client exercises buyback option

SCENARIO 2

Client exchanges the asset for a new qualifying asset of equal or greater value

SCENARIO 3

Client does not maintain custodial fee payments, resulting in termination of the client's buyback option and Liquidation of the asset from our trusted network

Integrated Risk Mitigation

Collateral

Custody and clear title to each watch we purchase

Price Risk

We purchase watches as an average discount of 65% market value

Security

Watches are insured and stored in a guarded storage facility

Value Retention

Luxury watches are recession proof and performed well in 2008

Authenticity

We utilize internal bids and independent appraisers to value our watches

Uncorrelated

Luxury watches are uncorrelated to economic cycles and capital markets

Liquidity

We concentrate on only the most accepted, liquid watch brands

Diversification

We maintain a large, diverse pool of luxury assets

Interest Reserve

2-month interest reserve account

Escrow

Escrow Account currently in place

Loss
Provision

10% 1st Loss provision

Recourse

Established dealer network to quickly liquidate any watches that are not repurchased.
Brands we support
PP
AP
RM
rolex
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