Venu Holding Corp

Venue-Related Properties

Venu indirectly owns properties through certain of its subsidiaries or controlled entities. The table below summarizes Venu’s portfolio of real estate as of the date of this Annual Report, indicating which of subsidiaries or entities owns each property. Venu is also party to certain agreements by which it (directly or through a subsidiary) closed upon and acquired real estate in Broken Arrow, Oklahoma (related to the Sunset at Broken Arrow), McKinney, Texas (related to the Sunset at McKinney), and El Paso, Texas (related to the Sunset at El Paso).

Subsidiary Owner · Size and Location · Status and Operations

SHC · 4.98 acres in Colorado Springs, CO · Site where Roth’s, Brohan’s, and NHC operate; leased from SHC to each of Roth’s and NHC

Trust · 9.41 acres in Colorado Springs, CO · Site where Ford Amphitheater is located; leased to Sunset pursuant to a ground lease

NLRE · 1.05 acres in Colorado Springs, CO · Vacant land open for development next to Ford Amphitheater

HIA · 1.5 acres in Colorado Springs, CO · Site where BBST restaurant operates; leased from HIA to BBST

HIA · 3.2 acres in Colorado Springs, CO · Site where BBP indoor music hall operates; leased from HIA to BBP

GAHIA · 1.7 acres in Gainesville, GA · Site where BBP GA indoor music hall and BBST GA restaurant operate

MK · 46 acres in McKinney, TX · Site where The Sunset Amphitheater in McKinney is being constructed

BA · 13 acres in Broken Arrow, OK · Site where The Sunset Amphitheater in Broken Arrow is being constructed

EP · 20 acres in El Paso, TX · Site where The Sunset Amphitheater in El Paso is to be constructed

Centennial · 6.4 acres in Centennial, CO · Site where BBST restaurant and BBP concert and event venue in Centennial are to be constructed

Lease Obligations

Venu or its subsidiaries currently lease facilities as follows:

● · BBST CS LLC leases the property where BBST CO operates from HIA, a majority-owned subsidiary of Venu. The lease is structured as an NNN lease with annual rents of $441,190. Base rent increases by 10% every five years through rent escalators in the lease. The initial term of the lease is ten years with one, ten-year renewal option, which will give Venu the ability to extend the lease on identical terms and control the property for up to 20 years.

● · BBP LLC leases the property where BBP CO operates from HIA. The lease is structured as an NNN lease with annual rents of $90,000, subject to specified rent adjustments every five years. The initial term of the lease is ten years with two, five-year renewal options, which will give Venu the ability to extend the lease on identical terms and control the property for up to 20 years.

● · Roth’s Sea & Steak LLC and NHC LLC each lease the property where Roth’s, Brohan’s, and NHC operate from SHC, a majority-owned subsidiary of which Venu has full voting control. Each lease is structured as an NNN lease with aggregate annual rents under both leases equal to $2.0 million. Under each lease, base rent will increase by 10% every five years throughout the initial 20-year lease term. The tenant will have four, five-year renewal options to extend the lease on identical terms.

● · Venu leases its principal executive office in Colorado Springs, Colorado from a third party pursuant to a lease that was assumed from the prior tenant and expires on November 29, 2029. Annual rent payments are $230,698, increasing by 1.3% annually.

● · BBST GA LLC and BBP GA LLC each lease the property where BBST GA and BBP GA operate from GA HIA, a controlled subsidiary. In each case, the initial term of the lease is ten years with four, five-year renewal options, which will give Venu the ability to extend the lease under identical terms and control the property for up to 30 years. For the first five years of the initial term of the lease, BBST GA LLC and BBP GA LLC must pay GA HIA an annual base rent of $641,410 and $191,590, respectively.

● · Pursuant to a ground lease, The Sunset Amphitheater LLC leases the property on which Ford Amphitheater is operated from Notes CS I MT, LLC a wholly owned subsidiary of Venu (and the “master tenant” for that property). The ground lease is for a 25-year term and provides for annual base rent of $3,222,000 (subject to escalation) which is paid monthly. The ground lease is a triple net lease. The Sunset Amphitheater LLC is also a party to an operations lease with respect to this same property. That operations lease and a corresponding operations sublease is generally described above under the subheading “Venu’s Subsidiaries and Properties.”

● · Pursuant to a ground lease, Notes Live Real Estate, LLC leases the parking lot on which the Ford Amphitheater is operated from a third-party. The ground lease is structured as an NNN lease with an option to re-purchase the parking lot within the first three years at a fixed price and annual base rent equal to $1,050,00. Base rent will increase by 2.5% every year throughout the 20-year lease term.

Public-Private Partnerships

For a description of the public-private partnerships that we have entered into in connection with the development of venues on our properties, see “Business – Venu’s Subsidiaries and Properties – Public-Private Partnership Obligations” in Item 1 above.

• Sunset at El Paso, LLC (“EP”) Colorado⁴
• Sunset at Houston in Webster, LLC (“Sunset Houston”) Colorado⁴
• Sunset at McKinney, LLC (“MK”) Colorado⁴
• Sunset at Mustang Creek, LLC (“MC”) Colorado⁴
• Venu 280, LLC (“Artist 280”) Colorado⁴
• Venu Income, LLC (“Income”) Colorado⁴
• Venu LuxeSuite Holdings, LLC (“Luxe”) Colorado⁴
• Venu Presents LLC (“Venu Presents”) Colorado⁴
• Venu VIP Rides, LLC (“Rides”) Colorado⁴

• Venu has not finalized certain plans and specifications for many of its proposed new venue locations, and as a result Venu’s costs may be higher than anticipated, resulting in possible additional capital requirements, additional debt, or less favorable operating results than projected.
• Venu may suffer project delays, increased costs, and financial losses if city councils or other local governmental bodies oppose Venu’s land-purchase and venue-construction proposals or reject purchase and development agreements that Venu has negotiated with other regulatory bodies within a given city.
• Potential development and construction delays could cause Venu’s estimate of future income, expenses, and development costs to be inaccurate.
• The success of Venu’s business operations depends in part on its ability to acquire, develop, lease, and maintain live-music venues, and if it is unable to do so on acceptable terms, or at all, its results of operations could be adversely affected.
• Venu’s reliance on third-party operators to manage and operate Ford Amphitheater and future amphitheater locations exposes Venu to risks, including profit sharing, limited operational control, non-compete restrictions, indemnification obligations, and potential disruptions from the termination or renewal of operating agreements.
• If Venu fails to execute its business strategy, which includes identifying, acquiring, and then developing new restaurants, amphitheaters, and entertainment venue locations, and opening locations that are profitable, Venu’s business could suffer.
• Expansion into new geographic markets may present increased risks due to relative unfamiliarity with these markets.
• The catastrophic loss of a facility could adversely affect business.
• Venu’s operational costs may be greater than projected due to factors beyond Venu’s control that slow project development and may adversely impact Venu’s profitability.
• Venu’s restaurants and live-music venues face intense competition, and if Venu is unable to continue to compete effectively, its business, financial condition, and results of operations would be adversely affected.
• Venu may face challenges in building name recognition, developing its reputation, and protecting its brand and reputation from adverse events that may not be within Venu’s control, which could adversely impact its expansion efforts, its operating results, and its ability to attract talented performers, generate audience enthusiasm, sell tickets, and generate revenue from its venues.
• The entertainment business in which Venu operates is highly sensitive to customer tastes. The success of Venu’s business depends on Venu’s (and its contractual partners’) ability to attract popular artists and other live events to its venues. Venu and its partners may be unable to book events that generate demand, or anticipate or respond to changes in consumer preferences, which may result in decreased attendance at concerts and events hosted at Venu’s venues.
• Venu’s success depends, in significant part, on entertainment and leisure events and economics, and other factors adversely affecting such events could have a material adverse effect on our business, financial condition, and results of operations.
• Venu’s business depends on discretionary consumer and corporate spending, which may be impacted by market volatility and challenging economic conditions.
• Portions of Venu’s business are subject to seasonal fluctuations, and its operating results and cash flow likely will vary from period to period.
• Poor weather adversely affects attendance at live music events, which could negatively impact Venu’s financial performance from period to period.
• There is a risk of personal injuries and accidents in connection with live music events, which could subject Venu to personal injury or other claims and increase expenses, as well as reduce attendance at its live music events, causing a decrease in revenue.
• The sale of food and prepared food products for human consumption involves a risk of injury to customers.
• The price and availability of food, ingredients, retail merchandise, transportation, distribution, and utilities used by Venu’s venues could adversely affect revenues and results of operations.
• Risks Related to Governmental Regulation
• Venu is subject to extensive governmental regulation and changes in these regulations and its failure to comply with them may have a material negative effect on the Company’s business and results of operations.
• Zoning and governmental approvals could hinder, delay, or completely inhibit Venu’s ability to own, develop, lease, and construct upon the real estate upon which it intends to build new restaurants and venues.
• Venu’s ability to meet labor needs while controlling costs is subject to external factors such as unemployment levels, minimum wage legislation, health care legislation, payroll taxes and changing demographics.
• The regulatory environment surrounding information security and privacy is increasingly demanding, with the frequent imposition of new and constantly changing requirements.
• Risks Related to Legal Matters
• Venu was previously engaged in litigation related to its construction and operation of Ford Amphitheater in a lawsuit that was ultimately dismissed. Venu is also currently facing litigation related to alleged unlawful noise pollution from Ford Amphitheater. Venu may face similar lawsuits in other municipalities where it is constructing, or plans to construct, Sunset Amphitheaters.
• We may, from time to time, be subject to legal proceedings, regulatory inquiries, investigations, or claims that could adversely affect our business.
• If certain communications used to market certain exempt offerings of membership interests conducted by the Company’s subsidiaries are deemed to have been an “offer” in violation of Section 5 of the Securities Act with respect to any public offering that the Company conducts, the Company may be subject to claims for rescission by investors that participate in the public offering.
• Any failure by Venu or its subsidiaries to comply with private offering exemption requirements could result in, among other things, rescission rights that could adversely affect the Company as a whole.
• Use of social media and influencers may adversely affect our reputation or subject us to fines or other penalties.
• Risks Related to Information Technology, Cybersecurity, and Intellectual Property
• A material disruption in information technology, network infrastructure, and telecommunication systems could adversely affect our business and results of operations.
• A privacy breach or cybersecurity attack could adversely affect Venu’s business and operations.
• Data security incidents and the unauthorized access, use, or disclosure of personal or sensitive information could adversely affect our business, damage our reputation, and give rise to liabilities.
• Failure to maximize or to successfully protect and assert Venu’s intellectual property rights could adversely affect business and results of operations.
• We may be subject to claims that we infringed upon certain third-party intellectual property rights, which, even if meritless, could be costly to defend and could adversely affect our business, results of operations, financial condition, and prospects.
• Risks Related to Our Officers, Directors, Affiliates, and Other Personnel
• Venu is involved in a number of related-party transactions.
• Venu is dependent on its key personnel and will need to hire additional personnel. Venu’s hiring abilities may be strained by current employment trends and economic conditions.
• Venu’s officers, directors, and principal shareholders collectively own a substantial portion of Venu’s Common Stock.
• Venu’s officers and directors do not owe a duty of exclusivity to Venu.
• Venu is dependent on attracting and retaining qualified employees while also controlling labor costs.
• General Risks Relating to Our Business and Operations
• Global economic and market uncertainty may adversely impact Venu’s business and operating results.
• Venu and its venues may be adversely affected by the occurrence of extraordinary events, such as terrorist attacks or disease epidemics.
• Health concerns, government regulation relating to the consumption of food products, and widespread infectious diseases could impact consumer preferences and negatively affect results of operations.
• Risks Related to Ownership of Our Common Stock
• The stock price of Venu’s Common Stock may be volatile or may decline regardless of our operating performance.
• We do not expect to pay dividends in the foreseeable future. Any return on investment may be limited to the value of Venu’s Common Stock.
• Widespread market volatility and fluctuations in the share price of Venu’s Common Stock could expose us to costly securities litigation.
• Our ability to use our net operating loss carry-forwards and certain other tax attributes may be limited.
• Our Articles of Incorporation permit “blank check” Preferred Stock, which can be designated by our Board of Directors without shareholder approval.
• Certain provisions in our Governance Documents could make a merger, acquisition, other change in control, tender offer, or proxy contest more difficult and may prevent shareholder attempts to replace or remove our current management, which could depress the trading price of our Common Stock.
• If securities analysts do not publish research or reports, or publish unfavorable research or reports, about us, our business, our Common Stock, or our market, the price of shares of our Common Stock and our trading volume could decline.
• Shareholders’ ownership interest may be diluted significantly through our efforts to obtain financing and satisfy obligations through issuance of additional shares.
• A significant portion of our total outstanding shares of Common Stock are eligible to be sold into the market in the near future, including pursuant to Rule 144, which could cause the market price of our Common Stock to drop significantly, even if our business is doing well.
• The financial and operational projections that we may make from time to time are subject to inherent risks.
• Risks Related to Being and Reporting as a Public Company
• If we fail to establish and maintain an effective system of internal control or disclosure controls and procedures are not effective, we may not be able to report our financial results accurately and timely or to prevent fraud. Any inability to report and file our financial results accurately and timely could harm our reputation and adversely impact the trading price of our Common Stock.
• We are an “emerging growth company” and a “smaller reporting company,” and the reduced disclosure requirements applicable to emerging growth companies and smaller reporting companies may make our Common Stock less attractive to investors.
• Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud.
• Future changes in financial accounting standards or practices may cause adverse and unexpected revenue fluctuations and adversely affect our reported results of operations.
• There are many risks associated with forward-looking information in this Annual Report.