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<A HREF="#bg10401a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>As filed with the Securities and Exchange Commission on February&nbsp;28, 2014  </B></FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B> Registration No.&nbsp;333-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </B></FONT></P>


<P style="font-family:times;"><FONT SIZE=1><B><BR>  </B></FONT></P>

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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=4><B>UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION<BR>  </B></FONT><FONT SIZE=1><B>Washington, D.C. 20549  </B></FONT></P>

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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=4><B>FORM S-1<BR>  </B></FONT><FONT SIZE=1><B>REGISTRATION STATEMENT<BR>
UNDER<BR>
THE SECURITIES ACT OF&nbsp;1933  </B></FONT></P>

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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=4><B>FANTEX,&nbsp;INC.<BR>  </B></FONT><FONT SIZE=1>(Exact Name of Registrant as Specified in Its Charter) </FONT></P>

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<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Delaware</B></FONT><FONT SIZE=1><BR>
(State or Other Jurisdiction of<BR>
Incorporation or Organization)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B> 7389</B></FONT><FONT SIZE=1><BR>
(Primary Standard Industrial<BR>
Classification Code No.)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B> 80-0884134</B></FONT><FONT SIZE=1><BR>
(I.R.S. Employer<BR>
Identification No.)</FONT></TD>
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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Fantex,&nbsp;Inc.<BR>
330 Townsend Street, Suite&nbsp;234<BR>
San Francisco, CA 94107<BR>
(415)&nbsp;592-5950</B></FONT><FONT SIZE=1><BR>
(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) </FONT></P>

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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Cornell "Buck" French<BR>
Chief Executive Officer<BR>
Fantex,&nbsp;Inc.<BR>
330 Townsend Street, Suite&nbsp;234<BR>
San Francisco, California 94107<BR>
(415)&nbsp;592-5950</B></FONT><FONT SIZE=1><BR>
(Name, address, including zip code, and telephone number, including area code, of agent for service) </FONT></P>

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<TD COLSPAN=3 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Copies to:</B></FONT></TD>
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<TD ALIGN="CENTER" style="font-family:times;"><BR><FONT SIZE=1><B>Patrick A. Pohlen, Esq.<BR>
Joel H. Trotter, Esq.<BR>
Jim Morrone, Esq.<BR>
Latham&nbsp;&amp; Watkins&nbsp;LLP<BR>
140 Scott Drive<BR>
Menlo Park, California 94025<BR>
(650)&nbsp;328-4600</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><BR><FONT SIZE=1><B> Mark P. Tanoury, Esq.<BR>
David G. Peinsipp, Esq.<BR>
Cooley&nbsp;LLP<BR>
3175 Hanover Street<BR>
Palo Alto, California 94304<BR>
(650)&nbsp;843-5000</B></FONT></TD>
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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Approximate date of commencement of proposed sale to the public:<BR>
As soon as practicable after this Registration Statement is declared effective.  </B></FONT></P>


<P style="font-family:times;"><FONT SIZE=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If any of the securities being registered on this form are offered on a delayed or continuous basis pursuant to Rule&nbsp;415 under the Securities Act of 1933,
as amended (the "Securities Act"), check the following box.&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="WINGDINGS">&#253;</FONT> </FONT></P>

<P style="font-family:times;"><FONT SIZE=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If this Form is filed to register additional securities for an offering pursuant to Rule&nbsp;462(b) under the Securities Act, check the following box and list
the Securities Act registration statement number of the earlier effective registration statement for the same offering.&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="WINGDINGS">&#111;</FONT> </FONT></P>


<P style="font-family:times;"><FONT SIZE=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If this Form is a post-effective amendment filed pursuant to Rule&nbsp;462(c) under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement for the same offering.&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="WINGDINGS">&#111;</FONT> </FONT></P>

<P style="font-family:times;"><FONT SIZE=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If this Form is a post-effective amendment filed pursuant to Rule&nbsp;462(d) under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement for the same offering.&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="WINGDINGS">&#111;</FONT> </FONT></P>

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<P style="font-family:times;"><FONT SIZE=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the
definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule&nbsp;12b-2 of the Exchange Act. (Check one): </FONT></P>
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<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>Large&nbsp;accelerated&nbsp;filer&nbsp;<FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>Accelerated&nbsp;filer&nbsp;<FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>Non-accelerated&nbsp;filer&nbsp;<FONT FACE="WINGDINGS">&#111;</FONT><BR></FONT> <FONT SIZE=1>(Do not check if a<BR>
smaller reporting company)</FONT></TD>
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<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>Smaller&nbsp;reporting&nbsp;company&nbsp;<FONT FACE="WINGDINGS">&#253;</FONT></FONT></TD>
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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>CALCULATION OF REGISTRATION FEE  </B></FONT></P>

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<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
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<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Title of Each Class of Securities<BR>
to be Registered</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Proposed Maximum<BR>
Aggregate Offering<BR>
Price(1)(2)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Amount of<BR>
Registration Fee</B></FONT><BR></TH>
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<TD style="font-family:times;"><p style="font-family:times;margin-left:3pt;text-indent:-3pt;"><FONT SIZE=1><B> </B></FONT><FONT SIZE=1>Fantex Series&nbsp;EJ Manuel Convertible Tracking Stock, par value $0.0001 per share</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>$5,237,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>$675</FONT></TD>
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<TD style="font-family:times;"><p style="font-family:times;margin-left:3pt;text-indent:-3pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Platform Common Stock, par value $0.0001 per share(3)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&#151;</FONT></TD>
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<DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1>(1)</FONT></DT><DD style="font-family:times;"><FONT SIZE=1>Estimated
solely for the purpose of computing the registration fee in accordance with Rule&nbsp;457(o) under the Securities Act.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1>(2)</FONT></DT><DD style="font-family:times;"><FONT SIZE=1>An
indeterminate amount of securities are being registered hereby to be offered solely for market-making purposes by specified affiliates of the registrant.
Pursuant to Rule&nbsp;457(q) under the Securities Act, no filing fee is required.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1>(3)</FONT></DT><DD style="font-family:times;"><FONT SIZE=1>Represents
up to 5,000,000 shares of platform common stock, par value $0.0001 per share, of Fantex,&nbsp;Inc. issuable upon the conversion of shares of
Fantex Series EJ Manuel Convertible Tracking Stock ("Fantex Series EJ Manuel"). The precise number of shares of platform common stock to be registered is not presently determinable because the
conversion ratio as of the conversion date, if any, of the Fantex Series EJ Manuel is not currently known. Pursuant to Rule&nbsp;457(i) under the Securities Act the registration fee is calculated on
the basis of the proposed offering price of the Fantex Series EJ Manuel alone because no additional consideration is to be received in connection with the future conversion, if any, of the Fantex
Series EJ Manuel into platform common stock. </FONT></DD></DL>
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<P style="font-family:times;"><FONT SIZE=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=1><B>The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall
file&nbsp;a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section&nbsp;8(a) of the Securities Act of 1933, as
amended, or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section&nbsp;8(a), may determine.  </B></FONT></P>
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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="bc10401_explanatory_note"> </A>
<A NAME="toc_bc10401_1"> </A>
<BR></FONT><FONT SIZE=2><B>  EXPLANATORY NOTE    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Registration Statement contains a prospectus relating to an offering of shares of our Fantex Series&nbsp;EJ Manuel. This
Registration Statement also contains a prospectus relating to sales of Fantex Series&nbsp;EJ Manuel in connection with certain market-making and other transactions that may be effected by FBS in the
secondary market following the completion of this offering. The complete prospectus relating to this offering of common stock (the Offering Prospectus) follows immediately after this Explanatory Note.
Following the Offering Prospectus are certain pages of the prospectus relating solely to such secondary market market-making transactions (referred to by us for convenience purposes as the
Market-Making Prospectus), including an alternate front cover page and alternate sections entitled "Use of Proceeds" and "Plan of Distribution." Each of such alternate pages has been marked "Alternate
Page for Market-Making Prospectus." A complete version of each of the Offering Prospectus and the Market-Making Prospectus will be filed with the Securities and Exchange Commission in accordance with
Rule&nbsp;424 under the Securities Act. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
have also filed with the SEC separate registration statements under the Securities Act in order to register each of the following tracking stocks: </FONT></P>
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<TH NOWRAP  ALIGN="LEFT" style="font-family:times;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:57pt;"><FONT SIZE=1><B>Title of Security

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<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Form </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Registration<BR>
File Number </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Referred to in this<BR>
Registration Statement as: </B></FONT></TH>
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<TD VALIGN="TOP" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Fantex Series Arian Foster Convertible Tracking Stock</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>Form&nbsp;S-1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>333-191772</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>Arian Foster Registration Statement</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Fantex Series Vernon Davis Convertible Tracking Stock</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>Form&nbsp;S-1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>333-192476</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>Vernon Davis Registration Statement</FONT></TD>
</TR>
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 <P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
prospectus does not constitute a part of any of the above listed registration statements. </FONT></P>

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<A HREF="#bg10401a_main_toc">Table of Contents</A> </FONT></P>

<P style="font-family:times;"><FONT SIZE=1>


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</FONT><FONT COLOR="#FF4040" SIZE=2><B>The information contained in this prospectus is not complete and may be changed. These
securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not
soliciting an offer to buy these securities in any state where the offer or sale is not permitted.</B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>


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</B></FONT><FONT COLOR="#FF4040" SIZE=1><B>SUBJECT TO COMPLETION, DATED FEBRUARY 28, 2014</B></FONT></P>


<P style="font-family:times;"><FONT SIZE=2><B> PRELIMINARY PROSPECTUS  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B>523,700 Shares  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B>
<IMG SRC="g981667.jpg" ALT="LOGO" WIDTH="135" HEIGHT="36">
  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=3><B>Fantex Series&nbsp;EJ Manuel Convertible Tracking Stock  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=3><B> and  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=3><B> Shares of Platform Common Stock issuable upon conversion of  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=3><B> the Fantex Series&nbsp;EJ Manuel Convertible Tracking Stock  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=3><B> $10.00 per share  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This is the initial public offering of Fantex Series&nbsp;EJ Manuel Convertible Tracking Stock, which we refer to as Fantex Series&nbsp;EJ
Manuel. This is also an offering of shares of our platform common stock into which the shares of Fantex Series&nbsp;EJ Manuel are convertible, and references in this prospectus to an offering of
shares of Fantex Series&nbsp;EJ Manuel shall be deemed also to mean a reference to the shares of platform common stock into which the shares of Fantex Series&nbsp;EJ Manuel are convertible. </FONT></P>

<P style="font-family:times;"><FONT SIZE=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
are offering hereby 523,700 shares of Fantex Series&nbsp;EJ Manuel at $10.00 per share on a best efforts, all or none basis. To the extent that there is insufficient interest in
shares of our Fantex Series&nbsp;EJ Manuel, this offering may be cancelled and no shares of our Fantex Series&nbsp;EJ Manuel would be sold to the public. Funds received from the offering will be
deposited into an interest bearing escrow account pending the closing of the offering in accordance with Rule&nbsp;15c2-4 of the Securities Exchange Act of 1934, as amended, or the Exchange Act. </FONT></P>

<P style="font-family:times;"><FONT SIZE=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
tracking stock brands are not separate legal entities and cannot issue securities. Instead, our Fantex Series&nbsp;EJ Manuel is a tracking stock. Each of our tracking stocks,
including our Fantex Series&nbsp;EJ Manuel and any tracking stock that we have or may create in the future, is intended to track and reflect the separate economic performance of a specific brand
contract we have signed with an athlete, entertainer or other high profile individual, each of which we refer to as a tracking stock brand. However, holders of shares of any of our tracking stocks
will have no direct investment in the associated tracking stock brand, brand contract or individual. Rather, investors in any of our tracking stocks, including our Fantex Series&nbsp;EJ Manuel, will
be our common stockholders and an investment in a tracking stock will represent an ownership interest in our company as a whole, which will expose holders to additional risks associated with any
individual tracking stock that exists at the time of any investment or that we may establish and issue in the future. EJ Manuel and his affiliated persons are, and we expect they will continue to be,
individuals and legal entities that are separate and independent from us, with separate ownership, management and operations. The issuance of Fantex Series&nbsp;EJ Manuel will not result in an
actual transfer of our assets or the creation of a separate legal entity. </FONT></P>

<P style="font-family:times;"><FONT SIZE=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
platform common stock is intended to track and reflect the economic performance of all of our tracking stock brands that we may issue in the future. Upon consummation of this
offering, the EJ Manuel Brand, tracked by the Fantex Series&nbsp;EJ Manuel, may be our only tracking stock brand depending upon the status of the offering of our Fantex Series Arian Foster
Convertible Tracking Stock and our Fantex Series Vernon Davis Convertible Tracking Stock, which we refer to respectively as Fantex Series Arian Foster and Fantex Series Vernon Davis. We would
attribute to the EJ Manuel Brand, any other outstanding tracking stock brands, and the platform common stock certain assets and expenses, including in certain cases expenses related to other series of
common stock of Fantex that may be issued from time to time in the future. Our board of directors at its sole discretion may convert the shares of Fantex Series&nbsp;EJ Manuel into platform common
stock at any time following the two-year anniversary of the filing of a certificate of designation creating the Fantex Series&nbsp;EJ Manuel. See "Management and Attribution Policies" beginning on
page 108 and "Description of Capital Stock" beginning on page 164. </FONT></P>

<P style="font-family:times;"><FONT SIZE=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Holders
of shares of our platform common stock and any of our tracking stocks, including shares of our Fantex Series&nbsp;EJ Manuel, are each entitled to one vote per share of such
stock. Following the consummation of this offering, Fantex Holdings, our parent company, will hold all 100,000,000 outstanding shares of our platform common stock, and thus will hold substantially all
of the voting power of our outstanding common stock. </FONT></P>

<P style="font-family:times;"><FONT SIZE=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=1><B><I>We are an "emerging growth company," as that term is used in the Jumpstart Our Business Startups Act of 2012, and, as such, are subject to reduced public company
reporting requirements. See "Prospectus Summary&#151;Implications of Being an Emerging Growth Company."</I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=1><B>Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a criminal offense.</B></FONT></P>

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<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="187" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="126" style="font-family:times;"></TD>
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<TR VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:6pt;text-indent:-6pt;"><FONT SIZE=1> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=5 VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Per Share of<BR>
Fantex Series&nbsp;EJ Manuel(1)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Total</B></FONT><BR></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=5 VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
</TR>
<TR VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:6pt;text-indent:-6pt;"><FONT SIZE=1><B> </B></FONT><FONT SIZE=1>Initial public offering price</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>$&nbsp;&nbsp;10.00</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>$&nbsp;&nbsp;5,237,000</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=5 VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
</TR>
<TR VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:6pt;text-indent:-6pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Underwriting discount(2)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>$&nbsp;&nbsp;&nbsp;&nbsp;0.50</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;261,850</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=5 VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
</TR>
<TR VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:6pt;text-indent:-6pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Proceeds to Fantex, before expenses</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>$&nbsp;&nbsp;&nbsp;&nbsp;9.50</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>$&nbsp;&nbsp;4,975,150</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
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<DL compact>
<DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1>(1)</FONT></DT><DD style="font-family:times;"><FONT SIZE=1>The
platform common stock will be issued for no separate consideration, but will be issued only upon the conversion of the Fantex Series&nbsp;EJ Manuel.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1>(2)</FONT></DT><DD style="font-family:times;"><FONT SIZE=1>See
"Underwriting (Conflicts of Interest)."  </FONT></DD></DL>

<P style="font-family:times;"><FONT SIZE=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shares
of our Fantex Series&nbsp;EJ Manuel are new securities; there are currently none issued and there is currently no established market. We do not intend to apply for a listing of
our Fantex Series&nbsp;EJ Manuel on any securities exchange or for their inclusion in any established automated dealer quotation system. Our Fantex Series&nbsp;EJ Manuel will be offered only
through the website of our affiliated broker-dealer, Fantex Brokerage Services,&nbsp;LLC, or FBS. Accordingly, we cannot assure you as to the development or liquidity of any market for our Fantex
Series&nbsp;EJ Manuel. Currently, there is no trading symbol assigned and there can be no assurance that we will ever be granted a trading symbol on the OTC Bulletin Board or any other quotation
system or exchange. However, shares of our Fantex Series&nbsp;EJ Manuel will be issued in electronic form and will be listed exclusively on the FBS alternative trading system under the symbol
"Fantex EJ Manuel." </FONT></P>

<P style="font-family:times;"><FONT SIZE=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investors
will be required to satisfy the suitability requirements described in the prospectus in order to invest in the offering. The method for submitting reservations and a more
detailed description of this offering process are included in "Underwriting (Conflicts of Interest)&#151;Offering Process" beginning on page 172. </FONT></P>

<P style="font-family:times;"><FONT SIZE=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>This offering is highly speculative and the securities involve a high degree of risk. Investing in our Fantex
Series&nbsp;EJ Manuel should be considered only by persons who can afford the loss of their entire investment. See "Risk Factors" beginning on page&nbsp;35.</B></FONT></P>


<P style="font-family:times;"><FONT SIZE=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=1><B>According to the NFL Players Association, the average career of a National Football League, or NFL, player lasts about
3&nbsp;years and according to the NFL Management Council the average career length for (i)&nbsp;an NFL rookie that makes an opening day NFL roster is 6&nbsp;years, (ii)&nbsp;an NFL player that
is a 1st&nbsp;round draft pick is 9.3&nbsp;years and (iii)&nbsp;an NFL player that is selected for or plays in at least one Pro Bowl is 11.7&nbsp;years. We assume that EJ Manuel's career will
be 10&nbsp;years. We have conducted a valuation analysis and determined that the present value of the brand income that EJ Manuel may earn is approximately $50&nbsp;million of which we are
entitled to 10% under our brand contract with EJ Manuel. We made a number of assumptions to determine the value of the brand income. We expect to attribute 95% of the income to which we are entitled
under our brand contract with EJ Manuel to the EJ Manuel Brand, while the remaining 5% will be attributed to the platform common stock. If any of our assumptions are materially incorrect, including
our assumptions regarding the projected future earnings of EJ Manuel in football, football related activities and other brand income, the actual value of the brand income could be significantly less
than $50&nbsp;million, 96.3% of which is estimated to be derived from anticipated future contracts that do not exist as of the date of this prospectus. In such case, the return on investment or rate
of return on an investment in Fantex Series&nbsp;EJ Manuel could be significantly below an investor's expectation. A more detailed description of the estimation of EJ Manuel's career length is
included in the section entitled "&#151;EJ Manuel Brand Contract, at Estimated Fair Value&#151;EJ Manuel Career Length" beginning on page&nbsp;94.</B></FONT></P>


<P style="font-family:times;"><FONT SIZE=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
offering will terminate upon the earlier to occur of (i)&nbsp;30&nbsp;days after this registration statement becomes effective with the Securities and Exchange Commission, or
(ii)&nbsp;the date on which all shares offered hereby have been sold. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=4><B>FANTEX BROKERAGE SERVICES,&nbsp;LLC</B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=4><B>STIFEL  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>The date of this prospectus is&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2014. </FONT></P>

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NAME="BG10401A_main_toc"></A> </FONT></P>

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<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
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<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
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<TD VALIGN="TOP" style="font-family:times;"><A HREF="#ca10401_prospectus_summary"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Prospectus Summary</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#ca10401_prospectus_summary"><FONT SIZE=2>1</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
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<TD VALIGN="TOP" style="font-family:times;"><A HREF="#da10401_glossary_of_certain_terms"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Glossary of Certain Terms</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#da10401_glossary_of_certain_terms"><FONT SIZE=2>28</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
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<TD VALIGN="TOP" style="font-family:times;"><A HREF="#dc10401_risk_factors"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Risk Factors</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#dc10401_risk_factors"><FONT SIZE=2>35</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
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<TD VALIGN="TOP" style="font-family:times;"><A HREF="#dm10401_special_note_regarding_forward__spe02700"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Special Note Regarding Forward-Looking Statements and Industry
Data</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#dm10401_special_note_regarding_forward__spe02700"><FONT SIZE=2>78</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
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<TD VALIGN="TOP" style="font-family:times;"><A HREF="#dm10401_use_of_proceeds"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Use of Proceeds</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#dm10401_use_of_proceeds"><FONT SIZE=2>79</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
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<TD VALIGN="TOP" style="font-family:times;"><A HREF="#dm10401_dividend_policy"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Dividend Policy</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#dm10401_dividend_policy"><FONT SIZE=2>80</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
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<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><A HREF="#do10401_capitalization"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Capitalization</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#do10401_capitalization"><FONT SIZE=2>82</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><A HREF="#do10401_dilution"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Dilution</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#do10401_dilution"><FONT SIZE=2>83</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><A HREF="#dq10401_management_s_discussion_and_an__man03466"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Management's Discussion and Analysis of Financial Condition and Results of
Operations</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#dq10401_management_s_discussion_and_an__man03466"><FONT SIZE=2>84</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><A HREF="#dw10401_management_and_attribution_policies"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Management and Attribution Policies</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#dw10401_management_and_attribution_policies"><FONT SIZE=2>108</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><A HREF="#dy10401_business"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Business</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#dy10401_business"><FONT SIZE=2>116</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><A HREF="#eg10401_management"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Management</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#eg10401_management"><FONT SIZE=2>145</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><A HREF="#ei10401_executive_compensation"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Executive Compensation</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#ei10401_executive_compensation"><FONT SIZE=2>152</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><A HREF="#ek10401_transactions_with_related_persons"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Transactions with Related Persons</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#ek10401_transactions_with_related_persons"><FONT SIZE=2>160</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><A HREF="#em10401_principal_stockholders"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Principal Stockholders</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#em10401_principal_stockholders"><FONT SIZE=2>162</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><A HREF="#eo10401_description_of_capital_stock"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Description of Capital Stock</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#eo10401_description_of_capital_stock"><FONT SIZE=2>164</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><A HREF="#eq10401_underwriting_(conflicts_of_interest)"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Underwriting (Conflicts of Interest)</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#eq10401_underwriting_(conflicts_of_interest)"><FONT SIZE=2>171</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><A HREF="#es10401_material_u.s._federal_income_tax_considerations"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Material U.S. Federal Income Tax Considerations</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#es10401_material_u.s._federal_income_tax_considerations"><FONT SIZE=2>178</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><A HREF="#es10401_legal_matters"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Legal Matters</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#es10401_legal_matters"><FONT SIZE=2>183</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><A HREF="#es10401_experts"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Experts</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#es10401_experts"><FONT SIZE=2>183</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><A HREF="#es10401_where_you_can_find_more_information"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Where You Can Find More Information</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#es10401_where_you_can_find_more_information"><FONT SIZE=2>183</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><A HREF="#fa10401_index_to_financial_statements"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Index to Financial Statements</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#fa10401_index_to_financial_statements"><FONT SIZE=2>F-1</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><A HREF="#Index1"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Index to Statements of Cash Receipts from Included Contracts for EJ Manuel</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#Index1"><FONT SIZE=2>SR-EM-1</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><A HREF="#Index2"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Index to Statements of Cash Receipts from Included Contracts for Vernon Davis</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#Index2"><FONT SIZE=2>SR-VD-1</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><A HREF="#Index3"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Index to Statements of Cash Receipts from Included Contracts for Arian Foster</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#Index3"><FONT SIZE=2>SR-AF-1</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
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<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>We have not, and the underwriters have not, authorized anyone to provide you with any information other than that contained in this prospectus or in any free
writing prospectus we may authorize to be delivered or made available to you. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others
may give you. This prospectus may only be used where it is legal to offer and sell shares of our Fantex Series&nbsp;EJ Manuel. The information in this prospectus is complete and accurate only as of
February&nbsp;28, 2014, regardless of the time of delivery of this prospectus or any sale of shares of our Fantex Series&nbsp;EJ Manuel. Our business, financial condition, results of operations
and prospects may have changed since that date. We are not, and the underwriters are not, making an offer of these securities in any jurisdiction where the offer is not
permitted.</B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
prospectus has been prepared by Fantex and may be used by FBS in connection with offers and sales of these securities in secondary market transactions in these securities, including
market-making transactions as may be effected from time to time. However, FBS is not obligated to make a market in the Fantex Series&nbsp;EJ Manuel and if it does so, it may discontinue any
market-making at any time without notice, in its sole discretion. FBS has no current intention of acting as a market-maker in the secondary market for the Fantex Series&nbsp;EJ Manuel, but may do so
in the future. If FBS decides to make a market in a tracking stock, it will first amend its Form ATS filed with the Securities and Exchange Commission, or SEC, to reflect such change. To the extent
FBS chooses to act as a market-maker, it may act as principal or agent in such transactions, including as agent for the counterparty when acting as principal or as agent for both counterparties, and
may receive compensation in the form </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>i</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2><A
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<P style="font-family:times;"><FONT SIZE=2>of
discounts and commissions, including from both counterparties, when it acts as agent for both. Such sales will be made at prevailing market prices at the time of sale, at prices related thereto or
at negotiated prices. Fantex will not receive any proceeds from such secondary market offers and sales. All such transactions with respect to these securities that are made pursuant to a prospectus
after the
effectiveness of the registration statement of which this prospectus is a part are being made solely pursuant to this prospectus, as it may be supplemented from time to time. This delivery requirement
is in addition to the dealers' obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Neither
we nor the underwriters have undertaken any efforts to qualify this offering for offers to investors in any jurisdiction outside the United States. Investors must have a U.S.
mailing address (other than a P.O.&nbsp;Box) and a U.S. social security number and/or a U.S. tax identification number to be eligible to participate in this offering. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>ii</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>
<A HREF="#bg10401a_main_toc">Table of Contents</A> </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;<BR></FONT></P>


<P style="font-family:times;"><FONT SIZE=2><I> </i></font></p>
<DIV style="width:100%;border:#000000 solid 1pt;padding-top:12pt;padding-right:12pt;padding-bottom:1pt;padding-left:12pt;">
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<BR></FONT><FONT SIZE=2><B>  PROSPECTUS SUMMARY    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>The following summary highlights information contained elsewhere in this prospectus and is qualified in its
entirety by the more detailed information and financial statements included elsewhere in this prospectus. This summary does not contain all of the information that may be important to you. You should
read and carefully consider the following summary together with the entire prospectus,
including our financial statements and the related notes thereto appearing elsewhere in this prospectus, before deciding to invest in our Fantex Series&nbsp;EJ Manuel. Some of the statements in this
prospectus constitute forward-looking statements that involve risks and uncertainties. See "Special Note Regarding Forward-Looking Statements and Industry Data." Our actual results could differ
materially from those anticipated in such forward-looking statements as a result of certain factors, including those discussed in the "Risk Factors" and other sections of this
prospectus.</I></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
are a development-stage brand acquisition, marketing and brand development company whose focus is on acquiring minority interests in the income associated with the brands of
professional athletes, entertainers and other high-profile individuals and assisting such individuals in enhancing the reach and value of their respective brands. We intend to focus our business on
three core areas:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>evaluating, targeting and accessing individuals and brands with the potential to generate significant income associated
with these brands, or brand income; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>acquiring minority interests in such brand income; and </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>assisting our acquired brands in increasing their value via technology and through leveraging our marketing, advertising
and strategic partnering expertise. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
February&nbsp;14, 2014, we entered into a brand contract with Erik "EJ" R. Manuel, Jr., who we refer to as EJ Manuel, a professional athlete in the National Football League, or NFL,
pursuant to which we will acquire an interest equal to 10% of the gross monies or other consideration (including rights to make investments) that EJ Manuel receives from and after February&nbsp;14,
2014, subject to specified exceptions and net of certain related expenses (such as legal fees, travel expenses and self-employment taxes), as a result of his activities in the NFL and related fields
(including activities in a non-NFL football league), such as broadcasting and coaching. As consideration for this interest under the brand contract, we will pay EJ Manuel a one-time cash amount of
$4.98&nbsp;million contingent upon our ability to obtain financing, which we intend to do through this offering. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
have also entered into brand contracts with Arian Foster, effective February&nbsp;28, 2013, as amended, and Vernon Davis, effective October&nbsp;30, 2013. We intend to enter into
additional brand contracts in the future with other individuals with the potential to generate significant brand income, and in some cases, with the affiliates of these individuals, who we refer to,
together with the individual, as the contract party. We are actively pursuing these additional brand contracts, but as of February&nbsp;28, 2014 we have no current commitments to enter into another
brand contract. All of our brand contracts, including those
that we enter into in the future with other contract parties, are or are expected to be contingent upon obtaining financing to fund the acquisition of the minority interest in the respective brands,
and we intend to finance the acquisition of additional brands through the issuance of additional tracking stocks linked to the value of such brands. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
were incorporated on September&nbsp;14, 2012 as a wholly-owned subsidiary of Fantex Holdings, our parent. Fantex Holdings was incorporated in Delaware on April&nbsp;9, 2012. We
have little operational history and limited assets and resources, have never generated any revenues, and to date we have relied on our parent to conduct our operations through its employees. Following
the consummation of our first public offering we intend to operate under a management agreement with our parent, which we describe in more detail below but pursuant to which our parent will provide us
with certain management and administrative services, including providing and compensating our executive management and other personnel, as well as services relating to information technology support,
brand management and other support operations, facilities, human resources, tax planning and administration, </FONT></P>
 <p style="font-family:times;"><font style="font-size:1pt;line-height:1pt;">&nbsp;</font></p>
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<P style="font-family:times;"><FONT SIZE=2><I> </i></font></p>
<DIV style="width:100%;border:#000000 solid 1pt;padding-top:12pt;padding-right:12pt;padding-bottom:1pt;padding-left:12pt;">


<P style="font-family:times;"><FONT SIZE=2>accounting,
treasury and insurance. We will begin to assume management and administrative tasks at such time in the future as the actual cost of these services is less than our service fee to Fantex
Holdings, which we do not anticipate would occur until we begin to receive significant cash flows from multiple brand contracts. However, if our parent is unable to perform any of the services that
they are required to perform under the management agreement, due to financial difficulty or otherwise, then we may be forced to assume management and administrative tasks, and incur additional
expenses, sooner than we anticipate. Until such time we will continue to rely on our parent to conduct our operations in accordance with the management agreement. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2><B><I> Evaluation, Acquisition and Enhancement of Brands  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prior to entering into a brand contract, we conduct a detailed evaluation of the brand and the contract party to determine whether, in
our opinion, the brand would be a suitable brand with the potential to generate significant brand income based on the criteria set forth
below. We consider a brand to be a distillation of a complex set of associations people make with respect to an individual, including performance, appearance, history and personal story, products or
services such individual is associated with, public statements or positions on matters of public concern, how an individual acts or the image such individual projects to the world. We seek brands that
convey images and associations that we believe will be recognized and valued in the market place. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
part of our brand evaluation, we review the brand's reputation and relative standing in their principal field, such as a running back, tight end or quarterback in the NFL, collect and
analyze widely followed statistics, review existing contracts and potential for future contracts, assess the character and reputation of the contract party, assess potential future cash flow expected
to be generated by the contract party as well as examine the brand's current positioning and marketing footprint (such as, for example, if they are on Twitter, the reach (how many followers),
engagement level (how engaged are the followers), and potential for growth). This evaluation provides a framework to develop further marketing strategies to aid us in our efforts to enhance the value
of the brand. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
believe we have extensive industry contacts among the board of directors, employees, consultants and advisors of our company and our affiliates, Fantex Holdings and FBS, which we
utilize to access individuals and brands that meet our criteria. Through our contacts we seek to establish working relationships with these brands and their key advisors to begin the process of
educating them about our business and the benefits of a brand contract and a continuing relationship. We enter into an arm's-length negotiation primarily to finalize a purchase price, our percentage
of the contract party's brand income, which we refer to as the acquired brand income, or ABI, and the scope of brand income, including whether or not there would be any specific exclusions. We do,
however, have limited experience in evaluating and entering into similar contracts with athletes, entertainers and other high-profile individuals because we are pioneering a new business model and to
date we have only entered into three brand contracts. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
believe that developing a diverse portfolio of global brands will enable us to increase brand reach across our portfolio and allow us to provide unique insights that contract parties
may employ to increase consumer awareness of their brands and our brands more generally. We believe that our combined efforts could lead to increased consumer engagement with the brands by optimizing
message delivery, including driving engagement through the use of content developed by us or third parties. We seek to aid our brands in fostering positive brand associations in order to create a
unique position in the marketplace that is independent of their primary occupation, such as an athlete in the NFL. We believe this will drive greater engagement with a connected audience and lead to
greater longevity of the brands. We also believe that investors in a tracking stock linked to a brand are more likely to be consumer advocates for that brand. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition to our services intended to help optimize the reach of the brand, we intend to provide advice to contract parties based on our experience that would aid them in obtaining
more attractive </FONT></P>
 <p style="font-family:times;"><font style="font-size:1pt;line-height:1pt;">&nbsp;</font></p>
</DIV>
 <P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>2</FONT></P>

<HR NOSHADE>
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<P style="font-family:times;"><FONT SIZE=2><I> </i></font></p>
<DIV style="width:100%;border:#000000 solid 1pt;padding-top:12pt;padding-right:12pt;padding-bottom:1pt;padding-left:12pt;">
 <P style="font-family:times;"><FONT SIZE=2>terms
in their negotiations with future sponsors. We believe that our proprietary internal data and our marketing insights will assist our contract parties to more accurately evaluate their brand
value in the marketplace and potentially increase future endorsement amounts and brand longevity post career. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
note, however, that we have no contractual obligation to the contract party to engage in any of these activities that may enhance the value of our brands, and the contract party has
no contractual obligation to implement any advice that we may provide. Brand development is a long-term strategy, and any investment we may make to promote our acquired brands will be for long- or
medium-term results and would not be expected to increase brand income in the near-term, if at all. Moreover, as with other forms of marketing and brand enhancement strategies, the impact of our
efforts on brand value may be difficult to determine objectively. Even if our promotion activities increase the endorsement income to a contract party, they may nonetheless have a negative impact on
the market value of shares of the associated tracking stock because we will only receive a portion of any increased brand income. For example, because the ABI under our EJ Manuel brand contract is 10%
of brand income, our promotion efforts must produce brand income equal to at least ten times our costs for such promotion efforts in order to return our investment. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
our brand enhancement strategy is unsuccessful, or if the contract party chooses not to accept any brand enhancement assistance from us, then the success of any brands we acquire will
be entirely dependent upon the efforts of the contract party. In addition, the contract party is neither our affiliate, nor a director, officer or employee of our company and owes no fiduciary duties
to us or any of our stockholders, and has no obligation to take any action whatsoever to enhance the value of the brand. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Our Tracking Units and Tracking Stocks  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To date, we have entered into three brand contracts, created a tracking unit related to each of these brand contracts, which we refer
to generally as "tracking stock brands," and created a tracking stock related to such tracking stock brands, with each of: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:100%;margin-left:0%;">
<p style="font-family:times;"></FONT></P>

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<TH NOWRAP  ALIGN="LEFT" style="font-family:times;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:52pt;"><FONT SIZE=1><B>Contract Party

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<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Effective Date of Brand Contract </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Tracking Unit Related to the Brand Contract </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Tracking Stock Related to the Tracking Stock Brand </B></FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2>EJ Manuel</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>February&nbsp;14, 2014</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>EJ Manuel Brand</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>Fantex Series&nbsp;EJ Manuel</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><BR><FONT SIZE=2>Vernon Davis</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>October&nbsp;30, 2013</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>Vernon Davis Brand</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>Fantex Series Vernon Davis</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><BR><FONT SIZE=2>Arian Foster</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>February&nbsp;28, 2013</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>Arian Foster Brand</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>Fantex Series Arian Foster</FONT></TD>
</TR>
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 </DIV>
 <P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
a more detailed description of the brand contracts and our tracking stock brands, please see the sections entitled "Business&#151;Our Brands" and "Management and Attribution
Policies." </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
will initially attribute the following assets and liabilities to our initial tracking stock brands:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>95% of our ABI under the associated brand contract; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>any and all of our liabilities, costs and expenses that are directly attributable to the associated tracking stock brand,
such as our direct costs arising out of our promotion of the associated brand or arising out of or related to the maintenance and enforcement of the associated brand contract; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>a pro rata share of our general liabilities, costs and expenses not directly attributable to any specific tracking stock
(calculated based on attributable income) but excluding any non-cash expenses that are allocated from our parent to us. Attributable expenses would include, for example, a pro rata portion of the
service fee we pay to our parent pursuant to the management agreement (5% of our cash receipts). Expenses that would not be attributed would include </FONT></DD></DL>
</UL>
 <p style="font-family:times;"><font style="font-size:1pt;line-height:1pt;">&nbsp;</font></p>
</DIV>
 <P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>3</FONT></P>

<HR NOSHADE>
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<P style="font-family:times;"><FONT SIZE=2><I> </i></font></p>
<DIV style="width:100%;border:#000000 solid 1pt;padding-top:12pt;padding-right:12pt;padding-bottom:1pt;padding-left:12pt;">
 <UL>
<UL>

<P style="font-family:times;"><FONT SIZE=2>expenses
incurred by our parent, including any expenses incurred in providing services to us under the management agreement, to the extent in excess of our service fee to them; </FONT></P>

</UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>as income, any covered amounts, as described in "Management and Attribution
Policies&#151;Attribution&#151;Covered Amounts," for the associated brand contract; and </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>as an expense, the pro rata share of any covered amounts, as described in "Management and Attribution
Policies&#151;Attribution&#151;Covered Amounts," relating to any tracking stock brand (including the pro rata share of any covered amounts for the associated tracking stock brand). </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
described above, income (and assets) will generally be attributed to any of our tracking stocks based on the earnings of the associated tracking stock brand. However, while we intend
for our tracking stocks, including Fantex Series&nbsp;EJ Manuel, to track the performance of the associated tracking stock brand (in this case, the EJ Manuel Brand), we cannot provide any guarantee
that any tracking stock will in fact track the performance of the associated tracking stock brand. Our board of directors has discretion to reattribute assets, liabilities, revenues, expenses and cash
flows without the approval of shareholders of a particular tracking stock, which discretion will be exercised in accordance with its fiduciary duties under Delaware law and only where its decisions
are in the best interests of the company and the stockholders as a whole. In certain circumstances, decisions of our board of directors may also be subject to the approval of the conflicts committee
of our board of directors. For a more detailed description, please see "Management and Attribution Policies&#151;Fiduciary and Management Responsibilities, Conflicts Committee." Furthermore, in
the event we do not receive cash payments from one or more of our brand contracts to which we otherwise would have been entitled because of debtor relief laws, then the attributed income for the
corresponding tracking stock will nonetheless be credited with the amount which we would otherwise have been entitled to receive. In such a case, the difference between such attributed amount and the
actual income we receive from such brand contract will be attributed as a general expense of Fantex. </FONT><FONT SIZE=2><B>As a result, each of our tracking stocks will share on a pro rata basis
(calculated based on attributable income) the burden of any non-performing brand contracts, whether or not included in the assets attributed to such tracking stock, and the economic performance of any
of our tracking stocks, including Fantex Series&nbsp;EJ Manuel, will be dependent, in part, upon the aggregate financial performance of Fantex.</B></FONT><FONT SIZE=2> Therefore, prior to purchasing
our Fantex Series&nbsp;EJ Manuel, you should understand our aggregate operating performance and our aggregate assets and liabilities. Furthermore, we intend to acquire additional minority interests
in other brands in the future so our operating performance will depend upon the soundness of our business plan and our ability to execute on that plan, including entering into additional brand
contracts in the future. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Given
that the economic performance of each of our tracking stocks is dependent, in part, upon the aggregate financial performance of Fantex, Fantex Series&nbsp;EJ Manuel could be
affected by any of our other brand contracts we have entered into or may enter into in the future. The risk profile of the shares of the Fantex Series&nbsp;EJ Manuel could likewise be materially and
adversely impacted by the performance of our other tracking stock brands if the offerings of our other tracking stocks are consummated, or by any additional brand contracts entered into subsequent to
your investment in the Fantex Series&nbsp;EJ Manuel. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
EJ Manuel Brand is not a separate legal entity and cannot issue securities. Holders of shares of Fantex Series&nbsp;EJ Manuel will not have an ownership interest in our EJ Manuel
Brand, or any of our affiliated entities. Rather, investors in our Fantex Series&nbsp;EJ Manuel will be our common stockholders. The issuance of the Fantex Series&nbsp;EJ Manuel will not result in
the actual transfer of our assets or the creation of a separate legal entity. EJ Manuel and his affiliated persons are, and we expect they will continue to be, individuals and legal entities that are
separate and independent from us, with separate ownership, management and operations. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition, there are certain features that may distinguish our tracking stock from more traditional investments. For example, the Fantex Series&nbsp;EJ Manuel is intended to track
the performance of EJ Manuel's brand over his lifetime, which could potentially be very short, and thereafter. Although </FONT></P>
 <p style="font-family:times;"><font style="font-size:1pt;line-height:1pt;">&nbsp;</font></p>
</DIV>
 <P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>4</FONT></P>

<HR NOSHADE>
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<P style="font-family:times;"><FONT SIZE=2><I> </i></font></p>
<DIV style="width:100%;border:#000000 solid 1pt;padding-top:12pt;padding-right:12pt;padding-bottom:1pt;padding-left:12pt;">
 <P style="font-family:times;"><FONT SIZE=2>we
intend to build brands that outlast an athlete's playing career, some brands may not produce income beyond the playing career of the athlete associated with such brand. Furthermore, potential gains
on your investment will likely come from dividends paid by us. Most of the dividends paid in the early years of your investment will, for U.S. federal income tax purposes, be considered a return of
your capital (rather than a gain on your investment), similar to the generally accepted accounting principles in the United States, or GAAP, treatment described in the critical accounting policies
section of our "Management's Discussion and Analysis of Financial Condition and Results of Operations," under the heading "Income (Loss) from Brand Contracts." The anticipated returns in the earlier
years under the brand contract are amounts currently expected to be paid from EJ Manuel's existing contracts and endorsement contracts expected to be entered into in the near future based on his
current brand value. As a result, any potential gains on your investment will only be realized if, and will be deferred until, we can enhance EJ Manuel's brand value over time and we monetize on this
expanded brand. Moreover, the EJ Manuel Brand does not currently represent a separate business division of Fantex, but rather will be a business division of ours following the completion of this
offering and thus we will have no prior operating history with this brand prior to consummation of this offering. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I> Conversion into Platform Common Stock  </I></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our board of directors may, at any time following the two-year anniversary of the filing of a certificate of designation creating a new
tracking stock, resolve to convert such tracking stock into fully paid and non-assessable shares of our platform common stock at a conversion ratio to be determined by dividing the fair value of a
share of such tracking stock by the fair value of a share of our platform common stock. For instance, our board of directors may convert any of our tracking stock into platform common stock where such
tracking stock is no longer an actively traded stock, as determined in good faith by our board of directors or a committee of our board of directors, such as, for example, if the athlete, entertainer
or other high profile individual suffers an
injury, illness, medical condition or disability, or he dies, and his brand income diminishes as a result and there is little if any expectation that his brand income will materially increase in the
future. In this case, our board of directors may convert the shares of such tracking stock into platform common stock as a means of retiring the tracking stock. As a result, you are not likely to
receive a new security of significant value because such conversion is likely to occur at a time when the tracking stock has little or no value. Our board of directors may also convert shares of any
tracking stock into platform common stock, at any time following the two-year anniversary of the filing of a certificate of designation creating a new tracking stock, if some other special or
extraordinary circumstances exist, such as a potential restructuring, reorganization or change of control of Fantex. Our platform common stock is not convertible into any other shares of our capital
stock. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
platform common stock is intended to track and reflect the economic performance of all of our tracking stock brands by having a percentage of ABI from these tracking stock brands
attributed to it. We will also initially attribute to our platform common stock any liabilities not directly attributable to tracking stocks or general expenses of the company not attributable to any
tracking stocks. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> EJ Manuel Brand  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> EJ Manuel Brand Contract  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our brand contract with EJ Manuel entitles us to receive 10% of brand income for EJ Manuel from and after February&nbsp;14, 2014.
Brand income generally means gross monies or other consideration (including rights to make investments) that EJ Manuel receives as a result of his skills and brand, including salary and wages from
being an athlete in the NFL and related fields (including activities in a non-NFL football league), such as broadcasting and coaching, subject to specified exceptions and net of certain related
expenses (such as legal fees, travel expenses and self-employment taxes). </FONT></P>
 <p style="font-family:times;"><font style="font-size:1pt;line-height:1pt;">&nbsp;</font></p>
</DIV>
 <P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>5</FONT></P>

<HR NOSHADE>
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<P style="font-family:times;"><FONT SIZE=2><I> </i></font></p>
<DIV style="width:100%;border:#000000 solid 1pt;padding-top:12pt;padding-right:12pt;padding-bottom:1pt;padding-left:12pt;">
 <P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
consideration for the acquired brand income under the brand contract, we will pay EJ Manuel a one-time cash amount of $4.98&nbsp;million contingent upon our ability to obtain
financing, which we intend to do through this offering. We will have no further financial obligation to EJ Manuel under the brand contract once this payment has been made. The brand contract is
intended to remain in effect indefinitely and, except as set forth below, may be terminated only upon mutual agreement of EJ Manuel and us. If EJ Manuel resigns from the NFL within two years of the
date of this offering for any reason other than injury, illness or a medical condition, we may elect in our sole discretion to terminate the brand contract and he will be required to pay us
approximately $5.24&nbsp;million (net of any amounts previously paid to us by him pursuant to the brand contract). We are also entitled to certain other ongoing information and audit rights. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
a further description of our brand contract with EJ Manuel please see "Business&#151;EJ Manuel Brand&#151;EJ Manuel Brand Contract." </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> EJ Manuel  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EJ Manuel is a quarterback for the Buffalo Bills, or the Bills, in the National Football League, or the NFL. He has been in the NFL
since 2013. EJ Manuel attended Florida State University, which finished 25-6 in games started by EJ Manuel. EJ Manuel was an All-Atlantic Coast Conference second team selection in 2012 and was the
most valuable player in the 2013 Senior Bowl. EJ Manuel was picked sixteenth overall in the first round of the 2013 NFL draft and signed with the Bills. EJ Manuel was the Bills starting quarterback
for the 2013 season, but missed 6 games due to injury. EJ Manuel was born on March&nbsp;19, 1990 and will be 24&nbsp;years old as of the start of the 2014 NFL season. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
August 2013 EJ Manuel had minor surgery on his left knee and missed two pre-season games. On October&nbsp;3, 2013, during the third quarter in a game against the Cleveland Browns,
Manuel sprained the lateral collateral ligament in his right knee. This injury caused him to miss 4 games of the 2013 season. In December 2013, EJ Manuel sprained the lateral collateral ligament in
his left knee and missed the last two games of the 2013 NFL season. In January 2014, EJ Manuel had an arthroscopic procedure performed on each of his knees. EJ Manuel has experienced these knee
injuries and other instances of normal wear and tear as an athlete in Division I college football and the NFL and we expect that EJ Manuel will continue to experience such wear and tear. Any worsening
of these conditions, or re-injury or new injury, could materially and adversely affect EJ Manuel's playing performance and the value of the EJ Manuel Brand. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2><B><I> EJ Manuel Brand Income  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EJ Manuel's brand income currently includes amounts from his NFL player contract with the Buffalo Bills and several endorsement
agreements. In 2013, a significant part of his brand income was derived from his NFL player contract. In addition, approximately 96.3% (before applying any discount rates for future earnings) of the
total brand income that we estimated for EJ Manuel is derived from anticipated future contracts that do not exist as of the date of this prospectus, such as future endorsements, playing contracts
and/or additional brand generating income from coaching, broadcasting or the like. The opportunity to receive a return of capital or any profit from an investment in our Fantex Series&nbsp;EJ Manuel
will depend in large part upon EJ Manuel's ability to enter into additional multi-year NFL player contracts on terms that are, on an average annualized basis, economically superior to his existing NFL
player contract and on his ability over the same period and beyond to enter into and maintain endorsement contracts (or earn other brand generating income) that compensate him in amounts that are
significantly in excess of compensation that he has had historically from these sources. We will not know for a number of years, including up to four years for his NFL player contract, whether and on
what terms EJ Manuel would be able to secure such contracts. For a more detailed description of the valuation of the EJ Manuel Brand Contract, please see section entitled "&#151;EJ Manuel Brand
Contract, at Estimated Fair Value" beginning on page&nbsp;93. </FONT></P>
 <p style="font-family:times;"><font style="font-size:1pt;line-height:1pt;">&nbsp;</font></p>
</DIV>
 <P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>6</FONT></P>

<HR NOSHADE>
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<UL>

<P style="font-family:times;"><FONT SIZE=2><I> NFL Player Contract  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EJ Manuel has completed the first year of a four year player contract with a one year team option with the Bills, pursuant to which he
is eligible to receive for the 2014 season through the 2016 season a salary of up to an aggregate of $3.64&nbsp;million ($0.81&nbsp;million in 2014, $1.21&nbsp;million in 2015 and
$1.62&nbsp;million in 2016). If the Bills exercise their option to extend the contract for the 2017 season, EJ Manuel's salary will be determined based upon the average of the
3<SUP>rd</SUP>&nbsp;through
25<SUP>th</SUP>&nbsp;highest salaries for quarterbacks in the NFL in the 2015 season. Each of these payments would be considered brand income when received by EJ Manuel, and thus we would be
entitled to 10% of these amounts when paid. To the extent EJ Manuel elects to defer receipt of his compensation under the NFL player contract, pursuant to Article&nbsp;26, Section&nbsp;6 of the
CBA, for purposes of the brand contract, such deferred compensation will be deemed to have been received by EJ Manuel on the due date provided in his NFL player contract, prior to any such deferral,
and we will be entitled to 10% of these amounts as of such due date. Payments under the NFL player contract are made in installments over the course of the applicable regular season period. Therefore,
we expect that the EJ Manuel Brand will be subject to seasonal fluctuations in attributed income. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
a further description of the duration, compensation and other material provisions of the NFL Player Contract, please see "Business&#151;EJ Manuel Brand&#151;EJ Manuel
Brand Income&#151;NFL Player Contract&#151;Buffalo Bills (the Bills)." </FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2><I> Other Contracts  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EJ Manuel has ongoing endorsement contracts or license agreements with The Upper Deck Company,&nbsp;Inc., Panini
America,&nbsp;Inc., Panini Authentic,&nbsp;Inc., NIKE USA,&nbsp;Inc., The Topps Company,&nbsp;Inc., Northtown Chrysler Jeep Dodge Ram. These endorsement contracts generally have terms that end
in 2016, with one contract extending to 2017, and require EJ Manuel to exclusively endorse certain categories of products, make certain appearances, participate in the production of promotional
materials and social media activities and sign autographs. EJ Manuel is entitled to total compensation under these agreements of up to approximately $464,700, and an additional amount of up to
$542,550, contingent on performing additional specific services, including autographing cards or stickers or achieving certain performance based milestones including $75,000 per year through 2017 for
any year in which EJ Manuel is named the NFL MVP. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition, certain endorsement contracts may be terminated due to changes to NFL rules preventing reasonable use of the endorsed product. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Other Brands  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Vernon Davis Brand  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our brand contract with Vernon Davis entitles us to receive 10% of brand income for Vernon Davis from and after October&nbsp;30,
2013. Brand income generally means gross monies or other consideration (including rights to make investments) that Vernon Davis receives as a result of his skills and brand, including salary and wages
from being an athlete in the NFL and related fields (including activities in a non-NFL football league), such as broadcasting and coaching, subject to specified exceptions and net of certain related
expenses (such as legal fees, travel expenses and self-employment taxes). </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
consideration for the acquired brand income under the brand contract, we will pay Vernon Davis a one-time cash amount of $4.0&nbsp;million contingent upon our ability to obtain
financing, which we intend to do through an offering of shares of our Fantex Series Vernon Davis. We will have no further financial obligation to Vernon Davis under the brand contract once this
payment has been made. The brand contract is intended to remain in effect indefinitely and, except as set forth below, may be terminated only upon mutual agreement of Vernon Davis and us. If Vernon
Davis resigns from the </FONT></P>
 <p style="font-family:times;"><font style="font-size:1pt;line-height:1pt;">&nbsp;</font></p>
</DIV>
 <P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>7</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<P style="font-family:times;"><FONT SIZE=2><I> </i></font></p>
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<P style="font-family:times;"><FONT SIZE=2>NFL
within two years of the date of the offering of shares of our Fantex Series Vernon Davis for any reason other than injury, illness or a medical condition, we may elect in our sole discretion to
terminate the brand contract and he will be required to pay us approximately $4.2&nbsp;million (net of any amounts previously paid to us by him pursuant to the brand contract). We are also entitled
to certain other ongoing information and audit rights. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
a further description of our brand contract with Vernon Davis please see "Business&#151;Other Brands&#151;Vernon Davis Brand." </FONT></P>


<P style="font-family:times;"><FONT SIZE=2><B><I> Arian Foster Brand  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our brand contract with Arian Foster entitles us to receive 20% of brand income for Arian Foster from and after February&nbsp;28,
2013. Brand income generally means gross monies or other consideration (including rights to make investments) that Arian Foster receives as a result of his skills and brand, including salary and wages
from being an athlete in the NFL and related fields (including activities in a non-NFL football league), such as broadcasting and coaching, subject to specified exceptions. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
consideration for the acquired brand income under the brand contract, we will pay Arian Foster a one-time cash amount of $10.0&nbsp;million contingent upon our ability to obtain
financing, which we intend to do through an offering of shares of our Fantex Series Arian Foster. We will have no further financial obligation to Arian Foster under the brand contract once this
payment has been made. The brand contract is intended to remain in effect indefinitely and, except as set forth below, may be terminated only upon mutual agreement of Arian Foster and us. If Arian
Foster resigns from the NFL within two years of the date of such offering of Fantex Series Arian Foster for any reason other than injury, illness or a medical condition, we may elect in our sole
discretion to terminate the brand contract and he will be required to pay us approximately $10.5&nbsp;million (net of any amounts previously paid to us by him pursuant to the brand contract). We are
also entitled to certain other ongoing information and audit rights. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
November&nbsp;12, 2013, after confirming reports that Arian Foster will undergo season ending back surgery, we announced that we are postponing the offering for Fantex Series Arian
Foster. Although we will continue to work with Arian Foster through his recovery and intend to continue with the offering of Fantex Series Arian Foster at an appropriate time in the future, we cannot
guarantee that the offering of Fantex Series Arian Foster will be consummated or that the offering will be resumed upon the same terms. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
a further description of our brand contract with Arian Foster please see "Business&#151;Other Brands&#151;Arian Foster Brand." </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Management Agreement  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have entered into an management agreement with our parent that will become effective upon the consummation of our first public
offering, and pursuant to which our parent will provide us with management and administrative services, including providing and compensating our executive management and other personnel, as well as
services relating to information technology support, brand management and other support operations, facilities, human resources, tax planning and administration, accounting, treasury and insurance. We
have agreed to pay 5% of the amount of the
gross cash received by us, if any, pursuant to our brand contracts during any quarterly period as remuneration for the services provided. The amount of gross cash received used to calculate this 5%
fee will include any portion allocated to reduction in carrying value on our financial statements but shall not take into account the changes in fair value of the brand contracts. As such, the service
fee under the management agreement will be determined based on the total amount of actual cash received under the brand contracts in a given quarterly period prior to any adjustments for fair value
and without regard to the expected cash receipts in such quarter as reflected in the financial statements for that quarter. To the extent we receive no cash for any period then we would not owe any
fee for any </FONT></P>
 <p style="font-family:times;"><font style="font-size:1pt;line-height:1pt;">&nbsp;</font></p>
</DIV>
 <P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>8</FONT></P>

<HR NOSHADE>
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<P style="font-family:times;"><FONT SIZE=2>services
provided during that period. We may evaluate the service fee from time to time to assess the continued appropriateness of the percentage of our cash receipts upon which the service fee is
calculated, in light of the services being provided by our parent at the time and cost of those services. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
agreement has an initial term through December&nbsp;31, 2014, and will automatically renew for successive one-year terms each December&nbsp;31 unless either party provides
written notice of its intent not to renew at least three months prior to such renewal. We may also terminate any specific service and/or the agreement, without penalty, with 30&nbsp;days prior
written notice to Fantex Holdings. Fantex Holdings may terminate any specific service and/or the agreement with 180&nbsp;days prior written notice to us, but if we, using our commercially reasonable
efforts, are unable to either perform the services ourselves or enter into a reasonable arrangement with a third party to perform the services that we are unable perform ourselves, then Fantex
Holdings will continue to perform such services for an additional period of 180&nbsp;days. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Risks Associated with Our Business  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our ability to implement our business strategy is subject to numerous risks and uncertainties. We face many risks inherent in our
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 our Fantex Series&nbsp;EJ Manuel. These risks include, among others, the following: </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Risks Relating to Our Limited Operating History, Financial Position and Capital Needs  </I></B></FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>We have incurred significant losses since our inception and anticipate that we will continue to incur losses in the
future. </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>We have a very limited operating history, which may make it difficult for you to evaluate the success of our business to
date and to assess our future viability. Our business model also requires us to make substantial upfront payments to our contract parties in exchange for rights to future payments. </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>To date, we have not generated any revenues or cash flow from any brand contract, and following completion of this
offering, our brand contract with EJ Manuel will represent our only source of revenue or cash flow. We may not receive the cash amounts that we expect, or any at all, from our brand contract with EJ
Manuel or from any future brand contracts and we may never generate sufficient revenue to become profitable. </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>We will need to obtain additional funding to acquire additional brands and we may also need additional funding to continue
operations. If we fail to obtain the necessary financing, or fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be unable to continue our operations at
planned levels and we may be forced to significantly delay, scale back or discontinue our operations. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2><B><I> Risks Relating to Our Brand Contracts and Our Business  </I></B></FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Our principal source of cash flow for the foreseeable future will be derived from our brand contracts. </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>We do not have any experience managing brand contracts and we do not have any historical performance data about our brand
contracts. </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Our cash flows under our brand contracts will depend upon the continued satisfactory performance of the related contract
party, and we do not have any rights to require the contract party to take any actions to attract or maintain or otherwise generate brand income. </FONT></DD></DL>
</UL>
 <p style="font-family:times;"><font style="font-size:1pt;line-height:1pt;">&nbsp;</font></p>
</DIV>
 <P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>9</FONT></P>

<HR NOSHADE>
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</FONT> <FONT SIZE=2>
<A HREF="#bg10401a_main_toc">Table of Contents</A> </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><BR></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I> </i></font></p>
<DIV style="width:100%;border:#000000 solid 1pt;padding-top:12pt;padding-right:12pt;padding-bottom:1pt;padding-left:12pt;">
 <UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>The contract party is neither our affiliate, nor a director, officer or employee of our company and owes no fiduciary
duties to us or any of our stockholders. The contract party has no obligation to enhance the value of the brand or disclose harmful information to the stockholders. </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Profitability of our 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. </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>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, it is likely that the brand income with
respect to such brand contract will not return to its prior levels or may cease completely. </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>The contract party or other third parties may refuse or fail to make payments to us under the brand contracts. </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Our 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. </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>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. </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>The financial and other information that we obtain 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 we anticipate. </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Our 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. </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>The valuation of our brand contracts and expected ABI requires us to make material assumptions that may ultimately prove
to be incorrect. In such an event, we could suffer significant losses that could materially and adversely affect our results of operations. </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Changes in government policy, legislation or regulatory interpretations could cause our 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 our business operations and ability to offer
additional tracking stocks. </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>The leagues, team owners, players associations, endorsement partners, elected officials or others may take actions that
could restrict our ability or make it more costly for us to enter into future brand contracts. </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>We are dependent on our management team, and the loss of any key member of this team may prevent us from implementing our
business plan in a timely manner, or at all. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2><B><I> Risks Relating to Each of Our Contract Parties  </I></B></FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Our ability to increase the value of our tracking stock brands may be limited and our investments in the promotion of such
tracking stock brands may cause the market value of our stock to decline. </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>The value of our tracking stock brands is dependent upon the performance of, and to a lesser extent, the popularity of our
contract parties. </FONT></DD></DL>
</UL>
 <p style="font-family:times;"><font style="font-size:1pt;line-height:1pt;">&nbsp;</font></p>
</DIV>
 <P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>10</FONT></P>

<HR NOSHADE>
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<P style="font-family:times;"><FONT SIZE=2><I> </i></font></p>
<DIV style="width:100%;border:#000000 solid 1pt;padding-top:12pt;padding-right:12pt;padding-bottom:1pt;padding-left:12pt;">

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Contract parties in the NFL could be negatively affected by an NFL work stoppage. </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Contract parties in the NFL could be negatively affected by current and future rules of the NFL. </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>There could be a decline in the popularity of the NFL and/or the team on which the contract party plays in the NFL, or a
decline in the contract party's popularity. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2><B><I> Risks Relating to EJ Manuel  </I></B></FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>EJ Manuel's NFL player contract is a significant portion of the current amounts we would receive under his brand contract. </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>The profitability of EJ Manuel's brand contract is substantially dependent upon EJ Manuel's ability to enter into
additional high-value, multi-year NFL player contracts, and on his ability to successfully attract and retain endorsements during his playing career and thereafter significantly in excess of amounts
he has attracted historically and/or generate other brand income after his playing career. For a more detailed description of the valuation of the EJ Manuel Brand Contract, please see section entitled
"&#151;EJ Manuel Brand Contract, at Estimated Fair Value" beginning on page&nbsp;93. </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>EJ Manuel has incurred other secured debt, including mortgage payables, the payment of which may adversely impact his
ability to make payments under the brand contract. </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>EJ Manuel may suffer from an injury, illness or a medical condition; any injuries, illnesses or medical conditions of EJ
Manuel may affect the cash received by us under the brand contract. </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Future negative publicity could damage EJ Manuel's reputation and impair the value of his brand. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2><B><I> Risks Relating to Vernon Davis  </I></B></FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Vernon Davis's NFL player contract is a significant portion of the current amounts we would receive under his brand
contract. </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>The profitability of Vernon Davis's brand contract is substantially dependent upon Vernon Davis's ability to enter into at
least one additional multi-year NFL player contract for at least $33&nbsp;million, and, to a lesser extent, on his ability to successfully attract and retain endorsements during his playing career
and thereafter in excess of amounts he has attracted historically and/or generate other brand income after his playing career. For a more detailed description of the valuation of the Vernon Davis
Brand Contract, please see section entitled "&#151;Vernon Davis Brand Contract, at Estimated Fair Value" beginning on page&nbsp;99. </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Vernon Davis has incurred other secured debt, including auto and mortgage payables, the payment of which may adversely
impact his ability to make payments under the brand contract. </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Vernon Davis may suffer from an injury, illness or a medical condition; any injuries, illnesses or medical conditions of
Vernon Davis may affect the cash received by us under the brand contract. </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Future negative publicity could damage Vernon Davis's reputation and impair the value of his brand. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2><B><I> Risks Relating to Arian Foster  </I></B></FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Arian Foster's NFL player contract is a significant portion of the current amounts we would receive under his brand
contract. </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>The profitability of Arian Foster's brand contract is substantially dependent upon Arian Foster's ability to enter into at
least one additional multi-year NFL player contract on economic terms </FONT></DD></DL>
</UL>
 <p style="font-family:times;"><font style="font-size:1pt;line-height:1pt;">&nbsp;</font></p>
</DIV>
 <P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>11</FONT></P>

<HR NOSHADE>
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<P style="font-family:times;"><FONT SIZE=2><I> </i></font></p>
<DIV style="width:100%;border:#000000 solid 1pt;padding-top:12pt;padding-right:12pt;padding-bottom:1pt;padding-left:12pt;">
 <UL>
<UL>

<P style="font-family:times;"><FONT SIZE=2>that
are comparable to his existing NFL player contract, and, to a lesser extent, on his ability to successfully attract and retain endorsements during his playing career and thereafter in excess of
amounts he has attracted historically and/or generate other brand income after his playing career. For a more detailed description of the valuation of the Arian Foster Brand Contract, please see
section entitled "&#151;Arian Foster Brand Contract, at Estimated Fair Value" beginning on page&nbsp;102. </FONT></P>

</UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Arian Foster may suffer from an injury, illness or a medical condition; any injuries, illnesses or medical conditions of
Arian Foster may affect the cash received by us under the brand contract. </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Future negative publicity could damage Arian Foster's reputation and impair the value of his brand. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2><B><I> Risks Relating to our Tracking Stock Structure  </I></B></FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>A specified portion of the ABI associated with each of our brand contracts will be attributed to our platform common stock
rather than the associated tracking stock. Therefore each of our tracking stocks will only partially reflect the economic performance of the associated brand contract and other assets and expenses of
the associated tracking stock brand. </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>As a series of our common stock, each of our tracking stocks will be exposed to additional risks associated with our
company as a whole, including any individual tracking stock that exists at the time of the offering or that we may establish and issue in the future. </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>The market price of our tracking stocks may not reflect the intrinsic value or performance of the associated tracking
stock brand. </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>The market price of our tracking stocks may be more volatile than other publicly traded common stock because of our unique
capital structure. </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Our capital structure may create conflicts of interest for our board of directors and management, which could have a
material adverse effect on the market value of any of our tracking stocks. </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Our parent, Fantex Holdings,&nbsp;Inc., or Fantex Holdings, as a holder of our platform common stock, will have control
over key decision making as a result of their control over a majority of our voting stock. </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Ownership of our platform common stock by our parent company and any of our officers or directors, may create, or appear
to create, conflicts of interest with holders of our tracking stocks. </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Our officers and directors may have a conflict of interest or appear to have a conflict since almost all of our officers
are also officers of Fantex Holdings. </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Our capital structure may decrease the amounts available for the payment of dividends to holders of our tracking stocks. </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Our board of directors has the ability to change our attribution policies at any time without a vote of our stockholders,
which may adversely affect the market value of our Fantex Series&nbsp;EJ Manuel. </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Our board of directors may, in its sole discretion, elect to convert any of our tracking stocks into our platform common
stock following the two-year anniversary of the filing of a certificate of designation 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 our tracking stocks. </FONT></DD></DL>
</UL>
 <p style="font-family:times;"><font style="font-size:1pt;line-height:1pt;">&nbsp;</font></p>
</DIV>
 <P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>12</FONT></P>

<HR NOSHADE>
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<DIV style="width:100%;border:#000000 solid 1pt;padding-top:12pt;padding-right:12pt;padding-bottom:1pt;padding-left:12pt;">
 <P style="font-family:times;"><FONT SIZE=2><B><I> Risks Relating to this Offering and the Offering Process  </I></B></FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>There is no current trading market for our Fantex Series&nbsp;EJ Manuel or any other series of our capital stock and if
a trading market does not develop, purchasers of our Fantex Series&nbsp;EJ Manuel may not be able to sell, or may have difficulty selling, their shares. </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Our Fantex Series&nbsp;EJ Manuel is not a "covered security," or otherwise exempt from the "blue sky" securities laws
governing sales and purchases of Fantex Series&nbsp;EJ Manuel in each of the fifty states, and therefore we must register in each state in which offers and sales will be made. </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>State securities laws may limit secondary trading, which may restrict the states in which and conditions under which you
can sell shares of our Fantex Series&nbsp;EJ Manuel. </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>We expect that our offering will primarily attract individual investors, and therefore our initial public offering price
may not be sustainable if and when trading begins, and the price of our Fantex Series&nbsp;EJ Manuel could decline rapidly and significantly. </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>We intend to issue additional tracking stocks, which would reduce then-existing investors' percentage of ownership in
Fantex and may dilute our share value. </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Transaction costs for trades on the FBS ATS could decrease the liquidity of your investment in our Fantex Series&nbsp;EJ
Manuel and could reduce or eliminate any positive return on your investment in our Fantex Series&nbsp;EJ Manuel. </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Our compliance burdens and costs will be significant as a result of operating as a public company, particularly as a
result of our tracking stock structure. Our management will be required to devote substantial time to compliance matters. </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>If Fantex Series&nbsp;EJ Manuel is not treated as a class of common stock of Fantex, adverse federal income tax
consequences will result. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2><B><I> Risks Relating to the Issuance of Additional Tracking Stocks, Including the Issuance of Fantex Series Vernon Davis and Fantex Series Arian Foster (the related offering of
which has been postponed and which may not be consummated on terms described elsewhere in this prospectus, if at all).  </I></B></FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Our Fantex Series&nbsp;EJ Manuel may be adversely impacted by any non-performing brand contracts, whether or not such
brand contracts are included in the assets attributed to our Fantex Series&nbsp;EJ Manuel. </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>If a blog post published about us in August 2013 were held to be in violation of the Securities Act, we could be required
to repurchase securities sold, if any, in our offering of Fantex Series Arian Foster. You should rely only on statements made in this prospectus in determining whether to purchase shares of our Fantex
Series&nbsp;EJ Manuel. For a more detailed discussion, please see the risk factor concerning the August 2013 blog post beginning on page&nbsp;67. </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Our business may be adversely impacted by the postponement of our offering of the Fantex Series Arian Foster. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2><B><I> Risks Relating to Our Affiliate, FBS, and the FBS ATS  </I></B></FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>To own or trade our Fantex Series&nbsp;EJ Manuel, you must have a brokerage account with FBS and our Fantex
Series&nbsp;EJ Manuel will be traded in the secondary market only through the FBS ATS. </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>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. </FONT></DD></DL>
</UL>
 <p style="font-family:times;"><font style="font-size:1pt;line-height:1pt;">&nbsp;</font></p>
</DIV>
 <P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>13</FONT></P>

<HR NOSHADE>
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<P style="font-family:times;"><FONT SIZE=2><I> </i></font></p>
<DIV style="width:100%;border:#000000 solid 1pt;padding-top:12pt;padding-right:12pt;padding-bottom:1pt;padding-left:12pt;">
 <UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>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 our, FBS's or the third party's control, which may result in an inability to sell your shares. </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>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. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2><B><I> Risks Relating to the Latitude Given to Our Board and Fantex Holdings  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our 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. Our 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 our company and the best interests of all of our stockholders as a whole. In certain circumstances, decisions of our board of directors may also be subject to the approval of the
conflicts committee. This may mean that our 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 our stockholders as a
whole. Significant decisions that may be made by Fantex Holdings or our board of directors without your consent include the following: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2><I>Voting.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Holders of shares of our tracking stocks and our
platform common stock are each entitled to one vote per share of such stock. Following the consummation of this offering, Fantex Holdings, our parent company, will hold all 100,000,000 outstanding
shares of our platform common stock, and thus will hold substantially all of the voting power of our outstanding common stock. As a result, our parent, Fantex Holdings will have control over key
decision making as a result of their control over a majority of our voting stock, including, for example, election of our board of directors and other major stockholder decisions, such as a whether or
not to enter into a change of control of the company.  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2><I>Conversion.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Our board of directors may, in its sole
discretion, elect to convert any of our tracking stocks into our platform common stock following the two-year anniversary of the filing of a certificate of designation creating such tracking stock,
thereby changing the nature of your investment and possibly diluting your economic interest in our company, which could result in a loss in value to holders of our tracking stocks. </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2><I>Dividends.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Our board of directors is permitted, but not
required, to declare and pay dividends on our platform common stock or any of our tracking stocks. Our board of directors has discretion to declare a dividend on any series of common stock without
declaring a dividend on any other series of our common stock, but not in excess of the available dividend amounts for each series. We 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 series. Our board of directors may change its dividend policy at any time and from time to
time. However, our board of directors will not in any event change the definition of "available dividend amount" for any series of our common stock or declare dividends on any series of our common
stock in excess of the "available dividend amount" for that series.  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2><I>Sale of Brands.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Our board of directors may in its
discretion sell all or substantially all of the assets of a tracking stock brand. If we do so (but not in connection with a sale of our company as a whole), our 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 designation creating such tracking stock, or they may choose any combination of the foregoing (however, they must choose one of
these options). </FONT></DD></DL>
</UL>
 <p style="font-family:times;"><font style="font-size:1pt;line-height:1pt;">&nbsp;</font></p>
</DIV>
 <P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>14</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2><I> </i></font></p>
<DIV style="width:100%;border:#000000 solid 1pt;padding-top:12pt;padding-right:12pt;padding-bottom:1pt;padding-left:12pt;">
 <UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2><I>Attribution Policies.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Our board of directors may, without
stockholder approval, modify, change, rescind or create exceptions to our management and attribution policies for purposes of attributing our assets and liabilities between and among our platform unit
and various other business units that we intend to establish from time to time, and attributing between these different business units other items (such as debt, corporate overhead, taxes, corporate
opportunities and other charges and obligations) in a manner we deem reasonable after taking into account all material factors. However, our board of directors will not in any event reallocate the
"underlying assets" for any tracking stock, as such term is defined in the certificate of designation for that series. For the Fantex Series&nbsp;EJ Manuel, the "underlying assets" are 95% of the
ABI. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2><B> Conflicts of Interest  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The offering is being conducted in accordance with the applicable provisions of Rule&nbsp;5121 of the Conduct Rules of the Financial
Industry Regulatory Authority,&nbsp;Inc., or FINRA, because one of the underwriters, FBS, will have a "conflict of interest" pursuant to Rule&nbsp;5121(f)(5)(B) because Fantex is under common
control with FBS, and pursuant to Rule&nbsp;5121(f)(5)(C)(ii) because at least five percent of the net offering proceeds, not including underwriting compensation, are intended to be directed to an
affiliate of FBS. Rule&nbsp;5121 requires that a "qualified independent underwriter" as defined in FINRA Rule&nbsp;5121 must participate in the preparation of the registration statement of which
this prospectus forms&nbsp;a part and perform due diligence investigations with respect to the registration statement and this prospectus. Accordingly, Stifel, Nicolaus&nbsp;&amp; Company,
Incorporated is assuming the responsibilities of acting as the "qualified independent underwriter" in the offering. In consideration for its services and expenses as the qualified independent
underwriter, FBS has agreed to pay Stifel, Nicolaus&nbsp;&amp; Company, Incorporated a fee equal to $130,925, assuming the sale of 523,700 shares of the Fantex Series&nbsp;EJ Manuel in this offering
at an initial public offering price of $10.00 per share (in each case, the amounts set forth on the front cover of this prospectus). Pursuant to FINRA Rule&nbsp;5121, FBS will not confirm sales to
accounts in which it exercises discretionary authority, if any, without the specific prior written approval of the account holder. See "Underwriting (Conflicts of Interest)&#151;Conflicts of
Interest." </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Corporate Information  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our principal executive offices are located at 330 Townsend Street, Suite&nbsp;234, San Francisco, CA&nbsp;94107, and our telephone
number is (415)&nbsp;592-5950. Our website address is www.fantexinc.com. The website address for FBS is www.fantex.com. Neither information contained on our website or the website of FBS is
incorporated by reference into this prospectus, and you should not consider information contained on either of these websites to be part of this prospectus. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
logo, "Fantex," and other trademarks or service marks of Fantex Holdings, our parent company, appearing in this prospectus are the property of Fantex Holdings. This prospectus
contains additional trade names, trademarks and service marks of other companies. We do not intend our use or display of other companies' trade names, trademarks or service marks to imply
relationships with, or endorsement or sponsorship of us by, these other companies. Subsequent use of such trademarks and service marks in this prospectus and prospectus supplements may occur without
their respective superscript symbols (<SUP>TM</SUP> or <SUP>SM</SUP>) in order to facilitate readability and does not constitute a waiver of any rights that might be associated with the
respective trademarks or service marks. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Implications of Being an Emerging Growth Company  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a company with less than $1.0&nbsp;billion in revenue during our last fiscal year, we qualify as an "emerging growth company" as
defined in the Jumpstart our Business Startups Act of 2012, or the </FONT></P>
 <p style="font-family:times;"><font style="font-size:1pt;line-height:1pt;">&nbsp;</font></p>
</DIV>
 <P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>15</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>JOBS
Act. An emerging growth company may take advantage of specified reduced reporting and other burdens that are otherwise applicable generally to public companies. These provisions
include:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>a requirement to have only two years of audited financial statements and only two years of related MD&amp;A; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>an exemption from the auditor attestation requirement on the effectiveness of our internal control over financial
reporting; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>an extended transition period for complying with new or revised accounting standards; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>reduced disclosure about the company's executive compensation arrangements; and </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>no non-binding advisory votes on executive compensation or golden parachute arrangements. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
may take advantage of these provisions for up to the last day of the fiscal year following the fifth anniversary of the date of the first sale of common equity securities pursuant to
an effective registration statement under the Securities Act or such earlier time when we are no longer an emerging growth company. We would cease to be an emerging growth company if we have more than
$1.0&nbsp;billion in annual revenues, have more than $700&nbsp;million in market value of our capital stock held by non-affiliates, or issue more than $1.0&nbsp;billion of non-convertible debt
over a three-year period. We may choose to take advantage of some but not all of these reduced burdens. We have taken advantage of other reduced reporting requirements in this prospectus, and we may
choose to do so in future filings. To the extent we do, the information that we provide stockholders may be different than you might get from other public companies in which you hold equity interests. </FONT></P>
 <p style="font-family:times;"><font style="font-size:1pt;line-height:1pt;">&nbsp;</font></p>
</DIV>
 <P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>16</FONT></P>

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<A HREF="#bg10401a_main_toc">Table of Contents</A> </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;<BR></FONT></P>


<P style="font-family:times;"><FONT SIZE=2><I> </i></font></p>
<DIV style="width:100%;border:#000000 solid 1pt;padding-top:12pt;padding-right:12pt;padding-bottom:1pt;padding-left:12pt;">
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="ce10401_the_offering"> </A>
<A NAME="toc_ce10401_1"> </A>
<BR></FONT><FONT SIZE=2><B>  THE OFFERING    <BR>    </B></FONT></P>

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<TR VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Shares offered</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>523,700 shares of Fantex Series&nbsp;EJ Manuel.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Common stock to be outstanding after this offering</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>100,000,000 shares of platform common stock and 523,700 shares of Fantex Series&nbsp;EJ Manuel.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Offering type</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>The offering is being conducted on a best efforts, all or none basis. To the extent that there is insufficient
interest in shares of our Fantex Series&nbsp;EJ Manuel, this offering may be cancelled and no shares of our Fantex Series&nbsp;EJ Manuel would be sold to the public.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Voting rights</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>The holders of shares of our tracking stock, including Fantex Series&nbsp;EJ Manuel, and our platform common
stock are each entitled to one vote per share of such stock. Following the consummation of this offering, Fantex Holdings, our parent company, will continue to hold substantially all of the voting power of our outstanding common stock. See
"Description of Capital Stock."</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Conversion</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Our board of directors may, at any time following the two-year anniversary of the filing of a certificate of
designation creating the Fantex Series&nbsp;EJ Manuel, convert shares of our Fantex Series&nbsp;EJ Manuel into fully paid and non-assessable shares of our platform common stock at a conversion ratio to be determined by dividing the fair value of a
share of our Fantex Series&nbsp;EJ Manuel by the fair value of a share of our platform common stock. For a further description, including how we would determine the fair value of shares of our platform common stock and our Fantex Series&nbsp;EJ
Manuel, please see "Description of Capital Stock."</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Liquidation</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>In the event of a liquidation, dissolution or winding up of Fantex, including a change of control of Fantex,
after payment or provision for payment of our debts and liabilities, each share of our common stock (including each of our tracking stocks and the platform common stock) will be entitled to receive a proportionate interest in the net assets of Fantex
remaining for distribution to holders of common stock equal to the fair value of such share, </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2> that if the assets legally available for distribution to the holders of common stock are insufficient
to permit the payment in full to each share of common stock the amount to which they would otherwise be entitled, then such assets available for distribution to the holders of common stock will be distributed to all holders of common stock ratably in
proportion to the full amounts which they would be entitled to receive on shares of common stock held by them. If all distributions required above are made and there remain any assets available for distribution to holders of common stock such assets
shall be divided among the holders of common stock in proportion to the amounts that were payable as required above in respect of the shares held by them. For a further description, including</FONT></TD>
</TR>
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<P style="font-family:times;"><FONT SIZE=2><I> </i></font></p>
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<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p align=left style="font-family:times;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>how we would determine the fair value of shares of our platform common stock and our tracking stocks, please see "Description of
Capital Stock."</FONT></TD>
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<TR VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Dividends</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>To date, we have never declared or paid any cash dividends on our capital stock. Following this offering, we
intend to pay cash dividends from time to time out of available cash for each tracking stock, including our Fantex Series&nbsp;EJ Manuel, equal to an amount in excess of 20% of the "available dividend amount" for such series. The available dividend
amount for any tracking stock is, as of any particular date, an amount equal to the lesser of (a)&nbsp;total assets of our company legally available for the payment of dividends under Delaware law and (b)&nbsp;an amount equal to (i)&nbsp;the excess
of the total assets attributed to the applicable tracking stock brand over the total liabilities attributed to such tracking stock brand, less the par value of the outstanding shares of such tracking stock; or (ii)&nbsp;if there is no such excess,
the attributable income of the tracking stock brand for the fiscal year in which the dividend is being declared and/or the preceding fiscal year.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Use of proceeds</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>As consideration for the ABI under our brand contract with EJ Manuel we will pay him a one-time cash amount of
$4.98&nbsp;million contingent upon our ability to obtain financing. We will use up to $4.98&nbsp;million of our net proceeds from this offering, together with existing cash and cash equivalents if necessary, to fund the payment of this purchase price
to EJ Manuel. See "Use of Proceeds."</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Electronic form and transferability</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>The Fantex Series&nbsp;EJ Manuel (and any shares of our platform common stock issuable upon conversion of the
Fantex Series&nbsp;EJ Manuel) will be issued in electronic form only and will be available exclusively through our broker-dealer affiliate, FBS. Shares of our Fantex Series&nbsp;EJ Manuel are new securities; there are currently none issued and there
is currently no established market. We do not intend to apply for a listing of our Fantex Series&nbsp;EJ Manuel or our platform common stock on any securities exchange or for their inclusion in any established automated dealer quotation system.
Accordingly, we cannot assure you as to the development or liquidity of any market for our Fantex Series&nbsp;EJ Manuel or our platform common stock. Neither Fantex Series&nbsp;EJ Manuel nor our platform common stock will be listed on any exchange
and neither will be transferable except through the FBS ATS. There can be no assurance that an active trading market for the Fantex Series&nbsp;EJ Manuel or platform common stock will develop, or that you will be able to resell shares of our Fantex
Series&nbsp;EJ Manuel or platform common stock at a price that would reflect their fundamental value, if at all.</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><BR>
<BR></FONT>
</TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
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 <P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>18</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2><I> </i></font></p>
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<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>U.S. federal income tax consequences</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p align=left style="font-family:times;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>For material U.S. federal income tax consequences of the acquisition, ownership, disposition and conversion of the Fantex
Series&nbsp;EJ Manuel and platform common stock, please see "Material U.S. Federal Income Tax Considerations" herein.</FONT></TD>
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<TD style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Maximum Investment Limits and Financial Suitability</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>An investment in Fantex Series&nbsp;EJ Manuel is subject to certain maximum investment limits, some of which are
based on financial suitability. See "Underwriting (Conflicts of Interest)&#151;Offering Process&#151;Maximum Investment Limits and Financial Suitability."</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Risk factors</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>You should read "Risk Factors" for a discussion of factors you should carefully consider before deciding to
invest in our Fantex Series&nbsp;EJ Manuel.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>FBS ATS trading symbol</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Fantex EJ Manuel</FONT></TD>
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<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
number of shares of our common stock to be outstanding after this offering is based on 100,000,000 shares of our platform common stock outstanding as of December&nbsp;31, 2013 and
no shares of our tracking stock outstanding as of December&nbsp;31, 2013 and excludes (1)&nbsp;1,055,000 shares of our Fantex Series Arian Foster that may be issuable upon the consummation of the
offering of our Fantex Series Arian Foster pursuant to the Arian Foster Registration Statement, (2)&nbsp;421,100 shares of our Fantex Series Vernon Davis that may be issuable upon the consummation
of the offering of our Fantex Series Vernon Davis pursuant to the Vernon Davis Registration Statement, and (3)&nbsp;7,500,000 shares of our platform common stock that will be reserved for future
issuance under our 2013 Equity Incentive Award Plan. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except
as otherwise indicated, all information in this prospectus assumes that our certificate of designations for the Fantex Series&nbsp;EJ Manuel, which we will file in connection
with the consummation of this offering, is in effect. </FONT></P>
 <p style="font-family:times;"><font style="font-size:1pt;line-height:1pt;">&nbsp;</font></p>
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<P style="font-family:times;"><FONT SIZE=2>&nbsp;<BR></FONT></P>


<P style="font-family:times;"><FONT SIZE=2><I> </i></font></p>
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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
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<A NAME="toc_cg10401_1"> </A>
<BR></FONT><FONT SIZE=2><B>  QUESTIONS AND ANSWERS    <BR>    </B></FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2><B>Q:</B></FONT></DT><DD style="font-family:times;"><FONT SIZE=2><B>What is our business?</B></FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>A:</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>We
are a brand acquisition, marketing and brand development company whose focus is on acquiring minority interests in the income associated with the brands
of professional athletes, entertainers and other high-profile individuals and assisting such individuals in enhancing the reach and value of their respective brands. We intend to focus our business on
three core areas: evaluating, targeting and accessing individuals and brands with the potential to generate significant brand income, acquiring minority interests in such brand income, and assisting
our acquired brands in increasing their value via technology and through leveraging our marketing, advertising and strategic partnering expertise.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2><B>Q:</B></FONT></DT><DD style="font-family:times;"><FONT SIZE=2><B>What are the securities that we are offering?</B></FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>A:</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>We
are offering shares of our Fantex Series&nbsp;EJ Manuel. We have entered into a brand contract with EJ Manuel, a professional athlete in the National
Football League, or NFL, pursuant to which we will acquire an interest equal to 10% of the gross monies or other consideration (including rights to make investments) that EJ Manuel receives from and
after February&nbsp;14, 2014, subject to specified exceptions and net of certain related expenses (such as legal fees, travel expenses and self-employment taxes), as a result of his activities in
the NFL and related fields (including activities in a non-NFL football league), such as broadcasting and coaching. We are attributing 95% of our acquired brand income, or ABI, under the EJ Manuel
brand contract to a tracking unit that we refer to as the EJ Manuel Brand. Our Fantex Series&nbsp;EJ Manuel is intended to track and reflect the separate economic performance of the EJ Manuel Brand.
In addition, we will attribute to the EJ Manuel Brand certain expenses of Fantex, including in certain cases expenses related to other series of our common stock that may be issued from time to time
in the future. See "Management and Attribution Policies."  </FONT>
<BR>

<P style="font-family:times;"><FONT SIZE=2>Holders
of shares of our Fantex Series&nbsp;EJ Manuel will have no direct investment in the businesses or assets attributed to the EJ Manuel Brand. Rather, an investment in Fantex Series&nbsp;EJ
Manuel will represent an ownership interest in our company as a whole.  </FONT></P>

</DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2><B>Q:</B></FONT></DT><DD style="font-family:times;"><FONT SIZE=2><B>Are there any risks associated with an investment in our Fantex Series&nbsp;EJ
Manuel?</B></FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>A:</FONT></DT><DD style="font-family:times;"><FONT SIZE=2><I>Yes</I></FONT><FONT SIZE=2>. Our Fantex Series&nbsp;EJ Manuel is highly risky and speculative. Investing in our Fantex
Series&nbsp;EJ Manuel should be considered only by persons who can afford the loss of their entire investment. Please see "Risk Factors" beginning on page 35. </FONT></DD></DL>

<P style="font-family:times;"><FONT SIZE=2><B>Q:&nbsp;&nbsp;&nbsp;&nbsp;Will we offer additional securities in the future?</B></FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>A:</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>We
have also entered into brand contracts with Arian Foster, effective February&nbsp;28, 2013, as amended, and Vernon Davis, effective October&nbsp;30,
2013. We intend to enter into additional brand contracts in the future with other individuals with the potential to generate significant brand income, and in some cases, with the affiliates of these
individuals, who we refer to, together with the individual, as the contract party. We are actively pursuing these additional brand contracts, but as of February&nbsp;28, 2014 we have no current
commitments to enter into another brand contract. All of our brand contracts, including those that we enter into in the future with other contract parties, are or are expected to be contingent upon
obtaining financing to fund the acquisition of the minority interest in the respective brands, and we intend to finance the acquisition of additional brands, at least in part, through the issuance of
additional tracking stocks linked to the value of such brands. </FONT></DD></DL>
 <p style="font-family:times;"><font style="font-size:1pt;line-height:1pt;">&nbsp;</font></p>
</DIV>
 <P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>20</FONT></P>

<HR NOSHADE>
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<P style="font-family:times;"><FONT SIZE=2><I> </i></font></p>
<DIV style="width:100%;border:#000000 solid 1pt;padding-top:12pt;padding-right:12pt;padding-bottom:1pt;padding-left:12pt;">
 <DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2><B>Q:</B></FONT></DT><DD style="font-family:times;"><FONT SIZE=2><B>What happens to the remaining 5% of the ABI under the EJ Manuel brand contract?</B></FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>A:</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>The
EJ Manuel Brand will initially include as an attributed asset 95% of ABI under our EJ Manuel brand contract. The remaining 5% of our ABI under the EJ
Manuel brand contract will be attributed to another series of our common stock that we refer to as our platform common stock. We also intend to attribute a similar interest of each of our future brand
contracts to our platform common stock, such that our platform common stock would have an interest in the ABI of all of our brand contracts. We intend to use the income attributed to our platform
common stock for general corporate and working capital purposes, including investments and expenses that may be generally applicable to all our brands. The attribution of this income to the platform
common stock also gives our platform common stock a value for purposes of any future conversion of any of our tracking stocks, including our Fantex Series&nbsp;EJ Manuel, into the platform common
stock.  </FONT>
<BR>

<P style="font-family:times;"><FONT SIZE=2>The
5% of our ABI under the EJ Manuel brand contract that is attributed to the platform common stock is in addition to a fee in an amount equal to 5% of the amount of gross cash received by us, if
any, payable to our parent for services provided by our parent under a management agreement between our parent and us. For a more detailed description of the management agreement, please see
"Transactions with Related Persons&#151;Management Agreement."  </FONT></P>

</DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2><B>Q:</B></FONT></DT><DD style="font-family:times;"><FONT SIZE=2><B>Who is EJ Manuel</B></FONT><FONT SIZE=2>?
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>A:</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>EJ
Manuel is a quarterback for the Bills in the NFL. He has been in the NFL since 2013. EJ Manuel attended Florida State University, which finished was 25-6
in games started by EJ Manuel. EJ Manuel was an All-Atlantic Coast Conference second team selection in 2012 and was the most valuable player in the 2013 Senior Bowl. EJ Manuel was picked sixteenth
overall in the first round of the 2013 NFL draft and signed with the Bills. EJ Manuel was the Bills starting quarterback for the 2013 season, but missed 6 games due to injury. EJ Manuel was born on
March&nbsp;19, 1990 and will be 24&nbsp;years old as of the start of the 2014 NFL season.  </FONT>
<BR>

<P style="font-family:times;"><FONT SIZE=2>During
the preseason and 2013 NFL season, EJ Manuel suffered several knee injuries, causing him to miss a total of six games during that season. EJ Manuel has experienced these and other instances of
normal wear and tear as an athlete in the NFL and we expect that EJ Manuel will continue to experience such wear and tear. Any worsening of these conditions, or re injury or new injury, could
materially and adversely affect EJ Manuel's playing performance and the value of the EJ Manuel Brand.  </FONT></P>

</DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2><B>Q:</B></FONT></DT><DD style="font-family:times;"><FONT SIZE=2><B>What is the EJ Manuel brand contract?</B></FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>A:</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>The
brand contract is a contract between us and EJ Manuel, assigning to us 10% of the EJ Manuel brand income from and after February&nbsp;14, 2014. In
exchange, we have agreed, subject to completion of this offering, to pay EJ Manuel $4.98&nbsp;million, after which we will have no further payment obligations to him under the brand contract. The
brand contract is intended to be effective in perpetuity and may be terminated only upon mutual agreement of EJ Manuel and us. Any decision by us to terminate the brand contract will be made solely by
our board of directors in good faith and will not be submitted to a vote of our stockholders. We do not intend to terminate the brand contract with EJ Manuel unless we are paid consideration by him
that we deem sufficient to compensate us for any reasonably expected future ABI at the time, or if our expectation of future ABI under the brand contract is not sufficient in our view to justify
incurring continued expense in connection with maintenance of such brand contract. </FONT></DD></DL>
 <p style="font-family:times;"><font style="font-size:1pt;line-height:1pt;">&nbsp;</font></p>
</DIV>
 <P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>21</FONT></P>

<HR NOSHADE>
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<P style="font-family:times;"><FONT SIZE=2><I> </i></font></p>
<DIV style="width:100%;border:#000000 solid 1pt;padding-top:12pt;padding-right:12pt;padding-bottom:1pt;padding-left:12pt;">
 <DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2><B>Q:</B></FONT></DT><DD style="font-family:times;"><FONT SIZE=2><B>What is brand income under the EJ Manuel brand contract?</B></FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>A:</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Brand
income means any amounts that EJ Manuel may receive from and after February&nbsp;14, 2014, subject to specified exceptions, as a result of his
activities in the sport of football (including NFL and non-NFL activities), including his employment as a professional athlete and the license or assignment of rights in his persona, including use of
his name, voice, likeness, image, signature, talents, live or taped performances, in connection with motion pictures, television and Internet programming, radio, music, literary, talent engagements,
personal appearances, public appearances, records and recording, or publications; any use of his persona for purposes of advertising, merchandising, or trade, including sponsorships, endorsements and
appearances, and any other license or assignment of rights in his persona, to generate income; and any other personal services performed by EJ Manuel which are of the type typically performed by
individuals in the field of football because of their status as a professional athlete or other professional within the field of football (including, without limitation, sports casting, coaching,
participating in sports camps, acting as spokesperson).
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2><B>Q:</B></FONT></DT><DD style="font-family:times;"><FONT SIZE=2><B>Is there anything excluded from brand income under the EJ Manuel brand contract?</B></FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>A:</FONT></DT><DD style="font-family:times;"><FONT SIZE=2><I>Yes</I></FONT><FONT SIZE=2>. We will not be entitled to any amounts related to any income received by EJ Manuel that is not
specifically included in his brand income, such as investments and income not related to professional football and related fields.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2><B>Q:</B></FONT></DT><DD style="font-family:times;"><FONT SIZE=2><B>Do investors in the Fantex Series&nbsp;EJ Manuel invest directly in EJ Manuel?</B></FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>A:</FONT></DT><DD style="font-family:times;"><FONT SIZE=2><I>No</I></FONT><FONT SIZE=2>. Investors in our Fantex Series&nbsp;EJ Manuel are investing in Fantex and not in the brand contract or
EJ Manuel. However, Fantex Series&nbsp;EJ Manuel is intended to track and reflect the separate economic performance of the businesses and assets to be attributed to the EJ Manuel Brand. Only Fantex
will have rights under the brand contract and recourse against EJ Manuel.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2><B>Q:</B></FONT></DT><DD style="font-family:times;"><FONT SIZE=2><B>Will you report separate financial information about the EJ Manuel Brand?</B></FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>A:</FONT></DT><DD style="font-family:times;"><FONT SIZE=2><I>Yes.</I></FONT><FONT SIZE=2> Although investors in our Fantex Series&nbsp;EJ Manuel are investing in our securities and not in the
brand contract or EJ Manuel, we will report and include as an exhibit in our periodic filings that we make under the Securities Exchange Act of 1934, as amended, or the Exchange Act, unaudited
attributed financial information that will include balance sheet, statement of operations and cash flow information for each tracking stock, including Fantex Series&nbsp;EJ Manuel, as well as an
explanation of the methods used in attributing the information to the tracking stock. In addition, we would provide in such exhibit for each tracking stock comparative financial information together
with a discussion and analysis of that information that described reasons for changes between periods and other developments or events material to the performance of such tracking stock. </FONT>
<BR>

<P style="font-family:times;"><FONT SIZE=2>In
addition, at least until such time as we no longer have significant concentration among our brands relative to our consolidated financials we will include in our audited annual reports statements
of cash receipts from included contracts with respect to each of our brand contracts.  </FONT></P>

</DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2><B>Q:</B></FONT></DT><DD style="font-family:times;"><FONT SIZE=2><B>How did we verify information provided by EJ Manuel?</B></FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>A:</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Prior
to entering into the brand contract with EJ Manuel, we conducted due diligence and reviewed the included contracts and other documents to support our
estimate of his projected brand income. We also ran credit checks on EJ Manuel to verify his payment history and track record of performing under other obligations. We also commissioned a third-party
background check to determine whether there was any other relevant information that might be useful in our evaluation of the EJ Manuel Brand. </FONT></DD></DL>
 <p style="font-family:times;"><font style="font-size:1pt;line-height:1pt;">&nbsp;</font></p>
</DIV>
 <P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>22</FONT></P>

<HR NOSHADE>
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<P style="font-family:times;"><FONT SIZE=2><I> </i></font></p>
<DIV style="width:100%;border:#000000 solid 1pt;padding-top:12pt;padding-right:12pt;padding-bottom:1pt;padding-left:12pt;">
 <DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2><B>Q:</B></FONT></DT><DD style="font-family:times;"><FONT SIZE=2><B>How will we verify information about the brand income of EJ Manuel in the future?</B></FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>A:</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Under
the EJ Manuel brand contract EJ Manuel is required to make ongoing payments and reports to us of brand income as well as other material information,
and we have audit rights that we will utilize to verify the information that we receive. In addition, as noted above, at least until such time as we no longer have significant concentration among our
brands relative to our consolidated financials, a statement of cash receipts from included contracts with respect to each of our brand contracts, including the EJ Manuel brand contract, will be
audited on an annual basis.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2><B>Q:</B></FONT></DT><DD style="font-family:times;"><FONT SIZE=2><B>How did we determine the purchase price for the ABI under the EJ Manuel brand
contract?</B></FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>A:</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>We
determined the purchase price for the ABI based on an arm's-length negotiation with EJ Manuel. As part of our assessment of the value of the ABI, we
applied a discounted cash flow analysis to our estimate of the lifetime brand income earning potential of EJ Manuel based on a number of our own estimates and assumptions. Please see "Business" and
"Management's Discussion and Analysis of Financial Condition and Results of Operations&#151;Critical Accounting Policies" for further discussion of the type of factors that we generally
consider in our assessments of value of brands we seek to acquire, as well as specific factors that we considered in our assessment of EJ Manuel's lifetime brand income earning potential. </FONT>
<BR>

<P style="font-family:times;"><FONT SIZE=2>There
can be no assurances that our assumptions and estimates will be accurate, and a failure of any of our assumptions or estimates to be accurate could have a materially adverse impact on your
investment return on our Fantex Series&nbsp;EJ Manuel. It is also important to note that EJ Manuel was one of the first contract parties with whom we entered into a brand contract. As a result, our
assumptions and estimates underlying our valuation of his brand are necessarily subject to greater uncertainty than we expect would be the case for future brand valuations. In particular, we estimated
a significant increase in the lifetime brand income that we believe EJ Manuel may earn as a result of our assumption that he will enter into additional multi-year NFL player contracts for at least
$80.31&nbsp;million in total. We do not know, however, whether any of our other assumptions and expectations discussed in this prospectus will prove to be true.  </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>Before
you make an investment in our Fantex Series&nbsp;EJ Manuel, you should make your own assessment of the value of the brand contract and the shares of our Fantex Series&nbsp;EJ Manuel,
including for example your own assessment of EJ Manuel's lifetime brand income earning potential (both from his NFL playing career, endorsements and other brand income generating activity) as well as
the present value of those potential lifetime earnings based on discount rates you think are appropriate to account for the risks inherent in the assumptions and estimates underlying such assessments. </FONT></P>

</DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2><B>Q:</B></FONT></DT><DD style="font-family:times;"><FONT SIZE=2><B>Is the EJ Manuel brand contract secured by any collateral?</B></FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>A:</FONT></DT><DD style="font-family:times;"><FONT SIZE=2><I>No</I></FONT><FONT SIZE=2>. The EJ Manuel brand contract is not secured by any collateral. In addition, the EJ Manuel brand contract
also does not impose any other financial restrictions on him, including any restriction from incurring unsecured debt. The amounts that EJ Manuel owes us under the brand contract are unsecured and
payments to us depend on EJ Manuel's creditworthiness, which may change in the future. If EJ Manuel incurs additional secured or unsecured debt after this offering, or if he incurs excessive expenses,
he may be impaired in his ability to make payments to us under the brand contract. In addition, additional debt or expenses may adversely affect his creditworthiness generally, and could result in his
financial distress, insolvency, or bankruptcy. If EJ Manuel incurs other indebtedness or expenses and cannot pay all of his indebtedness or expenses, he may choose to make payments to other creditors
rather than us. If EJ Manuel </FONT></DD></DL>
 <p style="font-family:times;"><font style="font-size:1pt;line-height:1pt;">&nbsp;</font></p>
</DIV>
 <P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>23</FONT></P>

<HR NOSHADE>
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<DIV style="width:100%;border:#000000 solid 1pt;padding-top:12pt;padding-right:12pt;padding-bottom:1pt;padding-left:12pt;">
 <UL>

<P style="font-family:times;"><FONT SIZE=2>declares
bankruptcy any amounts owed to us will only be paid out after all of his secured debt, including auto and mortgage payables, is repaid.  </FONT></P>

</UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2><B>Q:</B></FONT></DT><DD style="font-family:times;"><FONT SIZE=2><B>To the extent that EJ Manuel fails to make a required payment under the brand contract can the investors in our Fantex
Series&nbsp;EJ Manuel collect payments themselves?</B></FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>A:</FONT></DT><DD style="font-family:times;"><FONT SIZE=2><I>No</I></FONT><FONT SIZE=2>. The brand contract is between EJ Manuel and us, and as a stockholder, you have no rights under the brand
contract as a third-party beneficiary, or otherwise. In the event of any default under the brand contract, you must rely on us to collect any amounts due and you will be unable to pursue any claims
against EJ Manuel directly. We intend to enforce all contractual obligations to the extent we deem necessary and in the best interest of the company and its stockholders. Express remedies provided in
the brand contract in the event of late payments include (1)&nbsp;payment of interest at prime rate plus 3% per year, and (2)&nbsp;public disclosure of such late payments as well as other remedies
available to us at law, including the ability to file&nbsp;a judicial action seeking the payment of all amounts owed to us from EJ Manuel and, as applicable, the counterparties to the included
contracts with EJ Manuel.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2><B>Q:</B></FONT></DT><DD style="font-family:times;"><FONT SIZE=2><B>What happens if EJ Manuel is injured or suffers any other illness or medical condition, retires or fails to make an NFL
roster?</B></FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>A:</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>A
significant portion of EJ Manuel's brand income is dependent on his continued satisfactory performance in the NFL. If he retires from the NFL at any time
within two years following this offering, other than as a result of injury, illness or medical condition, we may elect in our sole discretion to terminate the brand contract and he will be required to
pay us approximately $5.23&nbsp;million (net of any amounts previously paid to us by him pursuant to the brand contract). Otherwise, if he stops playing in the NFL for any reason, either voluntary
or involuntary, his brand income would likely decline. EJ Manuel has no obligation to take any actions to generate brand income, and subject to the limited obligation to reimburse us funds as
discussed above, he may choose not to do anything to generate brand income following the date on which we pay the purchase price.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2><B>Q:</B></FONT></DT><DD style="font-family:times;"><FONT SIZE=2><B>Will we make dividend payments on Fantex Series&nbsp;EJ Manuel or other series of our common stock that may be outstanding in the
future?</B></FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>A:</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Our
board of directors would be permitted, but not required, to declare dividends from time to time on any series of our common stock, including the Fantex
Series&nbsp;EJ Manuel. Dividends will be limited to an amount up to the "available dividend amount" for such series. Following this offering, we intend to pay periodic cash dividends out of
available cash for each tracking stock, including Fantex Series&nbsp;EJ Manuel, equal to an amount in excess of 20% of the "available dividend amount" for each such series. Our board of directors
may change its dividend policy at any time and from time to time, and we may retain some or all available funds and future income to support our operations and finance the growth and development of
our business as well as, in some circumstances, invest some of the available funds to further enhance a brand or acquire additional ABI in a brand if we believe that those would be more productive
uses of some or all of the available funds. However, our board of directors will not in any event change the definition of "available dividend amount" for any series of our common stock or declare
dividends on any series of our common stock in excess of the "available dividend amount" for that series. Please see "Dividend Policy."
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2><B>Q:</B></FONT></DT><DD style="font-family:times;"><FONT SIZE=2><B>What happens if we convert shares of Fantex Series&nbsp;EJ Manuel into platform common
stock?</B></FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>A:</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Our
board of directors may, at any time following the two-year anniversary of the filing of a certificate of designation creating Fantex Series&nbsp;EJ
Manuel resolve to convert shares of our Fantex </FONT></DD></DL>
 <p style="font-family:times;"><font style="font-size:1pt;line-height:1pt;">&nbsp;</font></p>
</DIV>
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<P style="font-family:times;"><FONT SIZE=2><I> </i></font></p>
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 <UL>

<P style="font-family:times;"><FONT SIZE=2>Series&nbsp;EJ
Manuel into fully paid and non-assessable shares of our platform common stock at a conversion ratio to be determined by dividing the fair value of a share of our Fantex
Series&nbsp;EJ Manuel by the fair value of a share of our platform common stock. For example, if a share of Fantex Series&nbsp;EJ Manuel had at the time of determination a fair value of $10.00,
and a share of platform common stock had at the time of determination a fair value of $5.00, then if our board of directors elected to convert the Fantex Series&nbsp;EJ Manuel into platform common
stock, each holder of Fantex Series&nbsp;EJ Manuel would receive two shares of platform common stock for each share of Fantex Series&nbsp;EJ Manuel held by them. For a further description,
including how we would determine the fair value of shares of our platform common stock and our Fantex Series&nbsp;EJ Manuel, please see "Description of Capital Stock."  </FONT></P>

</UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2><B>Q:</B></FONT></DT><DD style="font-family:times;"><FONT SIZE=2><B>Under what circumstances do we anticipate that we might convert shares of Fantex Series&nbsp;EJ Manuel into platform common
stock?</B></FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>A:</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Although
our board of directors may, at any time following the two-year anniversary of the filing of a certificate of designation creating Fantex
Series&nbsp;EJ Manuel resolve to convert shares of our Fantex Series&nbsp;EJ Manuel into shares of our platform common stock, we anticipate doing so only in the following
circumstances: </FONT> <FONT SIZE=2>
<BR><BR></FONT>
<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the Fantex Series&nbsp;EJ Manuel is no longer an actively traded stock as determined in good faith by our board of
directors or a committee of our board of directors, such as, for example, if EJ Manuel suffers an injury, illness, medical condition or dies, and his brand income diminishes as a result and there is
little if any expectation that his brand income will materially increase in the future. In this case our board of directors may convert the shares of Fantex Series&nbsp;EJ Manuel into platform
common stock as a means of retiring the Fantex Series&nbsp;EJ Manuel, and our board of directors may do so in this circumstance even if the platform common stock is not an actively traded stock as
determined in good faith by our board of directors or a committee of our board of directors.  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>other special or extraordinary circumstances exist, such as a potential restructuring, reorganization or change of control
of Fantex. We would not expect our board of directors to approve a conversion in this circumstance unless there is an active trading market for the platform common stock at the time of such
conversion.  </FONT>
<BR>

<P style="font-family:times;"><FONT SIZE=2>We
structured our tracking stocks to provide the board with discretion to determine whether and when to convert a tracking stock into platform common stock in part because our tracking stock and our
business model are each unique and unproven and we wanted to maintain flexibility to reorganize our operations if our board of directors deems it to be in the best interest of the Company and all of
our stockholders.  </FONT></P>

</DD></DL>
</UL>
</DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2><B>Q:</B></FONT></DT><DD style="font-family:times;"><FONT SIZE=2><B>What happens if we sell all or substantially all of our assets of the EJ Manuel
Brand?</B></FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>A:</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>If
we sell all or substantially all of the assets of the EJ Manuel Brand (but not in connection with a sale of our company), our board of directors will
either pay a dividend to holders of our Fantex Series&nbsp;EJ Manuel, redeem shares of Fantex Series&nbsp;EJ Manuel, convert the outstanding shares of our Fantex Series&nbsp;EJ Manuel into our
platform common stock following the two-year anniversary of the filing of a certificate of designation creating such tracking stock or any combination of the foregoing. See "Description of Capital
Stock&#151;Common Stock&#151;Mandatory Dividend, Redemption and/or Conversion on Disposition of Assets."
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2><B>Q:</B></FONT></DT><DD style="font-family:times;"><FONT SIZE=2><B>What happens if we are sold or are otherwise liquidated?</B></FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>A:</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>In
the event of a sale or a liquidation, dissolution or winding up of our company, including a change of control, and after payment or provision for payment
of our debts and liabilities, each </FONT></DD></DL>
 <p style="font-family:times;"><font style="font-size:1pt;line-height:1pt;">&nbsp;</font></p>
</DIV>
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<UL>

<P style="font-family:times;"><FONT SIZE=2>share
of our common stock will be entitled to receive a proportionate interest in our net assets remaining for distribution to holders of common stock equal to the fair value of such share, or if
sufficient funds are not available (including, for example, as a result of satisfying liabilities of the Company), then a portion of such amount shared ratably with other holders of common stock. As a
result, holders of Fantex Series&nbsp;EJ Manuel would not necessarily receive upon a liquidation amounts equal to the cash received by Fantex under the EJ Manuel brand contract, after expenses that
are attributable to the Fantex Series&nbsp;EJ Manuel. See "Description of Capital Stock."  </FONT></P>

</UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2><B>Q:</B></FONT></DT><DD style="font-family:times;"><FONT SIZE=2><B>How will shares of my Fantex Series&nbsp;EJ Manuel be treated for United States federal income tax
purposes?</B></FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>A:</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>The
Fantex Series&nbsp;EJ Manuel should be treated as stock of our company for U.S. federal income tax purposes. There are, however, no court decisions or
other authorities directly bearing on the tax effects of the issuance and classification of stock with the features of Fantex Series&nbsp;EJ Manuel, so the matter is not free from doubt. In
addition, the Internal Revenue Service has announced that it will not issue advance rulings on the classification of an instrument with characteristics similar to those of Fantex Series&nbsp;EJ
Manuel. Accordingly, no assurance can be given that the views expressed in this paragraph, if contested, would be sustained by a court. It is possible that the Internal Revenue Service could
successfully assert that the issuance of the Fantex Series&nbsp;EJ Manuel could be taxable to us and the exchange of the Fantex Series&nbsp;EJ Manuel for shares of our platform common stock would
not qualify as a tax-free recapitalization. You should consult your tax advisor regarding the tax consequences of an investment in Fantex Series&nbsp;EJ Manuel.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2><B>Q:</B></FONT></DT><DD style="font-family:times;"><FONT SIZE=2><B>How is the Fantex Series&nbsp;EJ Manuel being offered?</B></FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>A:</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Our
Fantex Series&nbsp;EJ Manuel is being offered through a best efforts, all or none basis, by the underwriters, with Stifel, Nicolaus&nbsp;&amp; Company,
Incorporated, acting as the "qualified independent underwriter." To the extent that there is insufficient interest in shares of our Fantex Series&nbsp;EJ Manuel, this offering may be cancelled and
no shares of our Fantex Series&nbsp;EJ Manuel would be sold to the public. The process for placing orders in the offering is different from that used for most public offerings of equity securities.
You should carefully read the section entitled "Underwriting (Conflicts of Interest)&#151;Offering Process" for additional information regarding how to place an order for our Fantex
Series&nbsp;EJ Manuel. </FONT></DD></DL>


<P style="font-family:times;"><FONT SIZE=2><B>Q:&nbsp;&nbsp;&nbsp;&nbsp;Will I receive a certificate for my Fantex Series&nbsp;EJ Manuel?  </B></FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>A:</FONT></DT><DD style="font-family:times;"><FONT SIZE=2><I>No</I></FONT><FONT SIZE=2>. The shares of our Fantex Series&nbsp;EJ Manuel will be issued in book-entry form only. We will act as
registrar and transfer agent and will maintain a book-entry record of the holders of shares of our Fantex Series&nbsp;EJ Manuel.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2><B>Q:</B></FONT></DT><DD style="font-family:times;"><FONT SIZE=2><B>Will the Fantex Series&nbsp;EJ Manuel be listed on an exchange?</B></FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>A:</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>To
the extent available, buy and sell orders will be posted and executed by the FBS ATS, which is an alternative trading system as defined under the Exchange
Act. Our Fantex Series&nbsp;EJ Manuel will not be listed on a stock exchange such as the New York Stock Exchange or NASDAQ.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2><B>Q:</B></FONT></DT><DD style="font-family:times;"><FONT SIZE=2><B>Can I purchase Fantex Series&nbsp;EJ Manuel using my existing brokerage account?</B></FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>A:</FONT></DT><DD style="font-family:times;"><FONT SIZE=2><I>No</I></FONT><FONT SIZE=2>. In order to purchase shares of our Fantex Series&nbsp;EJ Manuel, either in this offering or subsequent
to this offering, investors are required to open a brokerage account with our broker-dealer affiliate, FBS. You will not be able to purchase or sell any shares of our Fantex Series&nbsp;EJ Manuel
through any other brokerage account or any exchange or trading system. See "Underwriting (Conflicts of Interest)&#151;Offering Process." </FONT></DD></DL>
 <p style="font-family:times;"><font style="font-size:1pt;line-height:1pt;">&nbsp;</font></p>
</DIV>
 <P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>26</FONT></P>

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<DIV style="width:100%;border:#000000 solid 1pt;padding-top:12pt;padding-right:12pt;padding-bottom:1pt;padding-left:12pt;">
 <DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2><B>Q:</B></FONT></DT><DD style="font-family:times;"><FONT SIZE=2><B>What is FBS and what role does it play in the offering and subsequent trading
market?</B></FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>A:</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>FBS
is our affiliated broker-dealer and is regulated by the SEC and FINRA. FBS is serving as an underwriter in this offering, along with Stifel,
Nicolaus&nbsp;&amp; Company, Incorporated, a "qualified independent underwriter" as defined in FINRA Rule&nbsp;5121. In addition, FBS is registered as an alternative trading system, which we refer to
as the FBS ATS, with the SEC. Upon completion of this offering, buy and sell orders for shares of our Fantex Series&nbsp;EJ Manuel will be posted on the FBS ATS under the symbol "Fantex EJ Manuel."
FBS will be the exclusive broker-dealer for executing trades in our Fantex Series&nbsp;EJ Manuel. Therefore, if you would like to execute any trades in our securities you first must open a brokerage
account with FBS. Stifel, Nicolaus&nbsp;&amp; Company, Incorporated will not be responsible for executing any trades in our Fantex Series&nbsp;EJ Manuel following this offering. FBS may act as
principal or agent in these transactions, and may also act as a market-maker in the secondary market from time to time. However, it is not obligated to make a market in the Fantex Series&nbsp;EJ
Manuel and if it does so it may discontinue any market-making at any time without notice, in its sole discretion. Currently, FBS is not expecting to act as a market-maker in the secondary trading
market for the Fantex Series&nbsp;EJ Manuel, though it will periodically reassess whether to do so. FBS may in the future also consider contacting other broker-dealers to assess their interest in
making markets in the securities of Fantex on the FBS ATS. If we have limited or no market-makers at any time, the liquidity of the secondary market for the Fantex Series&nbsp;EJ Manuel may be
materially adversely affected.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2><B>Q:</B></FONT></DT><DD style="font-family:times;"><FONT SIZE=2><B>What is the FBS ATS?</B></FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>A:</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Our
affiliate, FBS, operates an alternative trading system, registered with the SEC. Qualified investors will be required to open brokerage accounts with FBS
in order to invest in our securities, initially the Fantex Series&nbsp;EJ Manuel being offered hereby, and in the future, additional securities that we may register and issue from time to time.
Investors who have an account with FBS may post "bid" and "ask" orders for our securities with FBS that will be matched with other orders on the FBS ATS. Our securities will be exclusively traded on
the FBS ATS. FBS will accept only limit orders for trades in Fantex Series&nbsp;EJ Manuel and other securities on the FBS ATS.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2><B>Q:</B></FONT></DT><DD style="font-family:times;"><FONT SIZE=2><B>How can I sell my shares in Fantex Series&nbsp;EJ Manuel if I decide that I no longer wish to hold
them?</B></FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>A:</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>FBS
ATS has agreed to post buy and sell orders for shares of our Fantex Series&nbsp;EJ Manuel upon completion of this offering. If you decide to sell
shares of our Fantex Series&nbsp;EJ Manuel, you must pay a commission to FBS. Payment of this brokerage fee may negate or mitigate any appreciation on shares of our Fantex Series&nbsp;EJ Manuel or
cause you to incur a loss on your investment.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2><B>Q:</B></FONT></DT><DD style="font-family:times;"><FONT SIZE=2><B>Does Fantex participate in the FBS ATS as an investor?</B></FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>A:</FONT></DT><DD style="font-family:times;"><FONT SIZE=2><I>No</I></FONT><FONT SIZE=2>. Neither we nor the officers, directors, employees, promoters or affiliates of Fantex, Fantex Holdings or
FBS will be allowed to purchase any shares in the offering or execute trades in the secondary market for our or their own accounts through FBS or on the FBS ATS, except where FBS is acting as a
market-maker on the FBS ATS. FBS has no current intention of acting as a market-maker in the secondary market for Fantex Series&nbsp;EJ Manuel.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2><B>Q:</B></FONT></DT><DD style="font-family:times;"><FONT SIZE=2><B>What is the relationship between Fantex, Fantex Holdings and FBS?</B></FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>A:</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Fantex
Holdings was incorporated on April&nbsp;9, 2012. FBS was formed on May&nbsp;7, 2012 as a wholly-owned subsidiary of Fantex Holdings. We were
incorporated on September&nbsp;14, 2012 as a wholly-owned subsidiary of Fantex Holdings. Following this offering, FBS will continue to be a wholly-owned subsidiary of Fantex Holdings, and Fantex
Holdings will own 100% of our outstanding shares of platform common stock and no shares of our Fantex Series&nbsp;EJ Manuel. To date, Fantex Holdings has incurred expenses on our behalf and
contributed working capital towards our operations. See "Management's Discussion and Analysis of Financial Condition and Results of Operations&#151;Results of Operations
and&#151;Liquidity and Capital Resources." </FONT></DD></DL>
 <p style="font-family:times;"><font style="font-size:1pt;line-height:1pt;">&nbsp;</font></p>
</DIV>
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<P style="font-family:times;"><FONT SIZE=2>
<A HREF="#bg10401a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="da10401_glossary_of_certain_terms"> </A>
<A NAME="toc_da10401_1"> </A>
<BR></FONT><FONT SIZE=2><B>  GLOSSARY OF CERTAIN TERMS    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Set forth below is a glossary of certain terms used throughout this prospectus. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"acquired
brand income" or "ABI" means as context requires: (1)&nbsp;with respect to the EJ Manuel brand contract, the 10% of the brand income of EJ Manuel that we are acquiring
pursuant to his brand contract; (2)&nbsp;with respect to the Vernon Davis brand contract, the 10% of the brand income of Vernon Davis that we are acquiring pursuant to his brand contract;
(3)&nbsp;with respect to the Arian Foster brand contract, the 20% of the brand income of Arian Foster that we are acquiring pursuant to such brand contract; and (4)&nbsp;with respect to future
brand contracts, the negotiated amount of brand income of such contract party that we acquire pursuant to such brand contract. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"Arian
Foster" (including related pronouns) means Arian Foster, a running back for the Houston Texans in the NFL and/or The Ugly Duck,&nbsp;LLC, an affiliate of Arian Foster, or both
jointly and severally, as the context requires. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"Arian
Foster Brand" is a tracking unit that our board of directors intends to establish, upon the consummation of the offering of our Fantex Series Arian Foster. For a description of
the assets and liabilities that we are attributing to the Arian Foster Brand, please see "Management and Attribution Policies&#151;Attribution&#151;Other Tracking Stock Brands." </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"Arian
Foster Registration Statement" is a separate registration statement on Form&nbsp;S-1 (333-191772) with respect to shares of our Fantex Series Arian Foster Convertible Tracking
Stock, filed with the SEC pursuant to the Securities Act. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"attributable
income" with respect to any tracking stock as of any date of determination means the attributable income for such tracking stock brand as reflected in the unaudited
attributed financial information included as an exhibit to our most recent Exchange Act report. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"brand
contract" means as context requires: (1)&nbsp;when referring to EJ Manuel, that certain Brand Agreement dated as of February&nbsp;14, 2014, between EJ Manuel and Fantex;
(2)&nbsp;when referring to Vernon Davis, that certain Brand Agreement dated as of October&nbsp;30, 2013, between Vernon Davis and Fantex; (3)&nbsp;when referring to Arian Foster, that certain
Brand Agreement dated as of February&nbsp;28, 2013, and as amended and restated on May&nbsp;24, 2013 and August&nbsp;21, 2013, between Arian Foster and Fantex; or (4)&nbsp;generally, any
future brand agreement that Fantex may enter into with a contract party. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"brand
income" means, other than excluded income, as the context requires:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>with respect to EJ Manuel, contingent on our payment of the purchase price to him,  </FONT> <FONT SIZE=2>
<BR><BR></FONT>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the gross monies or other consideration (including rights to make investments) that he receives from and after
February&nbsp;14, 2014, subject to specified exceptions and net of certain related expenses (such as legal fees, travel expenses and self-employment taxes) as a result of his activities in the sport
of football (including NFL and non-NFL activities), including salaries and wages from his employment as a professional athlete and the license or assignment of rights in his persona, including use of
his name, voice, likeness, image, signature, talents, live or taped performances, in connection with motion pictures, television and Internet programming, radio, music, literary, talent engagements,
personal appearances, public appearances, records and recording, or publications; any use of his persona for purposes of advertising, merchandising, or trade, including sponsorships, endorsements and
appearances, and any other license or assignment of rights in his persona, to generate income; and any other personal services performed by EJ Manuel which are of the type typically performed by
individuals in the field of football because of their status as a professional athlete or other professional within the field of football (including, without limitation, sports casting, coaching,
participating in sports camps, acting as spokesperson); and </FONT></DD></DL>
</DD></DL>
</UL>
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<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>in the event EJ Manuel receives, pursuant to any Brand Income Contract, stock or other equity interests (including
membership interests and partnership interests), or options, warrants or other rights to acquire any of the foregoing interests, he shall provide us with advance written notice pursuant to which we
can elect to participate in the equity award by being issued a direct equity interest in the applicable issuer and to the extent we fail to make such an election or the applicable issuer does not
agree to issue to us the equity interests, we shall have the right to indirectly participate in the applicable equity interest by receiving our percentage (10%) of the distributions made on the
equity, including any distributions, dividends, profit payments, proceeds resulting from the sale, lease, license, exchange, liquidation or other disposition of any equity or assets of the applicable
issuer, in each case subject to us making a payment of any consideration for such equity interests proportional to our interest in the equity award (or such other negotiated price in the event that EJ
Manuel receives a discounted investment opportunity as a result of the performance of personal services that are not customary within celebrity endorsements), including without limitation, payments
required by the terms of exercise of any options, warrants or other similar rights to acquire stock or other equity interests; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD></DL>
</UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>with respect to Vernon Davis, contingent on our payment of the purchase price to him,  </FONT> <FONT SIZE=2>
<BR><BR></FONT>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the gross monies or other consideration (including rights to make investments) that he receives from and after
October&nbsp;30, 2013, subject to specified exceptions and net of certain related expenses (such as legal fees, travel expenses and self-employment taxes) as a result of his activities in the sport
of football (including NFL and non-NFL activities), including salaries and wages from his employment as a professional athlete and the license or assignment of rights in his persona, including use of
his name, voice, likeness, image, signature, talents, live or taped performances, in connection with motion pictures, television and Internet programming, radio, music, literary, talent engagements,
personal appearances, public appearances, records and recording, or publications; any use of his persona for purposes of advertising, merchandising, or trade, including sponsorships, endorsements and
appearances, and any other license or assignment of rights in his persona, to generate income; and any other personal services performed by Vernon Davis which are of the type typically performed by
individuals in the field of football because of their status as a professional athlete or other professional within the field of football (including, without limitation, sports casting, coaching,
participating in sports camps, acting as spokesperson); and  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>in the event Vernon Davis receives, pursuant to any Brand Income Contract, stock or other equity interests (including
membership interests and partnership interests), or options, warrants or other rights to acquire any of the foregoing interests, he shall provide us with advance written notice pursuant to which we
can elect to participate in the equity award by being issued a direct equity interest in the applicable issuer and to the extent we fail to make such an election or the applicable issuer does not
agree to issue to us the equity interests, we shall have the right to indirectly participate in the applicable equity interest by receiving our percentage (10%) of the distributions made on the
equity, including any distributions, dividends, profit payments, proceeds resulting from the sale, lease, license, exchange, liquidation or other disposition of any equity or assets of the applicable
issuer, in each case subject to us making a payment of any consideration for such equity interests proportional to our interest in the equity award (or such other negotiated price in the event that
Vernon Davis receives a discounted investment opportunity as a result of the performance of personal services that are not customary within celebrity endorsements), including without limitation,
payments required by the terms of exercise of any options, warrants or other similar rights to acquire stock or other equity interests; </FONT></DD></DL>
</DD></DL>
</UL>
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<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>with respect to Arian Foster, contingent on our payment of the purchase price to him,  </FONT> <FONT SIZE=2>
<BR><BR></FONT>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the gross monies or other consideration (including rights to make investments) that he receives from and after
February&nbsp;28, 2013 generally as a result of his skills and brand, including salary and wages from being an NFL football player and related fields (including activities in a non-NFL football
league), which consists of other compensation from his involvement in coaching, football camps, television or Internet programming (with respect to which he either performs in the role of a
professional or amateur football player, or performs as himself), radio (terrestrial or satellite), motion picture (solely to the extent Arian Foster appears as himself, such as in a documentary, or
is an actor in a motion picture playing the role of himself or an amateur or professional football), literary works the subject of which is Arian Foster, publications, personal appearances,
memorabilia signings and events, and the use of Arian Foster's name, voice, likeness, biography or talents for purposes of advertising and trade, including without limitation sponsorships,
endorsements, merchandising and appearances; and  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>in the event Arian Foster receives, pursuant to any Brand Income Contract, stock or other equity interests (including
membership interests and partnership interests), or options, warrants or other rights to acquire any of the foregoing interests, he shall provide us with advance written notice pursuant to which we
can elect to participate in the equity award by being issued a direct equity interest in the applicable issuer and to the extent we fail to make such an election or the applicable issuer does not
agree to issue to us the equity interests, we shall have the right to indirectly participate in the applicable equity interest by receiving our percentage (20%) of the distributions made on the
equity, including any distributions, dividends, profit payments, proceeds resulting from the sale, lease, license, exchange, liquidation or other disposition of any equity or assets of the applicable
issuer, in each case subject to us making a payment of any consideration for such equity interests proportional to our interest in the equity award, including without limitation, payments required by
the terms of exercise of any options, warrants or other similar rights to acquire stock or other equity interests; or </FONT><FONT SIZE=2>
<BR><BR></FONT></DD></DL>
</DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>with respect to other contract parties, the gross monies that such party receives generally as a result of their skills
and brand, including salary and wages from participation in their defined primary occupation, such as an athlete in the NFL, and related fields (including activities in a non-NFL football league),
such as broadcasting and coaching. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"contract
party" may as context requires refer to: (1)&nbsp;EJ Manuel; (2)&nbsp;Vernon Davis; (3)&nbsp;Arian Foster; or (4)&nbsp;any specified counterparty to a brand contract,
which may include an individual such as a professional athlete or entertainer, and/or affiliates or affiliated entities of such individual on a joint and several basis. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"EJ
Manuel" (including related pronouns) means Erik "EJ" R. Manuel, Jr., a quarterback for the Buffalo Bills in the NFL and/or Kire Enterprises&nbsp;LLC, an affiliate of EJ Manuel, or
both jointly and severally, as the context requires. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"EJ
Manuel Brand" is a tracking unit that our board of directors intends to establish, upon the consummation of the offering of our Fantex Series&nbsp;EJ Manuel. For a description of
the assets and liabilities that we are attributing to the EJ Manuel Brand, please see "Management and Attribution Policies&#151;Attribution&#151;EJ Manuel Brand." </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>30</FONT></P>

<HR NOSHADE>
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<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"excluded
income" means as the context requires:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>with respect to EJ Manuel: </FONT> <FONT SIZE=2>
<BR><BR></FONT>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>any cash receipts resulting from the contract party's investments in stocks or other equity, bonds, commodities,
derivatives, debt or real estate, so long as (a)&nbsp;such stocks or other equity, bonds, commodities, derivatives, debt investments and real estate are not received by him as compensation or
consideration for activities (including licensing of rights) in the "field" as defined in his brand contract, (b)&nbsp;the contract party is not obligated to provide any services related to the
"field" in connection with such investment and (c)&nbsp;the business or commercial venture related to such investment does not use the contract party's persona in its legal name or "dba," or in
connection with its marketing, advertising or promotion,  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>any income received from employment, services rendered or other activities not related to professional football and
related fields,  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>any reasonable reimbursement of incidental expenses actually incurred by EJ Manuel, including without limitation, travel,
lodging, per diem and other incidental expenses, or the value of any such items paid by a third party on his behalf,  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>certain future pension and benefit payments under the CBA, except that income deferred pursuant to Article&nbsp;26,
Section&nbsp;6 of such CBA shall not be deemed to be future pension payments and as such, shall be included in brand income; and  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>merchandise, services or service plans or merchandise, service or service plan credit up to the lesser of $40,000 and 4%
of all brand income during any applicable calendar year and as otherwise agreed by Fantex in its discretion; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD></DL>
</DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>with respect to Vernon Davis: </FONT> <FONT SIZE=2>
<BR><BR></FONT>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>any cash receipts resulting from his investments in stocks or other equity, bonds, commodities, derivatives, debt,
franchises or real estate, so long as such stocks or other equity, bonds, commodities, derivatives, debt investments, franchises and real estate are not received by him as compensation for activities
(including licensing of rights) in the "field" as defined in his brand contract,  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>any income received from employment, services rendered or other activities not related to professional football and
related fields,  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>any reasonable reimbursement of incidental expenses actually incurred by Vernon Davis, including without limitation,
travel, lodging, per diem and other incidental expenses, or the value of any such items paid by a third party on his behalf,  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>any income of: (1)&nbsp;the Vernon Davis Foundation or (2)&nbsp;any other charitable foundation or organization as a
result of personal services performed by Vernon Davis,  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>any proceeds of the insurance policy purchased by Vernon Davis against the risk of injury or disability, </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>certain future pension and benefit payments under the CBA, except that income deferred pursuant to Article&nbsp;26,
Section&nbsp;6 of such CBA shall not be deemed to be future pension payments and as such, shall be included in brand income;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>merchandise, services or service plans or merchandise, service or service plan credit up to the lesser of $40,000 and 4%
of all brand income during any applicable calendar year and as otherwise agreed by Fantex in its discretion; and </FONT></DD></DL>
</DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>31</FONT></P>

<HR NOSHADE>
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<UL>
<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the following specifically excluded income: </FONT> <FONT SIZE=2>
<BR><BR></FONT>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>income derived from his performance as a painter, sculptor or artist in any other fine or graphic arts medium, related of
Gallery 85 or any other art gallery owned by him or from any school for the arts established in part by him, whether charitable or for profit, regardless of whether he participates or his persona is
used to market or promote such school);  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>any and all cash or other consideration, in any form whatsoever, received by Vernon Davis from the following entities (or
their affiliates as agreed as of October&nbsp;30, 2013): (1)&nbsp;Ike Shehadeh and Ike's Love&nbsp;&amp; Sandwiches Franchising&nbsp;LLC and (2)&nbsp;Jamba Juice Company; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD></DL>
</DD></DL>
</UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>with respect to Arian Foster: </FONT> <FONT SIZE=2>
<BR><BR></FONT>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>any revenues resulting from Arian Foster's investments in stocks or other equity, bonds, commodities, derivatives, debt,
franchises or real estate, so long as (a)&nbsp;such stocks or other equity, bonds, commodities, derivatives or real estate are not received by Arian Foster as compensation for activities (including
licensing of rights) in the field, and (b)&nbsp;any such debt is not used to finance, and any such franchise is not participating in or related to, activities in the field, </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>any income received from employment, services rendered or other activities not related to professional football, </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>any reasonable reimbursement of incidental expenses actually incurred by Arian Foster, including without limitation,
travel, lodging, per diem and other incidental expenses, or the value of any such items paid by a third party on Participant's behalf,  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>certain future pension and benefit payments under the CBA, except that income deferred pursuant to Article&nbsp;26,
Section&nbsp;6 of such CBA shall not be deemed to be future pension payments and as such, shall be included in brand income;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>merchandise, services or service plans or merchandise, service or service plan credit up to the lesser of $40,000 and 4%
of all brand income during any applicable calendar year and as otherwise agreed by Fantex in its discretion; and  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the following specifically excluded income: </FONT> <FONT SIZE=2>
<BR><BR></FONT>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>income derived from: motion pictures and television (unless, in each case, Arian Foster either performs in the role of a
professional or amateur football player, or performs as himself), music (including writing, recording, publishing, artist management, touring), children's books, and any and all merchandising and
exploitation rights relating to any of these foregoing excluded categories;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>any and all cash or other consideration, in any form whatsoever, received by Arian Foster from the following entities (or
their affiliates as of February&nbsp;28, 2013): (A)&nbsp;Fuse Science,&nbsp;Inc. and (B)&nbsp;Mobli Media&nbsp;Inc.;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>$6.25&nbsp;million received by Arian Foster in March 2013 as the final payment to him from the Texans for his signing
bonus from the March&nbsp;5, 2012 contract with the Texans; or  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>any merchandise credit (or value thereof) payable to Arian Foster pursuant to the agreement, dated effective as of
March&nbsp;1, 2012, between Arian Foster and Under Armour,&nbsp;Inc. and any merchandise credit of the same or lesser value in any renewals, extensions or amendments and/or restatements thereof;
or </FONT></DD></DL>
</DD></DL>
</DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>32</FONT></P>

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<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>with respect to other contract parties, as specified in the respective brand contract between such contract party and
Fantex. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"fair
value" means:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>generally, the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. Where available, fair value is based on observable market prices or parameters or derived from such prices or parameters. Where observable prices
or inputs are not available, valuation models are applied; and </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>specifically, with respect to any share of our platform common stock or any of our tracking stocks, fair value will be
determined as the volume weighted average of the closing bid or sale prices, whichever is applicable, of such share over the 20-trading day period ending on the trading day before the date of
determination. However, such value will only be used for any series of our common stock if our board of directors determines in its good faith judgment that there is an active trading market for that
series. If our board of directors makes a determination that there is no active trading market for any series of our common stock, then the fair value for such series will be determined, at the
discretion of our board of directors, either by our board of directors in their good faith judgment or by a reputable and independent investment banking or valuation firm experienced in the valuation
of securities selected in good faith by our board of directors, provided, however, that to the extent that our board of directors determines in its good faith judgment that such series does not have
any material value in terms of assets attributable to such series, including but not limited to any material future brand income or assets, events or circumstances that our management or our board of
directors believe could reasonably result in material brand income in the future, then the fair value for such series may be determined by our board of directors in their good faith judgment alone.
Any such valuation determination will be made, whether by our board of directors or any independent investment banking, financial advisory or other valuation firm, based on the contractual value of
the brand assets related to the applicable tracking stock, and shall not include any discount for lack of marketability or liquidity or any minority interest discount (including that such series may
not have the rights contractually or otherwise, to receive dividends). Our board of directors intends to use such firm as a general matter unless the assets and expected valuation of the tracking
stock are not material. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"Fantex"
means Fantex,&nbsp;Inc. In addition, all other references in this prospectus to "the Company," "our company," "we," "us" and "our" refer to Fantex. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"Fantex
Series Arian Foster" is the tracking stock designated to track the Arian Foster Brand and being offered pursuant to the Arian Foster Registration Statement. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"Fantex
Series&nbsp;EJ Manuel" is the tracking stock designated to track the EJ Manuel Brand and being offered in this offering. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"Fantex
Series Vernon Davis" is the tracking stock designated to track the Vernon Davis Brand and being offered pursuant to the Vernon Davis Registration Statement. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"FBS"
means Fantex Brokerage Services,&nbsp;LLC, a registered broker-dealer affiliated with Fantex. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"FBS
ATS" means the alternative trading system operated by FBS. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"platform
common stock" means the series of our common stock provided for in our amended and restated certificate of incorporation into which our board of directors may determine to
convert any tracking stocks, following the two-year anniversary of the filing of a certificate of designation creating such tracking stock, based on the relative fair values of a share of platform
common stock and such tracking stock at the time of any such conversion. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>33</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"qualified
independent underwriter" means a qualified independent underwriter as defined under FINRA Rule&nbsp;5121, and which means a securities firm that does not have a conflict of
interest and that has agreed, in acting as a qualified independent underwriter, to undertake the legal responsibilities and liabilities of an underwriter under the Securities Act, specifically
including those inherent in Section&nbsp;11 thereof. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"tracking
stock" means any series of our common stock that our board of directors from time to time may designate as tracking a specified tracking stock brand. See "Description of
Capital Stock." </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"tracking
stock brand" or "tracking unit" means a business unit relating to a specified brand contract, which the corresponding tracking stock is designated to track. See "Management and
Attribution Policies." </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"underwriters"
refers to, as the context requires, FBS together with Stifel, Nicolaus&nbsp;&amp; Company, Incorporated, the "qualified independent underwriter" (as defined in FINRA
Rule&nbsp;5121) in this offering. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"Vernon
Davis" (including related pronouns) means Vernon Davis, a tight end for the 49ers in the NFL and/or The Duke Marketing&nbsp;LLC, an affiliate of Vernon Davis, or both jointly
and severally, as the context requires. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"Vernon
Davis Brand" is a tracking unit that our board of directors is establishing upon the consummation of an offering of shares of our Fantex Series Vernon Davis. For a description of
the assets and liabilities that we are attributing to the Vernon Davis Brand, please see "Management and Attribution Policies&#151;Attribution&#151;Vernon Davis Brand." </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"Vernon
Davis Registration Statement" is a separate registration statement on Form&nbsp;S-1 (333-192476) with respect to shares of our Fantex Series Vernon Davis Convertible Tracking
Stock, filed with the SEC pursuant to the Securities Act. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>34</FONT></P>

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<A HREF="#bg10401a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
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<BR></FONT><FONT SIZE=2><B>  RISK FACTORS    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Investing in our Fantex Series&nbsp;EJ Manuel involves a high degree of risk. You should carefully consider
the risks described below, together with the other information contained in this prospectus, including our financial statements and the related notes appearing at the end of this prospectus, and the
sections in this prospectus entitled "Business" and "Description of Capital Stock," before making any decision to invest in shares of our Fantex Series&nbsp;EJ Manuel. If any of the events discussed
in the risk factors below occur it could have a material and adverse impact on our business, results of operations, financial condition and cash flows. If that were to happen, the trading price of our
Fantex Series&nbsp;EJ Manuel could decline, and you could lose all or part of your investment.</I></FONT></P>


<P style="font-family:times;"><FONT SIZE=2><B> Risks Relating to Our Limited Operating History, Financial Position and Capital Needs  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> We have incurred significant losses since our inception and anticipate that we will continue to incur losses in the future.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We incorporated in Delaware in September 2012 as a wholly-owned subsidiary of Fantex Holdings. We are currently in a start-up phase and
to date have relied on our parent to conduct our operations. We therefore have a very limited operating history. Investment in our company is highly speculative because it entails substantial upfront
cost and significant risk that we may never become commercially viable. We have not generated any revenue to date, and our parent has incurred significant expenses on our behalf. Following this
offering, our parent will not be obligated to continue to incur expenses on our behalf except as required under our management agreement with them, and we expect that we will incur significant
expenses related to our ongoing operations. For the years ended December&nbsp;31, 2013 and 2012, we reported a net loss of approximately $3.6&nbsp;million and approximately $1.1&nbsp;million,
respectively, and had accumulated losses since inception of approximately $4.6&nbsp;million. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
expect to continue to incur losses for the foreseeable future, and we expect these losses to increase as we continue evaluating, targeting and accessing brands and negotiating the
acquisition of minority interests in those brands that meet our criteria, and as we develop the infrastructure necessary to support our ongoing operations. We may encounter unforeseen expenses,
difficulties, complications, delays and other unknown factors that may adversely affect our business. The size of our future net losses will depend, in part, on the rate of future growth of our
expenses, the rate at which we are able to acquire brands that meet our criteria and the ability of our acquired brands to generate revenues and cash flow. Even if our brands generate cash flows they
may not produce payments quickly enough to cover our expenses. If EJ Manuel, or any other individuals with whom we have or may contract in the future, fail to make payments in amounts we expect, or at
all, we may never become profitable. Even if we achieve profitability in the future, we may not be able to sustain profitability in subsequent periods. Our expected future losses will have an adverse
effect on our stockholders' equity and working capital. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> We have a very limited operating history, which may make it difficult for you to evaluate the success of our business to date and to assess our future viability. Our
business model also requires us to make substantial upfront payments to our contract parties in exchange for rights to future payments.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our operations to date have been limited to organizing and staffing our company, evaluating, targeting and accessing brands that meet
our criteria, negotiating the acquisition of minority interests in those brands and commencing the registration process for the offering of shares of our Fantex Series Arian Foster and Fantex Series
Vernon Davis. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
of February&nbsp;28, 2014, we have entered into three brand contracts one with each of EJ&nbsp;Manuel, Vernon Davis and Arian Foster, each professional athletes in the NFL. We
intend to enter into
additional brand contracts in the future with other contract parties and are actively pursuing these brand contracts, but as of February&nbsp;28, 2014 we have no current commitments to enter into
another </FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>brand
contract. Our contract with EJ Manuel requires us to make an upfront cash payment to him of $4.98&nbsp;million (less $0.25&nbsp;million to be held in escrow to satisfy future payment
obligations to us), and we expect that any other brand contracts that we enter into in the future with other contract parties will also require us to make upfront payments in return for the right to
future payments based on our ABI. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Therefore,
our business model requires us to make substantial upfront payments to our contract parties in exchange for rights to future payments. We will be at risk if for any reason we
do not receive those future payments, or if they are less than we would need to be profitable or to offset our expenses. We have no history to demonstrate, and we can make no assurances, that our
business model will be successful, or whether any of our brand contracts, including our brand contract with EJ Manuel, will be profitable. Consequently, it will be difficult for anyone to predict our
future success, performance or viability, and more difficult than it would be if we had a longer operating history and/or successful brand contracts to judge the viability of our business model, and
any such predictions may not be accurate or reliable. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> To date, we have not generated any revenues or cash flow from any brand contract, and following completion of this offering, our brand contract with EJ Manuel will represent
our only source of revenue or cash flow. We may not receive the cash amounts that we expect, or any at all, from our brand contract with EJ Manuel or from any future brand contracts and we may never
generate sufficient revenue to become profitable.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To date, we have not generated any revenues or cash flow from any brand contract and following completion of this offering, our brand
contract with EJ Manuel will represent our only source of cash flows. We may not receive the cash amounts that we expect, or any at all, from our brand contract with EJ Manuel or from any other brand
contracts. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
ability to generate revenue and become profitable will depend, among other things, upon our ability to successfully evaluate, target and access brands that have the potential to
generate significant brand income, acquire a minority interest in the brand income from these brands for an appropriate purchase price, aid our acquired brands in enhancing their value in amounts
sufficient to provide a return on our investment, and enforce the brand contracts and collect our ABI with respect to these brands. Even if we are able to successfully do these and other things that
are within our control there are numerous other factors, some of which are not within our control, that might impact our ability to
generate revenue or cash flows or be profitable, including those discussed in these Risk Factors and elsewhere in this prospectus. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition, there are numerous risks and uncertainties associated with the brands in which we invest, including that the success of our brand contracts will depend upon the
contributions, success and longevity of an individual in his primary occupation, such as an athlete in the NFL. Therefore, we are unable to predict the timing or amount of future cash receipts, or
when or if we will be able to achieve or maintain profitability. Even if we are able to acquire, manage and develop brands as described above, we anticipate incurring significant costs associated with
our efforts to achieve or maintain profitability. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Our business strategy depends in large part on our ability to build a robust platform of brands by entering into additional brand contracts. Even if we complete this
offering of Fantex Series&nbsp;EJ Manuel we may not be able to enter into additional brand contracts in the future, or enter into the number of additional brand contracts that we anticipate would be
necessary to support our business model.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our strategy of enhancing brand reach and brand value for our acquired brands depends in large part on our ability to build a robust
platform of brands and benefit from economies of scale and an ability to cross-pollinate and share best practices across our acquired brands. For example, any direct investment of resources that we
make in any promotional activities relative to our EJ Manuel Brand </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>36</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>must
exceed a return that is at least ten times our investment in order to increase the value of such tracking stock brand. Thus, unless we achieve significant economies of scale in our ability to
deliver brand enhancing value at a low cost across all our tracking stock brands (by, for example, utilizing fixed, in-house personnel rather than incurring out-of-pocket third party costs), then we
will not likely be able to make investments at a cost that would allow for a positive return on our investment. Accordingly, we are actively pursuing additional brand contracts that we intend to enter
into in the future. However, as of February&nbsp;28, 2014, we have no current commitments to enter into another brand contract. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
do not know if future potential contract parties will agree to enter into additional brand contracts and we may not be able to attract sufficient additional brand contracts. For
example, future potential contract parties may not view the brand contract as an attractive value proposition to them due to any number of factors, including differing expectations of an appropriate
purchase price that reflects the agreed upon ABI, which may be based on any number of factors, such as:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>we and future potential contract parties may not agree on the assumptions and estimates used to determine the estimated
future earnings of potential contract parties; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>potential contract parties may not want to incur legal, tax and other burdens associated with entering into a brand
contract, including, for example, ongoing information and disclosure requirements, as well as the potential risk, due to the lack of any currently binding or authoritative guidance from the IRS, that
the ABI we are purchasing from the contract party could be reportable income for the contract party, and, as a result, that it may not be fully deductible for U.S. federal income tax purposes; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the potential impact of possible disclosure of the terms of material included contracts, and the impact that these
disclosure obligations may have on the ability of a contract party to enter into additional endorsement deals or to participate in other brand-income generating activities; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>any negative perception by the media, fans, leagues, clubs or others of our business model; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>any negative perception by the media, fans, leagues, clubs or others of any of our current contract parties or other
future contract parties, as a result of their decision to enter into a brand contract with us, or otherwise; and </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the performance of our brand contracts or other brand contracts that we may enter into in the future, and/or the
performance of the related tracking stock, which may be worse than anticipated. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
a result, we may be forced to revise our business model to attract additional brand contracts. For example, we are not currently contractually obligated to expend capital on enhancing
the brand value of our contract parties. Contract parties may require us to contractually agree to provide certain minimum levels of marketing services in order to enter into brand contracts, which we
may not be able to provide or which may not give us sufficient return on capital to make the brand contract profitable. Moreover, we or our parent may be asked to provide an indemnity to the contract
party against any tax risk to them as a result of the uncertainty discussed above. For example, our parent has agreed to
provide an indemnity to each of our current contract parties if their respective ABI is reportable and not deductible, and either we or our parent may have to agree to similar tax indemnities for
future contract parties until there is additional guidance in this area or sufficient history with our contract parties. Even if potential contract parties are willing to agree to enter into
additional brand contracts with us, the leagues, team owners, players associations, endorsement partners, elected officials or others may take actions that could restrict our ability or make it more
costly for us to enter into future brand contracts. And even if we are successful in entering into additional brand contracts with additional contract parties, we may not be successful in conducting
offerings to finance the purchase price under these brand contracts. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>37</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2><B><I> We will need to obtain additional funding to acquire additional brands and we may also need additional funding to continue operations. If we fail to obtain the necessary
financing, or fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and we may be forced to
significantly delay, scale back or discontinue our operations.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We will require additional capital to fund our operations, and if we fail to obtain necessary financing, our business plan may not be
successful. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any
brand contracts that we enter into in the future with other contract parties will require us to make substantial upfront payments to acquire the ABI under such brand contracts. We do
not, and following this offering we do not expect to have, the necessary funds that we would need to make any of these upfront payments under future brand contracts. Therefore, we expect that our
future brand contracts for the foreseeable future will be contingent upon obtaining financing to fund the acquisition of the ABI in the respective brands, and we intend to finance these acquisitions
through the issuance of additional tracking stocks linked to the value of such brands. Such financing may be expensive and time consuming to obtain, and we may not have investor interest that would
enable us to obtain such financing. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition, our operations (excluding upfront payments under future brand contracts) have consumed substantial amounts of cash since inception, and we expect they will continue to
consume substantial amounts of cash as we aggressively build our platform of brands and our internal marketing, compliance and other administrative functions. To date, these operations have been
financed exclusively by equity contributions from our parent. Our parent has no obligation to continue to finance our operations, and they do not intend to continue to finance our operations except as
required under our management agreement with them. Although we believe the net proceeds from this offering together with existing cash and cash equivalents and interest thereon will be sufficient to
fund our projected operating expenses for the next 12&nbsp;months, as noted above, we will require additional capital to finance
the acquisition of future brands, and we may also need to raise additional funds sooner if our operating and other expenses are higher than we expect or our cash received from brand contracts is lower
than we expect. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Until
we can generate a sufficient amount of cash from our brand contracts, if ever, we expect to finance future cash needs through public or private equity or debt offerings. Additional
capital may not be available on reasonable terms, if at all. If we are unable to raise additional capital in sufficient amounts or on terms acceptable to us we may not be able to continue to acquire
additional ABI in other brands and we may have to significantly delay, scale back or discontinue our operations. If we raise additional funds through the issuance of additional debt or equity
securities it could result in dilution to our existing stockholders, and/or fixed payment obligations that could reduce our ability to pay dividends or otherwise fund our other operations.
Furthermore, these securities may have rights senior to those of our common stock and could contain covenants that would restrict our operations and potentially impair our competitiveness, such as
limitations on our ability to incur additional debt, limitations on our ability to acquire, sell or license brands without consent and other operating restrictions that could adversely impact our
ability to conduct our business. Any of these events could significantly harm our business, financial condition and prospects. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
forecast of the period of time through which our financial resources will be adequate to support our operations (excluding upfront payments under future brand contracts) is a
forward-looking statement and involves risks and uncertainties, and actual results could vary as a result of a number of factors, including the factors discussed elsewhere in this "Risk Factors"
section. We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>38</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>resources
sooner than we currently expect. Our future funding requirements, both near and long-term, will depend on many factors, including, but not limited
to:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the rate at which we begin to realize revenue under our brand contracts with EJ Manuel, Vernon Davis and Arian Foster (the
related offering of which has been postponed and which may not be consummated on terms described elsewhere in this prospectus, if at all), as well as under any additional brand contracts that we may
enter into in the future; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the cost of our efforts to evaluate, target and access the brands that meet our criteria, as well as the cost and expense
of negotiating any new brand contracts; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>our ability to enter into additional brand contracts, and if so the amount of the upfront purchase price that we would
have to pay to acquire rights under any such brand contracts; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the number and characteristics of any new brand contracts that we may enter into; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the cost and expenses of any equity or debt financings that would be necessary to pay the purchase price under any
additional brand contracts, and any regulatory or other delays in any of these offering processes; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the effect of competing technological and market developments; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the cost of establishing and building our sales, marketing and compliance capabilities; and </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the rate at which we invest in marketing and other costs to assist our acquired brands in building and enhancing the value
of their brands. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
a lack of available capital means that we are unable to expand our operations or otherwise capitalize on our business opportunities, our business, financial condition and results of
operations could be materially adversely affected. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Risks Relating to Our Brand Contracts and Our Business  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Our principal source of cash flows for the foreseeable future will be derived from our brand contracts.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our principal source of cash flows for the foreseeable future will be derived from our brand contracts. There are a number of risks
relating to brand contracts. If any of these risks occur it could have a material and adverse impact on our business, financial condition and results of operations. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> We do not have any experience managing brand contracts and we do not have any historical performance data about our brand contracts.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We entered into our first brand contract with Arian Foster on February&nbsp;28, 2013, a subsequent contract with Vernon Davis on
October&nbsp;30, 2013 and finally, a contract with EJ Manuel on February&nbsp;14, 2014. As of February&nbsp;28, 2014, we have not received any cash under these brand contracts. Due to our
limited experience with brand contracts, we do not have any historical performance data regarding our ability to generate cash receipts from the management of brand contracts and the likelihood of
long-term performance of the contract party, or our ability to aid our brands in enhancing their brand reach and brand value. As a result, the brand contracts that we enter into may generate lower ABI
than we anticipate, or none at all. We may therefore pay a purchase price for ABI that is too high. As we gain more experience with our brand contracts, we may change how we estimate the brand value
of future brand contracts, and investors who invest early may not benefit from the experience that we gain from our early brand contracts. </FONT></P>

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<P style="font-family:times;"><FONT SIZE=2><B><I> Our cash received under our brand contracts will depend upon the continued satisfactory performance of the related contract party, and we do not have any rights to require
the contract party to take any actions to attract or maintain or otherwise generate brand income.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Some or all of the brand income that a contract party is expected to generate is contingent on continued satisfactory performance and
is not guaranteed. Although we structure our brand contracts so that the contract party maintains the substantial majority of future brand income to help ensure that the contract party will maintain
incentives to continue to generate brand income, we can provide no assurances that the contract party will do so. The contract party may retire from such contract party's primary occupation, such as
an athlete in the NFL, at any time and for
any reason, subject only to a requirement to repay us the amount of the purchase price we paid such contract party, plus certain expenses and net of any amounts already paid to us, if the contract
party retires within two years. In addition, if the contract party voluntarily retires during such period, such contract party may have other obligations under other contracts to pay back upfront
payments, such as a signing bonus, and the contract party may not have the funds to meet all of its obligations at that time. The contract party has no obligation to take any actions to generate brand
income, and may choose not to do anything to generate brand income. In addition, even if the contract party chooses to engage in additional brand income generating activities, their ability to do so
may be restricted under their existing contracts. For example, NIKE USA,&nbsp;Inc. prohibits EJ Manuel from entering into an agreement to endorse any other athletic and athletically-inspired or
derived footwear and apparel through the term of its contract with EJ Manuel. Moreover, brand income under our brand contracts generally only includes income that the contract party may receive in the
future in such contract party's primary occupation at the time, such as an athlete in the NFL, and related fields, such as broadcasting and coaching. Our brand contract contains no restriction on the
ability of the contract party to change professions or earn money in unrelated fields, and such income may not be brand income. In any of these events, we may lose some or all of the brand income in
the future under a brand contract, in which case our cash receipts would decline. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> The contract party is neither our affiliate, nor a director, officer or employee of our company and owes no fiduciary duties to us or any of our stockholders. The contract
party has no obligation to enhance the value of the brand or disclose information to our stockholders.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Events in the contract party's personal life, including relationships with spouse, family, friends, etc. could have a significant
impact on the contract party's performance on the field. The contract party's obligations to disclose such personal events is limited to the obligations under the brand contract and the contract party
is under no obligation to disclose any personal matters to the holders of shares of our tracking stocks. Furthermore, although the contract party is contractually obligated to disclose all material
facts to us, we cannot guarantee that the contract party will comply with such disclosure requirements or that we can independently verify or uncover material events in the contract party's personal
life. In addition, the contract party has no obligation to enhance the value of his brand. For example, a contract party in the NFL may agree to a salary reduction to assist his team in staying within
the league salary cap, to be on a more competitive team, or to stay with a specific team, all of which may have the effect of reducing potential brand income and conflict with stockholders' interests
in maximizing brand income. Since the contract party's obligations under the brand contract are solely limited to obligations owed to us, the holders of shares of our tracking stocks have no
contractual right to enforce such obligations against the contract party. Furthermore, since the contract party is neither a director nor an officer of our company, such contract party owes no
fiduciary obligations to the holders of shares of our tracking stocks. As a result, our stockholders will have no recourse directly against the contract party, either under the brand contract or under
the securities laws. </FONT></P>

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<P style="font-family:times;"><FONT SIZE=2><B><I> Profitability of our 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.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The purchase price that we expect to pay for future ABI under our brand contracts is based on our assumption that the contract party
will generate brand income in excess of that which may be predictable under existing contracts that are included in brand income, or included contracts. Therefore, we expect that the contract party
will need to be able to maintain existing included contracts as well as attract and maintain additional endorsements and other brand income generating activities. As noted above, the contract party
has no obligation to take any actions to generate brand income, or to take any actions to increase the amount of brand income that the contract party currently generates. However, even if the contract
party desires to and attempts to attract and maintain additional endorsements and other brand income generating activities there can be no assurances that such contract party will be able to do so. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Competition
for endorsements and other brand income opportunities is intense. These opportunities may depend on a variety of factors, including the primary occupation, such as an athlete
in the NFL, and perceived value of such profession to marketing executives, and on-field factors in the primary occupation, such as quality of the contract party's performance, whether or not the
contract party plays for a winning team, plays in post-season games or wins individual awards or is named to the Pro Bowl or All-Pro Team, the market in which the contract party performs, skill of the
contract party at the contract party's position, the style of play and potential to perform in the future, as well as intangible traits off the field such as personality, personal drive and ambition,
"likability," authenticity and consistency. Thus, future endorsements and other brand income opportunities may be difficult to attract and maintain, and they may not generate as much brand income as
we expect or that they have historically. A downturn in the performance of the contract party or even the team on which the contract party plays, whether the current team or a different team, could
adversely affect such contract party's ability to attract and maintain endorsements. Even if the contract party enters into multi-year agreements that are capable of generating significant brand
income, such agreements may have termination clauses relating to performance, character or other reasons, or such agreements may become the subject of disputes. We will have no rights under our brand
contracts to require the contract party to pursue any remedies or engage in any disputes with any third parties. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> 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, it is likely that the brand income with respect to such brand contract will not return to its
prior levels or may cease completely.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our focus for the foreseeable future is to enter into brand contracts with high-profile athletes who play professional sports. For
example, EJ Manuel, Vernon Davis and Arian Foster are athletes in the NFL. There is a high risk of injury in many professional sports, and in particular in the NFL. For instance, on
November&nbsp;12, 2013, Arian Foster was placed on season-ending injured reserve list as a result of suffering a back injury. Nevertheless, we do not maintain any
insurance against the loss of any brand income as a result of injury, illness, medical condition or death of the contract party. Therefore, if a contract party becomes injured or sustains a serious
illness or other adverse medical condition in the course of his professional career or otherwise, or dies, the brand income, and thus our ABI, would likely be dramatically less than we anticipate, and
it is likely that such brand income would not return to its prior levels or may cease completely. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
also expect to receive brand income from existing and future endorsement agreements entered into by the contract party, as well as other public activities related to the primary
occupation of the contract party, such as television broadcasting. We believe that the contract party's ability to attract and maintain endorsement agreements as well as other sources of brand income
will depend on the contract party's reputation and ability to be viewed favorably by the public. Prior to entering into a brand </FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>contract,
we assess the character and reputation of the contract party and the brand through our independent assessments, industry references and background checks conducted by third parties. However,
there can be no assurance that our review process uncovers all facts and characteristics that could adversely affect the reputation of a contract party or the value of the brand contract. Even if our
review process provides us with an accurate assessment of the character and integrity of a contract party as of the date of our review, there can be no assurance that circumstances in the future will
not change, or that a contract party will continue to behave in a manner consistent with past behavior. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any
harm to the public reputation of a contract party, or association of the contract party's name with a public scandal, may reduce the contract party's ability to enter into and
maintain future endorsements and other sources of brand income and as a result, brand income would likely decrease or may cease completely. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> The contract party or other third parties may refuse or fail to make payments to us under the brand contracts.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our cash flows depend on contract parties and other third parties making payments of ABI to us. A contract party or other third party
may dispute amounts to which we believe we are entitled, or may be unwilling or unable to make payments to which we are entitled, including for reasons discussed elsewhere in these risk factors. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
either event, we may become involved in a dispute with the contract party or other third party regarding the payment of such amounts, including possible litigation. Disputes of this
nature could
harm the relationship between us and the contract party or other third party, and could be costly and time-consuming for us to pursue. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Failure
of the contract party or other third party to make payments of our ABI to us for any reason would adversely affect our business and in particular the value of your tracking stock
if the failure to pay relates to the brand contract associated with any tracking stocks. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition, if the contract party or other third party who may be obligated to make payments to us were to become the subject of a proceeding under the United States Bankruptcy Code or
a similar proceeding or arrangement under another state, federal or foreign law, our rights and interests under the brand contract or otherwise may be prejudiced or impaired, perhaps significantly so.
In such circumstances, we may be precluded, stayed or otherwise limited in enforcing some or all of our rights under the brand contract or otherwise and realizing the economic and other benefits
contemplated therein. To the extent we do not receive payments under a brand contract to which we would otherwise be entitled as a result of any such debtor relief laws, then the amount of such
payments we do not receive will nonetheless be attributable to the respective tracking stock brand. In such an event, such shortfall in income will be treated as a general expense of Fantex and be
shared pro rata (calculated based on attributable income) among all of our then outstanding tracking stocks. As a result, the market value of your tracking stock could decline if another brand
contract that is not related to your tracking stock is unenforceable as a result of debtor relief laws. For a further description of covered amounts please see "Management and Attribution
Policies&#151;Attribution&#151;Covered Amounts." </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Our 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.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The payments under a brand contract will be unsecured obligations of the contract party and will not be secured by any collateral, nor
guaranteed or insured by any third party or governmental authority. Therefore, we will be limited in our ability to collect any payments that may be owed to us under a brand contract if those amounts
are not paid. Generally, we would have to pursue remedies against the contract party or other third parties to whom our ABI was assigned by the contract party. </FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
the contract party defaults under the brand contract, there can be no assurances that the contract party will have adequate resources, if any, to satisfy any obligations to us under
the brand contract. In
addition, our brand contracts will require that our ABI be directly assigned to us by the contract party where commercially practicable. It may be necessary, therefore, for us to also pursue remedies
against counterparties to included contracts. These counterparties may assert that the assignment of brand income by the contract party did not create an obligation of their part to pay any brand
income to us. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Moreover,
payment of the ABI is an obligation of the contract party to us, not obligations to our stockholders, including holders of shares of our Fantex Series&nbsp;EJ Manuel. Our
stockholders will have no recourse directly against the contract party. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> 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.  </I></B></FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the contract party incurs additional secured or unsecured debt after entering into a brand contract with us, or if the contract
party incurs excessive expenses, the contract party may be impaired in its ability to make payments to us under the brand contract. In addition, additional debt or expenses may adversely affect the
contract party's creditworthiness generally, and could result in the financial distress, insolvency, or bankruptcy of the contract party. To the extent that the contract party has or incurs other
indebtedness and expenses and cannot pay all of its indebtedness or expenses, the contract party may choose to make payments to other creditors rather than us. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
the extent a contract party incurs other indebtedness that is secured, such as mortgage, home equity, or auto loans, the ability of the secured creditors to exercise remedies against
the assets of the contract party may impair the contract party's ability to make payments to us under the brand contract. The contract party may also choose to repay obligations under secured
indebtedness before making required payments on the brand contract because the contract party has no collateral at risk in the case of the brand contract. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> The financial and other information that we obtain 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 we anticipate.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prior to entering into a brand contract, we conduct a review of the contract party that includes collecting financial and other
information from the contract party to evaluate financial suitability of the contract party, including a review of assets, liabilities, existing commitments, tax returns and credit scores. We also
conduct background checks and obtain credit reports from the major credit rating agencies to help us assess the ability of the contract party to meet their financial obligations. However, we do not
verify this information and it may be inaccurate or incomplete. For example, the credit score assigned to a contract party may not accurately reflect the actual likelihood that the contract party will
perform under the brand contract because the credit score may be based on outdated, incomplete or inaccurate consumer reporting data, and we do not verify the
information obtained from the contract party's credit report. If information that is supplied to us by the contract party or other third parties is inaccurate or incomplete, the risk of default on the
brand contract may be significant and may be higher than we anticipate. </FONT></P>

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<P style="font-family:times;"><FONT SIZE=2><B><I> Our 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.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prior to entering into a brand contract with an athlete, entertainer or other high profile individual, we conduct due diligence and
review the included contracts of such contract party and other documents to support our estimate of such contract party's projected brand income. As part of this due diligence process and assessment,
we will rely in part on the contract party to fully address our questions by disclosing all relevant information and, in some cases, on information provided by third parties. However, our due
diligence processes may not uncover all relevant facts, and our brand acquisitions may not be profitable. Although our brand contract with EJ Manuel obligates him to, and we intend to require future
contract parties, if any, to contractually agree to, disclose all material facts to us, we cannot guarantee that EJ Manuel or any future contract party will comply with such disclosure requirements or
that we can independently verify or uncover material events about EJ Manuel or any such future contract parties. For instance, in a documentary released in September 2013, Arian Foster admitted to
receiving money as a college football player during his senior year at the University of Tennessee, in violation of NCAA rules. While it is difficult to assess the reputational harm of such a
disclosure, an athlete's, entertainer's or other high profile individual's failure during our due diligence process to reveal all relevant information prior to our entering into the brand contract
with such athlete, entertainer or other high profile individual may result in an inaccurate assessment of such contract party's projected brand value potentially leading to acquisitions that may not
be profitable. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> The valuation of our brand contracts and expected ABI requires us to make material assumptions that may ultimately prove to be incorrect. In such an event, we could suffer
significant losses that could materially and adversely affect our results of operations.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our principal assets are expected to be derived from our brand contracts with athletes, entertainers and other high-profile
individuals. Those assets are considered "Level&nbsp;3" assets under ASC&nbsp;820, Fair Value Measurements and Disclosures, as there is currently no active market where we are able to observe
quoted prices for identical assets. As a result, our valuation of those assets incorporates significant inputs that are not observable. Fair value of future expected brand income is determined by
measuring expected returns on player contracts, anticipated lengths of player careers and related contracts, anticipated future endorsements and anticipated renewals of existing contracts based on
comparable individuals in the same industry. However, valuation of the expected brand income is highly speculative due to the heavily subjective nature of identifying comparable athletes or
entertainers and is inherently difficult due to the uniqueness of each professional athlete or entertainer and the limited number of available comparable athletes and entertainers. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
fair value measurement of Level&nbsp;3 assets is inherently uncertain and creates additional volatility in our financial statements that are not necessarily related to the
performance of the underlying assets. To determine the amount of our purchase price (and the equivalent fair value at the time) of our brand contract with EJ Manuel we applied discount rates ranging
from 4.5% to 20.0%, with a weighted average of 14.6%. We subjectively determined the discount rates applied in our analysis based on assumptions that have not been reviewed by any independent
financial advisor. If we determine in the future that the discount rates we used were too low, then our estimate of the fair value of any of our brand contracts may be too high. See the section
entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations" for a further discussion of fair value measurements. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Failure of a contract party to adequately protect their intellectual property could injure the value of the contract party's brand.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We invest in high-profile brands through our brand contracts. Therefore, the success of our brand contracts is dependent on the
contract party protecting their brand from intellectual property </FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>infringement
(such as counterfeiting and other unauthorized uses of their intellectual property rights). Although the contract parties may seek to protect the intellectual property rights associated
with their brand by ensuring that they own and control certain intellectual property rights in and to those assets and, where appropriate, by enforcing those intellectual property rights, it may not
be possible to detect all instances of brand infringement. Additionally, where instances of brand infringement are detected, we cannot guarantee that such instances will be prevented as there may be
legal or factual circumstances that give rise to uncertainty as to the validity, scope and enforceability of a contract party's intellectual property rights. We will have no rights under the brand
contract to enforce any intellectual property rights of the contract party or the brand. Infringement of their trademark, copyright and other intellectual property rights by others could have an
adverse effect on the brand income, and thus the ABI that we receive under the brand contract. If any contract party were to fail or be unable to secure, protect, maintain and/or enforce the
intellectual property rights that vest in his brand, then we could lose a portion of our cash stream that would have been received from such brand assets. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2><B><I> Our cash received under brand contracts may fluctuate due to seasonality.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The cash receipts under our brand contracts may be subject to seasonal variation, limiting the overall comparability of interim
financial periods. For example, the salary under NFL contracts is usually paid out in even installments during the course of the NFL season, or as a signing bonus according to varying schedules. The
NFL season occurs primarily in the third and fourth quarters of each calendar year. As a result, our interim results and any quarterly financial information may not be indicative of the financial
performance for the whole year. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> An economic downturn and adverse economic conditions may harm a contract party's earning potential.  </I></B></FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The recent economic downturn and adverse conditions in the global markets may negatively affect the earnings of a contract party. For
example, the NFL market salary cap is dependent upon the revenues the NFL receives. In addition, endorsements may depend in part on the actual or perceived personal disposable income of consumers and
marketing budgets of endorsement partners. These commercial contract payments are contingent upon the expenditures of businesses across a wide range of industries, which industries may cut costs in
response to any economic downturn. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Our ability to increase the value of any of our brands may be limited and our investments in the promotion of any of our brands may cause the market value of our stock to
decline.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our management and board of directors will have complete discretion in determining the scope and execution of our brand promotion
efforts, if any, with respect to our tracking stock brands. Any investment we may make to promote our acquired brands will be for long-or medium-term results and would not be expected to increase
brand income in the near-term, if at all. Any expenditures that we may make on promotional activities that are attributable to a single tracking stock brand will be an attributable expense to that
tracking stock brand. To the extent that our promotional activities increase the attributable income of a tracking stock brand by an amount less than the attributable expenses for the promotion, the
attributed retained earnings of that tracking stock brand would decline. There can be no assurances that our management will promote any of our tracking stock brands in a manner that creates value for
the associated tracking stock or any of our other stockholders. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Confidentiality agreements with employees and others may not adequately prevent disclosures of our proprietary information and confidential information of the contract
party.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have taken measures to protect our proprietary information and confidential information of the contract parties, but these measures
may not be effective. We require new employees and consultants to execute confidentiality agreements upon the commencement of an employment or </FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>consulting
arrangement with us. These agreements generally require that all confidential information developed by the individual or made known to the individual by us during the course of the
individual's relationship with us, including for example, information we acquire about the contract parties, be kept confidential and not disclosed to third parties. These agreements also generally
provide that inventions conceived by the individual in the course of rendering services to us shall be our exclusive property. Nevertheless, employees, collaborators or consultants may still disclose
or misuse our confidential information, and we may not be able to meaningfully protect our proprietary information and confidential information of the contract parties. In addition, others may
independently develop substantially equivalent information or techniques or otherwise lawfully gain access to our proprietary information and confidential information of the contract parties, and
thereafter communicate this information to others without maintaining its confidentiality. If this occurs, it may negatively impact our business and relationships with our current or future contract
parties, and may damage our reputation and limit our ability to enter into new brand contracts. In addition, costly and time-consuming litigation could be necessary to enforce our proprietary rights
or limit the prohibited disclosure of confidential
information, and failure to obtain or maintain protection of our proprietary information or the confidential information of the contract parties could adversely affect our competitive business
position. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Changes in government policy, legislation or regulatory or judicial interpretations could hinder or prevent our ability to conduct our business operations, including by
hindering or preventing our ability to enforce our brand contracts or conduct offerings of tracking stocks.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changes in government policy, legislation or regulatory or judicial interpretations could hinder or prevent our ability to conduct our
business operations, including by hindering or preventing our ability to enforce our brand contracts or conduct offerings of tracking stocks. For example, we could be deemed to be subject to insurance
and other regulations, which in some circumstances may be applied retrospectively. In addition, our brand contracts are intended to be effective in perpetuity and may be terminated only upon mutual
agreement of the contract party and us. In some jurisdictions perpetual contracts have been found to be against public policy and therefore terminable in some circumstances. Our brand contracts are
governed by California law, and California legal decisions do not disfavor express contractual terms for indefinite duration. However, we can provide no assurances that a California court may not rule
differently in the future, or that a court of another jurisdiction might attempt to apply a different choice of law to our brand contracts. If this occurs then we may become involved in expensive and
time consuming litigation, or may be unable in certain cases to enforce our brand contracts. Any other changes in or interpretations of current laws and regulations could also require us to increase
our compliance expenditures, inhibit our ability to enter into new brand contracts or cause us to significantly alter or to discontinue offerings of additional tracking stocks. Altering the terms of
our brand contracts or tracking stocks to comply with changes in or interpretations of applicable laws and regulations could require significant legal expenditures, increase the cost of managing or
acquiring our brand contracts or make offerings of our tracking stocks less attractive to investors. In addition, our failure to comply with applicable laws and regulations could lead to significant
penalties, fines or other sanctions. If we are unable to effectively respond to any such changes or comply with existing and future laws and regulations, our competitive position, results of
operations, financial condition and cash flows could be materially adversely impacted. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> The leagues, team owners, players associations, endorsement partners, elected officials or others may take actions that could restrict our ability or make it more costly for
us to enter into future brand contracts.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our business model depends on the cooperation of various third parties. Because the brand contracts and offerings of tracking stocks
linked to the income of professional athletes and entertainers is a novel business model, there may be influential parties with interests that are adverse or perceived to be adverse to our business,
such as sports leagues, sports teams, fantasy sports networks or gambling institutions. These parties may seek to change the rules, policies, laws, regulations or legal </FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>interpretations
in ways to prohibit, or limit the success of, our business. For example, in 2010 the Cantor Futures Exchange received approval from the Commodities Futures Trading Commission to launch
the Hollywood Stock Exchange as a contract market for the trading of box office futures; however, the Motion Picture Association of America successfully lobbied members of the U.S. congress to pass
legislation making trading in box office futures illegal. In a similar manner, influential parties that perceive our business model to be a threat to their business or detrimental to professional
sports may attempt to lobby leagues, team owners, players associations, endorsement partners and elected officials to adopt rules, policies, laws, regulations or legal interpretations that inhibit us
from conducting our business. Any such changes may adversely affect the ability of our contract parties to perform their obligations under brand contracts, or inhibit our ability to enter into new
brand contracts with other contract parties. These changes could cover various requirements of the brand contract, such as prohibiting the sale or assignment of a portion of personal income, limiting
the ability to enter into contracts with an indefinite term or limiting the ability of the contract party to disclose information about included contracts to us. Any such changes prohibiting, or
limiting the enforceability of, any terms in the brand contract could prevent or inhibit our collection of the ABI to which we are entitled under the brand contract. Any limitations on the ability of
the contract party to disclose information about included contracts to us, or the SEC if we deemed it necessary, could limit the ability of a contract party to enter into such agreements subsequent to
entering into a brand contract with us. Any increase in the expenses associated with our management of the brand contract or decrease in the expected ABI that we will collect could materially and
adversely affect the value of shares of our Fantex Series&nbsp;EJ Manuel. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> We are dependent on our management team, and the loss of any key member of this team may prevent us from implementing our business plan in a timely manner, or at all.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our success depends largely upon the continued services of our executive officers and other key personnel, particularly Cornell "Buck"
French, our Chief Executive Officer, David Mullin, our Chief Financial Officer, and David Beirne, Chairman of our board of directors. Neither we nor Fantex Holdings have employment agreements with any
of our executive officers or key employees, other than Messrs.&nbsp;French and Mullin. The material terms of the agreements with Messrs.&nbsp;French and Mullin are described under "Executive
Compensation&#151;Executive Compensation Arrangements." Our executive officers or key employees could terminate their employment with Fantex Holdings or us at any time without penalty. In
addition, we do not maintain key person life insurance policies on any of our employees or any of our contract parties. The loss of one or more of these executive officers or key employees could
seriously harm our business and may prevent us from implementing our business plan in a timely manner, or at all. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2><B> Risks Relating to Each of Our Contract Parties  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Our ability to increase the value of our tracking stock brands may be limited and our investments in the promotion of such tracking stock brands may cause the market value
of our stock to decline.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based on publicly reported and widely available information, endorsement deals with professional football players historically appear
to have been significantly smaller than endorsement deals with athletes from other professional sports such as golf and basketball. As a result, the endorsement potential of each of our contract
parties may be limited and we may be unable to increase the value of the associated tracking stock brands despite our efforts. To the extent that our promotional activities are unsuccessful, the
market value of shares of such tracking stock brands may decline. Furthermore, even if our promotion activities increase the endorsement income to the contract parties, they may nonetheless have a
negative impact on the market value of shares of our tracking stock because we will only receive a portion of any increased brand income. For example, because the ABI under our EJ Manuel brand
contract is 10% of brand income, our promotion efforts must exceed a return that is at </FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>least
ten times our investment in order to increase the value of the EJ Manuel Brand to the extent that we increase our cash receipts under the brand contract. There can be no assurances that our
management will promote any of our tracking stock brands in a manner that creates value for holders of shares of our tracking stock. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> The value of our tracking stock brands is dependent upon the performance of, and to a lesser extent, the popularity of our contract parties.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our cash receipts under each of our brand contracts are driven by the performance of, and to a lesser extent, the popularity of our
contract parties. The contract party's performance in his primary career directly affects, and a deterioration of his performance could adversely affect, the ABI under our brand contract. Poor or
mediocre performance could cause the contract party's playing contract to be terminated and may result in sponsors cancelling their
endorsements, or result in the contract party failing to qualify for additional incentive payments under existing or future endorsement contracts. We cannot ensure that any of our contract parties
will continue to be successful in their playing careers. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Contract parties in the NFL could be negatively affected by an NFL work stoppage.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the NFL experiences a work stoppage, then the earnings of a contract party in the NFL, including each of our current contract
parties, will be adversely affected. In 1974 and 1982 the NFL experienced player strikes and in 2011 the NFL owners staged a "lockout" of the players. If either a strike or a lockout occurs during an
NFL season, player pay may be suspended. Each of our contract party's earnings are heavily dependent on his professional football salary and would be negatively affected by any such work stoppage.
This would have a negative impact on the payments we receive under the brand contract. We can give no assurances that such work stoppages will not occur. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Contract parties in the NFL could be negatively affected by current and future rules of the NFL.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Future changes to the NFL rules or other regulations may adversely affect the earnings of each of our contract parties in the NFL.
These regulations could cover various aspects of his participation, such as changes to the rules of the game resulting in a devaluation of their respective skill sets, changes governing player
eligibility and fines, and changes to the league's CBA. Changes in the format of the game and league in which the contract party plays could have a negative impact on his brand income and therefore,
will impact the ABI we receive under the respective brand contract. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> There could be a decline in the popularity of the NFL and/or the team on which the contract party plays in the NFL, or a decline in the contract party's popularity.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There can be no assurance that the NFL will retain its popularity as a sport, together with the associated levels of media coverage. In
addition, either the team for which the contract party plays or the contract party could suffer a decline in popularity, including as a result of poor performance or behavior by the contract party or
any of his teammates or the team in general, particularly if such performance or behavior tarnishes the contract party's brand image. A contract party may be traded to another club in the NFL that has
a smaller media market and/or is less popular than the current team, or other teams or players in the NFL may gain popularity relative to the contract party by performing at a higher level, exhibiting
more appealing behavior, or otherwise. Any decline in popularity of the NFL, the team on which the contract party plays in the NFL, or the
contract party, or relative decline as compared to other teams or players, could result in lower offers for future endorsements and NFL player contracts, a reduction in the value of the contract party
or his brand, and a resulting decline in the value of shares of our tracking stock linked to the value and performance of the contract party's brand. Even if the contract party and the team on which
he plays in the NFL is successful, a substantial decline in the popularity of the NFL, whether as a result of increase in the popularity of other professional sports or the emergence of new spectator
sports, could have a material adverse effect on </FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>shares
of our tracking stocks, including shares of our Fantex Series&nbsp;EJ Manuel. Any one of these events or a combination of such events could have a material adverse effect on the trading
volume of our tracking stock and on the cash received under the brand contract associated with such contract party. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Risks Relating to EJ Manuel  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> EJ Manuel's NFL player contract is a significant portion of the current cash we would receive under his brand contract.  </I></B></FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2013, EJ Manuel signed a four year contract with the Bills worth up to $8.89&nbsp;million, and his professional football
compensation in the year ended December&nbsp;31, 2013 made up over 90% of his annual income. This 2013 NFL player contract included a $4.84&nbsp;million signing bonus with the remaining
$4.05&nbsp;million to be paid out over the term of the contract. The maximum brand income remaining as of February&nbsp;14, 2014 under his existing NFL player contract was $3.64&nbsp;million,
all of which is guaranteed. We cannot guarantee that EJ Manuel will be able to enter into a new NFL player contract when the existing contract expires. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> The profitability of EJ Manuel's brand contract is substantially dependent upon his ability to enter into additional high-value, multi-year NFL player contracts, and on his
ability to successfully attract and retain endorsements during his playing career and thereafter significantly in excess of amounts he has attracted historically and/or generate other brand income
after his playing career.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We anticipate that we will receive the majority of payments due under our brand contract with EJ Manuel during the period of his NFL
playing career. His current NFL player contract represents the source of substantially all of the brand income, and we expect that EJ Manuel's annual income will continue to be more heavily weighted
toward his NFL player contract than on other brand income generating activities. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
length of EJ Manuel's NFL playing career is uncertain. EJ Manuel was born on March&nbsp;19, 1990, and thus was 23&nbsp;years old at the end of the 2013 NFL season. Unless earlier
terminated, EJ Manuel's current NFL player contract with the Bills will expire at the conclusion of the 2016 NFL season, but may be extended by the Bills to cover the 2017 season. Because EJ Manuel
will be 27&nbsp;years old prior to the beginning of the 2018 season and quarterbacks generally retire from the NFL by their early 30s, NFL teams may be unwilling to enter into an NFL player contract
with EJ Manuel for any longer than three years. In addition, EJ Manuel may not continue to perform well as an NFL player and therefore, future earnings may be substantially less than those guaranteed
under his current NFL contract. If EJ Manuel is unable to sign a new NFL player contract or the terms of such new contract are materially worse than his current NFL player contract, the cash receipts
from our EJ Manuel Brand will decline, which in turn may cause the market value of shares of our Fantex Series&nbsp;EJ Manuel to decline. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition, in valuing EJ Manuel's potential lifetime brand income we estimated an increase in the brand income EJ Manuel may earn as a result of his endorsements, as compared to his
historical earnings from endorsements. However, we do not know if his endorsement income will increase in the future, and we do not know if his reputation and brand will be enhanced as a result of his
being one of our first contract parties. In fact, his reputation and brand may be negatively affected by his willingness to enter into a brand contract and trade potential future earnings for present
income. If future endorsement partners or NFL teams suspect that EJ Manuel has hidden motives behind accepting an upfront cash payment in exchange for a portion of his future earnings, future
endorsement partners may be less willing to enter into contracts with EJ Manuel and may not find his promises of future performance under such contracts reliable. In addition, none of EJ Manuel's
current endorsement contracts last beyond 2017, and at least one of the endorsement contracts included in his brand income (and others he may enter into during his NFL playing career) may be
terminated if EJ Manuel does </FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>not
play for an NFL football team. Furthermore, EJ Manuel's ability to successfully attract and retain endorsements is dependent on EJ Manuel complying with the contractual requirements of those
endorsements and there is no guarantee that EJ Manuel will do so. Moreover, future endorsement
partners may be less willing to enter into contracts with EJ Manuel as a result of his entering into the brand contract with us in order to avoid public disclosure of their arrangements with EJ
Manuel. For the aforementioned reasons, EJ Manuel may be unable to renew existing endorsement deals on favorable terms, if at all, or may not be able to enter into new endorsement deals. In addition,
his ability to generate other brand income after his playing career, such as through coaching or broadcasting, is unproven. His failure to attract and maintain key endorsements or generate other brand
income after his playing career could have a negative impact on our cash received under the brand contract. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
opportunity to receive a return of capital or any profit from an investment in our Fantex Series&nbsp;EJ Manuel will depend in large part upon EJ Manuel's ability to enter into
additional high-value, multi-year NFL player contracts and on his ability over the same period and beyond to enter into and maintain endorsement contracts that are significantly in excess of those he
has had historically. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> EJ Manuel has incurred other secured debt, including auto and mortgage payables, the payment of which may adversely impact his ability to make payments under the brand
contract.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There exist outstanding mortgage loans payable by EJ Manuel to secured creditors. The ability of secured creditors to exercise remedies
against the assets of EJ Manuel, including his real estate properties, may impair EJ Manuel's ability to make payments to us under the brand contract. EJ Manuel may also choose to repay obligations
under secured indebtedness before making required payments on the brand contract because the contract party has no collateral at risk in the case of the brand contract. If EJ Manuel declares
bankruptcy any amounts owed to us may only be paid out after all of his secured debt is repaid. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> EJ Manuel may suffer from an injury, illness or a medical condition; any injuries, illnesses or medical conditions of EJ Manuel may affect the cash received by us under the
brand contract.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any injury, illness or a medical condition of EJ Manuel could cause you to lose a substantial portion or all of your investment in
Fantex Series&nbsp;EJ Manuel. Even if not career ending, an injury, illness or a medical condition could have a negative effect upon EJ Manuel's performance and may result in a loss of brand income
that would otherwise have resulted from current and future NFL player contracts. A reduction in brand income will reduce our ABI, our ability to make dividend payments, if any, and have a negative
impact on the value of shares of our Fantex Series&nbsp;EJ Manuel. Any of these outcomes could also affect our ability to enter into additional brand contracts or to finance the acquisition of
additional brands, which would have an adverse impact on our ability to execute on our business strategy. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
August 2013 EJ Manuel had minor surgery on his left knee and missed two pre-season games. On October&nbsp;3, 2013, during the third quarter in a game against the Cleveland Browns,
Manuel sprained the lateral collateral ligament in his right knee. This injury caused him to miss 4 games of the 2013 season. In December 2013, EJ Manuel sprained the lateral collateral ligament in
his left knee and missed the last two games of the 2013 NFL season. In January 2014, EJ Manuel had an arthroscopic procedure performed on each of his knees. EJ Manuel has experienced these knee
injuries and other instances of normal wear and tear as an athlete in Division I college football and the NFL and we expect that EJ Manuel will continue to experience such wear and tear. Any worsening
of these conditions, or re-injury or new injury, could materially and adversely affect EJ Manuel's playing performance and the value of the EJ Manuel Brand. </FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
substantial portion of our anticipated income under the brand contract is attributable to EJ Manuel's current and future NFL player contracts. To the extent that the value of your
investment is dependent on the competitive success of EJ Manuel, the likelihood of achieving such success is substantially reduced by serious or untimely injuries to EJ Manuel. If EJ Manuel is unable
to play as a result of any injury, illness or a medical condition he may be unable to enter into any future NFL player contracts. Even if EJ Manuel continues to receive payments under his endorsement
contracts, his ability to maintain sponsors and his ability to attract new sponsors may be severely diminished. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Future negative publicity could damage EJ Manuel's reputation and impair the value of his brand.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The return on your investment in shares of our Fantex Series&nbsp;EJ Manuel heavily depends on the value and strength of EJ Manuel's
brand and reputation as well as the financial success of Fantex as a whole. EJ Manuel has in the past received, and we expect that in the future he will continue to receive, media coverage.
Unfavorable publicity regarding his professional performance or his behavior off the field could negatively affect his brand and reputation. For example, in a January&nbsp;23, 2014 column published
online by </FONT><FONT SIZE=2><I>Sports Illustrated</I></FONT><FONT SIZE=2>, writer Don Banks described EJ Manuel's rookie season as "uneven and injury marred." Mike Rodak at ESPN.com mentioned on
more than one occasion that given EJ Manuel's injury history and varied performance during his first season, that the Bills will need more options for a quarterback than just EJ Manuel, which
according to Chris Wesseling, an </FONT><FONT SIZE=2><I>Around the League</I></FONT><FONT SIZE=2> writer, is an option that the Bill's coach, Doug Morrone, is entertaining. Additional negative
publicity regarding his on-filed performance or otherwise could damage his reputation and impair the value of his brand. Moreover, certain of EJ Manuel's endorsement agreements contain "morality"
clauses which would permit counterparties to endorsement agreements to terminate those agreements in certain circumstances (such as if he were charged with a felony or other crime involving fraud,
dishonesty, violence, physical harm to another person, possession or use of illegal drugs or moral turpitude), further reducing our ABI. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Risks Relating to Vernon Davis  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Vernon Davis's NFL player contract is a significant portion of the current cash we would receive under his brand contract.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2010, Vernon Davis signed a six year contract with the 49ers worth up to $42.5&nbsp;million, and his professional football
compensation in the year ended December&nbsp;31, 2012 made up over 90% of his annual income. This 2010 NFL player contract included a $10.0&nbsp;million signing bonus with the remaining
$32.5&nbsp;million to be paid out over the term of the contract. The maximum brand income remaining as of October&nbsp;30, 2013 under his existing NFL player contract was $13.7&nbsp;million,
none of which is guaranteed. Therefore, much of the cash expected to be received under our brand contract with Vernon Davis is tied to his professional football career and is not guaranteed. If he
does not play for any reason or if the 49ers decide to release him because of a decline in the quality of his play, an injury, illness or medical condition or for any other reason, then he will not
receive any of the remaining salary other than the guaranteed portion. We cannot guarantee that Vernon Davis will continue to be paid according to the terms of his current NFL player contract, or that
he will be able to enter into a new NFL player contract when the existing contract expires. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> The profitability of Vernon Davis's brand contract is substantially dependent upon Vernon Davis's ability to enter into at least one additional multi-year NFL player
contract for at least $33&nbsp;million, and, to a lesser extent, on his ability to successfully attract and retain endorsements during his playing career and thereafter in excess of amounts he has
attracted historically and/or generate other brand income after his playing career.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We anticipate that we will receive the majority of payments due under our brand contract with Vernon Davis during the period of his NFL
playing career. His current NFL player contract represents the source of substantially all of the brand income, and we expect that Vernon Davis's annual income </FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>will
continue to be more heavily weighted toward his NFL player contract than on other brand income generating activities. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
length of Vernon Davis's NFL playing career is uncertain, however, tight ends generally retire from the NFL by their early 30s. Vernon Davis was born on January&nbsp;31, 1984, and
thus was 29&nbsp;years old at the start of the 2013 NFL season. Unless earlier terminated, Vernon Davis's current NFL player contract with the 49ers will expire at the conclusion of the 2015 NFL
season. Because Vernon Davis will be 32&nbsp;years old prior to the beginning of the 2016 season, NFL teams may be unwilling to enter into a long-term NFL player contract with Vernon Davis on terms
comparable to his current NFL player contract, if at all. As a result, Vernon Davis may have already reached the peak of his earnings from his football salary. In addition, Vernon Davis may not
continue to perform well as an NFL player and therefore, future earnings may be substantially less than those realized over the past few years. If Vernon Davis is unable to sign a new NFL player
contract or the terms are materially worse than his current NFL player contract, the cash receipts from our Vernon Davis Brand will decline. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition, in valuing Vernon Davis's potential lifetime brand income we estimated an increase in the brand income Vernon Davis may earn as a result of his endorsements, as compared to
his historical earnings from endorsements. However, we do not know if his endorsement income will increase in the future, and we do not know if his reputation and brand will be enhanced as a result of
his being one of our first contract parties. In fact, his reputation and brand may be negatively affected by his willingness to enter into a brand contract and trade potential future earnings for
present income. If future endorsement partners or NFL teams suspect that Vernon Davis has hidden motives behind accepting an upfront cash payment in exchange for a portion of his future earnings,
future endorsement partners may be less willing to enter into contracts with Vernon Davis and may not find his promises of future performance under such contracts reliable. In addition, none of Vernon
Davis's current endorsement contracts last beyond the third quarter of 2016, and at least one of the endorsement contracts included in his brand income (likely also including those he may enter into
during his NFL playing career) may be terminated if Vernon Davis does not play for an NFL football team. Furthermore, Vernon Davis's ability to successfully attract and retain endorsements is
dependent on Vernon Davis complying with the contractual requirements of those endorsements and there is no guarantee that Vernon Davis will do so. For example, as a result of Vernon Davis tweeting
about a competing product, a coconut water company recently terminated its contract with him as a spokesperson. Moreover, future endorsement partners may be less willing to enter into contracts with
Vernon Davis as a result of his entering into the brand contract with us in order to avoid public disclosure of their arrangements with Vernon Davis. For the aforementioned reasons, Vernon Davis may
be unable to renew existing endorsement deals on favorable terms, if at all, or may not be able to enter into new endorsement deals. In addition, his ability to generate other brand income after his
playing career, such as through coaching or broadcasting, is unproven. His failure to attract and maintain key endorsements or generate other brand income after his playing career could have a
negative impact on our cash received under the brand contract. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
opportunity to receive a return of capital or any profit from our brand contract with Vernon Davis will depend in large part upon Vernon Davis's ability to enter into at least one
additional multi-year
NFL player contract for at least $33&nbsp;million and on his ability over the same period and beyond to enter into and maintain endorsement contracts that are in excess of those he has had
historically. </FONT></P>

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<P style="font-family:times;"><FONT SIZE=2><B><I> Vernon Davis has incurred other secured debt, including auto and mortgage payables, the payment of which may adversely impact his ability to make payments under the brand
contract.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There exist several outstanding auto and mortgage loans payable by Vernon Davis to secured creditors. The ability of secured creditors
to exercise remedies against the assets of Vernon Davis, including his automobile and several real estate properties, may impair Vernon Davis's ability to make payments to us under the brand contract.
Vernon Davis may also choose to repay obligations under secured indebtedness before making required payments on the brand contract because the contract party has no collateral at risk in the case of
the brand contract. If Vernon Davis declares bankruptcy any amounts owed to us may only be paid out after all of his secured debt is repaid. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Vernon Davis may suffer from an injury, illness or a medical condition; any injuries, illnesses or medical conditions of Vernon Davis may affect the cash received by us
under the brand contract.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any injury, illness or a medical condition of Vernon Davis could adversely impact the cash received by us under our Vernon Davis brand
contract. Even if not career ending, an injury, illness or a medical condition could have a negative effect upon Vernon Davis's performance and may result in a loss of brand income that would
otherwise have resulted from current and future NFL player contracts. A reduction in brand income will reduce our ABI, our ability to make dividend payments, if any, and have a negative impact on the
value of shares of our Fantex Series Vernon Davis. Any of these outcomes could also affect our ability to enter into additional brand contracts or to finance the acquisition of additional brands,
which would have an adverse impact on our ability to execute on our business strategy. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
September&nbsp;24, 2006, Vernon Davis left a regular season NFL game in the third quarter after sustaining a fracture to his left fibula. This injury caused him to miss six games
during the 2006 NFL regular season. After suffering a concussion, Vernon Davis was forced to temporarily leave a regular season game on December&nbsp;31, 2006. On September&nbsp;23, 2007, Vernon
Davis left a regular season NFL game early after suffering a sprain to his right knee. This injury caused him to miss the following two regular season games. Vernon Davis also missed portions of two
regular season NFL games in the 2010 season following a reported ankle injury. On December&nbsp;23, 2012, Vernon Davis was reported to leave an NFL game early after suffering a concussion. On
September&nbsp;15, 2013, Vernon Davis left a regular season NFL game early in the fourth quarter with a hamstring strain, which injury also caused him to miss a game the subsequent week. Most
recently, on November&nbsp;10, 2013, Vernon Davis was reported to leave a regular season game early as a result of suffering a concussion. Vernon Davis has experienced these and other instances of
normal wear and tear as an athlete in the NFL and we expect that Vernon Davis will continue to experience such wear and tear. Any worsening of these conditions, or re-injury or new injury, could
materially and adversely affect Vernon Davis's playing performance and the value of the Vernon Davis Brand. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
substantial portion of our income under the brand contract is attributable to Vernon Davis's NFL player contract. To the extent that the value of your investment is dependent on the
competitive success of Vernon Davis, the likelihood of achieving such success is substantially reduced by serious or untimely injuries to Vernon Davis. Vernon Davis is not contractually guaranteed to
receive any portion of his NFL player contract. If Vernon Davis is unable to play as a result of any injury, illness or a medical condition he may lose those portions of his contract payable on the
achievement of performance based incentives, those portions of his contract not guaranteed against injury, illness or a medical condition and may be unable to enter into any future NFL player
contracts. Additionally, Vernon Davis may not be paid under his endorsement contracts if he fails to play in a specified number of NFL games. Even if Vernon Davis continues to receive payments under
his endorsement contracts, his ability to maintain sponsors and his ability to attract new sponsors may be severely diminished. </FONT></P>

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<P style="font-family:times;"><FONT SIZE=2><B><I> Future negative publicity could damage Vernon Davis's reputation and impair the value of his brand.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The cash receipts under our Vernon Davis brand contract heavily depend on the value and strength of Vernon Davis's brand and
reputation. Vernon Davis has in the past received, and we expect that in the future he will continue to receive, media coverage. Unfavorable publicity regarding his professional performance or his
behavior off the field could negatively affect his brand and reputation. For example, in September 2010, it was widely reported that Vernon Davis initiated a fight at training camp with a fellow
teammate leading to some negative media coverage. Any future negative publicity as a result of similar incidents or otherwise could damage his reputation and impair the value of his brand. Moreover,
certain of Vernon Davis's endorsement agreements contain "morality" clauses which would permit counterparties to endorsement agreements to terminate those agreements in certain circumstances (such as
if he were charged with a felony or other crime involving fraud, dishonesty, violence, physical harm to another person, possession or use of illegal drugs or moral turpitude), further reducing our
ABI. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Risks Relating to Arian Foster  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Arian Foster's NFL player contract is a significant portion of the current cash we would receive under his brand contract.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2012, Arian Foster signed a five year contract with the Texans worth up to $43.5&nbsp;million, and his professional football
compensation in that year made up over 90% of his annual income. This 2012 NFL player contract included a $12.5&nbsp;million signing bonus with the remaining $31.0&nbsp;million to be paid out over
the term of the contract. The maximum brand income remaining as of June&nbsp;30, 2013 under his existing NFL player contract was $25.5&nbsp;million, of which only $3.25&nbsp;million is
guaranteed other than if, prior to or during the 2013 season, he either fails or refuses to report, practice or play for the team for any reason other than injury (or death) suffered while performing
services under the contract or is in material breach of his NFL player contract. Therefore, much of the cash expected to be received under our brand contract with Arian Foster is tied to his
professional football career and is not guaranteed. If he does not play for any reason or if the Texans
decide to release him because of a decline in the quality of his play, an injury, illness or medical condition or for any other reason, then he will not receive any of the remaining salary other than
the guaranteed portion. We cannot guarantee that Arian Foster will continue to be paid according to the terms of his current NFL player contract, or that he will be able to enter into a new NFL player
contract when the existing contract expires. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> The profitability of Arian Foster's brand contract is substantially dependent upon Arian Foster's ability to enter into at least one additional multi-year NFL player
contract on economic terms that are comparable to his existing NFL player contract, and, to a lesser extent, on his ability to successfully attract and retain endorsements during his playing career
and thereafter in excess of amounts he has attracted historically and/or generate other brand income after his playing career.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We anticipate that we will receive the majority of payments due under our brand contract with Arian Foster during the period of his NFL
playing career. His current NFL player contract represents the source of substantially all of the brand income, and we expect that Arian Foster's annual income will continue to be more heavily
weighted toward his NFL player contract than on other brand income generating activities. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
length of Arian Foster's NFL playing career is uncertain, however, running backs generally retire from the NFL by their early 30s. Arian Foster was born on August&nbsp;24, 1986,
and thus was 27&nbsp;years old at the start of the 2013 NFL season. Unless earlier terminated, Arian Foster's current NFL player contract with the Texans will expire at the conclusion of the 2016
NFL season. Because Arian Foster will be 30&nbsp;years old prior to the beginning of the 2017 season, NFL teams may be unwilling to enter into a long-term NFL player contract with Arian Foster on
terms comparable to his current NFL </FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>player
contract, if at all. As a result, Arian Foster may have already reached the peak of his earnings from his football salary. In addition, Arian Foster may not continue to perform well as an NFL
player and therefore, future earnings may be substantially less than those realized over the past few years. If Arian Foster is unable to sign a new NFL player contract or the terms are materially
worse than his current NFL player contract, the cash receipts from our Arian Foster Brand will decline. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition, in valuing Arian Foster's potential lifetime brand income we estimated a significant increase in the brand income Arian Foster may earn as a result of his endorsements, as
compared to his historical earnings from endorsements. We believe this was appropriate for several reasons, including that Arian Foster was an un-drafted free agent, and thus his historical
endorsement earnings in his first several seasons may be significantly lower than his longer-term potential. However, we do not know if his endorsement income will increase in the future, and we do
not know if his reputation
and brand will be enhanced as a result of his being our first contract party. In fact, his reputation and brand may be negatively affected by his willingness to enter into a brand contract and trade
potential future earnings for present income. If future endorsement partners or NFL teams suspect that Arian Foster has hidden motives behind accepting an upfront cash payment in exchange for a
portion of his future earnings, future endorsement partners may be less willing to enter into contracts with Arian Foster and may not find his promises of future performance under such contracts
reliable. In addition, none of Arian Foster's current endorsement contracts last beyond the first quarter of 2015, and many of the endorsement contracts included in his brand income (likely also
including those he may enter into during his NFL playing career) may be terminated if Arian Foster does not play for an NFL football team. Moreover, future endorsement partners may be less willing to
enter into contracts with Arian Foster as a result of his entering into the brand contract with us in order to avoid public disclosure of their arrangements with Arian Foster. For the aforementioned
reasons, Arian Foster may be unable to renew existing endorsement deals on favorable terms, if at all, or may not be able to enter into new endorsement deals. In addition, his ability to generate
other brand income after his playing career, such as through coaching or broadcasting, is unproven. His failure to attract and maintain key endorsements or generate other brand income after his
playing career could have a negative impact on our cash received under the brand contract. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
opportunity to receive a return of capital or any profit from our brand contract with Arian Foster will depend in large part upon Arian Foster's ability to enter into at least one
additional multi-year NFL player contract on terms that are, on an average annualized basis, economically comparable to his existing NFL player contract and on his ability over the same period and
beyond to enter into and maintain endorsement contracts that are significantly in excess of those he has had historically. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Arian Foster may suffer from an injury, illness or a medical condition; any injuries, illnesses or medical conditions of Arian Foster may affect the cash received by us
under the brand contract.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any injury, illness or a medical condition of Arian Foster could adversely impact the cash received by us under our Arian Foster brand
contract. Even if not career ending, an injury, illness or a medical condition could have a negative effect upon Arian Foster's performance and may result in a loss of brand income that would
otherwise have resulted from current and future NFL player contracts. A reduction in brand income will reduce our ABI, our ability to make dividend payments, if any, and have a negative impact on the
value of shares of our Fantex Series Arian Foster. Any of these outcomes could also affect our ability to enter into additional brand contracts or to finance the acquisition of additional brands,
which would have an adverse impact on our ability to execute on our business strategy. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
December&nbsp;23, 2012, Arian Foster left a regular season NFL game early with an irregular heartbeat. He is also reported to have experienced a similar condition on eight prior
occasions since he was 12&nbsp;years old. On January&nbsp;31, 2013, Alex Flanagan of the NFL Network reported that Arian Foster </FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>would
likely undergo an ablation surgical procedure, a process by which biological tissue is removed using lasers or chemicals. On February&nbsp;1, 2013 the Texans publicly released a statement by
Arian Foster stating that he had not, and did not have any current plans to, discuss a surgery with his doctors. Any current or future heart condition could adversely affect Arian Foster's playing
performance or ability to fulfill his obligations under his NFL player contract, which in turn could materially and adversely affect the revenues of our Arian Foster Brand. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition, Arian Foster played with a torn meniscus, or cartilage in his knee, during the 2010 NFL season, without publicly disclosing the injury until after the season when he
underwent surgery to repair the injury. Arian Foster's playing status was questionable for two games during the 2011 NFL season and was inactive for two more games in the season, missing three full
games due to hamstring issues. Arian Foster re-aggravated this injury during an NFL regular season game on October&nbsp;20, 2013 and left that game during the first quarter. A knee injury during the
2012 pre-season also made his season debut questionable. In addition, Arian Foster recently underwent an MRI on his right calf that was strained during off-season practice in May 2013 and missed most
of 2013 training camp due to a lingering back pain. Arian Foster has experienced these and other instances of normal wear and tear as an athlete in the NFL and we expect that Arian Foster will
continue to experience such wear and tear. Any worsening of these conditions, or re-injury or new injury, could materially and adversely affect Arian Foster's playing performance and the value of the
Arian Foster Brand. In addition, continuing to play while injured could lead to additional injuries and prematurely end Arian Foster's NFL career and significantly impair the value of the Arian Foster
Brand. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
substantial portion of our income under the brand contract is attributable to Arian Foster's NFL player contract. To the extent that the value of your investment is dependent on the
competitive success of Arian Foster, the likelihood of achieving such success is substantially reduced by serious or untimely injuries to Arian Foster. Arian Foster is only contractually guaranteed to
receive a portion of his NFL player contract. If Arian Foster is unable to play as a result of any injury, illness or a medical condition he may lose those portions of his contract payable on the
achievement of performance based incentives, those portions of his contract not guaranteed against injury, illness or a medical condition and may be unable to enter into any future NFL player
contracts. Additionally, Arian Foster may not be paid under his endorsement contracts if he fails to play in a specified number of NFL games. Even if Arian Foster continues to receive payments under
his endorsement contracts, his ability to maintain sponsors and his ability to attract new sponsors may be severely diminished. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Future negative publicity could damage Arian Foster's reputation and impair the value of his brand.  </I></B></FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The cash receipts under our Arian Foster brand contract heavily depend on the value and strength of Arian Foster's brand and
reputation. Arian Foster has in the past received, and we expect that in the future he will continue to receive, media coverage. Unfavorable
publicity regarding his professional performance or his behavior off the field could negatively affect his brand and reputation. For example, although we are not aware of any other similar incidents,
in November 2006, Arian Foster and two other team members of the Tennessee Volunteer's football team were arrested after an altercation at a night club. In a documentary released in September 2013,
Arian Foster admitted to receiving money as a college football player during his senior year at the University of Tennessee, in violation of NCAA rules. Arian Foster also became the subject of a
recent lawsuit filed by an alleged mistress claiming harassment. Any future negative publicity as a result of similar events or otherwise could damage Arian Foster's reputation and impair the value of
his brand. Moreover, certain of Arian Foster's endorsement agreements contain "morality" clauses which would permit counterparties to endorsement agreements to terminate those agreements in certain
circumstances (such as if he were charged with a felony or other crime involving fraud, dishonesty, violence, physical harm to another person, possession or use of illegal drugs or moral turpitude),
further reducing our ABI. </FONT></P>

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<P style="font-family:times;"><FONT SIZE=2><B> Risks Relating to our Tracking Stock Structure  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> There are numerous risks you should be aware of with respect to how we intend to structure our business and our proposed tracking stock structure  </I></B></FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our amended and restated certificate of incorporation authorizes us to establish and issue from time to time one or more series of
common stock and to determine the terms and rights of each such series. For example, we have already designated or are planning to designate the tracking series brands and the series of tracking
stocks described in the section entitled "Management and Attribution Policies" beginning on page&nbsp;108. We intend to enter into additional brand contracts in the future, and we intend to
establish and issue an additional series of common stock, which we refer to as our tracking stock, with each new brand contract. Each tracking stock would be intended to track and reflect the separate
economic performance of the assets and expenses associated with the associated brand contract. As a result, we expect to issue multiple tracking stocks in the future, and there are numerous risks
associated with our proposed tracking stock structure. However, to the extent that we fail to issue any additional tracking stocks or fail to consummate the offering of Fantex Series Arian Foster or
Fantex Series Vernon Davis, Fantex Series&nbsp;EJ Manuel will carry the full burden of our general liabilities, costs and expenses (including, for example, the full amount of the service fee we pay
to our parent pursuant to the management agreement), and the economic performance of the Fantex Series&nbsp;EJ Manuel will be more heavily dependent upon our aggregate financial performance. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> A specified portion of the ABI associated with each of our brand contracts will be attributed to our platform common stock rather than the associated tracking stock.
Therefore each of our tracking stocks will only partially reflect the economic performance of the associated brand contract and other assets and expenses of the associated tracking stock brand.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our Fantex Series&nbsp;EJ Manuel is intended to track the performance of our EJ Manuel Brand. However, we are attributing to the EJ
Manuel Brand only 95% of the ABI under the EJ Manuel brand contract. The remaining 5% of ABI under the EJ Manuel brand contract will be attributed to our platform common stock. Similarly, in the
future when we issue additional tracking stocks we intend to attribute a portion of the ABI under the associated brand contracts to the platform common stock. Therefore, each of our tracking stocks
will only partially reflect the economic performance of the associated brand contract and other assets and expenses of the associated tracking stock brand, even though we may use the proceeds of this
offering and future tracking stock offerings to fund the full purchase price of the associated brand contract. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition, an investment in any of our tracking stocks would not represent an ownership interest in any related tracking stock brand or assets associated with any particular tracking
stock. Rather, an investment in any of our tracking stocks would represent an ownership interest in one consolidated company, Fantex. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2><B><I> As a series of our common stock, each of our tracking stocks will be exposed to additional risks associated with our company as a whole, including any individual tracking
stock that exists at the time of the offering or that we may establish and issue in the future.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investors in any of our tracking stocks will be our common stockholders and an investment in a tracking stock will represent an
ownership interest in our company as a whole, which will expose holders to additional risks associated with any individual tracking stock that exists at the time of any investment or that we may
establish and issue in the future, even if an investor only owns shares of one series of our common stock. For example, holders of Fantex Series&nbsp;EJ Manuel will be exposed to the risks
associated with the offering of our Fantex Series Vernon Davis and Fantex Series Arian Foster, as set forth under the section entitled "&#151;Risks Relating to Vernon Davis,"
"&#151;Risks Relating to Arian Foster," and "&#151;Risks Relating to the Issuance of Additional Tracking Stocks, Including the Issuance of </FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>Fantex
Series Arian Foster." We will attribute, for financial reporting purposes, assets, liabilities, revenue, expenses and cash flows to tracking units that we establish for brands we acquire in the
future, and we will include unaudited attributed financial information as part of our financial reporting for each tracked unit we establish. However, holders of any of our tracking stocks will not
have any legal rights related to specific assets attributed to the associated tracked unit. Rather, Fantex will retain legal title to all of its assets, including assets attributed to any of our
current tracking stock brands or any other tracking stock brand we establish in the future, and, in any liquidation, holders of our tracking stocks and holders of any other tracking stocks we may
establish in the future, together with holders of our platform common stock, will be entitled to receive a proportionate share of our available net assets available for distribution to stockholders
after we satisfy our creditors, including creditors of any tracking stock brand other than a tracking stock brand related to a tracking stock in which you may invest. See "Description of Capital
Stock&#151;Common Stock&#151;Liquidation." </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Our board of directors will have discretion to reattribute assets and liabilities of any tracking stock brand without the approval of our holders of that tracking stock
brand.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our board of directors will have discretion to reattribute assets and liabilities of one tracking stock brand to another tracking stock
brand without the approval of our stockholders or the holders of any tracking stocks related to the impacted tracking stock brands. This may make it difficult to assess the future prospects of the EJ
Manuel Brand or any other tracking stock brand. Any reattribution made by our board of directors, as well as the existence of the right in and of itself to effect a reattribution, may impact the
ability of investors to assess the future prospects of the EJ Manuel Brand or any other tracking stock brand, including its liquidity and capital resource needs. Our stockholders may also have
difficulty evaluating the liquidity and capital resources of each of our tracking stock brands based on past performance, as our board of directors may use one tracking stock brand's liquidity to fund
another tracking stock brand's liquidity and capital requirements through the use of inter-series loans and inter-series equity investments. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
could be required to use assets attributed to one tracking stock brand to pay liabilities attributed to another tracking stock brand. The assets attributed to one tracking stock brand
are potentially subject to the liabilities attributed to another tracking stock brand, even if those liabilities arise from lawsuits, contracts or indebtedness that are attributed to such other
tracking stock brand. While our current management and attribution policies provide that reattributions of assets between tracking stock brands will result in the creation of an inter-series loan or
be considered an inter-series equity investment or an offsetting reattribution of cash or other assets, no provision of our amended and restated certificate of incorporation prevents us from
satisfying liabilities of one tracking stock brand with assets of another tracking stock brand, and our creditors will not in any way be limited by our capital structure from proceeding against any
assets they could have proceeded against if we did not have any tracking stocks. As a result, although we intend for the tracking stocks to track the performance of the tracking stock brand, we cannot
provide any guarantee that the tracking stock will in fact track the performance of such tracking stock brand and that a particular tracking stock, including the Fantex Series&nbsp;EJ Manuel, will
not be subject to a disproportionate share of the burden of any non- performing brand contracts,
whether or not included in the assets attributed to such tracking stock, and will not be attributed a disproportionate amount of our general liabilities, costs and expenses. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> The market price of our tracking stock may not reflect the intrinsic value or performance of the associated tracking stock brand.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The market price of our tracking stock may not reflect the performance of the associated tracking stock brand. Holders of our tracking
stock will be common stockholders of Fantex as a whole and, as such, will be subject to all risks associated with an investment in Fantex and all of our tracking stock </FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>brands,
assets and liabilities. As a result, the market price of our tracking stock may reflect the performance of Fantex as a whole or may more independently reflect the performance of some or all of
the assets attributed to the associated tracking stock brand. We intend to value each of our brand contracts using the fair value option under ASC 825. Please see "Management's Discussion and Analysis
of Financial Condition and Results of Operations&#151;Critical Accounting Policies." Our fair value determination may be different from the implied value of a brand contract based on the market
price for our tracking stock. In addition, investors may discount the value of any of our tracking stock because it is part of a common enterprise rather than a stand-alone entity. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> The market price of our tracking stock may be more volatile than other publicly traded common stock because of our unique capital structure.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The market price of our tracking stock may be volatile, could fluctuate substantially and could be affected by factors that do not
affect other publicly-traded common stock. Our capital structure and business model is unique and we do not know how the market will react. In addition, to the extent the market prices of any of our
tracking stock reflect the performance of more focused tracking stock brands, assets and liabilities than traditional common stock, the market prices of our tracking stock may be more volatile than
the market price of traditional common stock because they may be more sensitive to events or circumstances that could impact the associated tracking stock brand. The market prices of any of our
tracking stock may be materially affected by, among other things:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>actual or anticipated fluctuations in brand income or expected brand income attributed to the associated tracking stock
brand, or in other operating results related to the associated tracking stock brand; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>potential acquisition activity by Fantex, including in brands we acquire or that we publicly announce that we intend to
acquire or that people anticipate we may acquire; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>changes in estimates of brand income by analysts or commentators; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the complex nature and the potential difficulties investors may have in understanding the terms of our Fantex
Series&nbsp;EJ Manuel, the terms of our platform common stock or any other tracking stock, or our business model, as well as concerns regarding the possible effect of certain of those terms on an
investment in our stock; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>actual or anticipated liabilities or expenses attributed to the associated tracking stock brand or any other tracking
stock brand or Fantex as a whole; and</FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>general market conditions. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2><B><I> Our capital structure may create conflicts of interest for our board of directors and management, which could have a material adverse effect on the market value of any of
our tracking stocks.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our tracking stock capital structure could create conflicts of interest, and our board of directors may make decisions that could
adversely affect only some holders of our common stock. Our tracking stock capital structure could give rise to occasions when the interests of holders of one tracking stock might diverge or appear to
diverge from the interests of holders of another tracking stock. In addition, there may be inherent conflicts of interests between any of our tracking stocks and the platform common stock. Our
tracking stock brands are not separate entities and thus holders of our Fantex Series&nbsp;EJ Manuel, platform common stock and any future tracking stocks will
not have the right to elect separate boards of directors. As a result, our officers and directors owe fiduciary duties to Fantex as a whole and all of our stockholders as opposed only to holders of a
particular tracking stock. Decisions deemed to be in the best interest of Fantex and all of our stockholders may not be in the </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>59</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>best
interest of a particular tracking stock when considered independently. Examples include decisions relating to:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the terms of any business relationships that may be created between and among any of our tracking stock brands and the
platform common stock or the terms of any reattributions of assets between any of our tracking stock brands and the platform common stock; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the timing of a merger or other change of control transaction involving Fantex and its impact on the allocation of
consideration among the holders of our Fantex Series&nbsp;EJ Manuel, any future tracking stocks and platform common stock; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the allocation of corporate opportunities between any of our tracking stock brands, especially where the opportunities
might meet the strategic business objectives of more than one tracking stock brand; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>operational and financial matters that could be considered detrimental to one tracking stock brand but beneficial to
another tracking stock brand; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the conversion of shares of any of our tracking stock brands into shares of platform common stock; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the creation of any new tracking stocks; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the making of, and, if made, the subsequent increase or decrease of any inter-series equity investments that one tracking
stock brand may make in another tracking stock brand; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the internal or external financing or assets attributable to any of our tracking stock brands; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the dispositions of assets of any of our tracking stock brands; and </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the payment of any dividends on any of our tracking stocks or our platform common stock. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2><B><I> Our parent, as a holder of our platform common stock, will have control over key decision making as a result of their control over a majority of our voting stock.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Following this offering, our parent will be able to exercise voting rights with respect to an aggregate of 100,000,000 shares of common
stock, representing a majority of the voting power of our outstanding capital stock following our initial public offering. Our platform common stock and each of our tracking stocks, including our
Fantex Series&nbsp;EJ Manuel being offered in this initial public offering, are each entitled to one vote per share. As a result, our parent will hold substantially all of the voting power of our
outstanding capital stock following our initial public offering and will have the ability to control the outcome of matters submitted to our stockholders for approval, including the election of
directors and any merger, consolidation, or sale of all or substantially all of our assets. As a stockholder, even a controlling stockholder, our parent is entitled to vote its shares in its own
interests, which may not always be in the interests of our stockholders generally. Our parent will continue to control a majority of the combined voting power of our common stock and therefore be able
to control all matters submitted to our stockholders for approval so long as the shares of our platform common stock represent a majority of all outstanding shares of our common stock. This
concentrated control will limit your ability to influence corporate matters for the foreseeable future. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Ownership of our platform common stock by our parent company and any of our officers or directors, may create, or appear to create, conflicts of interest with holders of our
tracking stocks.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Ownership of platform common stock by our parent company and any of our officers or directors, may create or appear to create conflicts
of interest. Our parent company and our directors or officers directly or indirectly own an interest in platform common stock and not in any of our tracking stocks, including Fantex Series&nbsp;EJ
Manuel. This disparity could create or appear to create conflicts of interest </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>60</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>when
our parent company or any of our officers or directors are faced with decisions that could have different implications for the holders of shares of Fantex Series&nbsp;EJ Manuel and holders of
platform common stock. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Our officers and directors may have a conflict of interest or appear to have a conflict since almost all of our officers are also officers of Fantex Holdings.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Almost all of our officers are also the members of our parent's board and officers of our parent company. Because our parent holds all
of our platform common stock, its interests are expected to conflict in certain respects with the interests of holders of our Fantex Series&nbsp;EJ Manuel or additional tracking stocks. Furthermore,
since our parent is also required to provide services to us under the management agreement as long as such agreement is in effect, certain of its interests pursuant to that agreement are directly
adverse to the interests of Fantex. These differing interests could create or appear to create conflicts of interest when our officers or directors are faced with decisions that could have different
implications for Fantex Holdings and Fantex. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Our capital structure may decrease the amounts available for the payment of dividends to holders of our tracking stocks.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We may not pay dividends on one or more tracking stocks, even if we pay dividends on our platform common stock or any other tracking
stock. If we pay dividends or make any other distributions on, or repurchases of, shares of any other series of our common stock without also making a dividend on all other series of common stock the
assets that would be legally available to be
paid as dividends on the shares relating to our other series of common stock under Delaware law would be reduced. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Our board of directors has the ability to change our attribution policies at any time without a vote of our stockholders, which may adversely affect the market value of our
Fantex Series&nbsp;EJ Manuel.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other than pursuant to the management and attribution policies described in this prospectus, we have not adopted any specific
procedures for consideration of matters involving a divergence of interests among holders of shares of our tracking stocks and our platform common stock, or among holders of different tracking stocks.
Rather than develop additional specific procedures in advance, our board of directors intends to delegate decisions to our independent conflicts committee, which will exercise its judgment from time
to time, depending on the circumstances, as to how best to:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>obtain information regarding the divergence (or potential divergence) of interests; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>determine under what circumstances to seek the assistance of outside advisers; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>determine whether a special committee of our board of directors should be appointed to address a specific matter and the
appropriate members of that committee; and</FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>assess what is in our best interests and the best interests of all of our stockholders. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
board of directors believes the advantage of retaining flexibility in determining how to fulfill its responsibilities in any such circumstances as they may arise outweighs any
perceived advantages of adopting additional specific procedures in advance. Our board of directors intends to adopt certain management and attribution policies described in this prospectus to serve as
guidelines in making decisions regarding the relationships between the EJ Manuel Brand, any other tracking stock brand and the platform common stock with respect to matters such as tax liabilities and
benefits, inter-series
loans, inter-series equity investments, attribution of assets, financing alternatives, corporate opportunities and similar items. These policies also set forth the initial attribution and expected
future attributions of our assets and liabilities between and among our platform common stock and our tracking stock brands. These policies are not included in our amended and restated certificate of </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>61</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>incorporation
and our board of directors may at any time change or make exceptions to these policies. Because these policies relate to matters concerning the day-to-day management of Fantex as opposed
to significant corporate actions, such as a merger involving us or a sale of substantially all of our assets, stockholder approval will not be required with respect to their adoption or amendment. In
addition, to the extent that our board of directors seeks stockholder approval, Fantex Holdings, as the sole holder of our platform common stock, will be able to control such vote because they will
hold substantially all of the voting power of our outstanding capital stock following this offering. A decision to change, or make exceptions to, these policies or adopt additional policies could
disadvantage one series of common stock while advantaging another. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> You may not have any remedies under Delaware law if the actions of our directors or officers adversely affect the market value of any of our tracking stocks.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Holders of a particular tracking stock may not have any remedies if any action by our directors or officers has an adverse effect on
only that tracking stock. Principles of Delaware law and the provisions of our amended and restated certificate of incorporation may protect decisions of our board of directors that have a disparate
impact upon holders of any tracking stocks. Under Delaware law, the board of directors has a duty to act with due care and in the best interests of all of our stockholders, regardless of the stock, or
series, they hold. Principles of Delaware law established in cases involving differing treatment of multiple classes or series of stock provide that, subject to any applicable provisions of the
certificate of incorporation, a board of directors generally owes an equal duty to all stockholders and does not have separate or additional duties to any subset of stockholders. Judicial opinions in
Delaware involving tracking stocks have established that decisions by directors or officers involving differing treatment of holders of tracking stocks may be judged under the business judgment rule.
In some circumstances, our directors or officers may be required to make a decision that is viewed as adverse to the holders of a particular tracking stock. Under the principles of Delaware law and
the business judgment rule referred to above, you may not be able to successfully challenge decisions that you believe have a disparate impact upon the stockholders of one of our tracking stocks if a
majority of our board of directors, or an authorized committee thereof, is disinterested and independent with respect to the action taken, is adequately informed with respect to the action taken and
acts in good faith and in the honest belief that the board is acting in the best interest of our stockholders collectively. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> We may dispose of assets of the EJ Manuel Brand without your approval.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Delaware law requires stockholder approval only for a sale or other disposition of all or substantially all of the assets of Fantex
taken as a whole, and our amended and restated certificate of incorporation does not require a separate class vote in the case of a sale of a significant amount of assets of any of our tracking stock
brands. As long as the assets attributed to the EJ Manuel Brand or the platform common stock proposed to be disposed of represent less than substantially all of our assets, we may approve sales and
other dispositions of any amount of the assets of such tracking stock brand without any stockholder approval. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Holders of any of our tracking stocks may not be adequately compensated if we sell all or substantially all of the assets of the associated tracking stock brand.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If we dispose of all or substantially all of the assets attributed to any tracking stock brand, we would be required, if the
disposition is not an exempt disposition under the terms of our amended and restated certificate of incorporation, to choose one or more of the following three
alternatives:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>pay a dividend to holders of the associated tracking stock brand out of the available net proceeds of such disposition; or </FONT></DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>62</FONT></P>

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</FONT> <FONT SIZE=2>
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<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>if there are legally sufficient assets and the available dividend amount for the associated tracking stock would have been
sufficient to pay a dividend, then: (i)&nbsp;if the disposition involves all of the properties and assets of the associated tracking stock brand, redeem all outstanding shares of the associated
tracking stock in exchange for cash and/or securities or other assets with a fair value equal to the available net proceeds of such disposition, or (ii)&nbsp;if the disposition involves
substantially all (but not all) of the properties and assets of the associated tracking stock brand, redeem a portion of the outstanding shares of our associated tracking stock in exchange for cash
and/or securities or other assets with a fair value equal to the available net proceeds of such disposition; or </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>following the two-year anniversary of the filing of a certificate of designation creating any tracking stock, convert each
outstanding share of the associated tracking stock into our platform common stock at the applicable conversion ratio; or</FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>combine a conversion of a portion of the outstanding shares of the associated tracking stock into a number of shares of
our platform common stock at the applicable conversion ratio with either the payment of a dividend on or a redemption of shares of the associated tracking stock. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;See
"Description of Capital Stock" beginning on page&nbsp;164. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
this type of a transaction, holders of the disposing tracking stock brand's common stock may receive less value than the value that a third-party buyer might pay for all or
substantially all of the assets of the tracking stock brand. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
board of directors will decide, in its sole discretion, how to proceed and is not required to select the option that would result in the highest value to holders of any particular
tracking stock of our common stock. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Holders of any of our tracking stocks may receive less consideration upon a sale of the assets attributed to the associated tracking stock brand than if that brand were a
separate company.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the EJ Manuel Brand were a separate, independent company and its shares were acquired by another person, certain costs of that sale,
including corporate level taxes, might not be payable in connection with that acquisition. As a result, stockholders of a separate, independent company with the same assets might receive a greater
amount of proceeds than the holders of shares of Fantex Series&nbsp;EJ Manuel would receive upon a sale of all or substantially all of the assets of the EJ Manuel Brand. In addition, we cannot
assure you that in the event of such a sale the per share consideration to be paid to holders of shares of Fantex Series&nbsp;EJ Manuel will be equal to or more than the per share value of that
share of stock prior to or after the announcement of a sale of all or substantially all of the assets of the EJ Manuel Brand. Further, there is no requirement that the consideration paid be tax-free
to the holders of the shares of Fantex Series&nbsp;EJ Manuel. Accordingly, if we sell all or substantially all of the assets attributed to the EJ Manuel Brand, our stockholders could suffer a loss
in the value of their investment in Fantex. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> In the event of a liquidation of Fantex, holders of any of our tracking stocks will not have a priority with respect to the assets attributed to the associated tracking
stock brand remaining for distribution to stockholders.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under the amended and restated certificate of incorporation, upon liquidation, dissolution or winding up of Fantex as a whole, holders
of our tracking stocks will be entitled to receive, subject to the prior payment in full of creditors, a proportionate interest in the assets of Fantex remaining for distribution to holders of common
stock in an amount per share equal to the fair value of such share of common stock; however, if the assets of Fantex legally available for distribution to the holders of common stock are insufficient
to permit the payment to shares of all of our outstanding tracking stocks </FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>the
full amount to which they would otherwise be entitled, then the assets available for distribution to the holders of common stock shall be distributed to all holders of each tracking stock ratably
in proportion to the full amounts to which they would otherwise have been entitled to receive. As a result, the proportionate share of Fantex's assets that any holder of our tracking stocks would be
entitled to receive upon any liquidation may be less than the assets of the associated tracking stock brand, and less than the amount that you would have received if the associated tracking stock
brand were a separate company. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Our board of directors may, in its sole discretion, elect to convert any of our tracking stocks into our platform common stock following the two-year anniversary of the
filing of a certificate of designation 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 our tracking stocks.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our amended and restated certificate of incorporation and the certificate of designations for each of our tracking stocks will permit
our board of directors, in its sole discretion, to convert all of the outstanding shares of any tracking stock into shares of our platform common stock, following the two-year anniversary of the
filing of a certificate of designation creating such tracking stock, at an exchange rate based on the relative fair value of a share of the impacted tracking stock and the fair value of a share our
platform common stock at the time. Our amended and restated certificate of incorporation and the certificate of designation for future tracking stocks are expected to permit our board of directors, in
its sole discretion, to convert all of the outstanding shares of any future tracking stocks into shares of platform common stock, following the two-year anniversary of the filing of a certificate of
designation creating such tracking stock, at an exchange rate based on the relative fair value of the that tracking stock and the platform common stock at the time. Additional
details are as described under "Description of Capital Stock&#151;Common Stock&#151;Conversion." </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although
we do not anticipate converting an actively traded tracking stock into platform common stock that is not also actively traded, there may be circumstances that exist in the
future where our board of directors and, where applicable, the conflicts committee of our board of directors may consider it to be in the best interests of its stockholders to do so. For example, we
anticipate converting a tracking stock into platform common stock in the following circumstances:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>if the tracking stock is no longer an actively traded stock, such as, for example, if the contract party for the tracking
stock brand underlying that tracking stock suffers an injury, illness, medical condition or dies, and his brand income diminishes as a result and there is little if any expectation that his brand
income will materially increase in the future. In this case our board of directors may convert the shares of that tracking stock into platform common stock as a means of retiring the tracking stock,
and our board of directors may do so in this circumstance even if the platform common stock is not an actively traded stock. As a result, the value received at the time of conversion of Fantex
Series&nbsp;EJ Manuel to platform common stock may be limited because such conversion is likely to occur at a time when the value of Fantex Series&nbsp;EJ Manuel has little or no value.
Furthermore, the conversion could result in you holding shares of our platform common stock that are not actively traded as determined in good faith by our board of directors or a committee of our
board of directors. </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>other special or extraordinary circumstances exist, such as a potential restructuring, reorganization or change of control
of Fantex. We would not expect our board of directors to approve a conversion in this circumstance unless there is an active trading market for the platform common stock at the time of such
conversion. Our board of directors may effect such a conversion at a time when the market value of either our platform common stock or the relevant tracking stock could cause, or be perceived to
cause, the stockholders of either of such series to be disadvantaged. </FONT></DD></DL>
</UL>
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<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any
conversion of a tracking stock into platform common stock, whether or not the platform common stock is at the time an actively traded stock as determined in good faith by our board
of directors or a committee of our board of directors, would preclude the holders of that tracking stock from retaining their investment in a security that is intended to reflect separately the
performance of the relevant tracking stock brand. This uncertainty may also impact the market value of your tracking stock even if we do not ever convert your tracking stock. We cannot predict the
impact on the market value of our
stock because our board of directors' ability to effect any such conversion or the exercise of this conversion right by Fantex. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Our capital structure may inhibit beneficial acquisition offers.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our capital structure, as well as the fact that the EJ Manuel Brand is not an independent company may inhibit or prevent acquisition
bids for the EJ Manuel Brand and may make it difficult for a third party to acquire us, even if doing so may be beneficial to our stockholders. If the EJ Manuel Brand were a separate independent
company, any person interested in acquiring the EJ Manuel Brand without negotiating with management could seek control of that tracking stock brand by obtaining control of its outstanding voting
stock, by means of a tender offer, or by means of a proxy contest. Although we intend Fantex Series&nbsp;EJ Manuel to reflect the separate economic performance of the EJ Manuel Brand, it is not a
separate entity and a person interested in acquiring only Fantex Series&nbsp;EJ Manuel without negotiation with our management could obtain control of that tracking stock brand only by obtaining
control of a majority in voting power of the platform common stock. The existence of shares of common stock, and different series of shares, relating to different tracking stock brands could present
complexities and in certain circumstances pose obstacles, financial and otherwise, to an acquiring person that are not present in companies that do not have capital structures similar to ours. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2><B><I> Certain provisions of our amended and restated certificate of incorporation and amended and restated bylaws may discourage, delay or prevent a change in control of Fantex
that a stockholder may consider favorable.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certain provisions of our amended and restated certificate of incorporation and amended and restated bylaws may discourage, delay or
prevent a change in control of Fantex that a stockholder may consider favorable. These provisions include:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>authorizing our Fantex Series&nbsp;EJ Manuel or any other tracking stocks; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>classifying our board of directors with staggered three-year terms, which may lengthen the time required to gain control
of our board of directors; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>from and after such time as our parent company no longer holds a majority of the voting rights of our common stock, a
prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>advance notice and other requirements that stockholders, other than our parent company for so long as it holds a majority
of the voting rights of our common stock, must comply with in order to nominate candidates to our board of directors and propose matters to be brought before an annual meeting of our stockholders,
which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer's own slate of directors or otherwise attempting to obtain control of Fantex;
and</FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>from and after such time as our parent company holds less than a majority of the voting rights of our common stock, a 75%
stockholder vote is required for removal of a director with or without cause, and for the amendment, repeal or modification of certain provisions of our amended and restated certificate of
incorporation and amended and restated bylaws. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition, after our parent company ceases to own 15% of our voting stock, we will be subject to Section&nbsp;203 of the Delaware General Corporation Law. Under Section&nbsp;203, a
corporation may not, in </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>65</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>general,
engage in a business combination with any holder of 15% or more of its voting stock unless the holder has held the stock for three years or, among other things, the board of directors
approved the transaction prior to such holder acquiring its 15% stake. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Our amended and restated certificate of incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions
and proceedings that may be initiated by our stockholders, which could limit our stockholders' ability to obtain a favorable judicial forum for disputes with us or our directors, officers or
employees.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our certificate of incorporation provides that, subject to limited exceptions, the Court of Chancery of the State of Delaware will be
the sole and exclusive forum for (i)&nbsp;any derivative action or proceeding brought on behalf of us, (ii)&nbsp;any action asserting a claim of breach
of a fiduciary duty owed by, or other wrongdoing by, any of our directors or officers to us or our stockholders, (iii)&nbsp;any action asserting a claim against us arising pursuant to any provision
of the Delaware General Corporation Law or our amended and restated certificate of incorporation or amended and restated bylaws, (iv)&nbsp;any action to interpret, apply, enforce or determine the
validity of our amended and restated certificate of incorporation or the amended and restated bylaws or (v)&nbsp;any action asserting a claim against us governed by the internal affairs doctrine. We
believe this provision benefits us by providing increased consistency in the application of Delaware law by judges particularly experienced in resolving corporate disputes, efficient administration of
cases on a more expedited schedule relative to other forums and protection against the burdens of multi-forum litigation. Any person or entity purchasing or otherwise acquiring any interest in shares
of our Fantex Series&nbsp;EJ Manuel shall be deemed to have notice of and to have consented to the provisions of our certificate of incorporation described above. This choice of forum provision may
limit a stockholder's ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees, which may discourage such lawsuits
against us and our directors, officers and employees. Alternatively, if a court were to find these provisions of our certificate of incorporation inapplicable to, or unenforceable in respect of, one
or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business and
financial condition. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Risks Relating to the Issuance of Additional Tracking Stocks  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investors in any of our tracking stocks will be our common stockholders and an investment in a tracking stock will represent an
ownership interest in our company as a whole, which will expose holders to additional risks associated with any individual tracking stocks that exist at the time of any investment or that we may
establish and issue in the future. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Our Fantex Series&nbsp;EJ Manuel may be adversely impacted by any non-performing brand contracts, whether or not such brand contracts are included in the assets attributed
to our Fantex Series&nbsp;EJ Manuel.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have entered into a brand contract with each of EJ Manuel, Vernon Davis and Arian Foster, and we intend to enter into additional
brand contracts on an ongoing basis. In addition, we intend to create a separate business unit in connection with each new brand contract. Income (and assets) will generally be attributed to any of
our tracking stocks based on the earnings of the associated tracking stock brand. However, the assets attributed to one tracking stock brand are potentially subject to the liabilities attributed to
another tracking stock brand, even if those liabilities arise from lawsuits, contracts or indebtedness that are attributed to such other tracking stock brand. While our current management and
attribution policies provide that reattributions of assets between tracking stock brands will result in the creation of an inter-series loan or be considered an inter-series equity investment or an
offsetting reattribution of cash or other assets, no provision of our amended and restated certificate of incorporation prevents us from satisfying liabilities of one tracking stock brand with assets
of another </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>66</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>tracking
stock brand, and our creditors will not in any way be limited by our capital structure from proceeding against any assets they could have proceeded against if we did not have any tracking
stocks. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition, if the contract party or other third party who may be obligated to make payments to us were to become the subject of a proceeding under the United States Bankruptcy Code or
a similar proceeding or arrangement under another state, federal or foreign law, our rights and interests under the brand contract or otherwise may be significantly prejudiced or impaired. In such
circumstances, we may be precluded, stayed or otherwise limited in enforcing some or all of our rights under the brand contract or otherwise and realizing the economic and other benefits contemplated
therein. To the extent we do not receive payments under a brand contract to which we would otherwise be entitled as a result of any such debtor relief laws, then the amount of such payments we do not
receive will nonetheless be attributable to the respective tracking stock brand. In such an event, such shortfall in income will be treated as a general expense of Fantex and be shared pro rata
(calculated based on attributable income) among all of our then outstanding tracking stocks, including the Fantex Series&nbsp;EJ Manuel. As a result, the market value of your tracking stock could
decline if another brand contract that is not related to your tracking stock is unenforceable as a result of debtor relief laws. Therefore, the creditworthiness of another contract party may be
relevant to your investment. For example, we have a brand contract with Arian Foster, and Arian Foster is the subject of recent allegations made by an alleged mistress who has filed a complaint in
Texas courts. As a result of this allegation and/or related matters, including any litigation related to these allegations, Arian Foster could become liable for damages and/or his financial health
could otherwise be adversely impacted, therefore potentially impacting his ability to comply with the obligations under the brand contract with us should that brand contract become effective, and his
ability to comply with other obligations. The attributed earnings for the EJ Manuel Brand could be adversely impacted if any such financial hardship led to Arian Foster seeking any relief under debtor
relief laws. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> If a blog post published about us in August 2013 were held to be in violation of the Securities Act, we could be required to repurchase securities sold, if any, in our
offering of Fantex Series Arian Foster. In addition, we have received, and may continue to receive, various degrees of media coverage, including coverage that is not accurate or attributable to
statements made by us. You should rely only on statements made in this prospectus in determining whether to purchase shares of our Fantex Series&nbsp;EJ Manuel.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Information about us was published in a blog post hosted by an unaffiliated third party, techcrunch.com, on August&nbsp;31, 2013.
This blog post contains information derived from an inadvertent and unauthorized disclosure by an unaffiliated third party software developer of a confidential and preliminary beta version of a
proprietary mobile software application under development for possible future use. We have declined to comment on any inquiries related to the blog post and the blog post appears to be based solely on
the beta version of the mobile software application, which resulted in an inaccurate reporting of our business in isolation and without disclosure
of many of the related risks and uncertainties described in this prospectus. As a result, the blog post should not be considered in isolation and you should decide whether to purchase our shares only
after reading this entire prospectus carefully. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
do not believe the blog post constitutes "gun jumping" in violation of Section&nbsp;5 of the Securities Act. However, if it were held by a court to be in violation of the Securities
Act, we could be required to repurchase the shares sold to purchasers in our public offering of Fantex Series Arian Foster at the original purchase price, plus statutory interest, for a period of one
year following the date of the violation. We would vigorously contest any such claim that a violation of the Securities Act occurred. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any
liability for a potential violation of Section&nbsp;5 under the Securities Act and a resulting repurchase of Fantex Series Arian Foster assuming the offering of Fantex Series Arian
Foster is </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>67</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>consummated
may adversely impact the financial health of our company as a whole, and therefore investors in each of our tracking stocks, including holders of our Fantex Series&nbsp;EJ Manuel. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition, we have received, and may continue to receive, various degrees of media coverage, including coverage that is not accurate or attributable to statements made by us. You
should rely only on the information contained in this prospectus in making your investment decision. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Our business may be adversely impacted by the postponement of our offering of the Fantex Series Arian Foster.  </I></B></FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On February&nbsp;28, 2013, we entered into a brand contract with Arian Foster, a running back for the Houston Texans of the NFL and
his affiliated professional services company, The Ugly Duck,&nbsp;LLC. The brand contract assigns to us 20% of the gross monies or other consideration (including rights to make investments) that
Arian Foster will receive from and after February&nbsp;28, 2013, subject to specified exceptions, as a result of his activities in the NFL and related fields (including activities in a non-NFL
football league), such as broadcasting and coaching. On November&nbsp;12, 2013, after confirming reports that Arian Foster will undergo season ending back surgery, we announced that we are
postponing the offering for Fantex Series Arian Foster. Although we will continue to work with Arian Foster through his recovery and intend to continue with the offering of Fantex Series Arian Foster
at an appropriate time in the future, we cannot guarantee that the offering of Fantex Series Arian Foster will be consummated or that the offering will be resumed upon the same terms. Any
non-performance or under performance of one of our other brand contracts or the tracking stocks
related thereto, including in this case, any decline in value of Arian Foster Brand or a resulting decline in interest in Fantex Series Arian Foster, may negatively impact investors' perception of the
expected performance of any of our other tracking stocks, including the performance of our Fantex Series&nbsp;EJ Manuel. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2><B> Risks Relating to this Offering, the Offering Process and the Fantex Platform  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Our Fantex Series&nbsp;EJ Manuel is a highly risky and speculative investment. Only investors who can bear the loss of their entire investment should purchase shares of
our Fantex Series&nbsp;EJ Manuel.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our Fantex Series&nbsp;EJ Manuel is highly risky and speculative. Our Fantex Series&nbsp;EJ Manuel is suitable for purchase only
for investors of adequate financial means. If you cannot afford to lose all of the money you plan to invest in our Fantex Series&nbsp;EJ Manuel, you should not purchase shares of our Fantex
Series&nbsp;EJ Manuel. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2><B><I> The offering of our Fantex Series&nbsp;EJ Manuel may not be completed.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We expect to cancel this offering if we do not raise at least $5,237,000 of gross proceeds. In such case, no shares of our Fantex
Series&nbsp;EJ Manuel will be sold to the public. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> There is no current trading market for our Fantex Series&nbsp;EJ Manuel or any other series of our capital stock and if a trading market does not develop, purchasers of
our Fantex Series&nbsp;EJ Manuel may not be able to sell, or may have difficulty selling, their shares.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prior to this offering, there has been no public market for our Fantex Series&nbsp;EJ Manuel, or any other series of our capital
stock. We do not intend to apply for a listing of our Fantex Series&nbsp;EJ Manuel on any securities exchange or for their inclusion in any established automated dealer quotation system. To own or
trade our Fantex Series&nbsp;EJ Manuel, you must have a brokerage account with FBS through which you will only be permitted to enter limit orders. Our Fantex Series&nbsp;EJ Manuel will be traded
in the secondary market only through the FBS ATS. If FBS or the FBS ATS
suffers any disruption in business operations or activity for any reason, including regulatory or otherwise, you may not be able to sell shares of our Fantex Series&nbsp;EJ Manuel. Please see "Risks
Relating to Our Affiliate, FBS, and the FBS ATS." </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>68</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Because
we are an affiliate of FBS, FBS will deliver a current "market- maker" prospectus, such as this prospectus, and otherwise comply with the registration requirements of the
Securities Act in connection with any secondary market sale of the shares of Fantex Series&nbsp;EJ Manuel, which may affect your ability to engage in secondary sales on the FBS ATS. We have agreed
to make a "market-maker" prospectus generally available to FBS. If we do not have a current "market-maker" prospectus available at any time, or if we have limited or no market-makers at any time, the
liquidity of the secondary market for the Fantex Series&nbsp;EJ Manuel may be materially adversely affected. FBS may also act as a market-maker in the secondary market from time to time, but it is
not obligated to make a market in the Fantex Series&nbsp;EJ Manuel and may discontinue any market-making at any time without notice, in its sole discretion. FBS has no current intention of acting as
a market-maker in the secondary market for the Fantex Series&nbsp;EJ Manuel, but may do so in the future. If FBS decides to make a market in a tracking stock, it will first amend its Form ATS filed
with the SEC to reflect such change. If FBS chooses not to make a market in the Fantex Series&nbsp;EJ Manuel or discontinues market-making for any reason, there may be no other market-makers. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition, we cannot predict the extent to which investor interest in our Fantex Series&nbsp;EJ Manuel or any other tracking stocks will lead to the development of an active trading
market for our Fantex Series&nbsp;EJ Manuel or how liquid any trading market might become. If an active trading market does not develop, you may be unable to sell, or have difficulty selling, any
shares of our Fantex Series&nbsp;EJ Manuel that you purchase, and the value of such shares may not reflect their fundamental value. The initial public offering price has been set by us and FBS based
on, among other things, our evaluation of EJ Manuel's historical athletic performance as well as estimates of the business potential and earnings prospects of EJ Manuel. Our estimates may not be
indicative of prices that will prevail in the open market following this offering. Consequently, you may not be able to sell shares of our Fantex Series&nbsp;EJ Manuel, if at all, at a price equal
to or greater than the price you paid in this offering. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Certain underwriters have conflicts of interest with respect to this offering.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Because FBS, an underwriter for this offering, is under common control with us and we will receive all of the proceeds of the offering,
FBS is deemed to have a "conflict of interest" under Rule&nbsp;5121 of the Conduct Rules of FINRA. Accordingly, this offering will be made in compliance with the applicable provisions of
Rule&nbsp;5121 which requires, among other things, that a "qualified independent underwriter" has participated in the preparation of, and has exercised the usual standards of due diligence with
respect to, the registration statement and this prospectus. Stifel,
Nicolaus&nbsp;&amp; Company, Incorporated has agreed to act as the "qualified independent underwriter" for the offering and to undertake the legal responsibilities and liabilities of an underwriter
under the Securities Act, specifically including performing due diligence investigations and reviewing and participating in the preparation of the registration statement of which this prospectus
forms&nbsp;a part. However, we cannot assure you that this will adequately address any potential conflicts of interest. See "Underwriting (Conflicts of Interest)&#151;Conflicts of Interest."
In addition, we, Fantex Holdings and FBS have agreed to indemnify Stifel, Nicolaus&nbsp;&amp; Company, Incorporated for acting as "qualified independent underwriter" against certain liabilities,
including liabilities under the Securities Act, and to contribute to payments that Stifel, Nicolaus&nbsp;&amp; Company, Incorporated may be required to make for those liabilities. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Our Fantex Series&nbsp;EJ Manuel is not a "covered security," or otherwise exempt from the "blue sky" securities laws governing sales and purchases of Fantex
Series&nbsp;EJ Manuel in each of the fifty states, and therefore we must register in each state in which offers and sales will be made.  </I></B></FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our Fantex Series&nbsp;EJ Manuel is not a "covered security" for purposes of the Securities Act. The term "covered security" applies
to securities preempted under federal law from state securities registration requirements due to their oversight by federal authorities and self-regulatory authorities, such as national securities
exchanges. Because the Fantex Series&nbsp;EJ Manuel is not a "covered security," the sale of our shares is subject to securities registration in various states. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>69</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2><B><I> State securities laws may limit secondary trading, which may restrict the states in which and conditions under which you can sell shares of our Fantex Series&nbsp;EJ
Manuel.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Secondary trading in our Fantex Series&nbsp;EJ Manuel sold in the offering will not be possible in any state until the common stock
is qualified for sale under the applicable securities laws of such state or there is confirmation that an exemption, such as listing in certain recognized securities manuals, is available for
secondary trading in the state. If we fail to register or qualify, or to obtain or verify an exemption for the secondary trading of, our Fantex Series&nbsp;EJ Manuel in any particular state, our
Fantex Series&nbsp;EJ Manuel may not be offered or sold to, or purchased by, a resident of that state. In the event that a significant number of states refuse to permit secondary trading in our
Fantex Series&nbsp;EJ Manuel, the liquidity for our Fantex Series&nbsp;EJ Manuel could be significantly affected, resulting in a potential loss on your investment. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> We expect that our offering will primarily attract individual investors, and therefore our initial public offering price may not be sustainable if and when trading begins,
and the price of our Fantex Series&nbsp;EJ Manuel could decline rapidly and significantly.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We intend to set an initial public offering price at $10.00 per share and expect that the market for our offering will primarily be
individual investors. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
a typical initial public offering, a majority of the shares sold to the public are purchased by professional investors that have significant experience in determining valuations for
companies in connection with initial public offerings. These professional investors typically have access to, or conduct their own independent, research and analysis regarding investments in initial
public offerings. Other investors typically have less access to this level of research and analysis, and as a result, may be less sensitive to price in participating in our initial public offering. As
a result, our initial public offering price may be different than the price that would be established in a more traditional underwritten offering involving institutional investors. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition, institutional investors typically hold acquired shares for an extended period time and trade their holdings infrequently, while individual investors may be more likely to
trade their shares frequently and react to minor changes in the market value of our Fantex Series&nbsp;EJ Manuel, or may be more prone to have unexpected liquidity needs. This may result in greater
volatility in the trading price of shares of our Fantex Series&nbsp;EJ Manuel. This, in turn, could cause increased imbalances in supply and demand and cause the shares of our Fantex
Series&nbsp;EJ Manuel to decline in value. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
a result, our stock price may not be sustainable if and when trading begins, and the price of our Fantex Series&nbsp;EJ Manuel may decrease once trading of our Fantex
Series&nbsp;EJ Manuel begins. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Investors should not expect to sell our shares for a profit shortly after our Fantex Series&nbsp;EJ Manuel begins trading.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the offering process, we and our managing underwriters will monitor reservations in the offering to evaluate the demand that
exists for our initial public offering. Based on this information, we and FBS may revise the price of our initial public offering set forth on the cover of this prospectus, or we may decide to change
the number of shares of Fantex Series&nbsp;EJ Manuel offered through this prospectus. Any increases in the initial public offering price or the number of shares offered may result in there being
little or no demand for our shares in secondary trading after completion of the offering. Even if we do not change the number of shares offered or the offering price, the demand for our Fantex
Series&nbsp;EJ Manuel may be completely satisfied by the initial public offering and there may be little or no demand for shares of Fantex Series&nbsp;EJ Manuel in the secondary market. If this
were to occur, the price of our shares would likely decline following this offering. If your
objective is to make a short term profit by selling the shares you purchase in the offering shortly after trading begins, you should not submit an offer to purchase shares in this offering. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>70</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2><B><I> If you purchase our common stock in this offering, you will incur immediate dilution in the book value of your shares, on an as converted to platform common stock basis.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The initial public offering price is higher than the net tangible book value per share of our common stock (including our platform
common stock), on an as converted to platform common stock basis. Investors purchasing Fantex Series&nbsp;EJ Manuel in this offering will pay a price per share that exceeds the book value per share
(on an as converted basis) of our tangible assets after subtracting our liabilities. As a result, investors purchasing Fantex Series&nbsp;EJ Manuel in this offering will incur immediate dilution of
$4.72 per share, on an as converted to platform common stock basis, based on the sale of 523,700 shares at an initial public offering price of $10.00 per share (or $0.0565 per share, on an as
converted basis). </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Further,
because we expect that we will need to raise additional capital to fund additional brand acquisitions, we intend in the future to sell substantial amounts of common stock or
securities convertible into or exchangeable for common stock. These future issuances of equity or equity-linked securities, together with any additional shares issued in connection with acquisitions,
if any, may result in further dilution to investors. For a further description of the dilution that you will experience immediately following this offering, see "Dilution." </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> We intend to issue additional tracking stocks, which would reduce then-existing investors' percentage of ownership in Fantex and may dilute our share value.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our amended and restated certificate of incorporation authorizes the issuance of up to 1,500,000,000 shares of common stock.
Accordingly, our board of directors will be empowered, without further stockholder approval, to issue additional shares of capital stock up to the authorized amount, which could adversely affect the
rights of the holders of the existing series of our common stock. We may value any stock issued in the future on an arbitrary basis and the future issuance of capital stock may result in substantial
dilution in the percentage of our common stock or common stock-equivalents held by our then existing stockholders. The issuance of capital stock for future services or other corporate actions may have
the effect of diluting the value of the shares held by our then-existing stockholders, and might have an adverse effect on any trading market for our Fantex Series&nbsp;EJ Manuel. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> If analysts or commentators publish or establish target prices for our Fantex Series&nbsp;EJ Manuel that are below the initial public offering price or then current
trading market price of our shares, the price of shares of our Fantex Series&nbsp;EJ Manuel may fall.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We believe that analysts and commentators may publish price targets, and if they do they may rely upon methods to establish target
prices for our Fantex Series&nbsp;EJ Manuel that may be different than methodologies that we use or that other investors use to value these shares. If analysts and commentators publish target prices
for our Fantex Series&nbsp;EJ Manuel that are below our initial public offering price or the then current trading market price of our shares, it could cause our stock price to decline. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> The price of our Fantex Series&nbsp;EJ Manuel might fluctuate significantly, and you could lose all or part of your investment.  </I></B></FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Volatility in the market price of our Fantex Series&nbsp;EJ Manuel may prevent you from being able to sell shares of our Fantex
Series&nbsp;EJ Manuel at or above the price you paid for such shares. The trading price of our Fantex Series&nbsp;EJ Manuel may be volatile and subject to wide price fluctuations in response to
various factors, including:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>performance of EJ Manuel in the NFL; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>our perceived financial standing and the stability of the Fantex platform; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>market interest in trading our Fantex Series&nbsp;EJ Manuel; </FONT></DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>71</FONT></P>

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<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>liquidity needs of investors due to the overall performance of the equity markets or otherwise; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>industry related regulatory developments; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>investor perceptions of EJ Manuel, us and professional football; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>changes in accounting standards, policies, guidance, interpretations or principles; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>changes in tax code that may affect the economics of your investment; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>insolvency of Fantex or EJ Manuel; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>regulatory findings, determinations or changes affecting our ability to operate; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>sales of our Fantex Series&nbsp;EJ Manuel by a large stockholder; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>general economic conditions; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>changes in interest rates; and</FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>availability of capital. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These
and other factors might cause the market price of our Fantex Series&nbsp;EJ Manuel to fluctuate substantially, which might limit or prevent investors from readily selling their
shares of our Fantex Series&nbsp;EJ Manuel and may otherwise negatively affect the liquidity of our Fantex Series&nbsp;EJ Manuel. In addition, in recent years, the stock market has experienced
significant price and volume fluctuations. This volatility has had a significant impact on the market price of securities issued by many companies across many industries. The changes frequently appear
to occur without regard to the operating performance of the affected companies. Accordingly, the price of our Fantex Series&nbsp;EJ Manuel could fluctuate based upon factors that have little or
nothing to do with Fantex, EJ Manuel or the contract party, and these fluctuations could materially reduce our stock price. Securities class action litigation has often been instituted against
companies following periods of volatility in the overall market and in the market price of a company's securities. This litigation, if instituted against us, could result in substantial costs, divert
our management's attention and resources, and harm our business, operating results and financial condition. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Transaction costs for trades on the FBS ATS could decrease the liquidity of your investment in our Fantex Series&nbsp;EJ Manuel and could reduce or eliminate any positive
return on your investment in our Fantex Series&nbsp;EJ Manuel.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The transactions costs for you to trade on the FBS ATS are expected to be up to 1% of the total amount of the purchase or sale,
respectively, with lower amounts depending on whether or not you have an active trader account. This the cost of executing trades could be high relative to the size of your investment in our Fantex
Series&nbsp;EJ Manuel, and this cost could cause investors to trade less frequently and to increase their holding periods. Thin trading in our Fantex Series&nbsp;EJ Manuel could, in turn, increase
the spread between the bid price at which buyers are willing to acquire shares of our Fantex Series&nbsp;EJ Manuel and the ask price at which sellers are willing to sell their shares, making it more
difficult to buy or sell at a time and price that meets your objectives. In addition, brokerage commissions associated with your transactions in Fantex Series&nbsp;EJ Manuel could reduce or
eliminate your return on investment in our Fantex Series&nbsp;EJ Manuel or cause you to incur a loss on your investment. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> We may be subject to securities litigation, which is expensive and could divert management attention.  </I></B></FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The market price of our common stock may be volatile, and in the past companies that have experienced volatility in the market price of
their stock have been subject to securities class action litigation. We may be the target of this type of litigation in the future. Securities litigation against us </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>72</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>could
result in substantial costs and divert our management's attention from other business concerns, which could seriously harm our business. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2><B><I> We are an "emerging growth company" and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make shares of our Fantex
Series&nbsp;EJ Manuel less attractive to investors.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are an "emerging growth company," as defined in the JOBS Act, and we intend to take advantage of certain exemptions from various
reporting requirements that are applicable to other public companies that are not "emerging growth companies" including, but not limited to, not being required to comply with the auditor attestation
requirements of Section&nbsp;404(b) of the Sarbanes-Oxley Act of 2002. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
cannot predict if investors will find our Fantex Series&nbsp;EJ Manuel less attractive because we will rely on these exemptions. If some investors find our Fantex Series&nbsp;EJ
Manuel less attractive as a result, there may be a less active trading market for our Fantex Series&nbsp;EJ Manuel and our stock price may be more volatile. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition, Section&nbsp;107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section&nbsp;7(a)(2)(B)
of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards
would otherwise apply to private companies. However, we are choosing to "opt out" of such extended transition period, and as a result, we will comply with new or revised accounting standards on the
relevant dates on which adoption of such standards is required for non-emerging growth companies. Section&nbsp;107 of the JOBS
Act provides that our decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Our compliance burdens and costs will be significant as a result of operating as a public company, particularly as a result of our tracking stock structure. Our management
will be required to devote substantial time to compliance matters.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a public company in the United States, we will incur significant legal, accounting and other expenses that we did not previously
incur. Our business model depends on the ongoing issuance of tracking stocks intended to track the performance of tracking stock brands that we intend to establish with each new brand contract. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
will become subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, and other applicable securities rules and regulations. Compliance with these rules and
regulations will increase our legal and financial compliance costs, make some activities more difficult, time- consuming or costly and increase demand on our systems and resources, particularly as a
result of our tracking stock structure and to a greater extent after we are no longer an "emerging growth company." The Exchange Act requires that we file annual and current reports with respect to
our business, financial condition and results of operations. The Sarbanes-Oxley Act requires, among other things, that we establish and maintain effective internal controls and procedures for
financial reporting. Furthermore, the need to establish the corporate infrastructure demanded of a public company, particularly one with a tracking stock structure such as ours that contemplates
numerous series being issued on an ongoing basis, may divert management's attention from implementing our growth strategy, which could prevent us from improving our business, financial condition and
results of operations. We will need to implement significant enhancements to our internal controls and procedures for financial reporting and accounting systems to meet our reporting obligations as a
public company with multiple tracking stocks. However, the measures we take may not be sufficient to satisfy our obligations as a public company. In addition, these rules and regulations will increase
our legal and financial compliance costs and will make some activities more time-consuming and costly. For example, we </FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>expect
these rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to incur substantial costs to maintain
the same or similar coverage. These additional obligations could have a material adverse effect on our business, financial condition, results of operations and cash flow. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition, changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial
compliance costs
and making some activities more time-consuming. These laws, regulations and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their
application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs
necessitated by ongoing revisions to disclosure and governance practices. We intend to invest resources to comply with evolving laws, regulations and standards, and this investment may result in
increased general and administrative expenses and a diversion of management's time and attention from revenue-generating activities to compliance activities. If our efforts to comply with new laws,
regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to their application and practice, regulatory authorities may initiate legal
proceedings against us and our business, financial condition, results of operations and cash flow could be adversely affected. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
as long as we are an "emerging growth company" under the JOBS Act, our independent registered public accounting firm will not be required to attest to the effectiveness of our
internal control over financial reporting pursuant to Section&nbsp;404 of the Sarbanes-Oxley Act. We could be an emerging growth company for up to five years. See "Prospectus
Summary&#151;Implications of Being an Emerging Growth Company." Furthermore, after the date we are no longer an emerging growth company, our independent registered public accounting firm will
only be required to attest to the effectiveness of our internal control over financial reporting depending on our market capitalization. Even if our management concludes that our internal control over
financial reporting are effective, our independent registered public accounting firm may still decline to attest to the effectiveness of our internal controls or may issue a report that is qualified
if it is not satisfied with our controls or the level at which our controls are documented, designed, operated or reviewed, or if it interprets the relevant requirements differently from us. In
addition, in connection with the implementation of the necessary procedures and practices related to internal control over financial reporting, we may identify deficiencies that we may not be able to
remediate in time to meet the deadline imposed by the Sarbanes-Oxley Act for compliance with the requirements of Section&nbsp;404. Failure to comply with Section&nbsp;404 could subject us to
regulatory scrutiny and sanctions, impair our ability to raise revenue, cause investors to lose confidence in the accuracy and completeness of our financial reports and negatively affect our stock
price. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Noncompliance with laws and regulations may impair our ability to arrange or service the brand contracts.  </I></B></FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Generally, failure to comply with the laws and regulatory requirements applicable to our business may, among other things, limit our
ability to collect all or part of the payments under the brand contracts and, in addition, could subject us to damages, class action lawsuits, administrative enforcement actions, and civil and
criminal liability, which may harm our business and ability to maintain the Fantex platform and may result in contract parties attempting to rescind their brand contracts. For example, if we were
deemed to be an investment company under the Investment Company Act, we would be required to institute burdensome compliance requirements and our activities may be restricted, which would materially
adversely affect our business, financial condition and results of operations. </FONT></P>

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<P style="font-family:times;"><FONT SIZE=2><B><I> If Fantex Series&nbsp;EJ Manuel is not treated as a class of common stock of Fantex, adverse federal income tax consequences will result.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If Fantex Series&nbsp;EJ Manuel is considered property other than common stock of Fantex, for federal income tax purposes
(i)&nbsp;Fantex would generally be taxed on a portion of the appreciation of the assets, if any, attributable to Fantex Series&nbsp;EJ Manuel upon the issuance of such stock, (ii)&nbsp;the
exchange of Fantex Series&nbsp;EJ Manuel for shares of our platform common stock would not qualify as a tax-free recapitalization, and (iii)&nbsp;income, gain, losses and deductions attributable
to one tracking stock brand would not be offset against income, gain, losses and deductions attributable to another tracking stock brand. There are no court decisions or other authorities directly
bearing on the tax effects of the issuance and classification of stock with the features of Fantex Series&nbsp;EJ Manuel. In addition, the Internal Revenue Service has announced that it will not
issue advance rulings on the classification of an instrument with characteristics similar to those of Fantex Series&nbsp;EJ Manuel. As a result, there can be no assurance that Fantex
Series&nbsp;EJ Manuel will be treated as stock of Fantex for U.S. federal income tax purposes. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Risks Relating to Our Affiliate, FBS, and the FBS ATS  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> To own or trade our Fantex Series&nbsp;EJ Manuel, you must have a brokerage account with FBS and our Fantex Series&nbsp;EJ Manuel will be traded in the secondary market
only through the FBS ATS.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prior to this offering, there has been no public market for our Fantex Series&nbsp;EJ Manuel, or any other series of our capital
stock. We do not intend to apply for a listing of our Fantex Series&nbsp;EJ Manuel on any securities exchange or for their inclusion in any established automated dealer quotation system. To own or
trade our Fantex Series&nbsp;EJ Manuel, you must have a brokerage account with FBS through which you will only be permitted to enter limit orders. Our Fantex Series&nbsp;EJ Manuel will be traded
in the secondary market only through the FBS ATS. If FBS or the FBS ATS suffers any disruption in business operations or activity for any reason, including regulatory or otherwise, you may not be able
to sell your shares. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> 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.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FBS will clear all trades effected on its ATS. Broker-dealers that clear their own trades are subject to substantially more regulatory
requirements than brokers that outsource these functions to third-party providers. Errors in performing clearing functions, including clerical, technological and other errors related to the handling
of funds and securities held by FBS on behalf of customers, could lead to censures, fines or other sanctions imposed by applicable regulatory authorities as well as losses and liability in related
lawsuits and proceedings brought by FBS's customers. Any unsettled securities transactions or wrongly executed transactions may expose FBS's customers to adverse movements in the prices of the Fantex
Series&nbsp;EJ Manuel. In terms of customer order entry errors, there is always a risk a customer may accidentally enter a trade in the wrong stock, and/or with incorrect pricing. Customers will be
limited in almost all cases to entering trades online with substantial front end order alerts and safeguards. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> 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 our, FBS's or the third- party's control, which may result in an inability to sell your shares.  </I></B></FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The FBS website and the FBS ATS are each operated on computer hardware that is currently located in a third-party Web hosting facility
in Chicago, Illinois operated by Rackspace, US&nbsp;Inc. Neither we nor FBS control the operation of this facility, and it is subject to damage or interruption from natural disasters, fires, power
loss, telecommunications failures and similar events. It is also subject to </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>75</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>break-ins,
sabotage, intentional acts of vandalism and similar misconduct. Despite precautions that may be taken at the facility, the occurrence of any of these unanticipated problems at the facility
or any decision by Rackspace to close the facility without adequate notice could result in lengthy interruptions in the services provided by the FBS ATS, which could result in an extended period of
delay during which time you would not be able to sell any shares. In addition, the failure by the Rackspace facility to provide required data communications capacity could result in additional
interruptions. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> 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.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Services provided by FBS and the FBS ATS involve the storage and transmission of customers' proprietary information, and security
breaches could expose FBS and the FBS ATS to a risk of loss of this information, litigation and possible liability. If the security measures are breached as a result of third-party action, employee
error, malfeasance or otherwise, and, as a result, someone obtains unauthorized access to one of our customers' data, our reputation will be damaged, our business may suffer and we could incur
significant liability. Because techniques used to obtain unauthorized access or to sabotage systems change frequently and generally are not recognized until launched against a target, we may be unable
to anticipate these techniques or to implement adequate preventative measures. If an actual or perceived breach of security occurs, the market perception of the effectiveness of the security measures
at FBS and the FBS ATS could be harmed and could result in fewer sales and customers. In addition to any damage to market perception, such breaches of security measures or resulting unlawful use of
confidential information could, among other things: (i)&nbsp;subject FBS to liability for a failure to safeguard client data, (ii)&nbsp;subject FBS to regulatory sanctions or burdens, based on the
authority of the SEC and FINRA to enforce regulations regarding business continuity planning, and (iii)&nbsp;require significant capital and operating expenditures to investigate and remediate the
breach. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> FBS's insurance coverage may be inadequate or expensive to cover the losses resulting from any lawsuits or breaches of security.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FBS is subject to claims in the ordinary course of business. These claims may involve substantial amounts of money and involve
significant defense costs. It is not always possible to prevent or detect activities giving rise to claims, and the precautions FBS takes may not be effective in all cases. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FBS
maintains voluntary and required insurance coverage, including, among others, SIPC and fidelity bond insurance. While FBS endeavors to purchase coverage that is appropriate to its
assessment of its risk, FBS is unable to predict with certainty the frequency, nature or magnitude of claims for direct or consequential damages. FBS's business may be negatively affected if in the
future its insurance proves to be inadequate or unavailable. In addition, insurance claims may harm FBS's reputation or divert management resources away from operating FBS's business. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Failure to maintain technological capabilities, flaws in existing technology, difficulties in upgrading FBS's technology platform or the introduction of a competitive
platform could have a material adverse effect on FBS's business.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FBS depends on highly specialized and, in many cases, proprietary technology to support its business functions, including, among
others, (i)&nbsp;securities trading and custody, (ii)&nbsp;customer service, (iii)&nbsp;accounting and internal financial processes and controls, and (iv)&nbsp;regulatory compliance and
reporting. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition, FBS's continued success depends on its ability to effectively adopt new or adapt existing technologies to meet customer, industry and regulatory demands. FBS might be
required to make significant capital expenditures to maintain competitive technology. For example, the future success of FBS may depend in part on its ability to anticipate and adapt to technological
advancements </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>76</FONT></P>

<HR NOSHADE>
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<P style="font-family:times;"><FONT SIZE=2>required
to meet the changing demands of its customers. The emergence of new industry standards and practices could render FBS's existing systems obsolete or uncompetitive. Any upgrades or expansions
may require significant expenditures of funds and may also cause FBS to suffer system degradations, outages and failures. There cannot be any assurance that FBS will have sufficient funds to
adequately update and expand its networks, nor can there be any assurance that any upgrade or expansion attempts will be successful and accepted by its customers. If FBS's technology systems were to
fail and FBS were unable to recover in a timely way, FBS would be unable to fulfill critical business functions, which could lead to a loss of customers and could harm FBS's reputation. A
technological breakdown could also interfere with FBS's ability to comply with financial reporting and other regulatory requirements, exposing FBS to disciplinary action and to liability to its
customers. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Regulatory developments and FBS's failure to comply with regulations could adversely affect FBS's business by increasing its costs and exposure to litigation, affecting
FBS's reputation and making its business less profitable.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FBS's business is subject to extensive regulation and supervision under both federal and state laws. FBS is a member of FINRA and
registered as a broker- dealer with the SEC, each of the 50 states (except for Arizona, Colorado and Florida), the District of Columbia, Puerto Rico and the United States Virgin Islands. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Much
of the regulation of broker-dealers has been delegated to self- regulatory organizations ("SROs"), including FINRA. The primary regulators of FBS are FINRA and the SEC. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
SEC and FINRA as well as other U.S. governmental or regulatory authorities continuously review legislative and regulatory initiatives and may adopt new or revised laws and
regulations. There can also be no assurance that other federal or state agencies will not attempt to further regulate FBS's business. These legislative and regulatory initiatives may affect the way in
which FBS conducts its business and may make FBS's business model less profitable. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FBS's
ability to conduct business in the jurisdictions in which it operates depends on its compliance with the laws, rules and regulations promulgated by federal regulatory bodies and
the regulatory authorities in each of these jurisdictions. FBS's ability to comply with all applicable laws, rules and regulations is largely dependent on its establishment and maintenance of
compliance, audit and reporting systems and procedures, as well as its ability to attract and retain qualified compliance, audit and risk management personnel. Policies and procedures adopted by FBS
designed to comply with applicable laws, rules and regulations may not be fully effective and there can be no assurance that regulators or third parties will not raise material issues with respect to
FBS's past or future compliance with applicable regulations. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FBS's
profitability could also be affected by rules and regulations that impact the business and financial communities generally, including changes to the laws governing taxation,
electronic commerce, privacy and data protection. Failure to comply with new rules and regulations, including in particular, rules and regulations that may arise pursuant to the Dodd-Frank Wall Street
Reform and Consumer Protection Act, could subject FBS to regulatory actions or litigation and it could have a material adverse effect on FBS's business, results of operations, cash flows or financial
condition. In addition, new rules and regulations could result in limitations on the lines of business FBS conducts, modifications to its business practices, increased capital requirements or
additional costs. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> FBS is subject to various regulatory ownership requirements, which, if not complied with, could result in the restriction of the ongoing conduct of its business.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The business activities that FBS may conduct are limited by various regulatory agencies. FBS's membership agreement with FINRA may be
amended by application to include additional business activities. This application process is time- consuming and may not be successful. As a result, FBS may be prevented from entering new potentially
profitable businesses in a timely manner, or at all. FBS is subject to various regulatory capital requirements, which, if not complied with, could result in the restriction of the ongoing conduct,
growth, or even liquidation of parts of its business. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>77</FONT></P>

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<A HREF="#bg10401a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="dm10401_special_note_regarding_forward__spe02700"> </A>
<A NAME="toc_dm10401_1"> </A>
<BR></FONT><FONT SIZE=2><B>  SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS<BR>  AND INDUSTRY DATA    <BR>    </B></FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This prospectus includes forward-looking statements. We may, in some cases, use terms such as "believes," "estimates," "anticipates,"
"expects," "plans," "intends," "may," "could," "might," "will," "should," "approximately" or other words that convey uncertainty of future events or outcomes to identify these forward-looking
statements. Forward-looking statements appear in a number of places throughout this prospectus and include statements regarding our intentions, beliefs, projections, outlook, analyses or current
expectations concerning, among other things, our expectations regarding future ABI under our brand contracts with EJ Manuel, Vernon Davis and Arian Foster, including longevity of each of their careers
and an ability to enter into additional included contracts, our expectation that we will enter into other brand contracts, our ability to conduct additional offerings of new tracking stocks or
otherwise finance the purchase of additional ABI, our ability to build a portfolio of brands, our ability to contribute to the contract party's efforts to build brand value, our ability to consummate
the offerings of Fantex Series Vernon Davis and Fantex Series Arian Foster, our attribution policies with respect to our series of common stock, our results of operations, cash needs, spending of the
net proceeds from this offering, financial condition, liquidity, prospects, growth and strategies, and the trends that may affect us or the contract parties. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By
their nature, forward-looking statements involve risks and uncertainties because they relate to events, competitive dynamics and industry change, and depend on the economic
circumstances that may or may not occur in the future or may occur on longer or shorter timelines than anticipated. Although we believe that we have a reasonable basis for each forward-looking
statement contained in this prospectus, we caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and
liquidity, and the development of the field in which we operate, may differ materially from the forward-looking statements contained in this prospectus. In addition, even if our results of operations,
financial condition and liquidity, and the development of the field in which we operate are consistent with the forward-looking statements contained in this prospectus, they may not be predictive of
results or developments in future periods. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any
forward-looking statements that we make in this prospectus speak only as of the date of such statement, and we undertake no obligation to update such statements to reflect events or
circumstances after the date of this prospectus or to reflect the occurrence of unanticipated events. Comparisons of results for current and any prior periods are not intended to express any future
trends or indications of future performance, unless expressed as such, and should only be viewed as historical data. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You
should also read carefully the factors described in the "Risk Factors" section of this prospectus and elsewhere to better understand the risks and uncertainties inherent in our
business and underlying any forward-looking statements. As a result of these factors, we cannot assure you that the forward-looking statements in this prospectus will prove to be accurate.
Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not
regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified timeframe, or at all. The Private Securities Litigation
Reform Act of 1995 and Section&nbsp;27A of the Securities Act, do not protect any forward-looking statements that we make in connection with this offering. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
obtained data in this prospectus regarding the NFL and athletes in the NFL from our own internal estimates and research as well as from general publications, surveys and studies
conducted by third parties. While we believe that the information is reliable, we have not independently verified the data from third-party sources. While we believe our internal company research is
reliable and the market definitions we use are appropriate, neither such research nor these definitions have been verified by any independent source. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>78</FONT></P>

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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
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<A NAME="toc_dm10401_2"> </A>
<BR></FONT><FONT SIZE=2><B>  USE OF PROCEEDS    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We expect that our net proceeds from the sale of the shares of common stock in this offering will be approximately $4,975,150, assuming
the sale of 523,700 shares of Fantex Series&nbsp;EJ Manuel in this offering at an initial public offering price of $10.00 per share (in each case the amounts set forth on the front cover of this
prospectus), after deducting underwriting discounts payable by us. See "Underwriting (Conflicts of Interest)" for additional detail regarding the underwriting discounts. Offering expenses, estimated
to be $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, will be paid by our parent and are not included in the calculation of net proceeds. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
April&nbsp;3, 2013, we received an equity contribution of $2.0&nbsp;million from our parent to provide working capital to finance our operating expenses. As consideration for the
ABI under our brand contract with EJ Manuel we have agreed to pay him a one-time cash amount of $4.98&nbsp;million contingent upon our ability to obtain financing. We will use all of our net
proceeds from the offering of our Fantex Series&nbsp;EJ Manuel, together with existing cash and cash equivalents if necessary, to fund the payment of this purchase price to EJ Manuel pursuant to our
brand contract with him. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table represents the expected use of the proceeds of the sale of the shares of Fantex Series&nbsp;EJ Manuel in this offering: </FONT></P>
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<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="61pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="63pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Amount of Proceeds </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Percentage of<BR>
Total<BR>
Proceeds </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Expected use of the proceeds from this offering</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Payment of the underwriting discount</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>261,850</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5.000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Payment of the brand contract purchase price to EJ Manuel</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>4,975,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>94.997</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>General working capital for our operations</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>150</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>0.003</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
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<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2>


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 </font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total proceeds expected from this offering</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5,237,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>100</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0pt;font-family:times;">


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 </DIV>
 <P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;One
of the principal purposes of this offering is to obtain capital to finance the payment of the purchase price for the ABI pursuant to the EJ Manuel brand contract. We intend to use
the net proceeds from this offering and our existing cash and cash equivalents, together with interest thereon but after payment of the purchase price under the EJ Manuel brand contract, for general
working capital to fund our operations. Although it is difficult to predict future liquidity requirements, we believe that our existing cash and cash equivalents will be sufficient to fund our
operations for at least the next 12&nbsp;months. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
are actively pursuing the acquisition of additional brands, and any brand contracts that we enter into in the future with other contract parties are expected to be contingent upon
obtaining financing to fund the acquisition of the minority interest in the respective brands. We intend to finance the acquisition of additional brands through the issuance of additional tracking
stocks linked to the value of such brands, rather than through use of any of our existing cash and cash equivalents. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pending
use of our cash and cash equivalents for our operations, we intend to invest the net proceeds of this offering and our existing cash and cash equivalents after payment of the
purchase price to EJ Manuel under the brand contract in a variety of capital preservation investments, including short- term, interest-bearing investment grade securities, money market accounts,
certificates of deposit and direct or guaranteed obligations of the U.S. government. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>79</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<A NAME="page_dm10401_1_80"> </A>

<P style="font-family:times;"><FONT SIZE=2><A
HREF="#bg10401a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="dm10401_dividend_policy"> </A>
<A NAME="toc_dm10401_3"> </A>
<BR></FONT><FONT SIZE=2><B>  DIVIDEND POLICY    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our board of directors is permitted, but not required, to declare and pay dividends on our platform common stock or any of our tracking
stock (including our Fantex Series&nbsp;EJ Manuel) in an amount up to the "available dividend amount" for the applicable series, to the extent permitted by the Delaware General Corporation Law. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
available dividend amount for any tracking stock is as of any date an amount equal to the lesser of (a)&nbsp;total assets of our company legally available for the payment of
dividends under Delaware law and (b)&nbsp;an amount equal to:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the excess of the total assets attributed to the tracking stock brand over the total liabilities attributed to the
tracking stock brand, less the par value of the outstanding shares of such tracking stock; or </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>if there is no such excess, the attributable income of the tracking stock brand for the fiscal year in which the dividend
is being declared and/or the preceding fiscal year. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
example, if the attributed assets for a tracking stock brand as of a date of determination consisted of cash in the amount of $100,000, and the attributed liabilities for a tracking
stock brand as of that same date were in the aggregate $50,000, then the available dividend amount for that tracking stock at that time would be approximately $50,000. If in the prior example the
attributed liabilities were greater than the attributable assets, then instead the available dividend amount would be based on the total income attributable to that tracking stock for the current
fiscal year and/or the prior fiscal year. For example, if attributable income in the prior year were $50,000, then the available dividend amount would be $50,000. We will provide unaudited attributed
financial information as an exhibit to our periodic reports that we file pursuant to the Exchange Act. The unaudited attributed financial information will show the attribution of our assets,
liabilities, revenue, expenses and cash flows to each of our tracking stock and our platform common stock, and our available dividend amount as of any period may be determined based on such attributed
financial information. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
available dividend amount for our platform common stock is as of any date an amount equal to the amount of our total assets legally available for the payment of dividends under
Delaware law, less the aggregate amount of the "available dividend amount" for all of our then outstanding tracking stock. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
date, we have never declared or paid any cash dividends on our capital stock. Following this offering, we intend to pay cash dividends from time to time out of available cash for each
tracking stock, including Fantex Series&nbsp;EJ Manuel, equal to an amount in excess of 20% of the "available dividend amount" for such series. Because of the seasonal nature of the brand income
underlying our tracking stock, the dividends for a tracking stock would be expected to coincide with the seasonal receipt of cash pursuant to the underlying brand contract. For example, because of the
timing of the football season, to the extent we declare dividends on the Fantex Series&nbsp;EJ Manuel, these dividends are likely to be declared in the first or second fiscal quarters, following the
end of the NFL season, and they will not coincide with the third and fourth fiscal quarters during the NFL season. We do not intend to declare dividends on our platform common stock for the
foreseeable future. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certain
dividends paid may be considered a return of capital for U.S. federal income tax purposes. Please see "Material U.S. Federal Income Tax Considerations&#151;Dividends and
Distributions" for a detailed description of the tax treatment of the dividends and other distributions of cash or property to holders of the Fantex Series&nbsp;EJ Manuel. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
board of directors has discretion to declare a dividend on any series of common stock without declaring a dividend on any other series of our common stock. In general, our board of
directors does </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>80</FONT></P>

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<P style='font-family:times;page-break-before:always'></p>
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<P style="font-family:times;"><FONT SIZE=2><A
HREF="#bg10401a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>not
expect to declare dividends on any series of common stock in an amount greater than the attributed cash on hand for such series. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
we sell all or substantially all of the assets of a tracking stock brand (but not in connection with a sale of our company), our board of directors will 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 our platform common stock following the two-year anniversary
of the filing of a certificate of designation creating such tracking stock or some combination of the foregoing. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
board of directors may change its dividend policy at any time and from time to time, and we may retain some or all available funds and future income to support our operations and
finance the growth and development of our business as well as, in some circumstances, invest some of the available funds to further enhance a brand or acquire additional ABI in a brand if we believe
that those would be more productive uses of some or all of the available funds. However, our board of directors will not in any event change the definition of "available dividend amount" for any
series of our common stock or declare dividends on any series of our common stock in excess of the "available dividend amount" for that series. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>81</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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NAME="page_do10401_1_82"> </A>


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</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>
<A HREF="#bg10401a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="do10401_capitalization"> </A>
<A NAME="toc_do10401_1"> </A>
<BR></FONT><FONT SIZE=2><B>  CAPITALIZATION    <BR>    </B></FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth our cash and cash equivalents and our capitalization as of December&nbsp;31, 2013
on:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>an actual basis; and; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>a pro forma, as adjusted basis after further giving effect to an increase in authorized shares and designation for
tracking stock and the sale of 523,700 shares of Fantex Series&nbsp;EJ Manuel offered in this offering at an initial public offering price of $10.00 per share (in each case based on assumed amounts
set forth on the front cover of this prospectus), after deducting underwriting discounts payable by us, and assuming the offering for Fantex Series Arian Foster has not been consummated. Offering
expenses, estimated to be $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, will be paid by our parent and are not included in the calculation of cash and cash equivalents. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
information in this table is illustrative only and our capitalization following the closing of this offering will be adjusted based on the actual initial public offering price and
other terms of this offering determined at pricing. You should read this table in conjunction with the information contained in "Use of Proceeds" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations," as well as the financial statements and the notes thereto included elsewhere in this prospectus: </FONT></P>
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<p style="font-family:times;"></FONT></P>

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<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="65pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="68pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>December&nbsp;31, 2013 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Actual </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Pro forma,<BR>
As adjusted </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Cash and cash equivalents</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>466,833</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5,441,983</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0pt;font-family:times;">


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<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2>


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<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
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<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2>


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 </font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0pt;font-family:times;">


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&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Stockholders' equity:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Common stock, $0.0001 par value; 100,000,000 shares authorized, actual; 1,500,000,000 shares authorized, pro forma, as adjusted:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:30pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Platform Common Stock; 100,000,000 shares designated, issued and outstanding, actual and pro forma, as adjusted</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>10,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>10,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:30pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Fantex Series&nbsp;EJ Manuel; 0 shares designated, issued and outstanding, actual; 523,700 shares designated, issued and outstanding, pro forma, as
adjusted</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>52</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Additional Paid in Capital</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5,388,192</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>10,363,290</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Accumulated Losses</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(4,625,318</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(4,625,318</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0pt;font-family:times;">


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<!-- COMMAND=ADD_GUTTERGRID,"line-height:0pt;" -->


&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0.1pt;" -->


 </font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:30pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total Stockholders' Equity</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>772,874</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5,748,024</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0pt;font-family:times;">


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0pt;" -->


&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0.1pt;" -->


 </font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:30pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total Capitalization</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>772,874</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5,748,024</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0pt;font-family:times;">


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<!-- COMMAND=ADD_GUTTERGRID,"line-height:0pt;" -->


&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0.1pt;" -->


 </font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0.75pt;" -->


 </font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0pt;font-family:times;">



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&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
number of shares of our common stock to be outstanding immediately following this offering set forth above is based on 100,000,000 shares of our common stock outstanding as of
December&nbsp;31, 2013, giving effect to the 1,000,000-for-1 stock split of our common stock effective as of November&nbsp;1, 2013 and zero shares of Fantex Series&nbsp;EJ Manuel or any other
tracking stock outstanding as of December&nbsp;31, 2013. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>82</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=87,EFW="2218564",CP="FANTEX INC.",DN="1",CHK=714040,FOLIO='82',FILE='DISK116:[14ZAT1.14ZAT10401]DO10401A.;7',USER='MBRADT',CD='28-FEB-2014;15:37' -->
<A NAME="page_do10401_1_83"> </A>

<P style="font-family:times;"><FONT SIZE=2><A
HREF="#bg10401a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="do10401_dilution"> </A>
<A NAME="toc_do10401_2"> </A>
<BR></FONT><FONT SIZE=2><B>  DILUTION    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If you purchase shares of our Fantex Series&nbsp;EJ Manuel in this offering, your interest, on an as converted to platform common
stock basis, will be diluted to the extent of the difference between the initial public offering price per share of our Fantex Series&nbsp;EJ Manuel and the pro forma as adjusted net tangible book
value per share of our common stock, assuming conversion of the Fantex Series&nbsp;EJ Manuel into platform common stock, immediately after this offering. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net
tangible book value per share is determined by dividing our total tangible assets less our total liabilities by the number of shares of outstanding common stock, assuming conversion
of the Fantex Series&nbsp;EJ Manuel into platform common stock. Our historical net tangible book value (deficit) as of December&nbsp;31, 2013 was $772,874, or $0.0077 per share. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
pro forma, as adjusted, net tangible book value (deficit) as of December&nbsp;31, 2013 was $5,748,024, or $0.0298 per share of common stock, assuming conversion of the Fantex
Series&nbsp;EJ Manuel into platform common stock, after giving effect to the following:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>sale by us of 523,700 shares of Fantex Series&nbsp;EJ Manuel in this offering at an initial public offering price of
$10.00 per share (in each case based on assumed amounts set forth on the front cover of this prospectus), after deducting underwriting discounts payable by us (or $0.0565 per share, on an as converted
to platform common stock basis); and </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the payment by us of the $4.98&nbsp;million purchase price to EJ Manuel for the ABI under our brand contract with him. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
pro forma, as adjusted, net tangible book value (deficit) set forth above represents an immediate increase in net tangible book value of $0.0221 per share to our existing holders of
platform common
stock, assuming conversion of the Fantex Series&nbsp;EJ Manuel into platform common stock, and an immediate dilution in net tangible book value of approximately $0.0267 per share to new investors
purchasing shares of Fantex Series&nbsp;EJ Manuel in this offering, on an as converted to platform common stock basis. The following table illustrates this dilution on a per share basis: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:times;"></FONT></P>

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<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="45pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="45pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Assumed initial public offering price per share</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>10.00</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Assumed initial public offering price per share, on an as converted to platform common stock basis</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>0.0565</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Pro forma net tangible book value (deficit) per share as of December&nbsp;31, 2013</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>0.0077</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Increase in pro forma net tangible book value (deficit) per share attributable to new investors</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>0.0221</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Pro forma as adjusted net tangible book value per share after this offering</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>0.0298</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Dilution per share to investors in this offering</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>0.0267</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0pt;font-family:times;">


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&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0.1pt;" -->


 </font>&#8203;</TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Dilution per share to investors in this offering, prior to conversion</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>4.72</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0pt;font-family:times;">


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&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0.1pt;" -->


 </font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
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 </DIV>
 <P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
foregoing calculations are based on 100&nbsp;million shares of platform common stock outstanding as of December&nbsp;31, 2013, reflecting the reclassification of all outstanding
shares of our common stock into shares of our platform common stock upon the 1,000,000-for-1 stock split effected on November&nbsp;1, 2013. In addition, for purposes of determining the conversion
ratio of a share of Fantex Series&nbsp;EJ Manuel into platform common stock, we calculated the fair value of a share of platform common stock by dividing an assumed fair value of our platform unit
by the number of shares of our platform common stock outstanding as of December&nbsp;31, 2013 as set forth above. The fair value of the platform unit was assumed to be $5.65&nbsp;million based
upon the capital contributions to the company from the parent plus the imputed value of the 5% of the ABI that we will attribute to the platform unit. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
expect that we will need to raise additional capital to fund additional brand acquisitions, we may in the future sell substantial amounts of common stock or securities convertible
into or exchangeable for common stock. We may also choose to raise additional capital due to market conditions or other strategic considerations even if we believe we have sufficient funds for our
current or future operating plans. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of these securities could result in further
dilution to our stockholders. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>83</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>
<A HREF="#bg10401a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="dq10401_management_s_discussion_and_an__man03466"> </A>
<A NAME="toc_dq10401_1"> </A>
<BR></FONT><FONT SIZE=2><B>  MANAGEMENT'S DISCUSSION AND ANALYSIS<BR>  OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>The following discussion and analysis of our financial condition and results of operations should be read in
conjunction with our financial statements and related notes included elsewhere in this prospectus. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual
results could differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in
the section entitled "Risk Factors" included elsewhere in this prospectus.</I></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Overview  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are a brand acquisition, marketing and brand development company whose focus is on acquiring minority interests in the income
associated with the brands of professional athletes, entertainers and other high-profile individuals and assisting such individuals in enhancing the
reach and value of the brands we acquire. The business operates in a single segment and our focus is on three core areas:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>evaluating, targeting and accessing individuals and brands with the potential to generate significant income associated
with these brands, or brand income; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>acquiring minority interests in such brand income; and </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>assisting our acquired brands in increasing their value via technology and through leveraging our marketing, advertising
and strategic partnering expertise. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
were incorporated in Delaware on September&nbsp;14, 2012 as a wholly-owned subsidiary of Fantex Holdings, our parent. Fantex Holdings was incorporated in Delaware on April&nbsp;9,
2012. We are currently a development-stage entity and have to date relied on our parent to conduct our operations through its employees. Following the consummation of our first public offering we
intend to operate under a management agreement with our parent, who will provide us with management and administrative services, including providing and compensating our executive management and other
personnel as well as services relating to information technology support, brand management and other support, operations, facilities, human resources, tax planning and administration, accounting,
treasury and insurance. We will begin to assume management and administrative tasks at such time in the future as the actual cost of these services is less than our service fee to Fantex Holdings,
which we do not anticipate will occur until we begin to generate significant cash flows from multiple brand contracts. However, if our parent is unable to perform any of the services that they are
required to perform under the management agreement, due to financial difficulty or otherwise, then we may be forced to assume management and administrative tasks, and incur additional expenses, sooner
than we anticipate. Until such time, we will continue to rely on our parent to conduct our operations in accordance with the management agreement. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Results of Operations  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Period from September&nbsp;14, 2012 (inception) to December&nbsp;31, 2012 and year ended December&nbsp;31, 2013  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have little operational history and are not currently generating revenues. We, therefore, have no results of operations for the year
ended December&nbsp;31, 2012 and 2013. All of our costs to date have been allocated to us from our parent, which has identified all activities and costs related to our operations. Expenses such as
personnel and facility costs were primarily allocated based on the estimated number of full time equivalent (FTE) employees working on activities associated with us. All personnel costs were allocated
based on an estimated percentage of time spent on our activities. Facility costs were allocated based on the FTE associated with us as a percentage of all employees of our parent. All other costs were
specifically identified and charged to us as deemed appropriate. All </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>84</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>estimates
are deemed to be reasonable and reflect, in the best judgment of our management, the costs associated with our activities. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
most significant costs incurred by us or our parent to date were professional services. Our parent incurred, and allocated to us, $798,231 in professional services expenses in the
period from inception to December&nbsp;31, 2012 and $2,305,020 for the year ended December&nbsp;31, 2013. This increase in expense from 2012 to 2013 was due primarily to a longer operating period
of 12&nbsp;months in 2013 versus three and a half months in 2012 and reflected increased marketing and public relations costs in connection with the initial public offering of Fantex Series Arian
Foster as well as an increase in expenses related to pursuing potential contact parties, which increase was partially offset by lower costs relating to legal and regulatory structuring in 2013 as
compared to 2012, including significant costs associated with commencement of operations. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
have dedicated significant resources to commencing operations, including but not limited to company formation, brand research, compliance with various legal and regulatory
requirements, and pursuing brand contract acquisition. We believe that some of these costs are primarily associated with the start-up phase of the company and may decrease as our operations mature.
However, we will incur additional professional services expenses as a result of becoming a public company and expanding the business, particularly with respect to entering into additional brand
contracts and as a result of future financings, which expenses may offset any such decrease in initial start-up costs. As a result, we anticipate overall increased professional services expenses in
the future to support our operations. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
currently have no employees, but are being supported by personnel employed by our parent. We were allocated personnel and related benefits expenses of $98,174 for the period from
inception through December&nbsp;31, 2012, and $875,718 for the year ended December&nbsp;31, 2013. Our parent continues to dedicate more personnel to the brand contract acquisition, legal and
branding efforts resulting in a total of approximately nine FTEs as of December&nbsp;31, 2013. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Three
stockholders of our parent serve as our officers, including as our chief executive officer and the chief financial officer. Although these individuals purchased founders stock in
Fantex Holdings upon formation of our parent or received grants of options in our parent, prior to June&nbsp;1, 2013 they had received no compensation for their services from either us or our
parent. Prior to June&nbsp;1, 2013, the allocation of expenses from our parent for personnel does not include imputed costs for these officers, but does include other costs incurred by our parent
for those officers, such as travel, benefits and facilities expenses. Our parent began to pay cash compensation to our officers on June&nbsp;1, 2013, and a portion of personnel costs allocated to us
from our parent based on an estimated percentage of their time spent on our activities for the year ended December&nbsp;31, 2013 was $217,860. If our parent had incurred personnel costs for these
three officers, and allocated costs to us based on an estimated percentage of their time spent on our activities, such allocated costs to us from our parent would have been approximately $170,000 for
the period from inception through December&nbsp;31, 2012. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
have also devoted resources to target, access and negotiate for the acquisition of brands that meet our criteria, including travel and related expenditures of $121,507, for the period
from inception through December&nbsp;31, 2012 and $289,131 for the year ended December&nbsp;31, 2013. We believe that as we expand our operations these costs will continue to increase. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
share our parent's real estate facility located in San Francisco, California, and we are allocated expenses from our parent equal to a portion of the facility expenses in an amount of
$45,111 for the period from inception through December&nbsp;31, 2012 and $92,296 for the year ended December&nbsp;31, 2013. As we grow in head count, our share of the facilities expense may
increase, however the rate at which our facility expense increases will depend on the head count growth at both our parent and at FBS, our parent's wholly-owned subsidiary who also shares the same
facility. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>85</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
February&nbsp;28, 2013, we entered into a brand contract with Arian Foster, a running back for the Houston Texans of the NFL and his affiliated professional services company, The
Ugly Duck,&nbsp;LLC and amended and restated such brand contract on each of May&nbsp;24, 2013 and August&nbsp;21, 2013. The brand contract assigns to us 20% of the gross monies or other
consideration (including rights to make investments) that Arian Foster receives from and after February&nbsp;28, 2013, subject to specified exceptions and net of certain specified expenses, as a
result of Arian Foster's activities in the NFL and related fields (including activities in a non-NFL football league), such as broadcasting and coaching. Our contract with Arian Foster is contingent
upon obtaining financing to fund the acquisition of this brand
income. Our brand contract with Arian Foster is more fully described in the section entitled "Business&#151;Other Brand Contracts&#151;Arian Foster Brand Contract," in the footnotes of
the audited financial statements and the Statements of Cash Receipts from Included Contracts Subject to the Brand Agreement between Fantex,&nbsp;Inc. and Arian Foster and his affiliate The Ugly
Duck,&nbsp;LLC dated February&nbsp;28, 2013, which we refer to as the Statement of Cash Receipts from Included Contracts for Arian Foster, included elsewhere in this prospectus. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
October&nbsp;30, 2013, we entered into a brand contract with Vernon Davis, a tight end for the 49ers of the NFL and his affiliated professional services company, The Duke
Marketing&nbsp;LLC. The brand contract assigns to us 10% of the gross monies or other consideration (including rights to make investments) that Vernon Davis receives from and after
October&nbsp;30, 2013, subject to specified exceptions and net of certain related expenses (such as legal fees, travel expenses and self-employment taxes) as a result of his activities in football
and related fields (including NFL and non-NFL activities), such as broadcasting and coaching. Our contract with Vernon Davis is contingent upon obtaining financing to fund the acquisition of this
brand income. Our brand contract with Vernon Davis is more fully described in the section entitled "Business&#151;Vernon Davis Brand&#151;Vernon Davis Brand Contract," in the footnotes
of the audited financial statements and the Statements of Cash Receipts from Included Contracts Subject to the Brand Agreement between Fantex,&nbsp;Inc. and Vernon Davis and his affiliate The Duke
Marketing,&nbsp;LLC dated October&nbsp;30, 2013, which we refer to as the Statement of Cash Receipts from Included Contracts for Vernon Davis, included elsewhere in this prospectus. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
February&nbsp;14, 2014, we entered into a brand contract with EJ Manuel, a quarterback for the Bills of the NFL and his affiliated professional services company, Kire
Enterprises&nbsp;LLC. The brand contract assigns to us 10% of the gross monies or other consideration (including rights to make investments) that EJ Manuel receives from and after
February&nbsp;14, 2014, subject to specified exceptions and net of certain related expenses (such as legal fees, travel expenses and self-employment taxes) as a result of his activities in football
and related fields (including NFL and non-NFL activities), such as broadcasting and coaching. Our contract with EJ Manuel is contingent upon obtaining financing to fund the acquisition of this brand
income. Our brand contract with EJ Manuel is more fully described in the section entitled "Business&#151;EJ Manuel Brand&#151;EJ Manuel Brand Contract," in the footnotes of the audited
financial statements and the Statements of Cash Receipts from Included Contracts Subject to the Brand Agreement between Fantex,&nbsp;Inc. and EJ Manuel and his affiliate Kire Enterprises&nbsp;LLC
dated February&nbsp;14, 2014, which we refer to as the Statement of Cash Receipts from Included Contracts for EJ Manuel, or collectively with the Statement of Cash Receipts from Included Contracts
for Vernon Davis and the Statement of Cash Receipts from Included Contracts for Arian Foster, as the Statements of Cash Receipts from Included Contracts, included elsewhere in this prospectus. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
the operations of Fantex mature, we expect to continue to incur expenses of the type and nature described above. In addition, following the consummation of our first public offering,
we expect to incur service fees pursuant to our management agreement with our parent. We also expect to build internal staff and begin to incur expenses on our own behalf to administer our brand
contracts, including supporting cash collection and ensuring all sources of brand income subject to our agreement are identified, potential disclosures are identified and brought to management's
attention and that our contract rights are enforced. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>86</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
also expect to incur marketing and promotion expenses anticipated to be approximately $50,000 per tracking stock brand per year, with such amount expected to decrease as we scale.
However, we will incur this cost indirectly (as part of the service fee) while such services are provided by our parent pursuant to the management agreement. We will begin to incur these costs
directly as we grow our internal marketing infrastructure. See "Management and Attribution Policies" for a discussion about how these expenses will be attributed to our tracking stock brands. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Liquidity and Capital Resources  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To date, we have relied exclusively on our parent for liquidity and capital resources. Our parent contributed capital in the amount of
$1.1&nbsp;million from inception through December&nbsp;31, 2012 and $4.3&nbsp;million for the year ended December&nbsp;31, 2013. The contributed capital includes indirect expenses paid by our
parent on our behalf, as well as an equity cash contribution of $2.0&nbsp;million on April&nbsp;3, 2013 to provide additional working capital to finance our operating expenses. Starting with the
quarter ended September&nbsp;30, 2013, we began reimbursing our parent for certain costs directly associated with operating our business. These costs include personnel and related costs for
employees wholly dedicated to the Company, legal and other professional services directly related to the Company's operations as well as any travel expenses incurred by wholly dedicated employees. For
the year ended December&nbsp;31, 2013, the Company has reimbursed the parent approximately $1.6&nbsp;million of direct costs of operations. Prior to the consummation of our first public offering
and effectiveness of the management agreement discussed below, our parent has and intends to continue to fund our operations through direct cash contributions and non-cash contributions. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
are not committed to any capital expenditures and certain agreements, such as rental commitments, are in the name of our parent. We expect, however, that our operations (excluding
upfront payments under future brand contracts) will continue to consume substantial amounts of cash as we aggressively build our platform of brands and our internal marketing, compliance and other
administrative functions. Following the consummation of our first public offering we will operate under a management agreement with our parent, pursuant to which our parent will provide us with
certain management and administrative services, including providing and compensating our executive management and other personnel, as well as services relating to information technology support, brand
management and other support operations, facilities, human resources, tax planning and administration, accounting, treasury and insurance. We will pay our parent a fee equal to 5% of the amount of
gross cash received by us, if any, for such services under the management agreement. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
will begin to assume management and administrative tasks at such time in the future as the actual cost of these services is less than our service fee to Fantex Holdings, which we do
not anticipate would occur until we begin to generate significant cash flows from multiple brand contracts. However, if our parent is unable to perform any of the services that they are required to
perform under the management agreement, due to financial difficulty or otherwise, then we may be forced to assume management and administrative tasks, and incur additional expenses, sooner than we
anticipate. Until such time, we will continue to rely on our parent to conduct our operations in accordance with the management agreement. Our parent has no obligation to continue to finance our
operations, and they do not intend to continue to finance our operations or provide us any other assistance, except as required under our management agreement with them. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
believe the net proceeds from this offering together with existing cash and cash equivalents and interest thereon will be sufficient to fund our projected operating expenses for the
next 12&nbsp;months. However, if our operating and other expenses are higher than we expect or our cash receipts from brand contracts are lower than we expect then we may also need to raise
additional funds sooner. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition, any brand contracts that we enter into in the future with other contract parties will require us to make substantial upfront payments to acquire the ABI under such brand
contracts. We do </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>87</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>not,
and following this offering we do not expect to have, the necessary funds that we would need to make any of these upfront payments under future brand contracts. Therefore, we expect that our
future brand contracts for the foreseeable future will be contingent upon obtaining financing to fund the acquisition of the ABI in the respective brands, and we intend to finance these acquisitions
through the issuance of additional tracking stocks linked to the value of such brands. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Until
we begin receiving a sufficient amount of cash from our brand contracts, if ever, we expect to finance future cash needs through public or private equity or debt offerings.
Additional capital may not be available on reasonable terms, if at all. If we are unable to raise additional capital in sufficient amounts or on terms acceptable to us we may not be able to continue
to acquire additional ABI in other brands and we may have to significantly delay, scale back or discontinue our operations. If we raise additional funds through the issuance of additional debt or
equity securities it could result in dilution to our existing stockholders, and/or fixed payment obligations that could reduce our ability to pay dividends or otherwise fund our other operations.
Furthermore, these securities may have rights senior to those of our common stock and could contain covenants that would restrict our operations and potentially impair our competitiveness, such as
limitations on our ability to incur additional debt, limitations on our ability to acquire, sell or license brands without consent and other operating restrictions that could adversely impact our
ability to conduct our business. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition, cash received under our brand contracts may be subject to seasonal variation. For example, the salary under NFL contracts is usually paid out in even installments during the
course of the NFL season, or as a signing bonus according to varying schedules. The NFL season occurs primarily in the third and fourth quarters of each calendar year and therefore, we expect that
there will be seasonal fluctuations in our attributed income. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Critical Accounting Policies  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our financial statements have been prepared in conformity with accounting principles generally accepted in the United States. The
preparation of financial statements in conformity with GAAP requires our management to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements. On an
ongoing basis, management will evaluate these estimates, including those related to accounts receivable, fair values of financial instruments, income taxes, and contingent liabilities, among others.
Estimates will be based on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values
of assets and liabilities. Actual results could differ materially from these estimates. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
critical accounting policies requiring estimates, assumptions and judgments that we believe have the most significant impact on our financial statements are described below. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Income Taxes  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income taxes are accounted for under the asset and liability method, which requires the recognition of deferred tax assets and
liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the
differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a
change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred
tax assets are recorded to the extent management believes these assets will more likely than not be realized. In making such a determination, all available positive and negative
evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations is considered. In the event
it is determined that </FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>we
would be able to realize deferred tax assets in the future, an adjustment to the deferred tax asset valuation allowance would be made, which would reduce the provision for income taxes. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Uncertain
tax positions are recorded on the basis of a two-step process whereby (1)&nbsp;it is determined whether it is more likely than not that the tax positions will be sustained
based on the technical merits of the position and (2)&nbsp;those tax positions that meet the more-likely-than-not recognition threshold, the largest amount of tax benefit that is greater than
50&nbsp;percent likely to be realized upon ultimate settlement with the related tax authority would be recognized. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Fair Value Option  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The contracts with the contract parties represent a right to receive certain cash flows from the contract parties, and therefore, the
brand contracts meet the definition of a financial asset under GAAP. As financial assets, the brand contracts are precluded from being accounted for as intangible assets. We have elected to account
for the brand contracts at fair value, with changes recognized in the statement of operations. We believe measurement of the brand contracts at fair value provides the most meaningful information to
users of our financial statements, because the value of the brand contracts may increase or decrease over time based on future events. We believe that the change in fair value through net income or
loss provides a better indicator of the performance of the brand contracts for a given year, enhances transparency, and is more in line with how we manage the risks of the brand contracts. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2><B><I> Fair Value of Financial Instruments  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. Where available, fair value is based on observable market prices or parameters or derived from such prices or parameters. Where observable prices or inputs
are not available, valuation models are applied. These valuation models involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the
instruments or market and the instruments' complexity for disclosure purposes. Assets and liabilities in the balance sheet are categorized based upon the level of judgment associated with the inputs
used to measure their value. Hierarchical levels, as defined under GAAP, are directly related to the amount of subjectivity associated with the inputs to fair valuations of these assets and
liabilities, and are as follows: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2><I>Level&nbsp;1</I></FONT><FONT SIZE=2>&#151;Inputs are unadjusted, quoted prices in active markets for identical
assets or liabilities at the measurement date. The types of assets generally included in this category are mutual funds.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2><I>Level&nbsp;2</I></FONT><FONT SIZE=2>&#151;Inputs are other than quoted prices included in Level&nbsp;1 that are
observable for the asset or liability, either directly or indirectly. Level&nbsp;2 inputs include quoted prices for similar instruments in active markets, and inputs other than quoted prices that
are observable for the asset or liability.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2><I>Level&nbsp;3</I></FONT><FONT SIZE=2>&#151;Inputs are unobservable inputs for the asset or liability, and include
situations where there is little, if any, market activity for the asset or liability. The types of assets and liabilities generally included in this category are our brand contracts. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
significant decrease in the volume and level of activity for the asset or liability is an indication that transactions or quoted prices may not be representative of fair value because
in such market conditions there may be increased instances of transactions that are not orderly. In those circumstances, further analysis of transactions or quoted prices is needed, and a significant
adjustment to the transactions or quoted prices may be necessary to estimate fair value. </FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
availability of observable inputs can vary depending on the financial asset or liability and is affected by a wide variety of factors, including, for example, the type of product,
whether the product is new, whether the product is traded on an active exchange or in the secondary market, and the current market conditions. To the extent that valuation is based on models or inputs
that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by our management in determining fair
value is greatest for instruments categorized in Level&nbsp;3. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for
disclosure purposes, the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair
value measurement in its entirety. Our management's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and consideration of factors
specific to the asset. The variability of the observable inputs affected by the factors described above may cause transfers between Levels&nbsp;1, 2, and/or 3, which our management recognizes at the
end of the reporting period. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depending
on the relative liquidity in the markets for certain assets, our management may classify assets as Level&nbsp;3 if they determine that observable quoted prices, obtained
directly or indirectly, are not available. The valuation models used for the assets and liabilities that are valued using Level&nbsp;3 of the fair value hierarchy are described below. </FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2><I> Valuation Process  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The valuation process involved in Level&nbsp;3 measurements for assets and liabilities would be completed on no less than a quarterly
basis and is designed to subject the valuation of Level&nbsp;3 investments, including our brand contracts, to an appropriate level of consistency, oversight and review. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
internal investment professionals, which include employees of both Fantex and our parent, Fantex Holdings, are responsible for estimating fair value based on various factors
including:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>current playing contract including: amounts, duration, incentive provisions, guaranteed portions, if any, termination and
other important terms; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>current endorsement contracts, if any, including: amounts, duration, contract terms; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>age and health (including injuries) of the individual associated with the brand, duration of career to date and prospects
for additional future contracts, both playing and endorsement; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>our estimate of potential future playing and endorsement contracts, including duration and value; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>position and data specific to that position focused on estimating longevity of career; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>reported contract value increases or decreases for other comparable players (by position and status they hold among their
peers (e.g.&nbsp;All Pro, MVP, franchise player and the like)) in order to estimate future contract values; and </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>risk free cost of capital. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition, we consider a number of qualitative factors to develop estimates used in our models, including:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the stated aspirations and goals of the contract party; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>certain intangibles of the contract party, including media relationships, communication ability, "likeability," demand as
a product endorser, personal drive and ambition; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>social footprint (for example, number of Twitter followers); </FONT></DD></DL>
</UL>
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<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the market in which the contract party performs and how that may impact the number and amount of endorsement
opportunities; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the reach of the brand of the contract party; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>value of TV contracts and the rate of growth in those contracts; and </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>attendance trends in the contract party's primary field of performance. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
consider all of these factors to estimate brand income for use in a discounted cash flow model. These estimates include amounts based on existing contracts as well as our estimates of
amounts to be received for anticipated future contracts. With respect to existing contracts we consider that certain amounts are reasonably assured of realization, but that most earnings from existing
contracts depend on continued satisfactory performance. To determine the amount of the purchase price of a brand contract and a fair current value we apply discount rates to our estimates of earnings. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
general, we apply lower discount rates to amounts associated with existing contracts, particularly portions of those contracts that have a higher degree of certainty of payment, and
higher discount rates to amounts associated with future potential earnings under existing contracts and to potential earnings under anticipated future contracts. Further, discount rates rise over time
to reflect that uncertainty increases over time. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
investment professionals, which include employees of both Fantex and our parent, Fantex Holdings, will document their considerations of this data and it is then reviewed by a
valuation committee consisting of management of our parent, Fantex Holdings, and our officers, including our chief executive officer and chief financial officer. We then utilize the approved valuation
as a basis to negotiate the purchase price of a brand contract. We will follow the same process on no less than a quarterly basis to estimate the fair value of the brand contracts that are then in
effect. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
our estimates of brand income are too high and/or the discount rates we use in our calculations too low then our valuation of a brand contract may be too high. </FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2><I> Brand Contracts, at Estimated Fair Value  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The negotiated value of our brand contracts, including those brand contracts discussed below and brand contracts with any future
contract parties, have been and will continue to be based on a discounted cash flow model using the procedures described above. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
our analysis we generally consider three categories of potential brand income:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2><I>Category&nbsp;A&#151;</I></FONT><FONT SIZE=2>Potential brand income related to the
portions of existing contracts that have a higher degree of certainty of payment, such as brand income that is very near-term or that is guaranteed under existing included contracts. </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2><I>Category&nbsp;B&#151;</I></FONT><FONT SIZE=2>Potential brand income related to the
portions of existing contracts that have a lesser degree of certainty of payment, such as brand income that is payable pursuant to existing included contracts but that depends on longer-term continued
satisfactory performance of the contract party. </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2><I>Category&nbsp;C&#151;</I></FONT><FONT SIZE=2>Potential brand income related to
anticipated future contracts, such as future endorsements, playing contracts and/or additional brand income generated from coaching, broadcasting or the like. </FONT></DD></DL>
</UL>
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<UL>

<P style="font-family:times;"><FONT SIZE=2><I> Discount Rates  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In determining the discount rates to use, we consider numerous factors such as, for example, yield on CCC-rated bonds and discount
rates of companies that we believe have similar attributes to ours. For example, like us, some biotechnology companies have a very small capitalization, are heavily reliant on the revenues of only a
few products and in many cases, dependent on a single product, and at the time of their initial public offering, their main, if not their only product candidate, was still in development and future
revenues were uncertain and may never be realized. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
each of our current brand contracts, we based discount rates on our observations that (1)&nbsp;yields on CCC-rated bonds have been trading at less than 10% according to market
research and (2)&nbsp;based on our internal research and discussions with industry participants, we determined that as of February&nbsp;2014, the average weighted average cost of capital for a
sample set of 36 then publicly-traded biotechnology companies was 11.1%. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition, in determining the appropriate discount rates to use, we also consider the specific risk profile of the contract party. </FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2><I> Career Length  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our career length analysis varies based on the number of years the contract party has performed in his or her primary career, such as
the NFL. To the extent the contract party has sufficient playing experience and statistical data points to build an econometric model that can more accurately predict career length, we intend to use
the econometric model taking into account each of the following factors determined to be statistically significant in predicting career length: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2><I>Statistical Production.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Our research has indicated that
higher statistical production leads to longer career length. In particular, we measure statistical production through a weighted combination of factors that are relevant to a specific playing
position.  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2><I>Ability to play positions other than the position listed on the team
roster.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Our research indicates that players with the ability to play more than one position have a longer average career length. </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2><I>Durability.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Our research indicates that more durable
players have a longer career length. We measure durability based on a percentage of regular season games played during the total seasons completed as of the date of the analysis. </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2><I>Super Bowl Participation.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Our research indicates that
players participating in at least one Super Bowl have greater expected career length.  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2><I>Draft Position.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Our research indicates that the higher the
draft position, the longer the career length.  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2><I>Early Career Injuries.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Our research indicates that severe
injuries, determined by number of games missed (half a season) or placed on injured reserve, in a player's first through third seasons resulted in shorter career lengths. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
have determined that players with an active playing career of four complete seasons or more have sufficient playing experience and statistical data points that are useful in building
a meaningful econometric model. The respective weight assigned to each of these factors in our econometric model is dependent on the playing position of the particular contract party. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
players with shorter careers at the time they enter into the brand contract with us, including for EJ Manuel, we intend to use analytical models that predict that player's career
length based on factors relevant to that specific contract party, as determined on a case by case basis. </FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition, in determining career length, we only consider players that have retired from their playing careers in order to more completely assess potential career lengths of contract
parties. We believe that including players who are still active in their professional sport would artificially bias the projected career length downwards given that such a data set would include
players who have just begun their careers and may continue to play for several years longer. </FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2><I> Player Contract Values  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As further described in detail below under "&#151;EJ Manuel Brand Contract, at Estimated Fair Value&#151;EJ Manuel
Estimated Brand Income," "&#151;Vernon Davis Brand Contract, at Estimated Fair Value&#151;Vernon Davis Estimated Brand Income" and "&#151;Arian Foster Brand Contract, at Estimated
Fair Value&#151;Arian Foster Estimated Brand Income" in estimating the value of the future player contracts for our contract parties, we review the contracts for players in the professional
sport, retired or active, who are of similar caliber to the contract party and have entered into contracts in a similar era, and who are or were at similar ages and stages in their career at which the
contract party is expected to enter into additional player contracts. The values of such contracts are adjusted for inflation to better predict the contract values of future player contracts for our
contract parties. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I> EJ Manuel Brand Contract, at Estimated Fair Value  </I></FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2><I> EJ Manuel Estimated Brand Income  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On February&nbsp;14, 2014, we entered into a brand contract with EJ Manuel and his affiliated company, Kire Enterprises&nbsp;LLC.
The table below shows our estimates, based on the quantitative and qualitative factors described above, of Category&nbsp;A, Category&nbsp;B and Category&nbsp;C brand income for EJ Manuel as a
percentage of our estimate of aggregate lifetime brand income, on a gross basis before we applied any discount rates, and on a net basis after we applied our discount rates, as well as the discount
rates that we applied to each of these categories in our estimate of brand value: </FONT></P>
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<TD WIDTH="59pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="69pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="59pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="67pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Estimated Lifetime Brand<BR>
Income </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>% of Estimated Total<BR>
Lifetime Brand Income </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Gross amount,<BR>
before<BR>
applying any<BR>
discount rate<SUP>(1)</SUP> </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Net amount,<BR>
after<BR>
applying<BR>
discount<BR>
rates </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Gross amount,<BR>
before<BR>
applying any<BR>
discount rate </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Net amount,<BR>
after<BR>
applying<BR>
discount<BR>
rates </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Weighted-<BR>
Average<BR>
Discount Rate </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1><B>Category&nbsp;A<SUP>(2)</SUP></B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1><B> $</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>3,723,264</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>3,375,163</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>3.5</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1><B>%</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>6.8</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1><B>%</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>4.7</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1><B>%</B></FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:24pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Current NFL Contract (2014&nbsp;-&nbsp;2016)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>3,638,264</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>3,301,250</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>3.5</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>6.7</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>4.5</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:24pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Endorsements (2014)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>85,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>73,913</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>0.1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>0.1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>15.0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1><B>Category&nbsp;B</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1><B> $</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>195,000</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>134,455</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>0.2</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1><B>%</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>0.3</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1><B>%</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>15.0</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1><B>%</B></FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:24pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>NFL Contract (None)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>0.0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>0.0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:24pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Endorsements (2015 and beyond)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>195,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>134,455</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>0.2</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>0.3</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>15.0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1><B>Category&nbsp;C</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1><B> $</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>101,276,268</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>46,101,726</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>96.3</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1><B>%</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>92.9</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1><B>%</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>15.0</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1><B>%</B></FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:24pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Projected Player Contracts</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>80,306,268</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>36,167,290</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>76.3</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>72.9</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>14.7</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:24pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Projected Endorsements</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>19,220,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>9,715,512</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>18.3</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>19.6</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>15.8</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:24pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Projected Post-Career</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1,750,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>218,924</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1.7</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>0.4</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>20.0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0pt;font-family:times;">


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




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&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=1>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0.1pt;" -->


 </font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:16pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1><B>Total</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1><B> $</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>104,337,622</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>49,750,464</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>100</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1><B>%</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>100</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1><B>%</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>14.6</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1><B>%</B></FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0pt;font-family:times;">


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




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&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
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 </DIV>
<DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">
 <DL compact>
<DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1>(1)</FONT></DT><DD style="font-family:times;"><FONT SIZE=1>All
amounts presented are gross payments due to EJ Manuel prior to any exclusion for expenses such as legal fees, travel expenses or self-employment taxes,
which are otherwise excluded from brand income.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1>(2)</FONT></DT><DD style="font-family:times;"><FONT SIZE=1>All
amounts included in Category&nbsp;A are from and after February&nbsp;14, 2014.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1>(3)</FONT></DT><DD style="font-family:times;"><FONT SIZE=1>The
amounts payable to EJ Manuel under his NFL Player Contract from 2014&nbsp;-&nbsp;2016 are guaranteed. </FONT></DD></DL>
 </DIV>
 <UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2><I>Category&nbsp;A&#151;</I></FONT><FONT SIZE=2>Examples of Category&nbsp;A income that we
included in the model for EJ Manuel are his contractual salary for the 2014&nbsp;-&nbsp;2016 NFL playing seasons and amounts under existing endorsements through the 2014 NFL playing season, in
each case from and after February&nbsp;14, 2014. </FONT></DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>93</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2><A
HREF="#bg10401a_main_toc">Table of Contents</A></FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2><I>Category&nbsp;B&#151;</I></FONT><FONT SIZE=2>Examples of Category&nbsp;B income that we
included in the model for EJ Manuel are the portions of EJ Manuel's current endorsement contracts for seasons 2015 and beyond. </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2><I>Category&nbsp;C&#151;</I></FONT><FONT SIZE=2>Examples of Category&nbsp;C income that we
included in the model for EJ Manuel are: </FONT> <FONT SIZE=2>
<BR><BR></FONT>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2><I>Projected Future NFL Contract</I></FONT><FONT SIZE=2>&#151;Potential brand income related
to anticipated future NFL playing contracts, following the expiration of EJ Manuel's current NFL player contract.  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2><I>Projected Endorsements</I></FONT><FONT SIZE=2>&#151;Potential brand income related to
anticipated future endorsement contracts during EJ Manuel's NFL playing career. An example of this would include a potential future endorsement contract with a significant new sponsor. </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2><I>Projected Post-Career</I></FONT><FONT SIZE=2>&#151;Potential brand income related to
anticipated future contracts, such as future endorsements, and/or additional brand income generated from coaching, broadcasting or the like following EJ Manuel's NFL playing Career. </FONT></DD></DL>
</DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
most significant assumptions in our determination of fair value for EJ Manuel's brand contract include:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>discount rates for each of Category&nbsp;A, Category&nbsp;B and Category&nbsp;C as set forth above; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>that EJ Manuel would have an NFL career length of at least 10&nbsp;years; and </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>that during this time he would play out his existing NFL player contract and enter into two additional multi-year NFL
player contracts for at least $80.31&nbsp;million in total and that he will be able over the same period and beyond to enter into and maintain endorsement contracts (or earn other brand income) that
compensate him in amounts that are significantly in excess of compensation that he has had historically from these sources. </FONT></DD></DL>
</UL>
<UL>

<P style="font-family:times;"><FONT SIZE=2><I> EJ Manuel Discount Rates  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In determining the expected brand income for EJ Manuel, we used discount rates ranging from 4.5% to 20.0%, which are slightly higher
than those we have used with respect to the valuation of other brand contracts. We considered this appropriate in order to address the higher degree of uncertainty inherent in our estimates of
projected future contracts given that EJ Manuel has only played one season in the NFL. </FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2><I> EJ Manuel Career Length  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EJ Manuel has been a quarterback in the NFL for less than four years. Therefore, we did not use an econometric model in determining his
expected career length. Instead our investment professionals reviewed a data set consisting of all quarterbacks who qualified for the NFL passing title in their rookie season between 1980 and 2012
(i.e.&nbsp;attempted 14 passes per team game over the regular season). According to www.pro-football-reference.com, there were a total of 52 quarterbacks in this data set, of which 28 were retired
at the end of the 2013 NFL season. Based on the average career length of these </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>94</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2><A
HREF="#bg10401a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>28
quarterbacks, we determined that EJ Manuel would have an estimated career length of 10.32&nbsp;years, which we rounded down to 10&nbsp;years for the purposes of our valuation. </FONT></P>
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<TH NOWRAP  ALIGN="LEFT" style="font-family:times;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:45pt;"><FONT SIZE=1><B>Quarterback

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<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Career Length </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
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<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Troy Aikman</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>12</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Tony Banks</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>10</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Charlie Batch</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>15</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Drew Bledsoe</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>14</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Kyle Boller</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>David Carr</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>11</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Chris Chandler</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>17</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Kerry Collins</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>17</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Tim Couch</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>John Elway</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>16</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Jeff George</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>14</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Joey Harrington</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Chad Hutchinson</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Bernie Kosar</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>12</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Ryan Leaf</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Byron Leftwich</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>10</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Neil Lomax</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Dan Marino</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>17</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Jim McMahon</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>15</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Cade McNown</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Rick Mirer</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>12</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Mike Pagel</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>12</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Jake Plummer</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>10</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Patrick Ramsey</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Heath Shuler</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Jack Trudeau</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>10</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Chris Weinke</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>David Woodley</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="TOP">
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




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&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="TOP">
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0.1pt;" -->


 </font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Average </B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><B>10.32</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="TOP">
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0pt;" -->


&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="TOP">
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0.1pt;" -->


 </font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
</TABLE></DIV>
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 </DIV>
 <UL>

<P style="font-family:times;"><FONT SIZE=2><I> EJ Manuel Projected Contract Value  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In determining that EJ Manuel would play out his existing NFL player contract and enter into two additional multi-year NFL player
contracts, we assumed that he would have
a career length of 10&nbsp;years, as discussed above. In determining the estimated value of EJ Manuel's potential future NFL player contracts, we started with a data set consisting of all 52
quarterbacks who qualified for the NFL passing title in their rookie season between 1980 and 2012 (i.e.&nbsp;attempted 14 passes per team game over the regular season). We then limited this data set
to quarterbacks who signed one or more post-rookie </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>95</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<A NAME="page_ds10401_1_96"> </A>

<P style="font-family:times;"><FONT SIZE=2><A
HREF="#bg10401a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>NFL
player contracts in 1999 or thereafter. The following table lists the quarterbacks that met this criteria at the time we entered into the brand contract with EJ Manuel: </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="ds10401_quarterbacks_"> </A>
<A NAME="toc_ds10401_1"> </A>
<BR></FONT><FONT SIZE=2><B>  Quarterbacks:    <BR>    </B></FONT></P>
 <DIV style="padding:0pt;position:relative;width:70%;margin-left:15%;">
<p style="font-family:times;"></FONT></P>

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<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="126pt" style="font-family:times;"></TD>
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<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2>Charlie Batch</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>Byron Leftwich</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2>Drew Bledsoe</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>Matt Leinart</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2>Kyle Boller</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>Peyton Manning</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2>David Carr</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>Kyle Orton</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2>Kerry Collins</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>Ben Roethlisberger</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2>Trent Edwards</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>Matt Ryan</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2>Joe Flacco</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>Mark Sanchez</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2>Josh Freeman</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>Matthew Stafford</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>Bruce Gradkowski</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>Vince Young</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2>Joey Harrington</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <UL>

<P style="font-family:times;"><FONT SIZE=2><I> EJ Manuel's Second NFL Player Contract  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EJ Manuel has completed one season in the NFL and has a current NFL player contract that expires following his fourth season in the
NFL. However, the Bills have the option to extend this NFL player contract through EJ Manuel's fifth season. We have assumed that the Bills would enter into negotiations with EJ Manuel for another
multi-year contract after the fourth season in order to mitigate the risk of EJ Manuel becoming an unrestricted free agent, or having to declare him a franchise player, after the completion of his
fifth season. Any NFL team can designate a single player as its franchise player and therefore restrict the player from entering free agency. In return, the team must pay the player a premium salary
of at least the average of the top five players in the league at his position, or 120% of his previous year's salary, whichever is greater. Therefore, we estimated that EJ Manuel would enter into a
second NFL player contract prior to the 2017 season, his fifth NFL season. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
estimating the value of the this potential second NFL player contract, we reviewed the contracts for the quarterbacks in the above described data set who have entered into NFL player
contracts between their fourth and sixth NFL seasons, resulting in a set of 17 players who have entered into a total of 22 contracts. Based on a mathematical model taking into account statistical
production (a combination of yards per play (rushing and passing), touchdowns per play (rushing and passing), turnovers per play (interceptions and fumbles) and completion percentage), playing time
(total number of plays in the regular season where the quarterback attempted to pass or run the ball) and draft position, we assigned to each of these quarterbacks a relative weighting with the most
comparable quarterbacks to EJ Manuel (based on the above criteria) receiving a higher weighting. We then calculated the weighted average length and weighted average annual value of the contracts
signed by </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>96</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<A NAME="page_ds10401_1_97"> </A>

<P style="font-family:times;"><FONT SIZE=2><A
HREF="#bg10401a_main_toc">Table of Contents</A></FONT></P>


<P style="font-family:times;"><FONT SIZE=2>these
quarterbacks after adjusting for estimated inflation in quarterback contract values over time. According to Spotrac.com, a division of MG3 WebWorks, the contract data is as follows: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:54%;margin-left:10%;">
<p style="font-family:times;"></FONT></P>

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<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="4pt" ALIGN="RIGHT" style="font-family:times;"></TD>
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<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="4pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="61pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TH NOWRAP  ALIGN="LEFT" style="font-family:times;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:41pt;"><FONT SIZE=1><B>Quarterback

<!-- COMMAND=ADD_SCROPPEDRULE,41pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Calendar Year and<BR>
Season in which the<BR>
new contract was<BR>
executed </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Contract<BR>
Length </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Total<BR>
Compensation<BR>
under the<BR>
contract </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Average<BR>
Annual<BR>
Compensation<BR>
under the<BR>
Contract </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Inflation<BR>
Adjusted<BR>
Average<BR>
Annual<BR>
Compensation<BR>
amounts to<BR>
Year 2017<SUP>(1)</SUP> </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Weights<BR>
applied to<BR>
Contract<BR>
Length and<BR>
Contract<BR>
Amounts </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Weight-<BR>
Adjusted<BR>
Contract<BR>
Length </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Weighted<BR>
Inflation<BR>
Adjusted<BR>
Average<BR>
Annual<BR>
Compensation<BR>
under the<BR>
contract </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:7pt;text-indent:-7pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Matthew Stafford</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>2013; prior to season 5</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>3</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>53,000,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>17,666,667</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>25,922,263</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>9.80</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>0.29</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>2,539,088</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:7pt;text-indent:-7pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Matt Leinart</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>2010; prior to season 5</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>630,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>630,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1,232,388</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>4.43</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>0.04</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>54,554</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:7pt;text-indent:-7pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Matt Leinart</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>2011; prior to season 6</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>2</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>5,500,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>2,750,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>4,887,763</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>4.43</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>0.09</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>216,365</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:7pt;text-indent:-7pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Joe Flacco</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>2013; prior to season 6</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>6</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>120,600,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>20,100,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>29,492,688</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>8.07</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>0.48</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>2,381,062</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:7pt;text-indent:-7pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Joey Harrington</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>2006; prior to season 5</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>3</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>7,500,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>2,500,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>7,175,718</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>7.59</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>0.23</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>544,342</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:7pt;text-indent:-7pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Trent Edwards</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>2012; prior to season 6</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>2</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1,415,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>707,500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1,142,548</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>7.41</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>0.15</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>84,715</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:7pt;text-indent:-7pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Mark Sanchez</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>2012; prior to season 4</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>3</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>40,475,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>13,491,667</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>21,787,805</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>6.05</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>0.18</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1,318,754</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:7pt;text-indent:-7pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Kyle Boller</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>2008; prior to season 6</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>4,500,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>4,500,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>10,662,983</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>5.73</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>0.06</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>611,249</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:7pt;text-indent:-7pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Kyle Orton</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>2008; prior to season 4</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>2</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>3,520,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1,760,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>4,170,411</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>2.78</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>0.06</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>115,843</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:7pt;text-indent:-7pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Kyle Orton</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>2010; prior to season 6</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>2</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>11,621,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>5,810,500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>11,366,337</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>2.78</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>0.06</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>315,727</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:7pt;text-indent:-7pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Kerry Collins</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>1999; prior to season 5</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>4</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>16,900,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>4,225,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>23,722,425</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>4.95</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>0.20</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1,174,034</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:7pt;text-indent:-7pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Byron Leftwich</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>2007; prior to season 5</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>2,073,529</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>2,073,529</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>5,407,616</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>2.47</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>0.02</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>133,336</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:7pt;text-indent:-7pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Byron Leftwich</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>2008; prior to season 6</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>645,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>645,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1,528,361</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>2.47</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>0.02</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>37,685</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:7pt;text-indent:-7pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Vince Young</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>2011; prior to season 6</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>4,000,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>4,000,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>7,109,474</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>4.58</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>0.05</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>325,698</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:7pt;text-indent:-7pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Matt Ryan</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>2013; prior to season 6</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>5</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>103,750,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>20,750,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>30,446,432</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>4.57</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>0.23</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1,390,106</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:7pt;text-indent:-7pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Charlie Batch</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>2002; prior to season 5</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>525,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>525,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>2,211,072</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>2.27</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>0.02</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>50,268</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:7pt;text-indent:-7pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Charlie Batch</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>2003; prior to season 6</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>2</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>2,000,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1,000,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>3,826,609</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>2.27</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>0.05</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>86,996</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:7pt;text-indent:-7pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Josh Freeman</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>2013; prior to season 5</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>2,833,334</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>2,833,334</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>4,157,345</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>4.54</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>0.05</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>188,842</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:7pt;text-indent:-7pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Bruce Gradkowski</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>2010; prior to season 5</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1,684,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1,684,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>3,294,194</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>2.23</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>0.02</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>73,315</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:7pt;text-indent:-7pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Bruce Gradkowski</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>2011; prior to season 6</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>2</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>4,000,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>2,000,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>3,554,737</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>2.23</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>0.04</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>79,114</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:7pt;text-indent:-7pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Ben Roethlisberger</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>2008; prior to season 5</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>6</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>87,986,500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>14,664,417</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>34,748,093</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>4.25</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>0.26</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1,477,680</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:7pt;text-indent:-7pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>David Carr</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>2007; prior to season 6</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>2</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>6,200,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>3,100,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>8,084,580</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>4.12</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>0.08</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>332,828</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0pt;font-family:times;">


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<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
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<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
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<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
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 </font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD ALIGN="CENTER" style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:7pt;text-indent:-7pt;"><FONT SIZE=1> </FONT><FONT SIZE=1><B>Averages </B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>n/a</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>2.36</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>21,879,926</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>5,791,664</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>11,178,720</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>100.00</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1><B>%</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>2.68</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>13,531,600</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0pt;font-family:times;">



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<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
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<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
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<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
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<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
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 <DL compact>
<DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1>(1)</FONT></DT><DD style="font-family:times;"><FONT SIZE=1>Compensation
was adjusted for inflation from the year in which the players entered into a NFL player contract to the year 2017 based on an annual inflation
rate of 10.060%. The inflation rate used was calculated using a weighted average year-to-year growth of earnings from 2000 to 2009 of Pro Bowl and non-Pro Bowl quarterbacks between their fifth season
and seventh season in the NFL. </FONT></DD></DL>
 </DIV>
 <P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
weighted average contract length was 2.68&nbsp;years which we rounded up to 3&nbsp;years. We estimated that EJ Manuel will receive a 3&nbsp;year contract in 2017 with a total
value of $40.59&nbsp;million. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>97</FONT></P>

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</FONT> <FONT SIZE=2>
<A HREF="#bg10401a_main_toc">Table of Contents</A> </FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2><I> EJ Manuel's Third NFL Player Contract  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We estimated that EJ Manuel would enter into his third NFL player contract prior to the 2020 season, his eighth NFL season. In
estimating the value of the contract, we reviewed the contracts for quarterbacks in the above described data set have entered into NFL player contracts between their seventh and ninth NFL seasons,
resulting in a set of 11 players who have entered into a total of 18 contracts. Based on a mathematical model taking into account statistical production (a combination of yards per play (rushing and
passing), touchdowns per play (rushing and passing), turnovers per play (interceptions and fumbles) and completion percentage), playing time (total number of plays in the regular season where the
quarterback attempted to pass or run the ball) and draft position, we assigned to each of these quarterbacks a relative weighting with the most comparable quarterbacks to EJ Manuel (based on the above
criteria) receiving a higher weighting. We then calculated the weighted average length and weighted average annual value of the contracts signed by these quarterbacks after adjusting for estimated
inflation in quarterback contract values over time. According to Spotrac.com, a division of MG3 WebWorks, the contract data is as follows: </FONT></P>
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<TD WIDTH="93pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="4pt" ALIGN="RIGHT" style="font-family:times;"></TD>
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<TD WIDTH="59pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TD WIDTH="59pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="4pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="59pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="4pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="42pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="4pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="37pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="4pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="65pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH NOWRAP  ALIGN="LEFT" style="font-family:times;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:39pt;"><FONT SIZE=1><B>Quarterback

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 </B></FONT></DIV></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Calendar Year and<BR>
Season in which the<BR>
new contract was<BR>
executed </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Contract<BR>
Length </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Total<BR>
Compensation<BR>
under the<BR>
contract </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Average<BR>
Annual<BR>
Compensation<BR>
under the<BR>
Contract </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Inflation<BR>
Adjusted<BR>
Average<BR>
Annual<BR>
Compensation<BR>
amounts<BR>
to Year<BR>
2020<SUP>(1)</SUP> </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Weights<BR>
applied to<BR>
Contract<BR>
Length<BR>
and<BR>
Contract<BR>
Amounts </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Weight-<BR>
Adjusted<BR>
Contract<BR>
Length </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Weighted<BR>
Inflation<BR>
Adjusted<BR>
Average Annual<BR>
Compensation<BR>
under the<BR>
contract </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:7pt;text-indent:-7pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Matt Leinart</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>2012; prior to season 7</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>700,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>700,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1,413,080</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>14.34</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>0.14</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>202,566</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:7pt;text-indent:-7pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Joey Harrington</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>2009; prior to season 8</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>795,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>795,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>2,088,510</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>12.28</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>0.12</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>256,529</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:7pt;text-indent:-7pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Drew Bledsoe</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>2001; prior to season 9</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>10</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>103,000,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>10,300,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>54,622,980</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>11.40</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1.14</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>6,228,646</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:7pt;text-indent:-7pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Kyle Boller</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>2009; prior to season 7</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1,250,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1,250,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>3,283,821</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>3.09</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>0.03</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>101,599</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:7pt;text-indent:-7pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Kyle Boller</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>2010; prior to season 8</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1,000,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1,000,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>2,406,223</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>3.09</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>0.03</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>74,447</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:7pt;text-indent:-7pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Kyle Boller</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>2011; prior to season 9</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1,250,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1,250,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>2,754,941</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>3.09</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>0.03</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>85,236</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:7pt;text-indent:-7pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Kyle Orton</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>2012; prior to season 8</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>3</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>10,500,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>3,500,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>7,065,400</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>9.00</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>0.27</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>635,553</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:7pt;text-indent:-7pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Byron Leftwich</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>2009; prior to season 7</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>2</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>7,500,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>3,750,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>9,851,463</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>3.99</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>0.08</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>393,312</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:7pt;text-indent:-7pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Byron Leftwich</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>2011; prior to season 9</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1,750,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1,750,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>3,856,917</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>3.99</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>0.04</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>153,984</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:7pt;text-indent:-7pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Vince Young</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>2012; prior to season 7</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1,987,500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1,987,500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>4,012,138</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>3.71</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>0.04</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>148,805</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:7pt;text-indent:-7pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Vince Young</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>2013; prior to season 8</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>715,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>715,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1,322,030</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>3.71</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>0.04</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>49,032</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:7pt;text-indent:-7pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Charlie Batch</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>2005; prior to season 8</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>565,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>565,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>2,108,882</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>3.68</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>0.04</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>77,630</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:7pt;text-indent:-7pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Charlie Batch</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>2006; prior to season 9</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>3</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>4,220,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1,406,667</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>4,809,074</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>3.68</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>0.11</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>177,027</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:7pt;text-indent:-7pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Bruce Gradkowski</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>2013; prior to season 8</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>3</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>4,950,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1,650,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>3,050,837</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>7.21</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>0.22</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>219,880</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:7pt;text-indent:-7pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Peyton Manning</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>2004; prior to season 7</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>7</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>99,200,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>14,171,429</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>57,749,873</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>7.06</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>0.49</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>4,079,519</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:7pt;text-indent:-7pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>David Carr</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>2008; prior to season 7</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1,000,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1,000,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>2,868,158</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>2.22</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>0.02</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>63,729</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:7pt;text-indent:-7pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>David Carr</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>2009; prior to season 8</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>2,100,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>2,100,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>5,516,819</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>2.22</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>0.02</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>122,581</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:7pt;text-indent:-7pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>David Carr</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>2010; prior to season 9</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>2</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>6,250,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>3,125,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>7,519,447</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>2.22</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>0.04</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>167,078</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0pt;" -->


&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD ALIGN="CENTER" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=1>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0.1pt;" -->


 </font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD ALIGN="CENTER" style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:7pt;text-indent:-7pt;"><FONT SIZE=1> </FONT><FONT SIZE=1><B>Weighted Averages </B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>2.28</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>13,818,472</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>2,834,200</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>9,794,477</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>100.00</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1><B>%</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>2.91</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>13,237,156</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->


<!-- COMMAND=ADD_LINERULETXT,NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="26%" ALIGN="LEFT" -->
<HR NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="26%" ALIGN="LEFT" >
 </DIV>
<DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">
 <DL compact>
<DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1>(1)</FONT></DT><DD style="font-family:times;"><FONT SIZE=1>Compensation
was adjusted for inflation from the year in which the players entered into a NFL player contract to the year 2020 based on an annual inflation
rate of 9.221%. The inflation rate used was calculated using a weighted average year-to-year growth of earnings from 2000 to 2009 of Pro Bowl and non-Pro Bowl quarterbacks between their eighth season
and tenth season in the NFL. </FONT></DD></DL>
 </DIV>
 <P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
weighted average contract length was 2.91&nbsp;years which we rounded up to 3&nbsp;years. We estimated that EJ Manuel will receive a 3&nbsp;year contract in 2020 with a total
value of $39.71&nbsp;million. </FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2><I> EJ Manuel's Endorsements  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In determining that EJ Manuel would enter into and maintain endorsement contracts (or earn other brand income) that compensate him in
amounts that are significantly in excess of compensation that he has had historically from these sources, we considered that endorsement income for players in skill positions increases for those who
demonstrate a sustained and consistently high level of success and achievement at their position. In addition, we have considered that quarterbacks generally have greater endorsement potential than
other skilled players in the NFL. If EJ Manuel can demonstrate </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>98</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<P style="font-family:times;"><FONT SIZE=2><A
HREF="#bg10401a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>high
achievement as a quarterback in the NFL, we believe he is a good candidate to realize a higher level of endorsement income. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
any of our assumptions are incorrect then our estimate of the fair value of EJ Manuel's brand contract may be too high. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I> Vernon Davis Brand Contract, at Estimated Fair Value  </I></FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2><I> Vernon Davis Estimated Brand Income  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On October&nbsp;30, 2013, we entered into a brand contract with Vernon Davis and his affiliated company, The Duke
Marketing&nbsp;LLC. The table below shows our estimates, based on the quantitative and qualitative factors described above, of Category&nbsp;A, Category&nbsp;B and Category&nbsp;C brand income
for Vernon Davis as a percentage of our estimate of aggregate lifetime brand income, on a gross basis before we applied any discount rates, and on a net basis after we applied our discount rates, as
well as the discount rates that we applied to each of these categories in our estimate of brand value: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:62%;margin-left:10%;">
<p style="font-family:times;"></FONT></P>

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<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="69pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="59pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="69pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="59pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="67pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Estimated Lifetime<BR>
Brand Income </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>% of Estimated Total<BR>
Lifetime Brand Income </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Gross amount,<BR>
before<BR>
applying any<BR>
discount<BR>
rate<SUP>(1)</SUP> </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Net amount,<BR>
after<BR>
applying<BR>
discount<BR>
rates </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Gross amount,<BR>
before<BR>
applying any<BR>
discount rate </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Net amount,<BR>
after<BR>
applying<BR>
discount<BR>
rates </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Weighted-<BR>
Average<BR>
Discount Rate </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1><B>Category&nbsp;A<SUP>(2)</SUP></B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1><B> $</B></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1><B>3,462,900</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1><B>3,425,002</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1><B>5.7</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1><B>%</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1><B>8.7</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1><B>%</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1><B>4.5</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1><B>%</B></FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:24pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>NFL Contract (2013)<SUP>(3)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>3,414,588</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>3,377,219</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>5.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>8.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>4.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:24pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Endorsements (2013)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>48,312</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>47,783</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>0.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>0.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>4.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-top:10pt;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1><B>Category&nbsp;B</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1><BR>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1><B><BR>
10,663,000</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1><B><BR>$</B></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1><B><BR>
9,050,526</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1><B><BR>
17.4</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1><B><BR>%</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1><B><BR>
23.1</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1><B><BR>%</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1><B><BR>
10.0</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1><B><BR>%</B></FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:24pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>NFL Contract (2014 and beyond)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>10,250,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>8,699,318</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>16.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>22.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>10.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:24pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Endorsements (2014 and beyond)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>413,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>351,208</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>0.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>0.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>10.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-top:10pt;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1><B>Category&nbsp;C</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1><BR>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1><B><BR>
47,133,026</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1><B><BR>$</B></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1><B><BR>
26,782,368</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1><B><BR>
76.9</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1><B><BR>%</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1><B><BR>
68.2</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1><B><BR>%</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1><B><BR>
12.8</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1><B><BR>%</B></FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:24pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Projected Player Contract</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>33,344,338</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>19,348,544</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>54.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>49.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>13.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:24pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Projected Endorsements</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>8,288,689</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>6,047,439</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>13.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>15.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>9.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:24pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Projected Post-Career</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>5,500,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>1,386,385</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>9.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>3.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>15.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="TOP">
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">


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&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="TOP">
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=1>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0.1pt;" -->


 </font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:16pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1><B>Total</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1><B> $</B></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1><B>61,258,926</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1><B>39,257,896</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1><B>100</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1><B>%</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1><B>100</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1><B>%</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1><B>11.4</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1><B>%</B></FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="TOP">
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">


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<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
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<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
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<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
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<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
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<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
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<TD VALIGN="BOTTOM" style="line-height:0.75pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
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<TD VALIGN="BOTTOM" style="line-height:0.75pt;font-family:times;"><FONT SIZE=1></font>&#8203;<font></FONT></TD>
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<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
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<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
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<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
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 </DIV>
<DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">
 <DL compact>
<DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1>(1)</FONT></DT><DD style="font-family:times;"><FONT SIZE=1>All
amounts presented are gross payments due to Vernon Davis prior to any exclusion for expenses such as legal fees, travel expenses or self-employment
taxes, which are otherwise excluded from brand income.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1>(2)</FONT></DT><DD style="font-family:times;"><FONT SIZE=1>All
amounts included in Category&nbsp;A are from and after October&nbsp;30, 2013.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1>(3)</FONT></DT><DD style="font-family:times;"><FONT SIZE=1>The
amounts payable to Vernon Davis under his NFL Player Contract in 2013 are not guaranteed. </FONT></DD></DL>
 </DIV>
 <UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2><I>Category&nbsp;A&#151;</I></FONT><FONT SIZE=2>Examples of Category&nbsp;A income that we
included in the model for Vernon Davis are his contractual salary for the 2013 NFL playing season and amounts under existing endorsements through the 2013 NFL playing season, in each case from and
after October&nbsp;30, 2013. </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2><I>Category&nbsp;B&#151;</I></FONT><FONT SIZE=2>Examples of Category&nbsp;B income that we
included in the model for Vernon Davis are the portions of Vernon Davis's current NFL player contract and contracted salary and bonus for seasons 2014 and beyond. </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2><I>Category&nbsp;C&#151;</I></FONT><FONT SIZE=2>Examples of Category&nbsp;C income that we
included in the model for Vernon Davis are: </FONT> <FONT SIZE=2>
<BR><BR></FONT>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2><I>Projected Future NFL Contract</I></FONT><FONT SIZE=2>&#151;Potential brand income related
to anticipated future NFL playing contracts, following the expiration of Vernon Davis's current NFL player contract. </FONT></DD></DL>
</DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>99</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<A NAME="page_du10401_1_100"> </A>

<P style="font-family:times;"><FONT SIZE=2><A
HREF="#bg10401a_main_toc">Table of Contents</A></FONT></P>

<UL>
<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2><I>Projected Endorsements</I></FONT><FONT SIZE=2>&#151;Potential brand income related to
anticipated future endorsement contracts during Vernon Davis's NFL playing career. An example of this would include a potential future endorsement contract with a significant new sponsor. </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2><I>Projected Post-Career</I></FONT><FONT SIZE=2>&#151;Potential brand income related to
anticipated future contracts, such as future endorsements, and/or additional brand income generated from coaching, broadcasting or the like following Vernon Davis's NFL playing Career. An example of
this would include a potential future contract to be a sports broadcaster. </FONT></DD></DL>
</UL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
most significant assumptions in our determination of fair value for Vernon Davis's brand contract include:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>discount rates for each of Category&nbsp;A, Category&nbsp;B and Category&nbsp;C as set forth above; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>that Vernon Davis would have an NFL career length of at least 14&nbsp;years; and </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>that during this time he would play out his existing NFL player contract and enter into at least one additional multi-year
NFL player contract for at least $33&nbsp;million, and that he will be able over the same period and beyond to enter into and maintain endorsement contracts (or earn other brand income) that
compensate him in amounts that are significantly in excess of compensation that he has had historically from these sources. </FONT></DD></DL>


<P style="font-family:times;"><FONT SIZE=2><I> Vernon Davis Discount Rates  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In determining the expected brand income for Vernon Davis, we used discount rates ranging from 4.5% to 15.0%, which we believe
adequately address the uncertainty inherent in our estimates. </FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2><I> Vernon Davis Career Length  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To determine the expected career length for Vernon Davis our investment professionals used a proprietary econometric model. The data
set for the model used for Vernon Davis consisted of all tight ends who were drafted in rounds one through seven between 1990 and 2010, who played at least one NFL season and were no longer playing at
the start of the 2013 NFL season. According to www.pro-football-reference.com, there were a total of 212 tight ends in this data set, and the average career length for this group was approximately
5.5&nbsp;years. Using statistical analysis our investment professionals determined that there were six factors that were the most statistically relevant to a deviation from the average career length
of an NFL tight end. These factors are listed below: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2><I>Statistical Production.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Our research has indicated that
the relevant statistical measures for a tight end's production are receptions per game, yards per reception and touchdowns per game. Vernon Davis's statistical production based on a weighted
combination of these factors was significantly above the average. In fact, this a majority of the increase in estimated career length for Vernon Davis over the average tight end in our model comes
from this factor.  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2><I>Ability to play positions other than tight end.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Vernon
Davis was determined to play only in one position, and thus this factor did not result in any increase in estimated career length for Vernon Davis in our model.  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2><I>Durability.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Vernon Davis was significantly more durable
than average, and thus this factor results in an increase in estimated career length for Vernon Davis over the average tight end in our model.  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2><I>Super Bowl Participation.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Vernon Davis participated in at
least one Super Bowl, and thus this factor results in an increase in estimated career length for Vernon Davis over the average tight end in our model. </FONT></DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>100</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<A NAME="page_du10401_1_101"> </A>

<P style="font-family:times;"><FONT SIZE=2><A
HREF="#bg10401a_main_toc">Table of Contents</A></FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2><I>Draft Position.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Vernon Davis was drafted sixth overall and
thus, this factor results in an increase in estimated career length for Vernon Davis over the average tight end in our model.  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2><I>Early Career Injuries.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Vernon Davis did not suffer any
severe injuries in his earlier seasons and thus, this factor results in an increase in estimated career length for Vernon Davis over the average tight end in our model. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Applying
our proprietary econometric model for tight end career length and inputting the values applicable for Vernon Davis for these six factors, we estimated that Vernon Davis's career
length would be approximately 13.4&nbsp;years. This number was adjusted to produce a total career length for Vernon Davis of 14&nbsp;years because we do not believe players of Mr.&nbsp;Davis'
caliber are generally cut from the roster in the middle of a season. In addition, we believe that Vernon Davis has a strong desire to, and will attempt to, stay in the NFL for as long as he can
perform in the game, especially given his vocal desire to be an NFL Hall of Fame player. Accordingly, we believe he would be likely to continue to play in the NFL for the length of time that our model
estimates he would continue to play. </FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2><I> Vernon Davis Projected Contract Value  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Vernon Davis is currently in his eighth season in the NFL and has a current NFL player contract that expires following his tenth season
in the NFL. In determining that Vernon Davis would play out his existing NFL player contract and enter into at least one additional multi-year NFL player contract, we assumed he would have a career
length of 14&nbsp;years. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
determining that Vernon Davis's future NFL player contract would be worth at least $33&nbsp;million, we reviewed contracts entered into by tight ends within ten years of when Vernon
Davis is expected to enter into his next NFL player contract and who we believed were comparable both in terms of caliber (at least one Pro Bowl and averaged at least 600 receiving yards per season
during their NFL careers), age and stage of their career (played at least eight seasons in the NFL). Only three tight ends met this
criteria. According to Spotrac.com, a division of MG3 WebWorks, the contract data for this comparable group is as follows: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:54%;margin-left:10%;">
<p style="font-family:times;"></FONT></P>

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<TH NOWRAP  ALIGN="LEFT" style="font-family:times;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:32pt;"><FONT SIZE=1><B>Tight End

<!-- COMMAND=ADD_SCROPPEDRULE,32pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Age at<BR>
execution of<BR>
new contract </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Calendar Year<BR>
and Season in<BR>
which the new<BR>
contract was<BR>
executed </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Length of<BR>
the contract </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Total<BR>
Compensation<BR>
under the contract </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Average<BR>
Annual<BR>
Compensation<BR>
under the<BR>
Contract<SUP>(1)</SUP> </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Inflation-adjusted<BR>
Compensation<BR>
amounts to Year<BR>
2016<SUP>(2)</SUP> </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=1>Tony Gonzalez</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>31&nbsp;years old</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>2007; prior to Season 11</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>5&nbsp;years</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>31.25&nbsp;million</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>6.25&nbsp;million</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>8.52&nbsp;million</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=1>Antonio Gates</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>30&nbsp;years old</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>2010; prior to Season 8</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>6&nbsp;years</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>39.8&nbsp;million</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>6.63&nbsp;million</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>8.15&nbsp;million</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=1>Jeremy Shockey<SUP>(3)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>30&nbsp;years old</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>2011; prior to Season 10</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>1&nbsp;year</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>3.81&nbsp;million</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>3.81&nbsp;million</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>4.53&nbsp;million</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
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 </DIV>
<DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">
 <DL compact>
<DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1>(1)</FONT></DT><DD style="font-family:times;"><FONT SIZE=1>Average
amounts include total base salaries and signing bonuses contracted for at the time of entering into the NFL player contract.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1>(2)</FONT></DT><DD style="font-family:times;"><FONT SIZE=1>Compensation
was adjusted for inflation from the year in which the players entered into the NFL player contract to the year 2016 based on an annual
inflation rate of 3.5%. The inflation rate used was determined based upon the year-to-year growth from 2000 to 2009 of NFL tight end earnings of players in their tenth season and forward.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1>(3)</FONT></DT><DD style="font-family:times;"><FONT SIZE=1>Because
Jeremy Shockey's contract was only for one year in his tenth season, we do not believe that his contract is as relevant a comparable. We believe
that contracts for players of similar caliber and similar stage in their career as Vernon Davis are more comparable metrics in determining the value of a future NFL contract for Vernon Davis.
Therefore, we only used the contracts for Tony Gonzalez and Antonio Gates in evaluating the expected contract value for Vernon Davis' next NFL player contract. </FONT></DD></DL>
 </DIV>
 <P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
determining that Vernon Davis would enter into and maintain endorsement contracts (or earn other brand income) that compensate him in amounts that are slightly in excess of
compensation that he has had historically from these sources and that he would be entitled to other post-career income in the aggregate of $5.5&nbsp;million over his lifetime, we considered the
following factors:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>we believe that endorsement income for players in skill positions increases for those who demonstrate a sustained and
consistently high level of success and achievement at their position. Vernon Davis is currently in the midst of a period of high achievement as a tight end in the </FONT></DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>101</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<P style="font-family:times;"><FONT SIZE=2><A
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<UL>
<UL>

<P style="font-family:times;"><FONT SIZE=2>NFL
and has just begun to engage in marketing his brand, and thus we believe he is a good candidate to realize a higher level of endorsement income; </FONT></P>

</UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>we believe that being a member of a team with a consistently high level of achievement in the post-season in a major
market, including, in the recent years, sending five 49ers to the Pro Bowl in 2009, appearing in the NFC Championship in 2011, playing in the Super Bowl in the 2012 season and returning to the NFC
Championship in the 2013 season, will aid in boosting visibility; and </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>we believe that, based principally on a review of the post-career earnings of other athletes who have used their playing
career as a platform to build a post-career brand and available data on such post-career earnings for these athletes, Vernon Davis has the potential for generating other post-career brand income of at
least $5.5&nbsp;million in the aggregate, such as through broadcasting (as evidenced by his regular appearances on talk shows and/or sports television programs) royalties, and/or other
non-endorsement sources. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
any of our assumptions are incorrect then our estimate of the fair value of Vernon Davis's brand contract may be too high. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I> Arian Foster Brand Contract, at Estimated Fair Value  </I></FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2><I> Arian Foster Estimated Brand Income  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On February&nbsp;28, 2013, we entered into a brand contract with Arian Foster and his affiliated company, The Ugly Duck,&nbsp;LLC
and amended and restated such contract on each of May&nbsp;24, 2013 and August&nbsp;21, 2013. The table below shows our estimates, based on the quantitative and qualitative factors described
above, of Category&nbsp;A, Category&nbsp;B and Category&nbsp;C brand income for Arian Foster as a percentage of our estimate of aggregate lifetime brand income, on a gross basis before we
applied any discount rates, and on a net basis after we applied our discount rates, as well as the discount rates that we applied to each of these categories in our estimate of brand value: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:times;"></FONT></P>

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<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="72pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="65pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="72pt" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>% of Estimated Lifetime<BR>
Brand Income </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Gross amount,<BR>
before applying<BR>
any discount<BR>
rate </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Net amount,<BR>
after applying<BR>
discount<BR>
rates </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Discount Rate </B></FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Category&nbsp;A</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>5.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>11</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>3%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Category&nbsp;B</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>19.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>29</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>10%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Category&nbsp;C</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>75</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>60</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>10%&nbsp;-&nbsp;16.3%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="TOP">
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">


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&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="TOP">
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2>


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 </font>&#8203;</TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:18pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>100</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>100</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
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 </DIV>
 <UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2><I>Category&nbsp;A</I></FONT><FONT SIZE=2>&#151;Examples of Category&nbsp;A income that we
included in the model for Arian Foster are his contractual salary and bonus for the 2013 NFL playing season, which includes the guaranteed portions of Arian Foster's current NFL player contract. </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2><I>Category&nbsp;B&#151;</I></FONT><FONT SIZE=2>Examples of Category&nbsp;B income that we
included in the model for Arian Foster are the non-guaranteed portions of Arian Foster's current NFL player contract and contracted salary and bonus for seasons 2014 and beyond. </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2><I>Category&nbsp;C&#151;</I></FONT><FONT SIZE=2>Examples of Category&nbsp;C income that we
included in the model for Arian Foster include a potential future endorsement contract with a significant new sponsor or an additional NFL player contract following the expiration of Arian Foster's
current NFL player contract. </FONT></DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>102</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<P style="font-family:times;"><FONT SIZE=2><A
HREF="#bg10401a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
most significant assumptions in our determination of fair value for Arian Foster's brand contract include:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>discount rates for each of Category&nbsp;A, Category&nbsp;B and Category&nbsp;C as set forth above; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>that Arian Foster would have an NFL career length of at least 12&nbsp;years; and </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>that during this time he would play out his existing NFL player contract and enter into at least one additional multi-year
NFL player contract on terms that are, on an average annualized basis, economically comparable to his existing NFL player contract, and that he will be able over the same period and beyond to enter
into and maintain endorsement contracts (or earn other brand income) that compensate him in amounts that are significantly in excess of compensation that he has had historically from these sources. </FONT></DD></DL>

<P style="font-family:times;"><FONT SIZE=2><I> Arian Foster Discount Rates  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In determining the expected brand income for Arian Foster, we used discount rates ranging from 10.0% to 16.3%, which we believe
adequately address the uncertainty inherent in our estimates. </FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2><I> Arian Foster Career Length  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In our analysis of the estimated fair value of the brand contract with Arian Foster, we considered the average and median career
durations for running backs we considered to be comparable to be in the range of 6-16&nbsp;years, with an average and median of 10.5&nbsp;years. We considered the career length of running backs in
the modern era (which we defined as a running back who has retired from the NFL during the 15-year period between 1997 and 2011) who were the featured back on their team, selected to at least one Pro
Bowl and rushed for at least 1,000 yards in at least three of their first four full seasons in which the running back played at least 13 games to be comparable for purposes of our analysis. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
determining that Arian Foster would have a 12&nbsp;year NFL playing career, we used a comparable group of running backs, whose average career-length was 10.5&nbsp;years, but we
used 12&nbsp;years for Arian Foster's career-length, adding 1.5&nbsp;years, or an additional 14%, due to characteristics of Arian Foster's career that we believe distinguish him from the
comparable group. For example, we considered that in Arian Foster's first NFL season, he played in only six games, starting in only one and therefore, we believed it was appropriate to assume that
Arian Foster would have one additional season beyond the average for the comparable group. </FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2><I> Arian Foster Projected Contract Value  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In determining that Arian Foster would play out his existing NFL player contract and enter into at least one additional multi- year NFL
player contract on terms that are, on an average annualized basis, economically comparable to his existing NFL player contract, in addition to assuming he would have a career of 12&nbsp;years, we
reviewed contracts entered into by players in the comparable group at approximately the same age as the age at which Arian Foster would be at the end of his current contract. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
determining that Arian Foster would enter into and maintain endorsement contracts (or earn other brand income) that compensate him in amounts that are significantly in excess of
compensation that he has had historically from these sources, we considered the following factors:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Arian Foster was an un-drafted free agent, and thus we believe his historical endorsement earnings in his first several
seasons were significantly lower than his longer-term potential; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>we believe that endorsement income for players in skill positions increases for those who demonstrate a sustained and
consistently high level of success and achievement at their position. </FONT></DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>103</FONT></P>

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<UL>
<UL>

<P style="font-family:times;"><FONT SIZE=2>Arian
Foster is coming off three consecutive seasons of high achievement as a running back in the NFL and has not yet actively engaged in marketing his brand, and thus we believe he is a good
candidate to begin to realize a higher level of endorsement income; and </FONT></P>

</UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>we believe that Arian Foster has potential for generating other brand income, such as through motion pictures and/or
broadcasting, as evidenced by his recent appearance as himself on an episode of the television series Hawaii Five-O, and his recently landed role as a professional running back in </FONT> <FONT SIZE=2><I>Draft Day,</I></FONT><FONT SIZE=2> a new film
starring Kevin Costner. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
any of our assumptions are incorrect then our estimate of the fair value of Arian Foster's brand contract may be too high. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Income (Loss) From Brand Contracts  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We recognize income from brand contracts when cash or other considerations are received by the contract party under included contracts,
which is the point at which we earn the right to our proportionate share of amounts received by the contract party. Other considerations received by the contract party may include stock, automobiles,
or other items of value. In the event other considerations are received by the contract party, we will recognize income from brand contracts equal to our proportionate share of the estimated fair
value of the other considerations received, and will receive payment in either cash or such other considerations based on the contractual arrangement. Amounts due to us under the brand contract are
either remitted directly from the source of such income or through payment by the contract party. The brand contract stipulates that income once we earn it is not subject to recapture by the contract
party. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
purposes of our financial statements and the notes thereto, cash received under the brand contract will either be recognized as a reduction of our carrying value (i.e.,&nbsp;a
reduction in the brand contract asset) or income (loss) from brand contracts. Whether cash receipts will be recognized as a reduction of carrying value or income (loss) from brand contracts will
depend on the timing of such cash receipt. For example, if we expect to receive $1.0&nbsp;million from a contract party on January&nbsp;1, 20X5 after entering into the brand contract on
January&nbsp;1, 20X4 and based on our discount rate pay $0.9&nbsp;million for such cash receipt the Company will recognize $0.1&nbsp;million in income (loss) from brand contracts in the year
ended December&nbsp;31, 20X4. In this case, the entire $1.0&nbsp;million received in January&nbsp;20X5 will be recognized as a reduction of our carrying value. If on the other hand the
$1.0&nbsp;million cash is received in December&nbsp;20X4 a portion will be recognized as income (loss) from brand contracts in the fourth quarter of the year ended December&nbsp;31, 20X4. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Additionally,
the timing of changes in our estimates of future cash flows will impact whether cash receipts are recognized as a reduction of our carrying value or as income (loss) from
brand contracts. If for example we increase our estimate of future cash flows and such increased cash flows are not received until a future period, such increase will be recognized as income (loss)
from brand contracts and the majority of such future cash flow will be recognized as a reduction of carrying value of our investment. If on the other hand our expected cash flows increase and were not
foreseen and therefore not expected until the period in which the cash is actually received the entire cash amount will be recognized as income (loss) from brand contracts. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Expected
cash flows will be based on the included contracts the contract party has in place and the expectations of future contracts. As it becomes more likely that the contract party
will collect contracted amounts the expected discount rate will decrease. A decrease in the discount rate will result in the receipt of cash primarily being allocated to reduction of carrying value of
our investment. The discount rates are determined at the purchase date and are revised each period based on the performance of the tracking stock brand and the likelihood of collection of future
contracted amounts. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>104</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income
(loss) from brand contracts are based on an estimate of expected cash flows and the associated expected discount rate. Changes in fair value resulting from changes in the expected
performance of the tracking stock brand or market factors are included in income (loss) from brand contracts in the statement of operations. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
are entitled to certain information and audit rights pursuant to the brand contracts that enable us to adequately calculate and collect the ABI under the brand contract. In addition
to such annual audit rights, we intend to create a contract administration and surveillance division to proactively monitor and administer our rights under the brand contracts. Following the execution
of a brand contract, the contract administration and surveillance division shall prepare a schedule charting the timing and amounts of expected future payments associated with that certain
counterparty's existing contracts that are subject to our brand contract, along with the term and the expected timing each contract would be expected to be renegotiated or renewed. The division will
also be tasked with ensuring that all directives to pay Fantex directly have been executed and accepted by the parties making such payments. We will contact the contract party at renewal terms to
determine whether the contracts will be renewed and take necessary steps to ensure that any new agreements are covered under the brand contract. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
division will also be tasked with reviewing each brand contract quarterly and to contact each of our contract parties to determine if the parties entered into additional agreements
or renegotiated existing agreements that may impact our ABI. To supplement these direct inquiries, this division will also monitor social and mainstream media on at least a weekly basis for
information relevant to our brand contract or relationship with each of our contract parties, including trade rumors, reports of new endorsements or other agreements that may be subject to our brand
contract with such contract parties, reports of renegotiation of existing agreements and reports of personal behavior that may be beneficial or detrimental to the tracking stock brand in general. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition to the above, in the event that expected payments are not received on a timely basis (generally within five days of receipt of income by the contract party), we will attempt
to contact the contract party and resolve any issues of nonpayment amicably. If our efforts are unsuccessful, any issues with contract payments will initially be escalated to senior management for
resolution. Depending on
the nature and materiality of the contract party's nonperformance, we may initiate legal action to recover any unpaid amounts under the brand contract. Significant or continuous nonpayment may be
material and may trigger additional disclosure under the Securities Act as well as impair the fair value of the asset on our books. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Election to Opt Out of Transition Period  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;102(b)(1) of the JOBS Act exempts "emerging growth companies" from being required to comply with new or revised
financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered
under the Exchange Act) are required to comply with the new or revised financial accounting standard. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non- emerging growth companies but any such
election to opt out is irrevocable. Fantex has elected to opt out of the extended transition period. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2><B> Off-Balance Sheet Arrangements  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined in the rules
and regulations of the SEC. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>105</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2><B> Qualitative and Quantitative Disclosures of Market Risk  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We did not have during the periods presented, and we do not currently have, any market risk sensitive instruments, as defined in the
rules and regulations of the SEC. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Contractual Obligations  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our principal contractual obligations are limited to our obligations under our management agreement with our parent and our brand
contracts with EJ Manuel, Vernon Davis and Arian Foster. We are not committed to any future capital expenditures, including rental commitments, which are solely in the name of our parent. See
"&#151;Results of Operations" for additional information on the allocation of rent expenses from Fantex Holdings to us from inception to December&nbsp;31, 2012 and for the year ended
December&nbsp;31, 2013. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Arian Foster Brand Contract  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We must pay $10.0&nbsp;million to Arian Foster upon the consummation of the offering of Fantex Series Arian Foster. We will have no
further financial obligation to Arian Foster under his brand contract once this payment has been made, other than certain indemnity obligations. We have evaluated the impact of these indemnities on
our financial statements and determined that they are not material. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2><B><I> Vernon Davis Brand Contract  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We must pay $4.0&nbsp;million to Vernon Davis upon the consummation of the offering of Fantex Series Vernon Davis. We will have no
further financial obligation to Vernon Davis under the brand contract once this payment has been made, other than certain indemnity obligations. We have evaluated the impact of these indemnities on
our financial statements and determined that they are not material. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> EJ Manuel Brand Contract  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We must pay $4.98&nbsp;million to EJ Manuel upon the consummation of this offering. We will have no further financial obligation to
EJ Manuel under the brand contract once this payment has been made, other than certain indemnity obligations. We have evaluated the impact of these indemnities on our financial statements and
determined that they are not material. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Management Agreement  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have entered into a management agreement with our parent that will become effective upon the consummation of our first public
offering. Pursuant to the management agreement, our parent will provide us with management and administrative services, including providing and compensating our executive management and other
personnel, as well as services relating to information technology support, brand management and support operations, facilities, human resources, tax planning and administration, accounting, treasury
and insurance. We have agreed to pay our parent 5% of the amount of the gross cash received by us, if any, pursuant to our brand contracts during any quarterly period as remuneration for the services
provided. The amount of gross cash received used to calculate this 5% fee will include any portion allocated to reduction of carrying value but shall not take into account the changes in fair value of
the brand contracts. As such, the service fee under the management agreement will be determined based on the total amount of cash received under the brand contracts in a given quarterly period prior
to any adjustments for fair value and without regard to the expected cash receipts in such quarter as reflected in the financial statements for that quarter. We may evaluate the service fee from time
to time to assess the continued appropriateness of the percentage of our cash receipts upon which the service fee is calculated, in light of the services being provided by our parent at the time and
the cost of those services. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>106</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
agreement will have an initial term through December&nbsp;31, 2014, and will automatically renew for successive one-year terms each December&nbsp;31 unless either party provides
written notice of its intent not to renew at least three months prior to such renewal. We may also terminate any specific service and/or the agreement, without penalty, with 30&nbsp;days prior
written notice to Fantex Holdings. Fantex Holdings may terminate any specific service and/or the agreement with 180&nbsp;days prior written notice to us, but if we, using our commercially reasonable
efforts, are unable to either perform the services ourselves or enter into a reasonable arrangement with a third party to perform the services that we are unable perform ourselves, then Fantex
Holdings will continue to perform such services for an additional period of 180&nbsp;days. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
agreement contains certain provisions requiring us to indemnify our parent with respect to all losses or damages arising from acts not constituting bad faith, willful misconduct, or
gross negligence. We have evaluated the impact of these indemnities on our financial statements and determined that they are remote. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>107</FONT></P>

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<BR></FONT><FONT SIZE=2><B>  MANAGEMENT AND ATTRIBUTION POLICIES    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have established policies for purposes of managing and attributing our assets and liabilities between and among our platform unit
and various other business units that we intend to establish from time to time. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
a general principle, we expect that all material matters in which holders of any series of our common stock may have divergent interests (including our platform common stock and any
tracking stocks that we may issue from time to time) will be generally resolved in a manner that is in the best interests of our company and all of our stockholders after giving fair consideration to
the interests of the holders of each series of our common stock, as well as such other or different factors considered relevant by our board of directors (or any committee of our board of directors
authorized for this purpose, including the conflicts committee of our board of directors). </FONT></P>


<P style="font-family:times;"><FONT SIZE=2><B> Policies Subject to Change Without Stockholder Approval  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Set forth below are the management and attribution policies that will be effective upon the consummation of this offering. Our board of
directors may, without stockholder approval, modify, change, rescind or create exceptions to these policies, or adopt additional policies. Such actions could have different effects on holders of each
different series of our common stock and could include operational and financial decisions that could favor the platform common stock over a tracking stock, or one tracking stock over another. Our
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 our company and the best interests of all of our
stockholders as a whole. In certain circumstances, decisions of our board of directors may also be subject to the approval of the conflicts committee. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any
such modifications, changes, rescissions, exceptions or additional policies will be binding and conclusive unless otherwise determined by our board of directors. We will notify our
stockholders of any material modification, change or exception made to these policies, any rescission of these policies and the adoption of any material additions to these policies through the filing
of a Current Report on Form&nbsp;8-K within four business days after the modification, change, exception or addition is made. However, we will not notify our stockholders of any modification,
change, exception, rescission or addition to these policies if we determine that it is not material to the holders of any series of our common stock, in each case with such holders taken together as a
whole. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Attribution  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We currently have one business unit, which is our platform unit. We intend to establish additional business units from time to time
concurrently with the issuance of one or more new tracking stocks intended to track and reflect the economic performance of such business unit. We will attribute assets and liabilities to such
business units in accordance with the policies below. By attributing assets and liabilities to a business unit we mean that we will designate such assets and liabilities for the account of that
business unit on our internal financial accounts, and prepare our unaudited attributed financial information in accordance with such attributions. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> EJ Manuel Brand  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon the consummation of this offering we will establish a new tracking unit that we refer to as the EJ Manuel Brand. We will initially
attribute the following assets and liabilities to the EJ Manuel Brand:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>95% of our acquired brand income, or ABI, that we acquire under our EJ Manuel brand contract; </FONT></DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>108</FONT></P>

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<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>any and all of our liabilities, costs and expenses that are directly attributable to the EJ Manuel Brand, such as our
direct costs arising out of our promotion of the EJ Manuel Brand or arising out of or related to the maintenance and enforcement of the EJ Manuel brand contract; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>a pro rata share of our general liabilities, costs and expenses not directly attributable to any specific tracking stock
(calculated based on attributable income), but excluding any non-cash expenses that are allocated from our parent to us. Attributable expenses would include, for example, a pro rata portion of the
service fee we pay to our parent pursuant to the management agreement (5% of our cash receipts, which would be equal to 5% of our ABI under the EJ Manuel brand contract so long as there are no other
tracking stock outstanding). Expenses that would not be attributed would include expenses incurred by our parent, including any expenses incurred in providing services to us under the management
agreement, to the extent in excess of our service fee to them; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>as income, any covered amounts, as described below, for the EJ Manuel brand contract; and </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>as an expense, the pro rata share of any covered amounts, as described below, relating to any tracking stock brand
(including the pro rata share of any covered amounts for the EJ Manuel Brand). </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
will also attribute the following additional assets and liabilities to the EJ Manuel Brand:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>all net income or net losses from the assets and liabilities that are included in the EJ Manuel Brand and all net proceeds
from any disposition of any such assets, in each case, after deductions to reflect any dividends paid to holders of shares of Fantex Series&nbsp;EJ Manuel; and </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>any acquisitions or investments made from assets that are included in the EJ Manuel Brand. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2><B><I> Other Tracking Stock Brands  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We intend to enter into additional brand contracts on an ongoing basis, and we intend to create a separate business unit in connection
with each new brand contract. We will refer to each of these new business units in general as a tracking unit or a tracking stock brand, though each tracking stock brand will also be given a specific
name at the time we create a new tracking stock brand. We have previously entered into a brand contract with: </FONT></P>
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<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="157pt" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH NOWRAP  ALIGN="LEFT" style="font-family:times;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:52pt;"><FONT SIZE=1><B>Contract Party

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 </B></FONT></DIV></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Effective Date of<BR>
Brand Contract </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Percent of Brand<BR>
Income Payable<BR>
to Us Under<BR>
the Brand<BR>
Contract (ABI) </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Tracking Unit related<BR>
to the Brand<BR>
Contract </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Tracking Stock<BR>
related to the<BR>
Tracking Stock Brand </B></FONT></TH>
</TR>
<TR VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Vernon Davis</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>October&nbsp;30, 2013</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>10</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>Vernon Davis Brand</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>Fantex Series Vernon Davis</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Arian Foster</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>February&nbsp;28, 2013</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>20</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>Arian Foster Brand</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>Fantex Series Arian Foster</FONT></TD>
</TR>
</TABLE></DIV>
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 </DIV>
 <P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
will attribute the following assets and liabilities to each tracking stock brand:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>a fixed percentage of our ABI from the brand contract associated with a tracking stock brand, which we expect generally
(though not necessarily) will be 95% for each of our brand contracts; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>any and all of our liabilities, costs and expenses that are directly attributable to such tracking stock brand, such as
our direct costs arising out of our promotion of the tracking stock brand or arising out of or related to the maintenance and enforcement of the related brand contract; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>a pro rata share of our general liabilities, costs and expenses not directly attributable to any specific tracking stock
(calculated based on attributable income), but excluding any non-cash expenses that are allocated from our parent to us. Attributable expenses would include, for example, a pro rata portion of the
service fee we pay to our parent pursuant to the management agreement (5% of our cash receipts). Expenses that would not be attributed would include </FONT></DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>109</FONT></P>

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<UL>
<UL>

<P style="font-family:times;"><FONT SIZE=2>expenses
incurred by our parent, including any expenses incurred in providing services to us under the management agreement, to the extent in excess of our service fee to them; </FONT></P>

</UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>as income, any covered amounts, as described below, for the brand contract associated with such tracking stock brand; and </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>as an expense, the pro rata share of any covered amounts, as described below, relating to any tracking stock brand
(including the pro rata share of any covered amounts for such tracking stock brand). </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
will also attribute the following additional assets and liabilities to a tracking stock brand:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>all net income or net losses from the assets and liabilities that are included in such tracking stock brand and all net
proceeds from any disposition of any such assets, in each case, after deductions to reflect any dividends paid to holders of the tracking stock associated with such tracking stock brand; and </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>any acquisitions or investments made from assets that are included in such tracking stock brand. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2><B><I> Platform Unit  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our platform unit will initially have attributed to it all of our assets and liabilities that are not specifically attributed to our
three current tracking stock brands or to any other tracking stock brands that we may establish from time to time. The assets attributed to the platform unit will thus include, for example, any
portion of the ABI for any brand contract that is not specifically attributed to the associated tracking stock brand. For example, we will attribute the 5% of our ABI under our EJ Manuel brand
contract, Vernon Davis brand contract and Arian Foster brand contract to the platform unit, and expect to attribute a similar amount for each of our future brand contracts. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Covered Amounts  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As described above, income (and assets) and liabilities will generally be attributed to a tracking stock brand based on the income and
liabilities of that tracking stock brand. However, if as a result of any debtor relief laws we do not receive any portion of our ABI from a brand contract then we will nonetheless attribute income
during any period to the corresponding tracking stock brand in an amount equal to the difference between any amounts we actually receive under that brand contract and the amounts to which we would
otherwise have been entitled to receive but for the debtor relief law. We refer to such difference as a covered amount. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
such a case, the covered amount will also be attributed as a general expense of Fantex, and we will attribute the pro rata share of any covered amounts to each tracking stock brand as
an expense, as discussed above. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
purposes of this policy, "debtor relief laws" means the U.S. Bankruptcy Code, as now and hereafter in effect, or any successor statute to the U.S. Bankruptcy Code, and all other
liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief statute, law,
ordinance, rule or regulation of the United States, any state thereof or the District of Columbia, or other applicable jurisdictions from time to time in effect. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Fiduciary and Management Responsibilities, Conflicts Committee  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Because each of our business units will be part of a single company, our directors and officers will have the same fiduciary duties to
stockholders of our company as a whole (and not to any individual business unit or the holders of any specific series of our common stock associated with any of our business units). Under Delaware
law, a director or officer may be deemed to have satisfied his or her </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>110</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>fiduciary
duties to our company and its stockholders if that person is independent and disinterested with respect to the action taken, is adequately informed with respect to the action taken and acts
in good faith taking into account the interests of all of our stockholders as a whole. Our board of directors and officers, in establishing and applying policies with regard to intra-company matters
such as business transactions between our different business units and series of common stock, and attribution of assets, liabilities, debt, corporate overhead, taxes, interest, corporate
opportunities and other matters, will consider various factors and information that could benefit or cause relative detriment to the stockholders of any individual series of our common stock and will
seek to make determinations that are in our company's best interests and the best interests of our stockholders as a whole. If and when there are conflicting interests between our business units and
consequently any holders of any series of our common stock, our directors will use good faith business judgment to resolve such conflicts, including if applicable in the judgment of our board of
directors, through our conflicts committee. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
board of directors has established a conflicts committee that is responsible for reviewing all of our related party transactions in which our parent company, Fantex Holdings, is a
party with an interest adverse to our interests or any outstanding tracking stock, including any decision to convert any of our outstanding tracking stock into our platform common stock following the
two-year anniversary of the filing of a certificate of designation creating such tracking stock. Following the consummation of this offering Fantex Holdings will be the sole holder of shares of our
platform common stock. Our board of directors has also determined that each member of the conflicts committee must (a)&nbsp;satisfy the audit committee independence requirements under the rules and
regulations of the SEC that would be applicable to Fantex if our shares were listed on a national securities exchange such as Nasdaq, (b)&nbsp;not
have been an employee or director of our parent company at any time in the three years prior to his or her appointment to the conflicts committee and (c)&nbsp;not have any material interest in
Fantex or Fantex Holdings. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Dividend Policy  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our board of directors is permitted, but not required, to declare and pay dividends on our platform common stock or any of our tracking
stock in an amount up to the "available dividend amount" for the applicable series, to the extent permitted by the Delaware General Corporation Law. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
available dividend amount for any tracking stock is as of any date an amount equal to the lesser of (a)&nbsp;total assets of our company legally available for the payment of
dividends under Delaware law and (b)&nbsp;an amount equal to:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the excess of the total assets attributed to the tracking stock brand over the total liabilities attributed to the
tracking stock brand, less the par value of the outstanding shares of such tracking stock; or </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>if there is no such excess, the attributable income of the tracking stock brand for the fiscal year in which the dividend
is being declared and/or the preceding fiscal year. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
available dividend amount for our platform common stock is as of any date an amount equal to the amount of our total assets legally available for the payment of dividends under
Delaware law, less the aggregate amount of the "available dividend amount" for all of our then outstanding tracking stocks. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Following
this offering, we intend to pay periodic cash dividends out of available cash for each tracking stock, if outstanding, equal to an amount in excess of 20% of the "available
dividend amount" for each such tracking stock. Our board of directors has discretion to declare a dividend on any series of common stock without declaring a dividend on any other series of our common
stock. In general, </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>111</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>our
board of directors does not expect to declare dividends on any series of common stock in an amount greater than the attributed cash on hand for such series. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
board of directors may change its dividend policy at any time and from time to time, and we may retain some or all available funds and future income to support our operations and
finance the growth and development of our business. However, our board of directors will not in any event change the definition of "available dividend amount" for any series of our common stock or
declare dividends on any series of our common stock in excess of the "available dividend amount" for that series. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Financing Activities  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> General  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We may from time to time invest surplus cash, issue and repay short-term and long-term debt and the issue and repurchase any
outstanding tracking stocks. However, our board of directors will not in any event reallocate the "underlying assets" for any tracking stock, as such term is defined in the certificate of designation
for that series. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
we change the attribution of cash or other property from one tracking stock to another, we will account for such change as a short-term loan unless our board of directors determines
that a given change in attribution should be accounted for as a long-term loan, an inter-series equity investment, as a reduction of an inter-series equity investment or as a transfer in exchange for
cash or other assets. See "&#151;Inter-Series Loans" and "&#151;Inter-Series Investments" below. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
board of directors will make these determinations, either in specific instances or by setting applicable policies generally, in the exercise of its informed business judgment.
Factors our board of directors may consider in making this determination include:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the financing needs and objectives of the receiving tracking stock; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the investment objectives of the transferring tracking stock; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the current and projected capital structure of each tracking stock; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the relative levels of internally generated funds of each tracking stock; and </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the availability, cost and time associated with alternative financing sources, prevailing interest rates and general
economic conditions. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
board of directors will make all changes in the attribution of material assets from one series to the other on a fair value basis, as determined in good faith by the board of
directors. For accounting purposes, all such assets will be deemed reattributed at their carryover basis. To the extent that this amount is different than the fair value of the inter-series loan or
inter-series equity investment created in the transaction, this difference will be recorded as an adjustment to the series equity. No gain or loss will be recognized in the statement of operations
information for the tracking stock due to the related party nature of such transactions. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Inter-Series Loans  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If one tracking stock is deemed to lend to the other series, our board of directors will determine the terms of such loan, including
the rate at which it will bear interest. Our board of directors will determine the terms of any inter-series loans, either in specific instances or by setting applicable policies generally, in the
exercise of its informed business judgment. Factors our board of directors may consider in making this determination include:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>our company's needs; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the use of proceeds of the receiving tracking stock; </FONT></DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>112</FONT></P>

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<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the capital expenditure plans of and the investment opportunities available to each tracking stock; and </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the availability, cost and time associated with alternative financing sources. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
an inter-series loan is made, we intend to account for the loan based on its stated terms, and the resulting activity, such as interest amounts, will be recorded in the separate
series financial results to be included in our financial statements but will be eliminated in preparing our financial statement balances. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Inter-Series Investments  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;An inter-series investment is an equity investment that holders of one tracking stock may make in another tracking stock. Inter-series
investments would be represented by the issuance of shares of the tracking stock into which an equity investment may be made. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Equity Issuance and Repurchases and Dividends  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We will reflect all financial effects of issuances and repurchases of shares relating to any single tracking stock in our own financial
information. We will reflect financial effects of dividends or other distributions on, and purchases of, shares relating to each tracking stock in the unaudited attributed financial information. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Inter-Series Contracts  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The terms of all current and future material transactions, relationships and other matters between the platform unit and any tracking
stock brand, including those as to which the holders of any tracking stock may have potentially divergent interests, will be determined in a manner considered by our board of directors to be in our
company's best interests and the best interests of our stockholders as a whole. In certain circumstances, decisions of our board of directors may also be subject to the approval of our conflicts
committee. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Review of Corporate Opportunities  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In cases where a material corporate opportunity may appropriately be viewed as one that could be pursued by holders of more than one
tracking stock, our board of directors may, independently or at the request of management, review the attribution of that corporate opportunity to one of, or between, such series. In accordance with
Delaware law, our board of directors will make its determination with regard to the attribution of any such opportunity and the benefit of such opportunity in accordance with their good faith business
judgment of our company's best interests and the best interests of our stockholders as a whole. In certain circumstances, decisions of our board of directors may also be subject to the approval of our
conflicts committee. Among the factors that our board of directors may consider in making this attribution is:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>whether a particular corporate opportunity is principally related or complementary to the business focus or strategy of
any particular tracking stock; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>whether one tracking stock brand will be better positioned to undertake the corporate opportunity than another tracking
stock brand; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>existing contractual agreements and restrictions; and </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the financial resources and capital structure of each tracking stock. </FONT></DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>113</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2><B> Financial Statements and Other Financial Information  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We will present financial statements in accordance with GAAP, consistently applied. We will also provide unaudited attributed financial
information as an exhibit to our periodic reports that we file pursuant to the Exchange Act. The unaudited attributed financial information will show the attribution of our assets, liabilities,
revenue, income (loss) from brand contracts expenses and cash flows to each of the tracking stocks and our platform common stock, in accordance with the attribution policies set forth above. Unaudited
attributed financial information will also include, if applicable, attributed portions of our debt, interest and taxes, in accordance with the attribution policies set forth above. We will make these
attributions for the purpose of preparing such information; however, holders of our tracking stocks and our platform common stock will continue to be subject to all of the risks associated with an
investment in our company and all of our company's businesses, assets and liabilities. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition to the unaudited attributed financial information, at least until such time as we no longer have significant concentration among our tracking stock brands relative to our
consolidated financials, we will include in our audited annual reports statements of cash receipts from included contracts with respect to each of our brand contracts. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Taxes  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> General Policies  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Taxes and tax benefits, payments that are required to be made by, or are entitled to be received by, us and certain tax-related losses
will be attributed among the various tracking stock brands in accordance with the following tax sharing policies. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These
tax sharing policies may differ from the manner in which taxes and tax benefits of each tracking stock brand are reflected in our financial statements. For financial statement
purposes, taxes and tax benefits attributable to each tracking stock brand generally will be accounted for in a manner similar to a stand-alone company basis in accordance with GAAP. Any differences
between the tax sharing policies described below and the taxes and tax benefits of each of our business units reported in the financial statements will be reflected in the attributed net assets of the
various tracking stock brand for financial statement purposes. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
general, for purposes of these tax sharing policies, any tax item (including any tax item arising from a disposition) attributable to an asset, liability or other interest of a
tracking stock brand will be attributed to that tracking stock brand. Tax items that are attributable to any tracking stock brand that are carried forward or back and used as a tax benefit in another
tax year will be attributed to that tracking stock brand. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Income Taxes  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To the extent that federal, state, local or foreign income taxes are determined on a basis that includes the assets, liabilities or
other tax items of more than one tracking stock brand then income taxes and income tax benefits will be shared among the tracking stock brands based principally on the taxable income (or loss), tax
credits and other tax items directly related to each tracking stock brand. Such attributions will reflect each tracking stock brand's contribution, whether positive or negative, to our taxable income
(or loss), income tax liabilities and tax credit position. Consistent with the general policies described above, income tax benefits that cannot be used by a tracking stock brand generating such
benefits, but can be used to reduce the taxable income of another tracking stock brand, will be credited to the tracking stock brand that generated such benefits,
and a corresponding amount will be charged to the tracking stock brand utilizing such benefits. As a result, under this tax sharing policy, the amount of income taxes attributed to a tracking stock
brand or the amount credited to a tracking stock brand for income tax benefits may not necessarily be the same as that which would have been </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>114</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>payable
or received by the tracking stock brand had that tracking stock brand filed separate income tax returns. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Non-Income Taxes and Non-Income Tax Benefits  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In any taxable period, if any non-income taxes or non-income tax benefits are determined on a basis that includes the assets,
liabilities or other tax items of more than one tracking stock brand, then any such non- income taxes or non-income tax benefits will be attributed to each tracking stock brand based upon its
contribution to our non-income tax liability (or benefit). Non-income tax benefits that cannot be used by a tracking stock brand generating such benefits, but can be used to reduce taxes of another
tracking stock brand, will be credited to the tracking stock brand that generated such benefits, and a corresponding amount will be charged to the tracking stock brand utilizing such benefit. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any
income or non-income taxes or tax benefits that are determined on a basis that includes only the assets, liabilities or other tax items of one series will be attributed to that
series. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>115</FONT></P>

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<A HREF="#bg10401a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="dy10401_business"> </A>
<A NAME="toc_dy10401_1"> </A>
<BR></FONT><FONT SIZE=2><B>  BUSINESS    <BR>    </B></FONT></P>


<P style="font-family:times;"><FONT SIZE=2><B> Fantex  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Overview  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are a brand acquisition, marketing and brand development company whose focus is on acquiring minority interests in the income
associated with the brands of professional athletes, entertainers and other high-profile individuals and assisting such individuals in enhancing the reach and value of their respective brands. We
intend to focus our business on three core areas:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>evaluating, targeting and accessing individuals and brands with the potential to generate significant income associated
with these brands, or brand income; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>acquiring minority interests in such brand income; and </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>assisting our acquired brands in increasing their value via technology and through leveraging our marketing, advertising
and strategic partnering expertise. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
management team has significant marketing, operating and investment experience and what we believe are extensive industry contacts. Our team members have been directly involved with
building E*Trade Financial Corporation, Siebel Systems,&nbsp;Inc., Yahoo!Finance and Yahoo!Sports. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fantex
was incorporated on September&nbsp;14, 2012 in Delaware and is headquartered in San Francisco, California. To date, our operations have consisted of evaluating, targeting and
accessing brands and negotiating the acquisition of minority interests in those brands that meet our criteria. To date, we have entered into brand contracts with each of the following parties: </FONT></P>
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<TD WIDTH="18%" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="83pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TD WIDTH="79pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TD WIDTH="72pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TH NOWRAP  ALIGN="LEFT" style="font-family:times;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:52pt;"><FONT SIZE=1><B>Contract Party


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 </B></FONT></DIV></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Primary Career </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Effective Date of<BR>
Brand Contract </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Percent of<BR>
Brand Income<BR>
Payable to Us<BR>
Under the Brand<BR>
Contract (ABI) </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Purchase Price<BR>
for the<BR>
Acquisition of<BR>
ABI </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Termination Fee<BR>
Payable by Contract<BR>
Party (under specified<BR>
circumstances further<BR>
defined below) </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>EJ Manuel and his affiliated professional services company, Kire Enterprises&nbsp;LLC</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>Quarterback for the Buffalo Bills</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>February&nbsp;14, 2014</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>10</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>4.98&nbsp;million</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>5.24&nbsp;million</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Vernon Davis and his affiliated professional services company, The Duke Marketing&nbsp;LLC</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>Tight end for the San Francisco Forty Niners</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>October&nbsp;30, 2013</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>10</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>4.00&nbsp;million</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>4.21&nbsp;million</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Arian Foster and his affiliated professional services company, The Ugly Duck,&nbsp;LLC</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>Running back for the Houston Texans</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>February&nbsp;28, 2013</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>20</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>10.00&nbsp;million</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>10.55&nbsp;million</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
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 <P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each
of the foregoing contracts is contingent upon obtaining financing to fund the acquisition of our interest in the brand income under the brand contract. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
intend to enter into additional brand contracts in the future and we are actively pursuing these brand contracts, although as of February&nbsp;28, 2014 we have no current
commitments to enter into another brand contract. Any brand contracts that we enter into in the future with other parties, who we refer to as contract parties, are also expected to be contingent upon
obtaining financing to fund the acquisition of the interest in the brand income of the respective brands. We intend to finance the acquisition of additional brand income through the issuance of
additional tracking stocks linked to the value of such brand income. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>116</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2><A
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<P style="font-family:times;"><FONT SIZE=2><B><I> Brand Evaluation  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prior to entering into a brand contract, we conduct a detailed evaluation of the contract party and the brand to determine whether, in
our opinion, they would be a suitable brand with the potential to generate significant brand income based on the criteria discussed below. We consider brand to be a distillation of a complex set of
associations people make with respect to an individual, including performance, appearance, history and personal story, products or services they are associated with, public statements or positions on
matters of public concern, how an individual acts or the image they project to the world. We seek brands that convey images and associations that we believe will be recognized and valued in the market
place. Our evaluation activities include, but are not limited to:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Reviewing mainstream and social media to understand the individual's relative standing in their field and how they are
viewed by leading commentators and journalists as well as the public at large; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Collecting and analyzing widely followed performance metrics as well as recognized honors or awards received by the
individual. Examples might include: batting average, yards per carry, box office receipts, book sales, selection to All Pro or All Star teams, Grammy, Academy or Booker Awards, etc.; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Reviewing all existing contracts underlying the brand contract to verify current and future income streams, including
sources of guaranteed income, and income that are based on achievement of performance or other milestones and that may or may not be achieved based on continued performance in the field; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Evaluating the character and reputation of the individual through our independent assessments, industry references and
detailed background checks conducted by third parties; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>collecting financial and other information from each contract party to evaluate financial suitability and brand
sustainability. Key areas of focus include: review of assets, liabilities, existing commitments, tax returns and credit reports and credit scores; and </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Assessing potential future cash receipts based on our estimate of the value of future contracts that could be included in
brand income, considering factors such as: </FONT> <FONT SIZE=2>
<BR><BR></FONT>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the age of the individual and the average length of a career in the individual's primary occupation, such as an athlete in
the NFL;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>length of existing contracts and the potential for renewal or replacement of such contracts;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>potential for incremental endorsement and other cash flow generating activity, including a comparison against the value of
comparable brands;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the individual's aspirations and goals beyond a career in the individual's primary occupation; and </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>our judgment regarding the individual's ongoing appeal and ability to develop as a media talent based upon a variety of
intangibles including onscreen presence and ability to connect and communicate with consumers and the public. </FONT></DD></DL>
</DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
part of our brand evaluation, we also examine the brand's current positioning and marketing footprint, including the reach, demographic, engagement level, and potential for growth.
This evaluation provides a framework to develop further marketing strategies to aid us in our efforts to assist the contract party enhance the value of their brand. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>117</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2><A
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<P style="font-family:times;"><FONT SIZE=2><B><I> Brand Acquisition  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We believe we have extensive industry contacts among our board of directors, employees, consultants and advisors of our company and our
affiliates, which we utilize to access individuals and brands that meet our criteria. Through our contacts we seek to establish working relationships with these brands and their key advisors to begin
the process of educating them about our business and the benefits of a brand contract and a continuing relationship. We enter into an arm's-length negotiation primarily to finalize a purchase price,
our percentage of ABI and the scope of brand income, including whether or not there would be any specific exclusions. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Enhancing Brand Value  </I></B></FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2><I> Increasing Brand Reach and Consumer Engagement  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We intend to build a portfolio of brands and enhance the value of our acquired brands via technology and data applications, as well as
leveraging our marketing, advertising and strategic partnering expertise in collaboration with the contract parties. We believe that developing a diverse portfolio of global brands will enable us to
increase brand reach across our portfolio and allow us to provide unique insights that contract parties may employ to increase consumer awareness of their brands and our brands more generally. We
expect to leverage our data and expertise to assist and supplement our contract parties' efforts to extend the reach of their brands across multiple marketing mediums, including broadcast, print,
digital, live events, and social. For example, each of our acquired brands would have a "brand manager" who would be responsible for monitoring the brand and brand activities and serving as a liaison
to find opportunities for us to provide brand enhancing activities. We believe that, as a result of our combined efforts, there is an opportunity to increase consumer engagement with the acquired
brands by optimizing message delivery, including driving engagement through the use of content developed by us or third parties. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Typically
a contract party's current marketing services focus primarily on endorsement transactions with sponsors that reinforce his brand as a professional athlete. Although this brings
in short term cash flow, we do not believe these sponsorships aid in building a brand that can be sustained beyond a playing career. We intend to assist more broadly on brand building and brand
marketing. Our focus will primarily be on leveraging the platform of being a professional athlete to create a brand that is perceived as more than simply a sportsman, with the goal of having the
contract party's brand thrive beyond his playing career. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
seek to aid our brands in fostering positive brand associations in order to create a unique position in the marketplace that is independent of their primary occupation, such as an
athlete in the NFL. We believe this will drive greater engagement with a connected audience and lead to greater longevity of the brands. We also believe that investors in a tracking stock linked to a
brand are more likely to be consumer advocates for that brand. Brand development is a long-term strategy of ours intended to create greater longevity in the marketplace for our brands. </FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2><I> Our Brand Platform  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We intend to create a brand platform that will leverage social media data and in turn allow our contract parties to grow and develop
their audiences. Through social data and platform analytics, we believe we can better understand the contract parties' audiences, as well as cultivate engagement that supports the contract parties'
multi-dimensional interests and post-career aspirations. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
brand attributes of our contract parties when viewed solely as professional athletes are:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>professional sport; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>position played within that sport; </FONT></DD></DL>
</UL>
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<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>performance achieved within that sport; and </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>association with team(s) played for within that sport. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;However,
we intend to create brands with attributes beyond those of a professional athlete. Our contract parties have interests, opinions, skills, and passions and use certain products
and engage in activities outside of professional sports. These brand attributes might include:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>an interest in a certain type of music; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>opinions on relevant social issues; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>artistic abilities such as to paint, sing or act; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>wearing a certain style of clothing or jewelry; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>use of certain household products or services; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>an interest in travel; and </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>work with a particular charity. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Through
our brand platform we intend to connect our contract parties via social media to mass, engaged audiences that are interested in our contract party not necessarily because he is a
professional athlete, but because he has other brand attributes that are relevant to that target audience. We believe that our brand platform will be uniquely positioned to identify the specific
attributes, demographics, and psychographics of target audiences that were previously unaffiliated with our contract parties. We believe we can utilize this information to drive more and more
engagement within these existing mass audiences, as well as large undiscovered audiences. Our brand platform will allow our contract party to place very targeted messaging within his social media
feeds to connect with these audiences. We believe the ability serve such directed content to a specific target audience would be viewed as valuable by fans, investors in a tracking stock, existing
sponsors, and potential advertisers. Further, the engagement of our contract parties with these mass audiences will support our long-term strategy to create longevity for our contract party brands
beyond their playing careers. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
focus would include:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>assisting our brands in creating and developing a vision for their brand identity and attributes; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>identify opportunities for re-positioning and/or differentiation; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>monitoring the brand and brand activities to identify "brand moments" or events or circumstances that we believe present
an opportunity to establish or reinforce elements of the brand; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>providing marketing strategies to accelerate brand growth and influence of the brand based on a "cross-pollination"
technology to identify consumers that would potentially be interested in the brand; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>identifying content developed by us or third parties that could be used to increase awareness of the brand; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>identifying topics and vocabulary that would allow the contract party to increase consumer engagement; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>identifying trends in consumers' interest in the brand and optimizing messaging consistent with these trends and brand
identity; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>identifying and understanding, and where possible, influencing key social media thought-leaders; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>monitoring trends in similar brands that a contract party could leverage to increase the value of its brand; </FONT></DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>119</FONT></P>

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<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>providing advice on workflow and scheduling of messages to better optimize staging and consumer exposure; and </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>advising on search engine optimization for each brand to better enable discovery, searching, filtering and following by
consumers and media outlets. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
intend to measure the effectiveness of our strategies to enhance brand value where possible, and use those measurements to assess whether our efforts are successful. For example, we
intend to measure changes in the social media reach of our brands by measuring the change in the number of followers our brands may have on Twitter and Facebook and other social media sites, as well
as measure the demographics of those followers compared to the demographics that our brand vision may target. We also intend to measure the engagement level of these followers to determine brand
enthusiasm. Ultimately our success will be measured by brand income, particularly from new sources, including income from sponsors unrelated to sports, and/or increased brand income from existing
sources. As with other forms or marketing and advertising, however, our ability to precisely measure the impact of our efforts on brand value may be difficult to determine objectively. </FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2><I> Monetization of the Brand  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition to our brand platform services intended to help optimize the reach of the brand and consumer engagement, we intend to
provide advice to contract parties based both on our experience and through data analysis that would aid them in obtaining more attractive terms in their negotiations with future sponsors. We believe
that building critical mass with a portfolio of brands will enable us to generate meaningful data based on our brands and our continual monitoring of the marketplace, including best practices with
respect to consumer engagement and other critical drivers of brand value, as well as data on demographic metrics and other data relative to brands and their performance. In conjunction with the brand
platform, we intend to provide an accessible report, in customizable and graphical format with data filter capabilities, highlighting the demographic metrics, reach, consumer engagement, strength and
other critical drivers of brand value for sponsors based on our proprietary internal data. We are in the process of developing proprietary brand platform software to be used to produce such reports at
such time as there would be meaningful data. We believe that this information and our marketing insights will assist our contract parties to more accurately evaluate
their brand value in the marketplace and potentially increase future endorsement payments and brand longevity post career in the primary occupation, such as an athlete in the NFL. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2><B> Our Brands  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To date we have entered into three brand contracts, created a tracking unit related to each of these brand contracts, which we refer to
generally as "tracking stock brands," and created a tracking stock related to such tracking stock brands, with each of: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:70%;margin-left:15%;">
<p style="font-family:times;"></FONT></P>

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<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="157pt" style="font-family:times;"></TD>
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<TH NOWRAP  ALIGN="LEFT" style="font-family:times;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:52pt;"><FONT SIZE=1><B>Contract Party

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 </B></FONT></DIV></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Tracking Unit related to<BR>
the Brand Contract </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Tracking Stock related to the<BR>
Tracking Stock Brand </B></FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2>EJ Manuel</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>EJ Manuel Brand</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>Fantex Series&nbsp;EJ Manuel</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2>Vernon Davis</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>Vernon Davis Brand</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>Fantex Series Vernon Davis</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2>Arian Foster</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>Arian Foster Brand</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>Fantex Series Arian Foster</FONT></TD>
</TR>
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 <P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
prospectus is prepared in connection with the offering of shares of Fantex Series&nbsp;EJ Manuel. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Overview of Professional Football, Honors and Awards  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The NFL is the premier professional football league in the United States and was founded on August&nbsp;21, 1920. The NFL is
comprised of 32 teams divided into two conferences, the National Football Conference, or NFC, and the American Football Conference, or AFC, which in turn each </FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>have
four divisions. The regular season of the NFL consists of 16&nbsp;games played on a weekly basis over 17&nbsp;weeks (with one bye week for each team) roughly from September to December, with
up to four post-season games. Football is a physically demanding sport, requiring strength, speed and power. In addition, because of the frequent tackling and other physical contact, football players
are prone to injury. The age at which NFL players peak depends on many factors, including the player's position and the physical training of the player. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Associated Press annually publishes a list of the best player for each position, which it designates as the "All-Pro Team." Each year the All-Pro Team is selected by a national panel
of media members, regardless of the conference in which the player competes. The First Team consists of the top one or two players at each position; the Second Team consists of the runners-up at each
position. One player is selected at quarterback, fullback, tight end, center, punter, place kicker, and kick returner, while two players are selected at running back, wide receiver, offensive tackle,
offensive guard, outside linebacker, inside/middle linebacker, defensive end, defensive tackle, cornerback, and safety. In the event of a unanimously selected quarterback, fullback, tight end, center,
punter, place kicker, or kick returner, there will be no Second Team selection at that position. Additional designations, such as NFL "Most Valuable Player" are presented by various media outlets. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Since
the 1938 season, the NFL has held the Pro Bowl. NFL players are invited to attend the Pro Bowl based on votes cast by NFL coaches, NFL players and fans. The players for each
position who receive the highest votes for their respective conferences are selected to play in the Pro Bowl. An invitation to play in the Pro Bowl is generally considered to be a significant honor. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Professional Football Compensation  </I></B></FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2><I> Overview  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Player compensation during the regular season is established by contract between the player and the NFL franchise under the CBA between
the NFL and the National Football League Players' Association, or the NFLPA. On August&nbsp;4, 2011, the NFL and NFLPA entered into the current CBA which will be effective until the 2020 season,
subject to certain exceptions. NFL player contracts generally conform to the form player contract contained in the CBA, however individual modifications may be made. </FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2><I> Salary Cap  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The CBA establishes the maximum amount of compensation each club may pay to its players in a given season. This salary cap is
calculated as a percentage of total league
revenue. The current CBA provides that the salary cap may not exceed in the aggregate 48% of projected league revenues (excluding stadium credit) during the 2012-2014 seasons and 48.5% of projected
league revenues (excluding stadium credit) during the 2015-2020 seasons, except that the salary cap may not be less than $142.5&nbsp;million per team. The salary cap is divided equally among all 32
teams. The salary cap amount is reduced by retired player benefits, which were approximately $22.0&nbsp;million in 2011. From 1994 to 2012 the NFL per team salary cap, after reduction for retired
player benefits, rose from approximately $34.6&nbsp;million to approximately $120.6&nbsp;million, according to the NFL. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each
team has discretion to allocate compensation among players, however, the CBA imposes a minimum salary that increases over time based on the number of seasons played and the player's
roster status. Teams may offer signing bonuses to the player and certain amounts of "guaranteed money" that are paid to the player regardless of whether the player is on the club's active roster. For
purposes of determining the salary cap, signing bonuses are prorated over the life of the contract. As a result, teams may sometimes offer a larger percentage of the overall compensation in the form
of a signing bonus to allow for a higher upfront payment while mitigating the impact on the current season's salary cap. However, large signing bonuses will decrease the amount of money available
under the salary cap </FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>in
successive seasons. In addition, players may sometimes agree to renegotiate contracts in order to accommodate salary cap considerations. </FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2><I> Additional Bonus Opportunities  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each player is compensated for each post-season game in accordance with a schedule established in the CBA. In the years 2011 to 2020,
an NFL Player would be entitled to receive additional compensation ranging between:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>$20,000 to $30,000 for playing on a wild-card team; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>$22,000 to $33,000 participating in a division playoff game; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>$40,000 to $59,000 for participating in a conference championship; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>$44,000 to $65,000 for participating in the Super Bowl; and </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>$88,000 to $130,000 for winning the Super Bowl. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
NFL compensates Pro Bowl players based on a schedule established in the CBA between the NFL and the NFLPA. Between the years 2011 and 2020, NFL players participating in the Pro Bowl
are entitled to $25,000 to $37,000, with the players on the winning team receiving compensation ranging from $50,000 to $74,000. To the extent, players are unable to participate in the Pro Bowl due to
the timing of the Super Bowl, they are nonetheless entitled to the compensation discussed above depending on whether they were drafted into the winning or losing team in the Pro Bowl. In addition to
compensation received by the NFL, Pro Bowl players often receive bonuses from their endorsers as a result of being invited to play in the Pro Bowl. </FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2><I> Endorsements  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We believe that NFL players, including All Pro or Pro Bowl caliber players, and baseball players generally receive a smaller percentage
of their total compensation than other professional athletes from endorsement and appearance fees. Based on our internal market research we believe this is true for NFL players in part because they
wear helmets and pads during games, and therefore are less recognizable, and they play on a large roster and in fewer games than other major professional sports in the United States. We believe the
endorsement income that NFL players receive is determined by many factors including their position, the market in which the player performs, personal drive and ambition, personality, "likability,"
authenticity, consistency, "mediagenic" qualities, fan base and brand image. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Quarterbacks
are generally considered to be the most marketable NFL players and often garner the largest endorsement contracts, followed by other skilled- position players. Winning
post-season championships and winning individual awards such as being named to the Pro Bowl or All-Pro Team, playoff wins and Super Bowl championships, can increase the earning potential of a
professional football player. Earning most valuable player awards for stand out performances can also increase the
earning potential of NFL players. Endorsement contracts typically have morality clauses and minimum playing requirements that allow the sponsor to terminate the sponsorship. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Our Tracking Units&#151;EJ Manuel Brand, Vernon Davis Brand and Arian Foster Brand  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each of our tracking stocks are intended to reflect the economic performance of the associated tracking stock brands, which initially
consist of our business operations relating to the brand contract with the associated athlete, entertainer or high profile individual. We will initially attribute the following assets and liabilities
to our initial brands:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>95% of our ABI under the associated brand contract; </FONT></DD></DL>
</UL>
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<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>any and all of our liabilities, costs and expenses that are directly attributable to the associated tracking stock brand,
such as our direct costs arising out of our promotion of the associated brand or arising out of or related to the maintenance and enforcement of the associated brand contract; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>a pro rata share of our general liabilities, costs and expenses not directly attributable to any specific tracking stock
(calculated based on attributable income) but excluding any non-cash expenses that are allocated from our parent to us. Attributable expenses would include, for example, a pro rata portion of the
service fee we pay to our parent pursuant to the management agreement (5% of our cash receipts). Expenses that would not be attributed would include expenses incurred by our parent, including any
expenses incurred in providing services to us under the management agreement, to the extent in excess of our service fee to them; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>as income, any covered amounts, as described in "Management and Attribution
Policies&#151;Attribution&#151;Covered Amounts," for the associated brand contract; and </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>as an expense, the pro rata share of any covered amounts, as described in "Management and Attribution
Policies&#151;Attribution&#151;Covered Amounts," relating to any tracking stock brand (including the pro rata share of any covered amounts for the associated tracking stock brand). </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
EJ Manuel Brand, any of our other tracking stock brands, are not separate legal entities and cannot issue securities. Holders of shares of Fantex Series&nbsp;EJ Manuel will not
have an ownership interest in our EJ Manuel Brand, or any of our affiliated entities. Rather, investors in our Fantex Series&nbsp;EJ Manuel will be our common stockholders. The issuance of the
Fantex Series&nbsp;EJ Manuel will not result in the actual transfer of our assets or the creation of a separate legal entity. EJ Manuel and his affiliated persons are, and we expect they will
continue to be, individuals and legal entities that are separate and independent from us, with separate ownership, management and operations. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
described above, income (and assets) will generally be attributed to our Fantex Series&nbsp;EJ Manuel based on the income of the EJ Manuel Brand. However, if we do not receive cash
from one or more of our brand contracts to which we otherwise would have been entitled because of debtor relief laws, then the attributed income for the corresponding tracking stock will nonetheless
be credited with the amount that we would otherwise have been entitled to receive. In such a case, the difference between such attributed amount and the actual income we receive from such brand
contract will be attributed as a general expense of Fantex. As a result, each of our tracking stocks will share on a pro rata basis (calculated based on attributable income) the burden of any non-
performing brand contracts, whether or not included in the assets attributed to such tracking stock, and the economic performance of our Fantex Series&nbsp;EJ Manuel will be dependent, in part, upon
the aggregate financial performance of Fantex. Therefore, prior to purchasing our Fantex Series&nbsp;EJ Manuel, you should understand our aggregate operating performance and our aggregate assets and
liabilities. Until such time as we acquire additional brands, the risk of bankruptcy will be borne solely by holders of our Fantex Series&nbsp;EJ Manuel. Furthermore, we intend to acquire additional
minority interests in other brands in the future, so our operating performance will depend upon the soundness of our business plan and our ability to execute on that plan, including entering into
additional brand contracts in the future. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Given
that the economic performance of each of our tracking stocks is dependent, in part, upon the aggregate financial performance of Fantex, the Fantex Series&nbsp;EJ Manuel could be
affected by any of our current brand contracts or any additional brand contracts we may enter into. The risk profile of the shares of the Fantex Series&nbsp;EJ Manuel could likewise be materially
and adversely impacted by the performance of our other tracking stock brands, including any additional brand contracts entered into or tracking stock brands created subsequent to your investment in
the Fantex Series&nbsp;EJ Manuel. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
a more detailed description of our tracking stocks and tracking stock brands, please see "Management and Attribution Policies." </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>123</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2><B><I> Our Brand Contracts  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To date, we have entered into a brand contract with each of EJ Manuel, Vernon Davis and Arian Foster, whom we refer to individually as
a contract party and together as contract parties, and we intend to enter into additional brand contracts on an ongoing basis. The brand contracts entitle us to receive a specified percentage of the
contract party's brand income from and after the effective date of the brand contract. We refer to this percentage of brand income that we are entitled to under the brand contracts as our acquired
brand income, or ABI. Brand income generally means gross monies or other considerations that the contract party receives generally as a result of the contract party's skills and brand, including
salary and wages from being an NFL football player and activities generally in the sport of football (including NFL and non-NFL activities) and consists of other compensation from the contract party's
assignment of rights in his persona, including use of his name, voice, likeness, image, signature, talents, live or taped performances, in connection with motion pictures, television and Internet
programming, radio, music, literary, talent engagements, personal appearances, public appearances, records and recording, or publications; any use of his persona for purposes of advertising,
merchandising, or trade, including sponsorships, endorsements and appearances, and any other assignment of rights in his persona, to generate income; and any other personal services performed by the
contract party which are of the type typically performed by individuals in the field of football because of their status as a professional athlete or other professional within the field of football
(including, without limitation, sports casting, coaching, participating in sports camps, acting as spokesperson). </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Brand
income does not include:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>any cash receipts resulting from the contract party's investments in stocks or other equity, bonds, commodities,
derivatives, debt or real estate, so long as (a)&nbsp;such stocks or other equity, bonds, commodities, derivatives, debt investments and real estate are not received by him as compensation or
consideration for activities (including licensing of rights) in the "field" as defined in his brand contract, (b)&nbsp;the contract party is not obligated to provide any services related to the
"field" in connection with such investment and (c)&nbsp;the business or commercial venture related to such investment does not use the contract party's persona in its legal name or "dba," or in
connection with its marketing, advertising or promotion, </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>any income received from employment, services rendered or other activities not related to professional football and
related fields, </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>any reasonable reimbursement of incidental expenses actually incurred by the contract party, including without limitation,
travel, lodging, per diem and other incidental expenses, or the value of any such items paid by a third party on the contract party's behalf, </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>certain future pension and benefit payments under the CBA, except that income deferred pursuant to Article&nbsp;26,
Section&nbsp;6 of such CBA shall not be deemed to be future pension payments and as such, shall be included in brand income; and </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>merchandise, services or service plans or merchandise, service or service plan credit up to the lesser of $40,000 and 4%
of all brand income during any applicable calendar year and as otherwise agreed by Fantex in its discretion; and </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>any otherwise specifically excluded income under each brand contract. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each
contract party will retain the remainder of his brand income (total brand income less the ABI), subject to other encumbrances that he may have with respect to such income (such as
commissions payable to agents and other parties). However, pursuant to the brand contracts, each contract party has agreed that he will not encumber more than an additional 10% of his brand income
from his NFL player contracts and 30% of his other brand income in any given year. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>124</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
consideration for the ABI under the brand contract, we will pay the contract party a one-time cash amount of the purchase price negotiated under each brand contract (less 5% of the
purchase price to be held in escrow until six months of consecutive payments due under the brand contract have been timely delivered to us) contingent upon our ability to obtain financing for the
purchase price. We intend to finance the purchase price of each brand contract through the issuance of a tracking stock linked to the value of such brand. Our ABI under each brand contract is
contingent upon our payment of this purchase price. We will have no further financial obligation to the contract parties under a brand contract once this payment has been made, other than the
indemnities described below. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition to the escrow holdback (which will be released after six consecutive months of timely payments of the ABI to us after the closing of the respective offerings), the brand
contracts provide for certain express remedies (without limiting any other rights or remedies that we may have) in the event of late payments, including payment of interest at the then current prime
rate plus 3% per year, compounded monthly, and public disclosure of such late payments (subject to notice and an opportunity to cure with respect to the first or second such late payment in any
12&nbsp;month period). </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
brand contracts are intended to remain in effect indefinitely and, except as set forth below, may be terminated only upon mutual agreement of the contract party and us. If the
contract party resigns from the NFL within two years of the date of this offering for any reason other than a "good reason," we may elect in our sole discretion to terminate the brand contract and the
contract party will be required to pay us the amounts set forth under the heading "Termination Fee Payable by Contract Party" in the section entitled "&#151;Fantex&#151;Overview" (net of
any amounts previously paid to us by him pursuant to the respective brand contract). </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"Good
reason" means resignation from the NFL for any of the following reasons:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>contract party suffers or sustains any injury, illness or medical condition that renders him incapable of performing in
professional football; or </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>contract party suffers or sustains a major injury and a qualified medical physician (depending on the nature of the major
illness) advises him that as a result he would be putting his physical health at substantial risk (i.e.,&nbsp;a risk that is substantially greater than simply by virtue of his participation in
professional football) by continuing to engage in professional football. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each
of the contract parties has made certain other covenants to us in the brand contract, including providing us with certain information and audit rights, and copies of all new
material agreements, amendments or terminations. They have further agreed to comply with applicable laws and rules and standards or requirements of the league or other association or governing body,
to which he is a member in connection with being an NFL football player. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Following
the closing of this offering with respect to the brand contract with EJ Manuel, or the consummation of the offerings of additional tracking stocks linked to the value of our
other tracking stock brands, and pursuant to each brand contract, the contract party will provide irrevocable instructions to each payor of brand income (requiring them to pay the amounts owed to us
directly) and such other documents as we reasonably request. To the extent that it is not commercially practical, without unreasonable burden to the contract party, for ABI to be delivered directly to
us, or to the extent that any assignment of the ABI (or any portion thereof) is deemed invalid or not enforceable, then the contract party is required to make such payments to us as promptly as
practical after receipt thereof (but not later than 15&nbsp;days after receipt) including via automatic payments of installments from his bank accounts. We will not know whether there will be any
challenges that could affect whether payments will be made directly by each payor or from the contract party as described in this paragraph until after the payors respond to the irrevocable payment
instructions to be delivered by the contract party to such payors after the consummation of the respective offerings. To the extent that any </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>125</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>assignment
of such amounts (including wages) is effective under the relevant state law, we may seek to enforce our rights to receive such amounts directly from the payor. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each
of the contract parties has agreed to indemnify us against damages that may result in connection with his breach of any covenants, representations or warranties in the brand
contract with such contract party. We agreed to indemnify each contract party (and his heirs and assigns) against any third-party
lawsuit arising from the contract party being a party to a brand contract with us, including claims relating to (a)&nbsp;any breach of our representations and warranties in the brand contract,
(b)&nbsp;any violation of law by us and (c)&nbsp;our registration statement with respect to the related offering of tracking stock associated with such contract party, other than, in each case,
those arising out of or relating to any breach of the brand contract by the contract party. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Brand Income  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Brand income, as defined above, from each of our contract parties is generally derived from such contract party's NFL player contracts
and other included contracts described in further detail below. Due to the fact that payments under the NFL player contract, and some of the other included contracts, are usually made over the course
of the regular NFL season period, we expect that our tracking stock brands will be subject to seasonal fluctuations in attributed income. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
player contracts for each of the contract parties generally provide, except as otherwise indicated below, that payments are made in installments over the course of the applicable
regular season period. Each of these payments would be considered brand income when received by the contract parties, and thus we would be entitled to our ABI from these amounts, when paid. To the
extent any of our contract parties elects to defer receipt of his compensation under the NFL player contract, pursuant to Article&nbsp;26, Section&nbsp;6 of the CBA, for purposes of the brand
contract, such deferred compensation will be deemed to have been received by such contract party on the due date provided in his NFL player contract, prior to any such deferral, and we will be
entitled to our ABI from these amounts as of such due date. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
player contracts further provide that if the contract party is injured or dies in the performance of his services under the player contract then the contract party will receive
necessary medical and hospital care during the term of the player contract and will continue to receive his yearly salary during the season of injury or death only (including any guaranteed amounts). </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unless
otherwise stated in the player contract, the NFL teams may generally terminate the player contract at any time, in the sole judgment of the team, if the contract party's skill or
performance has been unsatisfactory as compared with that of other players competing for positions on the team's roster, or if the contract party has engaged in personal conduct reasonably judged by
the team to adversely affect or reflect on the team. In addition, during the period any salary cap is legally in effect, the player contract may be terminated if, in the team's opinion, the contract
party is anticipated to make less of a contribution to the team's ability to compete on the playing field than another player or players whom the team intends to sign or attempts to sign, or another
player or players who is or are already on the team's roster, and for whom the team needs room. The team may also terminate the player contract if the contract party fails to establish or maintain his
excellent physical condition to the satisfaction of the team's physician, or make the required full and complete disclosure and good faith responses to the team's physician of any physical or mental
condition known to him which might impair
his performance under this contract and to respond fully and in good faith when questioned by the team's physician about such condition. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition, the contract party's endorsement agreements and other included contracts may be terminated in the event of breach of contract by the contract party or if the contract party
fails to play in the NFL, is charged with criminal behavior or engages in conduct that adversely reflects on the sponsor. For example, as a result of Vernon Davis tweeting about a competing product, a
coconut </FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>water
company recently terminated its contract with him as a spokesperson. In addition, certain endorsement contracts may be terminated due to changes to NFL rules preventing reasonable use of the
endorsement product. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> EJ Manuel Brand  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> EJ Manuel Brand Contract  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On February&nbsp;14, 2014, we entered into a brand contract with EJ Manuel and Kire Enterprises&nbsp;LLC, a professional services
company affiliated with EJ Manuel. This brand contract entitles us to receive 10% of EJ Manuel's brand income from and after February&nbsp;14, 2014. As consideration for the ABI under the brand
contract, we will pay EJ Manuel a one-time cash amount of $4.98&nbsp;million (less $0.25&nbsp;million to be held in escrow until six months of consecutive payments due under the brand contract
have been timely delivered to us) contingent upon our ability to obtain financing for the purchase price. Our ABI under the brand contract is contingent upon our payment of the purchase price
following the consummation of this offering. We will have no further financial obligation to EJ Manuel under the brand contract once this payment has been made, other than the indemnities described
above. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> EJ Manuel  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EJ Manuel is a quarterback for the Bills in the NFL. He has been in the NFL since 2013. EJ Manuel attended Florida State University,
which finished 25-6 in games started by EJ Manuel. EJ Manuel was an All-Atlantic Coast Conference second team selection in 2012 and was the most valuable player in the 2013 Senior Bowl. EJ Manuel was
picked sixteenth overall in the first round of the 2013 NFL draft and signed with the Bills. EJ Manuel was the Bills starting quarterback for the 2013 season, but missed 6 games due to injury. EJ
Manuel was born on March&nbsp;19, 1990 and will be 24&nbsp;years old as of the start of the 2014 NFL season. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;According
to statistics publically available at NFL.com, EJ Manuel's passing and rushing statistics for the 2013 NFL season are as follows: </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> PASSING  </B></FONT></P>
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<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>G </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Att </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Comp </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Pct </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Att/G </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Yds </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Avg </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Yds/G </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>TD </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2013</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>Buffalo Bills</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>10</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>306</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>180</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>58.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>30.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1,972</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>6.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>197.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>11</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>TOTAL</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>10</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>306</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>180</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>58.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>30.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1,972</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>6.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>197.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>11</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
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 </DIV>
 <P style="font-family:times;"><FONT SIZE=2><B> RUSHING  </B></FONT></P>
 <DIV style="padding:0pt;position:relative;width:67%;margin-left:10%;">
<p style="font-family:times;"></FONT></P>

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<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="120%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="73pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="17pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="17pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="27pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="23pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="20pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="31pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="17pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH NOWRAP  ALIGN="LEFT" style="font-family:times;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:16pt;"><FONT SIZE=1><B>Year

<!-- COMMAND=ADD_SCROPPEDRULE,16pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Team </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>G </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Att </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Att/G </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Yds </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Avg </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Yds/G </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>TD </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2013</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>Buffalo Bills</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>10</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>53</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>5.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>186</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>3.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>18.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>TOTAL</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>10</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>53</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>5.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>186</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>3.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>18.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
vision for a brand identity for EJ Manuel is to associate him as "fearless." EJ Manuel has had a number of events throughout his life that serve as examples of his ability to succeed
in challenging circumstances that others might have shied away from. EJ Manuel has become a successful football player and intends to use his status as an NFL quarterback to help others. As one of the
first athletes to sign a brand contract with us, he is demonstrating how athletes can look to build and potentially enhance their brands. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
part of our due diligence of EJ Manuel we reviewed financial and other information from him to evaluate financial suitability and brand sustainability (including credit worthiness).
Other than what has been disclosed elsewhere in this prospectus, we have not been made aware by EJ Manuel of any </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>127</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2><A
HREF="#bg10401a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>events
or incidents (personal or otherwise) relating to EJ Manuel that we believe would materially negatively impact the EJ Manuel Brand going forward. Among other things we reviewed schedules of his
assets and liabilities and existing commitments, tax returns and credit reports and credit scores. Based on our review we concluded that as of February&nbsp;14, 2014, EJ Manuel is a sound credit
risk with sufficient financial health and stability, with prudent and manageable levels of indebtedness and other liabilities, to make required payments to us under his brand contract, including if
necessary the repayment to us of approximately $5.23&nbsp;million if he retires from professional football within two years of the date of this offering for any reason other than a "good reason."
For instance, as part of our due diligence, we were provided information that showed that EJ Manuel has substantial amounts of cash and liquid investments and limited debt, with an asset-to-debt ratio
of greater than 5 to 1. In addition, as of February&nbsp;14, 2014, EJ Manuel's current assets exceed his current liabilities by an amount at least equal to the anticipated ABI payments to us for the
next 24&nbsp;months. As a result, we have concluded that he is a sound credit risk. Other than the $0.25&nbsp;million of the cash consideration to be held in escrow for six months, we have not
required EJ Manuel to place any additional funds in an escrow account as security to cover the repayment of $5.23&nbsp;million in the event he retires from professional football within two years
following completion of the offering for any reason other than a "good reason." In addition, we intend to monitor the creditworthiness and financial health and stability of EJ Manuel on a periodic
basis in the future through the information and audit rights that we have under our brand contract with him. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2><I> Quarterback Position  </I></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A quarterback in the NFL is the primary leader of the offense. The quarterback touches the ball on almost every offensive play, and as
his performance can have a significant impact on the success of his team, the quarterback is the most visible and scrutinized positions in professional football. Prior to each play, the quarterback
will tell the rest of his team which play the team will run; after the team is lined up, the center will pass the ball back between his legs to the quarterback (a process called the snap). Once the
quarterback has received the snap, he will do one of several things. On a running play, the quarterback will hand or pitch the ball backwards to a running back. On a passing play, the quarterback will
try and throw the ball downfield to a wide receiver, tight end, or running back. Additionally, the quarterback can run with the ball himself. This could be part of a designed play like the option run
or quarterback sneak, or it could be an impromptu effort to avoid being sacked by the defense. In general, quarterbacks need to have physical skills such as arm strength, mobility, and quick throwing
motion, in addition to intangibles such as competitiveness, leadership, intelligence, and downfield vision. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
salary for an NFL football player is highly dependent upon his perceived ranking against other players in the position. All Pro or Pro Bowl caliber players generally receive
significantly higher compensation than players that are less well known. In particular, the top quarterbacks in the NFL are among the highest paid players in the NFL. Based on media reports, the
average annual compensation of the five highest paid quarterbacks for the 2013 season was nearly $20.41&nbsp;million. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based
on our analysis, the average career length of an NFL quarterback who was retired at the end of the 2013 NFL and qualified for the NFL passing title in his rookie season between
1980 and 2012 is approximately 10.32&nbsp;years. This group consisted of 28 NFL quarterbacks. Utilizing the methodology described under "Management's Discussion and Analysis of Financial Condition
and Results of Operations&#151;Critical Accounting Policies," we estimated EJ Manuel's expected career length to be 10&nbsp;years. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> EJ Manuel Brand Income  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The information below is a summary of currently effective contracts of EJ Manuel that are included in his brand income. We refer to
these as included contracts. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>128</FONT></P>

<HR NOSHADE>
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<P style="font-family:times;"><FONT SIZE=2><A
HREF="#bg10401a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I> Included Contracts  </I></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The table below lists the included contracts as of February&nbsp;28, 2014: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:100%;margin-left:0%;">
<p style="font-family:times;"></FONT></P>

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<TD WIDTH="31%" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="31%" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="31%" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH NOWRAP  ALIGN="LEFT" style="font-family:times;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:47pt;"><FONT SIZE=1><B>Counterparty

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 </B></FONT></DIV></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Type of contract </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Product category </B></FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>Buffalo Bills,&nbsp;Inc.&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>NFL Player Contract</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>N/A</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>Panini America,&nbsp;Inc.&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>Endorsement</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>Sports Cards</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>Panini Authentic,&nbsp;Inc.&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>Endorsement</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>Sports Cards</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>The Topps Company,&nbsp;Inc.&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>Endorsement</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>Sports Cards</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>NIKE USA,&nbsp;Inc.&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>Endorsement</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>Athletic Apparel</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>The Upper Deck Company,&nbsp;Inc.&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>Endorsement</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>Sports Cards and Memorabilia</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>Northtown Chrysler Jeep Dodge Ram</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>Merchandise</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>Automobile</FONT></TD>
</TR>
</TABLE></DIV>
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 </DIV>
 <P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table shows historical information of cash receipts for included contracts for the year ended December&nbsp;31, 2013, and is derived from our audited statements of cash
receipts from included contracts, included elsewhere in this prospectus. </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:times;"></FONT></P>

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<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="69pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Year Ended<BR>
December 31, 2013 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(in thousands)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Receipts from included contracts subject to the brand contract<SUP>(1)</SUP></B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Contractual National Football League (NFL) player receipts<SUP>(2)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>405</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Contractual NFL player signing bonus receipts</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>4,842</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="TOP">
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




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&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="TOP">
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0.1pt;" -->


 </font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total receipts from NFL player contract</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>5,247</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Receipts from other included contracts</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>467</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Total receipts from included contracts subject to the brand contract</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>5,714</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="TOP">
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0pt;" -->


&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="TOP">
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0.1pt;" -->


 </font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="TOP">
<TD VALIGN="BOTTOM" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




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 </font>&#8203;</TD>
<TD VALIGN="BOTTOM" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="TOP">
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">


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&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
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 </DIV>
<DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">
 <DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Please
see Notes&nbsp;1 and 2 to the audited statements of cash receipts from included contracts for EJ Manuel for an explanation of the basis of
presentation and summary of significant accounting policies used in presenting these amounts. Receipts shown are for historical periods and are not necessarily indicative of future expected receipts
from current or future included contracts for any period.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(2)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>NFL
Player Contract amounts were paid in installments over the course of the applicable regular season period; therefore, a portion of the amounts payable
for the 2012 season was paid 2013.  </FONT></DD></DL>
 </DIV>
 <P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following summaries include descriptions of contracted cash receipts for future years under the included contracts, assuming that the parties perform their obligations under the
included contracts and none of the included contracts are amended, renegotiated or terminated prior to the expected termination date of the included contracts, as well as a summary of material terms
of the included contracts. There can be no assurance that the parties will perform their obligations under the included contracts or that cash receipts with respect to the EJ Manuel Brand will equal
or exceed the aggregate annual cash receipts described in the following summaries. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>129</FONT></P>

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</FONT> <FONT SIZE=2>
<A HREF="#bg10401a_main_toc">Table of Contents</A> </FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2><I> NFL Player Contract&#151;Buffalo Bills (the Bills)  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EJ Manuel will enter into the second year of a four year player contract with the Bills, with a fifth year option exercisable by the
Bills, pursuant to which EJ Manuel is eligible to receive the following compensation (amounts in thousands and unaudited): </FONT></P>
 <DIV style="padding:0pt;position:relative;width:73%;margin-left:10%;">
<p style="font-family:times;"></FONT></P>

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<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="39pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="39pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="39pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="39pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="37pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="55pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=14 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Playing Season </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Total<BR>
(2013-2017) </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2013 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2014 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2015 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2016 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2017<SUP>(4)</SUP> </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>NFL Player Salary<SUP>(1)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>405</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>809</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,213</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,617</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>4,044</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Signing Bonus</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>4,842</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>4,842</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Appearance Fees<SUP>(2)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>25</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>25</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>25</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>25</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>125</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Post-Season and Pro Bowl Compensation<SUP>(3)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>189</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>198</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>210</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>219</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>816</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Total </B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><B>5,247</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><B>1,023</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><B>1,436</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><B>1,852</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><B>244</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><B>9,802</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Maximum Available Brand Income Under the NFL Player Contract </B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><B>&#151;</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><B>1,023</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><B>1,436</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><B>1,852</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><B>244</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><B>4,555</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
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 </DIV>
<DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">
 <DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>All
amounts are payable in equal weekly or bi-weekly installments over the course of the applicable regular season period, commencing with the first regular
season game played by the Bills in each season, reduced on a pro rata basis for any portion of a season that EJ&nbsp;Manuel is not on the active roster for the Bills. Does not include payment of
incidental expenses or reasonable reimbursement of incidental expenses incurred by the contract party, including travel, lodging, per diem and other incidental expenses, which amounts are not included
in brand income. The NFL Player salary for the 2013, 2014, 2015 and 2016 NFL Seasons are subject to the conditional skill, injury and salary cap guarantee. Therefore, in the event that during these
contract years the Bills terminate the NFL payer contract (1)&nbsp;because in the sole judgment of the Bills, EJ Manuel's skill or performance has been unsatisfactory as compared with that of other
players competing for positions on the Bill's roster, (2)&nbsp;for salary cap reasons or (3)&nbsp;due to professional football injury EJ&nbsp;Manuel is unable to perform his services under the
NFL player contract, then EJ Manuel will receive his NFL Player Salary.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(2)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>EJ
Manuel is required to make five appearances under his NFL player contract with the Bills for promotional or charitable purposes for which he shall be
compensated, if at all, in amounts no greater than $5,000 per appearance.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(3)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Amounts
payable for post-season play and Pro Bowl participation are defined in Articles&nbsp;37 and 38 of the NFL CBA. No amounts were due for post-season
play in the 2013 season. Amounts reflected for seasons 2014 and beyond assume that EJ Manuel qualifies for the maximum available payments under the CBA for being a wild card division winner, appearing
in a division playoff game, conference championship game and for winning the Super Bowl.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(4)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>2017
compensation amounts apply only if the Bills exercise their option to extend the contract through the 2017 season.  </FONT></DD></DL>
 </DIV>
 <P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>130</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<P style="font-family:times;"><FONT SIZE=2><A
HREF="#bg10401a_main_toc">Table of Contents</A></FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2><I> Other Included Contracts  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following are aggregate compensation ranges under the included contracts other than the NFL player contract: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:times;"></FONT></P>

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<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="51pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="51pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="51pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="51pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=11 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Year Ending December&nbsp;31, </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2014 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2015 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2016 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2017 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=11 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(unaudited)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Other Included Contracts</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Contractual amounts from other included Contracts<SUP>(1)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>269,700</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>85,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>85,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>25,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Contingent contract performance incentive amounts<SUP>(2)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>225,050</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>110,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>117,500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>90,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Maximum amounts due under other included
contracts&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><B>494,750</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><B>195,000</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><B>202,500</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><B>115,000</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0pt;font-family:times;">


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&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->





<!-- COMMAND=ADD_GUTTERGRID,"line-height:0.1pt;" -->


 </font>&#8203;</TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0.75pt;" -->


 </font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
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<TD ALIGN="RIGHT" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
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<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
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 <DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Includes
contractual amounts due under the following included contracts: The Upper Deck Company,&nbsp;Inc., Panini America,&nbsp;Inc., Panini
Authentic,&nbsp;Inc., NIKE USA,&nbsp;Inc., The Topps Company,&nbsp;Inc., Northtown Chrysler Jeep Dodge Ram.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(2)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Contingent
amounts include compensation for additional performance and other milestone payments, including $75,000 for being awarded the NFL MVP in each
contract year, under the endorsement agreement with Panini America,&nbsp;Inc., Panini Authentic,&nbsp;Inc., NIKE USA,&nbsp;Inc., The Topps Company,&nbsp;Inc., which payments may never be
earned by BJ&nbsp;Manuel.  </FONT></DD></DL>
 </DIV>
 <P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EJ
Manuel currently has ongoing endorsement contracts or license agreements with The Upper Deck Company,&nbsp;Inc., Panini America,&nbsp;Inc., Panini Authentic,&nbsp;Inc., NIKE
USA,&nbsp;Inc., The Topps Company,&nbsp;Inc., Northtown Chrysler Jeep Dodge Ram. These endorsement contracts generally have terms that end in 2016, with one contract extending to 2017, and require
EJ Manuel to exclusively endorse certain categories of products, make certain appearances, participate in the production of promotional materials and social media activities and sign autographs. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Other Brands  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Vernon Davis Brand  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I> Vernon Davis Brand Contract  </I></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On October&nbsp;30, 2013 we entered into a brand contract with Vernon Davis and The Duke Marketing&nbsp;LLC, a professional
services company affiliated with Vernon Davis. This brand contract entitles us to receive 10% of Vernon Davis's brand income from and after October&nbsp;30, 2013. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition to the exclusions laid out above under "&#151;Our Brand Contracts," brand income does not include the following specifically excluded
income:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>any income of: (1)&nbsp;the Vernon Davis Foundation or (2)&nbsp;any other charitable foundation or organization as a
result of personal services performed by Vernon Davis, </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>any proceeds of the insurance policy purchased by Vernon Davis against the risk of injury or disability, </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>income derived from his performance as a painter, sculptor or artist in any other fine or graphic arts medium, related of
Gallery 85 or any other art gallery owned by him or from any school for the arts established in part by him, whether charitable or for profit, regardless of whether he participates or his persona is
used to market or promote such school), and </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>any and all cash or other consideration, in any form whatsoever, received by Vernon Davis from the following entities (or
their affiliates as agreed as of October&nbsp;30, 2013): (1)&nbsp;Ike Shehadeh and Ike's Love&nbsp;&amp; Sandwiches Franchising&nbsp;LLC and (2)&nbsp;Jamba Juice Company. </FONT></DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>131</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2><A
HREF="#bg10401a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
consideration for the ABI under the brand contract, we will pay Vernon Davis a one-time cash amount of $4.0&nbsp;million (less $0.2&nbsp;million to be held in escrow until six
months of consecutive payments due under the brand contract have been timely delivered to us) contingent upon our ability to obtain financing for the purchase price. Our ABI under the brand contract
is contingent upon our payment of the purchase price following the consummation of an offering of shares of our Fantex Series Vernon Davis. We will have no further financial obligation to Vernon Davis
under the brand contract once this payment has been made, other than the indemnities described above. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I> Vernon Davis  </I></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Vernon Davis is a tight end for the San Francisco 49ers, or the 49ers, in the NFL. He has been in the NFL since 2006. Vernon Davis
attended the University of Maryland, where he was the starting tight end for his sophomore and junior seasons. Vernon Davis entered the NFL draft after his junior year and was selected in the first
round, 6<SUP>th</SUP>&nbsp;overall, by the San Francisco 49ers. Vernon Davis was born on January&nbsp;31, 1984 and is 30&nbsp;years old as of February&nbsp;28, 2014. He currently lives in
San Jose, California. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During
the 2009 NFL season, Vernon Davis was selected to the Pro Bowl after posting career highs of 78 receptions, 965 yards, and 13 touchdown receptions. At the time, that number of
touchdown receptions tied the NFL single season record for a tight end. According to statistics publically available at NFL.com, Vernon Davis's total receptions and receiving yards during each of the
seven prior seasons he has played in the NFL are as follows: </FONT></P>
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<p style="font-family:times;"></FONT></P>

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<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="51pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="45pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TH NOWRAP  ALIGN="LEFT" style="font-family:times;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:43pt;"><FONT SIZE=1><B>NFL Season

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 </B></FONT></DIV></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Receptions </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Receiving<BR>
Yards </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2006</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>20</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>265</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2007</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>52</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>509</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2008</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>31</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>358</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2009</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>78</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>965</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2010</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>56</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>914</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2011</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>67</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>792</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2012</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>41</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>548</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
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 </DIV>
 <P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
vision for a brand identity for Vernon Davis is to associate him as "transformational." Vernon Davis has had many inflection points throughout his life that serve as powerful
examples of his ability to persevere and evolve through challenging circumstances. Vernon Davis has become a successful football player, team leader, student of the arts, philanthropist, and
entrepreneur. As one of the first athletes to sign a brand contract with us, he is helping transform how athletes look to build and enhance their brands. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
part of our due diligence of Vernon Davis we reviewed financial and other information from him to evaluate financial suitability and brand sustainability (including credit
worthiness). Other than what has been disclosed elsewhere in this prospectus, we have not been made aware by Vernon Davis of any events or incidents (personal or otherwise) relating to Vernon Davis
that we believe would materially negatively impact the Vernon Davis Brand going forward. Among other things we reviewed schedules of his assets and liabilities and existing commitments, tax returns
and credit reports and credit scores. Based on our review we concluded that as of October&nbsp;30, 2013 Vernon Davis is a sound credit risk with sufficient financial health and stability, with
prudent and manageable levels of indebtedness and other liabilities, to make required payments to us under his brand contract, including if necessary the repayment to us of approximately
$4.2&nbsp;million if he retires from professional football within two years of the date of the offering of shares of our Fantex Series Vernon Davis for any reason other than a "good reason." For
instance, as part of our due diligence, we were provided information that showed that Vernon Davis has substantial amounts of cash and liquid investments and limited debt, with an asset-to-debt ratio
of greater than 4 to 1. In addition, as of October&nbsp;30, 2013, Vernon </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>132</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2><A
HREF="#bg10401a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>Davis's
current assets exceed his current liabilities by an amount at least equal to the anticipated ABI payments to us for the next 24&nbsp;months. As a result, we have concluded that he is a sound
credit risk. Other than the $0.2&nbsp;million of the cash consideration to be held in escrow for six months, we have not required Vernon Davis to place any additional funds in an escrow account as
security to cover the repayment of $4.2&nbsp;million in the event he retires from professional football within two years following completion of the offering. In addition, we intend to monitor the
creditworthiness and financial health and stability of Vernon Davis on a periodic basis in the future through the information and audit rights that we have under our brand contract with him. </FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2><I> Tight End Position  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A tight end in the NFL is often seen as a hybrid position with the characteristics and roles of both an offensive lineman and a wide
receiver. Like offensive linemen, a tight end is usually lined up on the offensive line and is large enough to be an effective blocker. On the other hand, a tight end is an eligible receiver and must
be skilled enough to warrant a defense's
attention when running pass patterns. Because of the hybrid nature of the position, the tight end's role in any given offense depends on the tactical preferences and philosophy of the head coach and
offensive coordinator. In some systems, the tight end will merely act as a sixth offensive lineman rarely going out for passes. Other systems utilize the tight end primarily as a receiver, frequently
taking advantage of the tight end's size and speed to create mismatches in the defensive secondary. Many coaches will often have one tight end who specializes in blocking in running situations while
utilizing a better pass catching tight end in obvious passing situations. Top tight ends in the NFL usually excel as both a blocker and receiver. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
salary for an NFL football player is highly dependent upon his perceived ranking against other players in the position. All Pro or Pro Bowl caliber players generally receive
significantly higher compensation than players that are less well known. Based on media reports, the average annual compensation of the five highest paid tight ends for the 2012 season was
approximately $7.1&nbsp;million. Vernon Davis is reported to make the second highest annual compensation for tight ends in the 2013 season. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NFL
players in the tight end position are generally considered to reach their peak at approximately 26&nbsp;years of age, and a sharp decline in performance is generally observed at
approximately 30&nbsp;years of age. Based on our analysis of data from publicly available sources, the average career length of an NFL tight end is approximately 5.5&nbsp;years. Our analysis
included the 212 NFL tight ends drafted in rounds one through seven between 1990 and 2010, who recorded at least one career NFL reception and were no longer playing at the start of the 2013 NFL
season. Utilizing the methodology described under "Management's Discussion and Analysis of Financial Condition and Results of Operations&#151;Critical Accounting Policies," we estimated Vernon
Davis's expected career length to be 14&nbsp;years. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I> Vernon Davis Brand Income  </I></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The information below is a summary of currently effective contracts of Vernon Davis that are included in his brand income. We refer to
these as included contracts. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>133</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2><A
HREF="#bg10401a_main_toc">Table of Contents</A></FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2><I> Included Contracts  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The table below lists the included contracts as of October&nbsp;30, 2013: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:100%;margin-left:0%;">
<p style="font-family:times;"></FONT></P>

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<TH NOWRAP  ALIGN="LEFT" style="font-family:times;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:47pt;"><FONT SIZE=1><B>Counterparty

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 </B></FONT></DIV></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Type of contract </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Product category </B></FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2>San Francisco Forty Niners, Limited</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>NFL Player Contract</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>N/A</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2>KGO-TV</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>Television</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>Sports Commentary</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2>Krave Pure Foods,&nbsp;Inc.&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>Endorsement</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>Food</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2>Hungry Fish Media,&nbsp;LLC (d/b/a NutraClick)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>Endorsement</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>Nutrition</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2>New League Productions,&nbsp;Inc.&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>Television</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>TV Appearances</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table shows historical information of cash receipts for included contracts for the years ended December&nbsp;31, 2012 and 2013, and is derived from our audited statements
of cash receipts from included contracts, included elsewhere in this prospectus. </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:times;"></FONT></P>

<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="39pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="39pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Year Ended<BR>
December&nbsp;31, </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2012 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2013 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(in thousands)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Receipts from included contracts subject to the brand contract<SUP>(1)</SUP></B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Contractual National Football League (NFL) player receipts<SUP>(2)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>5,751</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>6,072</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Contractual NFL player signing bonus receipts</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Contractual NFL post season roster incentive receipts</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>62</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>156</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Contractual NFL player performance incentives receipts</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>600</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>601</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="TOP">
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">



<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0pt;" -->


&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="TOP">
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0.1pt;" -->


 </font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total receipts from NFL player contract</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>6,413</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>6,829</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Receipts from other included contracts</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>227</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>382</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Total receipts from included contracts subject to the brand contract</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>6,640</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>7,211</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="TOP">
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0pt;" -->


&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="TOP">
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0.1pt;" -->


 </font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="TOP">
<TD VALIGN="BOTTOM" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0.75pt;" -->


 </font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="TOP">
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0pt;" -->


&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->


<!-- COMMAND=ADD_LINERULETXT,NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="26%" ALIGN="LEFT" -->
<HR NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="26%" ALIGN="LEFT" >
 </DIV>
<DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">
 <DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Please
see Notes&nbsp;1 and 2 to the audited statements of cash receipts from included contracts for Vernon Davis for an explanation of the basis of
presentation and summary of significant accounting policies used in presenting these amounts. Receipts shown are for historical periods and are not necessarily indicative of future expected receipts
from current or future included contracts for any period.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(2)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>NFL
Player Contract amounts were paid in installments over the course of the applicable regular season period; therefore, a portion of the amounts payable
for the 2011 and 2012 seasons were paid in 2012 and 2013, respectively.  </FONT></DD></DL>
 </DIV>
 <P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following summaries include descriptions of contracted cash receipts for future years under the included contracts, assuming that the parties perform their obligations under the
included contracts and none of the included contracts are amended, renegotiated or terminated prior to the expected termination date of the included contracts, as well as a summary of material terms
of the included contracts. There can be no assurance that the parties will perform their obligations under the included
contracts or that cash receipts with respect to the Vernon Davis Brand will equal or exceed the aggregate annual cash receipts described in the following summaries. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>134</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=5,SEQ=139,EFW="2218564",CP="FANTEX INC.",DN="1",CHK=924393,FOLIO='134',FILE='DISK116:[14ZAT1.14ZAT10401]EC10401A.;16',USER='MBRADT',CD='28-FEB-2014;16:12' -->
<A NAME="page_ec10401_1_135"> </A>

<P style="font-family:times;"><FONT SIZE=2><A
HREF="#bg10401a_main_toc">Table of Contents</A></FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2><I> NFL Player Contract&#151;San Francisco Forty Niners (the 49ers)  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Vernon Davis has completed the fourth year of a six year player contract with the 49ers, pursuant to which Vernon Davis is eligible to
receive the following compensation (amounts in thousands and unaudited): </FONT></P>
 <DIV style="padding:0pt;position:relative;width:62%;margin-left:10%;">
<p style="font-family:times;"></FONT></P>

<!-- COMMAND=ADD_TABLEWIDTH,"130%" -->

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="130%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="42pt" style="font-family:times;"></TD>
<TD WIDTH="16pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="37pt" style="font-family:times;"></TD>
<TD WIDTH="16pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="37pt" style="font-family:times;"></TD>
<TD WIDTH="16pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="37pt" style="font-family:times;"></TD>
<TD WIDTH="16pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="37pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="37pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="55pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=17 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Playing Season </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Total<BR>
(2010-2015) </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2010 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2011 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2012 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2013 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2014 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2015 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>NFL Player Salary<SUP>(1)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>3,874</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><SUP>(2)</SUP></FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>4,708</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><SUP>(2)</SUP></FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5,751</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><SUP>(3)</SUP></FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>6,072</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>4,700</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>4,350</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>29,455</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Signing Bonus</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>6,500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><SUP>(2)</SUP></FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>3,500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><SUP>(2)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>10,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Roster Bonus<SUP>(4)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>400</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>400</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>400</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>400</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>400</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Workout Bonus<SUP>(5)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>200</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>200</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>200</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>200</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>200</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Post-Season and Pro Bowl Compensation<SUP>(6)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>62</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>156</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>84</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>189</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>198</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>689</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:18pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Total </B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><B>10,374</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><B>8,870</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><B>6,507</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><B>6,756</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><B>5,489</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><B>5,148</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><B>43,144</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Maximum Available Brand Income Under the NFL Player Contract </B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><B>&#151;</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><B>&#151;</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><B>&#151;</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><B>3,499</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><B><SUP>(7)</SUP></B></FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><B>5,489</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><B>5,148</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><B>14,136</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
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 </DIV>
<DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">
 <DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>All
amounts are payable in equal weekly or bi-weekly installments over the course of the applicable regular season period, commencing with the first regular
season game played by the 49ers in each season, reduced on a pro rata basis for any portion of a season that Vernon Davis is not on the active roster for the 49ers. Does not include payment of
incidental expenses or reasonable reimbursement of incidental expenses incurred by the contract party, including travel, lodging, per diem and other incidental expenses, which amounts are not included
in brand income.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(2)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Amounts
guaranteed and fully earned.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(3)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>$4,418,000
of 2012 NFL Player Salary is guaranteed. All amounts due in 2012 were earned.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(4)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>During
each of the 2011, 2012, 2013, 2014 and 2015 NFL Seasons, Vernon Davis has received and will receive a $25,000 "Roster Bonus" for every game in which
he is a member of the 49ers 45-Man Active List. Vernon Davis earned the maximum Roster Bonus amount of $400,000 in 2011 and 2012 and $375,000 in 2013. Vernon Davis was listed as inactive on the 49ers
regular season game on September&nbsp;22, 2013, and therefore is only be eligible to receive $375,000 in Roster Bonuses during the 2013 NFL Season.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(5)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>During
each of his 2011, 2012, 2013, 2014 and 2015 NFL Contract years, Vernon Davis has received and will receive a $200,000 "Workout Bonus" if he
participates in 90% or more of the 49ers off-season conditioning program in that respective year. Vernon Davis has earned this Workout Bonus in each of 2011, 2012 and 2013.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(6)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Amounts
payable for post-season play and Pro Bowl participation are defined in Articles&nbsp;37 and 38 of the NFL CBA. The amounts for post-season play in
the 2011 season include $40,000 paid as a result of appearing in a conference championship game and $22,000 paid for appearance in a divisional playoff game. The amounts for post-season play in the
2012 season include $50,000 paid for being selected to the winning team in the Pro Bowl, $44,000 paid for participating on the losing team in the Super Bowl, $40,000 paid as a result of appearing in a
conference championship game and $22,000 paid for appearance in a divisional playoff game. The amounts to be paid for post-season play in the 2013 season include $40,000 for appearing in a conference
championship game, $23,000 for appearing in a divisional playoff game and $21,000 for appearance in a wild card game. Amounts reflected for seasons 2014 and beyond, assuming that Vernon Davis
qualifies for the maximum available payments under the CBA for being a wild card division winner, appearing in a division playoff game, conference championship game and for winning the Super Bowl.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(7)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Calculated
based on payments made through October&nbsp;30, 2013 of $2,857,412 of base salary due under the player contract, $200,000 of the workout bonus
and $175,000 of the roster bonus remaining under the player contract with the 49ers, taking into account the $25,000 roster bonus not earned on September&nbsp;22, 2013. Vernon Davis has $3,214,588
left to be paid on his base salary, $200,000 in roster bonuses and $84,000 of post-season earnings. </FONT></DD></DL>
 </DIV>
 <P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>135</FONT></P>

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</FONT> <FONT SIZE=2>
<A HREF="#bg10401a_main_toc">Table of Contents</A> </FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2><I> Other Included Contracts  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following are aggregate compensation ranges under the included contracts other than the NFL player contract: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:times;"></FONT></P>

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<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="37pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="39pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="39pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="32pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=11 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Year Ending December&nbsp;31, </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2013<SUP>(1)</SUP> </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2014 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2015 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2016 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=11 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(unaudited)<BR>
(in thousands)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Other Included Contracts</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Contractual amounts from other included Contracts<SUP>(2)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>48.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>238.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>80.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>20.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Other included contract performance incentive amounts<SUP>(3)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>25.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>25.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>25.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="TOP">
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">


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&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="TOP">
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2>


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 </font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Total amounts from other included contracts </B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><B>48.3</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><B>263.0</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><B>105.0</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><B>45.0</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="TOP">
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">


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&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="TOP">
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2>


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 </font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="TOP">
<TD VALIGN="BOTTOM" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




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 </font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="TOP">
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">


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&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
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 </DIV>
<DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">
 <DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Excludes
amounts previously paid to Vernon Davis as of October&nbsp;30, 2013.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(2)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Includes
contractual amounts not yet paid as of October&nbsp;30, 2013 pursuant to the following included contracts: KGO-TV, Krave Pure Foods, New League
Productions and NutraClick. Does not include a September&nbsp;1, 2013 grant to Vernon Davis of options to purchase 12,000 shares of common stock of Krave Pure Foods because such date of grant was
prior to the effective date of the brand contract.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(3)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Contingent
amounts include compensation for additional performance under the endorsement agreement with Krave Pure Foods, including additional appearances
wearing the marks of Krave Pure Foods products.  </FONT></DD></DL>
 </DIV>
 <P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Vernon
Davis currently has ongoing endorsement contracts or license agreements with Hungry Fish Media,&nbsp;LLC (d/b/a/ NutraClick), Krave Pure Foods and KGO-TV. These endorsement
contracts have terms that end in 2016 and require Vernon Davis to exclusively endorse certain categories of products, make certain appearances, participate in the production of promotional materials
and social media activities and sign autographs. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Arian Foster Brand  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I> Arian Foster Brand Contract  </I></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On February&nbsp;28, 2013 we entered into a brand contract with Arian Foster and The Ugly Duck,&nbsp;LLC, a professional services
company affiliated with Arian Foster, and amended and restated such contract on May&nbsp;24, 2013 and August&nbsp;21, 2013. This brand contract, as amended, entitles us to receive 20% of Arian
Foster's brand income from and after February&nbsp;28, 2013. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition to the exclusions laid out above under "&#151;Our Brand Contracts," brand income does not include the following specifically excluded
income:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>income derived from: motion pictures and television (unless, in each case, Arian Foster either performs in the role of a
professional or amateur football player, or performs as himself), music (including writing, recording, publishing, artist management, touring), children's books, and any and all merchandising and
exploitation rights relating to any of these foregoing excluded categories; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>any and all cash or other consideration, in any form whatsoever, received by Arian Foster from the following entities (or
their affiliates as of February&nbsp;28, 2013): (A)&nbsp;Fuse Science,&nbsp;Inc. and (B)&nbsp;Mobli Media&nbsp;Inc.; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>$6.25&nbsp;million received by Arian Foster in March 2013 as the final payment to him from the Texans for his signing
bonus from the March&nbsp;5, 2012 contract with the Texans; or </FONT></DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>136</FONT></P>

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<!-- ZEQ.=1,SEQ=141,EFW="2218564",CP="FANTEX INC.",DN="1",CHK=725698,FOLIO='136',FILE='DISK116:[14ZAT1.14ZAT10401]EE10401A.;9',USER='CHE108053',CD='28-FEB-2014;05:04' -->
<A NAME="page_ee10401_1_137"> </A>

<P style="font-family:times;"><FONT SIZE=2><A
HREF="#bg10401a_main_toc">Table of Contents</A></FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>any merchandise credit (or value thereof) payable to Arian Foster pursuant to the agreement, dated effective as of
March&nbsp;1, 2012, between Arian Foster and Under Armour,&nbsp;Inc. and any merchandise credit of the same or lesser value in any renewals, extensions or amendments and/or restatements thereof
(but all other cash consideration under such contract is included in brand income). </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
consideration for the ABI under the brand contract, we will pay Arian Foster a one-time cash amount of $10.0&nbsp;million (less $0.5&nbsp;million to be held in escrow until six
months of consecutive payments due under the brand contract have been timely delivered to us) contingent upon our ability to obtain financing for the purchase price. Our ABI under the brand contract
is contingent upon our payment of the purchase price following the consummation of the offering of Fantex Series Arian Foster. We will have no further financial obligation to Arian Foster under the
brand contract once this payment has been made, other than the indemnities described below. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I> Arian Foster  </I></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Arian Foster is a running back for the Houston Texans, or the Texans, in the NFL. He has been in the NFL since 2009. Arian Foster
attended the University of Tennessee, where he was the starting running back for three seasons. Arian Foster went undrafted in the 2009 draft and signed with the Texans as an undrafted free agent.
Arian Foster was born on August&nbsp;24, 1986 and is 27&nbsp;years old as of February&nbsp;28, 2014. He currently lives in Houston, Texas with his wife, daughter and son. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During
the 2010 NFL season, Arian Foster was the leading rusher in the NFL with 1,616 rushing yards. Arian Foster was named First Team All Pro in 2010 and Second Team All Pro in 2011.
Arian Foster has also been selected to three Pro Bowl appearances, in each of the 2010, 2011 and 2012 seasons. In
addition, Arian Foster led the NFL in carries in 2012, with 351 (405, including post-season games) carries, and was in the top six in carries in 2011 and 2010 with 278 and 327 carries, respectively.
According to statistics publically available at NFL.com, Arian Foster's total carries and rushing yards during each of the four prior seasons he has played in the NFL are as follows: </FONT></P>
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<TH NOWRAP  ALIGN="LEFT" style="font-family:times;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:43pt;"><FONT SIZE=1><B>NFL Season

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 </B></FONT></DIV></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Carries </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Rushing<BR>
Yards </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2009</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>54</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>257</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2010</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>327</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1,616</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2011</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>278</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1,244</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2012</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>351</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1,424</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2013</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>121</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>542</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
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 </DIV>
 <P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
vision for a brand identity for Arian Foster is to associate him as a "trailblazer." Arian Foster is a modern-day professional athlete who wants to combine his on-field
accomplishments with a desire and confidence to forge his own path in his off-field interests, including poetry, philosophy, humanitarian interests, music and acting. For example, Arian Foster
recently appeared as himself on an episode of the television series Hawaii Five-O, and has also recently been cast as a professional running back in </FONT><FONT SIZE=2><I>Draft
Day</I></FONT><FONT SIZE=2>, a new film starring Kevin Costner. Arian Foster is more interested in being interested than being known as interesting. By being the first athlete to sign a brand contract
with us he is helping trailblaze a path for others and helping us in our mission to improve how athlete brands are defined and enhanced. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
part of our due diligence of Arian Foster we reviewed financial and other information from him to evaluate financial suitability and brand sustainability (including credit
worthiness). Other than what has been disclosed elsewhere in this prospectus, we have not been made aware by Arian Foster of any events or incidents (personal or otherwise) relating to Arian Foster
that we believe would materially
negatively impact the Arian Foster Brand going forward. Among other things we reviewed schedules of his assets and liabilities and existing commitments, tax returns and credit reports and </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>137</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<P style="font-family:times;"><FONT SIZE=2><A
HREF="#bg10401a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>credit
scores. Based on our review we concluded that as of October&nbsp;31, 2013 Arian Foster is a sound credit risk with sufficient financial health and stability, with prudent and manageable
levels of indebtedness and other liabilities, to make required payments to us under his brand contract, including if necessary the repayment to us of approximately $10.5&nbsp;million if he retires
from professional football within two years of the date of the offering of shares of our Fantex Series Arian Foster for any reason other than a "good reason." For instance, as part of our due
diligence, we were provided information that showed that Arian Foster has substantial amounts of cash and liquid investments and no debt, or in other words, a debt-to-asset ratio of zero. In addition,
as of October&nbsp;31, 2013, Arian Foster had no material current liabilities, and his current assets exceed his current liabilities by an amount at least equal to the anticipated ABI payments to us
for the next 24&nbsp;months. As a result, we have concluded that he is a sound credit risk. Other than the $0.5&nbsp;million of the cash consideration to be held in escrow for six months, we have
not required Arian Foster to place any additional funds in an escrow account as security to cover the repayment of $10.5&nbsp;million in the event he retires from professional football within two
years. In addition, we intend to monitor the creditworthiness and financial health and stability of Arian Foster on a periodic basis in the future through the information and audit rights that we have
under our brand contract with him. </FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2><I> Running Back Position  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The salary for an NFL football player is highly dependent upon his perceived ranking against other players in the position. All Pro or
Pro Bowl caliber players generally receive significantly higher compensation than players that are less well known. Based on media reports, the average annual compensation of the five highest paid
running backs for the 2012 season was approximately $9.8&nbsp;million. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NFL
players in the running back position are generally considered to reach their peak at approximately 25&nbsp;years of age, and a significant drop off in performance is generally
observed at approximately 30&nbsp;years of age. In addition, many commentators argue that a high number of carries in any one season, approaching 370 carries or more, may result in a decline in
performance in the following season. Arian Foster led the NFL in carries in 2012, with 351 (405, including post-season games), and was in the top six in carries in 2011 and 2010 with 278 and 327
carries, respectively. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
average career lengths of NFL players, and NFL running backs, has been widely reported and the reports vary significantly, but the average career length of an NFL running back has
been reported to be as little as less than three years. However, those averages may include groupings of players that are overly broad. For example, the NFLPA issued a report that included all players
on an active roster at the beginning of a season, which means that many of those players included in the sample may simply have a short career because they do not perform at a high enough level to be
the starting running back. As a result, they may either retire for lack of playing time, or be cut from the team for lack of skill, and this may happen in a relatively short period of time. Thus we
believe these averages are not meaningful in assessing the career length of a more specific profile. According to statistics publicly available and compiled by STATS&nbsp;LLC, the average career
length for a running back whose first year in the NFL was between 1980 and 1994 and who has been selected to at least one Pro Bowl is longer and approximately 9.5&nbsp;years. Further, we believe
that the most meaningful comparison for Arian Foster is to assess the average career length for a running back in the modern era (which we define as a running back who has retired from the NFL during
the 15-year period between 1997 and 2011), who was the featured back on their team, selected to at least one Pro Bowl and rushed for at least 1,000 yards in at least three of their first four full
seasons in which the running back played at least 13 games. According to statistics publicly available and compiled by STATS&nbsp;LLC, the average and </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>138</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<P style="font-family:times;"><FONT SIZE=2><A
HREF="#bg10401a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>median
career length of the running backs who fit this criteria is approximately 10.5&nbsp;years, and a complete list of these players who fit the above criteria are as follows: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:70%;margin-left:15%;">
<p style="font-family:times;"></FONT></P>

<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->

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<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="68pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH NOWRAP  ALIGN="LEFT" style="font-family:times;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=1><B>Player

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 </B></FONT></DIV></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Career Length<SUP>(1)</SUP> </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Barry Sanders</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>10</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Clinton Portis</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Corey Dillon</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>10</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Curtis Martin</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>12</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Deuce McAllister</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Eddie George</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Edgerrin James</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>11</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Emmitt Smith</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>15</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Fred Taylor</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>13</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Garrison Hearst</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>12</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Jamal Anderson</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Jamal Lewis</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>10</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Jerome Bettis</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>13</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>LaDainian Tomlinson</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>11</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Marcus Allen</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>16</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Marshall Faulk</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>13</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Priest Holmes</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>11</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Ricky Williams</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>13</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Robert Smith</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Rodney Hampton</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Rudi Johnson</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Shaun Alexander</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Terrell Davis</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Terry Allen</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>11</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Thurman Thomas</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>13</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Travis Henry</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Willie Parker</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->


<!-- COMMAND=ADD_LINERULETXT,NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="26%" ALIGN="LEFT" -->
<HR NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="26%" ALIGN="LEFT" >
 </DIV>
<DIV style="padding:0pt;position:relative;text-align:left;margin-left:15%;">
 <DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Career
Length is calculated by subtracting the first year the player played from the last year the player played. Therefore, even if a player missed an
entire season for injury or other reason, the year is nevertheless counted towards his Career Length.  </FONT></DD></DL>
 </DIV>
 <P style="font-family:times;"><FONT SIZE=2><I> Arian Foster Brand Income  </I></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The information below is a summary of currently effective contracts of Arian Foster that are included in his brand income. We refer to
these as included contracts. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>139</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=4,SEQ=144,EFW="2218564",CP="FANTEX INC.",DN="1",CHK=689143,FOLIO='139',FILE='DISK116:[14ZAT1.14ZAT10401]EE10401A.;9',USER='CHE108053',CD='28-FEB-2014;05:04' -->
<A NAME="page_ee10401_1_140"> </A>

<P style="font-family:times;"><FONT SIZE=2><A
HREF="#bg10401a_main_toc">Table of Contents</A></FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2><I> Included Contracts  </I></FONT></P>

</UL>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The table below lists the included contracts as of October&nbsp;31, 2013: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:times;"></FONT></P>

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<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="31%" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="31%" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH NOWRAP  ALIGN="LEFT" style="font-family:times;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:47pt;"><FONT SIZE=1><B>Counterparty

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 </B></FONT></DIV></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Type of contract </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Product category </B></FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Houston Texans</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>NFL Player Contract</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>N/A</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Under Armour,&nbsp;Inc.&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>Endorsement</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>Retail Clothing and Equipment</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Kroger Texas&nbsp;LP</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>Endorsement</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>Grocery</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>ProCamps,&nbsp;Ltd.&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>Endorsement</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>Sports Camps</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Gamebreaker Sports&nbsp;LLC</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>Endorsement</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>Sports Memorabilia</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Health Warrior,&nbsp;Inc.&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>Endorsement</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>Superfoods</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Saatchi and Saatchi North America,&nbsp;Inc.&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>Commercial</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>Automotive</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Pro Player Merch&nbsp;LLC</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>Licensed Apparel</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>Retail Clothing and Equipment</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>First Pick Productions&nbsp;LLC</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>Performer Daily Contract (Acting)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>N/A</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table shows historical information of cash receipts for included contracts for the years ended December&nbsp;31, 2012 and 2013, and is derived from our audited statements
of cash receipts from included contracts, included elsewhere in this prospectus. </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:times;"></FONT></P>

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<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="45pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="39pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Year Ended<BR>
December&nbsp;31, </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2012 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2013 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(in thousands)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Receipts from included contracts subject to the brand contract<SUP>(1)</SUP></B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Contractual National Football League (NFL) player receipts<SUP>(2)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>4,540</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>5,248</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Contractual NFL player signing bonus receipts</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>6,250</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><SUP>(3)</SUP></FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Contractual NFL post season roster incentive receipts</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>69</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Contractual NFL player performance incentives receipts<SUP>(4)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>406</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>344</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="TOP">
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">


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<!-- COMMAND=ADD_GUTTERGRID,"line-height:0pt;" -->


&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="TOP">
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0.1pt;" -->


 </font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total receipts from NFL player contract</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>11,196</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>5,661</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Receipts from other included contracts</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>482</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1,066</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Total receipts from included contracts subject to the brand contract</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>11,678</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>6,727</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="TOP">
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0pt;" -->


&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="TOP">
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0.1pt;" -->


 </font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="TOP">
<TD VALIGN="BOTTOM" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0.75pt;" -->


 </font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="TOP">
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0pt;" -->


&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->


<!-- COMMAND=ADD_LINERULETXT,NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="26%" ALIGN="LEFT" -->
<HR NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="26%" ALIGN="LEFT" >
 </DIV>
<DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">
 <DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Please
see Notes&nbsp;1 and 2 to the audited statements of cash receipts from included contracts for Arian Foster for an explanation of the basis of
presentation and summary of significant accounting policies used in presenting these amounts. Receipts shown are for historical periods and are not necessarily indicative of future expected receipts
from current or future included contracts for any period.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(2)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>NFL
Player Contract amounts were paid in installments over the course of the applicable regular season period; therefore, a portion of the amounts payable
for the 2011 and 2012 seasons were paid in 2012 and 2013, respectively.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(3)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Does
not include $6.25&nbsp;million of signing bonus paid in March 2013. Because the final portion of the signing bonus related to the 2012 contract the
contract party entered into with the Houston Texans was expected to be received after the signing of the brand contract but prior to Fantex's purchase of the brand contract, the purchase price and
brand contract excluded the final installment of $6.25&nbsp;million of the signing bonus. Future signing bonuses received by the contract party for included contracts will be subject to the brand
contract and Fantex will be entitled to its proportionate share. The entire amount of the signing bonus is forfeitable on a pro-rated basis </FONT></DD></DL>
 </DIV>
 <P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>140</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=5,SEQ=145,EFW="2218564",CP="FANTEX INC.",DN="1",CHK=935707,FOLIO='140',FILE='DISK116:[14ZAT1.14ZAT10401]EE10401A.;9',USER='CHE108053',CD='28-FEB-2014;05:04' -->
<A NAME="page_ee10401_1_141"> </A>

<P style="font-family:times;"><FONT SIZE=2><A
HREF="#bg10401a_main_toc">Table of Contents</A></FONT></P>
 <DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">
 <UL>

<P style="font-family:times;"><FONT SIZE=2>during
the five-year term of the NFL Player Contract to the extent permitted under the CBA for certain acts such as voluntary retirement.  </FONT></P>

</UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(4)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Bonus
of $31,250 received for every game during the NFL regular season that Arian Foster was on the active roster for the Texans, not to exceed $500,000 for
any one season.  </FONT></DD></DL>
 </DIV>
 <P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following summaries include descriptions of contracted cash receipts for future years under the included contracts, assuming that the parties perform their obligations under the
included contracts and none of the included contracts are amended, renegotiated or terminated prior to the expected termination date of the included contracts, as well as a summary of material terms
of the included contracts. There can be no assurance that the parties will perform their obligations under the included contracts or that cash receipts with respect to the Arian Foster Brand will
equal or exceed the aggregate annual cash receipts described in the following summaries. </FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2><I> NFL Player Contract&#151;Houston Texans (the Texans)  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Arian Foster has completed the second year of a five year player contract with the Texans, pursuant to which Arian Foster is eligible
to receive the following compensation (amounts in thousands and unaudited): </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:times;"></FONT></P>

<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="39pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="39pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="39pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="39pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="47pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=11 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Playing Season </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Total<BR>
2013-2016 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2013 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2014 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2015 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2016 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Salary<SUP>(1)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>5,250</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><SUP>(3)</SUP></FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>5,750</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>6,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>6,500</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>23,500</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Maximum Bonus<SUP>(2)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>500</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>500</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>500</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>500</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="TOP">
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0pt;" -->


&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="TOP">
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0.1pt;" -->


 </font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Total</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>5,750</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><SUP>(3)</SUP></FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>6,250</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>6,500</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>7,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>25,500</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="TOP">
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">



<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0pt;" -->


&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
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 <DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>All
amounts are payable in equal weekly or bi-weekly installments over the course of the applicable regular season period, commencing with the first regular
season game played by the Texans in each season, reduced on a pro rata basis for any portion of a season that Arian Foster is not on the active roster for the Texans. Does not include necessary
traveling expenses or additional compensation, benefits and reimbursement of expenses as may be called for in any collective bargaining agreement in existence from time to time between the NFL and
NFLPA, which are not included in brand income.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(2)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Bonus
of $31,250 received for every game during the NFL regular season that Arian Foster is on the active roster for the Texans, not to exceed $500,000 for
any one season.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(3)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>$3.25&nbsp;million
of Arian Foster's salary for the 2013 season is guaranteed, and shall be payable in the event that Arian Foster is cut from the Texans,
suffers a football related injury, or the Texans determine to make room under their salary cap on the roster for the Texans during the 2013 season unless, prior to or during the 2013 season, Arian
Foster either fails or refuses to report, practice or play for the team for any reason other than football related injury (or death) or is in material breach of his NFL player contract. </FONT></DD></DL>
 </DIV>
 <P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>141</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2><A
HREF="#bg10401a_main_toc">Table of Contents</A></FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2><I> Other Included Contracts  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following are aggregate compensation ranges under the included contracts other than the NFL player contract: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:70%;margin-left:15%;">
<p style="font-family:times;"></FONT></P>

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<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="39pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
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<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Year Ended<BR>
December&nbsp;31, </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2013<SUP>(1)</SUP> </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2014 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(unaudited)<BR>
(in thousands)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Other Included Contracts</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Contractual amounts from other included contracts<SUP>(2)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>383.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>190.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><SUP>(3)</SUP></FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Other included contract performance incentive amounts<SUP>(4)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>265.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="TOP">
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">


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<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="TOP">
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2>


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 </font>&#8203;</TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Total amounts from other included contracts </B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><B>383.6</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><B>455.0</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="TOP">
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">


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&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="TOP">
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




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 </font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="TOP">
<TD VALIGN="BOTTOM" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




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 </font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="TOP">
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">


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&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
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 </DIV>
<DIV style="padding:0pt;position:relative;text-align:left;margin-left:15%;">
 <DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Excludes
amounts previously paid to Arian Foster as of February&nbsp;28, 2013.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(2)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Includes
contractual amounts not yet paid as of February&nbsp;28, 2013 pursuant to the following included contracts: First Pick Productions, Gamebreaker
Sports, Saatchi and Saatchi North America, Kroger Texas, Pro Player Merch, ProCamps and Under Armour. Does not include a September&nbsp;3, 2013 grant to Arian Foster of options to purchase 485,000
shares of common stock of Health Warrior with an exercise price of $1.484 per share and a 10&nbsp;year term in consideration for his services under his agreement with Health Warrior. We are not
guaranteed income under Arian Foster's agreement with Health Warrior and will be entitled to our portion of the ABI if and when Arian Foster receives distributions, dividends, proceeds from sale, or
other monies as a result of his equity interests in Health Warrior. The estimated fair market value of the stock options received by Arian Foster using a Black-Scholes valuation model is approximately
$292,000 based on the fair value for the options at grant date of $1.484 per share and assuming a weighted average term of the options of 5.54&nbsp;years, a risk-free rate of return of 1.6% using a
30-day average yield for five-year treasury securities and 60% volatility in the price of the options based on the volatilities for companies comparable to Health Warrior. We are entitled to 20% of
any profits related to the exercise of these options. To the extent Arian Foster does not exercise his options or otherwise receive proceeds, in the form of dividends, distributions, proceeds on a
sale or otherwise, we will be entitled to no income under Arian Foster's agreement with Health Warrior, and any such income is further contingent upon a combination of time vesting and certain
performance vesting measures.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(3)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Includes
amounts payable between January&nbsp;1, 2014 and March&nbsp;31, 2015.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(4)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Contingent
amounts include maximum merchandise credit available to Arian Foster under the included contracts, that is not otherwise excluded from the brand
income, and maximum bonuses payable to Arian Foster for achieving certain milestones, including reaching 2,000 rushing or receiving yards in a season, making at least ten rushing and/or receiving
touchdowns, appearing in a wild-card playoff game, divisional playoff game, conference championship game or the Super Bowl, being awarded the Super Bowl's Most Valuable Player, being elected to the
NFL Pro Bowl, amongst other milestones.  </FONT></DD></DL>
 </DIV>
 <P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Arian
Foster currently has ongoing endorsement contracts or license agreements with Under Armour, Kroger Texas, Gamebreaker Sports, Health Warrior, Pro Player Merch and ProCamps. These
endorsement contracts generally have a term that ends in 2014 (with one agreement terminating in the first quarter of 2015) and require Arian Foster to exclusively endorse certain categories of
products, </FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>make
certain appearances, participate in the production of promotional materials and social media activities and sign autographs. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Arian
Foster will also receive additional compensation for playing in post season games and earning individual honors such as rushing 2,000 yards in a season, scoring 10 touchdowns in a
season, playing in the Pro Bowl, being the NFL rushing leader or Super Bowl Most Valuable Player or breaking the NFL single season rushing record. In addition, Arian Foster receives certain income
from the NFL PLAYERS Inc, the marketing and licensing subsidiary of the NFLPA, which licenses the right to use his name, signature facsimile, voice, picture, photograph, likeness, and/or biographical
information (collectively "image") in group licensing programs. Arian Foster is entitled to no additional income under the CBA or his NFL player contract in exchange for the rights granted to the
NFLPA in Section&nbsp;4 of his NFL player contract. Nevertheless, Arian Foster has from time to time received income from such sponsorships at the discretion of the NFL PLAYERS Inc and NFLPA. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2><B> Competition  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our business is unique and we are not aware of anyone at this time who is attempting to engage in our business model or who is directly
competitive to us. We may if successful face competition from sports management agencies and sports marketing agencies with respect to our marketing activities. We believe that if we did face
competition from these types of agencies it would be based in part on the strength of the relationships they have with professional athletes, entertainers and other high-profile individuals. In this
regard these companies are more established and may have more extensive industry contacts and direct relationships with these brands than we do. However, we also believe that if there were competition
from these types of agencies it would be based on the effectiveness of the marketing efforts and the relative cost to the brand of these services, and we believe that we would be competitively
differentiated from these agencies in each of these areas. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;With
respect to the effectiveness of the marketing efforts, although we are a development-stage company and have not engaged in any marketing activities to date, we believe we have
assembled, through Fantex Holdings, a unique team with crossover talent in sports, sports marketing and digital
marketing and technology, which we believe will allow us to be effective at implementing marketing strategies, including with respect to digital marketing as discussed under the section entitled
"Business&#151;Enhancing Brand Value&#151;Increasing Brand Reach and Consumer Engagement" in general to help enhance brand value. We are not aware of any of the major sports management
or marketing agencies who currently are attempting to engage in these types of marketing activities, and we do not believe they would be willing to shift their focus to these activities in the future.
We believe the sports marketing agencies in effect act closer to the capacity as sales agencies. In large part they sell a product (the brand) to the buyer (an endorsement partner). We intend to make
the product (the brand) better, which we believe will ease their ability to sell that product to the buyers (the endorsement partners). We believe this will enhance our relationship with these
agencies and there would be incentives for us to work collaboratively with our brands and their management and marketing agencies to achieve the best results for our mutual brands. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;With
respect to the cost to the athlete of the marketing efforts, our business model provides that we make an upfront investment to purchase a minority interest in the future value of
our brands, so the overall cost to a brand will correlate to the longer-term success and sustainability of their brand. Although we currently have limited resources to employ in the enhancement of the
value of the brand contract and have fewer industry relationships than sports management agencies and sports marketing agencies, we believe that building a portfolio of brands will enable us to
achieve economies of scale and increase brand reach across our portfolio more efficiently. We do not believe that sports management agencies or sports marketing agencies would be willing to duplicate
our model. </FONT></P>

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<P style="font-family:times;"><FONT SIZE=2><B> Employees  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of December&nbsp;31, 2013, we had no employees. We are being supported by personnel employed by our parent. As of
December&nbsp;31, 2013, our parent had 36 full-time employees. Of these full time employees, three were engaged in support administration, including legal and finance, and eight were engaged in
other activities related to our business, five of whom were engaged in our business full-time. None of these employees are represented by labor unions or covered by collective bargaining agreements.
Our parent considers these relationships to be good. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Facilities  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We share our parent's 4,483 square foot real estate facility located in San Francisco, California, used primarily for corporate
function. Our parent's lease for this space expires in November 2015. We believe that this facility is sufficient for our needs for the foreseeable future. We have no contractual rights to share this
real estate facility. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Legal Proceedings  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are not currently a party to any material legal proceedings. </FONT></P>

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<BR></FONT><FONT SIZE=2><B>  MANAGEMENT    <BR>    </B></FONT></P>


<P style="font-family:times;"><FONT SIZE=2><B> Executive Officers and Directors  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth information regarding our executive officers and directors as of February&nbsp;28, 2014: </FONT></P>
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<TD WIDTH="229pt" style="font-family:times;"></TD>
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<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Age </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Position(s) </B></FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Cornell "Buck" French</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>48</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>Director and Chief Executive Officer</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>David Mullin</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>61</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>Chief Financial Officer</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Matthew Beirne</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>25</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>Vice President of Business Development</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>David Beirne</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>50</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>Director</FONT></TD>
</TR>
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<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>John Costello</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>66</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>Director</FONT></TD>
</TR>
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<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>C. William Hosler</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>50</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>Director</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Ronald Machtley</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>65</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>Director</FONT></TD>
</TR>
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<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Shahan Soghikian</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>55</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>Director</FONT></TD>
</TR>
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<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Terdema Ussery</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>55</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>Director</FONT></TD>
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 <P style="font-family:times;"><FONT SIZE=2><B> Executive Officers  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><B><I>Cornell "Buck" French</I></B></FONT><FONT SIZE=2> has served as our Director and Chief Executive Officer since our
founding. Mr.&nbsp;French also serves as the Chief Executive Officer of our parent, Fantex Holdings since its inception in September 2012. Mr.&nbsp;French co-founded OnLink Technologies, which was
later sold to Siebel Systems,&nbsp;Inc. in 2000. Mr.&nbsp;French is also a Co-Founder and Director of Zwingit. Mr.&nbsp;French currently serves on the Board of Directors of Prelert,&nbsp;Inc.
Mr.&nbsp;French served as the President, CEO and Chairman of Securify,&nbsp;Inc. from December 2004 to October 2008, through its sale to Secure Computing. Mr.&nbsp;French previously served as a
partner at technology venture capital firm JPMorgan Partners, and held the role of Vice President and General Manager of the Interactive Selling Group at Siebel. He is a former Director of
Zilliant,&nbsp;Inc., WebCollage,&nbsp;Inc., Axentis,&nbsp;Inc. and several other private companies. Mr.&nbsp;French received an MBA from Harvard University in 1996 and a B.S. in Economics and
General Engineering from the U.S. Military Academy at West Point in 1989. Mr.&nbsp;French brings to the Board extensive management, business development, financial and strategic planning experience. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B><I>David Mullin</I></B></FONT><FONT SIZE=2> has served as our Chief Financial Officer since our founding. Mr.&nbsp;Mullin also serves as the Chief Financial Officer of
our parent, Fantex Holdings since its inception in September 2012. Mr.&nbsp;Mullin has most recently served as a CFO of Become,&nbsp;Inc. from April 2010 to August 2011. Prior to joining Become,
Mr.&nbsp;Mullin has served as the Chief Operating Officer and CFO of Securify,&nbsp;Inc. from March 2005 to October 2008. Mr.&nbsp;Mullin also served as the Executive Vice President and CFO of
NP Test,&nbsp;Inc. from September 2003 to October 2004, and Terawave Communications,&nbsp;Inc. Mr.&nbsp;Mullin was the CFO of Borland International from 1995 to 1996, Smart Modular Technologies
from 1996 to 2000 and Vice President of Finance and Administration and CFO of OnLink Technologies,&nbsp;Inc. from 2000 to 2001. Mr.&nbsp;Mullin also held several senior finance executive
positions, including at Sun Microsystems, Conner Peripherals, PriceWaterhouse Coopers, and Arthur Anderson. Mr.&nbsp;Mullin is a California Certified Public Accountant and received a B.A. in
Business Administration from San Francisco State University in 1977. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B><I>Matthew Beirne</I></B></FONT><FONT SIZE=2> has served as our Vice President of Business Development since our founding. Prior to joining Fantex, Mr.&nbsp;Beirne
served as an analyst at Morgan Stanley&nbsp;&amp;&nbsp;Co.&nbsp;LLC. Mr.&nbsp;Beirne received a B.A. in Biological Anthropology&nbsp;&amp; Human Anatomy from Duke University in 2011. </FONT></P>

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<P style="font-family:times;"><FONT SIZE=2><B> Directors  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><B><I>David Beirne</I></B></FONT><FONT SIZE=2> has served as the Chairman of our board of directors since March 2013.
Mr.&nbsp;Beirne also serves as the Chairman on the board of directors of Fantex Holdings since its inception in September 2012. Mr.&nbsp;Beirne was a general partner at Benchmark
Capital,&nbsp;LLC from March 1997 until his retirement from the firm in September 2007. Mr.&nbsp;Beirne served as an advisor and limited partner to Benchmark until 2012. Mr.&nbsp;Beirne served
on the boards of Blazent Corporation, Vontu,&nbsp;Inc., Securify,&nbsp;Inc., 1(800)&nbsp;Flowers, Kana Corp. and several other private companies. Prior to joining Benchmark, Mr.&nbsp;Beirne
was co-founder of Ramsey/Beirne Associates,&nbsp;Inc., an executive search firm, where he served as CEO from October 1987 to June 1997. Mr.&nbsp;Beirne also serves on the Board of Directors of
several nonprofit organizations. Mr.&nbsp;Beirne received a B.S. in Business Administration and Management from Bryant University in 1985. Mr.&nbsp;Beirne has developed a nationwide reputation for
recruiting high-profile executives and brings to the Board extensive recruiting, management and operational experience. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B><I>John H. Costello</I></B></FONT><FONT SIZE=2> has served on the board of directors of Fantex,&nbsp;Inc. since July 2013. Mr.&nbsp;Costello has been the President,
Global Marketing&nbsp;&amp; Innovation, at Dunkin Brands Group,&nbsp;Inc. since March 2013 and has previously served as its Chief Global Marketing&nbsp;&amp; Innovation Officer. Mr.&nbsp;Costello
currently also serves as a director on the board of directors of Ace Hardware Corporation, where he also serves as a member of the Compensation Committee and Retail and Supply Chain Committee. He also
serves on the board of directors of Yellowstone Park Foundation and as a Board Advisor to Criteo,&nbsp;Inc. Prior to joining Dunkin Brands in 2009, Mr.&nbsp;Costello served as the Chief Executive
Officer and director of Zounds,&nbsp;Inc. from September 2007 through January 2009. From October 2006 to August 2007, he served as President of Consumer and Retail for Solidus Networks,&nbsp;Inc.
(d/b/a Pay By Touch). Mr.&nbsp;Costello has also previously served on the boards of directors of the Association of National Advertisers&nbsp;Inc., The Quaker Oats Company, The Bombay Company,
Aspen Marketing Services,&nbsp;Inc. and various other public and private companies, as well as serving on the Board of Trustees of the American Film Institute. In addition, Mr.&nbsp;Costello has
held leadership roles at several companies, including serving as President of Nielsen Marketing Research U.S., Chief Executive Officer of MVP.com,&nbsp;Inc., Executive Vice President of
Merchandising and Marketing at The Home Depot, Senior Executive Vice President of Sears, Senior Vice President of Marketing and Sales at Pepsi-Cola, USA and Chief Global Marketing Officer of Yahoo!.
Mr.&nbsp;Costello received a B.S. in Industrial Management from the University of Akron in 1968 and an MBA from Michigan State University in 1970. Mr.&nbsp;Costello brings to our board of
directors extensive operational and marketing experience. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B><I>C. William Hosler</I></B></FONT><FONT SIZE=2> has served on the board of Fantex,&nbsp;Inc. since August 2013. Mr.&nbsp;Hosler also currently serves as Chief
Financial Officer and a director of Catellus Acquisition Company,&nbsp;LLC, a company engaged in commercial real estate property ownership, management and development. Prior to
assuming his current role at Catellus Acquisition Company,&nbsp;LLC in March 2011, Mr.&nbsp;Hosler provided consulting services to Rockwood Capital and TPG Capital, two private investment firms,
from November 2008 to March 2011. Mr.&nbsp;Hosler served as Chief Financial Officer of Marcus&nbsp;&amp; Millichap Holding Companies, a privately held investment and real estate services company, from
January 2008 to November 2008. Prior to that, from June 2007 through December 2007 and July 2006 until June 2007 Mr.&nbsp;Hosler was a consultant to and Chief Financial Officer of Mirion
Technologies, a privately-held radiation detection, measuring and monitoring company. Mr.&nbsp;Hosler served as Chief Financial Officer of Catellus Development Corporation, a publicly traded real
estate company, from 1999 to 2005, and, prior to Catellus, he was Chief Financial Officer of the Morgan Stanley Real Estate Funds where he served on the Investment Committee. Mr.&nbsp;Hosler
currently serves as a director of CapitalSource&nbsp;Inc. and as a member of its audit committee, asset/liability committee, and compensation committee, as well as a director of CapitalSource Bank,
its wholly owned subsidiary. In addition, Mr.&nbsp;Hosler serves on the board of directors, audit committee and corporate governance and nominating committee of Parkway Properties,&nbsp;Inc., a
public, self-administered real estate investment trust. Mr.&nbsp;Hosler received a B.S. in </FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>Chemical
Engineering from the University of Notre Dame and an M.B.A from the University of Virginia. Mr.&nbsp;Hosler brings to the board significant experience in investment and finance, as well as
his experience as a Chief Financial Officer of a publicly traded company. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B><I>Ronald Machtley</I></B></FONT><FONT SIZE=2> has served on the board of directors of Fantex,&nbsp;Inc. since June 2013. Mr.&nbsp;Machtley has served as president
of Bryant University since 1996 and was previously a Republican member of the United States House of Representatives from Rhode Island from 1989 to 1995. Mr.&nbsp;Machtley also currently serves on
the boards of directors of five separate affiliate entities of Amica Insurance, including Amica Mutual Insurance Company, where he also served as a member of its Finance, Nominating, Executive
Compensation, and Audit Committees. He also currently serves on the board of directors of Cranston Print Works,&nbsp;Inc., Rhode Island Foundation and Preservation Society of Newport, among other
organizations. From 1994 until 1995, Mr.&nbsp;Machtley served as a Partner at Wilkinson, Barker, Knauer&nbsp;&amp; Quinn, a law firm in Washington D.C. Mr.&nbsp;Machtley has also previously served
as a director of Covansys Corp. Mr.&nbsp;Machtley received a B.S. from the United States Naval Academy in 1970 and a J.D. from Suffolk University Law School in 1978. Mr.&nbsp;Machtley brings to
our board of directors extensive management experience. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B><I>Shahan Soghikian</I></B></FONT><FONT SIZE=2> has served on the board of directors of Fantex,&nbsp;Inc. since June 2013. Mr.&nbsp;Soghikian is a co-founder and
Managing Director of Panorama Capital, a venture capital firm which invests in early to mid-stage technology and life sciences companies. Mr.&nbsp;Soghikian began his investment career when he
joined JPMorgan Partners in 1990, where he most recently served as head of its venture capital program until the formation of Panorama in 2006. Between 1994 and 1998, he was responsible for developing
and managing JPMorgan Partners' European investment team and was based in London. Mr.&nbsp;Soghikian was previously a member of the mergers and acquisitions group at both Bankers Trust,&nbsp;Inc.
and Prudential-Bache Securities,&nbsp;Inc. (currently known as Prudential Equity Group,&nbsp;LLC). Mr.&nbsp;Soghikian currently serves on the board of directors of Beyond The Rack,&nbsp;Inc.,
Validity Sensors,&nbsp;Inc. and WGT.com. Prior to this, he served as a director of SquareTrade,&nbsp;Inc., Tidal Software,&nbsp;Inc., Yipes
Communications,&nbsp;Inc. and AECOM,&nbsp;Inc., among other board memberships, including as a member of the audit committee on the board of directors of Digital Island,&nbsp;Inc. and Petco
Animal Supplies,&nbsp;Inc. In addition, Mr.&nbsp;Soghikian is currently a trustee of Pitzer College where he serves as Chair of the Investment Committee and as a member of its Audit Committee, and
also serves as a director of Children's Hospital and Research Center Oakland. Mr.&nbsp;Soghikian received a B.A. in Biology from Pitzer College in 1980 and an M.B.A. from the UCLA Anderson School of
Management. Mr.&nbsp;Soghikian is a longtime investor of over two decades and brings to our board of directors extensive investment and valuation experience. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B><I>Terdema Ussery</I></B></FONT><FONT SIZE=2> has served on the board of directors of Fantex,&nbsp;Inc. since June 2013. Mr.&nbsp;Ussery has also served as the
President and Chief Executive Officer of the Dallas Mavericks since April 1997. Prior to joining Fantex, Mr.&nbsp;Ussery has served as Chief Executive Officer of HDNet&nbsp;LLC from September 2001
until June 2012. Mr.&nbsp;Ussery also serves as an Alternate Governor for the Mavericks on the NBA Board of Governors. He has served as Lead Independent Director of Treehouse Foods&nbsp;Inc. since
June&nbsp;6, 2005 and as a member on its Governance&nbsp;&amp; Nominating, Audit and Compensation Committees. Mr.&nbsp;Ussery previously served as Director of Timberland&nbsp;Co. from
May&nbsp;19, 2005 until September&nbsp;13, 2011, where he also served as Timberland's Lead Independent Director and as a member if its Audit, Compensation, Governance&nbsp;&amp; Nominating and
Corporate&nbsp;&amp; Social Responsibility committees. He also served as a director of Entrust,&nbsp;Inc., from December 2006 to November 2009, and as a member of its Audit Committee from 2007 to
2009. In addition, Mr.&nbsp;Ussery served as the President of Nike Sports Management from 1993 to 1996 and was the Commissioner of the Continental Basketball Association ("CBA") from 1991 to 1993,
and Deputy Commissioner and General Counsel of the CBA from 1990 to 1991. Mr.&nbsp;Ussery received a B.A. from Princeton's Woodrow Wilson School of Public and International Affairs in 1981, an
M.P.A. from John F. Kennedy School of Government at Harvard University and a J.D. from the University of California at Berkeley in 1987. Mr.&nbsp;Ussery has </FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>extensive
experience working with athletes and other high-profile individuals as well as with sports associations and brings to our board of directors extensive industry knowledge and management
experience. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Board Composition and Election of Directors  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our board of directors currently consists of seven directors. In accordance with our amended and restated certificate of incorporation,
our board of directors will be divided into three classes with staggered three-year terms. At each annual meeting of stockholders, the successors to directors whose terms then expire will be elected
to serve from the time of election and qualification
until the third annual meeting following their election. Our directors are divided among the three classes as follows:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the Class&nbsp;I directors are David Beirne, C. William Hosler and Ronald Machtley, and their terms will expire at the
annual meeting of stockholders to be held in 2014; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the Class&nbsp;II directors are Cornell French and Terdema Ussery, and their terms will expire at the annual meeting of
stockholders to be held in 2015; and </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the Class&nbsp;III directors are John Costello and Shahan Soghikian, and their terms will expire at the annual meeting
of stockholders to be held in 2016. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
amended and restated certificate of incorporation provides that the authorized number of directors may be changed only by resolution of the board of directors. Any additional
directorships resulting from an increase in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the directors.
The division of our board of directors into three classes with staggered three- year terms may delay or prevent a change of our management or a change of control at our company. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Director Independence  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Because our common stock is not, and following this offering will not be, listed on a national securities exchange, we are not required
to maintain a board consisting of a majority of independent directors or to maintain an audit committee, nominating committee or compensation committee consisting solely of independent directors.
Nevertheless, our board of directors has determined to generally comply with the listing requirements of the national securities exchanges. The independence definitions of the national securities
exchanges generally include a series of objective tests, such as that the director is not, and has not been for at least three years, one of our employees and that neither the director nor any of his
family members has engaged in various types of business dealings with us. In addition, the rules of the national securities exchanges would require our board of directors to make a subjective
determination as to each independent director that no relationships exist, which, in the opinion of our board of directors, would interfere with the exercise of independent judgment in carrying out
the responsibilities of a director. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
board of directors currently consists of seven members. Our board of directors has determined that five of our current directors would qualify as "independent" directors in
accordance with the general listing requirements of the national securities exchanges. Mr.&nbsp;French is not considered independent because he is an officer of Fantex and an employee and director
of our parent company, Fantex Holdings. Mr.&nbsp;Beirne is not considered independent because he is a director and significant stockholder of our parent company, Fantex Holdings. In making these
determinations, our board of directors reviewed and discussed information provided by the directors and us with regard to each director's business and personal activities and relationships as they may
relate to us and our management. Each of Messrs.&nbsp;Costello, Hosler, Machtley, Soghikian and Ussery qualify as independent directors under the corporate governance standards of the NASDAQ Global
Market. </FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There
are no family relationships among any of our directors or executive officers, other than Matthew Beirne, our Vice President of Business Development, who is the son of
Mr.&nbsp;David Beirne, Chairman of our board of directors. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Board Committees  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Audit Committee and Audit Committee Financial Expert  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our audit committee will oversee our corporate accounting and financial reporting process. Among other matters, the audit committee
will:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>appoint our independent registered public accounting firm; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>evaluate the independent registered public accounting firm's qualifications, independence and performance; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>determine the engagement of the independent registered public accounting firm; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>review and approve the scope of the annual audit and the audit fee; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>discuss with management and the independent registered public accounting firm the results of the annual audit and the
review of our quarterly financial statements; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>approve the retention of the independent registered public accounting firm to perform any proposed permissible non-audit
services; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>monitor the rotation of partners of the independent registered public accounting firm on our engagement team as required
by law; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>be responsible for reviewing our financial statements and our management's discussion and analysis of financial condition
and results of operations to be included in our annual and quarterly reports to be filed with the SEC; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>review our critical accounting policies and estimates; and </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>annually review the audit committee charter and the committee's performance. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
current members of our audit committee are Messrs.&nbsp;Hosler, Soghikian and Ussery, with Mr.&nbsp;Hosler serving as the chairperson of the committee. All members of our audit
committee meet the requirements for financial literacy under the applicable rules and regulations of the SEC and generally under the rules of the national securities exchanges. Our board of directors
has determined that Mr.&nbsp;Hosler is an audit committee financial expert as defined under the applicable rules of the SEC and has the requisite financial sophistication as defined under the
applicable rules and regulations of national securities exchanges. Under the rules of the SEC, members of the audit committee must also meet heightened independence standards. Our board of directors
has determined that each of the members of the audit committee are independent under the applicable rules of the SEC and the national securities exchanges. The audit committee operates under a written
charter that satisfies the applicable standards of the SEC and the national securities exchanges. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2><B><I> Compensation Committee  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our compensation committee will review and recommend policies relating to compensation and benefits of our officers and employees. The
compensation committee will review and approve corporate goals and objectives relevant to compensation of our chief executive officer and other executive officers, evaluate the performance of these
officers in light of those goals and objectives. The compensation committee will review and evaluate, at least annually, the performance of the compensation committee and its members, including
compliance by the compensation committee with its charter. The current members of our compensation committee are Messrs.&nbsp;Costello, Machtley and </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>149</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>Ussery,
with Mr.&nbsp;Costello serving as the chairperson of the committee. Each of the members of our compensation committee is independent under the applicable rules and regulations of the
national securities exchanges, is a "non- employee director" as defined in Rule&nbsp;16b-3 promulgated under the Exchange Act and is an "outside director" as that term is defined in
Section&nbsp;162(m) of the U.S. Internal Revenue Code of 1986, as amended. The compensation committee operates under a written charter. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Nominating and Corporate Governance Committee  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The nominating and corporate governance committee will be responsible for making recommendations to our board of directors regarding
candidates for directorships and the size and composition of our board of directors. In addition, the nominating and corporate governance committee will be responsible for overseeing our corporate
governance policies and reporting and making recommendations to our board of directors concerning governance matters. The current members of our nominating and corporate governance committee are
Messrs.&nbsp;Costello, Machtley and Soghikian, with Mr.&nbsp;Machtley serving as the chairperson of the committee. Each of the members of our nominating and corporate governance committee is an
independent director under the applicable rules and regulations of the national securities exchanges relating to nominating and corporate governance committee independence. The nominating and
corporate governance committee operates under a written charter. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Conflicts Committee  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our conflicts committee will be responsible for reviewing all of our related party transactions in which Fantex Holdings is a party
with an interest adverse to our interests or with an interest adverse to any outstanding series of our common stock, including any decision to convert any tracking stock into our platform common stock
following the two-year anniversary of the filing of a certificate of designation creating such tracking stock. Each member of the conflicts committee must (a)&nbsp;satisfy the audit committee
independence requirements under the rules and regulations of the SEC that would be applicable to Fantex, (b)&nbsp;not have been an employee or director of our parent company at any time in the three
years prior to his or her appointment to the conflicts committee and (c)&nbsp;not have any material interest in Fantex or Fantex Holdings. The current members of the conflicts committee are
Messrs.&nbsp;Hosler, Soghikian and Ussery, with Mr.&nbsp;Soghikian serving as the chairperson of the committee. Each of whom meets the independence requirements described in the immediately
preceding sentence. The conflicts committee operates under a written charter. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Limitations on Officers' and Directors' Liability and Indemnification Agreements  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our amended and restated certificate of incorporation and amended and restated bylaws, which will become effective immediately prior to
the consummation of this offering, limit our directors' and officers' liability to the fullest extent permitted under the Delaware General Corporation Law. Consequently, our directors and officers
will not be personally liable to us or our
stockholders for monetary damages for any breach of their respective fiduciary duties, except liability for:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>any breach of the director's duty of loyalty to us or our stockholders; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>unlawful payments of dividends or unlawful stock repurchases or redemptions as provided in Section&nbsp;174 of the
Delaware General Corporation Law; or </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>any transaction from which the director derived an improper personal benefit. </FONT></DD></DL>
</UL>
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<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
Delaware law is amended to authorize corporate action further eliminating or limiting the personal liability of a director, then the liability of our directors will be eliminated or
limited to the fullest extent permitted by Delaware law, as so amended. Our amended and restated certificate of incorporation does not eliminate a director's duty of care and, in appropriate
circumstances, equitable remedies, such as injunctive or other forms of non- monetary relief, remain available under Delaware law. This provision also does not affect a director's responsibilities
under any other laws, such as the federal securities laws or other state or federal laws. Under our amended and restated bylaws, we will also be empowered to enter into indemnification agreements with
our directors, officers, employees and other agents and to purchase insurance on behalf of any person whom we are required or permitted to indemnify. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition to the indemnification and advancement of expenses required in our amended and restated certificate of incorporation and amended and restated bylaws, we have entered into
indemnification agreements with each of our directors, and will enter into new indemnification agreements with each of our current directors, officers and certain employees before the completion of
this offering. These agreements provide for the indemnification of and advancement of expenses of our directors, officers
and certain employees for all reasonable expenses and liabilities incurred in connection with any action or proceeding brought against them by reason of the fact that they are or were our agents. We
believe that these provisions in our amended and restated certificate of incorporation and amended and restated bylaws and indemnification agreements are necessary to attract and retain qualified
persons as directors and officers. Furthermore, we have obtained director and officer liability insurance to cover liabilities our directors and officers may incur in connection with their services to
us. This description of the indemnification provisions of our amended and restated certificate of incorporation, our amended and restated bylaws and our indemnification agreements is qualified in its
entirety by reference to these documents, each of which is attached as an exhibit to this registration statement. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
limitation of liability and indemnification and advancement of expenses provisions in our amended and restated certificate of incorporation and amended and restated bylaws may
discourage stockholders from bringing a lawsuit against directors for breach of their fiduciary duties. They may also reduce the likelihood of derivative litigation against directors and officers,
even though an action, if successful, might benefit us and our stockholders. A stockholder's investment may be harmed to the extent we pay the costs of settlement and damage awards against directors
and officers pursuant to these indemnification provisions. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling
persons pursuant to the foregoing provisions, or otherwise, we have been advised that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act, and
is, therefore, unenforceable. There is no pending litigation or proceeding naming any of our directors or officers as to which indemnification is being sought, nor are we aware of any pending or
threatened litigation that may result in claims for indemnification by any director or officer. </FONT></P>

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<BR></FONT><FONT SIZE=2><B>  EXECUTIVE COMPENSATION    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This section discusses the material components of the executive compensation program for our executive officers who are named in the
"Summary Compensation Table" below. In 2013, our "named executive officers" and their positions were as follows:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Cornell "Buck" French, Chief Executive Officer; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>David Mullin, Chief Financial Officer; and</FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Matthew Beirne, Vice President of Business Development. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Currently,
our employees, including our named executive officers, are employed by our parent, Fantex Holdings, and provide services to both Fantex and Fantex Holdings. Except as the
context otherwise requires or as otherwise noted, references in this section to "Fantex Holdings," "company," "we," "us" and "our" refer to both Fantex Holdings and Fantex. This discussion may contain
forward-looking statements that are based on our current plans, considerations, expectations and determinations regarding future compensation programs. Actual compensation programs that we adopt
following the completion of this offering may differ materially from the currently planned programs summarized in this discussion. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2><B> Summary Compensation Table  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth information concerning the compensation of our named executive officers for the years ended
December&nbsp;31, 2012 and December&nbsp;31, 2013. </FONT></P>
 <DIV style="padding:0pt;position:relative;width:54%;margin-left:10%;">
<p style="font-family:times;"></FONT></P>

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<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="27pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="41pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="31pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="36pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="36pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="68pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="67pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="67pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="41pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH NOWRAP  ALIGN="LEFT" style="font-family:times;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:72pt;"><FONT SIZE=1><B>Name and Principal<BR>
Position

<!-- COMMAND=ADD_SCROPPEDRULE,72pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Year </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Salary<BR>
($) </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Bonus<BR>
($) </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Stock<BR>
Awards<BR>
($)<SUP>(1)</SUP> </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Option<BR>
Awards<BR>
($) </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Non-Equity<BR>
Incentive Plan<BR>
Compensation<BR>
($) </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Nonqualified<BR>
Deferred<BR>
Compensation<BR>
Earnings<BR>
($) </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>All Other<BR>
Compensation<BR>
($) </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Totals </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#CCEEFF" -->


 Cornell "Buck" French</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2013</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>116,667</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>116,667</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:18pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#CCEEFF" -->


 Chief Executive Officer</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2012</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>David Mullin</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2013</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>116,667</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>116,667</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:18pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Chief Financial Officer</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2012</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>5,514</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>5,514</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>



<!-- COMMAND=ADD_ROWSHADECOLOR,"#CCEEFF" -->


 Matthew Beirne</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2013</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>58,333</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>58,333</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:18pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#CCEEFF" -->


 Vice President&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2012</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
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 Business Development</FONT></TD>
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 <DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Amounts
reflect the full grant-date fair value of stock awards granted during 2012 and 2013 computed in accordance with ASC Topic 718, rather than the
amounts paid to or realized by the named individual. Mr.&nbsp;Beirne paid a fair market value purchase price per share for his restricted stock, therefore we did not recognize a compensation expense
in connection with this award under ASC Topic 718. </FONT></DD></DL>
 </DIV>
 <P style="font-family:times;"><FONT SIZE=2><B><I> Narrative to Summary Compensation Table  </I></B></FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2><I> 2013 Salaries  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In June 2013, Messrs.&nbsp;French, Mullin and Beirne began drawing salaries from our parent, Fantex Holdings,&nbsp;Inc., with
annual base salaries for Messrs.&nbsp;French and Mullin of $200,000 and Mr.&nbsp;Beirne of $100,000. Subsequently, in October 2013, Messrs.&nbsp;French and Mullin entered into employment
agreements with our parent, which memorialized the base salary set forth above. We anticipate that, as of the consummation of this offering, each of our named executive officers will earn annualized
base salaries commensurate with their positions, work duties and responsibilities. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>152</FONT></P>

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<UL>

<P style="font-family:times;"><FONT SIZE=2><I> 2013 Bonuses  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have not yet determined whether any of our named executive officers will receive a bonus with respect to services performed in 2013.
Following the completion of this offering, we expect that our named executive officers will be eligible to earn annual bonuses based on the attainment of specified performance objectives established
by our compensation committee. The applicable terms and conditions of the cash bonuses will be determined by our compensation committee. </FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2><I> Equity Compensation  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In August 2013, our board of directors adopted our 2013 Equity Incentive Award Plan, referred to below as the 2013 Plan, in order to
facilitate the grant of cash and equity incentives to directors, employees (including our named executive officers) and consultants of our company and certain of its affiliates and to enable our
company and certain of its affiliates to obtain and retain services of these individuals, which is essential to our long-term success. The 2013 Plan will be effective on the date of the consummation
of an initial public offering of our stock. For additional information about the 2013 Plan, please see the section titled "&#151;Equity Plans&#151;2013 Equity Incentive Award Plan"
below. No equity grants were made to our officers in 2013. </FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2><I> Other Elements of Compensation  </I></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Retirement Plans  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We do not currently maintain a retirement savings plan for any of our employees, including our named executive officers. We intend to
establish a 401(k) retirement savings plan for our employees, including our named executive officers, who satisfy certain eligibility requirements. We expect that our named executive officers will be
eligible to participate in the 401(k) plan on the same terms as other full-time employees. The Internal Revenue Code of 1986, as amended, or the Code, allows eligible employees to defer a portion of
their compensation, within prescribed limits, on a pre-tax basis through contributions to the 401(k) plan. Currently, we do not anticipate matching any portion of the contributions that might be made
by participants in our 401(k) plan once we adopt one. We believe that providing a vehicle for tax-deferred retirement savings though a 401(k) plan will add to the overall desirability of our executive
compensation package and further incentivize our employees, including our named executive officers, in accordance with our compensation policies. </FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2><I> Employee Benefits and Perquisites  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All of our full-time employees, including our named executive officers, are eligible to participate in our medical, dental and vision
benefit plans. Following the consummation of this offering, we may also implement additional benefit and other perquisite programs as our compensation committee determines appropriate, though we do
not expect any such additional benefits and perquisites to constitute a material component of our named executive officers' compensation package. </FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2><I> No Tax Gross-Ups  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We do not make gross-up payments to cover our named executive officers' personal income taxes that may pertain to any of the
compensation or perquisites paid or provided by our company. </FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2><I> Additional Compensation Components  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Following the completion of this offering, as we formulate and implement our compensation program, we may provide different and/or
additional compensation components, benefits and/or perquisites to our named executive officers, to ensure that we provide a balanced and comprehensive compensation structure. We believe that it is
important to maintain flexibility to adapt our </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>153</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>compensation
structure at this time to properly attract, motivate and retain the top executive talent for which we compete. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2><B> Outstanding Equity Awards at Fiscal Year-End  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table summarizes the number of shares of Fantex Holdings' common stock underlying outstanding equity incentive plan
awards for each named executive officer as of December&nbsp;31, 2013. </FONT></P>
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<TH style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Stock Awards </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
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<TH NOWRAP  ALIGN="LEFT" style="font-family:times;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:21pt;"><FONT SIZE=1><B>Name

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 </B></FONT></DIV></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Grant Date </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Number of Shares or<BR>
Units of Stock That Have<BR>
Not Vested&nbsp;(#) </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Market Value of<BR>
Shares or Units of<BR>
Stock That Have Not<BR>
Vested&nbsp;($)<SUP>(1)</SUP> </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Matthew Beirne<SUP>(2)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>5/9/2012</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>58,344</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>147,610.32</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
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 </DIV>
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 <DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>The
market value of shares of the restricted Fantex Holdings' common stock that have not vested is calculated based on the fair market value of Fantex
Holdings' common stock on December&nbsp;31, 2013 ($2.53).
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(2)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>This
restricted stock award vested as to 25% of the award on the first anniversary of the vesting commencement date, and vested and will continue to vest as
to the remaining 75% of the award in substantially equal installments on each monthly anniversary thereafter, subject to continued employment with Fantex Holdings or any parent or subsidiary of Fantex
Holdings.  </FONT></DD></DL>
 </DIV>
 <P style="font-family:times;"><FONT SIZE=2><B> Executive Compensation Arrangements  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our parent, Fantex Holdings, has entered into employment agreements with Messrs.&nbsp;French and Mullin on October&nbsp;16, 2013.
The following is a summary of the material terms of the agreements. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under
the agreements, Mr.&nbsp;French will serve as the Chief Executive Officer and Mr.&nbsp;Mullin will serve as the Chief Financial Officer of Fantex Holdings, reporting directly
to the board of directors of Fantex Holdings and Chief Executive Officer, respectively. Mr.&nbsp;French will also serve as a member of our board of directors. The term of the agreements will
continue until the executive's employment with Fantex Holdings is terminated. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant
to the terms of the agreements, Messrs.&nbsp;French and Mullin will each receive annual base salaries in the amount of $200,000. In the event of an "IPO" (as defined in the
applicable employment agreement) during the executive's term of employment, each executive's annual base salary will be increased to $250,000 upon the consummation of the IPO, and which may be
increased from time to time in the discretion of Fantex Holdings' board of directors or the compensation committee. Messrs.&nbsp;French and Mullin will also be eligible to receive an annual
discretionary cash performance bonus. The actual amount of any such bonuses will be based on the attainment of specified performance objectives established by the board of directors of Fantex
Holdings. In addition, each executive will be entitled to participate in customary employee and executive benefit plans and programs as Fantex Holdings may from time to time offer. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
the event that Mr.&nbsp;French's or Mr.&nbsp;Mullin's employment is terminated without "cause" or by the executive for "good reason" (each, as defined in the applicable employment
agreement), then in addition to any accrued amounts, the executive will be entitled to receive the following:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>a lump-sum payment in the amount of one times the executive's annual base salary; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>a lump-sum payment in the amount equal to the pro rata portion of the executive's annual bonus for the partial fiscal year
in which the termination occurs; </FONT></DD></DL>
</UL>
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<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>company-paid premiums for healthcare coverage continuation for up to 12&nbsp;months after the date of termination;
and</FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>with respect to each then-outstanding Fantex Holdings equity award or Company equity award, accelerated vesting of the
number of shares subject to such award that would have vested during the 12-month period following the termination date. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
the event that Mr.&nbsp;French's or Mr.&nbsp;Mullin's employment is terminated without "cause" or by the executive for "good reason" on or within the 30&nbsp;days preceding, or
during the one-year period following, a "change in control" (as defined in the Fantex Holdings,&nbsp;Inc. 2012 Equity Incentive Plan), each executive will be entitled to the severance benefits and
payments described above, except that he will be entitled to a lump-sum payment in the amount of two times, rather than one times, his annual base salary. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
executive's right to receive the severance payments and benefits described above is subject to his delivery and non-revocation of an effective general release of claims in favor of
Fantex Holdings. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Furthermore,
in the event of a change in control of Fantex Holdings, the executive will be entitled to accelerated vesting of all outstanding Fantex Holdings equity awards and Company
equity awards then held, and in the event of a "change in control" (as defined in the Fantex,&nbsp;Inc. 2013 Equity Incentive Award Plan) of the Company, the executive will be entitled to
accelerated vesting of all outstanding Company equity awards then held. In addition, to the extent that any payment or benefit would be subject to an excise tax imposed in connection with
Section&nbsp;4999 of the Code, such payments and/or benefits may be subject to a "best pay cap" reduction to the extent necessary so that the executive receives the greater of (i)&nbsp;the net
amount of the payments and benefits reduced such that such payments and benefits will not be subject to the excise tax and (ii)&nbsp;the net amount of the payments and benefits without such
reduction. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Director Compensation  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except with respect to grants of equity awards covering our parent's common stock, none of our directors received any compensation for
service as a member of our board of directors in 2013. We intend to approve and implement a compensation program for our non-employee directors that consists of annual retainer fees and long-term
equity awards. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
July 2013, our parent, Fantex Holdings, granted stock options covering 20,000 shares of our parent's common stock to each of Messrs.&nbsp;Costello, Machtley, Soghikian and Ussery.
In September 2013, our parent granted stock options covering 20,000 shares of its common stock to Mr.&nbsp;Hosler. Each stock option vests with respect to <SUP>1</SUP>/<SUB>48</SUB>th of the
shares each month for four years following the grant date, subject to the director's continued service, and will accelerate and vest in full upon a change in control of our parent. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2><B> Equity Plans  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> 2013 Equity Incentive Award Plan  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In August 2013, our board of directors adopted our 2013 Equity Incentive Award Plan, or the 2013 Plan, under which we may grant cash
and equity incentive awards to eligible service providers in order to attract, motivate and retain the talent for which we compete. The 2013 Plan was subsequently approved by our stockholders in
September 2013. The material terms of the 2013 Plan are summarized below. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>155</FONT></P>

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<UL>

<P style="font-family:times;"><FONT SIZE=2><I> Eligibility and Administration  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our employees, consultants and directors, and employees and consultants of our affiliates, if any, are eligible to receive awards under
the 2013 Plan. Following our initial public offering, we expect the 2013 Plan will be administered by our board of directors with respect to awards to non- employee directors and by our compensation
committee with respect to other participants, each of which may delegate its duties and responsibilities to committees of our directors and/or officers (referred to collectively as the plan
administrator below), subject to certain limitations that may be imposed under Section&nbsp;162(m) of the Code, Section&nbsp;16 of the Exchange Act, and/or stock exchange rules, as applicable. The
plan administrator will have the authority to make all determinations and interpretations under, prescribe all forms for use with, and adopt rules for the administration of, the 2013 Plan, subject to
its express terms and conditions. The plan administrator will also set the terms and conditions of all awards under the 2013 Plan, including any vesting and vesting acceleration conditions. </FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2><I> Limitation on Awards and Shares Available  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;An aggregate of 7,500,000 shares of our platform common stock is available for issuance under awards granted pursuant to the 2013 Plan,
which shares may be authorized but unissued shares, treasury shares or shares purchased in the open market. If an award under the 2013 Plan is forfeited, expires or is settled for cash, any shares
subject to such award may, to the extent of such forfeiture, expiration or cash settlement, be used again for new grants under the 2013 Plan. However, the following shares may not be used again for
grant under the 2013 Plan: (1)&nbsp;shares tendered or withheld to satisfy grant or exercise price or tax withholding obligations associated with an award; (2)&nbsp;shares subject to a stock
appreciation right, or SAR, that are not issued in connection with the stock settlement of the SAR on its exercise; and (3)&nbsp;shares purchased on the open market with the cash proceeds from the
exercise of options. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Awards
granted under the 2013 Plan upon the assumption of, or in substitution for, awards authorized or outstanding under a qualifying equity plan maintained by an entity with which we
enter into a merger or similar corporate transaction will not reduce the shares available for grant under the 2013 Plan. After the expiration of a transition period that may apply following the
effective date of our initial public offering, the maximum number of shares of our platform common stock that may be subject to one or more awards granted to any participant pursuant to the 2013 Plan
during any calendar year will be 1,000,000 and the maximum amount that may be paid under a cash award pursuant to the 2013 Plan to any one participant during any calendar year period will be
$2,000,000. </FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2><I> Awards  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The 2013 Plan provides for the grant of stock options, including incentive stock options, or ISOs, and nonqualified stock options, or
NSOs, restricted stock, dividend equivalents, stock payments, restricted stock units, or RSUs, performance shares, deferred stock, other incentive awards, stock appreciation rights, or SARs, and cash
awards. No determination has been made as to the types or amounts of awards that will be granted to specific individuals pursuant to the 2013 Plan. Certain awards under the 2013 Plan may constitute or
provide for a deferral of compensation, subject to Section&nbsp;409A of the Code, which may impose additional requirements on the terms and conditions of such awards. All awards under the 2013 Plan
will be set forth in award agreements, which will detail all terms and conditions of the awards, including any applicable vesting and payment terms and post-termination exercise limitations. Awards
other than cash awards generally will be settled in shares of our platform common stock, but the plan administrator may provide for cash settlement of any award. A brief description of each award type
follows. </FONT></P>

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<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2><I>Stock Options.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Stock options provide for the purchase of
shares of our platform common stock in the future at an exercise price set on the grant date. ISOs, by contrast to NSOs, may provide tax deferral beyond exercise and favorable capital gains tax
treatment to their holders if certain holding period and other requirements of the Code are satisfied. The exercise price of a stock option may not be less than 100% of the fair market value of the
underlying share on the date of grant (or 110% in the case of ISOs granted to certain significant stockholders), except with respect to certain substitute options granted in connection with a
corporate transaction. The term of a stock option may not be longer than ten years (or five years in the case of ISOs granted to certain significant stockholders). Vesting conditions determined by the
plan administrator may apply to stock options and may include continued service, performance and/or other conditions.  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2><I>SARs.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;SARs entitle their holder, upon exercise, to receive
from us an amount equal to the appreciation of the shares subject to the award between the grant date and the exercise date. The exercise price of a SAR may not be less than 100% of the fair market
value of the underlying share on the date of grant (except with respect to certain substitute SARs granted in connection with a corporate transaction) and the term of a SAR may not be longer than ten
years. Vesting conditions determined by the plan administrator may apply to SARs and may include continued service, performance and/or other conditions.  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2><I>Restricted Stock, RSUs, Deferred Stock and Performance
Shares.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Restricted stock is an award of nontransferable shares of our platform common stock that remains forfeitable unless and until
specified conditions are met, and which may be subject to a purchase price. RSUs are contractual promises to deliver shares of our platform common stock in the future, which may also remain
forfeitable unless and until specified conditions are met. Delivery of the shares underlying RSUs may be deferred under the terms of the award or at the election of the participant, if the plan
administrator permits such a deferral. Deferred stock awards represent the right to receive shares of our platform common stock on a future date. Deferred stock will not be issued until the deferred
stock award has vested, and recipients of deferred stock generally will have no voting or dividend rights prior to the time when the vesting conditions are satisfied and the shares are issued.
Performance shares are contractual rights to receive a range of shares of our platform common stock in the future based on the attainment of specified performance goals, in addition to other
conditions which may apply to these awards. Conditions applicable to restricted stock, RSUs, deferred stock and performance shares may be based on continuing service, the attainment of performance
goals and/or such other conditions as the plan administrator may determine.  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2><I>Stock Payments, Other Incentive Awards and Cash
Awards.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Stock payments are awards of fully vested shares of our platform common stock that may, but need not, be made in lieu of base
salary, bonus, fees or other cash compensation otherwise payable to any individual who is eligible to receive awards. Other incentive awards are awards other than those enumerated in this summary that
are denominated in, linked to or derived from shares of our platform common stock or value metrics related to our shares, and may remain forfeitable unless and until specified conditions are met. Cash
awards are cash incentive bonuses subject to performance goals.  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2><I>Dividend Equivalents.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Dividend equivalents represent the
right to receive the equivalent value of dividends paid on shares of our platform common stock and may be granted alone or in tandem with awards other than stock options or SARs. Dividend equivalents
generally are credited as of dividend record dates during the period between the date an award is granted and the date such award vests, is exercised, is distributed or expires, as determined by the
plan administrator. Dividend equivalents may not be paid on awards granted under the 2013 Plan unless and until such awards have vested. </FONT></DD></DL>
</UL>
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<P style="font-family:times;"><FONT SIZE=2><I> Performance Awards  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Performance awards include any of the foregoing awards that are granted subject to vesting and/or payment based on the attainment of
specified performance goals. The plan administrator will determine whether performance awards are intended to constitute "qualified performance-based compensation," or QPBC, within the meaning of
Section&nbsp;162(m) of the Code, in which case the applicable performance criteria will be selected from the list below in accordance with the requirements of Section&nbsp;162(m) of the Code. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;162(m)
of the Code imposes a $1,000,000 cap on the compensation deduction that a public company may take in respect of compensation paid to its "covered employees" (which
should include our chief executive officer and our next three most highly compensated employees other than our chief financial officer), but excludes from the calculation of amounts subject to this
limitation any amounts that constitute QPBC. Under current tax law, we do not expect Section&nbsp;162(m) of the Code to apply to certain awards under the 2013 Plan until the earliest to occur of
(1)&nbsp;our annual stockholders' meeting at which members of our board of directors are to be elected that occurs after the close of the third calendar year following the calendar year in which
occurred the first registration of our equity securities under Section&nbsp;12 of the Exchange Act; (2)&nbsp;a material modification of the 2013 Plan; (3)&nbsp;an exhaustion of the share supply
under the 2013 Plan; or (4)&nbsp;the expiration of the 2013 Plan. However, QPBC performance criteria may be used with respect to performance awards that are not intended to constitute QPBC. In
addition, the company may issue awards that are not intended to constitute QPBC even if such awards might be non-deductible as a result of Section&nbsp;162(m) of the Code. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
order to constitute QPBC under Section&nbsp;162(m) of the Code, in addition to certain other requirements, the relevant amounts must be payable only upon the attainment of
pre-established, objective performance goals set by our compensation committee and linked to stockholder-approved performance criteria. For purposes of the 2013 Plan, one or more of the following
performance criteria will be used in setting performance goals applicable to QPBC, and may be used in setting performance goals applicable to other performance awards: (1)&nbsp;net earnings (either
before or after one or more of the following: (a)&nbsp;interest, (b)&nbsp;taxes, (c)&nbsp;depreciation, (d)&nbsp;amortization and (e)&nbsp;non-cash equity-based compensation expense);
(2)&nbsp;gross or net sales or revenue; (3)&nbsp;net income (either before or after taxes); (4)&nbsp;adjusted net income; (5)&nbsp;operating earnings or profit; (6)&nbsp;cash flow
(including, but not limited to, operating cash flow and free cash flow); (7)&nbsp;return on assets; (8)&nbsp;return on capital; (9)&nbsp;return on stockholders' equity; (10)&nbsp;total
stockholder return; (11)&nbsp;return on sales; (12)&nbsp;gross or net profit or operating margin; (13)&nbsp;costs; (14)&nbsp;funds from operations; (15)&nbsp;expenses; (16)&nbsp;working
capital; (17)&nbsp;earnings per share; (18)&nbsp;adjusted earnings per share; (19)&nbsp;price per share of platform common stock; (20)&nbsp;regulatory body approval for commercialization of a
product; (21)&nbsp;implementation or completion of critical projects; (22)&nbsp;market share; (23)&nbsp;economic value; (24)&nbsp;debt levels or reduction; (25)&nbsp;customer retention;
(26)&nbsp;sales-related goals; (27)&nbsp;comparisons with other stock market indices; (28)&nbsp;operating efficiency; (29)&nbsp;customer satisfaction and/or growth; (30)&nbsp;employee
satisfaction; (31)&nbsp;research and development achievements; (32)&nbsp;financing and other capital raising transactions; (33)&nbsp;recruiting and maintaining personnel; and
(34)&nbsp;year-end cash, any of which may be measured either in absolute terms for us or any operating unit of our company or as compared to any incremental increase or decrease or as compared to
results of a peer group or to market performance indicators or indices. The 2013 Plan also permits the plan administrator to provide for objectively determinable adjustments to the applicable
performance criteria in setting performance goals for QPBC awards. </FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2><I> Certain Transactions  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The plan administrator has broad discretion to take action under the 2013 Plan, as well as make adjustments to the terms and conditions
of existing and future awards, to prevent the dilution or enlargement of intended benefits and facilitate necessary or desirable changes in the event of certain </FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>transactions
and events affecting our platform common stock, such as stock dividends, stock splits, mergers, acquisitions, consolidations and other corporate transactions. In addition, in the event of
certain non-reciprocal transactions with our stockholders known as "equity restructurings," the plan administrator will make equitable adjustments to the 2013 Plan and outstanding awards. In the event
of a change in control of our company (as defined in the 2013 Plan), to the extent that the surviving entity declines to continue, convert, assume or replace outstanding awards, then all such awards
will become fully vested and exercisable in connection with the transaction. Upon or in anticipation of a change of control, the plan administrator may cause any outstanding awards to terminate at a
specified time in the future and give the participant the right to exercise such awards during a period of time determined by the plan administrator in its sole discretion. Individual award agreements
may provide for additional accelerated vesting and payment provisions. </FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2><I> Foreign Participants, Claw-Back Provisions, Transferability, and Participant Payments  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The plan administrator may modify award terms, establish subplans and/or adjust other terms and conditions of awards, subject to the
share limits described above, in order to facilitate grants of awards subject to the laws and/or stock exchange rules of countries outside of the United States. All awards will be subject to the
provisions of any claw-back policy implemented by our company to the extent set forth in such claw-back policy and/or in the applicable award agreement. With limited exceptions for estate planning,
domestic relations orders, certain beneficiary designations and the laws of descent and distribution, awards under the 2013 Plan are generally non- transferable prior to vesting, and are exercisable
only by the participant. With regard to tax withholding, exercise price and purchase price obligations arising in connection with awards under the 2013 Plan, the plan administrator may, in its
discretion, accept cash or check, shares of our platform common stock that meet specified conditions, a "market sell order" or such other consideration as it deems suitable. </FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2><I> Plan Amendment and Termination  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our board of directors may amend or terminate the 2013 Plan at any time; however, except in connection with certain changes in our
capital structure, stockholder approval will be required for any amendment that increases the number of shares available under the 2013 Plan, "reprices" any stock option or SAR, or cancels any stock
option or SAR in exchange for cash or another award when the option or SAR price per share exceeds the fair market value of the underlying shares. No award may be granted pursuant to the 2013 Plan
after the ten-year anniversary of the effective date of the 2013 Plan. </FONT></P>

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<BR></FONT><FONT SIZE=2><B>  TRANSACTIONS WITH RELATED PERSONS    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following is a description of transactions since our incorporation in September 2012, to which we have been a party, in which the
amount involved exceeds $120,000, and in which any of our directors, executive officers or holders of more than 5% of our capital stock, or an affiliate or immediate family member thereof, had or will
have a direct or indirect material interest, other than compensation, termination and change in control agreements, which are described under "Executive Compensation." We believe that all of the
transactions described below were made on terms no less favorable to us than could have been obtained from unaffiliated third parties. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Equity Contributions  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To date, we have relied exclusively on our parent for liquidity and capital resources. Our parent contributed capital in the amount of
$1.1&nbsp;million from inception through December&nbsp;31, 2012 and $4.3&nbsp;million for the year ended December&nbsp;31, 2013. The contributed capital
includes expenses paid by our parent on our behalf, as well as an equity contribution of $2.0&nbsp;million on April&nbsp;3, 2013 to provide additional working capital to finance our operating
expenses. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Indemnity Agreements  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our parent, Fantex Holdings, has agreed to indemnify each of our current contract parties under certain circumstances if the ABI that
we are purchasing from them under their respective brand contracts is reportable income to them and not deductible for United States federal income tax purposes. We are not a party to these indemnity
agreements, and would have no direct or indirect obligation to the contract parties or our parent under these agreements. However, because our parent is a party to these agreements, we may be deemed
to benefit from these agreements. In addition, to the extent such obligation of our parent to the contract parties impacts its financial stability and its continued ability to provide services under
the management agreement, as discussed below, an adverse tax ruling may indirectly impact Fantex as a whole, and therefore, the investors in our Fantex Series&nbsp;EJ Manuel. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Management Agreement  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have entered into a management agreement with Fantex Holdings that will be effective upon the consummation of our first public
offering. Pursuant to this agreement, our parent will provide to us management and administrative services, including providing our executive management and other personnel as well as services
relating to information technology support, brand management and other support operations, facilities, human resources, tax planning and administration, accounting, treasury and insurance. We have
agreed to pay our parent 5% of the amount of the gross cash received by us, if any, pursuant to our brand contracts during any quarterly period as remuneration for the services provided. The amount of
gross cash received used to calculate this 5% fee will include any portion allocated to a reduction of the carrying value on our financial statements but shall not take into account the changes in
fair value of the brand contracts. As such, the service fee under the management agreement will be determined based on the total amount of actual cash received under the brand contracts in a given
quarterly period prior to any adjustments for fair value and without regard to the expected cash receipts in such quarter as reflected in the financial statements for that quarter. To the extent we
receive no cash for any period then we would not owe any fee for any services provided during that period. We may evaluate the service fee from time to time to assess the continued appropriateness of
the percentage of our cash receipts upon which the service fee is calculated, in light of the services being provided by our parent at the time and cost of those services. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
agreement has an initial term through December&nbsp;31, 2014, and will automatically renew for successive one-year terms each December&nbsp;31 unless either party provides
written notice of its intent not </FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>to
renew at least three months prior to such renewal. We may also terminate any specific service and/or the agreement, without penalty, with 30&nbsp;days prior written notice to Fantex Holdings.
Fantex Holdings may terminate any specific service and/or the agreement with 180&nbsp;days prior written notice to us, but if we, using our commercially reasonable efforts, are unable to either
perform the services ourselves or enter into a reasonable arrangement with a third party to perform the services that we are unable perform ourselves, then Fantex Holdings will continue to perform
such services for an additional period of 180&nbsp;days. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
parent company allocated to us an aggregate expense of $1.1&nbsp;million from our incorporation on September&nbsp;14, 2012 through December&nbsp;31, 2012 and approximately
$3.6&nbsp;million for the year ended December&nbsp;31, 2013 for such services provided to us. In the immediate future, we do not plan to establish independent infrastructure that is dedicated to
our business and we will continue to rely on our parent company for these services in accordance with the management agreement. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2><B><I> Indemnification Agreements  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our amended and restated certificate of incorporation provides that we will indemnify and advance expenses to our directors and
officers to the fullest extent permitted under the Delaware General Corporation Law. In addition, we have entered into separate indemnification agreements with each of our directors and executive
officers. For more information regarding these agreements, see "Management&#151;Limitations on Officers' and Directors' Liability and Indemnification Agreements." </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Policies and Procedures for Related Party Transactions  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our board of directors has adopted a written related person transaction policy, to be effective upon the consummation of this offering,
setting forth the policies and procedures for the review and approval or ratification of related person transactions. This policy will cover, with certain exceptions set forth in Item&nbsp;404 of
Regulation&nbsp;S-K under the Securities Act, any transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships in which we were or are to be a
participant, where the amount involved exceeds $120,000 and a related person had or will have a direct or indirect material interest, including, without limitation, purchases of goods or services by
or from the related person or entities in which the related person has a material
interest, indebtedness, guarantees of indebtedness and employment by us of a related person. All of the transactions described in this section occurred prior to the adoption of this policy. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All
future material affiliated transactions and loans will be made or entered into on terms that are no less favorable to us than those that can be obtained from unaffiliated third
parties. In addition, all future material affiliated transactions and loans, and any forgiveness of loans, must be approved by a majority of our independent directors who do not have an interest in
the transactions and who have had access, at our expense, to our independent legal counsel. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
provided by our audit committee charter to be effective upon completion of this offering, our audit committee will be responsible for reviewing and approving in advance any related
party transaction, other than matters relating to our parent company. Our conflicts committee is responsible for reviewing all of our related party transactions in which parent company is a party with
an interest adverse to our interests. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>161</FONT></P>

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<BR></FONT><FONT SIZE=2><B>  PRINCIPAL STOCKHOLDERS    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth information regarding the beneficial ownership of the common stock of Fantex as of December&nbsp;31,
2013, by:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>each of our directors; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>each of our named executive officers; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>each person, or group of affiliated persons, who is known by us to beneficially own more than 5% of Fantex common stock;
and </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>all of our directors and executive officers as a group. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Beneficial
ownership is determined in accordance with the rules of the SEC. These rules generally attribute beneficial ownership of securities to persons who possess sole or shared
voting power or investment power with respect to those securities and include shares of Fantex common stock issuable upon the exercise of stock options that are immediately exercisable or exercisable
within 60&nbsp;days after December&nbsp;31, 2013. Except as otherwise indicated in the footnotes to the table below, all of the shares reflected in the table are shares of Fantex common stock and
all persons listed below have sole voting and investment power with respect to the shares beneficially owned by them, subject to applicable community property laws. The information is not necessarily
indicative of beneficial ownership for any other purpose. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Percentage
ownership calculations are based on 100,000,000 shares of Fantex common stock outstanding as of December&nbsp;31, 2013. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Beneficial
ownership representing less than 1% is denoted with an asterisk (*). Except as otherwise indicated in the footnotes to the table below, addresses of named beneficial owners
are in care of Fantex, 330 Townsend Street, Suite&nbsp;234, San Francisco, CA 94107. </FONT></P>
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<p style="font-family:times;"></FONT></P>

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<TD WIDTH="68pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Shares Beneficially<BR>
Owned </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH NOWRAP  ALIGN="LEFT" style="font-family:times;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:93pt;"><FONT SIZE=1><B>Name of Beneficial Owner

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<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Number </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Percentage </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Officers and Directors of Fantex<SUP>(1)</SUP></B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Cornell "Buck" French<SUP>(2)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>*</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>David Mullin</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>*</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>David Beirne<SUP>(2)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>*</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>John Costello</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>*</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Ronald Machtley</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>*</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Shahan Soghikian</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>*</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Terdema Ussery</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>*</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Matthew Beirne</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>*</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="TOP">
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">


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&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="TOP">
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2>


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 </font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>All directors and executive officers as a group (8 persons)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>*</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>5% Stockholders of Fantex</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Fantex Holdings,&nbsp;Inc.<SUP>(1)(2)(3)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>100,000,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>100.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
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<DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">
 <DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Each
of our officers and directors beneficially owns shares of Fantex Holdings common stock. Cornell "Buck" French and David Beirne, two of our directors,
beneficially own 22.5% and 28.0% of Fantex Holdings common stock, respectively and David Mullin, our Chief Financial Officer, beneficially owns 4.75% of Fantex Holdings common stock. The other
officers and directors own less than 2% of Fantex Holdings common stock in the aggregate. In computing beneficial ownership of Fantex Holdings common stock, we attributed securities to persons who
possess sole or shared voting power or investment power with respect to those securities and included shares of Fantex Holdings common stock issuable upon the exercise of stock options that are
immediately </FONT></DD></DL>
 </DIV>
 <P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>162</FONT></P>

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<A NAME="page_em10401_1_163"> </A>

<P style="font-family:times;"><FONT SIZE=2><A
HREF="#bg10401a_main_toc">Table of Contents</A></FONT></P>
 <DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">
 <UL>

<P style="font-family:times;"><FONT SIZE=2>exercisable
or exercisable within 60&nbsp;days after December&nbsp;31, 2013. Pursuant to their ownership interest in Fantex Holdings, Mr.&nbsp;French, Mr.&nbsp;Beirne and Mr.&nbsp;Mullin
together hold shares with a combined voting power over a majority of Fantex Holdings common stock.  </FONT></P>

</UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(2)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Cornell
"Buck" French, David Beirne, John Elway, Joshua Levine and Bruce Dunlevie are each members of the board of directors of Fantex Holdings and as such,
in effect, share voting power over 100% of the outstanding Fantex common stock prior to this offering, and substantially all of the total voting power of Fantex common stock immediately after this
offering. Each disclaims beneficial ownership of the shares held by Fantex Holdings, except to the extent of any pecuniary interest therein.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(3)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Fantex
Holdings owns 100% of our issued and outstanding platform common stock, which provides it with sole voting power over our common stock. Each platform
common stock is entitled to one vote per share, giving Fantex Holdings substantially all of the voting power over the Fantex common stock immediately following the consummation of this offering. </FONT></DD></DL>
 </DIV>
 <P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>163</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>
<A HREF="#bg10401a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="eo10401_description_of_capital_stock"> </A>
<A NAME="toc_eo10401_1"> </A>
<BR></FONT><FONT SIZE=2><B>  DESCRIPTION OF CAPITAL STOCK    <BR>    </B></FONT></P>


<P style="font-family:times;"><FONT SIZE=2><B> General  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have authorized under our amended and restated certificate of incorporation, 1,500,000,000 shares of common stock, $0.0001 par value
per share, consisting of:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>1,000,000,000 shares authorized for issuance as shares of tracking stocks, with 523,700 initially designated as Fantex
Series&nbsp;EJ Manuel upon the consummation of this offering, 421,100 shares expected to be designated as Fantex Series Vernon Davis upon the consummation of the offering of Fantex Series Vernon
Davis and 1,055,000 shares expected to be designated as Fantex Series Arian Foster upon the consummation of the offering of Fantex Series Arian Foster; and </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>500,000,000 shares authorized for issuance as platform common stock. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
of December&nbsp;31, 2013, there were outstanding 100,000,000 shares of our platform common stock held by one stockholder of record, our parent company, Fantex Holdings. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following description of our capital stock and provisions of our amended and restated certificate of incorporation, amended and restated bylaws, and certificates of designation for
each of:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Fantex Series Arian Foster to be in effect upon the consummation of the offering of Fantex Series Arian Foster; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Fantex Series Vernon Davis to be in effect upon the consummation of the offering of Fantex Series Vernon Davis; and </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Fantex Series&nbsp;EJ Manuel to be in effect upon the consummation of this offering </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>is
a summary and is qualified in its entirety by reference to the full copies of these documents, which have been filed with the SEC as exhibits to our registration statement, of which this prospectus
forms&nbsp;a part. Currently, there is no established public trading market for any series of our common stock. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Common Stock  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our board of directors is authorized to establish and issue one or more series of common stock from time to time, and determine the
designation of and the number of shares comprising such series and such other powers, designations, preferences and relative participating, optional and other special rights, and the qualifications,
limitations and restrictions thereof, if any, including without limitation, such voting powers, full or limited, or no voting powers, dividend rights, conversion rights, redemption privileges and
liquidation rights. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Without
limiting the generality of the foregoing, our board of directors may, to the extent permitted by law, provide that any series may be superior to, rank equally with or be junior
to any other series of our common stock. The powers, preferences and relative, participating, optional and other special rights of each series of common stock, and the qualifications, limitations or
restrictions thereof, if any, may be different from those of any and all other series at any time outstanding. No vote of the holders of shares of common stock shall be necessary to issue any shares
of any series of the common stock. The rights, preferences and privileges of the holders of any series of our common stock are subject to and may be adversely affected by the rights of the holders of
shares of any series of our common stock that we may designate in the future. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon
the consummation of this offering, the following series of common stock will have been designated or are contemplated to be
designated:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Platform Common Stock </FONT></DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>164</FONT></P>

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<UL>
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<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Fantex Series Arian Foster (to be designated if and when the offering of Fantex Series Arian Foster pursuant to the Arian
Foster Registration Statement is consummated) </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Fantex Series Vernon Davis (to be designated if and when the offering of Fantex Series Vernon Davis pursuant to the Vernon
Davis Registration Statement is consummated) </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Fantex Series&nbsp;EJ Manuel (to be designated if and when the offering of Fantex Series&nbsp;EJ Manuel pursuant to
this Registration Statement is consummated) </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unless
otherwise specified in the corresponding certificate of designation for any tracking stock, our amended and restated certificate of incorporation provides for the following
powers, preferences and relative participating, optional and other special rights, and the qualifications, limitations or restrictions thereof with respect to our platform common stock and our
tracking stocks that we may issue from time to time. We do not intend to provide in any certificate of designations for any of the tracking stocks set forth above rights or restrictions that are
different than the following description of rights and restrictions applicable to tracking stocks. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Voting Rights  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The holders of our platform common stock are entitled to one vote per share. Unless otherwise specified in the corresponding
certificate of designation for any tracking stock, the holders of shares of any tracking stock shall also have one vote per share of such tracking stock. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each
series of our common stock (including our platform common stock and each tracking stock) will vote together as a single class with all other series of common stock, unless otherwise
required by law. Delaware law would require holders of a series of stock to vote separately as a single class if we were to seek to amend our certificate of incorporation in a manner that alters or
changes the powers, preferences or special rights of one or more series of a class of stock in a manner that affected its holders adversely, but shall not so effect the entire class, in which case the
holders of the affected series would be required to vote separately to approve the proposed amendment. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
have not provided for cumulative voting for the election of directors in our amended and restated certificate of incorporation. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Dividends  </I></B></FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2><I> Platform Common Stock  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We will be permitted, but not required, to pay dividends on our platform common stock in an amount equal to the "platform common stock
available dividend amount" (defined generally as an amount equal to the amount of our total assets legally available for the payment of dividends under Delaware law, less the aggregate amount of the
"available dividend amount" for all of our then outstanding tracking stocks). </FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2><I> Tracking Stocks  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We will be permitted, but not required, to pay dividends with respect to any of our tracking stocks out of the lesser of our assets
legally available for the payment of dividends under Delaware law and the "available dividend amount" for such tracking stock. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unless
otherwise specified in the corresponding certificate of designation for any tracking stock, the "available dividend amount" for any tracking stock as of any date is an amount
equal to the lesser </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>165</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>of
(a)&nbsp;total assets of our company legally available for the payment of dividends under Delaware law and (b)&nbsp;an amount equal to:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the excess of the total assets attributed to the tracking stock brand over the total liabilities attributed to the
tracking stock brand, less the par value of the outstanding shares of such tracking stock; or </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>if there is no such excess, the attributable income of the tracking stock brand for the fiscal year in which the dividend
is being declared and/or the preceding fiscal year. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2><B><I> Conversion  </I></B></FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2><I> Platform Common Stock  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our platform common stock is not convertible into any other shares of our capital stock. However, at any time following the two-year
anniversary of the filing of a certificate of designation creating a new tracking stock, our board of directors may resolve to convert any such tracking stock into fully paid and non-assessable shares
of our platform common stock at a conversion ratio to be determined by dividing the fair value of a share of that tracking stock by the fair value of a share of our platform common stock (as
determined below). </FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2><I> Tracking Stocks  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At any time following the two-year anniversary of the filing of a certificate of designation creating a new tracking stock, our board
of directors may resolve to convert such tracking stock into fully paid and non-assessable shares of our platform common stock at a conversion ratio to be determined by dividing the fair value of a
share of such tracking stock by the fair value of a share of our platform common stock. We expect to file&nbsp;a certificate of designation creating a new tracking stock substantially concurrent
with the consummation of an offering of such tracking stock. </FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2><I> Fair Value  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fair value is established as the volume weighted average of the closing bid or sale prices, whichever is applicable, of the shares of
platform common stock and/or a tracking stock over the 20-trading day period ending on the trading day before the conversion ratio is determined. However, such value will only be used for any series
if our board of directors determines in its good faith judgment that there is an active trading market for that series. If our board of directors makes a determination in good faith that there is no
active trading market for any series, then the fair value for such series will be determined by a reputable and independent investment banking or valuation firm experienced in the valuation of
securities selected in good faith by our board of directors, provided, however, that to the extent that our board of directors determines in its good faith judgment that such series does not have any
material value in terms of assets attributable to such series, including but not limited to any material future brand income or assets, events or circumstances that our management or our board of
directors believe could reasonably result in material brand income in the future, then the fair value for such series may be determined by our board of directors in their good faith judgment alone.
Any such valuation determination will be made, whether by our board of directors or any independent investment banking, financial advisory or other valuation firm, based on the contractual value of
the brand assets related to the applicable tracking stock, and shall not include any discount for lack of marketability or liquidity or any minority interest discount (including that such series may
not have the rights, contractually or otherwise, to receive dividends). Our board of directors intends to use such firm as a general matter unless the assets and expected valuation of the tracking
stocks are not material. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>166</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2><B><I> Liquidation  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event of a liquidation, dissolution or winding up of Fantex, including a change of control of Fantex, after payment or provision
for payment of our debts and liabilities, each share of our common stock will be entitled to receive a proportionate interest in the net assets of Fantex remaining for distribution to holders of
common stock equal to the fair value (as described above "&#151;Conversion&#151;Fair Value") of such share, </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2> that if the assets
legally available for distribution to the holders of common stock are insufficient to permit the payment in full to each share of common stock the amount to which they would otherwise be entitled,
then such assets available for distribution to the holders of common stock will be distributed to all holders of common stock ratably in proportion to the full amounts which they would be entitled to
receive on shares of common stock held by them. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
all distributions required above are made and there remain any assets available for distribution to holders of common stock such assets shall be divided among the holders of common
stock in proportion to the amounts that were payable as required above in respect of the shares held by them. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Mandatory Dividend, Redemption and/or Conversion on Disposition of Assets  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If, in one transaction or a series of related transactions, we dispose of all or substantially all of the assets of a tracking stock
brand, our board of directors will be required to choose one of the following four alternatives:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>pay a dividend to holders of the corresponding tracking stock out of the available net proceeds of such disposition; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>if the disposition involves all of the properties and assets of the tracking stock brand (not merely substantially all),
redeem all outstanding shares of our Fantex Series&nbsp;EJ Manuel in exchange for cash and/or securities or other assets with a fair value equal to the available net proceeds of such disposition; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>following the two-year anniversary of the filing of a certificate of designation creating any tracking stock, convert each
outstanding share of such tracking stock into our platform common stock at the applicable conversion ratio; or </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>combine a conversion of a portion of the outstanding shares of such tracking stock into a number of shares of our platform
common stock at the applicable conversion ratio with either the payment of a dividend on or a redemption of shares of such tracking stock. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2><B> Anti-Takeover Provisions  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Fantex Holdings  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Following the consummation of this offering, Fantex Holdings, our parent company, will continue to hold substantially all of the voting
power of our outstanding common stock. As a result, our parent company will continue to be able to control all matters submitted to our stockholders for approval. This control could discourage others
from initiating any potential merger, takeover or other change of control transaction that other stockholders might view as beneficial. Our board of directors is authorized, without stockholder
approval, to issue additional series of common stock, with voting rights and other privileges established by a certificate of designation. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws to be in Effect upon the Completion of this Offering  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our amended and restated certificate of incorporation provides for our board of directors to be divided into three classes, with
staggered three-year terms. Only one class of directors will be elected at each annual meeting of our stockholders, with the other classes continuing for the remainder of their </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>167</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>respective
three-year terms. The number of directors constituting our board of directors is permitted to be established only by a resolution adopted by a majority vote of our board of directors, and
only our board of directors is authorized to fill vacant directorships, including newly created directorships, unless our board of directors determines that such vacancy or newly created directorship
shall be filled by the stockholders. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
holders of our common stock are entitled, by a plurality of the votes cast by the holders of the common stock present in person or represented by proxy, voting as a single voting
group at a meeting at which a quorum is present, to elect directors to our board of directors. Because our stockholders do not have cumulative voting rights, holders of our common stock representing a
majority of the voting rights of our common stock will be able to elect all of our directors up for election at any given stockholders' meeting. Accordingly, until such time as our parent company
beneficially owns shares of our common stock representing less than a majority of the voting rights of our common stock, our parent company will elect our entire board of directors. Our amended and
restated bylaws include advance notice procedures and other content requirements applicable to stockholders other than our parent company for proposals to be brought before a meeting of stockholders,
including proposed nominations of persons for election to our board of directors. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Until
such time as our parent company beneficially owns shares of our common stock representing less than a majority of the voting rights of our common stock, our amended and restated
certificate of incorporation and amended and restated bylaws will require a majority stockholder vote for the removal of a director with or without cause, and for the amendment, repeal or modification
of certain provisions of our amended and restated certificate of incorporation and amended and restated bylaws including, among other things, relating to the classification of our board of directors;
provided that, from and after such time as our parent company ceases to hold a majority of the voting rights of our common stock, any such removal, amendment, repeal or modification will require a 75%
stockholder vote. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
amended and restated certificate of incorporation provides and our amended and restated bylaws will provide that, until such time as our parent company beneficially owns shares of
our common stock representing less than a majority of the voting rights of our common stock, our parent company will have the ability to take stockholder action by written consent without calling a
stockholder meeting and to approve amendments to our amended and restated certificate of incorporation and amended and restated bylaws and to take other actions without the vote of any other
stockholder. From and after such time as our parent company beneficially owns shares of our common stock representing less than a majority of the voting rights of our common stock, all stockholder
action must be effected at a duly called meeting of stockholders and not by a consent in writing, and, further, from and after such time as our parent company beneficially owns shares of our common
stock representing less than a majority of the voting rights of our common stock, only our corporate secretary, upon the direction of our board of directors or the Chairman of the Board, may call a
special meeting of stockholders. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
combination of the classification of our board of directors, lack of cumulative voting rights, prohibitions on stockholder actions by written consent and stockholder ability to call
a special meeting by a stockholder other than our parent company, and supermajority voting requirements make it more difficult for stockholders other than our parent company (for so long as it holds
sufficient voting rights) to replace our board of directors as well as for another party to obtain control of us by replacing our board of directors. Because our board of directors has the power to
retain and discharge our officers, these provisions could also make it more difficult for stockholders other than our parent company (for so long as it holds sufficient voting rights) or another party
to effect a change in management. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These
provisions may have the effect of deterring hostile takeovers or delaying changes in our control or management. These provisions are intended to enhance the likelihood of continued
stability </FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>in
the composition of our board of directors and its policies and to discourage certain types of transactions that may involve an actual or threatened acquisition of us. These provisions are designed
to reduce our vulnerability to an unsolicited acquisition proposal. The provisions also are intended to discourage certain tactics that may be used in proxy fights. However, such provisions could have
the effect of discouraging others from making tender offers for our shares and, as a consequence, they also may inhibit fluctuations in the market price of our shares that could result from actual or
rumored takeover attempts. Such provisions may also have the effect of preventing changes in our management. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Section&nbsp;203 of the Delaware General Corporation Law  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;After our parent company ceases to own 15% of our voting stock, we will be subject to Section&nbsp;203 of the Delaware General
Corporation Law, which prohibits a Delaware corporation from engaging in any business combination with any interested stockholder for a period of three years after the time that such stockholder
became an interested stockholder, with the following exceptions:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>if, before such time, the board of directors of the corporation approved either the business combination or the
transaction that resulted in the stockholder becoming an interested stockholder; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>if, upon completion of the transaction that resulted in the stockholder becoming an interested stockholder, the interested
stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction began, excluding for purposes of determining the voting stock outstanding (but not the
outstanding voting stock owned by the interested stockholder) those shares owned (i)&nbsp;by persons who are directors and also officers and (ii)&nbsp;employee stock plans in which employee
participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>if, at or after such time, the business combination is approved by the board of directors and authorized at an annual or
special meeting of the stockholders, and not by written consent, by the affirmative vote of at least 66<SUP>2</SUP>/<SMALL>3</SMALL>% of the outstanding voting stock that is not owned by the interested
stockholder. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;203
defines "business combination" to include, among other things, the following:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>any merger or consolidation involving the corporation and the interested stockholder; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>any sale, transfer, pledge or other disposition of 10% or more of the assets of the corporation involving the interested
stockholder; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>subject to certain exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of
the corporation to the interested stockholder; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>any transaction involving the corporation that has the effect of increasing the proportionate share of the stock of any
class or series of the corporation beneficially owned by the interested stockholder; or </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial
benefits by or through the corporation. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;203
defines an "interested stockholder" as an entity or person who, together with the person's affiliates and associates, owns, or is an affiliate or associate of the
corporation and within three years prior to the time at which determination of interested stockholder status is being made did own, 15% or more of the outstanding voting stock of the corporation. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>169</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2><B> Delaware as Sole and Exclusive Forum  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our amended and restated certificate of incorporation provides that unless we consent in writing to an alternative forum, the Court of
Chancery of the State of Delaware shall, to the fullest extent permitted by law, be the sole and exclusive forum for (i)&nbsp;any derivative action or proceeding brought on behalf of us,
(ii)&nbsp;any action asserting a claim of breach of a fiduciary duty owed by, or other wrongdoing by, any of our directors or officers to us or our stockholders, (iii)&nbsp;any action asserting a
claim against us arising pursuant to any provision of the Delaware General Corporation Law or our amended and restated certificate of incorporation or amended and restated bylaws, (iv)&nbsp;any
action to interpret, apply, enforce or determine the validity of our amended and restated certificate of incorporation or the amended and restated bylaws or (v)&nbsp;any action asserting a claim
against us governed by the internal affairs doctrine. As a result, any action brought by any of our stockholders with regard to any of these matters will generally need to be filed in the Court of
Chancery of the State of Delaware and cannot be filed in any other jurisdiction. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2><B> Limitation of Liability and Indemnification of Executive Officers and Directors  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For an in depth discussion of liability and indemnification, please see "Management&#151;Limitations on Officers' and Directors'
Liability and Indemnification Agreements." </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Transfer Agent and Registrar  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We currently act as our own registrar and transfer agent for shares of our Fantex Series&nbsp;EJ Manuel. Shares of Fantex
Series&nbsp;EJ Manuel will be held in book-entry form only on our books and records, and any transfers of shares of our Fantex Series&nbsp;EJ Manuel must be made through a brokerage account with
FBS on the FBS&nbsp;ATS. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>170</FONT></P>

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<A HREF="#bg10401a_main_toc">Table of Contents</A> </FONT></P>

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<BR></FONT><FONT SIZE=2><B>  UNDERWRITING (CONFLICTS OF INTEREST)    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under the terms and subject to the conditions contained in an underwriting agreement dated the date of this prospectus, we have agreed
to sell to FBS, the sole book-running manager, and FBS has agreed to offer, shares of Fantex Series&nbsp;EJ Manuel on a best efforts basis as indicated below. FBS is required to use its best efforts
to sell the shares listed below but has no firm commitment or obligation to purchase any such shares. </FONT></P>
 <DIV style="padding:0pt;position:relative;width:70%;margin-left:15%;">
<p style="font-family:times;"></FONT></P>

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<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="86pt" style="font-family:times;"></TD>
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<TH NOWRAP  ALIGN="LEFT" style="font-family:times;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:43pt;"><FONT SIZE=1><B>Underwriter

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 </B></FONT></DIV></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Number of Shares </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Fantex Brokerage Services,&nbsp;LLC</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>523,700</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
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&nbsp;</TD>
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<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
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 </font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Total</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>523,700</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
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 <P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FBS
initially proposes to offer the shares of our Fantex Series&nbsp;EJ Manuel for sale at the price of $10.00 per share on a best efforts, all or none basis. In connection with this
offering, FBS will purchase each share from us at a discount of $0.50 per share, to the extent that any shares are sold. In consideration for its services and expenses as the qualified independent
underwriter, FBS has agreed to pay Stifel, Nicolaus&nbsp;&amp; Company, Incorporated a fee equal to $130,925, assuming the sale of 523,700 shares of the Fantex Series&nbsp;EJ Manuel in this offering
at an initial public offering price of $10.00 per share, which fee constitutes 50% of the underwriting discount that FBS will receive. The expenses of this offering, other than the underwriting
discount, will be paid by our parent, Fantex Holdings, which expenses are estimated to be approximately $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and include legal, accounting and printing costs and various other fees
associated with registration of our Fantex Series&nbsp;EJ Manuel. We and our parent have also agreed to reimburse the underwriters for certain of their fees and expenses in an amount up to
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;as set forth in the underwriting agreement, which reimbursement will be paid by our parent. In addition, subject to FINRA Rule&nbsp;5110(f)(2)(D), we have granted a right of first
refusal to Stifel, Nicolaus&nbsp;&amp; Company, Incorporated to act as the QIU in a number of our public offerings of one or more series of our common stock, as further specified in our agreement with
Stifel, Nicolaus&nbsp;&amp; Company, Incorporated. FINRA deems such a right of first refusal to be an additional item of compensation received by the underwriters. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prior
to this offering, there has been no public market for our shares. We initially determined to offer shares at a price of $10.00 per share, and the number of shares to be offered at
that price was determined between us and FBS based on demand in the offering process with the goal of issuing at least $5.23&nbsp;million of shares in this offering. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
Fantex Series&nbsp;EJ Manuel will be quoted on the FBS ATS upon the conclusion of this offering. The FBS ATS is an alternative trading system operated by FBS. We do not intend to
apply for a listing of our Fantex Series&nbsp;EJ Manuel on any securities exchange or for its inclusion in any established automated dealer quotation system. Accordingly, we cannot assure you as to
the development of an active or liquid market for our Fantex Series&nbsp;EJ Manuel. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FBS
may market our Fantex Series&nbsp;EJ Manuel through roadshow presentations. Any roadshow presentations would be open only to residents of states in which the offering has been
registered. We also plan to market our Fantex Series&nbsp;EJ Manuel through media interviews in print and electronic media, including email, and other methods in compliance with applicable laws and
regulations, including securities laws. We plan to permit investors who wish to do so to review this prospectus online at our website at the internet address www.fantexinc.com and online at FBS's
website at the internet address www.fantex.com. We are not incorporating by reference in this prospectus either our website or FBS's website or any material either may include. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You
must open a brokerage account with FBS at www.fantex.com in order to participate in this offering. See below for additional information about opening a brokerage account with FBS. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>171</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
order to comply with the applicable securities laws of certain states, the securities will be offered or sold in those states only if they have been registered or qualified for sale
or an exemption from such registration is available with which we have complied. In addition, and without limiting the foregoing, we will be subject to applicable provisions, rules and regulations
under the Exchange Act with regard to securities transactions during the period of time when this registration statement is effective. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Offering Process  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The process being used for our initial public offering of Fantex Series&nbsp;EJ Manuel differs from methods that have been
traditionally used in most other underwritten initial public offerings in the United States. In particular, the shares of Fantex Series&nbsp;EJ Manuel are being offered at a predetermined price and
orders may only be entered through brokerage accounts with our broker-dealer affiliate, FBS, who is serving as an underwriter of this offering. We plan to conduct this offering in two
stages&#151;Qualification and Allocation. Investors that do not submit orders through the prescribed process will not be eligible for an allocation of shares in our offering. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> The Qualification Process  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our objective is to ensure that only investors for whom an investment in the Fantex Series&nbsp;EJ Manuel is suitable may participate
in the offering. Before you can submit a conditional offer to participate in the offering, which FBS refers to as "reserving shares" or a "reservation," you will be required to open a brokerage
account with FBS. You sign up to open a brokerage account with FBS at www.fantex.com. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon
review of the information that you provide in the account opening questionnaire, FBS will determine, in its sole discretion, whether you meet the criteria for investing in the
Fantex Series&nbsp;EJ Manuel. If FBS determines that you are eligible to participate in the offering, then your brokerage account will be opened and instructions will be provided on how to make a
reservation and fund your account. Before establishing a brokerage account with FBS and making a reservation for Fantex Series&nbsp;EJ Manuel you
should:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>read this prospectus, including all the risk factors; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>understand that our initial public offering price will be predetermined, and, if there is little or no demand for our
shares at or above the initial public offering price once trading in the secondary market begins, the price of our Fantex Series&nbsp;EJ Manuel shares may decline; and </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>understand that all of the outstanding shares of our Fantex Series&nbsp;EJ Manuel may be available for re-sale to the
public immediately after our initial public offering. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
caution you that our Fantex Series&nbsp;EJ Manuel may not be a suitable investment for you even if you qualify to open a brokerage account with FBS. Moreover, even if you have an
FBS brokerage account, you may not be able to submit a reservation for our Fantex Series&nbsp;EJ Manuel if you do not meet the suitability requirements, as discussed below, for the shares of the
Fantex Series&nbsp;EJ Manuel for which you are seeking to submit a reservation or as a result of other regulatory requirements described below. There is no minimum funding requirement to open an FBS
account or submit reservations. You are not obligated to purchase shares at the time you submit a reservation. However, once we accept your reservation for shares of our Fantex Series&nbsp;EJ
Manuel, you will become obligated to purchase the amount of the reservation accepted. Before we will accept your reservation for shares of our Fantex
Series&nbsp;EJ Manuel in this offering, you must have sufficient funds in your account to cover the purchase price for such shares. You will not be required to deposit funds into your FBS brokerage
account sufficient to cover the purchase price of the shares you reserved until after the registration statement is declared effective by the SEC. Finally, even if you open a brokerage account with
FBS, submit a </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>172</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>reservation
for shares of our Fantex Series&nbsp;EJ Manuel and have sufficient funds deposited in your brokerage account to cover the entire purchase price for such shares, you still may not receive
your complete allocation of shares in our offering for a number of reasons described below. To the extent that you do not have sufficient funds in your account to cover the purchase price for the
shares specified in your reservation at the time FBS accepts reservations, then we and FBS will disregard that portion of your reservation that is unfunded, and such portion of the reservation will be
deemed to have been withdrawn by you. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any
funds that you may deposit in your FBS brokerage account, whether before or after the time you submit a reservation, will not be withdrawn by FBS until such time, if at all, as your
reservation has been accepted by FBS. You may withdraw any funds at any time by requesting an electronic transfer of funds or a check from FBS. You may also cancel or modify your reservation at any
time prior to acceptance. Funds in your FBS account will not be designated for use in a particular offering at the time of deposit and any of your deposited funds may be used to purchase securities
other than those offered pursuant to this registration statement. However, at the time FBS accepts any reservations placed by you for a tracking stock, all available funds will first be applied
towards the purchase of the reserved securities. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Neither
we nor the underwriters have undertaken any efforts to qualify this offering for offers to investors in any jurisdiction outside the United States. Investors must have a U.S.
mailing address (other than a P.O.&nbsp;Box) and a U.S. social security number and/or a U.S. tax identification number to be eligible to participate in this offering. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Reconfirmations of Reservations  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We will require that potential investors reconfirm their reservations that they have submitted in the offering if any of the following
events shall occur:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>more than 15&nbsp;days have elapsed since the potential investor submitted his reservation in the offering; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>there has been a material change to the prospectus available to the potential investor at the time of such potential
investor's original reservation; or </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the offering prices below or more than 20% above the estimated initial public offering price of $10 per share. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
a reconfirmation of reservations is required, we will send an electronic notice, at the email address on file with FBS, notifying such potential investors that they must affirmatively
reconfirm their reservation by visiting their account page on the FBS website to reconfirm the reservation, or by otherwise contacting the lead underwriter, FBS. If a potential investor does not
reconfirm his or her reservation when requested, we and FBS will disregard such reservation in the offering, and such reservations will be deemed to have been withdrawn. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> The Closing Process  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This offering will terminate upon the earlier to occur of (i)&nbsp;30&nbsp;days after this registration statement becomes effective
with the SEC, or (ii)&nbsp;the date on which all shares offered hereby have been sold. You will have the ability to modify or withdraw any reservation you make until your reservation is accepted by
FBS. Such acceptance will occur when and if you are sent a notice of acceptance by FBS, at the email address on file with FBS. As noted above, if you are requested to reconfirm your reservation and
fail to do so, your reservation will be deemed to have been withdrawn. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
noted above, you may deposit funds in your FBS brokerage account either before or after the time you submit a reservation, but FBS will only accept a reservation to the extent there
are sufficient </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>173</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>funds
in your account at the time FBS accepts reservations, and FBS will not withdraw any funds from your FBS brokerage account until such time as any portion of your reservation has been accepted by
FBS. You may cancel or modify your reservation at any time prior to acceptance. The offering will not be considered sold until reservations have been accepted by FBS. FBS will provide an electronic
notice of effectiveness to you, at the email address on file with FBS, at least three days prior to accepting and confirming orders, which will be your final notice to withdraw or modify your
reservation. The notice will further inform you that reservations for Fantex Series&nbsp;EJ Manuel will only be considered to the extent you have sufficient funds in your account to cover the
purchase price for such shares. If your reservation is accepted, you will be obligated to purchase the shares allocated to you in the allocation process, and FBS will be authorized to withdraw the
sufficient funds from your FBS brokerage account. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Promptly
after we and the underwriters request the SEC to declare this registration statement effective, FBS will provide an electronic notice to you, at the email address on file with
FBS, that such request for effectiveness has been made. Once the registration statement is effective, FBS will send you a second electronic notice, at the email address on file with FBS, informing you
that the registration statement is effective and that FBS may accept your reservation in as little as three days. In the event reservations are placed subsequent to the SEC declaring this registration
statement effective, you will receive a final electronic notice, at the email address on file with FBS, informing you of your ability to modify or withdraw your reservations or fund your account in
amounts sufficient to cover your reservations and that FBS may accept your reservation in as little as twenty-four hours. FBS will stop allowing reservations to be made at least twenty-four hours
prior to when FBS intends to accept the reservations. Until reservations are accepted by FBS, you may still withdraw your reservations. However, once FBS has sent an electronic notice of acceptance at
the email address on file with FBS, regardless of whether you are aware that the registration statement has been declared effective or that the electronic notice of acceptance of that bid has been
sent, you may no longer withdraw your reservations. At this point, reservations will be deemed accepted orders and FBS will send you a confirmation of the transaction, at the email address on file
with FBS. Reservations must be accepted by FBS for the offering to close. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Following
the acceptance of your reservations, FBS will transmit your funds to an escrow account under the control of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, as the escrow agent, by noon of the next business
day pending closing of the offering. Such funds will be released by the escrow agent upon confirmation by the escrow agent that either (i)&nbsp;the minimum contingency for this offering has been
satisfied, including that all shares in the offering have been sold and the funds should be directed to us in return for shares of Fantex Series&nbsp;EJ Manuel or (ii)&nbsp;all the shares of
Fantex Series&nbsp;EJ Manuel have not been sold and the funds should be directed to FBS for credit to the account of its customers. The escrow agent will invest all funds it receives in an interest
bearing account in accordance with Rule&nbsp;15c2-4 under the Exchange Act. Assuming the offering is successful, shares of the Fantex Series&nbsp;EJ Manuel would then be credited to your FBS
account. If, on the closing date, sufficient funds are not received for all of the shares being offered, your funds that were deposited into the escrow account will be returned to your FBS account
promptly, with interest and without deduction for expenses and the offering will terminate. All funds returned to your FBS account are available for immediate withdrawal. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You
should understand that the trading price of our Fantex Series&nbsp;EJ Manuel could vary significantly from the initial public offering price. Therefore, we caution you not to
submit a reservation in the initial offering unless you are willing to take the risk that our Fantex Series&nbsp;EJ Manuel price could decline significantly and you could lose your entire investment
in our Fantex Series&nbsp;EJ Manuel. Subsequent trades of Fantex Series&nbsp;EJ Manuel also have associated transaction costs, expected to be up to 1% of the total amount of the purchase or sale,
which could reduce or eliminate your return on investment. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>174</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2><B><I> Acceptance of Offers  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the demand for shares in our initial public offering of Fantex Series&nbsp;EJ Manuel is at least equal to the number of shares set
forth on the cover of this prospectus, FBS may accept reservations at the initial public offering price by sending electronic notices of acceptance to customers, at the email address on file with FBS.
In this case, FBS can accept your order as discussed above. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
we do not receive sufficient reservations to sell all of the shares being offered hereby, we and FBS will either:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>provide notice on our and FBS's websites that the offering has been cancelled and send an electronic notice to everyone
who submitted a reservation for the Fantex Series&nbsp;EJ Manuel, at the email address on file with FBS, notifying them that the offering has been cancelled and all reservations will be cancelled
without any further action of the potential investors who have submitted reservations; or </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>revise the terms of the offering. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
the revised terms of the offering represent a material change in the prospectus available to you at the time of your original reservation, then we will require that you reconfirm
reservations as discussed above under "&#151;Reconfirmation of Reservations." If the revised terms of the offering do
not represent a material change in the prospectus available to you at the time of your original reservation, then FBS may accept your reservation by sending an electronic notice of acceptance to you,
at the email address on file with FBS. In this case, FBS can accept your reservation without further reconfirmation. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> The Allocation Process  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event that the number of shares represented by reservations during the initial offering period exceeds the number of shares we
are offering, the offered shares will need to be allocated across the group of potential investors who have submitted reservations. Immediately prior to acceptance we, in consultation with FBS, will
allocate the shares pro rata to potential investors who have submitted reservations and funded their accounts based on the following rules:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>a pro rata allocation percentage will be determined by dividing the number of shares we are offering by the number of
shares represented by the reservations received (to the extent accounts are funded at the time); and </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>each potential investor who has submitted a reservation will be allocated a number of shares equal to the pro rata
allocation percentage multiplied by the number of shares represented by the reservation (to the extent accounts are funded at the time), subject to rounding, but not less than one whole share. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following simplified, hypothetical example illustrates how pro rata allocation might work in practice: </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="eq10401_assumptions"> </A>
<A NAME="toc_eq10401_2"> </A>
<BR></FONT><FONT SIZE=2><B>  Assumptions    <BR>    </B></FONT></P>
 <DIV style="padding:0pt;position:relative;width:70%;margin-left:15%;">
<p style="font-family:times;"></FONT></P>

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<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="45pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Shares Offered</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>523,700</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total Shares Reserved</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>551,263</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Pro Rata Allocation Percentage</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>95</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
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 <P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>175</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2><A
HREF="#bg10401a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="eq10401_potential_investor"> </A>
<A NAME="toc_eq10401_3"> </A>
<BR></FONT><FONT SIZE=2><B>  Potential Investor    <BR>    </B></FONT></P>
 <DIV style="padding:0pt;position:relative;width:70%;margin-left:15%;">
<p style="font-family:times;"></FONT></P>

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<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="105pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="49pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TH NOWRAP  ALIGN="LEFT" style="font-family:times;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:31pt;"><FONT SIZE=1><B>Scenario

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 </B></FONT></DIV></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Shares Represented by<BR>
Original Reservation </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Pro Rata<BR>
Allocation </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>A</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>100</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>95</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>B</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>500</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>475</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>C</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1,200</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1,140</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>D</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1,800</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1,710</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>E</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2,400</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2,280</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>F</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>3,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2,850</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Other<SUP>(1)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>542,263</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>515,150</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Total</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>551,263</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>523,700</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
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 </DIV>
<DIV style="padding:0pt;position:relative;text-align:left;margin-left:15%;">
 <DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>No
investor will be allowed to purchase or hold more than 5%, or 26,185 shares, of Fantex Series&nbsp;EJ Manuel.  </FONT></DD></DL>
 </DIV>

<P style="font-family:times;"><FONT SIZE=2><B> Maximum Investment Limits and Financial Suitability  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Trading on FBS is subject to certain maximum investment limits, some of which are based on financial suitability of the investor. No
investor will be allowed to purchase or hold more than 5% of any tracking stock issued by our company including the Fantex Series&nbsp;EJ Manuel offered hereby. FBS may, in its sole discretion,
increase or decrease this limit on a offering-by-offering basis based upon the facts and circumstances surrounding the offering of any of our tracking stocks. In
addition:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>investors with an annual gross income of less than $50,000 or a net worth (exclusive of home, home furnishings and
automobile) of less than $50,000 may only invest up to $2,500 in this offering; and </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>investors with an annual gross income of between $50,000 and $100,000 or a net worth (exclusive of home, home furnishings
and automobile) of between $50,000 and $100,000 may only invest up to $7,500 in this offering. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Moreover,
certain states may impose more restrictive suitability and/or other investment limitations and you will be required to represent and warrant in your FBS account agreement that
you meet the applicable state financial suitability and other investment standards before you invest in any series of common stock issued by our company, including the Fantex Series&nbsp;EJ Manuel
offered hereby. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Secondary Trading  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This prospectus is not an offer to sell shares of our Fantex Series&nbsp;EJ Manuel and it is not a solicitation of an offer to buy
shares of our Fantex Series&nbsp;EJ Manuel in any jurisdiction where an offer or sale thereof is not permitted. As of February&nbsp;28, 2014, we are in the process of registering shares of our
Fantex Series&nbsp;EJ Manuel described in this prospectus for sale in the following states: </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
will not sell shares of our Fantex Series&nbsp;EJ Manuel to retail customers in any jurisdiction until registration is complete for that particular jurisdiction, or there is a valid
exemption from such registration in such jurisdiction. As of February&nbsp;28, 2014, we have been approved or otherwise have a valid exemption to sell shares of our Fantex Series&nbsp;EJ Manuel in
the following states: </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>176</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2><A
HREF="#bg10401a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition, after the offering you may not sell your shares of Fantex Series&nbsp;EJ Manuel (a secondary sale) to any person in any jurisdiction in which registration was not complete
for that particular jurisdiction or there was a valid exemption from such registration. There can be no assurance that we will be successful in annually renewing the registration of shares of our
Fantex Series&nbsp;EJ Manuel for resale with the foregoing states. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2><B> Market-Making Activities  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This prospectus, together with the relevant pricing supplement, if any, product supplement, if any, prospectus supplement and
prospectus describing the terms of the Fantex Series&nbsp;EJ Manuel being offered and sold, may be used by FBS in connection with offers and sales of such securities in secondary market transactions
at prevailing market prices at the time of sale, at prices related thereto or at negotiated prices, including in which FBS acts as a market-maker. FBS may act as principal or agent in these
transactions. FBS has no current intention of acting as a market-maker in the secondary market for the Fantex Series&nbsp;EJ Manuel, but may do so in the future. If FBS decides to make a market in a
tracking stock, it will first amend its Form ATS filed with the SEC to reflect such change. In the event FBS acts as a market-maker in the secondary market from time to time, it is not obligated to
make a market in the Fantex Series&nbsp;EJ Manuel and may discontinue any market-making at any time without notice, in its sole discretion. FBS is a member of FINRA and may participate in
distributions of the Fantex Series&nbsp;EJ Manuel. All secondary market offers and sales made pursuant to this prospectus and the pricing supplement, if any, product supplement, if any, prospectus
supplement and prospectus describing the terms of the Fantex Series&nbsp;EJ Manuel being offered and sold will be for the accounts of customers of FBS or FBS itself in connection with market-making
transactions. We will not receive any proceeds in connection with these secondary market offers and sales. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Conflicts of Interest  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Because FBS, an underwriter for this offering, is under common control with us and we will receive all of the net proceeds of the
offering, FBS is deemed to have a "conflict of interest" under FINRA Rule&nbsp;5121 of the Conduct Rules of FINRA. Accordingly, this offering will be made in compliance with the applicable
provisions of FINRA Rule&nbsp;5121 which requires, among other things, that a "qualified independent underwriter" participate in the preparation of, and exercise the usual standards of due diligence
with respect to, the registration statement and this prospectus. Stifel, Nicolaus&nbsp;&amp; Company, Incorporated has agreed to act as the "qualified independent underwriter" (as defined by FINRA) for
the offering and to undertake the legal responsibilities and liabilities of an underwriter under the Securities Act, specifically including performing due diligence investigations and reviewing and
participating in the preparation of the registration statement of which this prospectus forms&nbsp;a part. In consideration for its services and expenses as the qualified independent underwriter,
FBS has agreed to pay Stifel, Nicolaus&nbsp;&amp; Company, Incorporated a fee equal to $130,925, assuming the sale of 523,700 shares of Fantex Series&nbsp;EJ Manuel in this offering at an initial
public offering price of $10.00 per share (in each case, the amounts set forth on the front cover of this prospectus), which fee equals 50% of the underwriting discount that FBS will receive. Stifel,
Nicolaus&nbsp;&amp; Company, Incorporated will not be responsible for the final allocation of any shares or any market-making activities. We, Fantex Holdings and FBS have agreed to indemnify Stifel,
Nicolaus&nbsp;&amp; Company, Incorporated for acting as "qualified independent underwriter" against certain liabilities, including liabilities under the Securities Act, and to contribute to payments
that Stifel, Nicolaus&nbsp;&amp; Company, Incorporated may be required to make for those liabilities. Pursuant to FINRA Rule&nbsp;5121, FBS will not confirm sales to accounts in which it exercises
discretionary authority, if any, without the specific prior written approval of the account holder. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>177</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>
<A HREF="#bg10401a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="es10401_material_u.s._federal_income_tax_considerations"> </A>
<A NAME="toc_es10401_1"> </A>
<BR></FONT><FONT SIZE=2><B>  MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject to the qualifications, assumptions and limitations contained herein, the statements of law and legal conclusions contained
under this caption "Material U.S. Federal Income Tax Considerations" regarding the material U.S. federal income tax consequences of an investment in the Fantex Series&nbsp;EJ Manuel constitute the
opinion of Latham&nbsp;&amp; Watkins&nbsp;LLP. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> U.S. Federal Income Tax Treatment of the Fantex Series&nbsp;EJ Manuel  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fantex Series&nbsp;EJ Manuel should be treated as stock of Fantex for U.S. federal income tax purposes. There are, however, no
court decisions or other authorities directly bearing on the tax effects of the issuance and classification of stock with the features of Fantex Series&nbsp;EJ Manuel. In addition, the Internal
Revenue Service has announced that it will not issue advance rulings on the classification of an instrument with characteristics similar to those of Fantex
Series&nbsp;EJ Manuel. Accordingly, no assurance can be given that the views expressed in this paragraph, if contested, would be sustained by a court. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
Fantex Series&nbsp;EJ Manuel is considered property other than common stock of Fantex, Fantex would generally be taxed on a portion of the appreciation of the assets, if any,
attributable to Fantex Series&nbsp;EJ Manuel upon the issuance of such stock. In addition, income, gain, losses and deductions of one tracking stock brand would not be offset against the income,
gain, losses and deductions of another tracking stock brand. Prospective investors are urged to consult their tax advisors regarding the tax consequences of an investment in the Fantex
Series&nbsp;EJ Manuel. The remainder of this discussion assumes the Fantex Series&nbsp;EJ Manuel will be treated as common stock of Fantex. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Taxation of Non-U.S. Holders  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following discussion sets forth the material U.S. federal income tax consequences to non-U.S. holders (as defined below) of the
purchase, ownership and disposition of Fantex Series&nbsp;EJ Manuel issued pursuant to this offering, but does not purport to be a complete analysis of all potential tax effects. The effects of
other U.S. federal tax laws, such as estate and gift tax laws, and any applicable state, local or foreign tax laws are not discussed. This discussion is based on the Code, Treasury Regulations
promulgated thereunder, judicial decisions, and published rulings and administrative pronouncements of the IRS in effect as of February&nbsp;28, 2014. These authorities may change or be subject to
differing interpretations. Any such change may be applied retroactively in a manner that could adversely affect a non-U.S. holder of our Fantex Series&nbsp;EJ Manuel. We have not sought and will not
seek any rulings from the IRS regarding the matters discussed below. There can be no assurance the IRS or a court will not take a contrary position regarding the tax consequences of the purchase,
ownership and disposition of Fantex Series&nbsp;EJ Manuel. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
discussion is limited to non-U.S. holders that hold Fantex Series&nbsp;EJ Manuel as a "capital asset" within the meaning of Section&nbsp;1221 of the Code (property held for
investment). This discussion does not address all U.S. federal income tax consequences relevant to a non-U.S. holder's particular circumstances, including the impact of the unearned income Medicare
contribution tax. In addition, it does not address consequences relevant to non-U.S. holders subject to particular rules, including, without
limitation:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>U.S. expatriates and certain former citizens or long-term residents of the United States; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>persons subject to the alternative minimum tax; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>persons holding Fantex Series&nbsp;EJ Manuel as part of a hedge, straddle or other risk reduction strategy or as part of
a conversion transaction or other integrated investment; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>banks, insurance companies, and other financial institutions; </FONT></DD></DL>
</UL>
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<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>real estate investment trusts or regulated investment companies; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>brokers, dealers or traders in securities; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>"controlled foreign corporations," "passive foreign investment companies," and corporations that accumulate earnings to
avoid U.S. federal income tax; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>S corporations, partnerships or other entities or arrangements treated as partnerships for U.S. federal income tax
purposes; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>tax-exempt organizations or governmental organizations; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>persons deemed to sell Fantex Series&nbsp;EJ Manuel under the constructive sale provisions of the Code; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>persons who hold or receive Fantex Series&nbsp;EJ Manuel pursuant to the exercise of any employee stock option or
otherwise as compensation; and </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>tax-qualified retirement plans. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
a partnership (or other entity treated as a partnership for U.S. federal income tax purposes) holds Fantex Series&nbsp;EJ Manuel, the tax treatment of a partner in the partnership
will depend on the status of the partner, the activities of the partnership and certain determinations made at the partner level. Accordingly, partnerships holding Fantex Series&nbsp;EJ Manuel and
the partners in such partnerships should consult their tax advisors regarding the U.S. federal income tax consequences to them. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>THIS DISCUSSION IS NOT INTENDED AS TAX ADVICE. INVESTORS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE APPLICATION OF THE U.S. FEDERAL INCOME TAX LAWS TO
THEIR PARTICULAR SITUATIONS AS WELL AS ANY TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF FANTEX SERIES EJ MANUEL ARISING UNDER THE U.S. FEDERAL ESTATE OR GIFT TAX LAWS OR UNDER THE
LAWS OF ANY STATE, LOCAL OR NON-U.S. TAXING JURISDICTION OR UNDER ANY APPLICABLE INCOME TAX TREATY.</B></FONT></P>


<P style="font-family:times;"><FONT SIZE=2><B> Definition of a Non-U.S. Holder  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For purposes of this discussion, a "non-U.S. holder" is any beneficial owner of Fantex Series&nbsp;EJ Manuel that is neither a "U.S.
person" nor a partnership for United States federal income tax purposes. A U.S. person is any of the following:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>an individual who is a citizen or resident of the United States; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) created or organized under
the laws of the United States, any state thereof, or the District of Columbia; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>an estate, the income of which is subject to U.S. federal income tax regardless of its source; or </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>a trust that (1)&nbsp;is subject to the primary supervision of a U.S. court and the control of one or more United States
persons (within the meaning of Section&nbsp;7701(a)(30) of the Code), or (2)&nbsp;has made a valid election under applicable Treasury Regulations to continue to be treated as a United States
person. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2><B> Dividends and Distributions  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If we make distributions of cash or property on Fantex Series&nbsp;EJ Manuel, such distributions will constitute dividends for U.S.
federal income tax purposes to the extent paid from our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. Amounts not </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>179</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>treated
as dividends for U.S. federal income tax purposes will constitute a return of capital and first be applied against and reduce a non-U.S. holder's adjusted tax basis in its Fantex
Series&nbsp;EJ Manuel, but not below zero. Any excess will be treated as capital gain and will be treated as described below under "&#151;Sale or Other Taxable Disposition." </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject
to the discussion below on backup withholding and foreign accounts, dividends paid to a non-U.S. holder of Fantex Series&nbsp;EJ Manuel that are not effectively connected with
the non-U.S. holder's conduct of a trade or business within the United States will be subject to U.S. federal withholding tax at a rate of 30% of the gross amount of the dividends (or such lower rate
specified by an applicable income tax treaty). </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-U.S.
holders will be entitled to a reduction in or an exemption from withholding on dividends as a result of either (a)&nbsp;an applicable income tax treaty or (b)&nbsp;the
non-U.S. holder holding Fantex Series&nbsp;EJ Manuel in connection with the conduct of a trade or business within the United States and dividends being paid in connection with that trade or
business. To claim such a reduction in or exemption from withholding, the non-U.S. holder must provide the applicable withholding agent with a properly executed (a)&nbsp;IRS Form&nbsp;W-8BEN
claiming an exemption from or reduction of the withholding tax under the benefit of an income tax treaty between the United States and the country in which the non-U.S. holder resides or is
established, or (b)&nbsp;IRS Form&nbsp;W-8ECI stating that the dividends are not subject to withholding tax because they are effectively connected with the conduct by the non-U.S. holder of a
trade or business within the United States, as may be applicable. These certifications must be provided to the applicable withholding agent prior to the payment of dividends and must be updated
periodically. Non-U.S. holders that do not timely provide the applicable withholding agent with the required certification, but that qualify for a reduced rate under an applicable income tax treaty,
may obtain a refund of any excess amounts withheld by timely filing an appropriate claim for refund with the IRS. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject
to the discussion below on backup withholding and foreign accounts, if dividends paid to a non-U.S. holder are effectively connected with the non-U.S. holder's conduct of a trade
or business within the United States (and, if required by an applicable income tax treaty, the non-U.S. holder maintains a permanent establishment in the United States to which such dividends are
attributable), then, although exempt from U.S. federal withholding tax (provided the non-U.S. holder provides appropriate certification, as described above), the non-U.S. holder will be subject to
U.S. federal income tax on such dividends on a net income basis at the regular graduated U.S. federal income tax rates. In addition, a non-U.S. holder that is a corporation may be subject to a branch
profits tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty) on its effectively connected earnings and profits for the taxable year that are attributable to such
dividends, as adjusted for certain items. Non-U.S. holders should consult their tax advisors regarding their entitlement to benefits under any applicable income tax treaty. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Sale or Other Taxable Disposition  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject to the discussions below on backup withholding and foreign accounts, a non-U.S. holder will not be subject to U.S. federal
income tax on any gain realized upon the sale or other disposition of Fantex Series&nbsp;EJ Manuel unless:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the gain is effectively connected with the non-U.S. holder's conduct of a trade or business within the United States (and,
if required by an applicable income tax treaty, the non-U.S. holder maintains a permanent establishment in the United States to which such gain is attributable); </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the non-U.S. holder is a nonresident alien individual present in the United States for 183&nbsp;days or more during the
taxable year of the disposition and certain other requirements are met; or </FONT></DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>180</FONT></P>

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<UL>
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<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Fantex Series&nbsp;EJ Manuel constitutes a U.S. real property interest ("USRPI") by reason of our status as a U.S. real
property holding corporation (a "USRPHC") for U.S. federal income tax purposes. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain
described in the first bullet point above will generally be subject to U.S. federal income tax on a net income basis at the regular graduated U.S. federal income tax rates. A
non-U.S. holder that is a foreign corporation also may be subject to a branch profits tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty) of a portion of its
effectively connected earnings and profits for the taxable year, as adjusted for certain items. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
non-U.S. holder described in the second bullet point above will be subject to U.S. federal income tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty)
on any gain derived from the disposition, which may be offset by certain U.S. source capital losses of the non-U.S. holder (even though the individual is not considered a resident of the United
States) provided the non-U.S. holder has timely filed U.S. federal income tax returns with respect to such losses. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;With
respect to the third bullet point above, we believe we are not currently and do not anticipate becoming a USRPHC. Because the determination of whether we are a USRPHC depends on the
fair market value of our USRPIs relative to the fair market value of our other business assets and our non-U.S. real property interests, however, there can be no assurance we are not a USRPHC or will
not become one in the future. Even if we are or were to become a USRPHC, gain arising from the sale or other taxable disposition by a non-U.S. holder of Fantex Series&nbsp;EJ Manuel will not be
subject to U.S. federal income tax if such class of stock is "regularly traded," as defined by applicable Treasury Regulations, on an established securities market, and such non-U.S. holder owned,
actually or constructively, 5% or less of such class of our stock throughout the shorter of the five-year period ending on the date of the sale or other disposition or the non-U.S. holder's holding
period for such stock. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-U.S.
holders should consult their tax advisors regarding potentially applicable income tax treaties that may provide for different rules. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Conversion  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our board of directors may, at any time following the two-year anniversary of the filing of a certificate of designation creating
Fantex Series&nbsp;EJ Manuel resolve to convert our Fantex Series&nbsp;EJ Manuel into fully paid and non-assessable shares of our platform common stock at a conversion ratio to be determined by
dividing the fair value of a share of our Fantex Series&nbsp;EJ Manuel by the fair value of a share of our platform common stock. If the Fantex Series&nbsp;EJ Manuel is treated as the stock of
Fantex, an exchange of stock incident to such a conversion will qualify as a tax-free recapitalization such that no gain or loss should be recognized by Fantex or by holders of Fantex Series&nbsp;EJ
Manuel. If, however, the Fantex Series&nbsp;EJ Manuel is not treated as the stock of Fantex, then a conversion of Fantex Series&nbsp;EJ Manuel into shares of platform common stock would be a
taxable exchange for federal income tax purposes. In such a case, holders of a share of Fantex Series&nbsp;EJ Manuel would recognize gain or loss in an amount equal to the difference between the
fair market value of the platform common stock received and their adjusted basis in the share of Fantex Series&nbsp;EJ Manuel surrendered in the conversion. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Information Reporting and Backup Withholding  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject to the discussion below on foreign accounts, a non-U.S. holder will not be subject to backup withholding with respect to
payments of dividends on Fantex Series&nbsp;EJ Manuel we make to the non-U.S. holder, provided the applicable withholding agent does not have actual knowledge or reason to know such holder is a
United States person and the holder certifies its non-U.S. status, such as by providing a valid IRS Form&nbsp;W-8BEN or W-8ECI, or other applicable certification. However, </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>181</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>information
returns will be filed with the IRS in connection with any dividends on Fantex Series&nbsp;EJ Manuel paid to the non-U.S. holder, regardless of whether any tax was actually withheld.
Copies of these information returns may also be made available under the provisions of a specific treaty or agreement to the tax authorities of the country in which the non-U.S. holder resides or is
established. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Information
reporting and backup withholding may apply to the proceeds of a sale of Fantex Series&nbsp;EJ Manuel within the United States, and information reporting may (although
backup withholding generally will not) apply to the proceeds of a sale of Fantex Series&nbsp;EJ Manuel outside the United States conducted through certain U.S.-related financial intermediaries, in
each case, unless the beneficial owner certifies under penalty of perjury that it is a non-U.S. holder on IRS Form&nbsp;W-8BEN or other applicable form (and the payor does not have actual knowledge
or reason to know that the beneficial owner is a United States person) or such owner otherwise establishes an exemption. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Backup
withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be allowed as a refund or a credit against a non-U.S. holder's U.S. federal
income tax liability, provided the required information is timely furnished to the IRS. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Additional Withholding Tax on Payments Made to Foreign Accounts  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Withholding taxes may be imposed under the Sections&nbsp;1471 through 1474 of the Code (commonly referred to as FATCA) on certain
types of payments made to non-U.S. financial institutions and certain other non-U.S. entities. Specifically, a 30% withholding tax may be imposed on dividends on, or gross proceeds from the sale or
other disposition of, Fantex Series&nbsp;EJ Manuel paid to a "foreign financial institution" or a "non-financial foreign entity" (each as defined in the Code), unless (1)&nbsp;the foreign
financial institution undertakes certain diligence and reporting obligations, (2)&nbsp;the non-financial foreign entity either certifies it does not have any "substantial United States owners" (as
defined in the Code) or furnishes identifying information regarding each substantial United States owner, or (3)&nbsp;the foreign financial institution or non-financial foreign entity otherwise
qualifies for an exemption from these rules. If the payee is a foreign financial institution and is subject to the diligence and reporting requirements in (1)&nbsp;above, it must enter into an
agreement with the U.S. Department of the Treasury requiring, among other things, that it undertake to identify accounts held by certain "specified United States persons" or "United States-owned
foreign entities" (each as defined in the Code), annually report certain information about such accounts, and withhold 30% on payments to non-compliant foreign financial institutions and certain other
account holders. Foreign financial institutions located in jurisdictions that have an intergovernmental agreement with the United States governing FATCA may be subject to different rules. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under
the applicable Treasury Regulations, withholding under FATCA generally will apply to payments of dividends on Fantex Series&nbsp;EJ Manuel made on or after July&nbsp;1, 2014
and to payments of gross proceeds from the sale or other disposition of such stock on or after January&nbsp;1, 2017. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prospective
investors should consult their tax advisors regarding the potential application of withholding under FATCA to their investment in Fantex Series&nbsp;EJ Manuel. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>182</FONT></P>

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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
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<BR></FONT><FONT SIZE=2><B>  LEGAL MATTERS    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The validity of the shares of Fantex Series&nbsp;EJ Manuel we are offering, and certain tax matters will be passed upon by
Latham&nbsp;&amp; Watkins&nbsp;LLP, Menlo Park, California. Certain legal matters in connection with this offering will be passed upon for the underwriters by Cooley&nbsp;LLP, Palo Alto, California. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="es10401_experts"> </A>
<A NAME="toc_es10401_3"> </A>
<BR></FONT><FONT SIZE=2><B>  EXPERTS    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The financial statements of Fantex,&nbsp;Inc. included in this prospectus have been audited by Deloitte&nbsp;&amp; Touche&nbsp;LLP,
an independent registered public accounting firm, as stated in their report appearing herein (which report expresses an unqualified opinion and includes an explanatory paragraph referring to
Fantex,&nbsp;Inc. being in the development stage). Such financial statements are included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Statements of Cash Receipts from Included Contracts for each of EJ Manuel, Vernon Davis and Arian Foster included in this prospectus have been audited by Deloitte&nbsp;&amp;
Touche&nbsp;LLP, an independent registered public accounting firm, as stated in their report appearing herein (which report expresses an unqualified opinion and includes an explanatory paragraph
referring to the purpose of the statements). Such Statements of Cash Receipts from Included Contracts have been so included in reliance upon the report of such firm given upon their authority as
experts in accounting and auditing. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="es10401_where_you_can_find_more_information"> </A>
<A NAME="toc_es10401_4"> </A>
<BR></FONT><FONT SIZE=2><B>  WHERE YOU CAN FIND MORE INFORMATION    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have filed with the SEC a registration statement on Form&nbsp;S-1 under the Securities Act with respect to the shares of our
Fantex Series&nbsp;EJ Manuel being offered by this prospectus. This prospectus, which constitutes part of that registration statement, does not contain all
of the information set forth in the registration statement or the exhibits and schedules that are part of the registration statement. Some items included in the registration statement are omitted from
the prospectus in accordance with the rules and regulations of the SEC. For further information with respect to us and the Fantex Series&nbsp;EJ Manuel offered in this prospectus, we refer you to
the registration statement and the accompanying exhibits and schedules. Statements contained in this prospectus regarding the contents of any contract, agreement or any other document to which
reference is made are summaries of the material terms of these contracts, agreements or other documents. With respect to each of these contracts, agreements or other documents filed as an exhibit to
the registration statement, reference is made to such exhibit for a more complete description of the matter involved. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
copy of the registration statement and the accompanying exhibits and schedules and any other document we file may be inspected without charge at the public reference facilities
maintained by the SEC in 100&nbsp;F Street, N.E., Washington, D.C. 20549 and copies of all or any part of the registration statement may be obtained from this office upon the payment of the fees
prescribed by the SEC. The public may obtain information on the operation of the public reference facilities in Washington, D.C. by calling the SEC at 1-800-SEC-0330. Our filings with the SEC are
available to the public from the SEC's website at www.sec.gov. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon
the closing of this offering, we will be subject to the information and periodic reporting requirements of the Exchange Act applicable to a company with securities registered
pursuant to Section&nbsp;12 of the Exchange Act. In accordance therewith, we will file proxy statements, periodic information and other information with the SEC. All documents filed with the SEC are
available for inspection and copying at the public reference room and website of the SEC referred to above. We maintain a website at www.fantexinc.com. You may access our reports, proxy statements and
other information free of charge at this website as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC. The information contained in, or that can
be accessed through, our website is not incorporated by reference and is not a part of this prospectus. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>183</FONT></P>

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<A HREF="#bg10401a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="fa10401_index_to_financial_statements"> </A>
<BR></FONT><FONT SIZE=2><B>  INDEX TO FINANCIAL STATEMENTS    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>
<A NAME="FA10401_TOC"></A> </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:times;"></FONT></P>

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<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TD VALIGN="TOP" style="font-family:times;"><A HREF="#1"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Report of Independent Registered Public Accounting Firm</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#1"><FONT SIZE=2>F-2</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><A HREF="#2"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Balance Sheet, as of December&nbsp;31, 2012 and 2013</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#2"><FONT SIZE=2><BR>
F-3</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><A HREF="#3"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Statement of Operations, for the period from inception to December&nbsp;31, 2012 and year ended
December&nbsp;31, 2013</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#3"><FONT SIZE=2><BR>
F-4</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><A HREF="#4"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Statement of Stockholder's Equity, for the period from inception to December&nbsp;31, 2012 and year ended
December&nbsp;31, 2013</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#4"><FONT SIZE=2><BR>
F-5</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><A HREF="#5"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Statement of Cash Flows, for the period from inception to December&nbsp;31, 2012 and year ended
December&nbsp;31, 2013</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#5"><FONT SIZE=2><BR>
F-6</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><A HREF="#fm10401_notes_to_financial_statements"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Notes to Financial Statements</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#fm10401_notes_to_financial_statements"><FONT SIZE=2><BR>
F-7</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
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<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investors
in our Fantex Series&nbsp;EJ Manuel are investing in Fantex and not in the brand contract or EJ Manuel. However, Fantex Series&nbsp;EJ Manuel is intended to track and
reflect the separate economic performance of the assets to be attributed to the EJ Manuel Brand. Only Fantex will have rights under
the brand contract and recourse against EJ Manuel. We are presenting separate financial information about the EJ Manuel Brand. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>F-1</FONT></P>

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<A HREF="#bg10401a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="fc10401_report_of_independent___fc102270"> </A>
<A NAME="toc_fc10401_1"> </A>
<BR></FONT><FONT SIZE=2><B>  <A NAME="1"></A>Report of Independent Registered Public Accounting Firm    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>To
the Board of Directors and Stockholder of<BR>
Fantex,&nbsp;Inc. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
have audited the accompanying balance sheets of Fantex,&nbsp;Inc. (a development-stage entity) (the "Company") as of December&nbsp;31, 2013 and 2012, and the related statements of
operations, stockholder's equity, and cash flows for the period from September&nbsp;14, 2012 (inception) to December&nbsp;31, 2012, for the year ended December&nbsp;31, 2013 and for the period
from September&nbsp;14, 2012 (inception) to December&nbsp;31, 2013. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audits. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our audits provides a reasonable basis for our opinion. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
our opinion, such financial statements present fairly, in all material respects, the financial position of Fantex,&nbsp;Inc. as of December&nbsp;31, 2013 and 2012, and the results
of its operations and its cash flows for the period from September&nbsp;14, 2012 (inception) to December&nbsp;31, 2012, for the year ended December&nbsp;31, 2013 and for the period from
September&nbsp;14, 2012 (inception) to December&nbsp;31, 2013, in conformity with accounting principles generally accepted in the United States of America. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company is in the development stage at December&nbsp;31, 2013. As discussed in Note&nbsp;1 to the financial statements, the Company is subject to certain significant risks and
uncertainties. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>/s/
Deloitte&nbsp;&amp; Touche&nbsp;LLP<BR>
San Francisco, CA<BR>
February&nbsp;28, 2014 </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>F-2</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2><A
NAME="2"></A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="fe10401_fantex,_inc._(developm__fe101915"> </A>
<A NAME="toc_fe10401_1"> </A></FONT> <FONT SIZE=2><B><BR>  FANTEX,&nbsp;INC. (DEVELOPMENT-STAGE ENTITY)    <BR>    <BR>    BALANCE SHEETS    <BR>    </B></FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:times;"></FONT></P>

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<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="65pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
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<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>As of December&nbsp;31 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2012 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2013 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>ASSETS</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Cash and Cash Equivalents</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>466,833</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Prepaid Assets</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>306,041</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total Assets</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>772,874</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0pt;font-family:times;">


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<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2>


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 </font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
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<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2>


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<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
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&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>LIABILITIES AND STOCKHOLDER'S EQUITY</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total Liabilities</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0pt;font-family:times;">


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0pt;" -->


&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0.1pt;" -->


 </font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0.75pt;" -->


 </font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0pt;font-family:times;">



<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0pt;" -->


&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Commitments and Contingencies</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Contributed Capital</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Common stock, $0.0001 par value (authorized 100,000,000 shares, 100,000,000 issued and outstanding)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>10,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>10,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0pt;font-family:times;">


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0pt;" -->


&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0.1pt;" -->


 </font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Additional Paid in Capital</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,053,023</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5,388,192</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0pt;font-family:times;">


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->





<!-- COMMAND=ADD_GUTTERGRID,"line-height:0pt;" -->


&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0.1pt;" -->


 </font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Accumulated Losses</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(1,063,023</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(4,625,318</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0pt;font-family:times;">


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0pt;" -->


&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0.1pt;" -->


 </font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total stockholder's equity</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>772,874</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0pt;font-family:times;">


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0pt;" -->


&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0.1pt;" -->


 </font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total liabilities and stockholder's equity</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>772,874</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0pt;font-family:times;">


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0pt;" -->


&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0.1pt;" -->


 </font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0.75pt;" -->


 </font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0pt;font-family:times;">


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0pt;" -->


&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
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<!-- BLANK LINE TO FORCE PARA -->
&nbsp;&nbsp;&nbsp;
</font></p><p align=center style="font-family:times;"><font> </FONT> <FONT SIZE=2>
See notes to financial statements. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>F-3</FONT></P>

<HR NOSHADE>
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<!-- ZEQ.=1,SEQ=191,EFW="2218564",CP="FANTEX INC.",DN="1",CHK=877189,FOLIO='F-3',FILE='DISK116:[14ZAT1.14ZAT10401]FE10401A.;5',USER='CHE108056',CD='28-FEB-2014;05:11' -->
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<P style="font-family:times;"><FONT SIZE=2>
<A HREF="#bg10401a_main_toc">Table of Contents</A> </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><A
NAME="3"></A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="fg10401_fantex,_inc._(development-stag__fan02375"> </A>
<A NAME="toc_fg10401_1"> </A></FONT> <FONT SIZE=2><B><BR>  FANTEX,&nbsp;INC. (DEVELOPMENT-STAGE ENTITY)    <BR>    <BR>    STATEMENTS OF OPERATIONS    <BR>    </B></FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:times;"></FONT></P>

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<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="68pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="77pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="65pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Cumulative<BR>
Amounts from<BR>
September&nbsp;14,<BR>
2012<BR>
(Inception) to<BR>
December&nbsp;31,<BR>
2013 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>The Period from<BR>
September&nbsp;14,<BR>
2012<BR>
(Inception) to<BR>
December&nbsp;31,<BR>
2012 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Year Ended<BR>
December&nbsp;31,<BR>
2013 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>REVENUES</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>OPERATING EXPENSES:</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:30pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Personnel</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>973,892</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>98,174</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>875,718</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:30pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Professional Services</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>3,103,251</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>798,231</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2,305,020</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:30pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>General and administrative, exclusive of personnel costs</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>548,175</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>166,618</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>381,557</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="TOP">
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">



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&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="TOP">
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0.1pt;" -->


 </font>&#8203;</TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total Operating Expenses</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>4,625,318</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1,063,023</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>3,562,295</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="TOP">
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0pt;" -->


&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="TOP">
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2>



<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0.1pt;" -->


 </font>&#8203;</TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net Loss Before Income Taxes</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(4,625,318</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(1,063,023</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(3,562,295</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Income Taxes</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="TOP">
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0pt;" -->


&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="TOP">
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0.1pt;" -->


 </font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net Loss</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(4,625,318</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(1,063,023</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(3,562,295</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="TOP">
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0pt;" -->


&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="TOP">
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2>



<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0.1pt;" -->


 </font>&#8203;</TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="TOP">
<TD VALIGN="BOTTOM" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0.75pt;" -->


 </font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="TOP">
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->





<!-- COMMAND=ADD_GUTTERGRID,"line-height:0pt;" -->


&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Loss per share</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Basic (weighted average shares&#151;100,000,000)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(0.05</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(0.01</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(0.04</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Diluted (weighted average shares&#151;100,000,000)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(0.05</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(0.01</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(0.04</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
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<!-- BLANK LINE TO FORCE PARA -->
&nbsp;&nbsp;&nbsp;
</font></p><p align=center style="font-family:times;"><font> </FONT> <FONT SIZE=2>
See notes to financial statements. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>F-4</FONT></P>

<HR NOSHADE>
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<P style="font-family:times;"><FONT SIZE=2>
<A HREF="#bg10401a_main_toc">Table of Contents</A> </FONT></P>


<P style="font-family:times;"><FONT SIZE=2><A
NAME="4"></A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="fi10401_fantex,_inc._(development-stag__fan02797"> </A>
<A NAME="toc_fi10401_1"> </A></FONT> <FONT SIZE=2><B><BR>  FANTEX,&nbsp;INC. (DEVELOPMENT-STAGE ENTITY)    <BR>    <BR>    STATEMENTS OF STOCKHOLDER'S EQUITY    <BR>    </B></FONT></P>
 <DIV style="padding:0pt;position:relative;width:67%;margin-left:10%;">
<p style="font-family:times;"></FONT></P>

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<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="68pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="45pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="61pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="65pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="65pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Common Stock </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Additional<BR>
Paid-in-<BR>
Capital </B></FONT></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Accumulated<BR>
Losses </B></FONT></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Total<BR>
Stockholder's<BR>
Equity </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Shares </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Amount </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Balance at September&nbsp;14, 2012 (Inception)</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Common stock</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>100,000,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>10,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>10,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Contributions from Parent</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,053,023</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,053,023</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net losses</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(1,063,023</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(1,063,023</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0pt;font-family:times;">


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0pt;" -->


&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0.1pt;" -->


 </font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Balance at December&nbsp;31, 2012</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>100,000,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>10,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,053,023</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(1,063,023</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0pt;font-family:times;">


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0pt;" -->


&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0.1pt;" -->


 </font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Contributions from Parent</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>4,335,169</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>4,335,169</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net losses</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(3,562,295</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(3,562,295</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0pt;font-family:times;">



<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0pt;" -->


&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->





<!-- COMMAND=ADD_GUTTERGRID,"line-height:0.1pt;" -->


 </font>&#8203;</TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Balance at December&nbsp;31, 2013</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>100,000,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>10,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5,388,192</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(4,625,318</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>772,874</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0pt;font-family:times;">


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0pt;" -->


&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0.1pt;" -->


 </font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0.75pt;" -->


 </font>&#8203;</TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0pt;font-family:times;">


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




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&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
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<!-- BLANK LINE TO FORCE PARA -->
&nbsp;&nbsp;&nbsp;
</font></p><p align=center style="font-family:times;"><font> </FONT> <FONT SIZE=2>
See notes to financial statements. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>F-5</FONT></P>

<HR NOSHADE>
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<A HREF="#bg10401a_main_toc">Table of Contents</A> </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><A
NAME="5"></A> </FONT></P>

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NAME="fk10401_fantex,_inc._(development-stag__fan02348"> </A>
<A NAME="toc_fk10401_1"> </A></FONT> <FONT SIZE=2><B><BR>  FANTEX,&nbsp;INC. (DEVELOPMENT-STAGE ENTITY)    <BR>    <BR>    STATEMENTS OF CASH FLOWS    <BR>    </B></FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:times;"></FONT></P>

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<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="68pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="77pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="65pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Cumulative<BR>
Amounts from<BR>
September&nbsp;14,<BR>
2012<BR>
(Inception) to<BR>
December&nbsp;31,<BR>
2013 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>The Period from<BR>
September&nbsp;14,<BR>
2012<BR>
(Inception) to<BR>
December&nbsp;31,<BR>
2012 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Year Ended<BR>
December&nbsp;31,<BR>
2013 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Operating Activities</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net loss</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(4,625,318</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(1,063,023</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(3,562,295</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0pt;font-family:times;">


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0pt;" -->


&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0.1pt;" -->


 </font>&#8203;</TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Adjustments to reconcile net loss to net cash used in operating activities:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:30pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Change in Due to Parent</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(306,041</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(306,041</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:30pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Non-cash contributions from Parent</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>3,398,192</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,063,023</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2,335,169</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0pt;font-family:times;">



<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0pt;" -->


&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0.1pt;" -->


 </font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net cash used in operating activities</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(1,533,167</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(1,533,167</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Financing Activities</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Contributed Capital</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2,000,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2,000,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0pt;font-family:times;">


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0pt;" -->


&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0.1pt;" -->


 </font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net cash provided by financing activities</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2,000,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2,000,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Cash and Cash Equivalents at Beginning of Period</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0pt;font-family:times;">


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0pt;" -->


&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->





<!-- COMMAND=ADD_GUTTERGRID,"line-height:0.1pt;" -->


 </font>&#8203;</TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Cash and Cash Equivalents at End of Period</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>466,833</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>466,833</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0pt;font-family:times;">


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0pt;" -->


&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0.1pt;" -->


 </font>&#8203;</TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0.75pt;" -->


 </font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0pt;font-family:times;">


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&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Cash Paid for Interest</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0pt;font-family:times;">


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<!-- COMMAND=ADD_GUTTERGRID,"line-height:0pt;" -->


&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2>


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 </font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0.75pt;" -->


 </font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0pt;font-family:times;">



<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0pt;" -->


&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Cash Paid for Taxes</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0pt;font-family:times;">


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<!-- COMMAND=ADD_GUTTERGRID,"line-height:0pt;" -->


&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2>


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<!-- COMMAND=ADD_GUTTERGRID,"line-height:0.1pt;" -->


 </font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2>


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 </font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0pt;font-family:times;">


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0pt;" -->


&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Non-Cash Financing Activities:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Contributions from Parent</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>3,398,355</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,063,023</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2,335,169</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
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&nbsp;&nbsp;&nbsp;
</font></p><p align=center style="font-family:times;"><font> </FONT> <FONT SIZE=2>
See notes to financial statements. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>F-6</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<P style="font-family:times;"><FONT SIZE=2><A
NAME="page_fm10401_1_7"> </A>


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</FONT></P>

<!-- TOC_END -->

<P style="font-family:times;"><FONT SIZE=2>
<A HREF="#bg10401a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="fm10401_notes_to_financial_statements"> </A>
<A NAME="toc_fm10401_1"> </A></FONT> <FONT SIZE=2><B><BR>  NOTES TO FINANCIAL STATEMENTS    <BR>    </B></FONT></P>


<P style="font-family:times;"><FONT SIZE=2><B> 1. BUSINESS  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Nature of Operations</B></FONT><FONT SIZE=2>&#151;Fantex,&nbsp;Inc. (the "Company" or "Fantex") was incorporated in Delaware in September 2012 and is a wholly-owned subsidiary
of Fantex Holdings,&nbsp;Inc. (the "Parent"). Fantex is a development-stage entity and has relied on the Parent to date to conduct its operations. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
November&nbsp;1, 2013, the Company effected a 1,000,000 to 1 stock split of the Company's common stock outstanding. All common stock share data included in these financial
statements give retroactive effect to the stock split. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fantex
is a brand acquisition, marketing and brand development company whose focus is on acquiring minority interests in the income associated with the brands of professional athletes,
entertainers and other high-profile individuals (together with affiliated entities, the "Contract Party") and assisting such individuals in enhancing the reach and value of the brands the Company
acquires. The business operates in a single segment and its focus is on three core areas:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>evaluating, targeting and accessing individuals and brands with the potential to generate significant income associated
with these brands, or brand income; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>acquiring minority interests in such brand income; and </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>assisting the acquired brands in increasing their value via technology and through leveraging Fantex's marketing,
advertising and strategic partnering expertise. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fantex
is currently managed by the Parent while the Company is commencing operations. The Company will continue to rely on the Parent to conduct its operations until such time as the
Company's revenues are sufficient to finance operations. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subsequent
to the successful completion of its first initial public offering, the Company intends to operate under a management agreement with the Parent that will provide Fantex with
management and administrative services, including providing and compensating the Company's executive management and other personnel, as well as services relating to information technology support,
brand management and other support operations, facilities, human resources, tax planning and administration, accounting, treasury and insurance. The Company will begin to assume direct management and
administrative responsibilities at such time in the future as the actual cost of these services is less than the service fee to Parent, which is not anticipated to occur until the Company begins to
generate revenue from multiple contracts with the Contract Parties ("Brand Contracts"). </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All
expenses incurred for the period ending December&nbsp;31, 2012 and the majority of expenses incurred for the year ended December&nbsp;31, 2013 were paid by the Parent and
allocated to Fantex based on the expenses incurred by Fantex in its operations. The allocations were based on the time spent by employees of the Parent on activities of Fantex, the number of full time
equivalent employees performing Fantex activities and direct expenses incurred for the operations of Fantex. The expense allocations have been determined on the basis that Fantex and the Parent
considered to be reasonable reflections of the utilization of services provided or the benefit received by Fantex. Management believes that the expenses allocated to Fantex are representative of the
operating expenses it would have incurred had Fantex been operated on a stand-alone basis. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
the period from September&nbsp;14, 2012 to September&nbsp;30, 2012 no expenses were incurred by the Parent for the operations of the Company; operations and expenses were
incurred by the Parent on behalf of the Company starting after December&nbsp;31, 2012. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>F-7</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<A NAME="page_fm10401_1_8"> </A>

<P style="font-family:times;"><FONT SIZE=2><A
HREF="#bg10401a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B><BR>
NOTES TO FINANCIAL STATEMENTS (Continued) </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> 1. BUSINESS (Continued) </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
the year ended December&nbsp;31, 2013, the Company paid the Parent $1,533,167 for certain direct expenses incurred on behalf of the Company, the first period in which the Company
paid for certain expenses as opposed to contributions from the Parent. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certain Significant Risks and Uncertainties</B></FONT><FONT SIZE=2>&#151;The Company can be affected by a variety of factors. Management of the Company believes that changes in
any of the following areas could have a significant negative effect on the Company in terms of its future financial position, results of operations or cash flows: the ability to maintain an adequate
rate of growth; the impact of the current economic climate on its business; the ability to effectively manage its growth; the ability to attract new Contract Parties; the ability to improve the
performance of Contract Parties; and the impact of labor issues in any of the major professional sports leagues. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basis of Presentation</B></FONT><FONT SIZE=2>&#151;The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the
United States of America ("GAAP"). The financial statements include the accounts of the Company. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Use of Estimates</B></FONT><FONT SIZE=2>&#151;The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts
reported and disclosed in the financial statements and the accompanying notes. On an ongoing basis, management will evaluate these estimates, including those related to accounts receivable, fair
values of financial instruments, income taxes, and contingent liabilities, among others. Estimates will be based on historical experience and on various other assumptions that are believed to be
reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ materially from these estimates. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash and Cash Equivalents</B></FONT><FONT SIZE=2>&#151;Cash and cash equivalents include cash on hand, cash held in banks and highly liquid investments with original maturities at
purchase of three months or less. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income Taxes</B></FONT><FONT SIZE=2>&#151;Income taxes are accounted for under the asset and liability method, which requires the recognition of deferred tax assets and
liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the
differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a
change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The current and deferred tax expense is presented under the separate
return method. Under the separate return method, Fantex calculates its tax provision as if it were filing a separate tax return. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred
tax assets are recorded to the extent management believes these assets will more likely than not be realized. In making such a determination, all available positive and negative
evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations is considered. In the event
it is determined that the Company would be able to realize deferred tax assets in the future, an adjustment to the deferred tax asset valuation allowance would be made, which would reduce the
provision for income taxes. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Uncertain
tax positions are recorded on the basis of a two-step process whereby (1)&nbsp;it is determined whether it is more likely than not that the tax positions will be sustained
based on the </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>F-8</FONT></P>

<HR NOSHADE>
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<P style="font-family:times;"><FONT SIZE=2><A
HREF="#bg10401a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B><BR>
NOTES TO FINANCIAL STATEMENTS (Continued) </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>technical
merits of the position and (2)&nbsp;those tax positions that meet the more-likely-than-not recognition threshold, the largest amount of tax benefit that is greater than 50&nbsp;percent
likely to be realized upon ultimate settlement with the related tax authority would be recognized. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Comprehensive Income</B></FONT><FONT SIZE=2>&#151;Total comprehensive income/(loss) consists of net loss and other comprehensive income/(loss). For the periods presented herein
the Company did not have any other comprehensive income/(loss). </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fair Value Option</B></FONT><FONT SIZE=2>&#151;The brand contracts represent a right to receive certain cash flows from the Contract Parties, and therefore, the brand contracts
meet the definition of a financial asset. As financial assets, the brand contracts are precluded from being accounted for as intangible assets. The Company has elected to adopt the fair value option
to account for the brand contracts at fair value, with changes recognized in income (loss) from brand contracts in the Statement of Operations and presented as a separate line item. The Company
believes that measurement of the brand contracts at fair value provides the most meaningful information to users of the financial statements, because the value of the brand contracts may increase or
decrease over time based on future events. The Company believes that recognizing the change in fair value through net income or loss provides a better indicator of the performance of the brand
contracts for a given year, enhances transparency, and is more in line with how the Company manages the risks of the brand contracts. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fair Value of Financial Instruments</B></FONT><FONT SIZE=2>&#151;Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. Where available, fair value is based on observable market prices or parameters or derived from such prices or parameters. Where
observable prices or inputs are not available, valuation models are applied. These valuation models involve some level of management estimation and judgment, the degree of which is dependent on the
price transparency for the instruments or market and the instruments' complexity for disclosure purposes. Assets and liabilities in the balance sheet are categorized based upon the level of judgment
associated with the inputs used to measure their value. Hierarchical levels, as defined under GAAP, are directly related to the amount of subjectivity associated with the inputs to fair valuations of
these assets and liabilities, and are as follows: </FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Level&nbsp;1&#151;  </I></FONT><FONT SIZE=2>Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. The types of assets
generally
included in this category are mutual funds. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Level&nbsp;2&#151;  </I></FONT><FONT SIZE=2>Inputs are other than quoted prices included in Level&nbsp;1 that are observable for the asset or liability, either directly or
indirectly.
Level&nbsp;2 inputs include quoted prices for similar instruments in active markets, and inputs other than quoted prices that are observable for the asset or liability. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Level&nbsp;3&#151;  </I></FONT><FONT SIZE=2>Inputs are unobservable inputs for the asset or liability, and include situations where there is little, if any, market activity for the
asset or
liability. The types of assets and liabilities generally included in this category are brand contracts. </FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
significant decrease in the volume and level of activity for the asset or liability is an indication that transactions or quoted prices may not be representative of fair value because
in such market conditions there may be increased instances of transactions that are not orderly. In those circumstances, further analysis of transactions or quoted prices is needed, and a significant
adjustment to the transactions or quoted prices may be necessary to estimate fair value. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>F-9</FONT></P>

<HR NOSHADE>
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<P style="font-family:times;"><FONT SIZE=2><A
HREF="#bg10401a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B><BR>
NOTES TO FINANCIAL STATEMENTS (Continued) </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) </B></FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
availability of observable inputs can vary depending on the financial asset or liability and is affected by a wide variety of factors, including, for example, the type of product,
whether the product is new, whether the product is traded on an active exchange or in the secondary market, and the current market conditions. To the extent that valuation is based on models or inputs
that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value
is greatest for instruments categorized in Level&nbsp;3. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for
disclosure purposes, the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair
value measurement in its entirety. The Company's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and consideration of factors
specific to the asset. The variability of the observable inputs affected by the factors described above may cause transfers between Levels&nbsp;1, 2, and/or 3, which the Company recognizes at the
end of the reporting period. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depending
on the relative liquidity in the markets for certain assets, the Company may classify assets as Level&nbsp;3 if it determines that observable quoted prices, obtained directly
or indirectly, are not available. The valuation models used for the assets and liabilities that are valued using Level&nbsp;3 of the fair value hierarchy are described below. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Brand Contracts, at Estimated Fair Value:</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Brand contracts, at estimated fair value, are initially valued at transaction price and are
subsequently
valued using observable market prices, if available, or internally developed models in the absence of readily observable market prices. Valuation models are generally based on a discounted cash flow
approach, in which various internal and external factors are considered. Factors include key financial inputs and recent transactions for comparable brands. The Company utilizes several unobservable
pricing inputs and assumptions in determining the fair value of its Level&nbsp;3 investments. Some of these assumptions include, risk free cost of capital, length of playing career, length of
post-career, future rates of inflation in salaries and endorsement contracts, and amounts that can be potentially realized in the future, and unsigned playing and endorsement contracts. These
unobservable pricing inputs and assumptions may differ by brand contract and in the application of the Company's valuation methodologies. The reported fair value estimates could vary materially if
the Company had chosen to incorporate different unobservable pricing inputs or other assumptions, for applicable investments. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Valuation Process</B></FONT><FONT SIZE=2>&#151;The valuation process for the Company's Level&nbsp;3 measurements for assets and liabilities will be completed on no less than a
quarterly basis and is designed to subject the valuation of Level&nbsp;3 investments, including brand contracts, to an appropriate level of consistency, oversight and review. The Company's internal
investment professionals are responsible for estimating fair value based on various factors including:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>current playing contract including: amounts, duration, incentive provisions, guaranteed portions, if any, termination and
other important terms; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>current endorsement contracts, if any, including: amounts, duration, contract terms; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>age of the individual associated with the brand and prospects for additional future contracts, both playing and
endorsement; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>estimate of potential future playing and endorsement contracts, including: duration and value; </FONT></DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>F-10</FONT></P>

<HR NOSHADE>
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<P style="font-family:times;"><FONT SIZE=2><A
HREF="#bg10401a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B><BR>
NOTES TO FINANCIAL STATEMENTS (Continued) </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) </B></FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>position and data specific to that position focused on estimating longevity of career; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>reported contract value increases or decreases for other comparable players (by position and status they hold among their
peers) in order to estimate future contract values; and </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>risk free cost of capital. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition, a number of qualitative factors are considered to develop estimates used in the models including:</FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the stated aspirations and goals of the contract party; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>certain intangibles of the contract party, including media relationships, communication ability, "likeability," demand as
a product endorser, personal drive and ambition; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>social footprint (for example, number of Twitter followers); </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the market in which the contract party performs and how that may impact the number and amount of endorsement
opportunities; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the reach of the brand of the contract party; </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>value of TV contracts and the rate of growth in those contracts; and </FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>attendance trends in the contract party's primary field of performance. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company considers all of these factors to estimate brand revenue for use in discounted cash flow models. These estimates include amounts based on existing contracts as well as
estimates of amounts to be received for future contracts. With respect to existing contracts, the Company considers that certain amounts are reasonably assured of realization, but that most earnings
from existing contracts depend on continued satisfactory performance. To determine the amount of the purchase price of a brand contract and a fair current value the Company applies discount rates to
the estimates of earnings. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
general, lower discount rates are applied to amounts associated with existing contracts, particularly portions of those contracts that have a higher degree of certainty of payment,
and higher discount rates to amounts associated with future potential earnings under existing contracts and to potential earnings under anticipated future contracts. Further, discount rates rise over
time to reflect that uncertainty increases over time. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company's internal investment professionals document their considerations of this data that is then reviewed by management, including the Chief Executive Officer and Chief Financial
Officer. The approved valuation is used to negotiate the purchase price of the brand contract. The same valuation process is followed on no less than a quarterly basis to determine fair value of
contracts entered into by the Company. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
the estimates of brand income are too high and/or the discount rates used in the calculation too low then the valuation of a brand contract may be too high, in which case the Company
may pay too much for a brand contract. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss per share</B></FONT><FONT SIZE=2>&#151;The Company presents both basic and diluted loss per share ("EPS") in its financial statements. Basic loss per share ("Basic EPS")
excludes dilution and is computed by dividing net loss by the weighted average number of shares outstanding for the period. The Company has no </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>F-11</FONT></P>

<HR NOSHADE>
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<P style="font-family:times;"><FONT SIZE=2><A
HREF="#bg10401a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B><BR>
NOTES TO FINANCIAL STATEMENTS (Continued) </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>potentially
dilutive common share options, unvested restricted common shares and convertible senior notes using the treasury method or if-converted method. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income (Loss) From Brand Contracts</B></FONT><FONT SIZE=2>&#151;Following the effective date of the brand contract, revenues are recognized when cash or other considerations are
received by the Contract Party under included contracts, which is the point at which the Company would have the right to receive and recognize its proportionate share of amounts received by the
Contract Party. Other consideration received by the Contract Party under included contracts may include stock, automobiles, or other nonmonetary consideration. In the event nonmonetary consideration
is received by the Contract Party, the Company will recognize income from brand contracts equal to its proportionate share of the estimated fair value of such consideration in either cash or such
other consideration based on the contractual arrangement. Amounts due to the Company under a brand contract are either remitted directly from the source of such income or through payment by the
Contract Party. Brand contracts stipulate that income once earned by Fantex is not subject to recapture by the Contract Party. All amounts received by the Company from the Contract Party will be
allocated between the contract as reduction in carrying value and income (loss) from brand contracts. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash
received under the brand contract will either be recognized as a reduction in carrying value (i.e.,&nbsp;a reduction in the brand contract asset) or income (loss) from brand
contracts. Whether cash receipts will be recognized as a reduction in carrying value or income (loss) from brand contracts will depend on the timing of such cash receipt. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Additionally,
the timing of changes in the estimates of future cash flows will impact whether cash receipts are recognized as a reduction in carrying value or as income (loss) from brand
contracts. If for example we increase our estimate of future cash flows and such increased cash flows are not received until a future period, such increase will be recognized as income (loss) from
brand contracts and the majority of such future cash flow will be recognized as a reduction in carrying value. If on the other hand our expected cash flows increase and was not foreseen and therefore
not expected until the period in which the cash is actually received the entire cash amount will be recognized as income (loss) from brand contracts. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Expected
cash flows will be based on the included contracts the contract party has in place and the expectations of future contracts. As it becomes more likely that the contract party
will collect contracted amounts the expected discount rate will decrease. A decrease in the discount rate will result in the receipt of cash primarily being allocated to reduction in carrying value.
The discount rates are determined at the purchase date and are revised each period based on the performance of the brand and the likelihood of collection of future contracted amounts. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income
(loss) from brand contracts are based on an estimate of expected cash flows and the associated expected discount rate. Changes in fair value resulting from changes in the expected
performance of the brand or market factors are included in income (loss) from brand contracts in the statement of operations. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> 3. RELATED PARTY TRANSACTIONS  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company will continue to rely on the Parent to conduct its operations until such time as the Company's revenues are sufficient to finance operations. Subsequent to the successful
completion of its first initial public offering, the Company intends to operate under a management agreement with the Parent that will provide Fantex with management and administrative services,
including providing and </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>F-12</FONT></P>

<HR NOSHADE>
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<P style="font-family:times;"><FONT SIZE=2><A
HREF="#bg10401a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B><BR>
NOTES TO FINANCIAL STATEMENTS (Continued) </B></FONT></P>


<P style="font-family:times;"><FONT SIZE=2><B> 3. RELATED PARTY TRANSACTIONS (Continued) </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>compensating
the Company's executive management and other personnel, as well as services relating to information technology support, brand management and other support operations, facilities, human
resources, tax planning and administration, accounting, treasury and insurance. The Company will begin to assume direct management and administrative responsibilities at such time in the future as the
actual cost of these services is less than the service fee to Parent, which is not anticipated to occur until the Company begins to generate significant revenue from multiple brand contracts. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All
expenses incurred for the period ending December&nbsp;31, 2012 and December&nbsp;31, 2013 were paid by the Parent and allocated to Fantex based on the expenses incurred by Fantex
in its operations. The allocations were based on the time spent by employees of the Parent on activities of Fantex, the number of full time equivalent employees performing Fantex activities and direct
expenses incurred for the operations of Fantex. The expense allocations have been determined on the basis that Fantex and the Parent considered to be reasonable reflections of the utilization of
services provided or the benefit received by Fantex. Management believes that the expenses allocated to Fantex are representative of the operating expenses it would have incurred had Fantex been
operated on a stand-alone basis. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During
the year ended December&nbsp;31, 2013, the Company incurred $3,562,295 of expenses directly related to its operations and paid by the Parent. The Parent contributed $2,335,169
to the Company's
capital. The Company paid $1,533,167 for certain expenses as opposed to contributions from the Parent for the year ended December&nbsp;31, 2013. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During
2013 the five independent directors of the Company were granted an aggregate of 100,000 non-qualified options in the Fantex Holdings,&nbsp;Inc. 2012 Equity Incentive Plan. These
options were granted with an exercise price equal to the fair market value of the Fantex Holdings&nbsp;Inc. common stock at the date of grant and have a 10&nbsp;year contractual term. The stock
options vest ratably over a 4&nbsp;year period. The fair market value of stock options is estimated using the Black Scholes Merton valuation model and the Company used the following methods to
determine its underlying assumptions: expected volatilities are based on the historical volatilities of the Daily closing price of the public common stock of companies believed comparable to Fantex
Holdings,&nbsp;Inc.; the expected term of options granted is based on the simplified method of using the mid-point between the vesting term and the original contractual term and/or average time
outstanding method; the risk-free interest rate is based on the U.S Treasury daily yield curve on the date of grant; and the expected dividend yield is based on the current dividend trend. Forfeitures
are estimated at the time of grant and adjusted, if necessary, in subsequent periods if actual forfeitures differ from those estimates. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company was allocated from the Parent $9,837 of stock compensation. The key assumptions used by the Parent in the valuation model to value the stock option grants were: </FONT></P>
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<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Expected Term:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>6.02&nbsp;years</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Risk Free Rate:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>1.75%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Weighted Average Volatility:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>63.9%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Expected Forfeiture Rate:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>35.0%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Expected Dividend Rate:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>0%</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
fair value of the options as computed under the Black-Scholes pricing model yielded $0.911. As of December&nbsp;31, 2013 there are 88,775 shares remaining to be expensed over the
remaining requisite vesting period. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>F-13</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=7,SEQ=201,EFW="2218564",CP="FANTEX INC.",DN="1",CHK=734046,FOLIO='F-13',FILE='DISK116:[14ZAT1.14ZAT10401]FM10401A.;6',USER='CMATTI',CD='28-FEB-2014;18:04' -->
<A NAME="page_fm10401_1_14"> </A>

<P style="font-family:times;"><FONT SIZE=2><A
HREF="#bg10401a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B><BR>
NOTES TO FINANCIAL STATEMENTS (Continued) </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> 4. INCOME TAXES  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the year ended December&nbsp;31, 2013, the period from September&nbsp;14, 2012 (inception) to December&nbsp;31, 2012 and the cumulative period from September&nbsp;14, 2012
(inception) to December&nbsp;31, 2013, no income tax expense or benefit was recognized. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At
the periods ended below deferred tax assets consisted of the following: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:70%;margin-left:15%;">
<p style="font-family:times;"></FONT></P>

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<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="88pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="88pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>December&nbsp;31, 2013 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>December&nbsp;31, 2012 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Deferred tax assets:</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net operating loss carry-forward</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1,737,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>462,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Valuation allowance</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(1,737,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(462,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total deferred tax assets</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Because
of the Company's limited operating history and cumulative loss, management believes it is more likely than not that the remaining deferred tax asset will not be realized,
therefore, the Company provided a full valuation allowance of $462,000 and $1,737,000 on the deferred tax asset as of December&nbsp;31, 2012 and 2013, respectively. The federal statutory income tax
rate of 35% is offset by the valuation allowance to reconcile to the effective income tax rate of 0%. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
of December&nbsp;31, 2013 we have federal and state income tax net operating loss carryforwards of $1,413,000 and $339,000 which will expire at various dates from 2032 through 2033.
Such net operating loss carryforwards expire as follows: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:70%;margin-left:15%;">
<p style="font-family:times;"></FONT></P>

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<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="61pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2032</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>485,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2033</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,267,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0pt;font-family:times;">


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0pt;" -->


&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0.1pt;" -->


 </font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,752,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0pt;font-family:times;">


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&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0.1pt;" -->


 </font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0.75pt;" -->


 </font>&#8203;</TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0pt;font-family:times;">


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0pt;" -->


&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company adopted a policy to classify accrued interest and penalties as part of the accrued liability for uncertain tax positions, if any, in the provision for income taxes. No
accrued interest or penalties were recorded as of December&nbsp;31, 2013 or 2012. The Company does not anticipate any significant changes to the unrecognized tax benefits within 12 months of this
reporting date. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company files income tax returns in federal and state jurisdictions. At December&nbsp;31, 2012 and 2013, all tax years were open and may be subject to potential examination in one
or more jurisdictions. There are no ongoing examinations by taxing authorities at this time. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> 5. STOCKHOLDER'S EQUITY  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Parent received 100,000,000 shares of Fantex's common stock in exchange for services provided for the benefit of Fantex of $10,000. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> 6. COMMITMENTS AND CONTINGENCIES  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On February&nbsp;28, 2013 Fantex entered into a brand contract with Arian Foster, a professional football player in the National Football League ("NFL") and The Ugly
Duck,&nbsp;LLC, a professional services company affiliated with Arian Foster (together, "Arian Foster"). The brand contract entitles Fantex to 20% of the income that Arian Foster receives from and
after February&nbsp;28, 2013 as a result of his activities in the NFL and related fields (the "Acquired Brand Income," or "ABI"), including salary and wages from being a football player,
broadcasting or coaching and the use of Arian Foster's name, </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>F-14</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>

<!-- ZEQ.=8,SEQ=202,EFW="2218564",CP="FANTEX INC.",DN="1",CHK=690785,FOLIO='F-14',FILE='DISK116:[14ZAT1.14ZAT10401]FM10401A.;6',USER='CMATTI',CD='28-FEB-2014;18:04' -->
<A NAME="page_fm10401_1_15"> </A>

<P style="font-family:times;"><FONT SIZE=2><A
HREF="#bg10401a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B><BR>
NOTES TO FINANCIAL STATEMENTS (Continued) </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> 6. COMMITMENTS AND CONTINGENCIES (Continued) </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>voice,
likeness, biography or talents for purposes of advertising and trade, including without limitation sponsorships, endorsements, merchandising and appearances, subject to certain exceptions. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
consideration for future ABI under the brand contract, Fantex agreed to pay Arian Foster a one-time cash amount of $10.0&nbsp;million (less $0.5&nbsp;million to be held in escrow
until six consecutive payments of brand amounts have been timely delivered to Fantex) contingent upon Fantex's ability to obtain financing. Fantex will have no further financial obligations to Arian
Foster under the brand contract once this payment is made, other than certain obligations to indemnify Arian Foster. According to the terms of the brand contract, Arian Foster is not obligated to make
payments to the Company until the upfront payment is made by the Company; as such there is no currently obligated payment due to Fantex by Arian Foster. Amounts received by Arian Foster subsequent to
the signing of the brand contract will be subject to payment to the Company once the upfront payment is made. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
October&nbsp;30, 2013 Fantex entered into a brand contract with Vernon Davis, a professional football player in the NFL and The Duke Marketing,&nbsp;LLC, a professional services
company affiliated with Vernon Davis (together, "Vernon Davis"). The brand contract entitles Fantex to 10% of the income that Vernon Davis receives from and after October&nbsp;30, 2013 as a result
of his activities in the NFL and related fields (the "Acquired Brand Income," or "ABI"), including salary and wages from being a football player, broadcasting or coaching and the use of Vernon Davis'
name, voice, likeness, biography or talents for purposes of advertising and trade, including without limitation sponsorships, endorsements, merchandising and appearances, subject to certain
exceptions. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
consideration for future ABI under the brand contract, Fantex agreed to pay Vernon Davis a one-time cash amount of $4.0&nbsp;million (less $0.2&nbsp;million to be held in escrow
until six consecutive payments of brand amounts have been timely delivered to Fantex) contingent upon Fantex's ability to obtain financing. Fantex will have no further financial obligations to Vernon
Davis under the brand contract once this payment is made, other than certain obligations to indemnify Vernon Davis. According to the terms of the brand contract, Vernon Davis is not obligated to make
payments to the Company until the upfront payment is made by the Company; as such there is no currently obligated payment due to Fantex by Vernon Davis. Amounts received by Vernon Davis subsequent to
the signing of the brand contract will be subject to payment to the Company once the upfront payment is made. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2><B> 7. SUBSEQUENT EVENTS  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On February&nbsp;14, 2014 Fantex entered into a brand contract with Erik "EJ" Manuel, Jr., a professional football player in the NFL and Kire Enterprises,&nbsp;LLC, a professional
services company affiliated with Erik "EJ" Manuel, Jr. (together, "Erik "EJ" Manuel, Jr."). The brand contract entitles Fantex to 10% of the income that Erik "EJ" Manuel, Jr. receives from and after
February&nbsp;14, 2014 as a result of his activities in the NFL and related fields (the "Acquired Brand Income," or "ABI"), including salary and wages from being a football player, broadcasting or
coaching and the use of Erik "EJ" Manuel, Jr.'s name, voice, likeness, biography or talents for purposes of advertising and trade, including without limitation sponsorships, endorsements,
merchandising and appearances, subject to certain exceptions. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
consideration for future ABI under the brand contract, Fantex agreed to pay Erik "EJ" Manuel, Jr. a one-time cash amount of $4.975&nbsp;million (less $0.2&nbsp;million to be held
in escrow until six consecutive payments of brand amounts have been timely delivered to Fantex) contingent upon Fantex's ability to obtain financing. Fantex will have no further financial obligations
to Erik "EJ" Manuel, Jr. under the brand contract once this payment is made, other than certain obligations to indemnify Erik </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>F-15</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=9,SEQ=203,EFW="2218564",CP="FANTEX INC.",DN="1",CHK=11696,FOLIO='F-15',FILE='DISK116:[14ZAT1.14ZAT10401]FM10401A.;6',USER='CMATTI',CD='28-FEB-2014;18:04' -->
<A NAME="page_fm10401_1_16"> </A>

<P style="font-family:times;"><FONT SIZE=2><A
HREF="#bg10401a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B><BR>
NOTES TO FINANCIAL STATEMENTS (Continued) </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> 7. SUBSEQUENT EVENTS (Continued) </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>"EJ"
Manuel, Jr. According to the terms of the brand contract, Erik "EJ" Manuel, Jr. is not obligated to make payments to the Company until the upfront payment is made by the Company; as such there is
no currently obligated payment due to Fantex by Erik "EJ" Manuel, Jr. Amounts received by Erik "EJ" Manuel, Jr. subsequent to the signing of the brand contract will be subject to payment to the
Company once the upfront payment is made. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fantex
has evaluated activity after December&nbsp;31, 2013 until the date of issuance of the annual audited Financial Statements on February&nbsp;28, 2014, and other than the events
described above, Fantex is not
aware of any events that have occurred subsequent to December&nbsp;31, 2013 that would require adjustments to or disclosures in the Financial Statements. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>F-16</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<P style="font-family:times;"><FONT SIZE=2>
<A HREF="#bg10401a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="fo10401_index_to_statement_of___fo102447"> </A>
<BR></FONT><FONT SIZE=2><B>  <A NAME="Index1"></A>INDEX TO STATEMENT OF CASH RECEIPTS FROM INCLUDED CONTRACTS    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>
<A NAME="FO10401_TOC"></A> </FONT></P>
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<TD VALIGN="TOP" style="font-family:times;"><A HREF="#aa1"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Report of Independent Registered Public Accounting Firm</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#aa1"><FONT SIZE=2>SR-EM-2</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><A HREF="#L1"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Statement of Cash Receipts from Included Contracts for year ended December&nbsp;31, 2013</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#L1"><FONT SIZE=2><BR>
SR-EM-3</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
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<TD VALIGN="TOP" style="font-family:times;"><A HREF="#fs10401_notes_to_statement_of_cash_rec__not07311"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Notes to Statement of Cash Receipts from Included
Contracts</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#fs10401_notes_to_statement_of_cash_rec__not07311"><FONT SIZE=2><BR>
SR-EM-4</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
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<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
accompanying Statement of Cash Receipts from Included Contracts Subject to the Brand Agreement between Fantex,&nbsp;Inc. ("Fantex") and Erik "EJ" Manuel, Jr. and his affiliate Kire
Enterprises,&nbsp;LLC (together, the "Contract Party") dated February&nbsp;14, 2014 (the "Brand Contract"), present the cash or other considerations received by the Contract Party from included
contracts subject to the Brand Contract for the year ended December&nbsp;31, 2013 ("Statement of Cash Receipts from Included Contracts"). </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Statement of Cash Receipts from Included Contracts reflects the historical cash receipts of the Contract Party that would have been subject to the Brand Contract with Fantex had the
brand contract been in place beginning January&nbsp;1, 2013. The Statements of Cash Receipts from Included Contracts reflect the gross amount received by the Contract Party subject to the Brand
Contract. Had the brand contract been in place beginning January&nbsp;1, 2013, and subject to the following consideration regarding expired contracts, Fantex would have been entitled to receive 10%
of the gross amount received by the Contract Party. The Statements of Cash Receipts from Included Contracts do not reflect earnings of the Contract Party under contracts that had expired and not been
renewed as of the signing date of the Brand Contract, as it is not possible to determine if the Contract Party would have excluded these
contracts from the Brand Contract. The amounts reflected in the Statements of Cash Receipts from Included Contracts are not necessarily indicative of future cash receipts that will be subject to the
Brand Contract. No amounts would be subject to the Brand Contract prior to January&nbsp;1, 2013 because the Contract Party was not engaged in brand income generating activities until 2013. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investors
in our Fantex Series&nbsp;EJ Manuel are investing in Fantex and not in the Brand Contract or EJ Manuel. However, Fantex Series&nbsp;EJ Manuel is intended to track and
reflect the separate economic performance of the assets to be attributed to the EJ Manuel Brand. Only Fantex will have rights under the Brand Contract and recourse against EJ Manuel. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>SR-EM-1</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2><A
HREF="#bg10401a_main_toc">Table of Contents</A></FONT></P>

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NAME="fo10401_report_of_independent___fo102282"> </A>
<BR></FONT><FONT SIZE=2><B>  <A NAME="aa1"></A>Report of Independent Registered Public Accounting Firm    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>The
Board of Directors and Stockholder<BR>
Fantex,&nbsp;Inc.: </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
have audited the accompanying Statement of Cash Receipts from Included Contracts Subject to the Brand Agreement between Fantex,&nbsp;Inc. ("Fantex") and EJ Manuel and his affiliate
Kire Enterprises,&nbsp;LLC (together, "the Contract Party") dated February&nbsp;14, 2014 (the "Brand Contract") for the year ended December&nbsp;31, 2013 ("Statement of Cash Receipts from
Included Contracts"). This Statement of Cash Receipts from Included Contracts is the responsibility of Fantex's management. Our responsibility is to express an opinion on this Statement of Cash
Receipts from Included Contracts based on our audit. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the Statement of Cash Receipts from Included Contracts is free of
material misstatement. Fantex is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting as it relates to the Statement of Cash Receipts from
Included Contracts. Our audit included consideration of internal control over financial reporting as it relates to the Statement of Cash Receipts from Included Contracts as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Fantex's internal control over financial reporting as it relates to the
Statement of Cash Receipts from Included Contracts. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the
Statement of Cash Receipts from Included Contracts, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the
Statement of Cash Receipts from Included Contracts. We believe that our audit provides a reasonable basis for our opinion. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
accompanying Statement of Cash Receipts from Included Contracts was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission for
inclusion in a Registration Statement on Form&nbsp;S-1 of Fantex. As discussed in Note&nbsp;1 to the Statement of Cash Receipts from Included Contracts, the statement is not intended to be a
complete presentation of the Contract Party's cash receipts. Further, Fantex's interest in the Contract Party cash receipts from included contracts, as defined in Note&nbsp;2 to the Statement of
Cash Receipts from Included Contracts, will commence upon the effective date of the Brand Contract, which has not yet occurred. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
our opinion, the Statement of Cash Receipts from Included Contracts referred to above present fairly, in all material respects, the cash receipts from included contracts subject to
the Brand Contract for the year ended December&nbsp;31, 2013, in accordance with accounting principles generally accepted in the United States of America. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>/s/
Deloitte&nbsp;&amp; Touche&nbsp;LLP<BR>
San Francisco, California<BR>
February&nbsp;28, 2014 </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>SR-EM-2</FONT></P>

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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="fq10401_statement_of_cash_receipts_fro__sta07793"> </A>
<A NAME="toc_fq10401_1"> </A></FONT> <FONT SIZE=2><B><BR>  <A NAME="L1"></A>Statement of Cash Receipts from Included Contracts Subject to the Brand Agreement between<BR>  Fantex,&nbsp;Inc. and    <BR>    <BR>    Erik "EJ" Manuel Jr. and his affiliate
Kire Enterprises,&nbsp;LLC dated February&nbsp;14, 2014    <BR>    <BR>    (Amounts in thousands)    <BR>    </B></FONT></P>
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<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Year Ended<BR>
December&nbsp;31,<BR>
2013 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
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<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>RECEIPTS FROM INCLUDED CONTRACTS SUBJECT TO THE BRAND CONTRACT</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
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<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Contractual National Football League (NFL) player receipts</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>405</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Contractual NFL player signing bonus receipts</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>4,842</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
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&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2>


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 </font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
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<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total receipts from NFL player contract</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5,247</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Receipts from other included contracts</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>467</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
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<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>TOTAL RECEIPTS FROM INCLUDED CONTRACTS SUBJECT TO THE BRAND CONTRACT</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5,714</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
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<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
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<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
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The notes are an integral part of these statements </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>SR-EM-3</FONT></P>

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<A HREF="#bg10401a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="fs10401_notes_to_statement_of_cash_rec__not07311"> </A>
<A NAME="toc_fs10401_1"> </A></FONT> <FONT SIZE=2><B><BR>  Notes to Statement of Cash Receipts from Included Contracts Subject to the Brand Agreement<BR>  between Fantex,&nbsp;Inc. and Erik "EJ" Manuel, Jr. and his affiliate Kire Enterprises,
&nbsp;LLC<BR>  dated February&nbsp;14, 2014    <BR>    </B></FONT></P>


<P style="font-family:times;"><FONT SIZE=2><B> Note&nbsp;1. Basis of Presentation  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The accompanying Statement of Cash Receipts from Included Contracts Subject to the Brand Agreement between Fantex,&nbsp;Inc. ("Fantex") and Erik "EJ" Manuel, Jr. and his affiliate Kire
Enterprises,&nbsp;LLC (together, the "Contract Party") dated February&nbsp;14, 2014 (the "Brand Contract"), present the cash or other considerations received by the Contract Party from included
contracts (see Note&nbsp;2) subject to the Brand Contract for the year ended December&nbsp;31, 2013 ("Statements of Cash Receipts from Included Contracts"). </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Brand Contract will entitle Fantex to 10% of the Contract Party's cash or other considerations received from included contracts from the effective date of the Brand Contract and cash
or other considerations received from future contracts resulting from certain activities of the Contract Party. These certain activities, defined under the terms of the Brand Contract as the "Field,"
include activities in or substantially related to being a football player, broadcasting, coaching, motion pictures, television, radio, music, literary, talent engagements, personal appearances, public
appearances in places of amusement and entertainment, records and recording, publications, and the use of Contract Party's name, voice, likeness, biography or talents for purposes of advertising and
trade, including without limitation sponsorships, endorsements and appearances, and any other activities in which Contract Party uses its name, likeness or reputation to generate cash or other
considerations received, unless such activities are specifically excluded by the Brand Contract. In the event that there is any ambiguity as to whether an activity is in the Field, Fantex and the
Contract party shall discuss in good faith to consider whether such activity is of the type typically performed by the Contract Party in the principal business (such activities may include sports
casting, coaching, acting as spokesperson, etc.). If a resolution is not reached within 30&nbsp;days from the initial discussions Fantex or the Contract Party may remit the matter to arbitration. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These
Statement of Cash Receipts from Included Contracts reflect the historical cash receipts of the Contract Party that would have been subject to the Brand Contract with Fantex had the
brand contract been in place beginning January&nbsp;1, 2013. The Statement of Cash Receipts from Included Contracts
reflect the gross amount received by the Contract Party subject to the Brand Contract. Had the brand contract been in place beginning January&nbsp;1, 2013, and subject to the following consideration
regarding expired contracts, Fantex would have been entitled to receive 10% of the gross amount received by the Contract Party. The Statements of Cash Receipts from Included Contracts do not reflect
earnings of the Contract Party under contracts that had expired and not been renewed as of the signing date of the Brand Contract, as it is not possible to determine if the Contract Party would have
excluded these contracts from the Brand Contract. The Contract Party did not begin generating cash that is or would have been subject to the Brand Contract until 2013. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
effectiveness of the Brand Contract is subject to the successful acquisition of the financing, which Fantex intends to acquire by conducting a registered public offering
("Offering")of tracking stock intended to track and reflect the separate economic performance of the assets to be attributed to the EJ Manuel brand, unless such condition is otherwise waived by
Fantex. If the Offering is not successful the Brand Contract is not expected to be effective and in such case Fantex will not have rights to collect any future cash receipts under the Brand Contract. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Statement of Cash Receipts from Included Contracts was prepared from the historical records of the Contract Party and is not intended to be a complete presentation of the Contract
Party's cash receipts. Cash receipts will only be earned by Fantex under the Brand Contract subsequent to the </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>SR-EM-4</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2><A
HREF="#bg10401a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B><BR>
Notes to Statement of Cash Receipts from Included Contracts Subject to the Brand Agreement<BR>
between Fantex,&nbsp;Inc. and Erik "EJ" Manuel, Jr. and his affiliate Kire Enterprises,&nbsp;LLC<BR>
dated February&nbsp;14, 2014 (Continued) </B></FONT></P>


<P style="font-family:times;"><FONT SIZE=2><B> Note&nbsp;1. Basis of Presentation (Continued) </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>effective
date of the Brand Contract. In the event the Contract Party does not receive cash, or other considerations no amounts are due to Fantex. No other considerations were received under the
included contracts for the year ended December&nbsp;31, 2013. The Statements of Cash Receipts from Included Contracts are presented in accordance with accounting principles generally accepted in the
United States of America. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Note&nbsp;2. Summary of Significant Accounting Policies  </B></FONT></P>


<P style="font-family:times;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contractual National Football League (NFL) player receipts</I></FONT><FONT SIZE=2>&#151;These receipts are recorded based on the cash received by the Contract Party for being on
the roster for NFL games, paid on a bi-weekly basis throughout the season. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contractual NFL signing bonus receipts</I></FONT><FONT SIZE=2>&#151;These receipts are recorded based on the cash received for the signing of the Contract Party's NFL contract,
paid on multiple dates as set forth in the NFL contract. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Receipts from other included contracts</I></FONT><FONT SIZE=2>&#151;These receipts are recorded based on the cash, or other considerations received from the Contract Party's other
contracts subject to the Brand Contract, such as endorsements and cash received from NFL Players,&nbsp;Inc. for licensing the image and likeness of the Contract Party. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Included Contracts</I></FONT><FONT SIZE=2>&#151;Included contracts are those that are effective upon the date that the Brand Contract was executed by Fantex and the Contract Party
and that are included in the Brand Contract. For contracts that existed at the signing on February&nbsp;14, 2014 of the Brand Contract that are renewals of previous contracts with the same
counterparty, those prior contracts, which relate to periods prior to the signing of the Brand Contract, have been considered included contracts. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2><B> Note&nbsp;3. Subsequent events  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fantex has evaluated activity after December&nbsp;31, 2013 until the date of issuance of the Statements of Cash Receipts from Included Contracts on February&nbsp;28, 2014, Fantex is
not aware of any events that have occurred subsequent to December&nbsp;31, 2013 that would require adjustments to or disclosures in the Statements of Cash Receipts from Included Contracts. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>SR-EM-5</FONT></P>

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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="fw10401_index_to_statements_of__fw102505"> </A>
<BR></FONT><FONT SIZE=2><B>  <A NAME="Index2"></A>INDEX TO STATEMENTS OF CASH RECEIPTS FROM INCLUDED CONTRACTS    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>
<A NAME="FW10401_TOC"></A> </FONT></P>
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<TD VALIGN="TOP" style="font-family:times;"><A HREF="#R1"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Report of Independent Registered Public Accounting Firm</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#R1"><FONT SIZE=2>SR-VD-2</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
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<TD VALIGN="TOP" style="font-family:times;"><A HREF="#R2"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Statements of Cash Receipts from Included Contracts for years ended December&nbsp;31, 2013 and
2012</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
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SR-VD-3</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
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<TD VALIGN="TOP" style="font-family:times;"><A HREF="#R3"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Notes to Statements of Cash Receipts from Included Contracts</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#R3"><FONT SIZE=2><BR>
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<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
accompanying Statements of Cash Receipts from Included Contracts Subject to the Brand Agreement between Fantex,&nbsp;Inc. ("Fantex") and Vernon Davis and his affiliate The Duke
Marketing,&nbsp;LLC (together, the "Contract Party") dated October&nbsp;30, 2013 (the "Brand Contract"), present the cash or other considerations received by the Contract Party from included
contracts subject to the Brand Contract for the years ended December&nbsp;31, 2013 and 2012 ("Statements of Cash Receipts from Included Contracts"). </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These
Statements of Cash Receipts from Included Contracts reflect the historical cash receipts of the Contract Party that would have been subject to the Brand Contract with Fantex had
the brand contract been in place beginning January&nbsp;1, 2012. The Statements of Cash Receipts from Included Contracts reflect the gross amount received by the Contract Party subject to the Brand
Contract. Had the brand contract been in place beginning January&nbsp;1, 2012, and subject to the following consideration regarding expired contracts, Fantex would have been entitled to receive 10%
of the gross amount received by the Contract Party. The Statements of Cash Receipts from Included Contracts do not reflect earnings of the Contract Party under contracts that had expired and not been
renewed as of the signing date of the
Brand Contract, as it is not possible to determine if the Contract Party would have excluded these contracts from the Brand Contract. The amounts reflected in the Statements of Cash Receipts from
Included Contracts are not necessarily indicative of future cash receipts that will be subject to the Brand Contract. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investors
in our Fantex Series Vernon Davis are investing in Fantex and not in the Brand Contract or Vernon Davis. However, Fantex Series Vernon Davis is intended to track and reflect
the separate economic performance of the assets to be attributed to the Vernon Davis Brand. Only Fantex will have rights under the Brand Contract and recourse against Vernon Davis. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>SR-VD-1</FONT></P>

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<A HREF="#bg10401a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="fy10401_report_of_independent___fy102292"> </A>
<A NAME="toc_fy10401_1"> </A>
<BR></FONT><FONT SIZE=2><B>  <A NAME="R1"></A>Report of Independent Registered Public Accounting Firm    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>The
Board of Directors and Stockholder<BR>
Fantex,&nbsp;Inc.: </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
have audited the accompanying Statements of Cash Receipts from Included Contracts Subject to the Brand Agreement between Fantex,&nbsp;Inc. ("Fantex") and Vernon Davis and his
affiliate The Duke Marketing,&nbsp;LLC (together, "the Contract Party") dated October&nbsp;30, 2013 (the "Brand Contract"), for the years ended December&nbsp;31, 2013 and 2012 ("Statements of
Cash Receipts from Included Contracts"). These Statements of Cash Receipts from Included Contracts are the responsibility of Fantex's management. Our responsibility is to express an opinion on these
Statements of Cash Receipts from Included Contracts based on our audits. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the Statements of Cash Receipts from Included Contracts are free of material misstatement. Fantex is not required to have, nor were we engaged to perform, an
audit of its internal control over financial reporting as it relates to the Statements of Cash Receipts from Included Contracts. Our audits included consideration of internal control over financial
reporting as it relates to the Statements of Cash Receipts from Included Contracts as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of Fantex's internal control over financial reporting as it relates to the Statements of Cash Receipts from Included Contracts. Accordingly, we express no
such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the Statements of Cash Receipts from Included Contracts, assessing the accounting
principles used and significant estimates made by management, as well as evaluating the overall presentation of the Statements of Cash Receipts from Included Contracts. We believe that our audits
provide a reasonable basis for our opinion. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
accompanying Statements of Cash Receipts from Included Contracts were prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission
for inclusion in a Registration Statement on Form&nbsp;S-1 of Fantex. As discussed in Note&nbsp;1 to the Statements of Cash Receipts from Included Contracts, the statements are not intended to be
a complete presentation of the Contract Party's cash receipts. Further, Fantex's interest in the Contract Party cash receipts from included contracts, as defined in Note&nbsp;2 to the Statements of
Cash Receipts from Included Contracts, will commence upon the effective date of the Brand Contract, which has not yet occurred. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
our opinion, the Statements of Cash Receipts from Included Contracts referred to above present fairly, in all material respects, the cash receipts from included contracts subject to
the Brand Contract for the years ended December&nbsp;31, 2013 and 2012, in accordance with accounting principles generally accepted in the United States of America. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>/s/
Deloitte&nbsp;&amp; Touche&nbsp;LLP<BR>
San Francisco, California<BR>
February&nbsp;28, 2014 </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>SR-VD-2</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2><A
NAME="R2"></A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
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<A NAME="toc_ga10401_1"> </A></FONT> <FONT SIZE=2><B><BR>  Statements of Cash Receipts from Included Contracts Subject to the Brand Agreement between<BR>  Fantex,&nbsp;Inc. and    <BR>    <BR>    Vernon Davis and his affiliate The Duke Marketing,
&nbsp;LLC dated October&nbsp;30, 2013    <BR>    <BR>    (Amounts in thousands)    <BR>    </B></FONT></P>
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<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Year Ended<BR>
December&nbsp;31, </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
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<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2012 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2013 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
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<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>RECEIPTS FROM INCLUDED CONTRACTS SUBJECT TO THE BRAND CONTRACT</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
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<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Contractual National Football League (NFL) player receipts</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5,751</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>6,072</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Contractual NFL player signing bonus receipts</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Contractual NFL post season roster incentive receipts</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>62</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>156</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Contractual NFL player performance incentives receipts</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>600</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>601</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total receipts from NFL player contract</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>6,413</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>6,829</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Receipts from other included contracts</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>227</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>382</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>TOTAL RECEIPTS FROM INCLUDED CONTRACTS SUBJECT TO THE BRAND CONTRACT</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>6,640</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>7,211</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
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The notes are an integral part of these statements </FONT></P>

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<A HREF="#bg10401a_main_toc">Table of Contents</A> </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><A
NAME="R3"></A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
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<A NAME="toc_gc10401_1"> </A></FONT> <FONT SIZE=2><B><BR>  Notes to Statements of Cash Receipts from Included Contracts Subject to the Brand Agreement between<BR>  Fantex,&nbsp;Inc. and Vernon Davis and his affiliate The Duke Marketing,&nbsp;LLC
dated October&nbsp;30, 2013    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Note&nbsp;1. Basis of Presentation  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The accompanying Statements of Cash Receipts from Included Contracts Subject to the Brand Agreement between Fantex,&nbsp;Inc. ("Fantex") and Vernon Davis and his affiliate The Duke
Marketing,&nbsp;LLC (together, the "Contract Party") dated October&nbsp;30, 2013 (the "Brand Contract"), present the cash or other considerations received by the Contract Party from included
contracts (see Note&nbsp;2) subject to the Brand Contract for the years ended December&nbsp;31, 2013 and 2012 ("Statements of Cash Receipts from Included Contracts"). </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Brand Contract will entitle Fantex to 10% of the Contract Party's cash or other considerations received from included contracts from the effective date of the Brand Contract and cash
or other considerations received from future contracts resulting from certain activities of the Contract Party. These certain activities, defined under the terms of the Brand Contract as the "Field,"
include activities in or substantially related to being a football player, broadcasting, coaching, motion pictures, television, radio, music, literary, talent engagements, personal appearances, public
appearances in places of amusement and entertainment, records and recording, publications, and the use or license of Contract Party's name, voice, likeness, biography or talents for purposes of
advertising and trade, including without limitation sponsorships, endorsements and appearances, and any other activities in which Contract Party uses or licenses its name, likeness or reputation to
generate cash or other considerations received, unless such activities are specifically excluded by the Brand Contract. In the event that there is any ambiguity as to whether an activity is in the
Field, Fantex and the Contract party shall discuss in good faith to consider whether such activity is of the type typically performed by the Contract Party in the principal business (such activities
may include sports broadcasting, coaching, acting as spokesperson, etc.). If a resolution is not reached within 30&nbsp;days from the initial discussions Fantex or the Contract Party may remit the
matter to arbitration. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These
Statements of Cash Receipts from Included Contracts reflect the historical cash receipts of the Contract Party that would have been subject to the Brand Contract with Fantex had
the brand contract been in place beginning January&nbsp;1, 2012. The Statements of Cash Receipts from Included Contracts
reflect the gross amount received by the Contract Party subject to the Brand Contract. Had the brand contract been in place beginning January&nbsp;1, 2012, and subject to the following consideration
regarding expired contracts, Fantex would have been entitled to receive 10% of the gross amount received by the Contract Party. The Statements of Cash Receipts from Included Contracts do not reflect
earnings of the Contract Party under contracts that had expired and not been renewed as of the signing date of the Brand Contract, as it is not possible to determine if the Contract Party would have
excluded these contracts from the Brand Contract. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
effectiveness of the Brand Contract is subject to the successful acquisition of financing, which Fantex intends to acquire by conducting a registered public offering ("Offering") of
tracking stock intended to track and reflect the separate economic performance of the assets to be attributed to the Vernon Davis Brand, unless such condition is otherwise waived by Fantex. If the
Offering is not successful the Brand Contract is not expected to be effective and in such case Fantex will not have rights to collect any future cash receipts under the Brand Contract. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These
Statements of Cash Receipts from Included Contracts were prepared from the historical records of the Contract Party and are not intended to be a complete presentation of the
Contract Party's cash receipts. Cash receipts will only be earned by Fantex under the Brand Contract subsequent to the effective date of the Brand Contract. In the event the Contract Party does not
receive cash, or other considerations no amounts are due to Fantex. No other considerations were received under the </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>SR-VD-4</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2><A
HREF="#bg10401a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B><BR>
Notes to Statements of Cash Receipts from Included Contracts Subject to the Brand Agreement between<BR>
Fantex,&nbsp;Inc. and Vernon Davis and his affiliate The Duke Marketing,&nbsp;LLC dated October&nbsp;30, 2013 (Continued) </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Note&nbsp;1. Basis of Presentation (Continued) </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>included
contracts for the years ended December&nbsp;31, 2013 or 2012. The Statements of Cash Receipts from Included Contracts are presented in accordance with accounting principles generally
accepted in the United States of America. Certain prior period amounts have been presented separately to reflect current period presentation. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Note&nbsp;2. Summary of Significant Accounting Policies  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contractual National Football League (NFL) player receipts</I></FONT><FONT SIZE=2>&#151;These receipts are recorded based on the cash received by the Contract Party for being on
the roster for NFL games, paid on a bi-weekly basis throughout the season. Other receipts such as being on the roster for playoff and Pro Bowl games are also included. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contractual NFL signing bonus receipts</I></FONT><FONT SIZE=2>&#151;These receipts are recorded based on the cash received for the signing of the Contract Party's NFL contract,
paid on multiple dates as set forth in the NFL contract. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contractual NFL post season roster incentive receipts</I></FONT><FONT SIZE=2>&#151;These receipts are recorded based on the cash received for participation in post season games,
including play-offs and the NFL Pro Bowl. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contractual NFL player performance incentives receipts</I></FONT><FONT SIZE=2>&#151;These receipts are recorded based on the cash received from various incentives included in the
Contract Party's NFL contract such as roster bonus and off-season workout bonus. The roster bonus is $25,000 for each regular season game the Contract Party is on the active roster, paid on a
bi-weekly basis throughout the season, up to a maximum bonus of $400,000 in any season during the NFL contract period. The off-season workout bonus is $200,000 paid in a lump sum amount if
Mr.&nbsp;Davis participates in at least 90% of the club's off season conditioning program sessions. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Receipts from other included contracts</I></FONT><FONT SIZE=2>&#151;These receipts are recorded based on the cash, or other considerations received from the Contract Party's other
contracts subject to the Brand Contract, such as endorsements and cash received from NFL Players,&nbsp;Inc. for licensing the image and likeness of the Contract Party. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Included Contracts</I></FONT><FONT SIZE=2>&#151;Included contracts are those that are effective upon the date that the Brand Contract was executed by Fantex and the Contract Party
and that are included in the Brand Contract. For contracts that existed at the signing on October&nbsp;30, 2013 of the Brand Contract that are renewals of previous contracts with the same
counterparty, those prior contracts, which relate to periods prior to the signing of the Brand Contract, have been considered included contracts. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Note&nbsp;3. Subsequent events  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fantex has evaluated activity after December&nbsp;31, 2013 until the date of issuance of the Statements of Cash Receipts from Included Contracts on February&nbsp;28, 2014, and Fantex
is not aware of any events that have occurred subsequent to December&nbsp;31, 2013 that would require adjustments to or disclosures in the Statements of Cash Receipts from Included Contracts. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>SR-VD-5</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>
<A HREF="#bg10401a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="ge10401_index_to_statements_of__ge102488"> </A>
<BR></FONT><FONT SIZE=2><B>  <A NAME="Index3"></A>INDEX TO STATEMENTS OF CASH RECEIPTS FROM INCLUDED CONTRACTS    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>
<A NAME="GE10401_TOC"></A> </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:times;"></FONT></P>

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<TD VALIGN="TOP" style="font-family:times;"><A HREF="#S1"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Report of Independent Registered Public Accounting Firm</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#S1"><FONT SIZE=2>SR-AF-2</FONT></A></TD>
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<TD VALIGN="TOP" style="font-family:times;"><A HREF="#S2"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Statements of Cash Receipts from Included Contracts for years ended December&nbsp;31, 2013 and
2012</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#S2"><FONT SIZE=2><BR>
SR-AF-3</FONT></A></TD>
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<TD VALIGN="TOP" style="font-family:times;"><A HREF="#S3"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Notes to Statements of Cash Receipts from Included Contracts</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#S3"><FONT SIZE=2><BR>
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<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
accompanying Statements of Cash Receipts from Included Contracts Subject to the Brand Agreement between Fantex,&nbsp;Inc. ("Fantex") and Arian Foster and his affiliate The Ugly
Duck,&nbsp;LLC (together, the "Contract Party") dated February&nbsp;28, 2013 (the "Brand Contract"), present the cash or other considerations received by the Contract Party from included contracts
subject to the Brand Contract for the years ended December&nbsp;31, 2013 and 2012 ("Statements of Cash Receipts from Included Contracts"). </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These
Statements of Cash Receipts from Included Contracts reflect the historical cash receipts of the Contract Party that would have been subject to the Brand Contract with Fantex had
the brand contract been in place beginning January&nbsp;1, 2012. The Statements of Cash Receipts from Included Contracts reflect the gross amount received by the Contract Party subject to the Brand
Contract. Had the brand contract been in place beginning January&nbsp;1, 2012, and subject to the following consideration regarding expired contracts, Fantex would have been entitled to receive 20%
of the gross amount received by the Contract Party. The Statements of Cash Receipts from Included Contracts do not reflect earnings of the Contract Party under contracts that had expired and not been
renewed as of the signing date of the Brand Contract, as it is not possible to determine if the Contract Party would have excluded these contracts from the Brand Contract. The amounts reflected in the
Statements of Cash Receipts from
Included Contracts are not necessarily indicative of future cash receipts that will be subject to the Brand Contract. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investors
in our Fantex Series Arian Foster are investing in Fantex and not in the Brand Contract or Arian Foster. However, Fantex Series Arian Foster is intended to track and reflect
the separate economic performance of the assets to be attributed to the Arian Foster Brand. Only Fantex will have rights under the Brand Contract and recourse against Arian Foster. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>SR-AF-1</FONT></P>

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<A HREF="#bg10401a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="gg10401_report_of_independent___gg102275"> </A>
<A NAME="toc_gg10401_1"> </A>
<BR></FONT><FONT SIZE=2><B>  <A NAME="S1"></A>Report of Independent Registered Public Accounting Firm    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>The
Board of Directors and Stockholder<BR>
Fantex,&nbsp;Inc.: </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
have audited the accompanying Statements of Cash Receipts from Included Contracts Subject to the Brand Agreement between Fantex,&nbsp;Inc. ("Fantex") and Arian Foster and his
affiliate The Ugly Duck,&nbsp;LLC (together, "the Contract Party") dated February&nbsp;28, 2013 (the "Brand Contract"), for the years ended December&nbsp;31, 2013 and 2012 ("Statements of Cash
Receipts from Included Contracts"). These Statements of Cash Receipts from Included Contracts are the responsibility of Fantex's management. Our responsibility is to express an opinion on these
Statements of Cash Receipts from Included Contracts based on our audits. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the Statements of Cash Receipts from Included Contracts are free of material misstatement. Fantex is not required to have, nor were we engaged to perform, an
audit of its internal control over financial reporting as it relates to the Statements of Cash Receipts from Included Contracts. Our audits included consideration of internal control over financial
reporting as it relates to the Statements of Cash Receipts from Included Contracts as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of Fantex's internal control over financial reporting as it relates to the Statements of Cash Receipts from Included Contracts. Accordingly, we express no
such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the Statements of Cash Receipts from Included Contracts, assessing the accounting
principles used and significant estimates made by management, as well as evaluating the overall presentation of the Statements of Cash Receipts from Included Contracts. We believe that our audits
provide a reasonable basis for our opinion. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
accompanying Statements of Cash Receipts from Included Contracts were prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission
for inclusion in a Registration Statement on Form&nbsp;S-1 of Fantex. As discussed in Note&nbsp;1 to the Statements of Cash Receipts from Included Contracts, the statements are not intended to be
a complete presentation of the Contract Party's cash receipts. Further, Fantex's interest in the Contract Party cash receipts from included contracts, as defined in Note&nbsp;2 to the Statements of
Cash Receipts from Included Contracts, will commence upon the effective date of the Brand Contract, which has not yet occurred. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
our opinion, the Statements of Cash Receipts from Included Contracts referred to above present fairly, in all material respects, the cash receipts from included contracts subject to
the Brand Contract for the years ended December&nbsp;31, 2013 and 2012, in accordance with accounting principles generally accepted in the United States of America. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>/s/
Deloitte&nbsp;&amp; Touche&nbsp;LLP </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>San
Francisco, California<BR>
February&nbsp;28, 2014<BR></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>SR-AF-2</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>
<A HREF="#bg10401a_main_toc">Table of Contents</A> </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><A
NAME="S2"></A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="gi10401_statements_of_cash_receipts_fr__sta07479"> </A>
<A NAME="toc_gi10401_1"> </A></FONT> <FONT SIZE=2><B><BR>  Statements of Cash Receipts from Included Contracts Subject to the Brand Agreement between<BR>  Fantex,&nbsp;Inc. and    <BR>    <BR>    Arian Foster and his affiliate The Ugly Duck,&nbsp;LLC
dated February&nbsp;28, 2013    <BR>    <BR>    (Amounts in thousands)    <BR>    </B></FONT></P>
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<p style="font-family:times;"></FONT></P>

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<TD WIDTH="39pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Year Ended<BR>
December&nbsp;31, </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2012 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2013 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>RECEIPTS FROM INCLUDED CONTRACTS SUBJECT TO THE BRAND CONTRACT</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Contractual National Football League (NFL) player receipts</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>4,540</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5,248</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Contractual NFL player signing bonus receipts</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>6,250</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Contractual NFL post season roster incentive receipts</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>69</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Contractual NFL player performance incentives receipts</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>406</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>344</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0pt;font-family:times;">


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&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2>


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 </font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total receipts from NFL player contract</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>11,196</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5,661</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Receipts from other included contracts</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>482</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,066</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>TOTAL RECEIPTS FROM INCLUDED CONTRACTS SUBJECT TO THE BRAND CONTRACT</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>11,678</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>6,727</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0pt;font-family:times;">


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&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
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<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2>


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 </font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.1pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
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<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2>


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 </font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
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<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="line-height:0pt;font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="line-height:0pt;font-family:times;">&nbsp;</TD>
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&nbsp;&nbsp;&nbsp;
</font></p><p align=center style="font-family:times;"><font> </FONT> <FONT SIZE=2>
The notes are an integral part of these statements </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>SR-AF-3</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>
<A HREF="#bg10401a_main_toc">Table of Contents</A> </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><A
NAME="S3"></A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="gk10401_notes_to_statements_of_cash_re__not07018"> </A>
<A NAME="toc_gk10401_1"> </A></FONT> <FONT SIZE=2><B><BR>  Notes to Statements of Cash Receipts from Included Contracts Subject to the Brand Agreement between<BR>  Fantex,&nbsp;Inc. and Arian Foster and his affiliate The Ugly Duck,&nbsp;LLC dated
February&nbsp;28, 2013    <BR>    </B></FONT></P>


<P style="font-family:times;"><FONT SIZE=2><B> Note&nbsp;1. Basis of Presentation  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The accompanying Statements of Cash Receipts from Included Contracts Subject to the Brand Agreement between Fantex,&nbsp;Inc. ("Fantex") and Arian Foster and his affiliate The Ugly
Duck,&nbsp;LLC (together, the "Contract Party") dated February&nbsp;28, 2013 (the "Brand Contract"), present the cash or other considerations received by the Contract Party from included contracts
(see Note&nbsp;2) subject to the Brand Contract for the years ended December&nbsp;31, 2013 and 2012 ("Statements of Cash Receipts from Included Contracts"). </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Brand Contract will entitle Fantex to 20% of the Contract Party's cash or other considerations received from included contracts from the effective date of the Brand Contract and cash
or other considerations received from future contracts resulting from certain activities of the Contract Party. These certain activities, defined under the terms of the Brand Contract as the "Field,"
include activities in connection with being a football player, broadcasting, coaching, motion pictures, television, radio, music, literary, talent engagements, personal appearances, public appearances
in places of amusement and entertainment, records and recording, publications, and the use of Contract Party's name, voice, likeness, biography or talents for purposes of advertising and trade,
including without limitation sponsorships, endorsements and appearances, and any other activities in which Contract Party uses its name, likeness or reputation to generate cash or other considerations
received, unless such activities are specifically excluded by the Brand Contract. In the event that there is any ambiguity as to whether an activity is in the Field, Fantex and the Contract party
shall discuss in good faith to consider whether such activity is of the type typically performed by the Contract Party in the principal business (such activities may include sports casting, coaching,
acting as spokesperson, etc.). If a resolution is not reached within 30&nbsp;days from the initial discussions Fantex or the Contract Party may remit the matter to arbitration. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These
Statements of Cash Receipts from Included Contracts reflect the historical cash receipts of the Contract Party that would have been subject to the Brand Contract with Fantex had
the brand contract been in place beginning January&nbsp;1, 2012. The Statements of Cash Receipts from Included Contracts
reflect the gross amount received by the Contract Party subject to the Brand Contract. Had the brand contract been in place beginning January&nbsp;1, 2012, and subject to the following consideration
regarding expired contracts, Fantex would have been entitled to receive 20% of the gross amount received by the Contract Party. The Statements of Cash Receipts from Included Contracts do not reflect
earnings of the Contract Party under contracts that had expired and not been renewed as of the signing date of the Brand Contract, as it is not possible to determine if the Contract Party would have
excluded these contracts from the Brand Contract. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Statement of Cash Receipts from Included Contracts includes cash receipts related to the signing bonus of the Contract Party with the Houston Texans prior to the signing of the Brand
Contract but not the payment made subsequent to the signing. The payment of the signing bonus was included in the currently existing contract between the Contract Party and the Houston Texans (the
"Texans Contract"), and not part of a previously expired contract. The Texans Contract provided for the signing bonus in four separate payments. The final payment of $6.25&nbsp;million, made
subsequent to the signing of the Brand Contract, was specifically excluded from the Brand Contract. Therefore, as the Texans Contract was not expired and the only amount pertaining to the Texans
Contract that was specifically excluded was the final payment of the signing bonus, the final payment of the signing bonus has been excluded from the Statement of Cash Receipts from Included
Contracts. Future contracts with teams in the National Football League that include signing bonuses will be subject to the Brand Contract. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>SR-AF-4</FONT></P>

<HR NOSHADE>
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<A NAME="page_gk10401_1_5"> </A>

<P style="font-family:times;"><FONT SIZE=2><A
HREF="#bg10401a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B><BR>
Notes to Statements of Cash Receipts from Included Contracts Subject to the Brand Agreement between<BR>
Fantex,&nbsp;Inc. and Arian Foster and his affiliate The Ugly Duck,&nbsp;LLC dated February&nbsp;28, 2013 (Continued) </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Note&nbsp;1. Basis of Presentation (Continued) </B></FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
effectiveness of the Brand Contract is subject to the successful completion of the initial public offering (IPO) of the Fantex Series Arian Foster common stock, unless such condition
is otherwise waived by Fantex. The effective date of the Brand Contract is expected to occur within 30&nbsp;days of the completion of the IPO. If the IPO is not successful the Brand Contract is not
expected to be effective and in such case Fantex will not have rights to collect any future cash receipts under the Brand Contract. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These
Statements of Cash Receipts from Included Contracts were prepared from the historical records of the Contract Party and are not intended to be a complete presentation of the
Contract Party's cash receipts. Cash receipts will only be earned by Fantex under the Brand Contract subsequent to the effective date of the Brand Contract. In the event the Contract Party does not
receive cash, or other considerations no amounts are due to Fantex. No other considerations were received under the included contracts for the years ended December&nbsp;31, 2013 or 2012. The
Statements of Cash Receipts from Included Contracts are presented in accordance with accounting principles generally accepted in the United States of America. Certain prior period amounts have been
presented separately to reflect current period presentation. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Note&nbsp;2. Summary of Significant Accounting Policies  </B></FONT></P>


<P style="font-family:times;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contractual National Football League (NFL) player receipts</I></FONT><FONT SIZE=2>&#151;These receipts are recorded based on the cash received by the Contract Party for being on
the roster for NFL games, paid on a bi-weekly basis throughout the season. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contractual NFL signing bonus receipts</I></FONT><FONT SIZE=2>&#151;These receipts are recorded based on the cash received for the signing of the Contract Party's NFL contract,
paid on multiple dates as set forth in the NFL contract. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contractual NFL post season roster incentive receipts</I></FONT><FONT SIZE=2>&#151;These receipts are recorded based on the cash received for participation in post season games,
including play-offs and the NFL Pro Bowl. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contractual NFL player performance incentives receipts</I></FONT><FONT SIZE=2>&#151;These receipts are recorded based on the cash received from the roster bonus included in the
Contract Party's NFL contract. The roster bonus is $31,250 for each regular season game the Contract Party is on the active roster, paid on a bi-weekly basis throughout the season, up to a maximum
bonus of $500,000 in any season during the NFL contract period. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Receipts from other included contracts</I></FONT><FONT SIZE=2>&#151;These receipts are recorded based on the cash, or other considerations received from the Contract Party's other
contracts subject to the Brand Contract, such as endorsements and cash received from NFL Players,&nbsp;Inc. for licensing the image and likeness of the Contract Party. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Included Contracts</I></FONT><FONT SIZE=2>&#151;Included contracts are those that are effective upon the date that the Brand Contract was executed by Fantex and the Contract Party
and that are included in the Brand Contract. For contracts that existed at the signing on February&nbsp;28, 2013 of the Brand Contract that are renewals of previous contracts with the same
counterparty, those prior contracts, which relate to periods prior to the signing of the Brand Contract, have been considered included contracts. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>SR-AF-5</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2><A
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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B><BR>
Notes to Statements of Cash Receipts from Included Contracts Subject to the Brand Agreement between<BR>
Fantex,&nbsp;Inc. and Arian Foster and his affiliate The Ugly Duck,&nbsp;LLC dated February&nbsp;28, 2013 (Continued) </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Note&nbsp;3. Subsequent events  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fantex has evaluated activity after December&nbsp;31, 2013 until the date of issuance of the Statements of Cash Receipts from Included Contracts on February&nbsp;28, 2014, and other
than the events described above, Fantex is not aware of any events that have occurred subsequent to December&nbsp;31, 2013 that would require adjustments to or disclosures in the Statements of Cash
Receipts from Included Contracts. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>SR-AF-6</FONT></P>

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<A HREF="#bg10401a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B> <A NAME="gm10401_[alternate_page_for_market-making_prospectus]"> </A>
<A NAME="toc_gm10401_1"> </A>
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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><A
NAME="gm10401_fantex,_inc."> </A>
<A NAME="toc_gm10401_2"> </A>
<BR></FONT><FONT SIZE=4><B>Fantex,&nbsp;Inc.  <BR>  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=4><B>Fantex Series&nbsp;EJ Manuel Convertible Tracking Stock  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=4><B> and  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=4><B> Shares of Platform Common Stock issuable upon conversion of  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=4><B> the Fantex Series&nbsp;EJ Manuel Convertible Tracking Stock  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This prospectus has been prepared by Fantex and may be used by Fantex Brokerage Services,&nbsp;LLC, or FBS, in connection with offers and sales
of these securities in secondary market transactions in these securities, including market-making transactions as may be effected from time to time. However, FBS is not obligated to make a market in
the Fantex Series&nbsp;EJ Manuel Convertible Tracking Stock, which we refer to as Fantex Series&nbsp;EJ Manuel, and if it does so, it may discontinue any market-making activities at any time
without notice, in its sole discretion. To the extent FBS chooses to act as a market-maker, it may act as principal or agent in such transactions, including as agent for the counterparty when acting
as principal or as agent for both counterparties, and may receive compensation in the form of discounts and commissions, including from both counterparties, when it acts as agent for both. Such sales
will be made at prevailing market prices at the time of sale, at prices related thereto or at negotiated prices. Fantex will not receive any proceeds from such secondary market offers and sales. All
such transactions with respect to these securities that are made pursuant to a prospectus after the effectiveness of the registration statement of which this prospectus is a part are being made solely
pursuant to this prospectus, as it may be supplemented from time to time. </FONT></P>


<P style="font-family:times;"><FONT SIZE=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
tracking stock brands are not separate legal entities and cannot issue securities. Instead, our Fantex Series&nbsp;EJ Manuel is a tracking stock. Each of our tracking stocks,
including our Fantex Series&nbsp;EJ Manuel and any tracking stock that we may create in the future, is intended to track and reflect the separate economic performance of a specific brand contract we
have signed with an athlete, entertainer or other high profile individual, each of which we refer to as a tracking stock brand. However, holders of shares of any of our tracking stocks will have no
direct investment in the associated tracking stock brand, brand contract or individual. Rather, investors in any of our tracking stocks, including our Fantex Series&nbsp;EJ Manuel, will be our
common stockholders and an investment in a tracking stock will represent an ownership interest in our company as a whole, which will expose holders to additional risks associated with any individual
tracking stock that exists at the time of any investment or that we may establish and issue in the future. EJ Manuel and his affiliated persons are, and we expect they will continue to be, individuals
and legal entities that are separate and independent from us, with separate ownership, management and operations. The issuance of Fantex Series&nbsp;EJ Manuel will not result in an actual transfer
of our assets or the creation of a separate legal entity. </FONT></P>

<P style="font-family:times;"><FONT SIZE=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
platform common stock is intended to track and reflect the economic performance of all of our tracking stock brands. The EJ&nbsp;Manuel Brand, tracked by the Fantex
Series&nbsp;EJ Manuel, is our first and only tracking stock brand to date. We would attribute to the EJ&nbsp;Manuel Brand and the platform common stock certain assets and expenses, including in
certain cases expenses related to other series of common stock of Fantex that may be issued from time to time in the future. Our board of directors may convert the shares of Fantex Series&nbsp;EJ
Manuel into platform common stock at any time following the two-year anniversary of the filing of a certificate of designation creating Fantex Series&nbsp;EJ Manuel. For additional information
please see "Management and Attribution Policies" and "Description of Capital Stock" herein. </FONT></P>

<P style="font-family:times;"><FONT SIZE=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Holders
of shares of our platform common stock and any of our tracking stocks, including shares of our Fantex Series&nbsp;EJ Manuel are each entitled to one vote per share of such
common stock. Following the consummation of this offering, Fantex Holdings, our parent company, will hold all 100,000,000 outstanding shares of our platform common stock, and thus will hold
substantially all of the voting power of our outstanding common stock. </FONT></P>

<P style="font-family:times;"><FONT SIZE=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=1><B><I>We are an "emerging growth company," as that term is used in the Jumpstart Our Business Startups Act of 2012, and, as such, are subject to reduced public company
reporting requirements. See "Prospectus Summary&#151;Implications of Being an Emerging Growth Company."</I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=1><B>Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a criminal offense.</B></FONT></P>

<P style="font-family:times;"><FONT SIZE=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shares
of our Fantex Series&nbsp;EJ Manuel are new securities; there may not be an established market for them. We have not applied for a listing of our Fantex Series&nbsp;EJ Manuel
on any securities exchange or for their inclusion in any established automated dealer quotation system. Our Fantex Series&nbsp;EJ Manuel is offered only through the website of our affiliated
broker-dealer, FBS. Accordingly, we cannot assure you as to the development or liquidity of any market for our Fantex Series&nbsp;EJ Manuel. Currently, there is no trading symbol assigned and there
can be no assurance that we will ever be granted a trading symbol on the OTC Bulletin Board or any other quotation system or exchange. However, shares of our Fantex Series&nbsp;EJ Manuel will be
issued in electronic form and will be listed exclusively on the FBS alternative trading system under the symbol "Fantex EJ Manuel." </FONT></P>

<P style="font-family:times;"><FONT SIZE=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investors
will be required to satisfy the suitability requirements described in the prospectus in order to invest in Fantex Series&nbsp;EJ Manuel. </FONT></P>

<P style="font-family:times;"><FONT SIZE=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=3><B>This offering is highly speculative and the securities involve a high degree of risk. Investing in our Fantex
Series&nbsp;EJ Manuel should be considered only by persons who can afford the loss of their entire investment. See "Risk Factors" beginning on page&nbsp;35.</B></FONT></P>

<P style="font-family:times;"><FONT SIZE=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=1><B>According to the NFL Players Association, the average career of a National Football League, or NFL, player lasts about 3&nbsp;years and according to the NFL
Management Council the average career length for (i)&nbsp;an NFL rookie that makes an opening day NFL roster is 6&nbsp;years, (ii)&nbsp;an NFL player that is a 1st&nbsp;round draft pick is
9.3&nbsp;years and (iii)&nbsp;an NFL player that is selected for or plays in at least one Pro Bowl is 11.7&nbsp;years. We assume that EJ Manuel's career will be 10&nbsp;years. We have
conducted a valuation analysis and determined that the present value of the brand income that EJ Manuel may earn is approximately $50&nbsp;million of which we are entitled to 10% under our brand
contract with EJ Manuel. We made a number of assumptions to determine the value of the brand income. We expect to attribute 95% of the income to which we are entitled under our brand contract with EJ
Manuel to the EJ Manuel Brand, while the remaining 5% will be attributed to the platform common stock. If any of our assumptions are materially incorrect, including our assumptions regarding the
projected future earnings of EJ Manuel in football, football related activities and other brand income, the actual value of the brand income could be significantly less than $50&nbsp;million, 96.3%
of which is estimated to be derived from anticipated future contracts that do not exist as of the date of this prospectus. In such case, the return on investment or rate of return on an investment in
Fantex Series&nbsp;EJ Manuel could be significantly below an investor's expectation.</B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=4><B>FANTEX BROKERAGE SERVICES,&nbsp;LLC</B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>The date of this prospectus is&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2014. </FONT></P>

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<A HREF="#bg10401a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="go10401_[alternate_page_for_market-making_prospectus]"> </A>
<A NAME="toc_go10401_1"> </A>
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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="go10401_use_of_proceeds"> </A>
<A NAME="toc_go10401_2"> </A>
<BR></FONT><FONT SIZE=2><B>  USE OF PROCEEDS    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This prospectus is being delivered in connection with the sale of the Fantex Series&nbsp;EJ Manuel by FBS in market-making
transactions. We will not receive any of the proceeds from these transactions. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="go10401_plan_of_distribution"> </A>
<A NAME="toc_go10401_3"> </A>
<BR></FONT><FONT SIZE=2><B>  PLAN OF DISTRIBUTION    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This prospectus has been prepared for use by FBS in connection with offers and sales of the Fantex Series&nbsp;EJ Manuel in
market-making transactions effected from time to time. FBS may act as principal or agent in such transactions. Such sales will be made at prevailing market prices at the time of sale, at prices
related thereto or at negotiated prices. We will not receive any of the proceeds from such sales. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
are an affiliate of FBS. In connection with the initial public offering of the Fantex Series&nbsp;EJ Manuel, we agreed to file&nbsp;a "market-making" prospectus in order to enable
FBS to engage in market-making activities for the Fantex Series&nbsp;EJ Manuel. We have agreed to indemnify FBS against certain liabilities, including liabilities under the Securities Act, and to
contribute payments which FBS might be required to make in connection with the market- making activities. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FBS
may also act as a market-maker in the secondary market from time to time, but it is not obligated to make a market in the Fantex Series&nbsp;EJ Manuel and may discontinue any
market-making at any time without notice, in its sole discretion. FBS is a member of FINRA and may participate in distributions of the Fantex Series&nbsp;EJ Manuel. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>A-2</FONT></P>

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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=5><B>523,700 Shares  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=5><B>
<IMG SRC="g559307.jpg" ALT="LOGO" WIDTH="450" HEIGHT="120">
  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=4><B>Fantex Series&nbsp;EJ Manuel Convertible Tracking Stock  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=4><B> and  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=4><B> Shares of Platform Common Stock issuable upon conversion of  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=4><B> the Fantex Series&nbsp;EJ Manuel Convertible Tracking Stock</B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=3><I>

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<P ALIGN="CENTER" style="font-family:times;"><BR><FONT SIZE=3><B>PROSPECTUS<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2014</B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=3><I>

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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=5><B>FANTEX BROKERAGE SERVICES,&nbsp;LLC</B></FONT><BR><FONT SIZE=5><B>STIFEL  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=5>

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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="gs10401_part_ii_information_not_required_in_prospectus"> </A>
<A NAME="toc_gs10401_1"> </A>
<BR></FONT><FONT SIZE=2><B>  PART II    <BR>    <BR>    INFORMATION NOT REQUIRED IN PROSPECTUS    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><A
NAME="gs10401_item_13._other_expenses_of_issuance_and_distribution"> </A>
<A NAME="toc_gs10401_2"> </A></FONT> <FONT SIZE=2><B>  Item&nbsp;13.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Other Expenses of Issuance and Distribution    <BR>    </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table indicates the expenses to be incurred in connection with the offering described in this Registration Statement, all
of which will be paid by Fantex Holdings,&nbsp;Inc. and will be allocated to Fantex,&nbsp;Inc. for financial statement purposes. All amounts are estimated except the Securities and Exchange
Commission registration fee. </FONT></P>
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<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
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<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Amount </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
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<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Securities and Exchange Commission registration fee</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>675</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
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<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>FINRA filing fee</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>*</FONT></TD>
</TR>
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<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Accountants' fees and expenses</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>*</FONT></TD>
</TR>
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<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Legal fees and expenses</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>*</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Blue Sky fees and expenses</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>*</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Print and engraving expenses</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>*</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Miscellaneous expenses</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>*</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>*</FONT></TD>
</TR>
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<DIV style="padding:0pt;position:relative;text-align:left;margin-left:15%;">
 <DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>*</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>to
be filed by amendment.  </FONT></DD></DL>
 </DIV>
 <P style="font-family:times;"><FONT SIZE=2><A
NAME="gs10401_item_14._indemnification_of_directors_and_officers"> </A>
<A NAME="toc_gs10401_3"> </A></FONT> <FONT SIZE=2><B>  Item&nbsp;14.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Indemnification of Directors and Officers    <BR>    </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our amended and restated certificate of incorporation provides that the liability of the directors of Fantex for monetary damages shall
be eliminated to the fullest extent permitted under applicable law. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;102
of the General Corporation Law of the State of Delaware permits a corporation to eliminate the personal liability of directors of a corporation to the corporation or
its stockholders for monetary damages for a breach of fiduciary duty as a director, except where the director breached his duty of loyalty, failed to act in good faith, engaged in intentional
misconduct or knowingly violated a law, authorized the payment of a dividend or approved a stock repurchase in violation of Delaware corporate law or obtained an improper personal benefit. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;204
of the California General Corporation Law, to the extent it is applicable to Fantex, permits a corporation to eliminate the personal liability of a director for
monetary damages in an action brought by or in the right of the corporation for breach of a director's duties to the corporation and its shareholders, except that a provision may not eliminate or
limit the liability of directors (i)&nbsp;for acts or omissions that involve intentional misconduct or a knowing and culpable violation of law, (ii)&nbsp;for acts or omissions that a director
believes to be contrary to the best interests of the corporation or its shareholders or that involve the absence of good faith on the part of the director, (iii)&nbsp;for any transaction from which
a director derived an improper personal benefit, (iv)&nbsp;for acts or omissions that show a reckless disregard for the director's duty to the corporation or its shareholders in circumstances in
which the director was aware, or should have been aware, in the ordinary course of performing the director's duties, of a risk of serious injury to the corporation or its shareholders, (v)&nbsp;for
acts or omissions that constitute an unexcused pattern of inattention that amounts to an abdication of the director's duty to the corporation or its shareholders, (vi)&nbsp;for contracts or
transactions between the director and the corporation or (vii)&nbsp;for approving a distribution, loan or guaranty in violation of California corporate law. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;145
of the General Corporation Law of the State of Delaware provides that a corporation has the power to indemnify a director, officer, employee or agent of the
corporation, or a person serving at the request of the corporation for another corporation, partnership, joint venture, trust or </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>II-1</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2><A
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<P style="font-family:times;"><FONT SIZE=2>other
enterprise in related capacities against expenses (including attorneys' fees), judgments, fines and amounts paid in settlements actually and reasonably incurred by the person in connection with
an action, suit or proceeding to which he was or is a party or is threatened to be made a party to any threatened, ending or completed action, suit or proceeding by reason of such position, if such
person acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, in any criminal action or proceeding, had no reasonable cause
to believe his conduct was unlawful, except that, in the case of actions brought by or in the right of the corporation, no indemnification shall be made with respect to any claim, issue or matter as
to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or other adjudicating court determines that, despite the
adjudication of liability but in view of all of the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other
court shall deem proper. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;317
of the California General Corporation Law likewise generally authorizes a court to award, or a corporation's board of directors to grant, indemnity to directors and
officers who are parties or are threatened to be made parties to any proceeding (with certain similar exceptions) by reason of the fact that the person is or was an agent of the corporation, against
expenses, judgments, fines, settlements and other amounts actually and reasonably incurred in connection with the proceeding if that person acted in good faith and in a manner the person reasonably
believed to be in the best interests of the corporation. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
amended and restated certificate of incorporation will provide for the indemnification of and advancement of expenses to directors and officers to the fullest extent permissible
under Delaware law. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
amended and restated bylaws provide for the indemnification of and advancement of expenses to officers, directors and third parties acting on our behalf if such persons act in good
faith and in a manner reasonably believed to be in and not opposed to our best interest, and, with respect to any criminal action or proceeding, such indemnified party had no reason to believe his or
her conduct was unlawful. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
are entering into indemnification agreements with each of its directors and executive officers, in addition to the indemnification provisions provided for in its charter documents,
and we intend to enter into indemnification agreements with any new directors and executive officers in the future. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
maintain a general liability insurance policy that covers certain liabilities of our directors and officers arising out of claims based on acts or omissions in their capacities as
directors or officers.  </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><A
NAME="gs10401_item_15._recent_sales_of_unregistered_securities"> </A>
<A NAME="toc_gs10401_4"> </A></FONT> <FONT SIZE=2><B>  Item&nbsp;15.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Recent Sales of Unregistered Securities    <BR>    </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Set forth below is information regarding shares of common stock issued, warrants exercisable for common stock issued, convertible notes
issued and options granted by us since our incorporation. Also included is the consideration, if any, received by us for such securities and information relating to the section of the Securities Act,
or rule of the Securities and Exchange Commission, under which exemption from registration was claimed. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> (a)&nbsp;&nbsp;&nbsp;&nbsp;Issuances of Capital Stock, Warrants and Promissory Notes  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On September&nbsp;14, 2012, we issued an aggregate of 100,000,000 shares of our common stock to our parent, Fantex Holdings, at a
price per share of $0.000001 for an aggregate purchase price of $100 (after giving effect to a 1,000,000 for 1 stock split of our common stock effective as of November&nbsp;1, 2013). </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> (b)&nbsp;&nbsp;&nbsp;&nbsp;Stock Options and Restricted Stock  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>II-2</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2><A
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<BR>

<P style="font-family:times;"><FONT SIZE=2><A
NAME="gs10401_item_16._exhibits"> </A>
<A NAME="toc_gs10401_5"> </A></FONT> <FONT SIZE=2><B>  Item&nbsp;16.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Exhibits    <BR>    </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The exhibits to the registration statement are listed in the Exhibit Index to this registration statement and are incorporated by
reference herein.  </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><A
NAME="gs10401_item_17._undertakings"> </A>
<A NAME="toc_gs10401_6"> </A></FONT> <FONT SIZE=2><B>  Item&nbsp;17.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Undertakings    <BR>    </I></B></FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Insofar as indemnification for liabilities arising under the Securities Act, as amended, may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
undersigned Registrant hereby undertakes: </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;To
file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: </FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;To
include any prospectus required by section&nbsp;10(a)(3) of the Securities Act of 1933; </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;To
reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may
be reflected in the form of prospectus filed with the Commission pursuant to Rule&nbsp;424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;To
include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such
information in the registration statement. </FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;That,
for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;To
remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;That,
for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities: The
undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the
securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>II-3</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2><A
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<P style="font-family:times;"><FONT SIZE=2>undersigned
registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser: </FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;Any
preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule&nbsp;424; </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;Any
free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;The
portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided
by or on behalf of the undersigned registrant; and </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;Any
other communication that is an offer in the offering made by the undersigned registrant to the purchaser. </FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;That
the Registrant will provide to the underwriters at the closing, as specified in the underwriting agreement, certificates in such denominations and registered in
such names as required by the underwriters to permit prompt delivery to each purchaser. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;That,
for purposes of determining any liability under the Securities Act of 1933, as amended, the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule&nbsp;430A and contained in the form of prospectus filed by the Registrant pursuant to Rule&nbsp;424(b)(1) or (4)&nbsp;or 497(h) under the Securities
Act of 1933, as amended, shall be deemed to be part of this registration statement as of the time it was declared effective. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;That,
for the purpose of determining any liability under the Securities Act of 1933, as amended, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>II-4</FONT></P>

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<A HREF="#bg10401a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="jc10401_signatures"> </A>
<A NAME="toc_jc10401_1"> </A>
<BR></FONT><FONT SIZE=2><B>  SIGNATURES    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Act, the Registrant has duly caused this Registration Statement on Form&nbsp;S-1 to be
signed on its behalf by the undersigned, thereunto duly authorized, in San Francisco, California, on February&nbsp;28, 2014. </FONT></P>
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<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><FONT SIZE=2>FANTEX,&nbsp;INC.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>By:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><p align=center style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>/s/ </FONT><FONT SIZE=2>CORNELL "BUCK" FRENCH</FONT><FONT SIZE=2><BR>


<HR NOSHADE SIZE="1.0pt" WIDTH="100%" COLOR="#000000">

</FONT> <FONT SIZE=2> Cornell "Buck" French, </FONT><FONT SIZE=2><I>Chief Executive Officer</I></FONT></TD>
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 <P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="jc10401_powers_of_attorney"> </A>
<A NAME="toc_jc10401_2"> </A>
<BR></FONT><FONT SIZE=2><B>  POWERS OF ATTORNEY    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each of the undersigned directors and officers of Fantex,&nbsp;Inc. hereby constitutes and appoints each of Cornell "Buck" French and
David Mullin his or her true and lawful attorneys-in-fact and agents with full power of substitution and resubstitution, for him or her and his or her name, place and stead, in any and all capacities,
to execute any and all amendments (including post-effective amendments) to this registration statement, to sign any registration statement related to this registration statement filed pursuant to
Rule&nbsp;462(b) of the Securities Act, and to cause the same to be filed with all exhibits thereto, and all documents in connection therewith, with the Securities and Exchange Commission, granting
unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and desirable to be done in and about the premises as fully
and to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all acts and things that said attorneys-in-fact and agents or any of them, or their or
his or her substitute or substitutes may lawfully do or cause to be done by virtue hereof. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant
to the requirements of the Securities Act, this Registration Statement on Form&nbsp;S-1 has been signed by the following persons in the capacities and on the dates indicated. </FONT></P>
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<p style="font-family:times;"></FONT></P>

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<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH NOWRAP  ALIGN="CENTER" style="font-family:times;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:17pt;"><FONT SIZE=1><B>Title

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 </B></FONT></DIV></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
</TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:times;"><BR><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>/s/ </FONT><FONT SIZE=2>CORNELL "BUCK" FRENCH</FONT><FONT SIZE=2><BR>


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</FONT> <FONT SIZE=2> Cornell "Buck" French</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>Chief Executive Officer and Director (Principal Executive Officer)</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>February&nbsp;28, 2014</FONT></TD>
</TR>
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<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:times;"><BR><FONT SIZE=2>/s/&nbsp;DAVID MULLIN<BR>


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</FONT> <FONT SIZE=2> David Mullin</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><BR><FONT SIZE=2>Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:times;"><BR><FONT SIZE=2>February&nbsp;28, 2014</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:times;"><BR><FONT SIZE=2>/s/&nbsp;DAVID BEIRNE<BR>


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</FONT> <FONT SIZE=2> David Beirne</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><BR><FONT SIZE=2>Director</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:times;"><BR><FONT SIZE=2>February&nbsp;28, 2014</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:times;"><BR><FONT SIZE=2>/s/&nbsp;JOHN COSTELLO<BR>


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</FONT> <FONT SIZE=2> John Costello</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><BR><FONT SIZE=2>Director</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:times;"><BR><FONT SIZE=2>February&nbsp;28, 2014</FONT></TD>
</TR>
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<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:times;"><BR><FONT SIZE=2>/s/&nbsp;C. WILLIAM HOSLER<BR>


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</FONT> <FONT SIZE=2> C. William Hosler</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><BR><FONT SIZE=2>Director</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:times;"><BR><FONT SIZE=2>February&nbsp;28, 2014</FONT></TD>
</TR>
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<P style="font-family:times;"><FONT SIZE=2><A
HREF="#bg10401a_main_toc">Table of Contents</A></FONT></P>
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<p style="font-family:times;"></FONT></P>

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<TD WIDTH="103pt" style="font-family:times;"></TD>
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<TH NOWRAP  ALIGN="CENTER" style="font-family:times;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:34pt;"><FONT SIZE=1><B>Signature

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<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH NOWRAP  ALIGN="CENTER" style="font-family:times;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:17pt;"><FONT SIZE=1><B>Title

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 </B></FONT></DIV></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
</TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:times;"><BR><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>/s/&nbsp;RONALD MACHTLEY<BR>


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</FONT> <FONT SIZE=2> Ronald Machtley</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>Director</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>February&nbsp;28, 2014</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:times;"><BR><FONT SIZE=2>/s/&nbsp;SHAHAN SOGHIKIAN<BR>


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</FONT> <FONT SIZE=2> Shahan Soghikian</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><BR><FONT SIZE=2>Director</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:times;"><BR><FONT SIZE=2>February&nbsp;28, 2014</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:times;"><BR><FONT SIZE=2>/s/&nbsp;TERDEMA USSERY<BR>


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</FONT> <FONT SIZE=2> Terdema Ussery</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><BR><FONT SIZE=2>Director</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:times;"><BR><FONT SIZE=2>February&nbsp;28, 2014</FONT></TD>
</TR>
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 <P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>II-6</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>
<A HREF="#bg10401a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="je10401_exhibit_index"> </A>
<A NAME="toc_je10401_1"> </A>
<BR></FONT><FONT SIZE=2><B>  EXHIBIT INDEX    <BR>    </B></FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:times;"></FONT></P>

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<TR><!-- TABLE COLUMN WIDTHS SET -->
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<TD WIDTH="61pt" style="font-family:times;"></TD>
<TD WIDTH="22pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Exhibit<BR>
Number </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Description </B></FONT></TH>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1.1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>*</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>Form of Underwriting Agreement</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>3.1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&#134;</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>Amended and Restated Certificate of Incorporation of Fantex,&nbsp;Inc.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>3.2</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>**</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>Bylaws of Fantex,&nbsp;Inc., currently in effect</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>3.3</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>**</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>Form of Amended and Restated Bylaws of Fantex,&nbsp;Inc., to be in effect prior to the consummation of this offering</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>3.4</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>Form of Certificate of Designation for Fantex Series Arian Foster</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>3.5</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>Form of Certificate of Designation for Fantex Series Vernon Davis</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>3.6</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>Form of Certificate of Designation for Fantex Series&nbsp;EJ Manuel</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>5.1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>*</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>Opinion of Latham&nbsp;&amp; Watkins&nbsp;LLP</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>8.1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>*</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>Opinion of Latham&nbsp;&amp; Watkins&nbsp;LLP</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>10.1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>**</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>Management Agreement, dated July&nbsp;10, 2013, by and between Fantex,&nbsp;Inc. and Fantex Holdings,&nbsp;Inc.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>10.2</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>Brand Agreement effective as of February&nbsp;14, 2014 by and between Erik R. Manuel, Jr., Kire Enterprises&nbsp;LLC and Fantex,&nbsp;Inc.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>10.3</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>NFL Player Contract dated as of June&nbsp;14, 2013, by and between Erik "EJ." Manuel and Buffalo Bills,&nbsp;Inc.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>10.4</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&#134;</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>Brand Agreement effective as of October&nbsp;30, 2013, by and between Vernon Davis, The Duke Marketing&nbsp;LLC and Fantex,&nbsp;Inc.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>10.5</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&#134;</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>NFL Player Contract dated as of March&nbsp;1, 2010, by and between Vernon Davis and San Francisco Forty Niners, Limited</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>10.6</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>**</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>Second Amended and Restated Brand Agreement effective as of February&nbsp;28, 2013, by and between Arian Foster, The Ugly Duck,&nbsp;LLC and Fantex,&nbsp;Inc.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>10.7</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>**</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>NFL Player Contract dated as of March&nbsp;6, 2012, by and between Arian Foster and Houston NFL Holdings,&nbsp;LP</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>10.8</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>*</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>Escrow Agreement dated as of by and between and Fantex,&nbsp;Inc.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>10.9</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>**+</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>Form of Indemnification Agreement between Fantex,&nbsp;Inc. and each of its directors, officers and certain employees, to be in effect before the completion of the offering.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>10.10</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>**+</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>Employment Agreement, dated October&nbsp;16, 2013, by and between Fantex Holdings,&nbsp;Inc., Fantex,&nbsp;Inc. and Cornell "Buck" French</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>10.11</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>**+</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>Employment Agreement, dated October&nbsp;16, 2013, by and between Fantex Holdings,&nbsp;Inc., Fantex,&nbsp;Inc. and David Mullin</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>10.12a</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>**+</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>Fantex,&nbsp;Inc. 2013 Equity Incentive Award Plan</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>10.12b</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>**+</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>Form of Stock Option Agreement under the 2013 Equity Incentive Award Plan</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>10.12c</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>**+</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>Form of Restricted Stock Award Agreement under the 2013 Equity Incentive Award Plan</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>23.1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>Consent of Deloitte&nbsp;&amp; Touche&nbsp;LLP</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>23.2</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>Consent of Deloitte&nbsp;&amp; Touche&nbsp;LLP</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>23.3</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>Consent of Deloitte&nbsp;&amp; Touche&nbsp;LLP</FONT></TD>
</TR>
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<P style="font-family:times;"><FONT SIZE=2><A
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<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Exhibit<BR>
Number </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Description </B></FONT></TH>
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<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>23.4</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>Consent of Deloitte&nbsp;&amp; Touche&nbsp;LLP</FONT></TD>
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<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>23.5</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>*</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>Consent of Latham&nbsp;&amp; Watkins&nbsp;LLP (included in Exhibits&nbsp;5.1 and 8.1)</FONT></TD>
</TR>
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<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>24.1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>Powers of Attorney (included on the signature page)</FONT></TD>
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<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>*</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>To
be filed by amendment.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#134;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Previously
filed by Fantex,&nbsp;Inc. as an exhibit to its Registration Statement on Form&nbsp;S-1, as amended (File No.&nbsp;333-192476),
as filed with the Securities and Exchange Commission on November&nbsp;21, 2013.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>**</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Previously
filed by Fantex,&nbsp;Inc. as an exhibit to its Registration Statement on Form&nbsp;S-1, as amended (File No.&nbsp;333-191772), as filed
with the Securities and Exchange Commission on October&nbsp;17, 2013.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>+</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Indicates
a management contract or compensatory plan.  </FONT></DD></DL>
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TABLE OF CONTENTS
INDEX TO FINANCIAL STATEMENTS
INDEX TO STATEMENT OF CASH RECEIPTS FROM INCLUDED CONTRACTS
INDEX TO STATEMENTS OF CASH RECEIPTS FROM INCLUDED CONTRACTS
INDEX TO STATEMENTS OF CASH RECEIPTS FROM INCLUDED CONTRACTS
Table of Contents
As filed with the Securities and Exchange Commission on February 28, 2014
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
FANTEX, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware
(State or Other Jurisdiction of
Incorporation or Organization)
7389
(Primary Standard Industrial
Classification Code No.)
80-0884134
(I.R.S. Employer
Identification No.)
Fantex, Inc.
330 Townsend Street, Suite 234
San Francisco, CA 94107
(415) 592-5950
(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)
Cornell "Buck" French
Chief Executive Officer
Fantex, Inc.
330 Townsend Street, Suite 234
San Francisco, California 94107
(415) 592-5950
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
Patrick A. Pohlen, Esq.
Joel H. Trotter, Esq.
Jim Morrone, Esq.
Latham & Watkins LLP
140 Scott Drive
Menlo Park, California 94025
(650) 328-4600
Mark P. Tanoury, Esq.
David G. Peinsipp, Esq.
Cooley LLP
3175 Hanover Street
Palo Alto, California 94304
(650) 843-5000
Approximate date of commencement of proposed sale to the public:
As soon as practicable after this Registration Statement is declared effective.
If any of the securities being registered on this form are offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933,
as amended (the "Securities Act"), check the following box.
ý
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list
the Securities Act registration statement number of the earlier effective registration statement for the same offering.
o
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement for the same offering.
o
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement for the same offering.
o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the
definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer
o
Accelerated filer
o
Non-accelerated filer
o
(Do not check if a
smaller reporting company)
Smaller reporting company
ý
CALCULATION OF REGISTRATION FEE
Title of Each Class of Securities
to be Registered
Proposed Maximum
Aggregate Offering
Price(1)(2)
Amount of
Registration Fee
Fantex Series EJ Manuel Convertible Tracking Stock, par value $0.0001 per share
$5,237,000
$675
Platform Common Stock, par value $0.0001 per share(3)
—
—
(1)
Estimated
solely for the purpose of computing the registration fee in accordance with Rule 457(o) under the Securities Act.
(2)
An
indeterminate amount of securities are being registered hereby to be offered solely for market-making purposes by specified affiliates of the registrant.
Pursuant to Rule 457(q) under the Securities Act, no filing fee is required.
(3)
Represents
up to 5,000,000 shares of platform common stock, par value $0.0001 per share, of Fantex, Inc. issuable upon the conversion of shares of
Fantex Series EJ Manuel Convertible Tracking Stock ("Fantex Series EJ Manuel"). The precise number of shares of platform common stock to be registered is not presently determinable because the
conversion ratio as of the conversion date, if any, of the Fantex Series EJ Manuel is not currently known. Pursuant to Rule 457(i) under the Securities Act the registration fee is calculated on
the basis of the proposed offering price of the Fantex Series EJ Manuel alone because no additional consideration is to be received in connection with the future conversion, if any, of the Fantex
Series EJ Manuel into platform common stock.
The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as
amended, or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.
Table of Contents
EXPLANATORY NOTE
This Registration Statement contains a prospectus relating to an offering of shares of our Fantex Series EJ Manuel. This
Registration Statement also contains a prospectus relating to sales of Fantex Series EJ Manuel in connection with certain market-making and other transactions that may be effected by FBS in the
secondary market following the completion of this offering. The complete prospectus relating to this offering of common stock (the Offering Prospectus) follows immediately after this Explanatory Note.
Following the Offering Prospectus are certain pages of the prospectus relating solely to such secondary market market-making transactions (referred to by us for convenience purposes as the
Market-Making Prospectus), including an alternate front cover page and alternate sections entitled "Use of Proceeds" and "Plan of Distribution." Each of such alternate pages has been marked "Alternate
Page for Market-Making Prospectus." A complete version of each of the Offering Prospectus and the Market-Making Prospectus will be filed with the Securities and Exchange Commission in accordance with
Rule 424 under the Securities Act.
We
have also filed with the SEC separate registration statements under the Securities Act in order to register each of the following tracking stocks:
Title of Security
Form
Registration
File Number
Referred to in this
Registration Statement as:
Fantex Series Arian Foster Convertible Tracking Stock
Form S-1
333-191772
Arian Foster Registration Statement
Fantex Series Vernon Davis Convertible Tracking Stock
Form S-1
333-192476
Vernon Davis Registration Statement
This
prospectus does not constitute a part of any of the above listed registration statements.
Table of Contents
The information contained in this prospectus is not complete and may be changed. These
securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not
soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED FEBRUARY 28, 2014
PRELIMINARY PROSPECTUS
523,700 Shares
Fantex Series EJ Manuel Convertible Tracking Stock
and
Shares of Platform Common Stock issuable upon conversion of
the Fantex Series EJ Manuel Convertible Tracking Stock
$10.00 per share
This is the initial public offering of Fantex Series EJ Manuel Convertible Tracking Stock, which we refer to as Fantex Series EJ
Manuel. This is also an offering of shares of our platform common stock into which the shares of Fantex Series EJ Manuel are convertible, and references in this prospectus to an offering of
shares of Fantex Series EJ Manuel shall be deemed also to mean a reference to the shares of platform common stock into which the shares of Fantex Series EJ Manuel are convertible.
We
are offering hereby 523,700 shares of Fantex Series EJ Manuel at $10.00 per share on a best efforts, all or none basis. To the extent that there is insufficient interest in
shares of our Fantex Series EJ Manuel, this offering may be cancelled and no shares of our Fantex Series EJ Manuel would be sold to the public. Funds received from the offering will be
deposited into an interest bearing escrow account pending the closing of the offering in accordance with Rule 15c2-4 of the Securities Exchange Act of 1934, as amended, or the Exchange Act.
Our
tracking stock brands are not separate legal entities and cannot issue securities. Instead, our Fantex Series EJ Manuel is a tracking stock. Each of our tracking stocks,
including our Fantex Series EJ Manuel and any tracking stock that we have or may create in the future, is intended to track and reflect the separate economic performance of a specific brand
contract we have signed with an athlete, entertainer or other high profile individual, each of which we refer to as a tracking stock brand. However, holders of shares of any of our tracking stocks
will have no direct investment in the associated tracking stock brand, brand contract or individual. Rather, investors in any of our tracking stocks, including our Fantex Series EJ Manuel, will
be our common stockholders and an investment in a tracking stock will represent an ownership interest in our company as a whole, which will expose holders to additional risks associated with any
individual tracking stock that exists at the time of any investment or that we may establish and issue in the future. EJ Manuel and his affiliated persons are, and we expect they will continue to be,
individuals and legal entities that are separate and independent from us, with separate ownership, management and operations. The issuance of Fantex Series EJ Manuel will not result in an
actual transfer of our assets or the creation of a separate legal entity.
The
platform common stock is intended to track and reflect the economic performance of all of our tracking stock brands that we may issue in the future. Upon consummation of this
offering, the EJ Manuel Brand, tracked by the Fantex Series EJ Manuel, may be our only tracking stock brand depending upon the status of the offering of our Fantex Series Arian Foster
Convertible Tracking Stock and our Fantex Series Vernon Davis Convertible Tracking Stock, which we refer to respectively as Fantex Series Arian Foster and Fantex Series Vernon Davis. We would
attribute to the EJ Manuel Brand, any other outstanding tracking stock brands, and the platform common stock certain assets and expenses, including in certain cases expenses related to other series of
common stock of Fantex that may be issued from time to time in the future. Our board of directors at its sole discretion may convert the shares of Fantex Series EJ Manuel into platform common
stock at any time following the two-year anniversary of the filing of a certificate of designation creating the Fantex Series EJ Manuel. See "Management and Attribution Policies" beginning on
page 108 and "Description of Capital Stock" beginning on page 164.
Holders
of shares of our platform common stock and any of our tracking stocks, including shares of our Fantex Series EJ Manuel, are each entitled to one vote per share of such
stock. Following the consummation of this offering, Fantex Holdings, our parent company, will hold all 100,000,000 outstanding shares of our platform common stock, and thus will hold substantially all
of the voting power of our outstanding common stock.
We are an "emerging growth company," as that term is used in the Jumpstart Our Business Startups Act of 2012, and, as such, are subject to reduced public company
reporting requirements. See "Prospectus Summary—Implications of Being an Emerging Growth Company."
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
Per Share of
Fantex Series EJ Manuel(1)
Total
Initial public offering price
$  10.00
$  5,237,000
Underwriting discount(2)
$    0.50
$     261,850
Proceeds to Fantex, before expenses
$    9.50
$  4,975,150
(1)
The
platform common stock will be issued for no separate consideration, but will be issued only upon the conversion of the Fantex Series EJ Manuel.
(2)
See
"Underwriting (Conflicts of Interest)."
Shares
of our Fantex Series EJ Manuel are new securities; there are currently none issued and there is currently no established market. We do not intend to apply for a listing of
our Fantex Series EJ Manuel on any securities exchange or for their inclusion in any established automated dealer quotation system. Our Fantex Series EJ Manuel will be offered only
through the website of our affiliated broker-dealer, Fantex Brokerage Services, LLC, or FBS. Accordingly, we cannot assure you as to the development or liquidity of any market for our Fantex
Series EJ Manuel. Currently, there is no trading symbol assigned and there can be no assurance that we will ever be granted a trading symbol on the OTC Bulletin Board or any other quotation
system or exchange. However, shares of our Fantex Series EJ Manuel will be issued in electronic form and will be listed exclusively on the FBS alternative trading system under the symbol
"Fantex EJ Manuel."
Investors
will be required to satisfy the suitability requirements described in the prospectus in order to invest in the offering. The method for submitting reservations and a more
detailed description of this offering process are included in "Underwriting (Conflicts of Interest)—Offering Process" beginning on page 172.
This offering is highly speculative and the securities involve a high degree of risk. Investing in our Fantex
Series EJ Manuel should be considered only by persons who can afford the loss of their entire investment. See "Risk Factors" beginning on page 35.
According to the NFL Players Association, the average career of a National Football League, or NFL, player lasts about
3 years and according to the NFL Management Council the average career length for (i) an NFL rookie that makes an opening day NFL roster is 6 years, (ii) an NFL player that
is a 1st round draft pick is 9.3 years and (iii) an NFL player that is selected for or plays in at least one Pro Bowl is 11.7 years. We assume that EJ Manuel's career will
be 10 years. We have conducted a valuation analysis and determined that the present value of the brand income that EJ Manuel may earn is approximately $50 million of which we are
entitled to 10% under our brand contract with EJ Manuel. We made a number of assumptions to determine the value of the brand income. We expect to attribute 95% of the income to which we are entitled
under our brand contract with EJ Manuel to the EJ Manuel Brand, while the remaining 5% will be attributed to the platform common stock. If any of our assumptions are materially incorrect, including
our assumptions regarding the projected future earnings of EJ Manuel in football, football related activities and other brand income, the actual value of the brand income could be significantly less
than $50 million, 96.3% of which is estimated to be derived from anticipated future contracts that do not exist as of the date of this prospectus. In such case, the return on investment or rate
of return on an investment in Fantex Series EJ Manuel could be significantly below an investor's expectation. A more detailed description of the estimation of EJ Manuel's career length is
included in the section entitled "—EJ Manuel Brand Contract, at Estimated Fair Value—EJ Manuel Career Length" beginning on page 94.
This
offering will terminate upon the earlier to occur of (i) 30 days after this registration statement becomes effective with the Securities and Exchange Commission, or
(ii) the date on which all shares offered hereby have been sold.
FANTEX BROKERAGE SERVICES, LLC
STIFEL
The date of this prospectus is                        , 2014.
Table of Contents
TABLE OF CONTENTS
Page
Prospectus Summary
1
Glossary of Certain Terms
28
Risk Factors
35
Special Note Regarding Forward-Looking Statements and Industry
Data
78
Use of Proceeds
79
Dividend Policy
80
Capitalization
82
Dilution
83
Management's Discussion and Analysis of Financial Condition and Results of
Operations
84
Management and Attribution Policies
108
Business
116
Management
145
Executive Compensation
152
Transactions with Related Persons
160
Principal Stockholders
162
Description of Capital Stock
164
Underwriting (Conflicts of Interest)
171
Material U.S. Federal Income Tax Considerations
178
Legal Matters
183
Experts
183
Where You Can Find More Information
183
Index to Financial Statements
F-1
Index to Statements of Cash Receipts from Included Contracts for EJ Manuel
SR-EM-1
Index to Statements of Cash Receipts from Included Contracts for Vernon Davis
SR-VD-1
Index to Statements of Cash Receipts from Included Contracts for Arian Foster
SR-AF-1
We have not, and the underwriters have not, authorized anyone to provide you with any information other than that contained in this prospectus or in any free
writing prospectus we may authorize to be delivered or made available to you. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others
may give you. This prospectus may only be used where it is legal to offer and sell shares of our Fantex Series EJ Manuel. The information in this prospectus is complete and accurate only as of
February 28, 2014, regardless of the time of delivery of this prospectus or any sale of shares of our Fantex Series EJ Manuel. Our business, financial condition, results of operations
and prospects may have changed since that date. We are not, and the underwriters are not, making an offer of these securities in any jurisdiction where the offer is not
permitted.
This
prospectus has been prepared by Fantex and may be used by FBS in connection with offers and sales of these securities in secondary market transactions in these securities, including
market-making transactions as may be effected from time to time. However, FBS is not obligated to make a market in the Fantex Series EJ Manuel and if it does so, it may discontinue any
market-making at any time without notice, in its sole discretion. FBS has no current intention of acting as a market-maker in the secondary market for the Fantex Series EJ Manuel, but may do so
in the future. If FBS decides to make a market in a tracking stock, it will first amend its Form ATS filed with the Securities and Exchange Commission, or SEC, to reflect such change. To the extent
FBS chooses to act as a market-maker, it may act as principal or agent in such transactions, including as agent for the counterparty when acting as principal or as agent for both counterparties, and
may receive compensation in the form
i
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of
discounts and commissions, including from both counterparties, when it acts as agent for both. Such sales will be made at prevailing market prices at the time of sale, at prices related thereto or
at negotiated prices. Fantex will not receive any proceeds from such secondary market offers and sales. All such transactions with respect to these securities that are made pursuant to a prospectus
after the
effectiveness of the registration statement of which this prospectus is a part are being made solely pursuant to this prospectus, as it may be supplemented from time to time. This delivery requirement
is in addition to the dealers' obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.
Neither
we nor the underwriters have undertaken any efforts to qualify this offering for offers to investors in any jurisdiction outside the United States. Investors must have a U.S.
mailing address (other than a P.O. Box) and a U.S. social security number and/or a U.S. tax identification number to be eligible to participate in this offering.
ii
Table of Contents
PROSPECTUS SUMMARY
The following summary highlights information contained elsewhere in this prospectus and is qualified in its
entirety by the more detailed information and financial statements included elsewhere in this prospectus. This summary does not contain all of the information that may be important to you. You should
read and carefully consider the following summary together with the entire prospectus,
including our financial statements and the related notes thereto appearing elsewhere in this prospectus, before deciding to invest in our Fantex Series EJ Manuel. Some of the statements in this
prospectus constitute forward-looking statements that involve risks and uncertainties. See "Special Note Regarding Forward-Looking Statements and Industry Data." Our actual results could differ
materially from those anticipated in such forward-looking statements as a result of certain factors, including those discussed in the "Risk Factors" and other sections of this
prospectus.
We
are a development-stage brand acquisition, marketing and brand development company whose focus is on acquiring minority interests in the income associated with the brands of
professional athletes, entertainers and other high-profile individuals and assisting such individuals in enhancing the reach and value of their respective brands. We intend to focus our business on
three core areas:
•
evaluating, targeting and accessing individuals and brands with the potential to generate significant income associated
with these brands, or brand income;
•
acquiring minority interests in such brand income; and
•
assisting our acquired brands in increasing their value via technology and through leveraging our marketing, advertising
and strategic partnering expertise.
On
February 14, 2014, we entered into a brand contract with Erik "EJ" R. Manuel, Jr., who we refer to as EJ Manuel, a professional athlete in the National Football League, or NFL,
pursuant to which we will acquire an interest equal to 10% of the gross monies or other consideration (including rights to make investments) that EJ Manuel receives from and after February 14,
2014, subject to specified exceptions and net of certain related expenses (such as legal fees, travel expenses and self-employment taxes), as a result of his activities in the NFL and related fields
(including activities in a non-NFL football league), such as broadcasting and coaching. As consideration for this interest under the brand contract, we will pay EJ Manuel a one-time cash amount of
$4.98 million contingent upon our ability to obtain financing, which we intend to do through this offering.
We
have also entered into brand contracts with Arian Foster, effective February 28, 2013, as amended, and Vernon Davis, effective October 30, 2013. We intend to enter into
additional brand contracts in the future with other individuals with the potential to generate significant brand income, and in some cases, with the affiliates of these individuals, who we refer to,
together with the individual, as the contract party. We are actively pursuing these additional brand contracts, but as of February 28, 2014 we have no current commitments to enter into another
brand contract. All of our brand contracts, including those
that we enter into in the future with other contract parties, are or are expected to be contingent upon obtaining financing to fund the acquisition of the minority interest in the respective brands,
and we intend to finance the acquisition of additional brands through the issuance of additional tracking stocks linked to the value of such brands.
We
were incorporated on September 14, 2012 as a wholly-owned subsidiary of Fantex Holdings, our parent. Fantex Holdings was incorporated in Delaware on April 9, 2012. We
have little operational history and limited assets and resources, have never generated any revenues, and to date we have relied on our parent to conduct our operations through its employees. Following
the consummation of our first public offering we intend to operate under a management agreement with our parent, which we describe in more detail below but pursuant to which our parent will provide us
with certain management and administrative services, including providing and compensating our executive management and other personnel, as well as services relating to information technology support,
brand management and other support operations, facilities, human resources, tax planning and administration,
1
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accounting,
treasury and insurance. We will begin to assume management and administrative tasks at such time in the future as the actual cost of these services is less than our service fee to Fantex
Holdings, which we do not anticipate would occur until we begin to receive significant cash flows from multiple brand contracts. However, if our parent is unable to perform any of the services that
they are required to perform under the management agreement, due to financial difficulty or otherwise, then we may be forced to assume management and administrative tasks, and incur additional
expenses, sooner than we anticipate. Until such time we will continue to rely on our parent to conduct our operations in accordance with the management agreement.
Evaluation, Acquisition and Enhancement of Brands
Prior to entering into a brand contract, we conduct a detailed evaluation of the brand and the contract party to determine whether, in
our opinion, the brand would be a suitable brand with the potential to generate significant brand income based on the criteria set forth
below. We consider a brand to be a distillation of a complex set of associations people make with respect to an individual, including performance, appearance, history and personal story, products or
services such individual is associated with, public statements or positions on matters of public concern, how an individual acts or the image such individual projects to the world. We seek brands that
convey images and associations that we believe will be recognized and valued in the market place.
As
part of our brand evaluation, we review the brand's reputation and relative standing in their principal field, such as a running back, tight end or quarterback in the NFL, collect and
analyze widely followed statistics, review existing contracts and potential for future contracts, assess the character and reputation of the contract party, assess potential future cash flow expected
to be generated by the contract party as well as examine the brand's current positioning and marketing footprint (such as, for example, if they are on Twitter, the reach (how many followers),
engagement level (how engaged are the followers), and potential for growth). This evaluation provides a framework to develop further marketing strategies to aid us in our efforts to enhance the value
of the brand.
We
believe we have extensive industry contacts among the board of directors, employees, consultants and advisors of our company and our affiliates, Fantex Holdings and FBS, which we
utilize to access individuals and brands that meet our criteria. Through our contacts we seek to establish working relationships with these brands and their key advisors to begin the process of
educating them about our business and the benefits of a brand contract and a continuing relationship. We enter into an arm's-length negotiation primarily to finalize a purchase price, our percentage
of the contract party's brand income, which we refer to as the acquired brand income, or ABI, and the scope of brand income, including whether or not there would be any specific exclusions. We do,
however, have limited experience in evaluating and entering into similar contracts with athletes, entertainers and other high-profile individuals because we are pioneering a new business model and to
date we have only entered into three brand contracts.
We
believe that developing a diverse portfolio of global brands will enable us to increase brand reach across our portfolio and allow us to provide unique insights that contract parties
may employ to increase consumer awareness of their brands and our brands more generally. We believe that our combined efforts could lead to increased consumer engagement with the brands by optimizing
message delivery, including driving engagement through the use of content developed by us or third parties. We seek to aid our brands in fostering positive brand associations in order to create a
unique position in the marketplace that is independent of their primary occupation, such as an athlete in the NFL. We believe this will drive greater engagement with a connected audience and lead to
greater longevity of the brands. We also believe that investors in a tracking stock linked to a brand are more likely to be consumer advocates for that brand.
In
addition to our services intended to help optimize the reach of the brand, we intend to provide advice to contract parties based on our experience that would aid them in obtaining
more attractive
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terms
in their negotiations with future sponsors. We believe that our proprietary internal data and our marketing insights will assist our contract parties to more accurately evaluate their brand
value in the marketplace and potentially increase future endorsement amounts and brand longevity post career.
We
note, however, that we have no contractual obligation to the contract party to engage in any of these activities that may enhance the value of our brands, and the contract party has
no contractual obligation to implement any advice that we may provide. Brand development is a long-term strategy, and any investment we may make to promote our acquired brands will be for long- or
medium-term results and would not be expected to increase brand income in the near-term, if at all. Moreover, as with other forms of marketing and brand enhancement strategies, the impact of our
efforts on brand value may be difficult to determine objectively. Even if our promotion activities increase the endorsement income to a contract party, they may nonetheless have a negative impact on
the market value of shares of the associated tracking stock because we will only receive a portion of any increased brand income. For example, because the ABI under our EJ Manuel brand contract is 10%
of brand income, our promotion efforts must produce brand income equal to at least ten times our costs for such promotion efforts in order to return our investment.
If
our brand enhancement strategy is unsuccessful, or if the contract party chooses not to accept any brand enhancement assistance from us, then the success of any brands we acquire will
be entirely dependent upon the efforts of the contract party. In addition, the contract party is neither our affiliate, nor a director, officer or employee of our company and owes no fiduciary duties
to us or any of our stockholders, and has no obligation to take any action whatsoever to enhance the value of the brand.
Our Tracking Units and Tracking Stocks
To date, we have entered into three brand contracts, created a tracking unit related to each of these brand contracts, which we refer
to generally as "tracking stock brands," and created a tracking stock related to such tracking stock brands, with each of:
Contract Party
Effective Date of Brand Contract
Tracking Unit Related to the Brand Contract
Tracking Stock Related to the Tracking Stock Brand
EJ Manuel
February 14, 2014
EJ Manuel Brand
Fantex Series EJ Manuel
Vernon Davis
October 30, 2013
Vernon Davis Brand
Fantex Series Vernon Davis
Arian Foster
February 28, 2013
Arian Foster Brand
Fantex Series Arian Foster
For
a more detailed description of the brand contracts and our tracking stock brands, please see the sections entitled "Business—Our Brands" and "Management and Attribution
Policies."
We
will initially attribute the following assets and liabilities to our initial tracking stock brands:
•
95% of our ABI under the associated brand contract;
•
any and all of our liabilities, costs and expenses that are directly attributable to the associated tracking stock brand,
such as our direct costs arising out of our promotion of the associated brand or arising out of or related to the maintenance and enforcement of the associated brand contract;
•
a pro rata share of our general liabilities, costs and expenses not directly attributable to any specific tracking stock
(calculated based on attributable income) but excluding any non-cash expenses that are allocated from our parent to us. Attributable expenses would include, for example, a pro rata portion of the
service fee we pay to our parent pursuant to the management agreement (5% of our cash receipts). Expenses that would not be attributed would include
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expenses
incurred by our parent, including any expenses incurred in providing services to us under the management agreement, to the extent in excess of our service fee to them;
•
as income, any covered amounts, as described in "Management and Attribution
Policies—Attribution—Covered Amounts," for the associated brand contract; and
•
as an expense, the pro rata share of any covered amounts, as described in "Management and Attribution
Policies—Attribution—Covered Amounts," relating to any tracking stock brand (including the pro rata share of any covered amounts for the associated tracking stock brand).
As
described above, income (and assets) will generally be attributed to any of our tracking stocks based on the earnings of the associated tracking stock brand. However, while we intend
for our tracking stocks, including Fantex Series EJ Manuel, to track the performance of the associated tracking stock brand (in this case, the EJ Manuel Brand), we cannot provide any guarantee
that any tracking stock will in fact track the performance of the associated tracking stock brand. Our board of directors has discretion to reattribute assets, liabilities, revenues, expenses and cash
flows without the approval of shareholders of a particular tracking stock, which discretion will be exercised in accordance with its fiduciary duties under Delaware law and only where its decisions
are in the best interests of the company and the stockholders as a whole. In certain circumstances, decisions of our board of directors may also be subject to the approval of the conflicts committee
of our board of directors. For a more detailed description, please see "Management and Attribution Policies—Fiduciary and Management Responsibilities, Conflicts Committee." Furthermore, in
the event we do not receive cash payments from one or more of our brand contracts to which we otherwise would have been entitled because of debtor relief laws, then the attributed income for the
corresponding tracking stock will nonetheless be credited with the amount which we would otherwise have been entitled to receive. In such a case, the difference between such attributed amount and the
actual income we receive from such brand contract will be attributed as a general expense of Fantex.
As a result, each of our tracking stocks will share on a pro rata basis
(calculated based on attributable income) the burden of any non-performing brand contracts, whether or not included in the assets attributed to such tracking stock, and the economic performance of any
of our tracking stocks, including Fantex Series EJ Manuel, will be dependent, in part, upon the aggregate financial performance of Fantex.
Therefore, prior to purchasing
our Fantex Series EJ Manuel, you should understand our aggregate operating performance and our aggregate assets and liabilities. Furthermore, we intend to acquire additional minority interests
in other brands in the future so our operating performance will depend upon the soundness of our business plan and our ability to execute on that plan, including entering into additional brand
contracts in the future.
Given
that the economic performance of each of our tracking stocks is dependent, in part, upon the aggregate financial performance of Fantex, Fantex Series EJ Manuel could be
affected by any of our other brand contracts we have entered into or may enter into in the future. The risk profile of the shares of the Fantex Series EJ Manuel could likewise be materially and
adversely impacted by the performance of our other tracking stock brands if the offerings of our other tracking stocks are consummated, or by any additional brand contracts entered into subsequent to
your investment in the Fantex Series EJ Manuel.
Our
EJ Manuel Brand is not a separate legal entity and cannot issue securities. Holders of shares of Fantex Series EJ Manuel will not have an ownership interest in our EJ Manuel
Brand, or any of our affiliated entities. Rather, investors in our Fantex Series EJ Manuel will be our common stockholders. The issuance of the Fantex Series EJ Manuel will not result in
the actual transfer of our assets or the creation of a separate legal entity. EJ Manuel and his affiliated persons are, and we expect they will continue to be, individuals and legal entities that are
separate and independent from us, with separate ownership, management and operations.
In
addition, there are certain features that may distinguish our tracking stock from more traditional investments. For example, the Fantex Series EJ Manuel is intended to track
the performance of EJ Manuel's brand over his lifetime, which could potentially be very short, and thereafter. Although
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we
intend to build brands that outlast an athlete's playing career, some brands may not produce income beyond the playing career of the athlete associated with such brand. Furthermore, potential gains
on your investment will likely come from dividends paid by us. Most of the dividends paid in the early years of your investment will, for U.S. federal income tax purposes, be considered a return of
your capital (rather than a gain on your investment), similar to the generally accepted accounting principles in the United States, or GAAP, treatment described in the critical accounting policies
section of our "Management's Discussion and Analysis of Financial Condition and Results of Operations," under the heading "Income (Loss) from Brand Contracts." The anticipated returns in the earlier
years under the brand contract are amounts currently expected to be paid from EJ Manuel's existing contracts and endorsement contracts expected to be entered into in the near future based on his
current brand value. As a result, any potential gains on your investment will only be realized if, and will be deferred until, we can enhance EJ Manuel's brand value over time and we monetize on this
expanded brand. Moreover, the EJ Manuel Brand does not currently represent a separate business division of Fantex, but rather will be a business division of ours following the completion of this
offering and thus we will have no prior operating history with this brand prior to consummation of this offering.
Conversion into Platform Common Stock
Our board of directors may, at any time following the two-year anniversary of the filing of a certificate of designation creating a new
tracking stock, resolve to convert such tracking stock into fully paid and non-assessable shares of our platform common stock at a conversion ratio to be determined by dividing the fair value of a
share of such tracking stock by the fair value of a share of our platform common stock. For instance, our board of directors may convert any of our tracking stock into platform common stock where such
tracking stock is no longer an actively traded stock, as determined in good faith by our board of directors or a committee of our board of directors, such as, for example, if the athlete, entertainer
or other high profile individual suffers an
injury, illness, medical condition or disability, or he dies, and his brand income diminishes as a result and there is little if any expectation that his brand income will materially increase in the
future. In this case, our board of directors may convert the shares of such tracking stock into platform common stock as a means of retiring the tracking stock. As a result, you are not likely to
receive a new security of significant value because such conversion is likely to occur at a time when the tracking stock has little or no value. Our board of directors may also convert shares of any
tracking stock into platform common stock, at any time following the two-year anniversary of the filing of a certificate of designation creating a new tracking stock, if some other special or
extraordinary circumstances exist, such as a potential restructuring, reorganization or change of control of Fantex. Our platform common stock is not convertible into any other shares of our capital
stock.
Our
platform common stock is intended to track and reflect the economic performance of all of our tracking stock brands by having a percentage of ABI from these tracking stock brands
attributed to it. We will also initially attribute to our platform common stock any liabilities not directly attributable to tracking stocks or general expenses of the company not attributable to any
tracking stocks.
EJ Manuel Brand
EJ Manuel Brand Contract
Our brand contract with EJ Manuel entitles us to receive 10% of brand income for EJ Manuel from and after February 14, 2014.
Brand income generally means gross monies or other consideration (including rights to make investments) that EJ Manuel receives as a result of his skills and brand, including salary and wages from
being an athlete in the NFL and related fields (including activities in a non-NFL football league), such as broadcasting and coaching, subject to specified exceptions and net of certain related
expenses (such as legal fees, travel expenses and self-employment taxes).
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As
consideration for the acquired brand income under the brand contract, we will pay EJ Manuel a one-time cash amount of $4.98 million contingent upon our ability to obtain
financing, which we intend to do through this offering. We will have no further financial obligation to EJ Manuel under the brand contract once this payment has been made. The brand contract is
intended to remain in effect indefinitely and, except as set forth below, may be terminated only upon mutual agreement of EJ Manuel and us. If EJ Manuel resigns from the NFL within two years of the
date of this offering for any reason other than injury, illness or a medical condition, we may elect in our sole discretion to terminate the brand contract and he will be required to pay us
approximately $5.24 million (net of any amounts previously paid to us by him pursuant to the brand contract). We are also entitled to certain other ongoing information and audit rights.
For
a further description of our brand contract with EJ Manuel please see "Business—EJ Manuel Brand—EJ Manuel Brand Contract."
EJ Manuel
EJ Manuel is a quarterback for the Buffalo Bills, or the Bills, in the National Football League, or the NFL. He has been in the NFL
since 2013. EJ Manuel attended Florida State University, which finished 25-6 in games started by EJ Manuel. EJ Manuel was an All-Atlantic Coast Conference second team selection in 2012 and was the
most valuable player in the 2013 Senior Bowl. EJ Manuel was picked sixteenth overall in the first round of the 2013 NFL draft and signed with the Bills. EJ Manuel was the Bills starting quarterback
for the 2013 season, but missed 6 games due to injury. EJ Manuel was born on March 19, 1990 and will be 24 years old as of the start of the 2014 NFL season.
In
August 2013 EJ Manuel had minor surgery on his left knee and missed two pre-season games. On October 3, 2013, during the third quarter in a game against the Cleveland Browns,
Manuel sprained the lateral collateral ligament in his right knee. This injury caused him to miss 4 games of the 2013 season. In December 2013, EJ Manuel sprained the lateral collateral ligament in
his left knee and missed the last two games of the 2013 NFL season. In January 2014, EJ Manuel had an arthroscopic procedure performed on each of his knees. EJ Manuel has experienced these knee
injuries and other instances of normal wear and tear as an athlete in Division I college football and the NFL and we expect that EJ Manuel will continue to experience such wear and tear. Any worsening
of these conditions, or re-injury or new injury, could materially and adversely affect EJ Manuel's playing performance and the value of the EJ Manuel Brand.
EJ Manuel Brand Income
EJ Manuel's brand income currently includes amounts from his NFL player contract with the Buffalo Bills and several endorsement
agreements. In 2013, a significant part of his brand income was derived from his NFL player contract. In addition, approximately 96.3% (before applying any discount rates for future earnings) of the
total brand income that we estimated for EJ Manuel is derived from anticipated future contracts that do not exist as of the date of this prospectus, such as future endorsements, playing contracts
and/or additional brand generating income from coaching, broadcasting or the like. The opportunity to receive a return of capital or any profit from an investment in our Fantex Series EJ Manuel
will depend in large part upon EJ Manuel's ability to enter into additional multi-year NFL player contracts on terms that are, on an average annualized basis, economically superior to his existing NFL
player contract and on his ability over the same period and beyond to enter into and maintain endorsement contracts (or earn other brand generating income) that compensate him in amounts that are
significantly in excess of compensation that he has had historically from these sources. We will not know for a number of years, including up to four years for his NFL player contract, whether and on
what terms EJ Manuel would be able to secure such contracts. For a more detailed description of the valuation of the EJ Manuel Brand Contract, please see section entitled "—EJ Manuel Brand
Contract, at Estimated Fair Value" beginning on page 93.
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NFL Player Contract
EJ Manuel has completed the first year of a four year player contract with a one year team option with the Bills, pursuant to which he
is eligible to receive for the 2014 season through the 2016 season a salary of up to an aggregate of $3.64 million ($0.81 million in 2014, $1.21 million in 2015 and
$1.62 million in 2016). If the Bills exercise their option to extend the contract for the 2017 season, EJ Manuel's salary will be determined based upon the average of the
3
rd
through
25
th
highest salaries for quarterbacks in the NFL in the 2015 season. Each of these payments would be considered brand income when received by EJ Manuel, and thus we would be
entitled to 10% of these amounts when paid. To the extent EJ Manuel elects to defer receipt of his compensation under the NFL player contract, pursuant to Article 26, Section 6 of the
CBA, for purposes of the brand contract, such deferred compensation will be deemed to have been received by EJ Manuel on the due date provided in his NFL player contract, prior to any such deferral,
and we will be entitled to 10% of these amounts as of such due date. Payments under the NFL player contract are made in installments over the course of the applicable regular season period. Therefore,
we expect that the EJ Manuel Brand will be subject to seasonal fluctuations in attributed income.
For
a further description of the duration, compensation and other material provisions of the NFL Player Contract, please see "Business—EJ Manuel Brand—EJ Manuel
Brand Income—NFL Player Contract—Buffalo Bills (the Bills)."
Other Contracts
EJ Manuel has ongoing endorsement contracts or license agreements with The Upper Deck Company, Inc., Panini
America, Inc., Panini Authentic, Inc., NIKE USA, Inc., The Topps Company, Inc., Northtown Chrysler Jeep Dodge Ram. These endorsement contracts generally have terms that end
in 2016, with one contract extending to 2017, and require EJ Manuel to exclusively endorse certain categories of products, make certain appearances, participate in the production of promotional
materials and social media activities and sign autographs. EJ Manuel is entitled to total compensation under these agreements of up to approximately $464,700, and an additional amount of up to
$542,550, contingent on performing additional specific services, including autographing cards or stickers or achieving certain performance based milestones including $75,000 per year through 2017 for
any year in which EJ Manuel is named the NFL MVP.
In
addition, certain endorsement contracts may be terminated due to changes to NFL rules preventing reasonable use of the endorsed product.
Other Brands
Vernon Davis Brand
Our brand contract with Vernon Davis entitles us to receive 10% of brand income for Vernon Davis from and after October 30,
2013. Brand income generally means gross monies or other consideration (including rights to make investments) that Vernon Davis receives as a result of his skills and brand, including salary and wages
from being an athlete in the NFL and related fields (including activities in a non-NFL football league), such as broadcasting and coaching, subject to specified exceptions and net of certain related
expenses (such as legal fees, travel expenses and self-employment taxes).
As
consideration for the acquired brand income under the brand contract, we will pay Vernon Davis a one-time cash amount of $4.0 million contingent upon our ability to obtain
financing, which we intend to do through an offering of shares of our Fantex Series Vernon Davis. We will have no further financial obligation to Vernon Davis under the brand contract once this
payment has been made. The brand contract is intended to remain in effect indefinitely and, except as set forth below, may be terminated only upon mutual agreement of Vernon Davis and us. If Vernon
Davis resigns from the
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NFL
within two years of the date of the offering of shares of our Fantex Series Vernon Davis for any reason other than injury, illness or a medical condition, we may elect in our sole discretion to
terminate the brand contract and he will be required to pay us approximately $4.2 million (net of any amounts previously paid to us by him pursuant to the brand contract). We are also entitled
to certain other ongoing information and audit rights.
For
a further description of our brand contract with Vernon Davis please see "Business—Other Brands—Vernon Davis Brand."
Arian Foster Brand
Our brand contract with Arian Foster entitles us to receive 20% of brand income for Arian Foster from and after February 28,
2013. Brand income generally means gross monies or other consideration (including rights to make investments) that Arian Foster receives as a result of his skills and brand, including salary and wages
from being an athlete in the NFL and related fields (including activities in a non-NFL football league), such as broadcasting and coaching, subject to specified exceptions.
As
consideration for the acquired brand income under the brand contract, we will pay Arian Foster a one-time cash amount of $10.0 million contingent upon our ability to obtain
financing, which we intend to do through an offering of shares of our Fantex Series Arian Foster. We will have no further financial obligation to Arian Foster under the brand contract once this
payment has been made. The brand contract is intended to remain in effect indefinitely and, except as set forth below, may be terminated only upon mutual agreement of Arian Foster and us. If Arian
Foster resigns from the NFL within two years of the date of such offering of Fantex Series Arian Foster for any reason other than injury, illness or a medical condition, we may elect in our sole
discretion to terminate the brand contract and he will be required to pay us approximately $10.5 million (net of any amounts previously paid to us by him pursuant to the brand contract). We are
also entitled to certain other ongoing information and audit rights.
On
November 12, 2013, after confirming reports that Arian Foster will undergo season ending back surgery, we announced that we are postponing the offering for Fantex Series Arian
Foster. Although we will continue to work with Arian Foster through his recovery and intend to continue with the offering of Fantex Series Arian Foster at an appropriate time in the future, we cannot
guarantee that the offering of Fantex Series Arian Foster will be consummated or that the offering will be resumed upon the same terms.
For
a further description of our brand contract with Arian Foster please see "Business—Other Brands—Arian Foster Brand."
Management Agreement
We have entered into an management agreement with our parent that will become effective upon the consummation of our first public
offering, and pursuant to which our parent will provide us with management and administrative services, including providing and compensating our executive management and other personnel, as well as
services relating to information technology support, brand management and other support operations, facilities, human resources, tax planning and administration, accounting, treasury and insurance. We
have agreed to pay 5% of the amount of the
gross cash received by us, if any, pursuant to our brand contracts during any quarterly period as remuneration for the services provided. The amount of gross cash received used to calculate this 5%
fee will include any portion allocated to reduction in carrying value on our financial statements but shall not take into account the changes in fair value of the brand contracts. As such, the service
fee under the management agreement will be determined based on the total amount of actual cash received under the brand contracts in a given quarterly period prior to any adjustments for fair value
and without regard to the expected cash receipts in such quarter as reflected in the financial statements for that quarter. To the extent we receive no cash for any period then we would not owe any
fee for any
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services
provided during that period. We may evaluate the service fee from time to time to assess the continued appropriateness of the percentage of our cash receipts upon which the service fee is
calculated, in light of the services being provided by our parent at the time and cost of those services.
The
agreement has an initial term through December 31, 2014, and will automatically renew for successive one-year terms each December 31 unless either party provides
written notice of its intent not to renew at least three months prior to such renewal. We may also terminate any specific service and/or the agreement, without penalty, with 30 days prior
written notice to Fantex Holdings. Fantex Holdings may terminate any specific service and/or the agreement with 180 days prior written notice to us, but if we, using our commercially reasonable
efforts, are unable to either perform the services ourselves or enter into a reasonable arrangement with a third party to perform the services that we are unable perform ourselves, then Fantex
Holdings will continue to perform such services for an additional period of 180 days.
Risks Associated with Our Business
Our ability to implement our business strategy is subject to numerous risks and uncertainties. We face many risks inherent in our
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 our Fantex Series EJ Manuel. These risks include, among others, the following:
Risks Relating to Our Limited Operating History, Financial Position and Capital Needs
•
We have incurred significant losses since our inception and anticipate that we will continue to incur losses in the
future.
•
We have a very limited operating history, which may make it difficult for you to evaluate the success of our business to
date and to assess our future viability. Our business model also requires us to make substantial upfront payments to our contract parties in exchange for rights to future payments.
•
To date, we have not generated any revenues or cash flow from any brand contract, and following completion of this
offering, our brand contract with EJ Manuel will represent our only source of revenue or cash flow. We may not receive the cash amounts that we expect, or any at all, from our brand contract with EJ
Manuel or from any future brand contracts and we may never generate sufficient revenue to become profitable.
•
We will need to obtain additional funding to acquire additional brands and we may also need additional funding to continue
operations. If we fail to obtain the necessary financing, or fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be unable to continue our operations at
planned levels and we may be forced to significantly delay, scale back or discontinue our operations.
Risks Relating to Our Brand Contracts and Our Business
•
Our principal source of cash flow for the foreseeable future will be derived from our brand contracts.
•
We do not have any experience managing brand contracts and we do not have any historical performance data about our brand
contracts.
•
Our cash flows under our brand contracts will depend upon the continued satisfactory performance of the related contract
party, and we do not have any rights to require the contract party to take any actions to attract or maintain or otherwise generate brand income.
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•
The contract party is neither our affiliate, nor a director, officer or employee of our company and owes no fiduciary
duties to us or any of our stockholders. The contract party has no obligation to enhance the value of the brand or disclose harmful information to the stockholders.
•
Profitability of our 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, 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.
•
Our 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 we obtain 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 we anticipate.
•
Our 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 our brand contracts and expected ABI requires us to make material assumptions that may ultimately prove
to be incorrect. In such an event, we could suffer significant losses that could materially and adversely affect our results of operations.
•
Changes in government policy, legislation or regulatory interpretations could cause our 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 our 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 our ability or make it more costly for us to enter into future brand contracts.
•
We are dependent on our management team, and the loss of any key member of this team may prevent us from implementing our
business plan in a timely manner, or at all.
Risks Relating to Each of Our Contract Parties
•
Our ability to increase the value of our tracking stock brands may be limited and our investments in the promotion of such
tracking stock brands may cause the market value of our stock to decline.
•
The value of our tracking stock brands is dependent upon the performance of, and to a lesser extent, the popularity of our
contract parties.
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•
Contract parties in the NFL could be negatively affected by an NFL work stoppage.
•
Contract parties in the NFL could be negatively affected by current and future rules of the NFL.
•
There could be a decline in the popularity of the NFL and/or the team on which the contract party plays in the NFL, or a
decline in the contract party's popularity.
Risks Relating to EJ Manuel
•
EJ Manuel's NFL player contract is a significant portion of the current amounts we would receive under his brand contract.
•
The profitability of EJ Manuel's brand contract is substantially dependent upon EJ Manuel's ability to enter into
additional high-value, multi-year NFL player contracts, and on his ability to successfully attract and retain endorsements during his playing career and thereafter significantly in excess of amounts
he has attracted historically and/or generate other brand income after his playing career. For a more detailed description of the valuation of the EJ Manuel Brand Contract, please see section entitled
"—EJ Manuel Brand Contract, at Estimated Fair Value" beginning on page 93.
•
EJ Manuel has incurred other secured debt, including mortgage payables, the payment of which may adversely impact his
ability to make payments under the brand contract.
•
EJ Manuel may suffer from an injury, illness or a medical condition; any injuries, illnesses or medical conditions of EJ
Manuel may affect the cash received by us under the brand contract.
•
Future negative publicity could damage EJ Manuel's reputation and impair the value of his brand.
Risks Relating to Vernon Davis
•
Vernon Davis's NFL player contract is a significant portion of the current amounts we would receive under his brand
contract.
•
The profitability of Vernon Davis's brand contract is substantially dependent upon Vernon Davis's ability to enter into at
least one additional multi-year NFL player contract for at least $33 million, and, to a lesser extent, on his ability to successfully attract and retain endorsements during his playing career
and thereafter in excess of amounts he has attracted historically and/or generate other brand income after his playing career. For a more detailed description of the valuation of the Vernon Davis
Brand Contract, please see section entitled "—Vernon Davis Brand Contract, at Estimated Fair Value" beginning on page 99.
•
Vernon Davis has incurred other secured debt, including auto and mortgage payables, the payment of which may adversely
impact his ability to make payments under the brand contract.
•
Vernon Davis may suffer from an injury, illness or a medical condition; any injuries, illnesses or medical conditions of
Vernon Davis may affect the cash received by us under the brand contract.
•
Future negative publicity could damage Vernon Davis's reputation and impair the value of his brand.
Risks Relating to Arian Foster
•
Arian Foster's NFL player contract is a significant portion of the current amounts we would receive under his brand
contract.
•
The profitability of Arian Foster's brand contract is substantially dependent upon Arian Foster's ability to enter into at
least one additional multi-year NFL player contract on economic terms
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that
are comparable to his existing NFL player contract, and, to a lesser extent, on his ability to successfully attract and retain endorsements during his playing career and thereafter in excess of
amounts he has attracted historically and/or generate other brand income after his playing career. For a more detailed description of the valuation of the Arian Foster Brand Contract, please see
section entitled "—Arian Foster Brand Contract, at Estimated Fair Value" beginning on page 102.
•
Arian Foster may suffer from an injury, illness or a medical condition; any injuries, illnesses or medical conditions of
Arian Foster may affect the cash received by us under the brand contract.
•
Future negative publicity could damage Arian Foster's reputation and impair the value of his brand.
Risks Relating to our Tracking Stock Structure
•
A specified portion of the ABI associated with each of our brand contracts will be attributed to our platform common stock
rather than the associated tracking stock. Therefore each of our tracking stocks will only partially reflect the economic performance of the associated brand contract and other assets and expenses of
the associated tracking stock brand.
•
As a series of our common stock, each of our tracking stocks will be exposed to additional risks associated with our
company as a whole, including any individual tracking stock that exists at the time of the offering or that we may establish and issue in the future.
•
The market price of our tracking stocks may not reflect the intrinsic value or performance of the associated tracking
stock brand.
•
The market price of our tracking stocks may be more volatile than other publicly traded common stock because of our unique
capital structure.
•
Our capital structure may create conflicts of interest for our board of directors and management, which could have a
material adverse effect on the market value of any of our tracking stocks.
•
Our parent, Fantex Holdings, Inc., or Fantex Holdings, as a holder of our platform common stock, will have control
over key decision making as a result of their control over a majority of our voting stock.
•
Ownership of our platform common stock by our parent company and any of our officers or directors, may create, or appear
to create, conflicts of interest with holders of our tracking stocks.
•
Our officers and directors may have a conflict of interest or appear to have a conflict since almost all of our officers
are also officers of Fantex Holdings.
•
Our capital structure may decrease the amounts available for the payment of dividends to holders of our tracking stocks.
•
Our board of directors has the ability to change our attribution policies at any time without a vote of our stockholders,
which may adversely affect the market value of our Fantex Series EJ Manuel.
•
Our board of directors may, in its sole discretion, elect to convert any of our tracking stocks into our platform common
stock following the two-year anniversary of the filing of a certificate of designation 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 our tracking stocks.
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Risks Relating to this Offering and the Offering Process
•
There is no current trading market for our Fantex Series EJ Manuel or any other series of our capital stock and if
a trading market does not develop, purchasers of our Fantex Series EJ Manuel may not be able to sell, or may have difficulty selling, their shares.
•
Our Fantex Series EJ Manuel is not a "covered security," or otherwise exempt from the "blue sky" securities laws
governing sales and purchases of Fantex Series EJ Manuel in each of the fifty states, and therefore we 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 our Fantex Series EJ Manuel.
•
We expect that our offering will primarily attract individual investors, and therefore our initial public offering price
may not be sustainable if and when trading begins, and the price of our Fantex Series EJ Manuel could decline rapidly and significantly.
•
We intend to issue additional tracking stocks, which would reduce then-existing investors' percentage of ownership in
Fantex and may dilute our share value.
•
Transaction costs for trades on the FBS ATS could decrease the liquidity of your investment in our Fantex Series EJ
Manuel and could reduce or eliminate any positive return on your investment in our Fantex Series EJ Manuel.
•
Our compliance burdens and costs will be significant as a result of operating as a public company, particularly as a
result of our tracking stock structure. Our management will be required to devote substantial time to compliance matters.
•
If Fantex Series EJ Manuel is not treated as a class of common stock of Fantex, adverse federal income tax
consequences will result.
Risks Relating to the Issuance of Additional Tracking Stocks, Including the Issuance of Fantex Series Vernon Davis and Fantex Series Arian Foster (the related offering of
which has been postponed and which may not be consummated on terms described elsewhere in this prospectus, if at all).
•
Our Fantex Series EJ Manuel may be adversely impacted by any non-performing brand contracts, whether or not such
brand contracts are included in the assets attributed to our Fantex Series EJ Manuel.
•
If a blog post published about us in August 2013 were held to be in violation of the Securities Act, we could be required
to repurchase securities sold, if any, in our offering of Fantex Series Arian Foster. You should rely only on statements made in this prospectus in determining whether to purchase shares of our Fantex
Series EJ Manuel. For a more detailed discussion, please see the risk factor concerning the August 2013 blog post beginning on page 67.
•
Our business may be adversely impacted by the postponement of our offering of the Fantex Series Arian Foster.
Risks Relating to Our Affiliate, FBS, and the FBS ATS
•
To own or trade our Fantex Series EJ Manuel, you must have a brokerage account with FBS and our Fantex
Series EJ Manuel 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.
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•
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 our, 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 Our Board and Fantex Holdings
Our 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. Our 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 our company and the best interests of all of our stockholders as a whole. In certain circumstances, decisions of our board of directors may also be subject to the approval of the
conflicts committee. This may mean that our 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 our stockholders as a
whole. Significant decisions that may be made by Fantex Holdings or our board of directors without your consent include the following:
•
Voting.
Holders of shares of our tracking stocks and our
platform common stock are each entitled to one vote per share of such stock. Following the consummation of this offering, Fantex Holdings, our parent company, will hold all 100,000,000 outstanding
shares of our platform common stock, and thus will hold substantially all of the voting power of our outstanding common stock. As a result, our parent, Fantex Holdings will have control over key
decision making as a result of their control over a majority of our voting stock, including, for example, election of our 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.
Our board of directors may, in its sole
discretion, elect to convert any of our tracking stocks into our platform common stock following the two-year anniversary of the filing of a certificate of designation creating such tracking stock,
thereby changing the nature of your investment and possibly diluting your economic interest in our company, which could result in a loss in value to holders of our tracking stocks.
•
Dividends.
Our board of directors is permitted, but not
required, to declare and pay dividends on our platform common stock or any of our tracking stocks. Our board of directors has discretion to declare a dividend on any series of common stock without
declaring a dividend on any other series of our common stock, but not in excess of the available dividend amounts for each series. We 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 series. Our board of directors may change its dividend policy at any time and from time to
time. However, our board of directors will not in any event change the definition of "available dividend amount" for any series of our common stock or declare dividends on any series of our common
stock in excess of the "available dividend amount" for that series.
•
Sale of Brands.
Our board of directors may in its
discretion sell all or substantially all of the assets of a tracking stock brand. If we do so (but not in connection with a sale of our company as a whole), our 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 designation creating such tracking stock, or they may choose any combination of the foregoing (however, they must choose one of
these options).
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•
Attribution Policies.
Our board of directors may, without
stockholder approval, modify, change, rescind or create exceptions to our management and attribution policies for purposes of attributing our assets and liabilities between and among our platform unit
and various other business units that we intend to establish from time to time, and attributing between these different business units other items (such as debt, corporate overhead, taxes, corporate
opportunities and other charges and obligations) in a manner we deem reasonable after taking into account all material factors. However, our board of directors will not in any event reallocate the
"underlying assets" for any tracking stock, as such term is defined in the certificate of designation for that series. For the Fantex Series EJ Manuel, the "underlying assets" are 95% of the
ABI.
Conflicts of Interest
The offering is being conducted in accordance with the applicable provisions of Rule 5121 of the Conduct Rules of the Financial
Industry Regulatory Authority, Inc., or FINRA, because one of the underwriters, FBS, will have a "conflict of interest" pursuant to Rule 5121(f)(5)(B) because Fantex is under common
control with FBS, and pursuant to Rule 5121(f)(5)(C)(ii) because at least five percent of the net offering proceeds, not including underwriting compensation, are intended to be directed to an
affiliate of FBS. Rule 5121 requires that a "qualified independent underwriter" as defined in FINRA Rule 5121 must participate in the preparation of the registration statement of which
this prospectus forms a part and perform due diligence investigations with respect to the registration statement and this prospectus. Accordingly, Stifel, Nicolaus & Company,
Incorporated is assuming the responsibilities of acting as the "qualified independent underwriter" in the offering. In consideration for its services and expenses as the qualified independent
underwriter, FBS has agreed to pay Stifel, Nicolaus & Company, Incorporated a fee equal to $130,925, assuming the sale of 523,700 shares of the Fantex Series EJ Manuel in this offering
at an initial public offering price of $10.00 per share (in each case, the amounts set forth on the front cover of this prospectus). Pursuant to FINRA Rule 5121, FBS will not confirm sales to
accounts in which it exercises discretionary authority, if any, without the specific prior written approval of the account holder. See "Underwriting (Conflicts of Interest)—Conflicts of
Interest."
Corporate Information
Our principal executive offices are located at 330 Townsend Street, Suite 234, San Francisco, CA 94107, and our telephone
number is (415) 592-5950. Our website address is www.fantexinc.com. The website address for FBS is www.fantex.com. Neither information contained on our website or the website of FBS is
incorporated by reference into this prospectus, and you should not consider information contained on either of these websites to be part of this prospectus.
Our
logo, "Fantex," and other trademarks or service marks of Fantex Holdings, our parent company, appearing in this prospectus are the property of Fantex Holdings. This prospectus
contains additional trade names, trademarks and service marks of other companies. We do not intend our use or display of other companies' trade names, trademarks or service marks to imply
relationships with, or endorsement or sponsorship of us by, these other companies. Subsequent use of such trademarks and service marks in this prospectus and prospectus supplements may occur without
their respective superscript symbols (
TM
or
SM
) in order to facilitate readability and does not constitute a waiver of any rights that might be associated with the
respective trademarks or service marks.
Implications of Being an Emerging Growth Company
As a company with less than $1.0 billion in revenue during our last fiscal year, we qualify as an "emerging growth company" as
defined in the Jumpstart our Business Startups Act of 2012, or the
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JOBS
Act. An emerging growth company may take advantage of specified reduced reporting and other burdens that are otherwise applicable generally to public companies. These provisions
include:
•
a requirement to have only two years of audited financial statements and only two years of related MD&A;
•
an exemption from the auditor attestation requirement on the effectiveness of our internal control over financial
reporting;
•
an extended transition period for complying with new or revised accounting standards;
•
reduced disclosure about the company's executive compensation arrangements; and
•
no non-binding advisory votes on executive compensation or golden parachute arrangements.
We
may take advantage of these provisions for up to the last day of the fiscal year following the fifth anniversary of the date of the first sale of common equity securities pursuant to
an effective registration statement under the Securities Act or such earlier time when we are no longer an emerging growth company. We would cease to be an emerging growth company if we have more than
$1.0 billion in annual revenues, have more than $700 million in market value of our capital stock held by non-affiliates, or issue more than $1.0 billion of non-convertible debt
over a three-year period. We may choose to take advantage of some but not all of these reduced burdens. We have taken advantage of other reduced reporting requirements in this prospectus, and we may
choose to do so in future filings. To the extent we do, the information that we provide stockholders may be different than you might get from other public companies in which you hold equity interests.
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THE OFFERING
Shares offered
523,700 shares of Fantex Series EJ Manuel.
Common stock to be outstanding after this offering
100,000,000 shares of platform common stock and 523,700 shares of Fantex Series EJ Manuel.
Offering type
The offering is being conducted on a best efforts, all or none basis. To the extent that there is insufficient
interest in shares of our Fantex Series EJ Manuel, this offering may be cancelled and no shares of our Fantex Series EJ Manuel would be sold to the public.
Voting rights
The holders of shares of our tracking stock, including Fantex Series EJ Manuel, and our platform common
stock are each entitled to one vote per share of such stock. Following the consummation of this offering, Fantex Holdings, our parent company, will continue to hold substantially all of the voting power of our outstanding common stock. See
"Description of Capital Stock."
Conversion
Our board of directors may, at any time following the two-year anniversary of the filing of a certificate of
designation creating the Fantex Series EJ Manuel, convert shares of our Fantex Series EJ Manuel into fully paid and non-assessable shares of our platform common stock at a conversion ratio to be determined by dividing the fair value of a
share of our Fantex Series EJ Manuel by the fair value of a share of our platform common stock. For a further description, including how we would determine the fair value of shares of our platform common stock and our Fantex Series EJ
Manuel, please see "Description of Capital Stock."
Liquidation
In the event of a liquidation, dissolution or winding up of Fantex, including a change of control of Fantex,
after payment or provision for payment of our debts and liabilities, each share of our common stock (including each of our tracking stocks and the platform common stock) will be entitled to receive a proportionate interest in the net assets of Fantex
remaining for distribution to holders of common stock equal to the fair value of such share,
provided
that if the assets legally available for distribution to the holders of common stock are insufficient
to permit the payment in full to each share of common stock the amount to which they would otherwise be entitled, then such assets available for distribution to the holders of common stock will be distributed to all holders of common stock ratably in
proportion to the full amounts which they would be entitled to receive on shares of common stock held by them. If all distributions required above are made and there remain any assets available for distribution to holders of common stock such assets
shall be divided among the holders of common stock in proportion to the amounts that were payable as required above in respect of the shares held by them. For a further description, including
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how we would determine the fair value of shares of our platform common stock and our tracking stocks, please see "Description of
Capital Stock."
Dividends
To date, we have never declared or paid any cash dividends on our capital stock. Following this offering, we
intend to pay cash dividends from time to time out of available cash for each tracking stock, including our Fantex Series EJ Manuel, equal to an amount in excess of 20% of the "available dividend amount" for such series. The available dividend
amount for any tracking stock is, as of any particular date, an amount equal to the lesser of (a) total assets of our company legally available for the payment of dividends under Delaware law and (b) an amount equal to (i) the excess
of the total assets attributed to the applicable tracking stock brand over the total liabilities attributed to such tracking stock brand, less the par value of the outstanding shares of such tracking stock; or (ii) if there is no such excess,
the attributable income of the tracking stock brand for the fiscal year in which the dividend is being declared and/or the preceding fiscal year.
Use of proceeds
As consideration for the ABI under our brand contract with EJ Manuel we will pay him a one-time cash amount of
$4.98 million contingent upon our ability to obtain financing. We will use up to $4.98 million of our net proceeds from this offering, together with existing cash and cash equivalents if necessary, to fund the payment of this purchase price
to EJ Manuel. See "Use of Proceeds."
Electronic form and transferability
The Fantex Series EJ Manuel (and any shares of our platform common stock issuable upon conversion of the
Fantex Series EJ Manuel) will be issued in electronic form only and will be available exclusively through our broker-dealer affiliate, FBS. Shares of our Fantex Series EJ Manuel are new securities; there are currently none issued and there
is currently no established market. We do not intend to apply for a listing of our Fantex Series EJ Manuel or our platform common stock on any securities exchange or for their inclusion in any established automated dealer quotation system.
Accordingly, we cannot assure you as to the development or liquidity of any market for our Fantex Series EJ Manuel or our platform common stock. Neither Fantex Series EJ Manuel nor our platform common stock will be listed on any exchange
and neither will be transferable except through the FBS ATS. There can be no assurance that an active trading market for the Fantex Series EJ Manuel or platform common stock will develop, or that you will be able to resell shares of our Fantex
Series EJ Manuel or platform common stock at a price that would reflect their fundamental value, if at all.
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U.S. federal income tax consequences
For material U.S. federal income tax consequences of the acquisition, ownership, disposition and conversion of the Fantex
Series EJ Manuel and platform common stock, please see "Material U.S. Federal Income Tax Considerations" herein.
Maximum Investment Limits and Financial Suitability
An investment in Fantex Series EJ Manuel is subject to certain maximum investment limits, some of which are
based on financial suitability. See "Underwriting (Conflicts of Interest)—Offering Process—Maximum Investment Limits and Financial Suitability."
Risk factors
You should read "Risk Factors" for a discussion of factors you should carefully consider before deciding to
invest in our Fantex Series EJ Manuel.
FBS ATS trading symbol
Fantex EJ Manuel
The
number of shares of our common stock to be outstanding after this offering is based on 100,000,000 shares of our platform common stock outstanding as of December 31, 2013 and
no shares of our tracking stock outstanding as of December 31, 2013 and excludes (1) 1,055,000 shares of our Fantex Series Arian Foster that may be issuable upon the consummation of the
offering of our Fantex Series Arian Foster pursuant to the Arian Foster Registration Statement, (2) 421,100 shares of our Fantex Series Vernon Davis that may be issuable upon the consummation
of the offering of our Fantex Series Vernon Davis pursuant to the Vernon Davis Registration Statement, and (3) 7,500,000 shares of our platform common stock that will be reserved for future
issuance under our 2013 Equity Incentive Award Plan.
Except
as otherwise indicated, all information in this prospectus assumes that our certificate of designations for the Fantex Series EJ Manuel, which we will file in connection
with the consummation of this offering, is in effect.
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QUESTIONS AND ANSWERS
Q:
What is our business?
A:
We
are a brand acquisition, marketing and brand development company whose focus is on acquiring minority interests in the income associated with the brands
of professional athletes, entertainers and other high-profile individuals and assisting such individuals in enhancing the reach and value of their respective brands. We intend to focus our business on
three core areas: evaluating, targeting and accessing individuals and brands with the potential to generate significant brand income, acquiring minority interests in such brand income, and assisting
our acquired brands in increasing their value via technology and through leveraging our marketing, advertising and strategic partnering expertise.
Q:
What are the securities that we are offering?
A:
We
are offering shares of our Fantex Series EJ Manuel. We have entered into a brand contract with EJ Manuel, a professional athlete in the National
Football League, or NFL, pursuant to which we will acquire an interest equal to 10% of the gross monies or other consideration (including rights to make investments) that EJ Manuel receives from and
after February 14, 2014, subject to specified exceptions and net of certain related expenses (such as legal fees, travel expenses and self-employment taxes), as a result of his activities in
the NFL and related fields (including activities in a non-NFL football league), such as broadcasting and coaching. We are attributing 95% of our acquired brand income, or ABI, under the EJ Manuel
brand contract to a tracking unit that we refer to as the EJ Manuel Brand. Our Fantex Series EJ Manuel is intended to track and reflect the separate economic performance of the EJ Manuel Brand.
In addition, we will attribute to the EJ Manuel Brand certain expenses of Fantex, including in certain cases expenses related to other series of our common stock that may be issued from time to time
in the future. See "Management and Attribution Policies."
Holders
of shares of our Fantex Series EJ Manuel will have no direct investment in the businesses or assets attributed to the EJ Manuel Brand. Rather, an investment in Fantex Series EJ
Manuel will represent an ownership interest in our company as a whole.
Q:
Are there any risks associated with an investment in our Fantex Series EJ
Manuel?
A:
Yes
. Our Fantex Series EJ Manuel is highly risky and speculative. Investing in our Fantex
Series EJ Manuel should be considered only by persons who can afford the loss of their entire investment. Please see "Risk Factors" beginning on page 35.
Q:    Will we offer additional securities in the future?
A:
We
have also entered into brand contracts with Arian Foster, effective February 28, 2013, as amended, and Vernon Davis, effective October 30,
2013. We intend to enter into additional brand contracts in the future with other individuals with the potential to generate significant brand income, and in some cases, with the affiliates of these
individuals, who we refer to, together with the individual, as the contract party. We are actively pursuing these additional brand contracts, but as of February 28, 2014 we have no current
commitments to enter into another brand contract. All of our brand contracts, including those that we enter into in the future with other contract parties, are or are expected to be contingent upon
obtaining financing to fund the acquisition of the minority interest in the respective brands, and we intend to finance the acquisition of additional brands, at least in part, through the issuance of
additional tracking stocks linked to the value of such brands.
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Q:
What happens to the remaining 5% of the ABI under the EJ Manuel brand contract?
A:
The
EJ Manuel Brand will initially include as an attributed asset 95% of ABI under our EJ Manuel brand contract. The remaining 5% of our ABI under the EJ
Manuel brand contract will be attributed to another series of our common stock that we refer to as our platform common stock. We also intend to attribute a similar interest of each of our future brand
contracts to our platform common stock, such that our platform common stock would have an interest in the ABI of all of our brand contracts. We intend to use the income attributed to our platform
common stock for general corporate and working capital purposes, including investments and expenses that may be generally applicable to all our brands. The attribution of this income to the platform
common stock also gives our platform common stock a value for purposes of any future conversion of any of our tracking stocks, including our Fantex Series EJ Manuel, into the platform common
stock.
The
5% of our ABI under the EJ Manuel brand contract that is attributed to the platform common stock is in addition to a fee in an amount equal to 5% of the amount of gross cash received by us, if
any, payable to our parent for services provided by our parent under a management agreement between our parent and us. For a more detailed description of the management agreement, please see
"Transactions with Related Persons—Management Agreement."
Q:
Who is EJ Manuel
?
A:
EJ
Manuel is a quarterback for the Bills in the NFL. He has been in the NFL since 2013. EJ Manuel attended Florida State University, which finished was 25-6
in games started by EJ Manuel. EJ Manuel was an All-Atlantic Coast Conference second team selection in 2012 and was the most valuable player in the 2013 Senior Bowl. EJ Manuel was picked sixteenth
overall in the first round of the 2013 NFL draft and signed with the Bills. EJ Manuel was the Bills starting quarterback for the 2013 season, but missed 6 games due to injury. EJ Manuel was born on
March 19, 1990 and will be 24 years old as of the start of the 2014 NFL season.
During
the preseason and 2013 NFL season, EJ Manuel suffered several knee injuries, causing him to miss a total of six games during that season. EJ Manuel has experienced these and other instances of
normal wear and tear as an athlete in the NFL and we expect that EJ Manuel will continue to experience such wear and tear. Any worsening of these conditions, or re injury or new injury, could
materially and adversely affect EJ Manuel's playing performance and the value of the EJ Manuel Brand.
Q:
What is the EJ Manuel brand contract?
A:
The
brand contract is a contract between us and EJ Manuel, assigning to us 10% of the EJ Manuel brand income from and after February 14, 2014. In
exchange, we have agreed, subject to completion of this offering, to pay EJ Manuel $4.98 million, after which we will have no further payment obligations to him under the brand contract. The
brand contract is intended to be effective in perpetuity and may be terminated only upon mutual agreement of EJ Manuel and us. Any decision by us to terminate the brand contract will be made solely by
our board of directors in good faith and will not be submitted to a vote of our stockholders. We do not intend to terminate the brand contract with EJ Manuel unless we are paid consideration by him
that we deem sufficient to compensate us for any reasonably expected future ABI at the time, or if our expectation of future ABI under the brand contract is not sufficient in our view to justify
incurring continued expense in connection with maintenance of such brand contract.
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Q:
What is brand income under the EJ Manuel brand contract?
A:
Brand
income means any amounts that EJ Manuel may receive from and after February 14, 2014, subject to specified exceptions, as a result of his
activities in the sport of football (including NFL and non-NFL activities), including his employment as a professional athlete and the license or assignment of rights in his persona, including use of
his name, voice, likeness, image, signature, talents, live or taped performances, in connection with motion pictures, television and Internet programming, radio, music, literary, talent engagements,
personal appearances, public appearances, records and recording, or publications; any use of his persona for purposes of advertising, merchandising, or trade, including sponsorships, endorsements and
appearances, and any other license or assignment of rights in his persona, to generate income; and any other personal services performed by EJ Manuel which are of the type typically performed by
individuals in the field of football because of their status as a professional athlete or other professional within the field of football (including, without limitation, sports casting, coaching,
participating in sports camps, acting as spokesperson).
Q:
Is there anything excluded from brand income under the EJ Manuel brand contract?
A:
Yes
. We will not be entitled to any amounts related to any income received by EJ Manuel that is not
specifically included in his brand income, such as investments and income not related to professional football and related fields.
Q:
Do investors in the Fantex Series EJ Manuel invest directly in EJ Manuel?
A:
No
. Investors in our Fantex Series EJ Manuel are investing in Fantex and not in the brand contract or
EJ Manuel. However, Fantex Series EJ Manuel is intended to track and reflect the separate economic performance of the businesses and assets to be attributed to the EJ Manuel Brand. Only Fantex
will have rights under the brand contract and recourse against EJ Manuel.
Q:
Will you report separate financial information about the EJ Manuel Brand?
A:
Yes.
Although investors in our Fantex Series EJ Manuel are investing in our securities and not in the
brand contract or EJ Manuel, we will report and include as an exhibit in our periodic filings that we make under the Securities Exchange Act of 1934, as amended, or the Exchange Act, unaudited
attributed financial information that will include balance sheet, statement of operations and cash flow information for each tracking stock, including Fantex Series EJ Manuel, as well as an
explanation of the methods used in attributing the information to the tracking stock. In addition, we would provide in such exhibit for each tracking stock comparative financial information together
with a discussion and analysis of that information that described reasons for changes between periods and other developments or events material to the performance of such tracking stock.
In
addition, at least until such time as we no longer have significant concentration among our brands relative to our consolidated financials we will include in our audited annual reports statements
of cash receipts from included contracts with respect to each of our brand contracts.
Q:
How did we verify information provided by EJ Manuel?
A:
Prior
to entering into the brand contract with EJ Manuel, we conducted due diligence and reviewed the included contracts and other documents to support our
estimate of his projected brand income. We also ran credit checks on EJ Manuel to verify his payment history and track record of performing under other obligations. We also commissioned a third-party
background check to determine whether there was any other relevant information that might be useful in our evaluation of the EJ Manuel Brand.
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Q:
How will we verify information about the brand income of EJ Manuel in the future?
A:
Under
the EJ Manuel brand contract EJ Manuel is required to make ongoing payments and reports to us of brand income as well as other material information,
and we have audit rights that we will utilize to verify the information that we receive. In addition, as noted above, at least until such time as we no longer have significant concentration among our
brands relative to our consolidated financials, a statement of cash receipts from included contracts with respect to each of our brand contracts, including the EJ Manuel brand contract, will be
audited on an annual basis.
Q:
How did we determine the purchase price for the ABI under the EJ Manuel brand
contract?
A:
We
determined the purchase price for the ABI based on an arm's-length negotiation with EJ Manuel. As part of our assessment of the value of the ABI, we
applied a discounted cash flow analysis to our estimate of the lifetime brand income earning potential of EJ Manuel based on a number of our own estimates and assumptions. Please see "Business" and
"Management's Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies" for further discussion of the type of factors that we generally
consider in our assessments of value of brands we seek to acquire, as well as specific factors that we considered in our assessment of EJ Manuel's lifetime brand income earning potential.
There
can be no assurances that our assumptions and estimates will be accurate, and a failure of any of our assumptions or estimates to be accurate could have a materially adverse impact on your
investment return on our Fantex Series EJ Manuel. It is also important to note that EJ Manuel was one of the first contract parties with whom we entered into a brand contract. As a result, our
assumptions and estimates underlying our valuation of his brand are necessarily subject to greater uncertainty than we expect would be the case for future brand valuations. In particular, we estimated
a significant increase in the lifetime brand income that we believe EJ Manuel may earn as a result of our assumption that he will enter into additional multi-year NFL player contracts for at least
$80.31 million in total. We do not know, however, whether any of our other assumptions and expectations discussed in this prospectus will prove to be true.
Before
you make an investment in our Fantex Series EJ Manuel, you should make your own assessment of the value of the brand contract and the shares of our Fantex Series EJ Manuel,
including for example your own assessment of EJ Manuel's lifetime brand income earning potential (both from his NFL playing career, endorsements and other brand income generating activity) as well as
the present value of those potential lifetime earnings based on discount rates you think are appropriate to account for the risks inherent in the assumptions and estimates underlying such assessments.
Q:
Is the EJ Manuel brand contract secured by any collateral?
A:
No
. The EJ Manuel brand contract is not secured by any collateral. In addition, the EJ Manuel brand contract
also does not impose any other financial restrictions on him, including any restriction from incurring unsecured debt. The amounts that EJ Manuel owes us under the brand contract are unsecured and
payments to us depend on EJ Manuel's creditworthiness, which may change in the future. If EJ Manuel incurs additional secured or unsecured debt after this offering, or if he incurs excessive expenses,
he may be impaired in his ability to make payments to us under the brand contract. In addition, additional debt or expenses may adversely affect his creditworthiness generally, and could result in his
financial distress, insolvency, or bankruptcy. If EJ Manuel incurs other indebtedness or expenses and cannot pay all of his indebtedness or expenses, he may choose to make payments to other creditors
rather than us. If EJ Manuel
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declares
bankruptcy any amounts owed to us will only be paid out after all of his secured debt, including auto and mortgage payables, is repaid.
Q:
To the extent that EJ Manuel fails to make a required payment under the brand contract can the investors in our Fantex
Series EJ Manuel collect payments themselves?
A:
No
. The brand contract is between EJ Manuel and us, and as a stockholder, you have no rights under the brand
contract as a third-party beneficiary, or otherwise. In the event of any default under the brand contract, you must rely on us to collect any amounts due and you will be unable to pursue any claims
against EJ Manuel directly. We intend to enforce all contractual obligations to the extent we deem necessary and in the best interest of the company and its stockholders. Express remedies provided in
the brand contract in the event of late payments include (1) payment of interest at prime rate plus 3% per year, and (2) public disclosure of such late payments as well as other remedies
available to us at law, including the ability to file a judicial action seeking the payment of all amounts owed to us from EJ Manuel and, as applicable, the counterparties to the included
contracts with EJ Manuel.
Q:
What happens if EJ Manuel is injured or suffers any other illness or medical condition, retires or fails to make an NFL
roster?
A:
A
significant portion of EJ Manuel's brand income is dependent on his continued satisfactory performance in the NFL. If he retires from the NFL at any time
within two years following this offering, other than as a result of injury, illness or medical condition, we may elect in our sole discretion to terminate the brand contract and he will be required to
pay us approximately $5.23 million (net of any amounts previously paid to us by him pursuant to the brand contract). Otherwise, if he stops playing in the NFL for any reason, either voluntary
or involuntary, his brand income would likely decline. EJ Manuel has no obligation to take any actions to generate brand income, and subject to the limited obligation to reimburse us funds as
discussed above, he may choose not to do anything to generate brand income following the date on which we pay the purchase price.
Q:
Will we make dividend payments on Fantex Series EJ Manuel or other series of our common stock that may be outstanding in the
future?
A:
Our
board of directors would be permitted, but not required, to declare dividends from time to time on any series of our common stock, including the Fantex
Series EJ Manuel. Dividends will be limited to an amount up to the "available dividend amount" for such series. Following this offering, we intend to pay periodic cash dividends out of
available cash for each tracking stock, including Fantex Series EJ Manuel, equal to an amount in excess of 20% of the "available dividend amount" for each such series. Our board of directors
may change its dividend policy at any time and from time to time, and we may retain some or all available funds and future income to support our operations and finance the growth and development of
our business as well as, in some circumstances, invest some of the available funds to further enhance a brand or acquire additional ABI in a brand if we believe that those would be more productive
uses of some or all of the available funds. However, our board of directors will not in any event change the definition of "available dividend amount" for any series of our common stock or declare
dividends on any series of our common stock in excess of the "available dividend amount" for that series. Please see "Dividend Policy."
Q:
What happens if we convert shares of Fantex Series EJ Manuel into platform common
stock?
A:
Our
board of directors may, at any time following the two-year anniversary of the filing of a certificate of designation creating Fantex Series EJ
Manuel resolve to convert shares of our Fantex
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Series EJ
Manuel into fully paid and non-assessable shares of our platform common stock at a conversion ratio to be determined by dividing the fair value of a share of our Fantex
Series EJ Manuel by the fair value of a share of our platform common stock. For example, if a share of Fantex Series EJ Manuel had at the time of determination a fair value of $10.00,
and a share of platform common stock had at the time of determination a fair value of $5.00, then if our board of directors elected to convert the Fantex Series EJ Manuel into platform common
stock, each holder of Fantex Series EJ Manuel would receive two shares of platform common stock for each share of Fantex Series EJ Manuel held by them. For a further description,
including how we would determine the fair value of shares of our platform common stock and our Fantex Series EJ Manuel, please see "Description of Capital Stock."
Q:
Under what circumstances do we anticipate that we might convert shares of Fantex Series EJ Manuel into platform common
stock?
A:
Although
our board of directors may, at any time following the two-year anniversary of the filing of a certificate of designation creating Fantex
Series EJ Manuel resolve to convert shares of our Fantex Series EJ Manuel into shares of our platform common stock, we anticipate doing so only in the following
circumstances:
•
the Fantex Series EJ Manuel is no longer an actively traded stock as determined in good faith by our board of
directors or a committee of our board of directors, such as, for example, if EJ Manuel suffers an injury, illness, medical condition or dies, and his brand income diminishes as a result and there is
little if any expectation that his brand income will materially increase in the future. In this case our board of directors may convert the shares of Fantex Series EJ Manuel into platform
common stock as a means of retiring the Fantex Series EJ Manuel, and our board of directors may do so in this circumstance even if the platform common stock is not an actively traded stock as
determined in good faith by our board of directors or a committee of our board of directors.
•
other special or extraordinary circumstances exist, such as a potential restructuring, reorganization or change of control
of Fantex. We would not expect our board of directors to approve a conversion in this circumstance unless there is an active trading market for the platform common stock at the time of such
conversion.
We
structured our tracking stocks to provide the board with discretion to determine whether and when to convert a tracking stock into platform common stock in part because our tracking stock and our
business model are each unique and unproven and we wanted to maintain flexibility to reorganize our operations if our board of directors deems it to be in the best interest of the Company and all of
our stockholders.
Q:
What happens if we sell all or substantially all of our assets of the EJ Manuel
Brand?
A:
If
we sell all or substantially all of the assets of the EJ Manuel Brand (but not in connection with a sale of our company), our board of directors will
either pay a dividend to holders of our Fantex Series EJ Manuel, redeem shares of Fantex Series EJ Manuel, convert the outstanding shares of our Fantex Series EJ Manuel into our
platform common stock following the two-year anniversary of the filing of a certificate of designation creating such tracking stock or any combination of the foregoing. See "Description of Capital
Stock—Common Stock—Mandatory Dividend, Redemption and/or Conversion on Disposition of Assets."
Q:
What happens if we are sold or are otherwise liquidated?
A:
In
the event of a sale or a liquidation, dissolution or winding up of our company, including a change of control, and after payment or provision for payment
of our debts and liabilities, each
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share
of our common stock will be entitled to receive a proportionate interest in our net assets remaining for distribution to holders of common stock equal to the fair value of such share, or if
sufficient funds are not available (including, for example, as a result of satisfying liabilities of the Company), then a portion of such amount shared ratably with other holders of common stock. As a
result, holders of Fantex Series EJ Manuel would not necessarily receive upon a liquidation amounts equal to the cash received by Fantex under the EJ Manuel brand contract, after expenses that
are attributable to the Fantex Series EJ Manuel. See "Description of Capital Stock."
Q:
How will shares of my Fantex Series EJ Manuel be treated for United States federal income tax
purposes?
A:
The
Fantex Series EJ Manuel should be treated as stock of our company for U.S. federal income tax purposes. There are, however, no court decisions or
other authorities directly bearing on the tax effects of the issuance and classification of stock with the features of Fantex Series EJ Manuel, so the matter is not free from doubt. In
addition, the Internal Revenue Service has announced that it will not issue advance rulings on the classification of an instrument with characteristics similar to those of Fantex Series EJ
Manuel. Accordingly, no assurance can be given that the views expressed in this paragraph, if contested, would be sustained by a court. It is possible that the Internal Revenue Service could
successfully assert that the issuance of the Fantex Series EJ Manuel could be taxable to us and the exchange of the Fantex Series EJ Manuel for shares of our platform common stock would
not qualify as a tax-free recapitalization. You should consult your tax advisor regarding the tax consequences of an investment in Fantex Series EJ Manuel.
Q:
How is the Fantex Series EJ Manuel being offered?
A:
Our
Fantex Series EJ Manuel is being offered through a best efforts, all or none basis, by the underwriters, with Stifel, Nicolaus & Company,
Incorporated, acting as the "qualified independent underwriter." To the extent that there is insufficient interest in shares of our Fantex Series EJ Manuel, this offering may be cancelled and
no shares of our Fantex Series EJ Manuel would be sold to the public. The process for placing orders in the offering is different from that used for most public offerings of equity securities.
You should carefully read the section entitled "Underwriting (Conflicts of Interest)—Offering Process" for additional information regarding how to place an order for our Fantex
Series EJ Manuel.
Q:    Will I receive a certificate for my Fantex Series EJ Manuel?
A:
No
. The shares of our Fantex Series EJ Manuel will be issued in book-entry form only. We will act as
registrar and transfer agent and will maintain a book-entry record of the holders of shares of our Fantex Series EJ Manuel.
Q:
Will the Fantex Series EJ Manuel be listed on an exchange?
A:
To
the extent available, buy and sell orders will be posted and executed by the FBS ATS, which is an alternative trading system as defined under the Exchange
Act. Our Fantex Series EJ Manuel will not be listed on a stock exchange such as the New York Stock Exchange or NASDAQ.
Q:
Can I purchase Fantex Series EJ Manuel using my existing brokerage account?
A:
No
. In order to purchase shares of our Fantex Series EJ Manuel, either in this offering or subsequent
to this offering, investors are required to open a brokerage account with our broker-dealer affiliate, FBS. You will not be able to purchase or sell any shares of our Fantex Series EJ Manuel
through any other brokerage account or any exchange or trading system. See "Underwriting (Conflicts of Interest)—Offering Process."
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Q:
What is FBS and what role does it play in the offering and subsequent trading
market?
A:
FBS
is our affiliated broker-dealer and is regulated by the SEC and FINRA. FBS is serving as an underwriter in this offering, along with Stifel,
Nicolaus & Company, Incorporated, a "qualified independent underwriter" as defined in FINRA Rule 5121. In addition, FBS is registered as an alternative trading system, which we refer to
as the FBS ATS, with the SEC. Upon completion of this offering, buy and sell orders for shares of our Fantex Series EJ Manuel will be posted on the FBS ATS under the symbol "Fantex EJ Manuel."
FBS will be the exclusive broker-dealer for executing trades in our Fantex Series EJ Manuel. Therefore, if you would like to execute any trades in our securities you first must open a brokerage
account with FBS. Stifel, Nicolaus & Company, Incorporated will not be responsible for executing any trades in our Fantex Series EJ Manuel following this offering. FBS may act as
principal or agent in these transactions, and may also act as a market-maker in the secondary market from time to time. However, it is not obligated to make a market in the Fantex Series EJ
Manuel and if it does so it may discontinue any market-making at any time without notice, in its sole discretion. Currently, FBS is not expecting to act as a market-maker in the secondary trading
market for the Fantex Series EJ Manuel, though it will periodically reassess whether to do so. FBS may in the future also consider contacting other broker-dealers to assess their interest in
making markets in the securities of Fantex on the FBS ATS. If we have limited or no market-makers at any time, the liquidity of the secondary market for the Fantex Series EJ Manuel may be
materially adversely affected.
Q:
What is the FBS ATS?
A:
Our
affiliate, FBS, operates an alternative trading system, registered with the SEC. Qualified investors will be required to open brokerage accounts with FBS
in order to invest in our securities, initially the Fantex Series EJ Manuel being offered hereby, and in the future, additional securities that we may register and issue from time to time.
Investors who have an account with FBS may post "bid" and "ask" orders for our securities with FBS that will be matched with other orders on the FBS ATS. Our securities will be exclusively traded on
the FBS ATS. FBS will accept only limit orders for trades in Fantex Series EJ Manuel and other securities on the FBS ATS.
Q:
How can I sell my shares in Fantex Series EJ Manuel if I decide that I no longer wish to hold
them?
A:
FBS
ATS has agreed to post buy and sell orders for shares of our Fantex Series EJ Manuel upon completion of this offering. If you decide to sell
shares of our Fantex Series EJ Manuel, you must pay a commission to FBS. Payment of this brokerage fee may negate or mitigate any appreciation on shares of our Fantex Series EJ Manuel or
cause you to incur a loss on your investment.
Q:
Does Fantex participate in the FBS ATS as an investor?
A:
No
. Neither we nor the officers, directors, employees, promoters or affiliates of Fantex, Fantex Holdings or
FBS will be allowed to purchase any shares in the offering or execute trades in the secondary market for our or their own accounts through FBS or on the FBS ATS, except where FBS is acting as a
market-maker on the FBS ATS. FBS has no current intention of acting as a market-maker in the secondary market for Fantex Series EJ Manuel.
Q:
What is the relationship between Fantex, Fantex Holdings and FBS?
A:
Fantex
Holdings was incorporated on April 9, 2012. FBS was formed on May 7, 2012 as a wholly-owned subsidiary of Fantex Holdings. We were
incorporated on September 14, 2012 as a wholly-owned subsidiary of Fantex Holdings. Following this offering, FBS will continue to be a wholly-owned subsidiary of Fantex Holdings, and Fantex
Holdings will own 100% of our outstanding shares of platform common stock and no shares of our Fantex Series EJ Manuel. To date, Fantex Holdings has incurred expenses on our behalf and
contributed working capital towards our operations. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations
and—Liquidity and Capital Resources."
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GLOSSARY OF CERTAIN TERMS
Set forth below is a glossary of certain terms used throughout this prospectus.
"acquired
brand income" or "ABI" means as context requires: (1) with respect to the EJ Manuel brand contract, the 10% of the brand income of EJ Manuel that we are acquiring
pursuant to his brand contract; (2) with respect to the Vernon Davis brand contract, the 10% of the brand income of Vernon Davis that we are acquiring pursuant to his brand contract;
(3) with respect to the Arian Foster brand contract, the 20% of the brand income of Arian Foster that we are acquiring pursuant to such brand contract; and (4) with respect to future
brand contracts, the negotiated amount of brand income of such contract party that we acquire pursuant to such brand contract.
"Arian
Foster" (including related pronouns) means Arian Foster, a running back for the Houston Texans in the NFL and/or The Ugly Duck, LLC, an affiliate of Arian Foster, or both
jointly and severally, as the context requires.
"Arian
Foster Brand" is a tracking unit that our board of directors intends to establish, upon the consummation of the offering of our Fantex Series Arian Foster. For a description of
the assets and liabilities that we are attributing to the Arian Foster Brand, please see "Management and Attribution Policies—Attribution—Other Tracking Stock Brands."
"Arian
Foster Registration Statement" is a separate registration statement on Form S-1 (333-191772) with respect to shares of our Fantex Series Arian Foster Convertible Tracking
Stock, filed with the SEC pursuant to the Securities Act.
"attributable
income" with respect to any tracking stock as of any date of determination means the attributable income for such tracking stock brand as reflected in the unaudited
attributed financial information included as an exhibit to our most recent Exchange Act report.
"brand
contract" means as context requires: (1) when referring to EJ Manuel, that certain Brand Agreement dated as of February 14, 2014, between EJ Manuel and Fantex;
(2) when referring to Vernon Davis, that certain Brand Agreement dated as of October 30, 2013, between Vernon Davis and Fantex; (3) when referring to Arian Foster, that certain
Brand Agreement dated as of February 28, 2013, and as amended and restated on May 24, 2013 and August 21, 2013, between Arian Foster and Fantex; or (4) generally, any
future brand agreement that Fantex may enter into with a contract party.
"brand
income" means, other than excluded income, as the context requires:
•
with respect to EJ Manuel, contingent on our payment of the purchase price to him,
•
the gross monies or other consideration (including rights to make investments) that he receives from and after
February 14, 2014, subject to specified exceptions and net of certain related expenses (such as legal fees, travel expenses and self-employment taxes) as a result of his activities in the sport
of football (including NFL and non-NFL activities), including salaries and wages from his employment as a professional athlete and the license or assignment of rights in his persona, including use of
his name, voice, likeness, image, signature, talents, live or taped performances, in connection with motion pictures, television and Internet programming, radio, music, literary, talent engagements,
personal appearances, public appearances, records and recording, or publications; any use of his persona for purposes of advertising, merchandising, or trade, including sponsorships, endorsements and
appearances, and any other license or assignment of rights in his persona, to generate income; and any other personal services performed by EJ Manuel which are of the type typically performed by
individuals in the field of football because of their status as a professional athlete or other professional within the field of football (including, without limitation, sports casting, coaching,
participating in sports camps, acting as spokesperson); and
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•
in the event EJ Manuel receives, pursuant to any Brand Income Contract, stock or other equity interests (including
membership interests and partnership interests), or options, warrants or other rights to acquire any of the foregoing interests, he shall provide us with advance written notice pursuant to which we
can elect to participate in the equity award by being issued a direct equity interest in the applicable issuer and to the extent we fail to make such an election or the applicable issuer does not
agree to issue to us the equity interests, we shall have the right to indirectly participate in the applicable equity interest by receiving our percentage (10%) of the distributions made on the
equity, including any distributions, dividends, profit payments, proceeds resulting from the sale, lease, license, exchange, liquidation or other disposition of any equity or assets of the applicable
issuer, in each case subject to us making a payment of any consideration for such equity interests proportional to our interest in the equity award (or such other negotiated price in the event that EJ
Manuel receives a discounted investment opportunity as a result of the performance of personal services that are not customary within celebrity endorsements), including without limitation, payments
required by the terms of exercise of any options, warrants or other similar rights to acquire stock or other equity interests;
•
with respect to Vernon Davis, contingent on our payment of the purchase price to him,
•
the gross monies or other consideration (including rights to make investments) that he receives from and after
October 30, 2013, subject to specified exceptions and net of certain related expenses (such as legal fees, travel expenses and self-employment taxes) as a result of his activities in the sport
of football (including NFL and non-NFL activities), including salaries and wages from his employment as a professional athlete and the license or assignment of rights in his persona, including use of
his name, voice, likeness, image, signature, talents, live or taped performances, in connection with motion pictures, television and Internet programming, radio, music, literary, talent engagements,
personal appearances, public appearances, records and recording, or publications; any use of his persona for purposes of advertising, merchandising, or trade, including sponsorships, endorsements and
appearances, and any other license or assignment of rights in his persona, to generate income; and any other personal services performed by Vernon Davis which are of the type typically performed by
individuals in the field of football because of their status as a professional athlete or other professional within the field of football (including, without limitation, sports casting, coaching,
participating in sports camps, acting as spokesperson); and
•
in the event Vernon Davis receives, pursuant to any Brand Income Contract, stock or other equity interests (including
membership interests and partnership interests), or options, warrants or other rights to acquire any of the foregoing interests, he shall provide us with advance written notice pursuant to which we
can elect to participate in the equity award by being issued a direct equity interest in the applicable issuer and to the extent we fail to make such an election or the applicable issuer does not
agree to issue to us the equity interests, we shall have the right to indirectly participate in the applicable equity interest by receiving our percentage (10%) of the distributions made on the
equity, including any distributions, dividends, profit payments, proceeds resulting from the sale, lease, license, exchange, liquidation or other disposition of any equity or assets of the applicable
issuer, in each case subject to us making a payment of any consideration for such equity interests proportional to our interest in the equity award (or such other negotiated price in the event that
Vernon Davis receives a discounted investment opportunity as a result of the performance of personal services that are not customary within celebrity endorsements), including without limitation,
payments required by the terms of exercise of any options, warrants or other similar rights to acquire stock or other equity interests;
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•
with respect to Arian Foster, contingent on our payment of the purchase price to him,
•
the gross monies or other consideration (including rights to make investments) that he receives from and after
February 28, 2013 generally as a result of his skills and brand, including salary and wages from being an NFL football player and related fields (including activities in a non-NFL football
league), which consists of other compensation from his involvement in coaching, football camps, television or Internet programming (with respect to which he either performs in the role of a
professional or amateur football player, or performs as himself), radio (terrestrial or satellite), motion picture (solely to the extent Arian Foster appears as himself, such as in a documentary, or
is an actor in a motion picture playing the role of himself or an amateur or professional football), literary works the subject of which is Arian Foster, publications, personal appearances,
memorabilia signings and events, and the use of Arian Foster's name, voice, likeness, biography or talents for purposes of advertising and trade, including without limitation sponsorships,
endorsements, merchandising and appearances; and
•
in the event Arian Foster receives, pursuant to any Brand Income Contract, stock or other equity interests (including
membership interests and partnership interests), or options, warrants or other rights to acquire any of the foregoing interests, he shall provide us with advance written notice pursuant to which we
can elect to participate in the equity award by being issued a direct equity interest in the applicable issuer and to the extent we fail to make such an election or the applicable issuer does not
agree to issue to us the equity interests, we shall have the right to indirectly participate in the applicable equity interest by receiving our percentage (20%) of the distributions made on the
equity, including any distributions, dividends, profit payments, proceeds resulting from the sale, lease, license, exchange, liquidation or other disposition of any equity or assets of the applicable
issuer, in each case subject to us making a payment of any consideration for such equity interests proportional to our interest in the equity award, including without limitation, payments required by
the terms of exercise of any options, warrants or other similar rights to acquire stock or other equity interests; or
•
with respect to other contract parties, the gross monies that such party receives generally as a result of their skills
and brand, including salary and wages from participation in their defined primary occupation, such as an athlete in the NFL, and related fields (including activities in a non-NFL football league),
such as broadcasting and coaching.
"contract
party" may as context requires refer to: (1) EJ Manuel; (2) Vernon Davis; (3) Arian Foster; or (4) any specified counterparty to a brand contract,
which may include an individual such as a professional athlete or entertainer, and/or affiliates or affiliated entities of such individual on a joint and several basis.
"EJ
Manuel" (including related pronouns) means Erik "EJ" R. Manuel, Jr., a quarterback for the Buffalo Bills in the NFL and/or Kire Enterprises LLC, an affiliate of EJ Manuel, or
both jointly and severally, as the context requires.
"EJ
Manuel Brand" is a tracking unit that our board of directors intends to establish, upon the consummation of the offering of our Fantex Series EJ Manuel. For a description of
the assets and liabilities that we are attributing to the EJ Manuel Brand, please see "Management and Attribution Policies—Attribution—EJ Manuel Brand."
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"excluded
income" means as the context requires:
•
with respect to EJ Manuel:
•
any cash receipts resulting from the contract party's investments in stocks or other equity, bonds, commodities,
derivatives, debt or real estate, so long as (a) such stocks or other equity, bonds, commodities, derivatives, debt investments and real estate are not received by him as compensation or
consideration for activities (including licensing of rights) in the "field" as defined in his brand contract, (b) the contract party is not obligated to provide any services related to the
"field" in connection with such investment and (c) the business or commercial venture related to such investment does not use the contract party's persona in its legal name or "dba," or in
connection with its marketing, advertising or promotion,
•
any income received from employment, services rendered or other activities not related to professional football and
related fields,
•
any reasonable reimbursement of incidental expenses actually incurred by EJ Manuel, including without limitation, travel,
lodging, per diem and other incidental expenses, or the value of any such items paid by a third party on his behalf,
•
certain future pension and benefit payments under the CBA, except that income deferred pursuant to Article 26,
Section 6 of such CBA shall not be deemed to be future pension payments and as such, shall be included in brand income; and
•
merchandise, services or service plans or merchandise, service or service plan credit up to the lesser of $40,000 and 4%
of all brand income during any applicable calendar year and as otherwise agreed by Fantex in its discretion;
•
with respect to Vernon Davis:
•
any cash receipts resulting from his investments in stocks or other equity, bonds, commodities, derivatives, debt,
franchises or real estate, so long as such stocks or other equity, bonds, commodities, derivatives, debt investments, franchises and real estate are not received by him as compensation for activities
(including licensing of rights) in the "field" as defined in his brand contract,
•
any income received from employment, services rendered or other activities not related to professional football and
related fields,
•
any reasonable reimbursement of incidental expenses actually incurred by Vernon Davis, including without limitation,
travel, lodging, per diem and other incidental expenses, or the value of any such items paid by a third party on his behalf,
•
any income of: (1) the Vernon Davis Foundation or (2) any other charitable foundation or organization as a
result of personal services performed by Vernon Davis,
•
any proceeds of the insurance policy purchased by Vernon Davis against the risk of injury or disability,
•
certain future pension and benefit payments under the CBA, except that income deferred pursuant to Article 26,
Section 6 of such CBA shall not be deemed to be future pension payments and as such, shall be included in brand income;
•
merchandise, services or service plans or merchandise, service or service plan credit up to the lesser of $40,000 and 4%
of all brand income during any applicable calendar year and as otherwise agreed by Fantex in its discretion; and
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•
the following specifically excluded income:
•
income derived from his performance as a painter, sculptor or artist in any other fine or graphic arts medium, related of
Gallery 85 or any other art gallery owned by him or from any school for the arts established in part by him, whether charitable or for profit, regardless of whether he participates or his persona is
used to market or promote such school);
•
any and all cash or other consideration, in any form whatsoever, received by Vernon Davis from the following entities (or
their affiliates as agreed as of October 30, 2013): (1) Ike Shehadeh and Ike's Love & Sandwiches Franchising LLC and (2) Jamba Juice Company;
•
with respect to Arian Foster:
•
any revenues resulting from Arian Foster's investments in stocks or other equity, bonds, commodities, derivatives, debt,
franchises or real estate, so long as (a) such stocks or other equity, bonds, commodities, derivatives or real estate are not received by Arian Foster as compensation for activities (including
licensing of rights) in the field, and (b) any such debt is not used to finance, and any such franchise is not participating in or related to, activities in the field,
•
any income received from employment, services rendered or other activities not related to professional football,
•
any reasonable reimbursement of incidental expenses actually incurred by Arian Foster, including without limitation,
travel, lodging, per diem and other incidental expenses, or the value of any such items paid by a third party on Participant's behalf,
•
certain future pension and benefit payments under the CBA, except that income deferred pursuant to Article 26,
Section 6 of such CBA shall not be deemed to be future pension payments and as such, shall be included in brand income;
•
merchandise, services or service plans or merchandise, service or service plan credit up to the lesser of $40,000 and 4%
of all brand income during any applicable calendar year and as otherwise agreed by Fantex in its discretion; and
•
the following specifically excluded income:
•
income derived from: motion pictures and television (unless, in each case, Arian Foster either performs in the role of a
professional or amateur football player, or performs as himself), music (including writing, recording, publishing, artist management, touring), children's books, and any and all merchandising and
exploitation rights relating to any of these foregoing excluded categories;
•
any and all cash or other consideration, in any form whatsoever, received by Arian Foster from the following entities (or
their affiliates as of February 28, 2013): (A) Fuse Science, Inc. and (B) Mobli Media Inc.;
•
$6.25 million received by Arian Foster in March 2013 as the final payment to him from the Texans for his signing
bonus from the March 5, 2012 contract with the Texans; or
•
any merchandise credit (or value thereof) payable to Arian Foster pursuant to the agreement, dated effective as of
March 1, 2012, between Arian Foster and Under Armour, Inc. and any merchandise credit of the same or lesser value in any renewals, extensions or amendments and/or restatements thereof;
or
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•
with respect to other contract parties, as specified in the respective brand contract between such contract party and
Fantex.
"fair
value" means:
•
generally, the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. Where available, fair value is based on observable market prices or parameters or derived from such prices or parameters. Where observable prices
or inputs are not available, valuation models are applied; and
•
specifically, with respect to any share of our platform common stock or any of our tracking stocks, fair value will be
determined as the volume weighted average of the closing bid or sale prices, whichever is applicable, of such share over the 20-trading day period ending on the trading day before the date of
determination. However, such value will only be used for any series of our common stock if our board of directors determines in its good faith judgment that there is an active trading market for that
series. If our board of directors makes a determination that there is no active trading market for any series of our common stock, then the fair value for such series will be determined, at the
discretion of our board of directors, either by our board of directors in their good faith judgment or by a reputable and independent investment banking or valuation firm experienced in the valuation
of securities selected in good faith by our board of directors, provided, however, that to the extent that our board of directors determines in its good faith judgment that such series does not have
any material value in terms of assets attributable to such series, including but not limited to any material future brand income or assets, events or circumstances that our management or our board of
directors believe could reasonably result in material brand income in the future, then the fair value for such series may be determined by our board of directors in their good faith judgment alone.
Any such valuation determination will be made, whether by our board of directors or any independent investment banking, financial advisory or other valuation firm, based on the contractual value of
the brand assets related to the applicable tracking stock, and shall not include any discount for lack of marketability or liquidity or any minority interest discount (including that such series may
not have the rights contractually or otherwise, to receive dividends). Our board of directors intends to use such firm as a general matter unless the assets and expected valuation of the tracking
stock are not material.
"Fantex"
means Fantex, Inc. In addition, all other references in this prospectus to "the Company," "our company," "we," "us" and "our" refer to Fantex.
"Fantex
Series Arian Foster" is the tracking stock designated to track the Arian Foster Brand and being offered pursuant to the Arian Foster Registration Statement.
"Fantex
Series EJ Manuel" is the tracking stock designated to track the EJ Manuel Brand and being offered in this offering.
"Fantex
Series Vernon Davis" is the tracking stock designated to track the Vernon Davis Brand and being offered pursuant to the Vernon Davis Registration Statement.
"FBS"
means Fantex Brokerage Services, LLC, a registered broker-dealer affiliated with Fantex.
"FBS
ATS" means the alternative trading system operated by FBS.
"platform
common stock" means the series of our common stock provided for in our amended and restated certificate of incorporation into which our board of directors may determine to
convert any tracking stocks, following the two-year anniversary of the filing of a certificate of designation creating such tracking stock, based on the relative fair values of a share of platform
common stock and such tracking stock at the time of any such conversion.
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"qualified
independent underwriter" means a qualified independent underwriter as defined under FINRA Rule 5121, and which means a securities firm that does not have a conflict of
interest and that has agreed, in acting as a qualified independent underwriter, to undertake the legal responsibilities and liabilities of an underwriter under the Securities Act, specifically
including those inherent in Section 11 thereof.
"tracking
stock" means any series of our common stock that our board of directors from time to time may designate as tracking a specified tracking stock brand. See "Description of
Capital Stock."
"tracking
stock brand" or "tracking unit" means a business unit relating to a specified brand contract, which the corresponding tracking stock is designated to track. See "Management and
Attribution Policies."
"underwriters"
refers to, as the context requires, FBS together with Stifel, Nicolaus & Company, Incorporated, the "qualified independent underwriter" (as defined in FINRA
Rule 5121) in this offering.
"Vernon
Davis" (including related pronouns) means Vernon Davis, a tight end for the 49ers in the NFL and/or The Duke Marketing LLC, an affiliate of Vernon Davis, or both jointly
and severally, as the context requires.
"Vernon
Davis Brand" is a tracking unit that our board of directors is establishing upon the consummation of an offering of shares of our Fantex Series Vernon Davis. For a description of
the assets and liabilities that we are attributing to the Vernon Davis Brand, please see "Management and Attribution Policies—Attribution—Vernon Davis Brand."
"Vernon
Davis Registration Statement" is a separate registration statement on Form S-1 (333-192476) with respect to shares of our Fantex Series Vernon Davis Convertible Tracking
Stock, filed with the SEC pursuant to the Securities Act.
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RISK FACTORS
Investing in our Fantex Series EJ Manuel involves a high degree of risk. You should carefully consider
the risks described below, together with the other information contained in this prospectus, including our financial statements and the related notes appearing at the end of this prospectus, and the
sections in this prospectus entitled "Business" and "Description of Capital Stock," before making any decision to invest in shares of our Fantex Series EJ Manuel. If any of the events discussed
in the risk factors below occur it could have a material and adverse impact on our business, results of operations, financial condition and cash flows. If that were to happen, the trading price of our
Fantex Series EJ Manuel could decline, and you could lose all or part of your investment.
Risks Relating to Our Limited Operating History, Financial Position and Capital Needs
We have incurred significant losses since our inception and anticipate that we will continue to incur losses in the future.
We incorporated in Delaware in September 2012 as a wholly-owned subsidiary of Fantex Holdings. We are currently in a start-up phase and
to date have relied on our parent to conduct our operations. We therefore have a very limited operating history. Investment in our company is highly speculative because it entails substantial upfront
cost and significant risk that we may never become commercially viable. We have not generated any revenue to date, and our parent has incurred significant expenses on our behalf. Following this
offering, our parent will not be obligated to continue to incur expenses on our behalf except as required under our management agreement with them, and we expect that we will incur significant
expenses related to our ongoing operations. For the years ended December 31, 2013 and 2012, we reported a net loss of approximately $3.6 million and approximately $1.1 million,
respectively, and had accumulated losses since inception of approximately $4.6 million.
We
expect to continue to incur losses for the foreseeable future, and we expect these losses to increase as we continue evaluating, targeting and accessing brands and negotiating the
acquisition of minority interests in those brands that meet our criteria, and as we develop the infrastructure necessary to support our ongoing operations. We may encounter unforeseen expenses,
difficulties, complications, delays and other unknown factors that may adversely affect our business. The size of our future net losses will depend, in part, on the rate of future growth of our
expenses, the rate at which we are able to acquire brands that meet our criteria and the ability of our acquired brands to generate revenues and cash flow. Even if our brands generate cash flows they
may not produce payments quickly enough to cover our expenses. If EJ Manuel, or any other individuals with whom we have or may contract in the future, fail to make payments in amounts we expect, or at
all, we may never become profitable. Even if we achieve profitability in the future, we may not be able to sustain profitability in subsequent periods. Our expected future losses will have an adverse
effect on our stockholders' equity and working capital.
We have a very limited operating history, which may make it difficult for you to evaluate the success of our business to date and to assess our future viability. Our
business model also requires us to make substantial upfront payments to our contract parties in exchange for rights to future payments.
Our operations to date have been limited to organizing and staffing our company, evaluating, targeting and accessing brands that meet
our criteria, negotiating the acquisition of minority interests in those brands and commencing the registration process for the offering of shares of our Fantex Series Arian Foster and Fantex Series
Vernon Davis.
As
of February 28, 2014, we have entered into three brand contracts one with each of EJ Manuel, Vernon Davis and Arian Foster, each professional athletes in the NFL. We
intend to enter into
additional brand contracts in the future with other contract parties and are actively pursuing these brand contracts, but as of February 28, 2014 we have no current commitments to enter into
another
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brand
contract. Our contract with EJ Manuel requires us to make an upfront cash payment to him of $4.98 million (less $0.25 million to be held in escrow to satisfy future payment
obligations to us), and we expect that any other brand contracts that we enter into in the future with other contract parties will also require us to make upfront payments in return for the right to
future payments based on our ABI.
Therefore,
our business model requires us to make substantial upfront payments to our contract parties in exchange for rights to future payments. We will be at risk if for any reason we
do not receive those future payments, or if they are less than we would need to be profitable or to offset our expenses. We have no history to demonstrate, and we can make no assurances, that our
business model will be successful, or whether any of our brand contracts, including our brand contract with EJ Manuel, will be profitable. Consequently, it will be difficult for anyone to predict our
future success, performance or viability, and more difficult than it would be if we had a longer operating history and/or successful brand contracts to judge the viability of our business model, and
any such predictions may not be accurate or reliable.
To date, we have not generated any revenues or cash flow from any brand contract, and following completion of this offering, our brand contract with EJ Manuel will represent
our only source of revenue or cash flow. We may not receive the cash amounts that we expect, or any at all, from our brand contract with EJ Manuel or from any future brand contracts and we may never
generate sufficient revenue to become profitable.
To date, we have not generated any revenues or cash flow from any brand contract and following completion of this offering, our brand
contract with EJ Manuel will represent our only source of cash flows. We may not receive the cash amounts that we expect, or any at all, from our brand contract with EJ Manuel or from any other brand
contracts.
Our
ability to generate revenue and become profitable will depend, among other things, upon our ability to successfully evaluate, target and access brands that have the potential to
generate significant brand income, acquire a minority interest in the brand income from these brands for an appropriate purchase price, aid our acquired brands in enhancing their value in amounts
sufficient to provide a return on our investment, and enforce the brand contracts and collect our ABI with respect to these brands. Even if we are able to successfully do these and other things that
are within our control there are numerous other factors, some of which are not within our control, that might impact our ability to
generate revenue or cash flows or be profitable, including those discussed in these Risk Factors and elsewhere in this prospectus.
In
addition, there are numerous risks and uncertainties associated with the brands in which we invest, including that the success of our brand contracts will depend upon the
contributions, success and longevity of an individual in his primary occupation, such as an athlete in the NFL. Therefore, we are unable to predict the timing or amount of future cash receipts, or
when or if we will be able to achieve or maintain profitability. Even if we are able to acquire, manage and develop brands as described above, we anticipate incurring significant costs associated with
our efforts to achieve or maintain profitability.
Our business strategy depends in large part on our ability to build a robust platform of brands by entering into additional brand contracts. Even if we complete this
offering of Fantex Series EJ Manuel we may not be able to enter into additional brand contracts in the future, or enter into the number of additional brand contracts that we anticipate would be
necessary to support our business model.
Our strategy of enhancing brand reach and brand value for our acquired brands depends in large part on our ability to build a robust
platform of brands and benefit from economies of scale and an ability to cross-pollinate and share best practices across our acquired brands. For example, any direct investment of resources that we
make in any promotional activities relative to our EJ Manuel Brand
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must
exceed a return that is at least ten times our investment in order to increase the value of such tracking stock brand. Thus, unless we achieve significant economies of scale in our ability to
deliver brand enhancing value at a low cost across all our tracking stock brands (by, for example, utilizing fixed, in-house personnel rather than incurring out-of-pocket third party costs), then we
will not likely be able to make investments at a cost that would allow for a positive return on our investment. Accordingly, we are actively pursuing additional brand contracts that we intend to enter
into in the future. However, as of February 28, 2014, we have no current commitments to enter into another brand contract.
We
do not know if future potential contract parties will agree to enter into additional brand contracts and we may not be able to attract sufficient additional brand contracts. For
example, future potential contract parties may not view the brand contract as an attractive value proposition to them due to any number of factors, including differing expectations of an appropriate
purchase price that reflects the agreed upon ABI, which may be based on any number of factors, such as:
•
we and future potential contract parties may not agree on the assumptions and estimates used to determine the estimated
future earnings of potential contract parties;
•
potential contract parties may not want to incur legal, tax and other burdens associated with entering into a brand
contract, including, for example, ongoing information and disclosure requirements, as well as the potential risk, due to the lack of any currently binding or authoritative guidance from the IRS, that
the ABI we are purchasing from the contract party could be reportable income for the contract party, and, as a result, that it may not be fully deductible for U.S. federal income tax purposes;
•
the potential impact of possible disclosure of the terms of material included contracts, and the impact that these
disclosure obligations may have on the ability of a contract party to enter into additional endorsement deals or to participate in other brand-income generating activities;
•
any negative perception by the media, fans, leagues, clubs or others of our business model;
•
any negative perception by the media, fans, leagues, clubs or others of any of our current contract parties or other
future contract parties, as a result of their decision to enter into a brand contract with us, or otherwise; and
•
the performance of our brand contracts or other brand contracts that we may enter into in the future, and/or the
performance of the related tracking stock, which may be worse than anticipated.
As
a result, we may be forced to revise our business model to attract additional brand contracts. For example, we are not currently contractually obligated to expend capital on enhancing
the brand value of our contract parties. Contract parties may require us to contractually agree to provide certain minimum levels of marketing services in order to enter into brand contracts, which we
may not be able to provide or which may not give us sufficient return on capital to make the brand contract profitable. Moreover, we or our parent may be asked to provide an indemnity to the contract
party against any tax risk to them as a result of the uncertainty discussed above. For example, our parent has agreed to
provide an indemnity to each of our current contract parties if their respective ABI is reportable and not deductible, and either we or our parent may have to agree to similar tax indemnities for
future contract parties until there is additional guidance in this area or sufficient history with our contract parties. Even if potential contract parties are willing to agree to enter into
additional brand contracts with us, the leagues, team owners, players associations, endorsement partners, elected officials or others may take actions that could restrict our ability or make it more
costly for us to enter into future brand contracts. And even if we are successful in entering into additional brand contracts with additional contract parties, we may not be successful in conducting
offerings to finance the purchase price under these brand contracts.
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We will need to obtain additional funding to acquire additional brands and we may also need additional funding to continue operations. If we fail to obtain the necessary
financing, or fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and we may be forced to
significantly delay, scale back or discontinue our operations.
We will require additional capital to fund our operations, and if we fail to obtain necessary financing, our business plan may not be
successful.
Any
brand contracts that we enter into in the future with other contract parties will require us to make substantial upfront payments to acquire the ABI under such brand contracts. We do
not, and following this offering we do not expect to have, the necessary funds that we would need to make any of these upfront payments under future brand contracts. Therefore, we expect that our
future brand contracts for the foreseeable future will be contingent upon obtaining financing to fund the acquisition of the ABI in the respective brands, and we intend to finance these acquisitions
through the issuance of additional tracking stocks linked to the value of such brands. Such financing may be expensive and time consuming to obtain, and we may not have investor interest that would
enable us to obtain such financing.
In
addition, our operations (excluding upfront payments under future brand contracts) have consumed substantial amounts of cash since inception, and we expect they will continue to
consume substantial amounts of cash as we aggressively build our platform of brands and our internal marketing, compliance and other administrative functions. To date, these operations have been
financed exclusively by equity contributions from our parent. Our parent has no obligation to continue to finance our operations, and they do not intend to continue to finance our operations except as
required under our management agreement with them. Although we believe the net proceeds from this offering together with existing cash and cash equivalents and interest thereon will be sufficient to
fund our projected operating expenses for the next 12 months, as noted above, we will require additional capital to finance
the acquisition of future brands, and we may also need to raise additional funds sooner if our operating and other expenses are higher than we expect or our cash received from brand contracts is lower
than we expect.
Until
we can generate a sufficient amount of cash from our brand contracts, if ever, we expect to finance future cash needs through public or private equity or debt offerings. Additional
capital may not be available on reasonable terms, if at all. If we are unable to raise additional capital in sufficient amounts or on terms acceptable to us we may not be able to continue to acquire
additional ABI in other brands and we may have to significantly delay, scale back or discontinue our operations. If we raise additional funds through the issuance of additional debt or equity
securities it could result in dilution to our existing stockholders, and/or fixed payment obligations that could reduce our ability to pay dividends or otherwise fund our other operations.
Furthermore, these securities may have rights senior to those of our common stock and could contain covenants that would restrict our operations and potentially impair our competitiveness, such as
limitations on our ability to incur additional debt, limitations on our ability to acquire, sell or license brands without consent and other operating restrictions that could adversely impact our
ability to conduct our business. Any of these events could significantly harm our business, financial condition and prospects.
Our
forecast of the period of time through which our financial resources will be adequate to support our operations (excluding upfront payments under future brand contracts) is a
forward-looking statement and involves risks and uncertainties, and actual results could vary as a result of a number of factors, including the factors discussed elsewhere in this "Risk Factors"
section. We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital
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resources
sooner than we currently expect. Our future funding requirements, both near and long-term, will depend on many factors, including, but not limited
to:
•
the rate at which we begin to realize revenue under our brand contracts with EJ Manuel, Vernon Davis and Arian Foster (the
related offering of which has been postponed and which may not be consummated on terms described elsewhere in this prospectus, if at all), as well as under any additional brand contracts that we may
enter into in the future;
•
the cost of our efforts to evaluate, target and access the brands that meet our criteria, as well as the cost and expense
of negotiating any new brand contracts;
•
our ability to enter into additional brand contracts, and if so the amount of the upfront purchase price that we would
have to pay to acquire rights under any such brand contracts;
•
the number and characteristics of any new brand contracts that we may enter into;
•
the cost and expenses of any equity or debt financings that would be necessary to pay the purchase price under any
additional brand contracts, and any regulatory or other delays in any of these offering processes;
•
the effect of competing technological and market developments;
•
the cost of establishing and building our sales, marketing and compliance capabilities; and
•
the rate at which we invest in marketing and other costs to assist our acquired brands in building and enhancing the value
of their brands.
If
a lack of available capital means that we are unable to expand our operations or otherwise capitalize on our business opportunities, our business, financial condition and results of
operations could be materially adversely affected.
Risks Relating to Our Brand Contracts and Our Business
Our principal source of cash flows for the foreseeable future will be derived from our brand contracts.
Our principal source of cash flows for the foreseeable future will be derived from our brand contracts. There are a number of risks
relating to brand contracts. If any of these risks occur it could have a material and adverse impact on our business, financial condition and results of operations.
We do not have any experience managing brand contracts and we do not have any historical performance data about our brand contracts.
We entered into our first brand contract with Arian Foster on February 28, 2013, a subsequent contract with Vernon Davis on
October 30, 2013 and finally, a contract with EJ Manuel on February 14, 2014. As of February 28, 2014, we have not received any cash under these brand contracts. Due to our
limited experience with brand contracts, we do not have any historical performance data regarding our ability to generate cash receipts from the management of brand contracts and the likelihood of
long-term performance of the contract party, or our ability to aid our brands in enhancing their brand reach and brand value. As a result, the brand contracts that we enter into may generate lower ABI
than we anticipate, or none at all. We may therefore pay a purchase price for ABI that is too high. As we gain more experience with our brand contracts, we may change how we estimate the brand value
of future brand contracts, and investors who invest early may not benefit from the experience that we gain from our early brand contracts.
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Our cash received under our brand contracts will depend upon the continued satisfactory performance of the related contract party, and we do not have any rights to require
the contract party to take any actions to attract or maintain or otherwise generate brand income.
Some or all of the brand income that a contract party is expected to generate is contingent on continued satisfactory performance and
is not guaranteed. Although we structure our brand contracts so that the contract party maintains the substantial majority of future brand income to help ensure that the contract party will maintain
incentives to continue to generate brand income, we can provide no assurances that the contract party will do so. The contract party may retire from such contract party's primary occupation, such as
an athlete in the NFL, at any time and for
any reason, subject only to a requirement to repay us the amount of the purchase price we paid such contract party, plus certain expenses and net of any amounts already paid to us, if the contract
party retires within two years. In addition, if the contract party voluntarily retires during such period, such contract party may have other obligations under other contracts to pay back upfront
payments, such as a signing bonus, and the contract party may not have the funds to meet all of its obligations at that time. The contract party has no obligation to take any actions to generate brand
income, and may choose not to do anything to generate brand income. In addition, even if the contract party chooses to engage in additional brand income generating activities, their ability to do so
may be restricted under their existing contracts. For example, NIKE USA, Inc. prohibits EJ Manuel from entering into an agreement to endorse any other athletic and athletically-inspired or
derived footwear and apparel through the term of its contract with EJ Manuel. Moreover, brand income under our brand contracts generally only includes income that the contract party may receive in the
future in such contract party's primary occupation at the time, such as an athlete in the NFL, and related fields, such as broadcasting and coaching. Our brand contract contains no restriction on the
ability of the contract party to change professions or earn money in unrelated fields, and such income may not be brand income. In any of these events, we may lose some or all of the brand income in
the future under a brand contract, in which case our cash receipts would decline.
The contract party is neither our affiliate, nor a director, officer or employee of our company and owes no fiduciary duties to us or any of our stockholders. The contract
party has no obligation to enhance the value of the brand or disclose information to our stockholders.
Events in the contract party's personal life, including relationships with spouse, family, friends, etc. could have a significant
impact on the contract party's performance on the field. The contract party's obligations to disclose such personal events is limited to the obligations under the brand contract and the contract party
is under no obligation to disclose any personal matters to the holders of shares of our tracking stocks. Furthermore, although the contract party is contractually obligated to disclose all material
facts to us, we cannot guarantee that the contract party will comply with such disclosure requirements or that we can independently verify or uncover material events in the contract party's personal
life. In addition, the contract party has no obligation to enhance the value of his brand. For example, a contract party in the NFL may agree to a salary reduction to assist his team in staying within
the league salary cap, to be on a more competitive team, or to stay with a specific team, all of which may have the effect of reducing potential brand income and conflict with stockholders' interests
in maximizing brand income. Since the contract party's obligations under the brand contract are solely limited to obligations owed to us, the holders of shares of our tracking stocks have no
contractual right to enforce such obligations against the contract party. Furthermore, since the contract party is neither a director nor an officer of our company, such contract party owes no
fiduciary obligations to the holders of shares of our tracking stocks. As a result, our stockholders will have no recourse directly against the contract party, either under the brand contract or under
the securities laws.
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Profitability of our 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.
The purchase price that we expect to pay for future ABI under our brand contracts is based on our assumption that the contract party
will generate brand income in excess of that which may be predictable under existing contracts that are included in brand income, or included contracts. Therefore, we expect that the contract party
will need to be able to maintain existing included contracts as well as attract and maintain additional endorsements and other brand income generating activities. As noted above, the contract party
has no obligation to take any actions to generate brand income, or to take any actions to increase the amount of brand income that the contract party currently generates. However, even if the contract
party desires to and attempts to attract and maintain additional endorsements and other brand income generating activities there can be no assurances that such contract party will be able to do so.
Competition
for endorsements and other brand income opportunities is intense. These opportunities may depend on a variety of factors, including the primary occupation, such as an athlete
in the NFL, and perceived value of such profession to marketing executives, and on-field factors in the primary occupation, such as quality of the contract party's performance, whether or not the
contract party plays for a winning team, plays in post-season games or wins individual awards or is named to the Pro Bowl or All-Pro Team, the market in which the contract party performs, skill of the
contract party at the contract party's position, the style of play and potential to perform in the future, as well as intangible traits off the field such as personality, personal drive and ambition,
"likability," authenticity and consistency. Thus, future endorsements and other brand income opportunities may be difficult to attract and maintain, and they may not generate as much brand income as
we expect or that they have historically. A downturn in the performance of the contract party or even the team on which the contract party plays, whether the current team or a different team, could
adversely affect such contract party's ability to attract and maintain endorsements. Even if the contract party enters into multi-year agreements that are capable of generating significant brand
income, such agreements may have termination clauses relating to performance, character or other reasons, or such agreements may become the subject of disputes. We will have no rights under our brand
contracts to require the contract party to pursue any remedies or engage in any disputes with any third parties.
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, it is likely that the brand income with respect to such brand contract will not return to its
prior levels or may cease completely.
Our focus for the foreseeable future is to enter into brand contracts with high-profile athletes who play professional sports. For
example, EJ Manuel, Vernon Davis and Arian Foster are athletes in the NFL. There is a high risk of injury in many professional sports, and in particular in the NFL. For instance, on
November 12, 2013, Arian Foster was placed on season-ending injured reserve list as a result of suffering a back injury. Nevertheless, we do not maintain any
insurance against the loss of any brand income as a result of injury, illness, medical condition or death of the contract party. Therefore, if a contract party becomes injured or sustains a serious
illness or other adverse medical condition in the course of his professional career or otherwise, or dies, the brand income, and thus our ABI, would likely be dramatically less than we anticipate, and
it is likely that such brand income would not return to its prior levels or may cease completely.
We
also expect to receive brand income from existing and future endorsement agreements entered into by the contract party, as well as other public activities related to the primary
occupation of the contract party, such as television broadcasting. We believe that the contract party's ability to attract and maintain endorsement agreements as well as other sources of brand income
will depend on the contract party's reputation and ability to be viewed favorably by the public. Prior to entering into a brand
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contract,
we assess the character and reputation of the contract party and the brand through our independent assessments, industry references and background checks conducted by third parties. However,
there can be no assurance that our review process uncovers all facts and characteristics that could adversely affect the reputation of a contract party or the value of the brand contract. Even if our
review process provides us with an accurate assessment of the character and integrity of a contract party as of the date of our review, there can be no assurance that circumstances in the future will
not change, or that a contract party will continue to behave in a manner consistent with past behavior.
Any
harm to the public reputation of a contract party, or association of the contract party's name with a public scandal, may reduce the contract party's ability to enter into and
maintain future endorsements and other sources of brand income and as a result, brand income would likely decrease or may cease completely.
The contract party or other third parties may refuse or fail to make payments to us under the brand contracts.
Our cash flows depend on contract parties and other third parties making payments of ABI to us. A contract party or other third party
may dispute amounts to which we believe we are entitled, or may be unwilling or unable to make payments to which we are entitled, including for reasons discussed elsewhere in these risk factors.
In
either event, we may become involved in a dispute with the contract party or other third party regarding the payment of such amounts, including possible litigation. Disputes of this
nature could
harm the relationship between us and the contract party or other third party, and could be costly and time-consuming for us to pursue.
Failure
of the contract party or other third party to make payments of our ABI to us for any reason would adversely affect our business and in particular the value of your tracking stock
if the failure to pay relates to the brand contract associated with any tracking stocks.
In
addition, if the contract party or other third party who may be obligated to make payments to us were to become the subject of a proceeding under the United States Bankruptcy Code or
a similar proceeding or arrangement under another state, federal or foreign law, our rights and interests under the brand contract or otherwise may be prejudiced or impaired, perhaps significantly so.
In such circumstances, we may be precluded, stayed or otherwise limited in enforcing some or all of our rights under the brand contract or otherwise and realizing the economic and other benefits
contemplated therein. To the extent we do not receive payments under a brand contract to which we would otherwise be entitled as a result of any such debtor relief laws, then the amount of such
payments we do not receive will nonetheless be attributable to the respective tracking stock brand. In such an event, such shortfall in income will be treated as a general expense of Fantex and be
shared pro rata (calculated based on attributable income) among all of our then outstanding tracking stocks. As a result, the market value of your tracking stock could decline if another brand
contract that is not related to your tracking stock is unenforceable as a result of debtor relief laws. For a further description of covered amounts please see "Management and Attribution
Policies—Attribution—Covered Amounts."
Our 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 payments under a brand contract will be unsecured obligations of the contract party and will not be secured by any collateral, nor
guaranteed or insured by any third party or governmental authority. Therefore, we will be limited in our ability to collect any payments that may be owed to us under a brand contract if those amounts
are not paid. Generally, we would have to pursue remedies against the contract party or other third parties to whom our ABI was assigned by the contract party.
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If
the contract party defaults under the brand contract, there can be no assurances that the contract party will have adequate resources, if any, to satisfy any obligations to us under
the brand contract. In
addition, our brand contracts will require that our ABI be directly assigned to us by the contract party where commercially practicable. It may be necessary, therefore, for us to also pursue remedies
against counterparties to included contracts. These counterparties may assert that the assignment of brand income by the contract party did not create an obligation of their part to pay any brand
income to us.
Moreover,
payment of the ABI is an obligation of the contract party to us, not obligations to our stockholders, including holders of shares of our Fantex Series EJ Manuel. Our
stockholders will have no recourse directly against the contract party.
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.
If the contract party incurs additional secured or unsecured debt after entering into a brand contract with us, or if the contract
party incurs excessive expenses, the contract party may be impaired in its ability to make payments to us under the brand contract. In addition, additional debt or expenses may adversely affect the
contract party's creditworthiness generally, and could result in the financial distress, insolvency, or bankruptcy of the contract party. To the extent that the contract party has or incurs other
indebtedness and expenses and cannot pay all of its indebtedness or expenses, the contract party may choose to make payments to other creditors rather than us.
To
the extent a contract party incurs other indebtedness that is secured, such as mortgage, home equity, or auto loans, the ability of the secured creditors to exercise remedies against
the assets of the contract party may impair the contract party's ability to make payments to us under the brand contract. The contract party may also choose to repay obligations under secured
indebtedness before making required payments on the brand contract because the contract party has no collateral at risk in the case of the brand contract.
The financial and other information that we obtain 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 we anticipate.
Prior to entering into a brand contract, we conduct a review of the contract party that includes collecting financial and other
information from the contract party to evaluate financial suitability of the contract party, including a review of assets, liabilities, existing commitments, tax returns and credit scores. We also
conduct background checks and obtain credit reports from the major credit rating agencies to help us assess the ability of the contract party to meet their financial obligations. However, we do not
verify this information and it may be inaccurate or incomplete. For example, the credit score assigned to a contract party may not accurately reflect the actual likelihood that the contract party will
perform under the brand contract because the credit score may be based on outdated, incomplete or inaccurate consumer reporting data, and we do not verify the
information obtained from the contract party's credit report. If information that is supplied to us by the contract party or other third parties is inaccurate or incomplete, the risk of default on the
brand contract may be significant and may be higher than we anticipate.
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Our 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.
Prior to entering into a brand contract with an athlete, entertainer or other high profile individual, we conduct due diligence and
review the included contracts of such contract party and other documents to support our estimate of such contract party's projected brand income. As part of this due diligence process and assessment,
we will rely in part on the contract party to fully address our questions by disclosing all relevant information and, in some cases, on information provided by third parties. However, our due
diligence processes may not uncover all relevant facts, and our brand acquisitions may not be profitable. Although our brand contract with EJ Manuel obligates him to, and we intend to require future
contract parties, if any, to contractually agree to, disclose all material facts to us, we cannot guarantee that EJ Manuel or any future contract party will comply with such disclosure requirements or
that we can independently verify or uncover material events about EJ Manuel or any such future contract parties. For instance, in a documentary released in September 2013, Arian Foster admitted to
receiving money as a college football player during his senior year at the University of Tennessee, in violation of NCAA rules. While it is difficult to assess the reputational harm of such a
disclosure, an athlete's, entertainer's or other high profile individual's failure during our due diligence process to reveal all relevant information prior to our entering into the brand contract
with such athlete, entertainer or other high profile individual may result in an inaccurate assessment of such contract party's projected brand value potentially leading to acquisitions that may not
be profitable.
The valuation of our brand contracts and expected ABI requires us to make material assumptions that may ultimately prove to be incorrect. In such an event, we could suffer
significant losses that could materially and adversely affect our results of operations.
Our principal assets are expected to be derived from our brand contracts with athletes, entertainers and other high-profile
individuals. Those assets are considered "Level 3" assets under ASC 820, Fair Value Measurements and Disclosures, as there is currently no active market where we are able to observe
quoted prices for identical assets. As a result, our valuation of those assets incorporates significant inputs that are not observable. Fair value of future expected brand income is determined by
measuring expected returns on player contracts, anticipated lengths of player careers and related contracts, anticipated future endorsements and anticipated renewals of existing contracts based on
comparable individuals in the same industry. However, valuation of the expected brand income is highly speculative due to the heavily subjective nature of identifying comparable athletes or
entertainers and is inherently difficult due to the uniqueness of each professional athlete or entertainer and the limited number of available comparable athletes and entertainers.
The
fair value measurement of Level 3 assets is inherently uncertain and creates additional volatility in our financial statements that are not necessarily related to the
performance of the underlying assets. To determine the amount of our purchase price (and the equivalent fair value at the time) of our brand contract with EJ Manuel we applied discount rates ranging
from 4.5% to 20.0%, with a weighted average of 14.6%. We subjectively determined the discount rates applied in our analysis based on assumptions that have not been reviewed by any independent
financial advisor. If we determine in the future that the discount rates we used were too low, then our estimate of the fair value of any of our brand contracts may be too high. See the section
entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations" for a further discussion of fair value measurements.
Failure of a contract party to adequately protect their intellectual property could injure the value of the contract party's brand.
We invest in high-profile brands through our brand contracts. Therefore, the success of our brand contracts is dependent on the
contract party protecting their brand from intellectual property
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infringement
(such as counterfeiting and other unauthorized uses of their intellectual property rights). Although the contract parties may seek to protect the intellectual property rights associated
with their brand by ensuring that they own and control certain intellectual property rights in and to those assets and, where appropriate, by enforcing those intellectual property rights, it may not
be possible to detect all instances of brand infringement. Additionally, where instances of brand infringement are detected, we cannot guarantee that such instances will be prevented as there may be
legal or factual circumstances that give rise to uncertainty as to the validity, scope and enforceability of a contract party's intellectual property rights. We will have no rights under the brand
contract to enforce any intellectual property rights of the contract party or the brand. Infringement of their trademark, copyright and other intellectual property rights by others could have an
adverse effect on the brand income, and thus the ABI that we receive under the brand contract. If any contract party were to fail or be unable to secure, protect, maintain and/or enforce the
intellectual property rights that vest in his brand, then we could lose a portion of our cash stream that would have been received from such brand assets.
Our cash received under brand contracts may fluctuate due to seasonality.
The cash receipts under our brand contracts may be subject to seasonal variation, limiting the overall comparability of interim
financial periods. For example, the salary under NFL contracts is usually paid out in even installments during the course of the NFL season, or as a signing bonus according to varying schedules. The
NFL season occurs primarily in the third and fourth quarters of each calendar year. As a result, our interim results and any quarterly financial information may not be indicative of the financial
performance for the whole year.
An economic downturn and adverse economic conditions may harm a contract party's earning potential.
The recent economic downturn and adverse conditions in the global markets may negatively affect the earnings of a contract party. For
example, the NFL market salary cap is dependent upon the revenues the NFL receives. In addition, endorsements may depend in part on the actual or perceived personal disposable income of consumers and
marketing budgets of endorsement partners. These commercial contract payments are contingent upon the expenditures of businesses across a wide range of industries, which industries may cut costs in
response to any economic downturn.
Our ability to increase the value of any of our brands may be limited and our investments in the promotion of any of our brands may cause the market value of our stock to
decline.
Our management and board of directors will have complete discretion in determining the scope and execution of our brand promotion
efforts, if any, with respect to our tracking stock brands. Any investment we may make to promote our acquired brands will be for long-or medium-term results and would not be expected to increase
brand income in the near-term, if at all. Any expenditures that we may make on promotional activities that are attributable to a single tracking stock brand will be an attributable expense to that
tracking stock brand. To the extent that our promotional activities increase the attributable income of a tracking stock brand by an amount less than the attributable expenses for the promotion, the
attributed retained earnings of that tracking stock brand would decline. There can be no assurances that our management will promote any of our tracking stock brands in a manner that creates value for
the associated tracking stock or any of our other stockholders.
Confidentiality agreements with employees and others may not adequately prevent disclosures of our proprietary information and confidential information of the contract
party.
We have taken measures to protect our proprietary information and confidential information of the contract parties, but these measures
may not be effective. We require new employees and consultants to execute confidentiality agreements upon the commencement of an employment or
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consulting
arrangement with us. These agreements generally require that all confidential information developed by the individual or made known to the individual by us during the course of the
individual's relationship with us, including for example, information we acquire about the contract parties, be kept confidential and not disclosed to third parties. These agreements also generally
provide that inventions conceived by the individual in the course of rendering services to us shall be our exclusive property. Nevertheless, employees, collaborators or consultants may still disclose
or misuse our confidential information, and we may not be able to meaningfully protect our proprietary information and confidential information of the contract parties. In addition, others may
independently develop substantially equivalent information or techniques or otherwise lawfully gain access to our proprietary information and confidential information of the contract parties, and
thereafter communicate this information to others without maintaining its confidentiality. If this occurs, it may negatively impact our business and relationships with our current or future contract
parties, and may damage our reputation and limit our ability to enter into new brand contracts. In addition, costly and time-consuming litigation could be necessary to enforce our proprietary rights
or limit the prohibited disclosure of confidential
information, and failure to obtain or maintain protection of our proprietary information or the confidential information of the contract parties could adversely affect our competitive business
position.
Changes in government policy, legislation or regulatory or judicial interpretations could hinder or prevent our ability to conduct our business operations, including by
hindering or preventing our ability to enforce our brand contracts or conduct offerings of tracking stocks.
Changes in government policy, legislation or regulatory or judicial interpretations could hinder or prevent our ability to conduct our
business operations, including by hindering or preventing our ability to enforce our brand contracts or conduct offerings of tracking stocks. For example, we could be deemed to be subject to insurance
and other regulations, which in some circumstances may be applied retrospectively. In addition, our brand contracts are intended to be effective in perpetuity and may be terminated only upon mutual
agreement of the contract party and us. In some jurisdictions perpetual contracts have been found to be against public policy and therefore terminable in some circumstances. Our brand contracts are
governed by California law, and California legal decisions do not disfavor express contractual terms for indefinite duration. However, we can provide no assurances that a California court may not rule
differently in the future, or that a court of another jurisdiction might attempt to apply a different choice of law to our brand contracts. If this occurs then we may become involved in expensive and
time consuming litigation, or may be unable in certain cases to enforce our brand contracts. Any other changes in or interpretations of current laws and regulations could also require us to increase
our compliance expenditures, inhibit our ability to enter into new brand contracts or cause us to significantly alter or to discontinue offerings of additional tracking stocks. Altering the terms of
our brand contracts or tracking stocks to comply with changes in or interpretations of applicable laws and regulations could require significant legal expenditures, increase the cost of managing or
acquiring our brand contracts or make offerings of our tracking stocks less attractive to investors. In addition, our failure to comply with applicable laws and regulations could lead to significant
penalties, fines or other sanctions. If we are unable to effectively respond to any such changes or comply with existing and future laws and regulations, our competitive position, results of
operations, financial condition and cash flows could be materially adversely impacted.
The leagues, team owners, players associations, endorsement partners, elected officials or others may take actions that could restrict our ability or make it more costly for
us to enter into future brand contracts.
Our business model depends on the cooperation of various third parties. Because the brand contracts and offerings of tracking stocks
linked to the income of professional athletes and entertainers is a novel business model, there may be influential parties with interests that are adverse or perceived to be adverse to our business,
such as sports leagues, sports teams, fantasy sports networks or gambling institutions. These parties may seek to change the rules, policies, laws, regulations or legal
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interpretations
in ways to prohibit, or limit the success of, our business. For example, in 2010 the Cantor Futures Exchange received approval from the Commodities Futures Trading Commission to launch
the Hollywood Stock Exchange as a contract market for the trading of box office futures; however, the Motion Picture Association of America successfully lobbied members of the U.S. congress to pass
legislation making trading in box office futures illegal. In a similar manner, influential parties that perceive our business model to be a threat to their business or detrimental to professional
sports may attempt to lobby leagues, team owners, players associations, endorsement partners and elected officials to adopt rules, policies, laws, regulations or legal interpretations that inhibit us
from conducting our business. Any such changes may adversely affect the ability of our contract parties to perform their obligations under brand contracts, or inhibit our ability to enter into new
brand contracts with other contract parties. These changes could cover various requirements of the brand contract, such as prohibiting the sale or assignment of a portion of personal income, limiting
the ability to enter into contracts with an indefinite term or limiting the ability of the contract party to disclose information about included contracts to us. Any such changes prohibiting, or
limiting the enforceability of, any terms in the brand contract could prevent or inhibit our collection of the ABI to which we are entitled under the brand contract. Any limitations on the ability of
the contract party to disclose information about included contracts to us, or the SEC if we deemed it necessary, could limit the ability of a contract party to enter into such agreements subsequent to
entering into a brand contract with us. Any increase in the expenses associated with our management of the brand contract or decrease in the expected ABI that we will collect could materially and
adversely affect the value of shares of our Fantex Series EJ Manuel.
We are dependent on our management team, and the loss of any key member of this team may prevent us from implementing our business plan in a timely manner, or at all.
Our success depends largely upon the continued services of our executive officers and other key personnel, particularly Cornell "Buck"
French, our Chief Executive Officer, David Mullin, our Chief Financial Officer, and David Beirne, Chairman of our board of directors. Neither we nor Fantex Holdings have employment agreements with any
of our executive officers or key employees, other than Messrs. French and Mullin. The material terms of the agreements with Messrs. French and Mullin are described under "Executive
Compensation—Executive Compensation Arrangements." Our executive officers or key employees could terminate their employment with Fantex Holdings or us at any time without penalty. In
addition, we do not maintain key person life insurance policies on any of our employees or any of our contract parties. The loss of one or more of these executive officers or key employees could
seriously harm our business and may prevent us from implementing our business plan in a timely manner, or at all.
Risks Relating to Each of Our Contract Parties
Our ability to increase the value of our tracking stock brands may be limited and our investments in the promotion of such tracking stock brands may cause the market value
of our stock to decline.
Based on publicly reported and widely available information, endorsement deals with professional football players historically appear
to have been significantly smaller than endorsement deals with athletes from other professional sports such as golf and basketball. As a result, the endorsement potential of each of our contract
parties may be limited and we may be unable to increase the value of the associated tracking stock brands despite our efforts. To the extent that our promotional activities are unsuccessful, the
market value of shares of such tracking stock brands may decline. Furthermore, even if our promotion activities increase the endorsement income to the contract parties, they may nonetheless have a
negative impact on the market value of shares of our tracking stock because we will only receive a portion of any increased brand income. For example, because the ABI under our EJ Manuel brand
contract is 10% of brand income, our promotion efforts must exceed a return that is at
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least
ten times our investment in order to increase the value of the EJ Manuel Brand to the extent that we increase our cash receipts under the brand contract. There can be no assurances that our
management will promote any of our tracking stock brands in a manner that creates value for holders of shares of our tracking stock.
The value of our tracking stock brands is dependent upon the performance of, and to a lesser extent, the popularity of our contract parties.
Our cash receipts under each of our brand contracts are driven by the performance of, and to a lesser extent, the popularity of our
contract parties. The contract party's performance in his primary career directly affects, and a deterioration of his performance could adversely affect, the ABI under our brand contract. Poor or
mediocre performance could cause the contract party's playing contract to be terminated and may result in sponsors cancelling their
endorsements, or result in the contract party failing to qualify for additional incentive payments under existing or future endorsement contracts. We cannot ensure that any of our contract parties
will continue to be successful in their playing careers.
Contract parties in the NFL could be negatively affected by an NFL work stoppage.
If the NFL experiences a work stoppage, then the earnings of a contract party in the NFL, including each of our current contract
parties, will be adversely affected. In 1974 and 1982 the NFL experienced player strikes and in 2011 the NFL owners staged a "lockout" of the players. If either a strike or a lockout occurs during an
NFL season, player pay may be suspended. Each of our contract party's earnings are heavily dependent on his professional football salary and would be negatively affected by any such work stoppage.
This would have a negative impact on the payments we receive under the brand contract. We can give no assurances that such work stoppages will not occur.
Contract parties in the NFL could be negatively affected by current and future rules of the NFL.
Future changes to the NFL rules or other regulations may adversely affect the earnings of each of our contract parties in the NFL.
These regulations could cover various aspects of his participation, such as changes to the rules of the game resulting in a devaluation of their respective skill sets, changes governing player
eligibility and fines, and changes to the league's CBA. Changes in the format of the game and league in which the contract party plays could have a negative impact on his brand income and therefore,
will impact the ABI we receive under the respective brand contract.
There could be a decline in the popularity of the NFL and/or the team on which the contract party plays in the NFL, or a decline in the contract party's popularity.
There can be no assurance that the NFL will retain its popularity as a sport, together with the associated levels of media coverage. In
addition, either the team for which the contract party plays or the contract party could suffer a decline in popularity, including as a result of poor performance or behavior by the contract party or
any of his teammates or the team in general, particularly if such performance or behavior tarnishes the contract party's brand image. A contract party may be traded to another club in the NFL that has
a smaller media market and/or is less popular than the current team, or other teams or players in the NFL may gain popularity relative to the contract party by performing at a higher level, exhibiting
more appealing behavior, or otherwise. Any decline in popularity of the NFL, the team on which the contract party plays in the NFL, or the
contract party, or relative decline as compared to other teams or players, could result in lower offers for future endorsements and NFL player contracts, a reduction in the value of the contract party
or his brand, and a resulting decline in the value of shares of our tracking stock linked to the value and performance of the contract party's brand. Even if the contract party and the team on which
he plays in the NFL is successful, a substantial decline in the popularity of the NFL, whether as a result of increase in the popularity of other professional sports or the emergence of new spectator
sports, could have a material adverse effect on
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shares
of our tracking stocks, including shares of our Fantex Series EJ Manuel. Any one of these events or a combination of such events could have a material adverse effect on the trading
volume of our tracking stock and on the cash received under the brand contract associated with such contract party.
Risks Relating to EJ Manuel
EJ Manuel's NFL player contract is a significant portion of the current cash we would receive under his brand contract.
In 2013, EJ Manuel signed a four year contract with the Bills worth up to $8.89 million, and his professional football
compensation in the year ended December 31, 2013 made up over 90% of his annual income. This 2013 NFL player contract included a $4.84 million signing bonus with the remaining
$4.05 million to be paid out over the term of the contract. The maximum brand income remaining as of February 14, 2014 under his existing NFL player contract was $3.64 million,
all of which is guaranteed. We cannot guarantee that EJ Manuel will be able to enter into a new NFL player contract when the existing contract expires.
The profitability of EJ Manuel's brand contract is substantially dependent upon his ability to enter into additional high-value, multi-year NFL player contracts, and on his
ability to successfully attract and retain endorsements during his playing career and thereafter significantly in excess of amounts he has attracted historically and/or generate other brand income
after his playing career.
We anticipate that we will receive the majority of payments due under our brand contract with EJ Manuel during the period of his NFL
playing career. His current NFL player contract represents the source of substantially all of the brand income, and we expect that EJ Manuel's annual income will continue to be more heavily weighted
toward his NFL player contract than on other brand income generating activities.
The
length of EJ Manuel's NFL playing career is uncertain. EJ Manuel was born on March 19, 1990, and thus was 23 years old at the end of the 2013 NFL season. Unless earlier
terminated, EJ Manuel's current NFL player contract with the Bills will expire at the conclusion of the 2016 NFL season, but may be extended by the Bills to cover the 2017 season. Because EJ Manuel
will be 27 years old prior to the beginning of the 2018 season and quarterbacks generally retire from the NFL by their early 30s, NFL teams may be unwilling to enter into an NFL player contract
with EJ Manuel for any longer than three years. In addition, EJ Manuel may not continue to perform well as an NFL player and therefore, future earnings may be substantially less than those guaranteed
under his current NFL contract. If EJ Manuel is unable to sign a new NFL player contract or the terms of such new contract are materially worse than his current NFL player contract, the cash receipts
from our EJ Manuel Brand will decline, which in turn may cause the market value of shares of our Fantex Series EJ Manuel to decline.
In
addition, in valuing EJ Manuel's potential lifetime brand income we estimated an increase in the brand income EJ Manuel may earn as a result of his endorsements, as compared to his
historical earnings from endorsements. However, we do not know if his endorsement income will increase in the future, and we do not know if his reputation and brand will be enhanced as a result of his
being one of our first contract parties. In fact, his reputation and brand may be negatively affected by his willingness to enter into a brand contract and trade potential future earnings for present
income. If future endorsement partners or NFL teams suspect that EJ Manuel has hidden motives behind accepting an upfront cash payment in exchange for a portion of his future earnings, future
endorsement partners may be less willing to enter into contracts with EJ Manuel and may not find his promises of future performance under such contracts reliable. In addition, none of EJ Manuel's
current endorsement contracts last beyond 2017, and at least one of the endorsement contracts included in his brand income (and others he may enter into during his NFL playing career) may be
terminated if EJ Manuel does
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not
play for an NFL football team. Furthermore, EJ Manuel's ability to successfully attract and retain endorsements is dependent on EJ Manuel complying with the contractual requirements of those
endorsements and there is no guarantee that EJ Manuel will do so. Moreover, future endorsement
partners may be less willing to enter into contracts with EJ Manuel as a result of his entering into the brand contract with us in order to avoid public disclosure of their arrangements with EJ
Manuel. For the aforementioned reasons, EJ Manuel may be unable to renew existing endorsement deals on favorable terms, if at all, or may not be able to enter into new endorsement deals. In addition,
his ability to generate other brand income after his playing career, such as through coaching or broadcasting, is unproven. His failure to attract and maintain key endorsements or generate other brand
income after his playing career could have a negative impact on our cash received under the brand contract.
The
opportunity to receive a return of capital or any profit from an investment in our Fantex Series EJ Manuel will depend in large part upon EJ Manuel's ability to enter into
additional high-value, multi-year NFL player contracts and on his ability over the same period and beyond to enter into and maintain endorsement contracts that are significantly in excess of those he
has had historically.
EJ Manuel has incurred other secured debt, including auto and mortgage payables, the payment of which may adversely impact his ability to make payments under the brand
contract.
There exist outstanding mortgage loans payable by EJ Manuel to secured creditors. The ability of secured creditors to exercise remedies
against the assets of EJ Manuel, including his real estate properties, may impair EJ Manuel's ability to make payments to us under the brand contract. EJ Manuel may also choose to repay obligations
under secured indebtedness before making required payments on the brand contract because the contract party has no collateral at risk in the case of the brand contract. If EJ Manuel declares
bankruptcy any amounts owed to us may only be paid out after all of his secured debt is repaid.
EJ Manuel may suffer from an injury, illness or a medical condition; any injuries, illnesses or medical conditions of EJ Manuel may affect the cash received by us under the
brand contract.
Any injury, illness or a medical condition of EJ Manuel could cause you to lose a substantial portion or all of your investment in
Fantex Series EJ Manuel. Even if not career ending, an injury, illness or a medical condition could have a negative effect upon EJ Manuel's performance and may result in a loss of brand income
that would otherwise have resulted from current and future NFL player contracts. A reduction in brand income will reduce our ABI, our ability to make dividend payments, if any, and have a negative
impact on the value of shares of our Fantex Series EJ Manuel. Any of these outcomes could also affect our ability to enter into additional brand contracts or to finance the acquisition of
additional brands, which would have an adverse impact on our ability to execute on our business strategy.
In
August 2013 EJ Manuel had minor surgery on his left knee and missed two pre-season games. On October 3, 2013, during the third quarter in a game against the Cleveland Browns,
Manuel sprained the lateral collateral ligament in his right knee. This injury caused him to miss 4 games of the 2013 season. In December 2013, EJ Manuel sprained the lateral collateral ligament in
his left knee and missed the last two games of the 2013 NFL season. In January 2014, EJ Manuel had an arthroscopic procedure performed on each of his knees. EJ Manuel has experienced these knee
injuries and other instances of normal wear and tear as an athlete in Division I college football and the NFL and we expect that EJ Manuel will continue to experience such wear and tear. Any worsening
of these conditions, or re-injury or new injury, could materially and adversely affect EJ Manuel's playing performance and the value of the EJ Manuel Brand.
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A
substantial portion of our anticipated income under the brand contract is attributable to EJ Manuel's current and future NFL player contracts. To the extent that the value of your
investment is dependent on the competitive success of EJ Manuel, the likelihood of achieving such success is substantially reduced by serious or untimely injuries to EJ Manuel. If EJ Manuel is unable
to play as a result of any injury, illness or a medical condition he may be unable to enter into any future NFL player contracts. Even if EJ Manuel continues to receive payments under his endorsement
contracts, his ability to maintain sponsors and his ability to attract new sponsors may be severely diminished.
Future negative publicity could damage EJ Manuel's reputation and impair the value of his brand.
The return on your investment in shares of our Fantex Series EJ Manuel heavily depends on the value and strength of EJ Manuel's
brand and reputation as well as the financial success of Fantex as a whole. EJ Manuel has in the past received, and we expect that in the future he will continue to receive, media coverage.
Unfavorable publicity regarding his professional performance or his behavior off the field could negatively affect his brand and reputation. For example, in a January 23, 2014 column published
online by
Sports Illustrated
, writer Don Banks described EJ Manuel's rookie season as "uneven and injury marred." Mike Rodak at ESPN.com mentioned on
more than one occasion that given EJ Manuel's injury history and varied performance during his first season, that the Bills will need more options for a quarterback than just EJ Manuel, which
according to Chris Wesseling, an
Around the League
writer, is an option that the Bill's coach, Doug Morrone, is entertaining. Additional negative
publicity regarding his on-filed performance or otherwise could damage his reputation and impair the value of his brand. Moreover, certain of EJ Manuel's endorsement agreements contain "morality"
clauses which would permit counterparties to endorsement agreements to terminate those agreements in certain circumstances (such as if he were charged with a felony or other crime involving fraud,
dishonesty, violence, physical harm to another person, possession or use of illegal drugs or moral turpitude), further reducing our ABI.
Risks Relating to Vernon Davis
Vernon Davis's NFL player contract is a significant portion of the current cash we would receive under his brand contract.
In 2010, Vernon Davis signed a six year contract with the 49ers worth up to $42.5 million, and his professional football
compensation in the year ended December 31, 2012 made up over 90% of his annual income. This 2010 NFL player contract included a $10.0 million signing bonus with the remaining
$32.5 million to be paid out over the term of the contract. The maximum brand income remaining as of October 30, 2013 under his existing NFL player contract was $13.7 million,
none of which is guaranteed. Therefore, much of the cash expected to be received under our brand contract with Vernon Davis is tied to his professional football career and is not guaranteed. If he
does not play for any reason or if the 49ers decide to release him because of a decline in the quality of his play, an injury, illness or medical condition or for any other reason, then he will not
receive any of the remaining salary other than the guaranteed portion. We cannot guarantee that Vernon Davis will continue to be paid according to the terms of his current NFL player contract, or that
he will be able to enter into a new NFL player contract when the existing contract expires.
The profitability of Vernon Davis's brand contract is substantially dependent upon Vernon Davis's ability to enter into at least one additional multi-year NFL player
contract for at least $33 million, and, to a lesser extent, on his ability to successfully attract and retain endorsements during his playing career and thereafter in excess of amounts he has
attracted historically and/or generate other brand income after his playing career.
We anticipate that we will receive the majority of payments due under our brand contract with Vernon Davis during the period of his NFL
playing career. His current NFL player contract represents the source of substantially all of the brand income, and we expect that Vernon Davis's annual income
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will
continue to be more heavily weighted toward his NFL player contract than on other brand income generating activities.
The
length of Vernon Davis's NFL playing career is uncertain, however, tight ends generally retire from the NFL by their early 30s. Vernon Davis was born on January 31, 1984, and
thus was 29 years old at the start of the 2013 NFL season. Unless earlier terminated, Vernon Davis's current NFL player contract with the 49ers will expire at the conclusion of the 2015 NFL
season. Because Vernon Davis will be 32 years old prior to the beginning of the 2016 season, NFL teams may be unwilling to enter into a long-term NFL player contract with Vernon Davis on terms
comparable to his current NFL player contract, if at all. As a result, Vernon Davis may have already reached the peak of his earnings from his football salary. In addition, Vernon Davis may not
continue to perform well as an NFL player and therefore, future earnings may be substantially less than those realized over the past few years. If Vernon Davis is unable to sign a new NFL player
contract or the terms are materially worse than his current NFL player contract, the cash receipts from our Vernon Davis Brand will decline.
In
addition, in valuing Vernon Davis's potential lifetime brand income we estimated an increase in the brand income Vernon Davis may earn as a result of his endorsements, as compared to
his historical earnings from endorsements. However, we do not know if his endorsement income will increase in the future, and we do not know if his reputation and brand will be enhanced as a result of
his being one of our first contract parties. In fact, his reputation and brand may be negatively affected by his willingness to enter into a brand contract and trade potential future earnings for
present income. If future endorsement partners or NFL teams suspect that Vernon Davis has hidden motives behind accepting an upfront cash payment in exchange for a portion of his future earnings,
future endorsement partners may be less willing to enter into contracts with Vernon Davis and may not find his promises of future performance under such contracts reliable. In addition, none of Vernon
Davis's current endorsement contracts last beyond the third quarter of 2016, and at least one of the endorsement contracts included in his brand income (likely also including those he may enter into
during his NFL playing career) may be terminated if Vernon Davis does not play for an NFL football team. Furthermore, Vernon Davis's ability to successfully attract and retain endorsements is
dependent on Vernon Davis complying with the contractual requirements of those endorsements and there is no guarantee that Vernon Davis will do so. For example, as a result of Vernon Davis tweeting
about a competing product, a coconut water company recently terminated its contract with him as a spokesperson. Moreover, future endorsement partners may be less willing to enter into contracts with
Vernon Davis as a result of his entering into the brand contract with us in order to avoid public disclosure of their arrangements with Vernon Davis. For the aforementioned reasons, Vernon Davis may
be unable to renew existing endorsement deals on favorable terms, if at all, or may not be able to enter into new endorsement deals. In addition, his ability to generate other brand income after his
playing career, such as through coaching or broadcasting, is unproven. His failure to attract and maintain key endorsements or generate other brand income after his playing career could have a
negative impact on our cash received under the brand contract.
The
opportunity to receive a return of capital or any profit from our brand contract with Vernon Davis will depend in large part upon Vernon Davis's ability to enter into at least one
additional multi-year
NFL player contract for at least $33 million and on his ability over the same period and beyond to enter into and maintain endorsement contracts that are in excess of those he has had
historically.
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Vernon Davis has incurred other secured debt, including auto and mortgage payables, the payment of which may adversely impact his ability to make payments under the brand
contract.
There exist several outstanding auto and mortgage loans payable by Vernon Davis to secured creditors. The ability of secured creditors
to exercise remedies against the assets of Vernon Davis, including his automobile and several real estate properties, may impair Vernon Davis's ability to make payments to us under the brand contract.
Vernon Davis may also choose to repay obligations under secured indebtedness before making required payments on the brand contract because the contract party has no collateral at risk in the case of
the brand contract. If Vernon Davis declares bankruptcy any amounts owed to us may only be paid out after all of his secured debt is repaid.
Vernon Davis may suffer from an injury, illness or a medical condition; any injuries, illnesses or medical conditions of Vernon Davis may affect the cash received by us
under the brand contract.
Any injury, illness or a medical condition of Vernon Davis could adversely impact the cash received by us under our Vernon Davis brand
contract. Even if not career ending, an injury, illness or a medical condition could have a negative effect upon Vernon Davis's performance and may result in a loss of brand income that would
otherwise have resulted from current and future NFL player contracts. A reduction in brand income will reduce our ABI, our ability to make dividend payments, if any, and have a negative impact on the
value of shares of our Fantex Series Vernon Davis. Any of these outcomes could also affect our ability to enter into additional brand contracts or to finance the acquisition of additional brands,
which would have an adverse impact on our ability to execute on our business strategy.
On
September 24, 2006, Vernon Davis left a regular season NFL game in the third quarter after sustaining a fracture to his left fibula. This injury caused him to miss six games
during the 2006 NFL regular season. After suffering a concussion, Vernon Davis was forced to temporarily leave a regular season game on December 31, 2006. On September 23, 2007, Vernon
Davis left a regular season NFL game early after suffering a sprain to his right knee. This injury caused him to miss the following two regular season games. Vernon Davis also missed portions of two
regular season NFL games in the 2010 season following a reported ankle injury. On December 23, 2012, Vernon Davis was reported to leave an NFL game early after suffering a concussion. On
September 15, 2013, Vernon Davis left a regular season NFL game early in the fourth quarter with a hamstring strain, which injury also caused him to miss a game the subsequent week. Most
recently, on November 10, 2013, Vernon Davis was reported to leave a regular season game early as a result of suffering a concussion. Vernon Davis has experienced these and other instances of
normal wear and tear as an athlete in the NFL and we expect that Vernon Davis will continue to experience such wear and tear. Any worsening of these conditions, or re-injury or new injury, could
materially and adversely affect Vernon Davis's playing performance and the value of the Vernon Davis Brand.
A
substantial portion of our income under the brand contract is attributable to Vernon Davis's NFL player contract. To the extent that the value of your investment is dependent on the
competitive success of Vernon Davis, the likelihood of achieving such success is substantially reduced by serious or untimely injuries to Vernon Davis. Vernon Davis is not contractually guaranteed to
receive any portion of his NFL player contract. If Vernon Davis is unable to play as a result of any injury, illness or a medical condition he may lose those portions of his contract payable on the
achievement of performance based incentives, those portions of his contract not guaranteed against injury, illness or a medical condition and may be unable to enter into any future NFL player
contracts. Additionally, Vernon Davis may not be paid under his endorsement contracts if he fails to play in a specified number of NFL games. Even if Vernon Davis continues to receive payments under
his endorsement contracts, his ability to maintain sponsors and his ability to attract new sponsors may be severely diminished.
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Future negative publicity could damage Vernon Davis's reputation and impair the value of his brand.
The cash receipts under our Vernon Davis brand contract heavily depend on the value and strength of Vernon Davis's brand and
reputation. Vernon Davis has in the past received, and we expect that in the future he will continue to receive, media coverage. Unfavorable publicity regarding his professional performance or his
behavior off the field could negatively affect his brand and reputation. For example, in September 2010, it was widely reported that Vernon Davis initiated a fight at training camp with a fellow
teammate leading to some negative media coverage. Any future negative publicity as a result of similar incidents or otherwise could damage his reputation and impair the value of his brand. Moreover,
certain of Vernon Davis's endorsement agreements contain "morality" clauses which would permit counterparties to endorsement agreements to terminate those agreements in certain circumstances (such as
if he were charged with a felony or other crime involving fraud, dishonesty, violence, physical harm to another person, possession or use of illegal drugs or moral turpitude), further reducing our
ABI.
Risks Relating to Arian Foster
Arian Foster's NFL player contract is a significant portion of the current cash we would receive under his brand contract.
In 2012, Arian Foster signed a five year contract with the Texans worth up to $43.5 million, and his professional football
compensation in that year made up over 90% of his annual income. This 2012 NFL player contract included a $12.5 million signing bonus with the remaining $31.0 million to be paid out over
the term of the contract. The maximum brand income remaining as of June 30, 2013 under his existing NFL player contract was $25.5 million, of which only $3.25 million is
guaranteed other than if, prior to or during the 2013 season, he either fails or refuses to report, practice or play for the team for any reason other than injury (or death) suffered while performing
services under the contract or is in material breach of his NFL player contract. Therefore, much of the cash expected to be received under our brand contract with Arian Foster is tied to his
professional football career and is not guaranteed. If he does not play for any reason or if the Texans
decide to release him because of a decline in the quality of his play, an injury, illness or medical condition or for any other reason, then he will not receive any of the remaining salary other than
the guaranteed portion. We cannot guarantee that Arian Foster will continue to be paid according to the terms of his current NFL player contract, or that he will be able to enter into a new NFL player
contract when the existing contract expires.
The profitability of Arian Foster's brand contract is substantially dependent upon Arian Foster's ability to enter into at least one additional multi-year NFL player
contract on economic terms that are comparable to his existing NFL player contract, and, to a lesser extent, on his ability to successfully attract and retain endorsements during his playing career
and thereafter in excess of amounts he has attracted historically and/or generate other brand income after his playing career.
We anticipate that we will receive the majority of payments due under our brand contract with Arian Foster during the period of his NFL
playing career. His current NFL player contract represents the source of substantially all of the brand income, and we expect that Arian Foster's annual income will continue to be more heavily
weighted toward his NFL player contract than on other brand income generating activities.
The
length of Arian Foster's NFL playing career is uncertain, however, running backs generally retire from the NFL by their early 30s. Arian Foster was born on August 24, 1986,
and thus was 27 years old at the start of the 2013 NFL season. Unless earlier terminated, Arian Foster's current NFL player contract with the Texans will expire at the conclusion of the 2016
NFL season. Because Arian Foster will be 30 years old prior to the beginning of the 2017 season, NFL teams may be unwilling to enter into a long-term NFL player contract with Arian Foster on
terms comparable to his current NFL
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player
contract, if at all. As a result, Arian Foster may have already reached the peak of his earnings from his football salary. In addition, Arian Foster may not continue to perform well as an NFL
player and therefore, future earnings may be substantially less than those realized over the past few years. If Arian Foster is unable to sign a new NFL player contract or the terms are materially
worse than his current NFL player contract, the cash receipts from our Arian Foster Brand will decline.
In
addition, in valuing Arian Foster's potential lifetime brand income we estimated a significant increase in the brand income Arian Foster may earn as a result of his endorsements, as
compared to his historical earnings from endorsements. We believe this was appropriate for several reasons, including that Arian Foster was an un-drafted free agent, and thus his historical
endorsement earnings in his first several seasons may be significantly lower than his longer-term potential. However, we do not know if his endorsement income will increase in the future, and we do
not know if his reputation
and brand will be enhanced as a result of his being our first contract party. In fact, his reputation and brand may be negatively affected by his willingness to enter into a brand contract and trade
potential future earnings for present income. If future endorsement partners or NFL teams suspect that Arian Foster has hidden motives behind accepting an upfront cash payment in exchange for a
portion of his future earnings, future endorsement partners may be less willing to enter into contracts with Arian Foster and may not find his promises of future performance under such contracts
reliable. In addition, none of Arian Foster's current endorsement contracts last beyond the first quarter of 2015, and many of the endorsement contracts included in his brand income (likely also
including those he may enter into during his NFL playing career) may be terminated if Arian Foster does not play for an NFL football team. Moreover, future endorsement partners may be less willing to
enter into contracts with Arian Foster as a result of his entering into the brand contract with us in order to avoid public disclosure of their arrangements with Arian Foster. For the aforementioned
reasons, Arian Foster may be unable to renew existing endorsement deals on favorable terms, if at all, or may not be able to enter into new endorsement deals. In addition, his ability to generate
other brand income after his playing career, such as through coaching or broadcasting, is unproven. His failure to attract and maintain key endorsements or generate other brand income after his
playing career could have a negative impact on our cash received under the brand contract.
The
opportunity to receive a return of capital or any profit from our brand contract with Arian Foster will depend in large part upon Arian Foster's ability to enter into at least one
additional multi-year NFL player contract on terms that are, on an average annualized basis, economically comparable to his existing NFL player contract and on his ability over the same period and
beyond to enter into and maintain endorsement contracts that are significantly in excess of those he has had historically.
Arian Foster may suffer from an injury, illness or a medical condition; any injuries, illnesses or medical conditions of Arian Foster may affect the cash received by us
under the brand contract.
Any injury, illness or a medical condition of Arian Foster could adversely impact the cash received by us under our Arian Foster brand
contract. Even if not career ending, an injury, illness or a medical condition could have a negative effect upon Arian Foster's performance and may result in a loss of brand income that would
otherwise have resulted from current and future NFL player contracts. A reduction in brand income will reduce our ABI, our ability to make dividend payments, if any, and have a negative impact on the
value of shares of our Fantex Series Arian Foster. Any of these outcomes could also affect our ability to enter into additional brand contracts or to finance the acquisition of additional brands,
which would have an adverse impact on our ability to execute on our business strategy.
On
December 23, 2012, Arian Foster left a regular season NFL game early with an irregular heartbeat. He is also reported to have experienced a similar condition on eight prior
occasions since he was 12 years old. On January 31, 2013, Alex Flanagan of the NFL Network reported that Arian Foster
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would
likely undergo an ablation surgical procedure, a process by which biological tissue is removed using lasers or chemicals. On February 1, 2013 the Texans publicly released a statement by
Arian Foster stating that he had not, and did not have any current plans to, discuss a surgery with his doctors. Any current or future heart condition could adversely affect Arian Foster's playing
performance or ability to fulfill his obligations under his NFL player contract, which in turn could materially and adversely affect the revenues of our Arian Foster Brand.
In
addition, Arian Foster played with a torn meniscus, or cartilage in his knee, during the 2010 NFL season, without publicly disclosing the injury until after the season when he
underwent surgery to repair the injury. Arian Foster's playing status was questionable for two games during the 2011 NFL season and was inactive for two more games in the season, missing three full
games due to hamstring issues. Arian Foster re-aggravated this injury during an NFL regular season game on October 20, 2013 and left that game during the first quarter. A knee injury during the
2012 pre-season also made his season debut questionable. In addition, Arian Foster recently underwent an MRI on his right calf that was strained during off-season practice in May 2013 and missed most
of 2013 training camp due to a lingering back pain. Arian Foster has experienced these and other instances of normal wear and tear as an athlete in the NFL and we expect that Arian Foster will
continue to experience such wear and tear. Any worsening of these conditions, or re-injury or new injury, could materially and adversely affect Arian Foster's playing performance and the value of the
Arian Foster Brand. In addition, continuing to play while injured could lead to additional injuries and prematurely end Arian Foster's NFL career and significantly impair the value of the Arian Foster
Brand.
A
substantial portion of our income under the brand contract is attributable to Arian Foster's NFL player contract. To the extent that the value of your investment is dependent on the
competitive success of Arian Foster, the likelihood of achieving such success is substantially reduced by serious or untimely injuries to Arian Foster. Arian Foster is only contractually guaranteed to
receive a portion of his NFL player contract. If Arian Foster is unable to play as a result of any injury, illness or a medical condition he may lose those portions of his contract payable on the
achievement of performance based incentives, those portions of his contract not guaranteed against injury, illness or a medical condition and may be unable to enter into any future NFL player
contracts. Additionally, Arian Foster may not be paid under his endorsement contracts if he fails to play in a specified number of NFL games. Even if Arian Foster continues to receive payments under
his endorsement contracts, his ability to maintain sponsors and his ability to attract new sponsors may be severely diminished.
Future negative publicity could damage Arian Foster's reputation and impair the value of his brand.
The cash receipts under our Arian Foster brand contract heavily depend on the value and strength of Arian Foster's brand and
reputation. Arian Foster has in the past received, and we expect that in the future he will continue to receive, media coverage. Unfavorable
publicity regarding his professional performance or his behavior off the field could negatively affect his brand and reputation. For example, although we are not aware of any other similar incidents,
in November 2006, Arian Foster and two other team members of the Tennessee Volunteer's football team were arrested after an altercation at a night club. In a documentary released in September 2013,
Arian Foster admitted to receiving money as a college football player during his senior year at the University of Tennessee, in violation of NCAA rules. Arian Foster also became the subject of a
recent lawsuit filed by an alleged mistress claiming harassment. Any future negative publicity as a result of similar events or otherwise could damage Arian Foster's reputation and impair the value of
his brand. Moreover, certain of Arian Foster's endorsement agreements contain "morality" clauses which would permit counterparties to endorsement agreements to terminate those agreements in certain
circumstances (such as if he were charged with a felony or other crime involving fraud, dishonesty, violence, physical harm to another person, possession or use of illegal drugs or moral turpitude),
further reducing our ABI.
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Risks Relating to our Tracking Stock Structure
There are numerous risks you should be aware of with respect to how we intend to structure our business and our proposed tracking stock structure
Our amended and restated certificate of incorporation authorizes us to establish and issue from time to time one or more series of
common stock and to determine the terms and rights of each such series. For example, we have already designated or are planning to designate the tracking series brands and the series of tracking
stocks described in the section entitled "Management and Attribution Policies" beginning on page 108. We intend to enter into additional brand contracts in the future, and we intend to
establish and issue an additional series of common stock, which we refer to as our tracking stock, with each new brand contract. Each tracking stock would be intended to track and reflect the separate
economic performance of the assets and expenses associated with the associated brand contract. As a result, we expect to issue multiple tracking stocks in the future, and there are numerous risks
associated with our proposed tracking stock structure. However, to the extent that we fail to issue any additional tracking stocks or fail to consummate the offering of Fantex Series Arian Foster or
Fantex Series Vernon Davis, Fantex Series EJ Manuel will carry the full burden of our general liabilities, costs and expenses (including, for example, the full amount of the service fee we pay
to our parent pursuant to the management agreement), and the economic performance of the Fantex Series EJ Manuel will be more heavily dependent upon our aggregate financial performance.
A specified portion of the ABI associated with each of our brand contracts will be attributed to our platform common stock rather than the associated tracking stock.
Therefore each of our tracking stocks will only partially reflect the economic performance of the associated brand contract and other assets and expenses of the associated tracking stock brand.
Our Fantex Series EJ Manuel is intended to track the performance of our EJ Manuel Brand. However, we are attributing to the EJ
Manuel Brand only 95% of the ABI under the EJ Manuel brand contract. The remaining 5% of ABI under the EJ Manuel brand contract will be attributed to our platform common stock. Similarly, in the
future when we issue additional tracking stocks we intend to attribute a portion of the ABI under the associated brand contracts to the platform common stock. Therefore, each of our tracking stocks
will only partially reflect the economic performance of the associated brand contract and other assets and expenses of the associated tracking stock brand, even though we may use the proceeds of this
offering and future tracking stock offerings to fund the full purchase price of the associated brand contract.
In
addition, an investment in any of our tracking stocks would not represent an ownership interest in any related tracking stock brand or assets associated with any particular tracking
stock. Rather, an investment in any of our tracking stocks would represent an ownership interest in one consolidated company, Fantex.
As a series of our common stock, each of our tracking stocks will be exposed to additional risks associated with our company as a whole, including any individual tracking
stock that exists at the time of the offering or that we may establish and issue in the future.
Investors in any of our tracking stocks will be our common stockholders and an investment in a tracking stock will represent an
ownership interest in our company as a whole, which will expose holders to additional risks associated with any individual tracking stock that exists at the time of any investment or that we may
establish and issue in the future, even if an investor only owns shares of one series of our common stock. For example, holders of Fantex Series EJ Manuel will be exposed to the risks
associated with the offering of our Fantex Series Vernon Davis and Fantex Series Arian Foster, as set forth under the section entitled "—Risks Relating to Vernon Davis,"
"—Risks Relating to Arian Foster," and "—Risks Relating to the Issuance of Additional Tracking Stocks, Including the Issuance of
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Fantex
Series Arian Foster." We will attribute, for financial reporting purposes, assets, liabilities, revenue, expenses and cash flows to tracking units that we establish for brands we acquire in the
future, and we will include unaudited attributed financial information as part of our financial reporting for each tracked unit we establish. However, holders of any of our tracking stocks will not
have any legal rights related to specific assets attributed to the associated tracked unit. Rather, Fantex will retain legal title to all of its assets, including assets attributed to any of our
current tracking stock brands or any other tracking stock brand we establish in the future, and, in any liquidation, holders of our tracking stocks and holders of any other tracking stocks we may
establish in the future, together with holders of our platform common stock, will be entitled to receive a proportionate share of our available net assets available for distribution to stockholders
after we satisfy our creditors, including creditors of any tracking stock brand other than a tracking stock brand related to a tracking stock in which you may invest. See "Description of Capital
Stock—Common Stock—Liquidation."
Our board of directors will have discretion to reattribute assets and liabilities of any tracking stock brand without the approval of our holders of that tracking stock
brand.
Our board of directors will have discretion to reattribute assets and liabilities of one tracking stock brand to another tracking stock
brand without the approval of our stockholders or the holders of any tracking stocks related to the impacted tracking stock brands. This may make it difficult to assess the future prospects of the EJ
Manuel Brand or any other tracking stock brand. Any reattribution made by our board of directors, as well as the existence of the right in and of itself to effect a reattribution, may impact the
ability of investors to assess the future prospects of the EJ Manuel Brand or any other tracking stock brand, including its liquidity and capital resource needs. Our stockholders may also have
difficulty evaluating the liquidity and capital resources of each of our tracking stock brands based on past performance, as our board of directors may use one tracking stock brand's liquidity to fund
another tracking stock brand's liquidity and capital requirements through the use of inter-series loans and inter-series equity investments.
We
could be required to use assets attributed to one tracking stock brand to pay liabilities attributed to another tracking stock brand. The assets attributed to one tracking stock brand
are potentially subject to the liabilities attributed to another tracking stock brand, even if those liabilities arise from lawsuits, contracts or indebtedness that are attributed to such other
tracking stock brand. While our current management and attribution policies provide that reattributions of assets between tracking stock brands will result in the creation of an inter-series loan or
be considered an inter-series equity investment or an offsetting reattribution of cash or other assets, no provision of our amended and restated certificate of incorporation prevents us from
satisfying liabilities of one tracking stock brand with assets of another tracking stock brand, and our creditors will not in any way be limited by our capital structure from proceeding against any
assets they could have proceeded against if we did not have any tracking stocks. As a result, although we intend for the tracking stocks to track the performance of the tracking stock brand, we cannot
provide any guarantee that the tracking stock will in fact track the performance of such tracking stock brand and that a particular tracking stock, including the Fantex Series EJ Manuel, will
not be subject to a disproportionate share of the burden of any non- performing brand contracts,
whether or not included in the assets attributed to such tracking stock, and will not be attributed a disproportionate amount of our general liabilities, costs and expenses.
The market price of our tracking stock may not reflect the intrinsic value or performance of the associated tracking stock brand.
The market price of our tracking stock may not reflect the performance of the associated tracking stock brand. Holders of our tracking
stock will be common stockholders of Fantex as a whole and, as such, will be subject to all risks associated with an investment in Fantex and all of our tracking stock
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brands,
assets and liabilities. As a result, the market price of our tracking stock may reflect the performance of Fantex as a whole or may more independently reflect the performance of some or all of
the assets attributed to the associated tracking stock brand. We intend to value each of our brand contracts using the fair value option under ASC 825. Please see "Management's Discussion and Analysis
of Financial Condition and Results of Operations—Critical Accounting Policies." Our fair value determination may be different from the implied value of a brand contract based on the market
price for our tracking stock. In addition, investors may discount the value of any of our tracking stock because it is part of a common enterprise rather than a stand-alone entity.
The market price of our tracking stock may be more volatile than other publicly traded common stock because of our unique capital structure.
The market price of our tracking stock may be volatile, could fluctuate substantially and could be affected by factors that do not
affect other publicly-traded common stock. Our capital structure and business model is unique and we do not know how the market will react. In addition, to the extent the market prices of any of our
tracking stock reflect the performance of more focused tracking stock brands, assets and liabilities than traditional common stock, the market prices of our tracking stock may be more volatile than
the market price of traditional common stock because they may be more sensitive to events or circumstances that could impact the associated tracking stock brand. The market prices of any of our
tracking stock may be materially affected by, among other things:
•
actual or anticipated fluctuations in brand income or expected brand income attributed to the associated tracking stock
brand, or in other operating results related to the associated tracking stock brand;
•
potential acquisition activity by Fantex, including in brands we acquire or that we publicly announce that we intend to
acquire or that people anticipate we may acquire;
•
changes in estimates of brand income by analysts or commentators;
•
the complex nature and the potential difficulties investors may have in understanding the terms of our Fantex
Series EJ Manuel, the terms of our platform common stock or any other tracking stock, or our business model, as well as concerns regarding the possible effect of certain of those terms on an
investment in our stock;
•
actual or anticipated liabilities or expenses attributed to the associated tracking stock brand or any other tracking
stock brand or Fantex as a whole; and
•
general market conditions.
Our capital structure may create conflicts of interest for our board of directors and management, which could have a material adverse effect on the market value of any of
our tracking stocks.
Our tracking stock capital structure could create conflicts of interest, and our board of directors may make decisions that could
adversely affect only some holders of our common stock. Our tracking stock capital structure could give rise to occasions when the interests of holders of one tracking stock might diverge or appear to
diverge from the interests of holders of another tracking stock. In addition, there may be inherent conflicts of interests between any of our tracking stocks and the platform common stock. Our
tracking stock brands are not separate entities and thus holders of our Fantex Series EJ Manuel, platform common stock and any future tracking stocks will
not have the right to elect separate boards of directors. As a result, our officers and directors owe fiduciary duties to Fantex as a whole and all of our stockholders as opposed only to holders of a
particular tracking stock. Decisions deemed to be in the best interest of Fantex and all of our stockholders may not be in the
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best
interest of a particular tracking stock when considered independently. Examples include decisions relating to:
•
the terms of any business relationships that may be created between and among any of our tracking stock brands and the
platform common stock or the terms of any reattributions of assets between any of our tracking stock brands and the platform common stock;
•
the timing of a merger or other change of control transaction involving Fantex and its impact on the allocation of
consideration among the holders of our Fantex Series EJ Manuel, any future tracking stocks and platform common stock;
•
the allocation of corporate opportunities between any of our tracking stock brands, especially where the opportunities
might meet the strategic business objectives of more than one tracking stock brand;
•
operational and financial matters that could be considered detrimental to one tracking stock brand but beneficial to
another tracking stock brand;
•
the conversion of shares of any of our tracking stock brands into shares of platform common stock;
•
the creation of any new tracking stocks;
•
the making of, and, if made, the subsequent increase or decrease of any inter-series equity investments that one tracking
stock brand may make in another tracking stock brand;
•
the internal or external financing or assets attributable to any of our tracking stock brands;
•
the dispositions of assets of any of our tracking stock brands; and
•
the payment of any dividends on any of our tracking stocks or our platform common stock.
Our parent, as a holder of our platform common stock, will have control over key decision making as a result of their control over a majority of our voting stock.
Following this offering, our parent will be able to exercise voting rights with respect to an aggregate of 100,000,000 shares of common
stock, representing a majority of the voting power of our outstanding capital stock following our initial public offering. Our platform common stock and each of our tracking stocks, including our
Fantex Series EJ Manuel being offered in this initial public offering, are each entitled to one vote per share. As a result, our parent will hold substantially all of the voting power of our
outstanding capital stock following our initial public offering and will have the ability to control the outcome of matters submitted to our stockholders for approval, including the election of
directors and any merger, consolidation, or sale of all or substantially all of our assets. As a stockholder, even a controlling stockholder, our parent is entitled to vote its shares in its own
interests, which may not always be in the interests of our stockholders generally. Our parent will continue to control a majority of the combined voting power of our common stock and therefore be able
to control all matters submitted to our stockholders for approval so long as the shares of our platform common stock represent a majority of all outstanding shares of our common stock. This
concentrated control will limit your ability to influence corporate matters for the foreseeable future.
Ownership of our platform common stock by our parent company and any of our officers or directors, may create, or appear to create, conflicts of interest with holders of our
tracking stocks.
Ownership of platform common stock by our parent company and any of our officers or directors, may create or appear to create conflicts
of interest. Our parent company and our directors or officers directly or indirectly own an interest in platform common stock and not in any of our tracking stocks, including Fantex Series EJ
Manuel. This disparity could create or appear to create conflicts of interest
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when
our parent company or any of our officers or directors are faced with decisions that could have different implications for the holders of shares of Fantex Series EJ Manuel and holders of
platform common stock.
Our officers and directors may have a conflict of interest or appear to have a conflict since almost all of our officers are also officers of Fantex Holdings.
Almost all of our officers are also the members of our parent's board and officers of our parent company. Because our parent holds all
of our platform common stock, its interests are expected to conflict in certain respects with the interests of holders of our Fantex Series EJ Manuel or additional tracking stocks. Furthermore,
since our parent is also required to provide services to us under the management agreement as long as such agreement is in effect, certain of its interests pursuant to that agreement are directly
adverse to the interests of Fantex. These differing interests could create or appear to create conflicts of interest when our officers or directors are faced with decisions that could have different
implications for Fantex Holdings and Fantex.
Our capital structure may decrease the amounts available for the payment of dividends to holders of our tracking stocks.
We may not pay dividends on one or more tracking stocks, even if we pay dividends on our platform common stock or any other tracking
stock. If we pay dividends or make any other distributions on, or repurchases of, shares of any other series of our common stock without also making a dividend on all other series of common stock the
assets that would be legally available to be
paid as dividends on the shares relating to our other series of common stock under Delaware law would be reduced.
Our board of directors has the ability to change our attribution policies at any time without a vote of our stockholders, which may adversely affect the market value of our
Fantex Series EJ Manuel.
Other than pursuant to the management and attribution policies described in this prospectus, we have not adopted any specific
procedures for consideration of matters involving a divergence of interests among holders of shares of our tracking stocks and our platform common stock, or among holders of different tracking stocks.
Rather than develop additional specific procedures in advance, our board of directors intends to delegate decisions to our independent conflicts committee, which will exercise its judgment from time
to time, depending on the circumstances, as to how best to:
•
obtain information regarding the divergence (or potential divergence) of interests;
•
determine under what circumstances to seek the assistance of outside advisers;
•
determine whether a special committee of our board of directors should be appointed to address a specific matter and the
appropriate members of that committee; and
•
assess what is in our best interests and the best interests of all of our stockholders.
Our
board of directors believes the advantage of retaining flexibility in determining how to fulfill its responsibilities in any such circumstances as they may arise outweighs any
perceived advantages of adopting additional specific procedures in advance. Our board of directors intends to adopt certain management and attribution policies described in this prospectus to serve as
guidelines in making decisions regarding the relationships between the EJ Manuel Brand, any other tracking stock brand and the platform common stock with respect to matters such as tax liabilities and
benefits, inter-series
loans, inter-series equity investments, attribution of assets, financing alternatives, corporate opportunities and similar items. These policies also set forth the initial attribution and expected
future attributions of our assets and liabilities between and among our platform common stock and our tracking stock brands. These policies are not included in our amended and restated certificate of
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incorporation
and our board of directors may at any time change or make exceptions to these policies. Because these policies relate to matters concerning the day-to-day management of Fantex as opposed
to significant corporate actions, such as a merger involving us or a sale of substantially all of our assets, stockholder approval will not be required with respect to their adoption or amendment. In
addition, to the extent that our board of directors seeks stockholder approval, Fantex Holdings, as the sole holder of our platform common stock, will be able to control such vote because they will
hold substantially all of the voting power of our outstanding capital stock following this offering. A decision to change, or make exceptions to, these policies or adopt additional policies could
disadvantage one series of common stock while advantaging another.
You may not have any remedies under Delaware law if the actions of our directors or officers adversely affect the market value of any of our tracking stocks.
Holders of a particular tracking stock may not have any remedies if any action by our directors or officers has an adverse effect on
only that tracking stock. Principles of Delaware law and the provisions of our amended and restated certificate of incorporation may protect decisions of our board of directors that have a disparate
impact upon holders of any tracking stocks. Under Delaware law, the board of directors has a duty to act with due care and in the best interests of all of our stockholders, regardless of the stock, or
series, they hold. Principles of Delaware law established in cases involving differing treatment of multiple classes or series of stock provide that, subject to any applicable provisions of the
certificate of incorporation, a board of directors generally owes an equal duty to all stockholders and does not have separate or additional duties to any subset of stockholders. Judicial opinions in
Delaware involving tracking stocks have established that decisions by directors or officers involving differing treatment of holders of tracking stocks may be judged under the business judgment rule.
In some circumstances, our directors or officers may be required to make a decision that is viewed as adverse to the holders of a particular tracking stock. Under the principles of Delaware law and
the business judgment rule referred to above, you may not be able to successfully challenge decisions that you believe have a disparate impact upon the stockholders of one of our tracking stocks if a
majority of our board of directors, or an authorized committee thereof, is disinterested and independent with respect to the action taken, is adequately informed with respect to the action taken and
acts in good faith and in the honest belief that the board is acting in the best interest of our stockholders collectively.
We may dispose of assets of the EJ Manuel Brand without your approval.
Delaware law requires stockholder approval only for a sale or other disposition of all or substantially all of the assets of Fantex
taken as a whole, and our amended and restated certificate of incorporation does not require a separate class vote in the case of a sale of a significant amount of assets of any of our tracking stock
brands. As long as the assets attributed to the EJ Manuel Brand or the platform common stock proposed to be disposed of represent less than substantially all of our assets, we may approve sales and
other dispositions of any amount of the assets of such tracking stock brand without any stockholder approval.
Holders of any of our tracking stocks may not be adequately compensated if we sell all or substantially all of the assets of the associated tracking stock brand.
If we dispose of all or substantially all of the assets attributed to any tracking stock brand, we would be required, if the
disposition is not an exempt disposition under the terms of our amended and restated certificate of incorporation, to choose one or more of the following three
alternatives:
•
pay a dividend to holders of the associated tracking stock brand out of the available net proceeds of such disposition; or
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•
if there are legally sufficient assets and the available dividend amount for the associated tracking stock would have been
sufficient to pay a dividend, then: (i) if the disposition involves all of the properties and assets of the associated tracking stock brand, redeem all outstanding shares of the associated
tracking stock in exchange for cash and/or securities or other assets with a fair value equal to the available net proceeds of such disposition, or (ii) if the disposition involves
substantially all (but not all) of the properties and assets of the associated tracking stock brand, redeem a portion of the outstanding shares of our associated tracking stock in exchange for cash
and/or securities or other assets with a fair value equal to the available net proceeds of such disposition; or
•
following the two-year anniversary of the filing of a certificate of designation creating any tracking stock, convert each
outstanding share of the associated tracking stock into our platform common stock at the applicable conversion ratio; or
•
combine a conversion of a portion of the outstanding shares of the associated tracking stock into a number of shares of
our platform common stock at the applicable conversion ratio with either the payment of a dividend on or a redemption of shares of the associated tracking stock.
See
"Description of Capital Stock" beginning on page 164.
In
this type of a transaction, holders of the disposing tracking stock brand's common stock may receive less value than the value that a third-party buyer might pay for all or
substantially all of the assets of the tracking stock brand.
Our
board of directors will decide, in its sole discretion, how to proceed and is not required to select the option that would result in the highest value to holders of any particular
tracking stock of our common stock.
Holders of any of our tracking stocks may receive less consideration upon a sale of the assets attributed to the associated tracking stock brand than if that brand were a
separate company.
If the EJ Manuel Brand were a separate, independent company and its shares were acquired by another person, certain costs of that sale,
including corporate level taxes, might not be payable in connection with that acquisition. As a result, stockholders of a separate, independent company with the same assets might receive a greater
amount of proceeds than the holders of shares of Fantex Series EJ Manuel would receive upon a sale of all or substantially all of the assets of the EJ Manuel Brand. In addition, we cannot
assure you that in the event of such a sale the per share consideration to be paid to holders of shares of Fantex Series EJ Manuel will be equal to or more than the per share value of that
share of stock prior to or after the announcement of a sale of all or substantially all of the assets of the EJ Manuel Brand. Further, there is no requirement that the consideration paid be tax-free
to the holders of the shares of Fantex Series EJ Manuel. Accordingly, if we sell all or substantially all of the assets attributed to the EJ Manuel Brand, our stockholders could suffer a loss
in the value of their investment in Fantex.
In the event of a liquidation of Fantex, holders of any of our tracking stocks will not have a priority with respect to the assets attributed to the associated tracking
stock brand remaining for distribution to stockholders.
Under the amended and restated certificate of incorporation, upon liquidation, dissolution or winding up of Fantex as a whole, holders
of our tracking stocks will be entitled to receive, subject to the prior payment in full of creditors, a proportionate interest in the assets of Fantex remaining for distribution to holders of common
stock in an amount per share equal to the fair value of such share of common stock; however, if the assets of Fantex legally available for distribution to the holders of common stock are insufficient
to permit the payment to shares of all of our outstanding tracking stocks
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the
full amount to which they would otherwise be entitled, then the assets available for distribution to the holders of common stock shall be distributed to all holders of each tracking stock ratably
in proportion to the full amounts to which they would otherwise have been entitled to receive. As a result, the proportionate share of Fantex's assets that any holder of our tracking stocks would be
entitled to receive upon any liquidation may be less than the assets of the associated tracking stock brand, and less than the amount that you would have received if the associated tracking stock
brand were a separate company.
Our board of directors may, in its sole discretion, elect to convert any of our tracking stocks into our platform common stock following the two-year anniversary of the
filing of a certificate of designation 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 our tracking stocks.
Our amended and restated certificate of incorporation and the certificate of designations for each of our tracking stocks will permit
our board of directors, in its sole discretion, to convert all of the outstanding shares of any tracking stock into shares of our platform common stock, following the two-year anniversary of the
filing of a certificate of designation creating such tracking stock, at an exchange rate based on the relative fair value of a share of the impacted tracking stock and the fair value of a share our
platform common stock at the time. Our amended and restated certificate of incorporation and the certificate of designation for future tracking stocks are expected to permit our board of directors, in
its sole discretion, to convert all of the outstanding shares of any future tracking stocks into shares of platform common stock, following the two-year anniversary of the filing of a certificate of
designation creating such tracking stock, at an exchange rate based on the relative fair value of the that tracking stock and the platform common stock at the time. Additional
details are as described under "Description of Capital Stock—Common Stock—Conversion."
Although
we do not anticipate converting an actively traded tracking stock into platform common stock that is not also actively traded, there may be circumstances that exist in the
future where our board of directors and, where applicable, the conflicts committee of our board of directors may consider it to be in the best interests of its stockholders to do so. For example, we
anticipate converting a tracking stock into platform common stock in the following circumstances:
•
if the tracking stock is no longer an actively traded stock, such as, for example, if the contract party for the tracking
stock brand underlying that tracking stock suffers an injury, illness, medical condition or dies, and his brand income diminishes as a result and there is little if any expectation that his brand
income will materially increase in the future. In this case our board of directors may convert the shares of that tracking stock into platform common stock as a means of retiring the tracking stock,
and our board of directors may do so in this circumstance even if the platform common stock is not an actively traded stock. As a result, the value received at the time of conversion of Fantex
Series EJ Manuel to platform common stock may be limited because such conversion is likely to occur at a time when the value of Fantex Series EJ Manuel has little or no value.
Furthermore, the conversion could result in you holding shares of our platform common stock that are not actively traded as determined in good faith by our board of directors or a committee of our
board of directors.
•
other special or extraordinary circumstances exist, such as a potential restructuring, reorganization or change of control
of Fantex. We would not expect our board of directors to approve a conversion in this circumstance unless there is an active trading market for the platform common stock at the time of such
conversion. Our board of directors may effect such a conversion at a time when the market value of either our platform common stock or the relevant tracking stock could cause, or be perceived to
cause, the stockholders of either of such series to be disadvantaged.
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Any
conversion of a tracking stock into platform common stock, whether or not the platform common stock is at the time an actively traded stock as determined in good faith by our board
of directors or a committee of our board of directors, would preclude the holders of that tracking stock from retaining their investment in a security that is intended to reflect separately the
performance of the relevant tracking stock brand. This uncertainty may also impact the market value of your tracking stock even if we do not ever convert your tracking stock. We cannot predict the
impact on the market value of our
stock because our board of directors' ability to effect any such conversion or the exercise of this conversion right by Fantex.
Our capital structure may inhibit beneficial acquisition offers.
Our capital structure, as well as the fact that the EJ Manuel Brand is not an independent company may inhibit or prevent acquisition
bids for the EJ Manuel Brand and may make it difficult for a third party to acquire us, even if doing so may be beneficial to our stockholders. If the EJ Manuel Brand were a separate independent
company, any person interested in acquiring the EJ Manuel Brand without negotiating with management could seek control of that tracking stock brand by obtaining control of its outstanding voting
stock, by means of a tender offer, or by means of a proxy contest. Although we intend Fantex Series EJ Manuel to reflect the separate economic performance of the EJ Manuel Brand, it is not a
separate entity and a person interested in acquiring only Fantex Series EJ Manuel without negotiation with our management could obtain control of that tracking stock brand only by obtaining
control of a majority in voting power of the platform common stock. The existence of shares of common stock, and different series of shares, relating to different tracking stock brands could present
complexities and in certain circumstances pose obstacles, financial and otherwise, to an acquiring person that are not present in companies that do not have capital structures similar to ours.
Certain provisions of our amended and restated certificate of incorporation and amended and restated bylaws may discourage, delay or prevent a change in control of Fantex
that a stockholder may consider favorable.
Certain provisions of our amended and restated certificate of incorporation and amended and restated bylaws may discourage, delay or
prevent a change in control of Fantex that a stockholder may consider favorable. These provisions include:
•
authorizing our Fantex Series EJ Manuel or any other tracking stocks;
•
classifying our board of directors with staggered three-year terms, which may lengthen the time required to gain control
of our board of directors;
•
from and after such time as our parent company no longer holds a majority of the voting rights of our common stock, a
prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders;
•
advance notice and other requirements that stockholders, other than our parent company for so long as it holds a majority
of the voting rights of our common stock, must comply with in order to nominate candidates to our board of directors and propose matters to be brought before an annual meeting of our stockholders,
which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer's own slate of directors or otherwise attempting to obtain control of Fantex;
and
•
from and after such time as our parent company holds less than a majority of the voting rights of our common stock, a 75%
stockholder vote is required for removal of a director with or without cause, and for the amendment, repeal or modification of certain provisions of our amended and restated certificate of
incorporation and amended and restated bylaws.
In
addition, after our parent company ceases to own 15% of our voting stock, we will be subject to Section 203 of the Delaware General Corporation Law. Under Section 203, a
corporation may not, in
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general,
engage in a business combination with any holder of 15% or more of its voting stock unless the holder has held the stock for three years or, among other things, the board of directors
approved the transaction prior to such holder acquiring its 15% stake.
Our amended and restated certificate of incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions
and proceedings that may be initiated by our stockholders, which could limit our stockholders' ability to obtain a favorable judicial forum for disputes with us or our directors, officers or
employees.
Our certificate of incorporation provides that, subject to limited exceptions, the Court of Chancery of the State of Delaware will be
the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of us, (ii) any action asserting a claim of breach
of a fiduciary duty owed by, or other wrongdoing by, any of our directors or officers to us or our stockholders, (iii) any action asserting a claim against us arising pursuant to any provision
of the Delaware General Corporation Law or our amended and restated certificate of incorporation or amended and restated bylaws, (iv) any action to interpret, apply, enforce or determine the
validity of our amended and restated certificate of incorporation or the amended and restated bylaws or (v) any action asserting a claim against us governed by the internal affairs doctrine. We
believe this provision benefits us by providing increased consistency in the application of Delaware law by judges particularly experienced in resolving corporate disputes, efficient administration of
cases on a more expedited schedule relative to other forums and protection against the burdens of multi-forum litigation. Any person or entity purchasing or otherwise acquiring any interest in shares
of our Fantex Series EJ Manuel shall be deemed to have notice of and to have consented to the provisions of our certificate of incorporation described above. This choice of forum provision may
limit a stockholder's ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees, which may discourage such lawsuits
against us and our directors, officers and employees. Alternatively, if a court were to find these provisions of our certificate of incorporation inapplicable to, or unenforceable in respect of, one
or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business and
financial condition.
Risks Relating to the Issuance of Additional Tracking Stocks
Investors in any of our tracking stocks will be our common stockholders and an investment in a tracking stock will represent an
ownership interest in our company as a whole, which will expose holders to additional risks associated with any individual tracking stocks that exist at the time of any investment or that we may
establish and issue in the future.
Our Fantex Series EJ Manuel may be adversely impacted by any non-performing brand contracts, whether or not such brand contracts are included in the assets attributed
to our Fantex Series EJ Manuel.
We have entered into a brand contract with each of EJ Manuel, Vernon Davis and Arian Foster, and we intend to enter into additional
brand contracts on an ongoing basis. In addition, we intend to create a separate business unit in connection with each new brand contract. Income (and assets) will generally be attributed to any of
our tracking stocks based on the earnings of the associated tracking stock brand. However, the assets attributed to one tracking stock brand are potentially subject to the liabilities attributed to
another tracking stock brand, even if those liabilities arise from lawsuits, contracts or indebtedness that are attributed to such other tracking stock brand. While our current management and
attribution policies provide that reattributions of assets between tracking stock brands will result in the creation of an inter-series loan or be considered an inter-series equity investment or an
offsetting reattribution of cash or other assets, no provision of our amended and restated certificate of incorporation prevents us from satisfying liabilities of one tracking stock brand with assets
of another
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tracking
stock brand, and our creditors will not in any way be limited by our capital structure from proceeding against any assets they could have proceeded against if we did not have any tracking
stocks.
In
addition, if the contract party or other third party who may be obligated to make payments to us were to become the subject of a proceeding under the United States Bankruptcy Code or
a similar proceeding or arrangement under another state, federal or foreign law, our rights and interests under the brand contract or otherwise may be significantly prejudiced or impaired. In such
circumstances, we may be precluded, stayed or otherwise limited in enforcing some or all of our rights under the brand contract or otherwise and realizing the economic and other benefits contemplated
therein. To the extent we do not receive payments under a brand contract to which we would otherwise be entitled as a result of any such debtor relief laws, then the amount of such payments we do not
receive will nonetheless be attributable to the respective tracking stock brand. In such an event, such shortfall in income will be treated as a general expense of Fantex and be shared pro rata
(calculated based on attributable income) among all of our then outstanding tracking stocks, including the Fantex Series EJ Manuel. As a result, the market value of your tracking stock could
decline if another brand contract that is not related to your tracking stock is unenforceable as a result of debtor relief laws. Therefore, the creditworthiness of another contract party may be
relevant to your investment. For example, we have a brand contract with Arian Foster, and Arian Foster is the subject of recent allegations made by an alleged mistress who has filed a complaint in
Texas courts. As a result of this allegation and/or related matters, including any litigation related to these allegations, Arian Foster could become liable for damages and/or his financial health
could otherwise be adversely impacted, therefore potentially impacting his ability to comply with the obligations under the brand contract with us should that brand contract become effective, and his
ability to comply with other obligations. The attributed earnings for the EJ Manuel Brand could be adversely impacted if any such financial hardship led to Arian Foster seeking any relief under debtor
relief laws.
If a blog post published about us in August 2013 were held to be in violation of the Securities Act, we could be required to repurchase securities sold, if any, in our
offering of Fantex Series Arian Foster. In addition, we have received, and may continue to receive, various degrees of media coverage, including coverage that is not accurate or attributable to
statements made by us. You should rely only on statements made in this prospectus in determining whether to purchase shares of our Fantex Series EJ Manuel.
Information about us was published in a blog post hosted by an unaffiliated third party, techcrunch.com, on August 31, 2013.
This blog post contains information derived from an inadvertent and unauthorized disclosure by an unaffiliated third party software developer of a confidential and preliminary beta version of a
proprietary mobile software application under development for possible future use. We have declined to comment on any inquiries related to the blog post and the blog post appears to be based solely on
the beta version of the mobile software application, which resulted in an inaccurate reporting of our business in isolation and without disclosure
of many of the related risks and uncertainties described in this prospectus. As a result, the blog post should not be considered in isolation and you should decide whether to purchase our shares only
after reading this entire prospectus carefully.
We
do not believe the blog post constitutes "gun jumping" in violation of Section 5 of the Securities Act. However, if it were held by a court to be in violation of the Securities
Act, we could be required to repurchase the shares sold to purchasers in our public offering of Fantex Series Arian Foster at the original purchase price, plus statutory interest, for a period of one
year following the date of the violation. We would vigorously contest any such claim that a violation of the Securities Act occurred.
Any
liability for a potential violation of Section 5 under the Securities Act and a resulting repurchase of Fantex Series Arian Foster assuming the offering of Fantex Series Arian
Foster is
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consummated
may adversely impact the financial health of our company as a whole, and therefore investors in each of our tracking stocks, including holders of our Fantex Series EJ Manuel.
In
addition, we have received, and may continue to receive, various degrees of media coverage, including coverage that is not accurate or attributable to statements made by us. You
should rely only on the information contained in this prospectus in making your investment decision.
Our business may be adversely impacted by the postponement of our offering of the Fantex Series Arian Foster.
On February 28, 2013, we entered into a brand contract with Arian Foster, a running back for the Houston Texans of the NFL and
his affiliated professional services company, The Ugly Duck, LLC. The brand contract assigns to us 20% of the gross monies or other consideration (including rights to make investments) that
Arian Foster will receive from and after February 28, 2013, subject to specified exceptions, as a result of his activities in the NFL and related fields (including activities in a non-NFL
football league), such as broadcasting and coaching. On November 12, 2013, after confirming reports that Arian Foster will undergo season ending back surgery, we announced that we are
postponing the offering for Fantex Series Arian Foster. Although we will continue to work with Arian Foster through his recovery and intend to continue with the offering of Fantex Series Arian Foster
at an appropriate time in the future, we cannot guarantee that the offering of Fantex Series Arian Foster will be consummated or that the offering will be resumed upon the same terms. Any
non-performance or under performance of one of our other brand contracts or the tracking stocks
related thereto, including in this case, any decline in value of Arian Foster Brand or a resulting decline in interest in Fantex Series Arian Foster, may negatively impact investors' perception of the
expected performance of any of our other tracking stocks, including the performance of our Fantex Series EJ Manuel.
Risks Relating to this Offering, the Offering Process and the Fantex Platform
Our Fantex Series EJ Manuel is a highly risky and speculative investment. Only investors who can bear the loss of their entire investment should purchase shares of
our Fantex Series EJ Manuel.
Our Fantex Series EJ Manuel is highly risky and speculative. Our Fantex Series EJ Manuel is suitable for purchase only
for investors of adequate financial means. If you cannot afford to lose all of the money you plan to invest in our Fantex Series EJ Manuel, you should not purchase shares of our Fantex
Series EJ Manuel.
The offering of our Fantex Series EJ Manuel may not be completed.
We expect to cancel this offering if we do not raise at least $5,237,000 of gross proceeds. In such case, no shares of our Fantex
Series EJ Manuel will be sold to the public.
There is no current trading market for our Fantex Series EJ Manuel or any other series of our capital stock and if a trading market does not develop, purchasers of
our Fantex Series EJ Manuel may not be able to sell, or may have difficulty selling, their shares.
Prior to this offering, there has been no public market for our Fantex Series EJ Manuel, or any other series of our capital
stock. We do not intend to apply for a listing of our Fantex Series EJ Manuel on any securities exchange or for their inclusion in any established automated dealer quotation system. To own or
trade our Fantex Series EJ Manuel, you must have a brokerage account with FBS through which you will only be permitted to enter limit orders. Our Fantex Series EJ Manuel will be traded
in the secondary market only through the FBS ATS. If FBS or the FBS ATS
suffers any disruption in business operations or activity for any reason, including regulatory or otherwise, you may not be able to sell shares of our Fantex Series EJ Manuel. Please see "Risks
Relating to Our Affiliate, FBS, and the FBS ATS."
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Because
we are an affiliate of FBS, FBS will deliver a current "market- maker" prospectus, such as this prospectus, and otherwise comply with the registration requirements of the
Securities Act in connection with any secondary market sale of the shares of Fantex Series EJ Manuel, which may affect your ability to engage in secondary sales on the FBS ATS. We have agreed
to make a "market-maker" prospectus generally available to FBS. If we do not have a current "market-maker" prospectus available at any time, or if we have limited or no market-makers at any time, the
liquidity of the secondary market for the Fantex Series EJ Manuel may be materially adversely affected. FBS may also act as a market-maker in the secondary market from time to time, but it is
not obligated to make a market in the Fantex Series EJ Manuel and may discontinue any market-making at any time without notice, in its sole discretion. FBS has no current intention of acting as
a market-maker in the secondary market for the Fantex Series EJ Manuel, but may do so in the future. If FBS decides to make a market in a tracking stock, it will first amend its Form ATS filed
with the SEC to reflect such change. If FBS chooses not to make a market in the Fantex Series EJ Manuel or discontinues market-making for any reason, there may be no other market-makers.
In
addition, we cannot predict the extent to which investor interest in our Fantex Series EJ Manuel or any other tracking stocks will lead to the development of an active trading
market for our Fantex Series EJ Manuel or how liquid any trading market might become. If an active trading market does not develop, you may be unable to sell, or have difficulty selling, any
shares of our Fantex Series EJ Manuel that you purchase, and the value of such shares may not reflect their fundamental value. The initial public offering price has been set by us and FBS based
on, among other things, our evaluation of EJ Manuel's historical athletic performance as well as estimates of the business potential and earnings prospects of EJ Manuel. Our estimates may not be
indicative of prices that will prevail in the open market following this offering. Consequently, you may not be able to sell shares of our Fantex Series EJ Manuel, if at all, at a price equal
to or greater than the price you paid in this offering.
Certain underwriters have conflicts of interest with respect to this offering.
Because FBS, an underwriter for this offering, is under common control with us and we will receive all of the proceeds of the offering,
FBS is deemed to have a "conflict of interest" under Rule 5121 of the Conduct Rules of FINRA. Accordingly, this offering will be made in compliance with the applicable provisions of
Rule 5121 which requires, among other things, that a "qualified independent underwriter" has participated in the preparation of, and has exercised the usual standards of due diligence with
respect to, the registration statement and this prospectus. Stifel,
Nicolaus & Company, Incorporated has agreed to act as the "qualified independent underwriter" for the offering and to undertake the legal responsibilities and liabilities of an underwriter
under the Securities Act, specifically including performing due diligence investigations and reviewing and participating in the preparation of the registration statement of which this prospectus
forms a part. However, we cannot assure you that this will adequately address any potential conflicts of interest. See "Underwriting (Conflicts of Interest)—Conflicts of Interest."
In addition, we, Fantex Holdings and FBS have agreed to indemnify Stifel, Nicolaus & Company, Incorporated for acting as "qualified independent underwriter" against certain liabilities,
including liabilities under the Securities Act, and to contribute to payments that Stifel, Nicolaus & Company, Incorporated may be required to make for those liabilities.
Our Fantex Series EJ Manuel is not a "covered security," or otherwise exempt from the "blue sky" securities laws governing sales and purchases of Fantex
Series EJ Manuel in each of the fifty states, and therefore we must register in each state in which offers and sales will be made.
Our Fantex Series EJ Manuel is not a "covered security" for purposes of the Securities Act. The term "covered security" applies
to securities preempted under federal law from state securities registration requirements due to their oversight by federal authorities and self-regulatory authorities, such as national securities
exchanges. Because the Fantex Series EJ Manuel is not a "covered security," the sale of our shares is subject to securities registration in various states.
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State securities laws may limit secondary trading, which may restrict the states in which and conditions under which you can sell shares of our Fantex Series EJ
Manuel.
Secondary trading in our Fantex Series EJ Manuel sold in the offering will not be possible in any state until the common stock
is qualified for sale under the applicable securities laws of such state or there is confirmation that an exemption, such as listing in certain recognized securities manuals, is available for
secondary trading in the state. If we fail to register or qualify, or to obtain or verify an exemption for the secondary trading of, our Fantex Series EJ Manuel in any particular state, our
Fantex Series EJ Manuel may not be offered or sold to, or purchased by, a resident of that state. In the event that a significant number of states refuse to permit secondary trading in our
Fantex Series EJ Manuel, the liquidity for our Fantex Series EJ Manuel could be significantly affected, resulting in a potential loss on your investment.
We expect that our offering will primarily attract individual investors, and therefore our initial public offering price may not be sustainable if and when trading begins,
and the price of our Fantex Series EJ Manuel could decline rapidly and significantly.
We intend to set an initial public offering price at $10.00 per share and expect that the market for our offering will primarily be
individual investors.
In
a typical initial public offering, a majority of the shares sold to the public are purchased by professional investors that have significant experience in determining valuations for
companies in connection with initial public offerings. These professional investors typically have access to, or conduct their own independent, research and analysis regarding investments in initial
public offerings. Other investors typically have less access to this level of research and analysis, and as a result, may be less sensitive to price in participating in our initial public offering. As
a result, our initial public offering price may be different than the price that would be established in a more traditional underwritten offering involving institutional investors.
In
addition, institutional investors typically hold acquired shares for an extended period time and trade their holdings infrequently, while individual investors may be more likely to
trade their shares frequently and react to minor changes in the market value of our Fantex Series EJ Manuel, or may be more prone to have unexpected liquidity needs. This may result in greater
volatility in the trading price of shares of our Fantex Series EJ Manuel. This, in turn, could cause increased imbalances in supply and demand and cause the shares of our Fantex
Series EJ Manuel to decline in value.
As
a result, our stock price may not be sustainable if and when trading begins, and the price of our Fantex Series EJ Manuel may decrease once trading of our Fantex
Series EJ Manuel begins.
Investors should not expect to sell our shares for a profit shortly after our Fantex Series EJ Manuel begins trading.
During the offering process, we and our managing underwriters will monitor reservations in the offering to evaluate the demand that
exists for our initial public offering. Based on this information, we and FBS may revise the price of our initial public offering set forth on the cover of this prospectus, or we may decide to change
the number of shares of Fantex Series EJ Manuel offered through this prospectus. Any increases in the initial public offering price or the number of shares offered may result in there being
little or no demand for our shares in secondary trading after completion of the offering. Even if we do not change the number of shares offered or the offering price, the demand for our Fantex
Series EJ Manuel may be completely satisfied by the initial public offering and there may be little or no demand for shares of Fantex Series EJ Manuel in the secondary market. If this
were to occur, the price of our shares would likely decline following this offering. If your
objective is to make a short term profit by selling the shares you purchase in the offering shortly after trading begins, you should not submit an offer to purchase shares in this offering.
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If you purchase our common stock in this offering, you will incur immediate dilution in the book value of your shares, on an as converted to platform common stock basis.
The initial public offering price is higher than the net tangible book value per share of our common stock (including our platform
common stock), on an as converted to platform common stock basis. Investors purchasing Fantex Series EJ Manuel in this offering will pay a price per share that exceeds the book value per share
(on an as converted basis) of our tangible assets after subtracting our liabilities. As a result, investors purchasing Fantex Series EJ Manuel in this offering will incur immediate dilution of
$4.72 per share, on an as converted to platform common stock basis, based on the sale of 523,700 shares at an initial public offering price of $10.00 per share (or $0.0565 per share, on an as
converted basis).
Further,
because we expect that we will need to raise additional capital to fund additional brand acquisitions, we intend in the future to sell substantial amounts of common stock or
securities convertible into or exchangeable for common stock. These future issuances of equity or equity-linked securities, together with any additional shares issued in connection with acquisitions,
if any, may result in further dilution to investors. For a further description of the dilution that you will experience immediately following this offering, see "Dilution."
We intend to issue additional tracking stocks, which would reduce then-existing investors' percentage of ownership in Fantex and may dilute our share value.
Our amended and restated certificate of incorporation authorizes the issuance of up to 1,500,000,000 shares of common stock.
Accordingly, our board of directors will be empowered, without further stockholder approval, to issue additional shares of capital stock up to the authorized amount, which could adversely affect the
rights of the holders of the existing series of our common stock. We may value any stock issued in the future on an arbitrary basis and the future issuance of capital stock may result in substantial
dilution in the percentage of our common stock or common stock-equivalents held by our then existing stockholders. The issuance of capital stock for future services or other corporate actions may have
the effect of diluting the value of the shares held by our then-existing stockholders, and might have an adverse effect on any trading market for our Fantex Series EJ Manuel.
If analysts or commentators publish or establish target prices for our Fantex Series EJ Manuel that are below the initial public offering price or then current
trading market price of our shares, the price of shares of our Fantex Series EJ Manuel may fall.
We believe that analysts and commentators may publish price targets, and if they do they may rely upon methods to establish target
prices for our Fantex Series EJ Manuel that may be different than methodologies that we use or that other investors use to value these shares. If analysts and commentators publish target prices
for our Fantex Series EJ Manuel that are below our initial public offering price or the then current trading market price of our shares, it could cause our stock price to decline.
The price of our Fantex Series EJ Manuel might fluctuate significantly, and you could lose all or part of your investment.
Volatility in the market price of our Fantex Series EJ Manuel may prevent you from being able to sell shares of our Fantex
Series EJ Manuel at or above the price you paid for such shares. The trading price of our Fantex Series EJ Manuel may be volatile and subject to wide price fluctuations in response to
various factors, including:
•
performance of EJ Manuel in the NFL;
•
our perceived financial standing and the stability of the Fantex platform;
•
market interest in trading our Fantex Series EJ Manuel;
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•
liquidity needs of investors due to the overall performance of the equity markets or otherwise;
•
industry related regulatory developments;
•
investor perceptions of EJ Manuel, us and professional football;
•
changes in accounting standards, policies, guidance, interpretations or principles;
•
changes in tax code that may affect the economics of your investment;
•
insolvency of Fantex or EJ Manuel;
•
regulatory findings, determinations or changes affecting our ability to operate;
•
sales of our Fantex Series EJ Manuel by a large stockholder;
•
general economic conditions;
•
changes in interest rates; and
•
availability of capital.
These
and other factors might cause the market price of our Fantex Series EJ Manuel to fluctuate substantially, which might limit or prevent investors from readily selling their
shares of our Fantex Series EJ Manuel and may otherwise negatively affect the liquidity of our Fantex Series EJ Manuel. In addition, in recent years, the stock market has experienced
significant price and volume fluctuations. This volatility has had a significant impact on the market price of securities issued by many companies across many industries. The changes frequently appear
to occur without regard to the operating performance of the affected companies. Accordingly, the price of our Fantex Series EJ Manuel could fluctuate based upon factors that have little or
nothing to do with Fantex, EJ Manuel or the contract party, and these fluctuations could materially reduce our stock price. Securities class action litigation has often been instituted against
companies following periods of volatility in the overall market and in the market price of a company's securities. This litigation, if instituted against us, could result in substantial costs, divert
our management's attention and resources, and harm our business, operating results and financial condition.
Transaction costs for trades on the FBS ATS could decrease the liquidity of your investment in our Fantex Series EJ Manuel and could reduce or eliminate any positive
return on your investment in our Fantex Series EJ Manuel.
The transactions costs for you to trade on the FBS ATS are expected to be up to 1% of the total amount of the purchase or sale,
respectively, with lower amounts depending on whether or not you have an active trader account. This the cost of executing trades could be high relative to the size of your investment in our Fantex
Series EJ Manuel, and this cost could cause investors to trade less frequently and to increase their holding periods. Thin trading in our Fantex Series EJ Manuel could, in turn, increase
the spread between the bid price at which buyers are willing to acquire shares of our Fantex Series EJ Manuel and the ask price at which sellers are willing to sell their shares, making it more
difficult to buy or sell at a time and price that meets your objectives. In addition, brokerage commissions associated with your transactions in Fantex Series EJ Manuel could reduce or
eliminate your return on investment in our Fantex Series EJ Manuel or cause you to incur a loss on your investment.
We may be subject to securities litigation, which is expensive and could divert management attention.
The market price of our common stock may be volatile, and in the past companies that have experienced volatility in the market price of
their stock have been subject to securities class action litigation. We may be the target of this type of litigation in the future. Securities litigation against us
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could
result in substantial costs and divert our management's attention from other business concerns, which could seriously harm our business.
We are an "emerging growth company" and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make shares of our Fantex
Series EJ Manuel less attractive to investors.
We are an "emerging growth company," as defined in the JOBS Act, and we intend to take advantage of certain exemptions from various
reporting requirements that are applicable to other public companies that are not "emerging growth companies" including, but not limited to, not being required to comply with the auditor attestation
requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002.
We
cannot predict if investors will find our Fantex Series EJ Manuel less attractive because we will rely on these exemptions. If some investors find our Fantex Series EJ
Manuel less attractive as a result, there may be a less active trading market for our Fantex Series EJ Manuel and our stock price may be more volatile.
In
addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B)
of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards
would otherwise apply to private companies. However, we are choosing to "opt out" of such extended transition period, and as a result, we will comply with new or revised accounting standards on the
relevant dates on which adoption of such standards is required for non-emerging growth companies. Section 107 of the JOBS
Act provides that our decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.
Our compliance burdens and costs will be significant as a result of operating as a public company, particularly as a result of our tracking stock structure. Our management
will be required to devote substantial time to compliance matters.
As a public company in the United States, we will incur significant legal, accounting and other expenses that we did not previously
incur. Our business model depends on the ongoing issuance of tracking stocks intended to track the performance of tracking stock brands that we intend to establish with each new brand contract.
We
will become subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, and other applicable securities rules and regulations. Compliance with these rules and
regulations will increase our legal and financial compliance costs, make some activities more difficult, time- consuming or costly and increase demand on our systems and resources, particularly as a
result of our tracking stock structure and to a greater extent after we are no longer an "emerging growth company." The Exchange Act requires that we file annual and current reports with respect to
our business, financial condition and results of operations. The Sarbanes-Oxley Act requires, among other things, that we establish and maintain effective internal controls and procedures for
financial reporting. Furthermore, the need to establish the corporate infrastructure demanded of a public company, particularly one with a tracking stock structure such as ours that contemplates
numerous series being issued on an ongoing basis, may divert management's attention from implementing our growth strategy, which could prevent us from improving our business, financial condition and
results of operations. We will need to implement significant enhancements to our internal controls and procedures for financial reporting and accounting systems to meet our reporting obligations as a
public company with multiple tracking stocks. However, the measures we take may not be sufficient to satisfy our obligations as a public company. In addition, these rules and regulations will increase
our legal and financial compliance costs and will make some activities more time-consuming and costly. For example, we
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expect
these rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to incur substantial costs to maintain
the same or similar coverage. These additional obligations could have a material adverse effect on our business, financial condition, results of operations and cash flow.
In
addition, changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial
compliance costs
and making some activities more time-consuming. These laws, regulations and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their
application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs
necessitated by ongoing revisions to disclosure and governance practices. We intend to invest resources to comply with evolving laws, regulations and standards, and this investment may result in
increased general and administrative expenses and a diversion of management's time and attention from revenue-generating activities to compliance activities. If our efforts to comply with new laws,
regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to their application and practice, regulatory authorities may initiate legal
proceedings against us and our business, financial condition, results of operations and cash flow could be adversely affected.
For
as long as we are an "emerging growth company" under the JOBS Act, our independent registered public accounting firm will not be required to attest to the effectiveness of our
internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act. We could be an emerging growth company for up to five years. See "Prospectus
Summary—Implications of Being an Emerging Growth Company." Furthermore, after the date we are no longer an emerging growth company, our independent registered public accounting firm will
only be required to attest to the effectiveness of our internal control over financial reporting depending on our market capitalization. Even if our management concludes that our internal control over
financial reporting are effective, our independent registered public accounting firm may still decline to attest to the effectiveness of our internal controls or may issue a report that is qualified
if it is not satisfied with our controls or the level at which our controls are documented, designed, operated or reviewed, or if it interprets the relevant requirements differently from us. In
addition, in connection with the implementation of the necessary procedures and practices related to internal control over financial reporting, we may identify deficiencies that we may not be able to
remediate in time to meet the deadline imposed by the Sarbanes-Oxley Act for compliance with the requirements of Section 404. Failure to comply with Section 404 could subject us to
regulatory scrutiny and sanctions, impair our ability to raise revenue, cause investors to lose confidence in the accuracy and completeness of our financial reports and negatively affect our stock
price.
Noncompliance with laws and regulations may impair our ability to arrange or service the brand contracts.
Generally, failure to comply with the laws and regulatory requirements applicable to our business may, among other things, limit our
ability to collect all or part of the payments under the brand contracts and, in addition, could subject us to damages, class action lawsuits, administrative enforcement actions, and civil and
criminal liability, which may harm our business and ability to maintain the Fantex platform and may result in contract parties attempting to rescind their brand contracts. For example, if we were
deemed to be an investment company under the Investment Company Act, we would be required to institute burdensome compliance requirements and our activities may be restricted, which would materially
adversely affect our business, financial condition and results of operations.
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If Fantex Series EJ Manuel is not treated as a class of common stock of Fantex, adverse federal income tax consequences will result.
If Fantex Series EJ Manuel is considered property other than common stock of Fantex, for federal income tax purposes
(i) Fantex would generally be taxed on a portion of the appreciation of the assets, if any, attributable to Fantex Series EJ Manuel upon the issuance of such stock, (ii) the
exchange of Fantex Series EJ Manuel for shares of our platform common stock would not qualify as a tax-free recapitalization, and (iii) income, gain, losses and deductions attributable
to one tracking stock brand would not be offset against income, gain, losses and deductions attributable to another tracking stock brand. There are no court decisions or other authorities directly
bearing on the tax effects of the issuance and classification of stock with the features of Fantex Series EJ Manuel. In addition, the Internal Revenue Service has announced that it will not
issue advance rulings on the classification of an instrument with characteristics similar to those of Fantex Series EJ Manuel. As a result, there can be no assurance that Fantex
Series EJ Manuel will be treated as stock of Fantex for U.S. federal income tax purposes.
Risks Relating to Our Affiliate, FBS, and the FBS ATS
To own or trade our Fantex Series EJ Manuel, you must have a brokerage account with FBS and our Fantex Series EJ Manuel will be traded in the secondary market
only through the FBS ATS.
Prior to this offering, there has been no public market for our Fantex Series EJ Manuel, or any other series of our capital
stock. We do not intend to apply for a listing of our Fantex Series EJ Manuel on any securities exchange or for their inclusion in any established automated dealer quotation system. To own or
trade our Fantex Series EJ Manuel, you must have a brokerage account with FBS through which you will only be permitted to enter limit orders. Our Fantex Series EJ Manuel will be traded
in the secondary market only through the FBS ATS. If FBS or the FBS ATS suffers any disruption in business operations or activity for any reason, including regulatory or otherwise, you may not be able
to sell your shares.
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.
FBS will clear all trades effected on its ATS. Broker-dealers that clear their own trades are subject to substantially more regulatory
requirements than brokers that outsource these functions to third-party providers. Errors in performing clearing functions, including clerical, technological and other errors related to the handling
of funds and securities held by FBS on behalf of customers, could lead to censures, fines or other sanctions imposed by applicable regulatory authorities as well as losses and liability in related
lawsuits and proceedings brought by FBS's customers. Any unsettled securities transactions or wrongly executed transactions may expose FBS's customers to adverse movements in the prices of the Fantex
Series EJ Manuel. In terms of customer order entry errors, there is always a risk a customer may accidentally enter a trade in the wrong stock, and/or with incorrect pricing. Customers will be
limited in almost all cases to entering trades online with substantial front end order alerts and safeguards.
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 our, FBS's or the third- party's control, which may result in an inability to sell your shares.
The FBS website and the FBS ATS are each operated on computer hardware that is currently located in a third-party Web hosting facility
in Chicago, Illinois operated by Rackspace, US Inc. Neither we nor FBS control the operation of this facility, and it is subject to damage or interruption from natural disasters, fires, power
loss, telecommunications failures and similar events. It is also subject to
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break-ins,
sabotage, intentional acts of vandalism and similar misconduct. Despite precautions that may be taken at the facility, the occurrence of any of these unanticipated problems at the facility
or any decision by Rackspace to close the facility without adequate notice could result in lengthy interruptions in the services provided by the FBS ATS, which could result in an extended period of
delay during which time you would not be able to sell any shares. In addition, the failure by the Rackspace facility to provide required data communications capacity could result in additional
interruptions.
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.
Services provided by FBS and the FBS ATS involve the storage and transmission of customers' proprietary information, and security
breaches could expose FBS and the FBS ATS to a risk of loss of this information, litigation and possible liability. If the security measures are breached as a result of third-party action, employee
error, malfeasance or otherwise, and, as a result, someone obtains unauthorized access to one of our customers' data, our reputation will be damaged, our business may suffer and we could incur
significant liability. Because techniques used to obtain unauthorized access or to sabotage systems change frequently and generally are not recognized until launched against a target, we may be unable
to anticipate these techniques or to implement adequate preventative measures. If an actual or perceived breach of security occurs, the market perception of the effectiveness of the security measures
at FBS and the FBS ATS could be harmed and could result in fewer sales and customers. In addition to any damage to market perception, such breaches of security measures or resulting unlawful use of
confidential information could, among other things: (i) subject FBS to liability for a failure to safeguard client data, (ii) subject FBS to regulatory sanctions or burdens, based on the
authority of the SEC and FINRA to enforce regulations regarding business continuity planning, and (iii) require significant capital and operating expenditures to investigate and remediate the
breach.
FBS's insurance coverage may be inadequate or expensive to cover the losses resulting from any lawsuits or breaches of security.
FBS is subject to claims in the ordinary course of business. These claims may involve substantial amounts of money and involve
significant defense costs. It is not always possible to prevent or detect activities giving rise to claims, and the precautions FBS takes may not be effective in all cases.
FBS
maintains voluntary and required insurance coverage, including, among others, SIPC and fidelity bond insurance. While FBS endeavors to purchase coverage that is appropriate to its
assessment of its risk, FBS is unable to predict with certainty the frequency, nature or magnitude of claims for direct or consequential damages. FBS's business may be negatively affected if in the
future its insurance proves to be inadequate or unavailable. In addition, insurance claims may harm FBS's reputation or divert management resources away from operating FBS's business.
Failure to maintain technological capabilities, flaws in existing technology, difficulties in upgrading FBS's technology platform or the introduction of a competitive
platform could have a material adverse effect on FBS's business.
FBS depends on highly specialized and, in many cases, proprietary technology to support its business functions, including, among
others, (i) securities trading and custody, (ii) customer service, (iii) accounting and internal financial processes and controls, and (iv) regulatory compliance and
reporting.
In
addition, FBS's continued success depends on its ability to effectively adopt new or adapt existing technologies to meet customer, industry and regulatory demands. FBS might be
required to make significant capital expenditures to maintain competitive technology. For example, the future success of FBS may depend in part on its ability to anticipate and adapt to technological
advancements
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required
to meet the changing demands of its customers. The emergence of new industry standards and practices could render FBS's existing systems obsolete or uncompetitive. Any upgrades or expansions
may require significant expenditures of funds and may also cause FBS to suffer system degradations, outages and failures. There cannot be any assurance that FBS will have sufficient funds to
adequately update and expand its networks, nor can there be any assurance that any upgrade or expansion attempts will be successful and accepted by its customers. If FBS's technology systems were to
fail and FBS were unable to recover in a timely way, FBS would be unable to fulfill critical business functions, which could lead to a loss of customers and could harm FBS's reputation. A
technological breakdown could also interfere with FBS's ability to comply with financial reporting and other regulatory requirements, exposing FBS to disciplinary action and to liability to its
customers.
Regulatory developments and FBS's failure to comply with regulations could adversely affect FBS's business by increasing its costs and exposure to litigation, affecting
FBS's reputation and making its business less profitable.
FBS's business is subject to extensive regulation and supervision under both federal and state laws. FBS is a member of FINRA and
registered as a broker- dealer with the SEC, each of the 50 states (except for Arizona, Colorado and Florida), the District of Columbia, Puerto Rico and the United States Virgin Islands.
Much
of the regulation of broker-dealers has been delegated to self- regulatory organizations ("SROs"), including FINRA. The primary regulators of FBS are FINRA and the SEC.
The
SEC and FINRA as well as other U.S. governmental or regulatory authorities continuously review legislative and regulatory initiatives and may adopt new or revised laws and
regulations. There can also be no assurance that other federal or state agencies will not attempt to further regulate FBS's business. These legislative and regulatory initiatives may affect the way in
which FBS conducts its business and may make FBS's business model less profitable.
FBS's
ability to conduct business in the jurisdictions in which it operates depends on its compliance with the laws, rules and regulations promulgated by federal regulatory bodies and
the regulatory authorities in each of these jurisdictions. FBS's ability to comply with all applicable laws, rules and regulations is largely dependent on its establishment and maintenance of
compliance, audit and reporting systems and procedures, as well as its ability to attract and retain qualified compliance, audit and risk management personnel. Policies and procedures adopted by FBS
designed to comply with applicable laws, rules and regulations may not be fully effective and there can be no assurance that regulators or third parties will not raise material issues with respect to
FBS's past or future compliance with applicable regulations.
FBS's
profitability could also be affected by rules and regulations that impact the business and financial communities generally, including changes to the laws governing taxation,
electronic commerce, privacy and data protection. Failure to comply with new rules and regulations, including in particular, rules and regulations that may arise pursuant to the Dodd-Frank Wall Street
Reform and Consumer Protection Act, could subject FBS to regulatory actions or litigation and it could have a material adverse effect on FBS's business, results of operations, cash flows or financial
condition. In addition, new rules and regulations could result in limitations on the lines of business FBS conducts, modifications to its business practices, increased capital requirements or
additional costs.
FBS is subject to various regulatory ownership requirements, which, if not complied with, could result in the restriction of the ongoing conduct of its business.
The business activities that FBS may conduct are limited by various regulatory agencies. FBS's membership agreement with FINRA may be
amended by application to include additional business activities. This application process is time- consuming and may not be successful. As a result, FBS may be prevented from entering new potentially
profitable businesses in a timely manner, or at all. FBS is subject to various regulatory capital requirements, which, if not complied with, could result in the restriction of the ongoing conduct,
growth, or even liquidation of parts of its business.
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
AND INDUSTRY DATA
This prospectus includes forward-looking statements. We may, in some cases, use terms such as "believes," "estimates," "anticipates,"
"expects," "plans," "intends," "may," "could," "might," "will," "should," "approximately" or other words that convey uncertainty of future events or outcomes to identify these forward-looking
statements. Forward-looking statements appear in a number of places throughout this prospectus and include statements regarding our intentions, beliefs, projections, outlook, analyses or current
expectations concerning, among other things, our expectations regarding future ABI under our brand contracts with EJ Manuel, Vernon Davis and Arian Foster, including longevity of each of their careers
and an ability to enter into additional included contracts, our expectation that we will enter into other brand contracts, our ability to conduct additional offerings of new tracking stocks or
otherwise finance the purchase of additional ABI, our ability to build a portfolio of brands, our ability to contribute to the contract party's efforts to build brand value, our ability to consummate
the offerings of Fantex Series Vernon Davis and Fantex Series Arian Foster, our attribution policies with respect to our series of common stock, our results of operations, cash needs, spending of the
net proceeds from this offering, financial condition, liquidity, prospects, growth and strategies, and the trends that may affect us or the contract parties.
By
their nature, forward-looking statements involve risks and uncertainties because they relate to events, competitive dynamics and industry change, and depend on the economic
circumstances that may or may not occur in the future or may occur on longer or shorter timelines than anticipated. Although we believe that we have a reasonable basis for each forward-looking
statement contained in this prospectus, we caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and
liquidity, and the development of the field in which we operate, may differ materially from the forward-looking statements contained in this prospectus. In addition, even if our results of operations,
financial condition and liquidity, and the development of the field in which we operate are consistent with the forward-looking statements contained in this prospectus, they may not be predictive of
results or developments in future periods.
Any
forward-looking statements that we make in this prospectus speak only as of the date of such statement, and we undertake no obligation to update such statements to reflect events or
circumstances after the date of this prospectus or to reflect the occurrence of unanticipated events. Comparisons of results for current and any prior periods are not intended to express any future
trends or indications of future performance, unless expressed as such, and should only be viewed as historical data.
You
should also read carefully the factors described in the "Risk Factors" section of this prospectus and elsewhere to better understand the risks and uncertainties inherent in our
business and underlying any forward-looking statements. As a result of these factors, we cannot assure you that the forward-looking statements in this prospectus will prove to be accurate.
Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not
regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified timeframe, or at all. The Private Securities Litigation
Reform Act of 1995 and Section 27A of the Securities Act, do not protect any forward-looking statements that we make in connection with this offering.
We
obtained data in this prospectus regarding the NFL and athletes in the NFL from our own internal estimates and research as well as from general publications, surveys and studies
conducted by third parties. While we believe that the information is reliable, we have not independently verified the data from third-party sources. While we believe our internal company research is
reliable and the market definitions we use are appropriate, neither such research nor these definitions have been verified by any independent source.
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USE OF PROCEEDS
We expect that our net proceeds from the sale of the shares of common stock in this offering will be approximately $4,975,150, assuming
the sale of 523,700 shares of Fantex Series EJ Manuel in this offering at an initial public offering price of $10.00 per share (in each case the amounts set forth on the front cover of this
prospectus), after deducting underwriting discounts payable by us. See "Underwriting (Conflicts of Interest)" for additional detail regarding the underwriting discounts. Offering expenses, estimated
to be $            , will be paid by our parent and are not included in the calculation of net proceeds.
On
April 3, 2013, we received an equity contribution of $2.0 million from our parent to provide working capital to finance our operating expenses. As consideration for the
ABI under our brand contract with EJ Manuel we have agreed to pay him a one-time cash amount of $4.98 million contingent upon our ability to obtain financing. We will use all of our net
proceeds from the offering of our Fantex Series EJ Manuel, together with existing cash and cash equivalents if necessary, to fund the payment of this purchase price to EJ Manuel pursuant to our
brand contract with him.
The
following table represents the expected use of the proceeds of the sale of the shares of Fantex Series EJ Manuel in this offering:
Amount of Proceeds
Percentage of
Total
Proceeds
Expected use of the proceeds from this offering
Payment of the underwriting discount
$
261,850
5.000
%
Payment of the brand contract purchase price to EJ Manuel
4,975,000
94.997
%
General working capital for our operations
150
0.003
%
​
​
​
​
​
​
​
​
Total proceeds expected from this offering
$
5,237,000
100
%
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
One
of the principal purposes of this offering is to obtain capital to finance the payment of the purchase price for the ABI pursuant to the EJ Manuel brand contract. We intend to use
the net proceeds from this offering and our existing cash and cash equivalents, together with interest thereon but after payment of the purchase price under the EJ Manuel brand contract, for general
working capital to fund our operations. Although it is difficult to predict future liquidity requirements, we believe that our existing cash and cash equivalents will be sufficient to fund our
operations for at least the next 12 months.
We
are actively pursuing the acquisition of additional brands, and any brand contracts that we enter into in the future with other contract parties are expected to be contingent upon
obtaining financing to fund the acquisition of the minority interest in the respective brands. We intend to finance the acquisition of additional brands through the issuance of additional tracking
stocks linked to the value of such brands, rather than through use of any of our existing cash and cash equivalents.
Pending
use of our cash and cash equivalents for our operations, we intend to invest the net proceeds of this offering and our existing cash and cash equivalents after payment of the
purchase price to EJ Manuel under the brand contract in a variety of capital preservation investments, including short- term, interest-bearing investment grade securities, money market accounts,
certificates of deposit and direct or guaranteed obligations of the U.S. government.
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DIVIDEND POLICY
Our board of directors is permitted, but not required, to declare and pay dividends on our platform common stock or any of our tracking
stock (including our Fantex Series EJ Manuel) in an amount up to the "available dividend amount" for the applicable series, to the extent permitted by the Delaware General Corporation Law.
The
available dividend amount for any tracking stock is as of any date an amount equal to the lesser of (a) total assets of our company legally available for the payment of
dividends under Delaware law and (b) an amount equal to:
•
the excess of the total assets attributed to the tracking stock brand over the total liabilities attributed to the
tracking stock brand, less the par value of the outstanding shares of such tracking stock; or
•
if there is no such excess, the attributable income of the tracking stock brand for the fiscal year in which the dividend
is being declared and/or the preceding fiscal year.
For
example, if the attributed assets for a tracking stock brand as of a date of determination consisted of cash in the amount of $100,000, and the attributed liabilities for a tracking
stock brand as of that same date were in the aggregate $50,000, then the available dividend amount for that tracking stock at that time would be approximately $50,000. If in the prior example the
attributed liabilities were greater than the attributable assets, then instead the available dividend amount would be based on the total income attributable to that tracking stock for the current
fiscal year and/or the prior fiscal year. For example, if attributable income in the prior year were $50,000, then the available dividend amount would be $50,000. We will provide unaudited attributed
financial information as an exhibit to our periodic reports that we file pursuant to the Exchange Act. The unaudited attributed financial information will show the attribution of our assets,
liabilities, revenue, expenses and cash flows to each of our tracking stock and our platform common stock, and our available dividend amount as of any period may be determined based on such attributed
financial information.
The
available dividend amount for our platform common stock is as of any date an amount equal to the amount of our total assets legally available for the payment of dividends under
Delaware law, less the aggregate amount of the "available dividend amount" for all of our then outstanding tracking stock.
To
date, we have never declared or paid any cash dividends on our capital stock. Following this offering, we intend to pay cash dividends from time to time out of available cash for each
tracking stock, including Fantex Series EJ Manuel, equal to an amount in excess of 20% of the "available dividend amount" for such series. Because of the seasonal nature of the brand income
underlying our tracking stock, the dividends for a tracking stock would be expected to coincide with the seasonal receipt of cash pursuant to the underlying brand contract. For example, because of the
timing of the football season, to the extent we declare dividends on the Fantex Series EJ Manuel, these dividends are likely to be declared in the first or second fiscal quarters, following the
end of the NFL season, and they will not coincide with the third and fourth fiscal quarters during the NFL season. We do not intend to declare dividends on our platform common stock for the
foreseeable future.
Certain
dividends paid may be considered a return of capital for U.S. federal income tax purposes. Please see "Material U.S. Federal Income Tax Considerations—Dividends and
Distributions" for a detailed description of the tax treatment of the dividends and other distributions of cash or property to holders of the Fantex Series EJ Manuel.
Our
board of directors has discretion to declare a dividend on any series of common stock without declaring a dividend on any other series of our common stock. In general, our board of
directors does
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not
expect to declare dividends on any series of common stock in an amount greater than the attributed cash on hand for such series.
If
we sell all or substantially all of the assets of a tracking stock brand (but not in connection with a sale of our company), our board of directors will 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 our platform common stock following the two-year anniversary
of the filing of a certificate of designation creating such tracking stock or some combination of the foregoing.
Our
board of directors may change its dividend policy at any time and from time to time, and we may retain some or all available funds and future income to support our operations and
finance the growth and development of our business as well as, in some circumstances, invest some of the available funds to further enhance a brand or acquire additional ABI in a brand if we believe
that those would be more productive uses of some or all of the available funds. However, our board of directors will not in any event change the definition of "available dividend amount" for any
series of our common stock or declare dividends on any series of our common stock in excess of the "available dividend amount" for that series.
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CAPITALIZATION
The following table sets forth our cash and cash equivalents and our capitalization as of December 31, 2013
on:
•
an actual basis; and;
•
a pro forma, as adjusted basis after further giving effect to an increase in authorized shares and designation for
tracking stock and the sale of 523,700 shares of Fantex Series EJ Manuel offered in this offering at an initial public offering price of $10.00 per share (in each case based on assumed amounts
set forth on the front cover of this prospectus), after deducting underwriting discounts payable by us, and assuming the offering for Fantex Series Arian Foster has not been consummated. Offering
expenses, estimated to be $            , will be paid by our parent and are not included in the calculation of cash and cash equivalents.
The
information in this table is illustrative only and our capitalization following the closing of this offering will be adjusted based on the actual initial public offering price and
other terms of this offering determined at pricing. You should read this table in conjunction with the information contained in "Use of Proceeds" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations," as well as the financial statements and the notes thereto included elsewhere in this prospectus:
December 31, 2013
Actual
Pro forma,
As adjusted
Cash and cash equivalents
$
466,833
$
5,441,983
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
Stockholders' equity:
Common stock, $0.0001 par value; 100,000,000 shares authorized, actual; 1,500,000,000 shares authorized, pro forma, as adjusted:
Platform Common Stock; 100,000,000 shares designated, issued and outstanding, actual and pro forma, as adjusted
10,000
10,000
Fantex Series EJ Manuel; 0 shares designated, issued and outstanding, actual; 523,700 shares designated, issued and outstanding, pro forma, as
adjusted
—
52
Additional Paid in Capital
5,388,192
10,363,290
Accumulated Losses
(4,625,318
)
(4,625,318
)
​
​
​
​
​
​
​
​
Total Stockholders' Equity
772,874
5,748,024
​
​
​
​
​
​
​
​
Total Capitalization
$
772,874
5,748,024
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
The
number of shares of our common stock to be outstanding immediately following this offering set forth above is based on 100,000,000 shares of our common stock outstanding as of
December 31, 2013, giving effect to the 1,000,000-for-1 stock split of our common stock effective as of November 1, 2013 and zero shares of Fantex Series EJ Manuel or any other
tracking stock outstanding as of December 31, 2013.
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DILUTION
If you purchase shares of our Fantex Series EJ Manuel in this offering, your interest, on an as converted to platform common
stock basis, will be diluted to the extent of the difference between the initial public offering price per share of our Fantex Series EJ Manuel and the pro forma as adjusted net tangible book
value per share of our common stock, assuming conversion of the Fantex Series EJ Manuel into platform common stock, immediately after this offering.
Net
tangible book value per share is determined by dividing our total tangible assets less our total liabilities by the number of shares of outstanding common stock, assuming conversion
of the Fantex Series EJ Manuel into platform common stock. Our historical net tangible book value (deficit) as of December 31, 2013 was $772,874, or $0.0077 per share.
Our
pro forma, as adjusted, net tangible book value (deficit) as of December 31, 2013 was $5,748,024, or $0.0298 per share of common stock, assuming conversion of the Fantex
Series EJ Manuel into platform common stock, after giving effect to the following:
•
sale by us of 523,700 shares of Fantex Series EJ Manuel in this offering at an initial public offering price of
$10.00 per share (in each case based on assumed amounts set forth on the front cover of this prospectus), after deducting underwriting discounts payable by us (or $0.0565 per share, on an as converted
to platform common stock basis); and
•
the payment by us of the $4.98 million purchase price to EJ Manuel for the ABI under our brand contract with him.
The
pro forma, as adjusted, net tangible book value (deficit) set forth above represents an immediate increase in net tangible book value of $0.0221 per share to our existing holders of
platform common
stock, assuming conversion of the Fantex Series EJ Manuel into platform common stock, and an immediate dilution in net tangible book value of approximately $0.0267 per share to new investors
purchasing shares of Fantex Series EJ Manuel in this offering, on an as converted to platform common stock basis. The following table illustrates this dilution on a per share basis:
Assumed initial public offering price per share
$
10.00
Assumed initial public offering price per share, on an as converted to platform common stock basis
0.0565
Pro forma net tangible book value (deficit) per share as of December 31, 2013
0.0077
Increase in pro forma net tangible book value (deficit) per share attributable to new investors
0.0221
Pro forma as adjusted net tangible book value per share after this offering
0.0298
Dilution per share to investors in this offering
0.0267
​
​
​
​
​
​
​
​
Dilution per share to investors in this offering, prior to conversion
$
4.72
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
The
foregoing calculations are based on 100 million shares of platform common stock outstanding as of December 31, 2013, reflecting the reclassification of all outstanding
shares of our common stock into shares of our platform common stock upon the 1,000,000-for-1 stock split effected on November 1, 2013. In addition, for purposes of determining the conversion
ratio of a share of Fantex Series EJ Manuel into platform common stock, we calculated the fair value of a share of platform common stock by dividing an assumed fair value of our platform unit
by the number of shares of our platform common stock outstanding as of December 31, 2013 as set forth above. The fair value of the platform unit was assumed to be $5.65 million based
upon the capital contributions to the company from the parent plus the imputed value of the 5% of the ABI that we will attribute to the platform unit.
We
expect that we will need to raise additional capital to fund additional brand acquisitions, we may in the future sell substantial amounts of common stock or securities convertible
into or exchangeable for common stock. We may also choose to raise additional capital due to market conditions or other strategic considerations even if we believe we have sufficient funds for our
current or future operating plans. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of these securities could result in further
dilution to our stockholders.
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MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read in
conjunction with our financial statements and related notes included elsewhere in this prospectus. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual
results could differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in
the section entitled "Risk Factors" included elsewhere in this prospectus.
Overview
We are a brand acquisition, marketing and brand development company whose focus is on acquiring minority interests in the income
associated with the brands of professional athletes, entertainers and other high-profile individuals and assisting such individuals in enhancing the
reach and value of the brands we acquire. The business operates in a single segment and our focus is on three core areas:
•
evaluating, targeting and accessing individuals and brands with the potential to generate significant income associated
with these brands, or brand income;
•
acquiring minority interests in such brand income; and
•
assisting our acquired brands in increasing their value via technology and through leveraging our marketing, advertising
and strategic partnering expertise.
We
were incorporated in Delaware on September 14, 2012 as a wholly-owned subsidiary of Fantex Holdings, our parent. Fantex Holdings was incorporated in Delaware on April 9,
2012. We are currently a development-stage entity and have to date relied on our parent to conduct our operations through its employees. Following the consummation of our first public offering we
intend to operate under a management agreement with our parent, who will provide us with management and administrative services, including providing and compensating our executive management and other
personnel as well as services relating to information technology support, brand management and other support, operations, facilities, human resources, tax planning and administration, accounting,
treasury and insurance. We will begin to assume management and administrative tasks at such time in the future as the actual cost of these services is less than our service fee to Fantex Holdings,
which we do not anticipate will occur until we begin to generate significant cash flows from multiple brand contracts. However, if our parent is unable to perform any of the services that they are
required to perform under the management agreement, due to financial difficulty or otherwise, then we may be forced to assume management and administrative tasks, and incur additional expenses, sooner
than we anticipate. Until such time, we will continue to rely on our parent to conduct our operations in accordance with the management agreement.
Results of Operations
Period from September 14, 2012 (inception) to December 31, 2012 and year ended December 31, 2013
We have little operational history and are not currently generating revenues. We, therefore, have no results of operations for the year
ended December 31, 2012 and 2013. All of our costs to date have been allocated to us from our parent, which has identified all activities and costs related to our operations. Expenses such as
personnel and facility costs were primarily allocated based on the estimated number of full time equivalent (FTE) employees working on activities associated with us. All personnel costs were allocated
based on an estimated percentage of time spent on our activities. Facility costs were allocated based on the FTE associated with us as a percentage of all employees of our parent. All other costs were
specifically identified and charged to us as deemed appropriate. All
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estimates
are deemed to be reasonable and reflect, in the best judgment of our management, the costs associated with our activities.
The
most significant costs incurred by us or our parent to date were professional services. Our parent incurred, and allocated to us, $798,231 in professional services expenses in the
period from inception to December 31, 2012 and $2,305,020 for the year ended December 31, 2013. This increase in expense from 2012 to 2013 was due primarily to a longer operating period
of 12 months in 2013 versus three and a half months in 2012 and reflected increased marketing and public relations costs in connection with the initial public offering of Fantex Series Arian
Foster as well as an increase in expenses related to pursuing potential contact parties, which increase was partially offset by lower costs relating to legal and regulatory structuring in 2013 as
compared to 2012, including significant costs associated with commencement of operations.
We
have dedicated significant resources to commencing operations, including but not limited to company formation, brand research, compliance with various legal and regulatory
requirements, and pursuing brand contract acquisition. We believe that some of these costs are primarily associated with the start-up phase of the company and may decrease as our operations mature.
However, we will incur additional professional services expenses as a result of becoming a public company and expanding the business, particularly with respect to entering into additional brand
contracts and as a result of future financings, which expenses may offset any such decrease in initial start-up costs. As a result, we anticipate overall increased professional services expenses in
the future to support our operations.
We
currently have no employees, but are being supported by personnel employed by our parent. We were allocated personnel and related benefits expenses of $98,174 for the period from
inception through December 31, 2012, and $875,718 for the year ended December 31, 2013. Our parent continues to dedicate more personnel to the brand contract acquisition, legal and
branding efforts resulting in a total of approximately nine FTEs as of December 31, 2013.
Three
stockholders of our parent serve as our officers, including as our chief executive officer and the chief financial officer. Although these individuals purchased founders stock in
Fantex Holdings upon formation of our parent or received grants of options in our parent, prior to June 1, 2013 they had received no compensation for their services from either us or our
parent. Prior to June 1, 2013, the allocation of expenses from our parent for personnel does not include imputed costs for these officers, but does include other costs incurred by our parent
for those officers, such as travel, benefits and facilities expenses. Our parent began to pay cash compensation to our officers on June 1, 2013, and a portion of personnel costs allocated to us
from our parent based on an estimated percentage of their time spent on our activities for the year ended December 31, 2013 was $217,860. If our parent had incurred personnel costs for these
three officers, and allocated costs to us based on an estimated percentage of their time spent on our activities, such allocated costs to us from our parent would have been approximately $170,000 for
the period from inception through December 31, 2012.
We
have also devoted resources to target, access and negotiate for the acquisition of brands that meet our criteria, including travel and related expenditures of $121,507, for the period
from inception through December 31, 2012 and $289,131 for the year ended December 31, 2013. We believe that as we expand our operations these costs will continue to increase.
We
share our parent's real estate facility located in San Francisco, California, and we are allocated expenses from our parent equal to a portion of the facility expenses in an amount of
$45,111 for the period from inception through December 31, 2012 and $92,296 for the year ended December 31, 2013. As we grow in head count, our share of the facilities expense may
increase, however the rate at which our facility expense increases will depend on the head count growth at both our parent and at FBS, our parent's wholly-owned subsidiary who also shares the same
facility.
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On
February 28, 2013, we entered into a brand contract with Arian Foster, a running back for the Houston Texans of the NFL and his affiliated professional services company, The
Ugly Duck, LLC and amended and restated such brand contract on each of May 24, 2013 and August 21, 2013. The brand contract assigns to us 20% of the gross monies or other
consideration (including rights to make investments) that Arian Foster receives from and after February 28, 2013, subject to specified exceptions and net of certain specified expenses, as a
result of Arian Foster's activities in the NFL and related fields (including activities in a non-NFL football league), such as broadcasting and coaching. Our contract with Arian Foster is contingent
upon obtaining financing to fund the acquisition of this brand
income. Our brand contract with Arian Foster is more fully described in the section entitled "Business—Other Brand Contracts—Arian Foster Brand Contract," in the footnotes of
the audited financial statements and the Statements of Cash Receipts from Included Contracts Subject to the Brand Agreement between Fantex, Inc. and Arian Foster and his affiliate The Ugly
Duck, LLC dated February 28, 2013, which we refer to as the Statement of Cash Receipts from Included Contracts for Arian Foster, included elsewhere in this prospectus.
On
October 30, 2013, we entered into a brand contract with Vernon Davis, a tight end for the 49ers of the NFL and his affiliated professional services company, The Duke
Marketing LLC. The brand contract assigns to us 10% of the gross monies or other consideration (including rights to make investments) that Vernon Davis receives from and after
October 30, 2013, subject to specified exceptions and net of certain related expenses (such as legal fees, travel expenses and self-employment taxes) as a result of his activities in football
and related fields (including NFL and non-NFL activities), such as broadcasting and coaching. Our contract with Vernon Davis is contingent upon obtaining financing to fund the acquisition of this
brand income. Our brand contract with Vernon Davis is more fully described in the section entitled "Business—Vernon Davis Brand—Vernon Davis Brand Contract," in the footnotes
of the audited financial statements and the Statements of Cash Receipts from Included Contracts Subject to the Brand Agreement between Fantex, Inc. and Vernon Davis and his affiliate The Duke
Marketing, LLC dated October 30, 2013, which we refer to as the Statement of Cash Receipts from Included Contracts for Vernon Davis, included elsewhere in this prospectus.
On
February 14, 2014, we entered into a brand contract with EJ Manuel, a quarterback for the Bills of the NFL and his affiliated professional services company, Kire
Enterprises LLC. The brand contract assigns to us 10% of the gross monies or other consideration (including rights to make investments) that EJ Manuel receives from and after
February 14, 2014, subject to specified exceptions and net of certain related expenses (such as legal fees, travel expenses and self-employment taxes) as a result of his activities in football
and related fields (including NFL and non-NFL activities), such as broadcasting and coaching. Our contract with EJ Manuel is contingent upon obtaining financing to fund the acquisition of this brand
income. Our brand contract with EJ Manuel is more fully described in the section entitled "Business—EJ Manuel Brand—EJ Manuel Brand Contract," in the footnotes of the audited
financial statements and the Statements of Cash Receipts from Included Contracts Subject to the Brand Agreement between Fantex, Inc. and EJ Manuel and his affiliate Kire Enterprises LLC
dated February 14, 2014, which we refer to as the Statement of Cash Receipts from Included Contracts for EJ Manuel, or collectively with the Statement of Cash Receipts from Included Contracts
for Vernon Davis and the Statement of Cash Receipts from Included Contracts for Arian Foster, as the Statements of Cash Receipts from Included Contracts, included elsewhere in this prospectus.
As
the operations of Fantex mature, we expect to continue to incur expenses of the type and nature described above. In addition, following the consummation of our first public offering,
we expect to incur service fees pursuant to our management agreement with our parent. We also expect to build internal staff and begin to incur expenses on our own behalf to administer our brand
contracts, including supporting cash collection and ensuring all sources of brand income subject to our agreement are identified, potential disclosures are identified and brought to management's
attention and that our contract rights are enforced.
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We
also expect to incur marketing and promotion expenses anticipated to be approximately $50,000 per tracking stock brand per year, with such amount expected to decrease as we scale.
However, we will incur this cost indirectly (as part of the service fee) while such services are provided by our parent pursuant to the management agreement. We will begin to incur these costs
directly as we grow our internal marketing infrastructure. See "Management and Attribution Policies" for a discussion about how these expenses will be attributed to our tracking stock brands.
Liquidity and Capital Resources
To date, we have relied exclusively on our parent for liquidity and capital resources. Our parent contributed capital in the amount of
$1.1 million from inception through December 31, 2012 and $4.3 million for the year ended December 31, 2013. The contributed capital includes indirect expenses paid by our
parent on our behalf, as well as an equity cash contribution of $2.0 million on April 3, 2013 to provide additional working capital to finance our operating expenses. Starting with the
quarter ended September 30, 2013, we began reimbursing our parent for certain costs directly associated with operating our business. These costs include personnel and related costs for
employees wholly dedicated to the Company, legal and other professional services directly related to the Company's operations as well as any travel expenses incurred by wholly dedicated employees. For
the year ended December 31, 2013, the Company has reimbursed the parent approximately $1.6 million of direct costs of operations. Prior to the consummation of our first public offering
and effectiveness of the management agreement discussed below, our parent has and intends to continue to fund our operations through direct cash contributions and non-cash contributions.
We
are not committed to any capital expenditures and certain agreements, such as rental commitments, are in the name of our parent. We expect, however, that our operations (excluding
upfront payments under future brand contracts) will continue to consume substantial amounts of cash as we aggressively build our platform of brands and our internal marketing, compliance and other
administrative functions. Following the consummation of our first public offering we will operate under a management agreement with our parent, pursuant to which our parent will provide us with
certain management and administrative services, including providing and compensating our executive management and other personnel, as well as services relating to information technology support, brand
management and other support operations, facilities, human resources, tax planning and administration, accounting, treasury and insurance. We will pay our parent a fee equal to 5% of the amount of
gross cash received by us, if any, for such services under the management agreement.
We
will begin to assume management and administrative tasks at such time in the future as the actual cost of these services is less than our service fee to Fantex Holdings, which we do
not anticipate would occur until we begin to generate significant cash flows from multiple brand contracts. However, if our parent is unable to perform any of the services that they are required to
perform under the management agreement, due to financial difficulty or otherwise, then we may be forced to assume management and administrative tasks, and incur additional expenses, sooner than we
anticipate. Until such time, we will continue to rely on our parent to conduct our operations in accordance with the management agreement. Our parent has no obligation to continue to finance our
operations, and they do not intend to continue to finance our operations or provide us any other assistance, except as required under our management agreement with them.
We
believe the net proceeds from this offering together with existing cash and cash equivalents and interest thereon will be sufficient to fund our projected operating expenses for the
next 12 months. However, if our operating and other expenses are higher than we expect or our cash receipts from brand contracts are lower than we expect then we may also need to raise
additional funds sooner.
In
addition, any brand contracts that we enter into in the future with other contract parties will require us to make substantial upfront payments to acquire the ABI under such brand
contracts. We do
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not,
and following this offering we do not expect to have, the necessary funds that we would need to make any of these upfront payments under future brand contracts. Therefore, we expect that our
future brand contracts for the foreseeable future will be contingent upon obtaining financing to fund the acquisition of the ABI in the respective brands, and we intend to finance these acquisitions
through the issuance of additional tracking stocks linked to the value of such brands.
Until
we begin receiving a sufficient amount of cash from our brand contracts, if ever, we expect to finance future cash needs through public or private equity or debt offerings.
Additional capital may not be available on reasonable terms, if at all. If we are unable to raise additional capital in sufficient amounts or on terms acceptable to us we may not be able to continue
to acquire additional ABI in other brands and we may have to significantly delay, scale back or discontinue our operations. If we raise additional funds through the issuance of additional debt or
equity securities it could result in dilution to our existing stockholders, and/or fixed payment obligations that could reduce our ability to pay dividends or otherwise fund our other operations.
Furthermore, these securities may have rights senior to those of our common stock and could contain covenants that would restrict our operations and potentially impair our competitiveness, such as
limitations on our ability to incur additional debt, limitations on our ability to acquire, sell or license brands without consent and other operating restrictions that could adversely impact our
ability to conduct our business.
In
addition, cash received under our brand contracts may be subject to seasonal variation. For example, the salary under NFL contracts is usually paid out in even installments during the
course of the NFL season, or as a signing bonus according to varying schedules. The NFL season occurs primarily in the third and fourth quarters of each calendar year and therefore, we expect that
there will be seasonal fluctuations in our attributed income.
Critical Accounting Policies
Our financial statements have been prepared in conformity with accounting principles generally accepted in the United States. The
preparation of financial statements in conformity with GAAP requires our management to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements. On an
ongoing basis, management will evaluate these estimates, including those related to accounts receivable, fair values of financial instruments, income taxes, and contingent liabilities, among others.
Estimates will be based on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values
of assets and liabilities. Actual results could differ materially from these estimates.
The
critical accounting policies requiring estimates, assumptions and judgments that we believe have the most significant impact on our financial statements are described below.
Income Taxes
Income taxes are accounted for under the asset and liability method, which requires the recognition of deferred tax assets and
liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the
differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a
change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.
Deferred
tax assets are recorded to the extent management believes these assets will more likely than not be realized. In making such a determination, all available positive and negative
evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations is considered. In the event
it is determined that
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we
would be able to realize deferred tax assets in the future, an adjustment to the deferred tax asset valuation allowance would be made, which would reduce the provision for income taxes.
Uncertain
tax positions are recorded on the basis of a two-step process whereby (1) it is determined whether it is more likely than not that the tax positions will be sustained
based on the technical merits of the position and (2) those tax positions that meet the more-likely-than-not recognition threshold, the largest amount of tax benefit that is greater than
50 percent likely to be realized upon ultimate settlement with the related tax authority would be recognized.
Fair Value Option
The contracts with the contract parties represent a right to receive certain cash flows from the contract parties, and therefore, the
brand contracts meet the definition of a financial asset under GAAP. As financial assets, the brand contracts are precluded from being accounted for as intangible assets. We have elected to account
for the brand contracts at fair value, with changes recognized in the statement of operations. We believe measurement of the brand contracts at fair value provides the most meaningful information to
users of our financial statements, because the value of the brand contracts may increase or decrease over time based on future events. We believe that the change in fair value through net income or
loss provides a better indicator of the performance of the brand contracts for a given year, enhances transparency, and is more in line with how we manage the risks of the brand contracts.
Fair Value of Financial Instruments
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. Where available, fair value is based on observable market prices or parameters or derived from such prices or parameters. Where observable prices or inputs
are not available, valuation models are applied. These valuation models involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the
instruments or market and the instruments' complexity for disclosure purposes. Assets and liabilities in the balance sheet are categorized based upon the level of judgment associated with the inputs
used to measure their value. Hierarchical levels, as defined under GAAP, are directly related to the amount of subjectivity associated with the inputs to fair valuations of these assets and
liabilities, and are as follows:
•
Level 1
—Inputs are unadjusted, quoted prices in active markets for identical
assets or liabilities at the measurement date. The types of assets generally included in this category are mutual funds.
•
Level 2
—Inputs are other than quoted prices included in Level 1 that are
observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar instruments in active markets, and inputs other than quoted prices that
are observable for the asset or liability.
•
Level 3
—Inputs are unobservable inputs for the asset or liability, and include
situations where there is little, if any, market activity for the asset or liability. The types of assets and liabilities generally included in this category are our brand contracts.
A
significant decrease in the volume and level of activity for the asset or liability is an indication that transactions or quoted prices may not be representative of fair value because
in such market conditions there may be increased instances of transactions that are not orderly. In those circumstances, further analysis of transactions or quoted prices is needed, and a significant
adjustment to the transactions or quoted prices may be necessary to estimate fair value.
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The
availability of observable inputs can vary depending on the financial asset or liability and is affected by a wide variety of factors, including, for example, the type of product,
whether the product is new, whether the product is traded on an active exchange or in the secondary market, and the current market conditions. To the extent that valuation is based on models or inputs
that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by our management in determining fair
value is greatest for instruments categorized in Level 3. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for
disclosure purposes, the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair
value measurement in its entirety. Our management's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and consideration of factors
specific to the asset. The variability of the observable inputs affected by the factors described above may cause transfers between Levels 1, 2, and/or 3, which our management recognizes at the
end of the reporting period.
Depending
on the relative liquidity in the markets for certain assets, our management may classify assets as Level 3 if they determine that observable quoted prices, obtained
directly or indirectly, are not available. The valuation models used for the assets and liabilities that are valued using Level 3 of the fair value hierarchy are described below.
Valuation Process
The valuation process involved in Level 3 measurements for assets and liabilities would be completed on no less than a quarterly
basis and is designed to subject the valuation of Level 3 investments, including our brand contracts, to an appropriate level of consistency, oversight and review.
Our
internal investment professionals, which include employees of both Fantex and our parent, Fantex Holdings, are responsible for estimating fair value based on various factors
including:
•
current playing contract including: amounts, duration, incentive provisions, guaranteed portions, if any, termination and
other important terms;
•
current endorsement contracts, if any, including: amounts, duration, contract terms;
•
age and health (including injuries) of the individual associated with the brand, duration of career to date and prospects
for additional future contracts, both playing and endorsement;
•
our estimate of potential future playing and endorsement contracts, including duration and value;
•
position and data specific to that position focused on estimating longevity of career;
•
reported contract value increases or decreases for other comparable players (by position and status they hold among their
peers (e.g. All Pro, MVP, franchise player and the like)) in order to estimate future contract values; and
•
risk free cost of capital.
In
addition, we consider a number of qualitative factors to develop estimates used in our models, including:
•
the stated aspirations and goals of the contract party;
•
certain intangibles of the contract party, including media relationships, communication ability, "likeability," demand as
a product endorser, personal drive and ambition;
•
social footprint (for example, number of Twitter followers);
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•
the market in which the contract party performs and how that may impact the number and amount of endorsement
opportunities;
•
the reach of the brand of the contract party;
•
value of TV contracts and the rate of growth in those contracts; and
•
attendance trends in the contract party's primary field of performance.
We
consider all of these factors to estimate brand income for use in a discounted cash flow model. These estimates include amounts based on existing contracts as well as our estimates of
amounts to be received for anticipated future contracts. With respect to existing contracts we consider that certain amounts are reasonably assured of realization, but that most earnings from existing
contracts depend on continued satisfactory performance. To determine the amount of the purchase price of a brand contract and a fair current value we apply discount rates to our estimates of earnings.
In
general, we apply lower discount rates to amounts associated with existing contracts, particularly portions of those contracts that have a higher degree of certainty of payment, and
higher discount rates to amounts associated with future potential earnings under existing contracts and to potential earnings under anticipated future contracts. Further, discount rates rise over time
to reflect that uncertainty increases over time.
The
investment professionals, which include employees of both Fantex and our parent, Fantex Holdings, will document their considerations of this data and it is then reviewed by a
valuation committee consisting of management of our parent, Fantex Holdings, and our officers, including our chief executive officer and chief financial officer. We then utilize the approved valuation
as a basis to negotiate the purchase price of a brand contract. We will follow the same process on no less than a quarterly basis to estimate the fair value of the brand contracts that are then in
effect.
If
our estimates of brand income are too high and/or the discount rates we use in our calculations too low then our valuation of a brand contract may be too high.
Brand Contracts, at Estimated Fair Value
The negotiated value of our brand contracts, including those brand contracts discussed below and brand contracts with any future
contract parties, have been and will continue to be based on a discounted cash flow model using the procedures described above.
In
our analysis we generally consider three categories of potential brand income:
•
Category A—
Potential brand income related to the
portions of existing contracts that have a higher degree of certainty of payment, such as brand income that is very near-term or that is guaranteed under existing included contracts.
•
Category B—
Potential brand income related to the
portions of existing contracts that have a lesser degree of certainty of payment, such as brand income that is payable pursuant to existing included contracts but that depends on longer-term continued
satisfactory performance of the contract party.
•
Category C—
Potential brand income related to
anticipated future contracts, such as future endorsements, playing contracts and/or additional brand income generated from coaching, broadcasting or the like.
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Discount Rates
In determining the discount rates to use, we consider numerous factors such as, for example, yield on CCC-rated bonds and discount
rates of companies that we believe have similar attributes to ours. For example, like us, some biotechnology companies have a very small capitalization, are heavily reliant on the revenues of only a
few products and in many cases, dependent on a single product, and at the time of their initial public offering, their main, if not their only product candidate, was still in development and future
revenues were uncertain and may never be realized.
For
each of our current brand contracts, we based discount rates on our observations that (1) yields on CCC-rated bonds have been trading at less than 10% according to market
research and (2) based on our internal research and discussions with industry participants, we determined that as of February 2014, the average weighted average cost of capital for a
sample set of 36 then publicly-traded biotechnology companies was 11.1%.
In
addition, in determining the appropriate discount rates to use, we also consider the specific risk profile of the contract party.
Career Length
Our career length analysis varies based on the number of years the contract party has performed in his or her primary career, such as
the NFL. To the extent the contract party has sufficient playing experience and statistical data points to build an econometric model that can more accurately predict career length, we intend to use
the econometric model taking into account each of the following factors determined to be statistically significant in predicting career length:
•
Statistical Production.
Our research has indicated that
higher statistical production leads to longer career length. In particular, we measure statistical production through a weighted combination of factors that are relevant to a specific playing
position.
•
Ability to play positions other than the position listed on the team
roster.
Our research indicates that players with the ability to play more than one position have a longer average career length.
•
Durability.
Our research indicates that more durable
players have a longer career length. We measure durability based on a percentage of regular season games played during the total seasons completed as of the date of the analysis.
•
Super Bowl Participation.
Our research indicates that
players participating in at least one Super Bowl have greater expected career length.
•
Draft Position.
Our research indicates that the higher the
draft position, the longer the career length.
•
Early Career Injuries.
Our research indicates that severe
injuries, determined by number of games missed (half a season) or placed on injured reserve, in a player's first through third seasons resulted in shorter career lengths.
We
have determined that players with an active playing career of four complete seasons or more have sufficient playing experience and statistical data points that are useful in building
a meaningful econometric model. The respective weight assigned to each of these factors in our econometric model is dependent on the playing position of the particular contract party.
For
players with shorter careers at the time they enter into the brand contract with us, including for EJ Manuel, we intend to use analytical models that predict that player's career
length based on factors relevant to that specific contract party, as determined on a case by case basis.
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In
addition, in determining career length, we only consider players that have retired from their playing careers in order to more completely assess potential career lengths of contract
parties. We believe that including players who are still active in their professional sport would artificially bias the projected career length downwards given that such a data set would include
players who have just begun their careers and may continue to play for several years longer.
Player Contract Values
As further described in detail below under "—EJ Manuel Brand Contract, at Estimated Fair Value—EJ Manuel
Estimated Brand Income," "—Vernon Davis Brand Contract, at Estimated Fair Value—Vernon Davis Estimated Brand Income" and "—Arian Foster Brand Contract, at Estimated
Fair Value—Arian Foster Estimated Brand Income" in estimating the value of the future player contracts for our contract parties, we review the contracts for players in the professional
sport, retired or active, who are of similar caliber to the contract party and have entered into contracts in a similar era, and who are or were at similar ages and stages in their career at which the
contract party is expected to enter into additional player contracts. The values of such contracts are adjusted for inflation to better predict the contract values of future player contracts for our
contract parties.
EJ Manuel Brand Contract, at Estimated Fair Value
EJ Manuel Estimated Brand Income
On February 14, 2014, we entered into a brand contract with EJ Manuel and his affiliated company, Kire Enterprises LLC.
The table below shows our estimates, based on the quantitative and qualitative factors described above, of Category A, Category B and Category C brand income for EJ Manuel as a
percentage of our estimate of aggregate lifetime brand income, on a gross basis before we applied any discount rates, and on a net basis after we applied our discount rates, as well as the discount
rates that we applied to each of these categories in our estimate of brand value:
Estimated Lifetime Brand
Income
% of Estimated Total
Lifetime Brand Income
Gross amount,
before
applying any
discount rate
(1)
Net amount,
after
applying
discount
rates
Gross amount,
before
applying any
discount rate
Net amount,
after
applying
discount
rates
Weighted-
Average
Discount Rate
Category A
(2)
$
3,723,264
$
3,375,163
3.5
%
6.8
%
4.7
%
Current NFL Contract (2014 - 2016)
$
3,638,264
$
3,301,250
3.5
%
6.7
%
4.5
%
Endorsements (2014)
$
85,000
$
73,913
0.1
%
0.1
%
15.0
%
Category B
$
195,000
$
134,455
0.2
%
0.3
%
15.0
%
NFL Contract (None)
$
0
$
0
0.0
%
0.0
%
—
Endorsements (2015 and beyond)
$
195,000
$
134,455
0.2
%
0.3
%
15.0
%
Category C
$
101,276,268
$
46,101,726
96.3
%
92.9
%
15.0
%
Projected Player Contracts
$
80,306,268
$
36,167,290
76.3
%
72.9
%
14.7
%
Projected Endorsements
$
19,220,000
$
9,715,512
18.3
%
19.6
%
15.8
%
Projected Post-Career
$
1,750,000
$
218,924
1.7
%
0.4
%
20.0
%
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
Total
$
104,337,622
$
49,750,464
100
%
100
%
14.6
%
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
(1)
All
amounts presented are gross payments due to EJ Manuel prior to any exclusion for expenses such as legal fees, travel expenses or self-employment taxes,
which are otherwise excluded from brand income.
(2)
All
amounts included in Category A are from and after February 14, 2014.
(3)
The
amounts payable to EJ Manuel under his NFL Player Contract from 2014 - 2016 are guaranteed.
•
Category A—
Examples of Category A income that we
included in the model for EJ Manuel are his contractual salary for the 2014 - 2016 NFL playing seasons and amounts under existing endorsements through the 2014 NFL playing season, in
each case from and after February 14, 2014.
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•
Category B—
Examples of Category B income that we
included in the model for EJ Manuel are the portions of EJ Manuel's current endorsement contracts for seasons 2015 and beyond.
•
Category C—
Examples of Category C income that we
included in the model for EJ Manuel are:
•
Projected Future NFL Contract
—Potential brand income related
to anticipated future NFL playing contracts, following the expiration of EJ Manuel's current NFL player contract.
•
Projected Endorsements
—Potential brand income related to
anticipated future endorsement contracts during EJ Manuel's NFL playing career. An example of this would include a potential future endorsement contract with a significant new sponsor.
•
Projected Post-Career
—Potential brand income related to
anticipated future contracts, such as future endorsements, and/or additional brand income generated from coaching, broadcasting or the like following EJ Manuel's NFL playing Career.
The
most significant assumptions in our determination of fair value for EJ Manuel's brand contract include:
•
discount rates for each of Category A, Category B and Category C as set forth above;
•
that EJ Manuel would have an NFL career length of at least 10 years; and
•
that during this time he would play out his existing NFL player contract and enter into two additional multi-year NFL
player contracts for at least $80.31 million in total and that he will be able over the same period and beyond to enter into and maintain endorsement contracts (or earn other brand income) that
compensate him in amounts that are significantly in excess of compensation that he has had historically from these sources.
EJ Manuel Discount Rates
In determining the expected brand income for EJ Manuel, we used discount rates ranging from 4.5% to 20.0%, which are slightly higher
than those we have used with respect to the valuation of other brand contracts. We considered this appropriate in order to address the higher degree of uncertainty inherent in our estimates of
projected future contracts given that EJ Manuel has only played one season in the NFL.
EJ Manuel Career Length
EJ Manuel has been a quarterback in the NFL for less than four years. Therefore, we did not use an econometric model in determining his
expected career length. Instead our investment professionals reviewed a data set consisting of all quarterbacks who qualified for the NFL passing title in their rookie season between 1980 and 2012
(i.e. attempted 14 passes per team game over the regular season). According to www.pro-football-reference.com, there were a total of 52 quarterbacks in this data set, of which 28 were retired
at the end of the 2013 NFL season. Based on the average career length of these
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28
quarterbacks, we determined that EJ Manuel would have an estimated career length of 10.32 years, which we rounded down to 10 years for the purposes of our valuation.
Quarterback
Career Length
Troy Aikman
12
Tony Banks
10
Charlie Batch
15
Drew Bledsoe
14
Kyle Boller
9
David Carr
11
Chris Chandler
17
Kerry Collins
17
Tim Couch
5
John Elway
16
Jeff George
14
Joey Harrington
7
Chad Hutchinson
3
Bernie Kosar
12
Ryan Leaf
4
Byron Leftwich
10
Neil Lomax
8
Dan Marino
17
Jim McMahon
15
Cade McNown
2
Rick Mirer
12
Mike Pagel
12
Jake Plummer
10
Patrick Ramsey
9
Heath Shuler
5
Jack Trudeau
10
Chris Weinke
7
David Woodley
6
​
​
​
​
​
Average
10.32
​
​
​
​
​
EJ Manuel Projected Contract Value
In determining that EJ Manuel would play out his existing NFL player contract and enter into two additional multi-year NFL player
contracts, we assumed that he would have
a career length of 10 years, as discussed above. In determining the estimated value of EJ Manuel's potential future NFL player contracts, we started with a data set consisting of all 52
quarterbacks who qualified for the NFL passing title in their rookie season between 1980 and 2012 (i.e. attempted 14 passes per team game over the regular season). We then limited this data set
to quarterbacks who signed one or more post-rookie
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NFL
player contracts in 1999 or thereafter. The following table lists the quarterbacks that met this criteria at the time we entered into the brand contract with EJ Manuel:
Quarterbacks:
Charlie Batch
Byron Leftwich
Drew Bledsoe
Matt Leinart
Kyle Boller
Peyton Manning
David Carr
Kyle Orton
Kerry Collins
Ben Roethlisberger
Trent Edwards
Matt Ryan
Joe Flacco
Mark Sanchez
Josh Freeman
Matthew Stafford
Bruce Gradkowski
Vince Young
Joey Harrington
EJ Manuel's Second NFL Player Contract
EJ Manuel has completed one season in the NFL and has a current NFL player contract that expires following his fourth season in the
NFL. However, the Bills have the option to extend this NFL player contract through EJ Manuel's fifth season. We have assumed that the Bills would enter into negotiations with EJ Manuel for another
multi-year contract after the fourth season in order to mitigate the risk of EJ Manuel becoming an unrestricted free agent, or having to declare him a franchise player, after the completion of his
fifth season. Any NFL team can designate a single player as its franchise player and therefore restrict the player from entering free agency. In return, the team must pay the player a premium salary
of at least the average of the top five players in the league at his position, or 120% of his previous year's salary, whichever is greater. Therefore, we estimated that EJ Manuel would enter into a
second NFL player contract prior to the 2017 season, his fifth NFL season.
In
estimating the value of the this potential second NFL player contract, we reviewed the contracts for the quarterbacks in the above described data set who have entered into NFL player
contracts between their fourth and sixth NFL seasons, resulting in a set of 17 players who have entered into a total of 22 contracts. Based on a mathematical model taking into account statistical
production (a combination of yards per play (rushing and passing), touchdowns per play (rushing and passing), turnovers per play (interceptions and fumbles) and completion percentage), playing time
(total number of plays in the regular season where the quarterback attempted to pass or run the ball) and draft position, we assigned to each of these quarterbacks a relative weighting with the most
comparable quarterbacks to EJ Manuel (based on the above criteria) receiving a higher weighting. We then calculated the weighted average length and weighted average annual value of the contracts
signed by
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these
quarterbacks after adjusting for estimated inflation in quarterback contract values over time. According to Spotrac.com, a division of MG3 WebWorks, the contract data is as follows:
Quarterback
Calendar Year and
Season in which the
new contract was
executed
Contract
Length
Total
Compensation
under the
contract
Average
Annual
Compensation
under the
Contract
Inflation
Adjusted
Average
Annual
Compensation
amounts to
Year 2017
(1)
Weights
applied to
Contract
Length and
Contract
Amounts
Weight-
Adjusted
Contract
Length
Weighted
Inflation
Adjusted
Average
Annual
Compensation
under the
contract
Matthew Stafford
2013; prior to season 5
3
$
53,000,000
$
17,666,667
$
25,922,263
9.80
%
0.29
$
2,539,088
Matt Leinart
2010; prior to season 5
1
$
630,000
$
630,000
$
1,232,388
4.43
%
0.04
$
54,554
Matt Leinart
2011; prior to season 6
2
$
5,500,000
$
2,750,000
$
4,887,763
4.43
%
0.09
$
216,365
Joe Flacco
2013; prior to season 6
6
$
120,600,000
$
20,100,000
$
29,492,688
8.07
%
0.48
$
2,381,062
Joey Harrington
2006; prior to season 5
3
$
7,500,000
$
2,500,000
$
7,175,718
7.59
%
0.23
$
544,342
Trent Edwards
2012; prior to season 6
2
$
1,415,000
$
707,500
$
1,142,548
7.41
%
0.15
$
84,715
Mark Sanchez
2012; prior to season 4
3
$
40,475,000
$
13,491,667
$
21,787,805
6.05
%
0.18
$
1,318,754
Kyle Boller
2008; prior to season 6
1
$
4,500,000
$
4,500,000
$
10,662,983
5.73
%
0.06
$
611,249
Kyle Orton
2008; prior to season 4
2
$
3,520,000
$
1,760,000
$
4,170,411
2.78
%
0.06
$
115,843
Kyle Orton
2010; prior to season 6
2
$
11,621,000
$
5,810,500
$
11,366,337
2.78
%
0.06
$
315,727
Kerry Collins
1999; prior to season 5
4
$
16,900,000
$
4,225,000
$
23,722,425
4.95
%
0.20
$
1,174,034
Byron Leftwich
2007; prior to season 5
1
$
2,073,529
$
2,073,529
$
5,407,616
2.47
%
0.02
$
133,336
Byron Leftwich
2008; prior to season 6
1
$
645,000
$
645,000
$
1,528,361
2.47
%
0.02
$
37,685
Vince Young
2011; prior to season 6
1
$
4,000,000
$
4,000,000
$
7,109,474
4.58
%
0.05
$
325,698
Matt Ryan
2013; prior to season 6
5
$
103,750,000
$
20,750,000
$
30,446,432
4.57
%
0.23
$
1,390,106
Charlie Batch
2002; prior to season 5
1
$
525,000
$
525,000
$
2,211,072
2.27
%
0.02
$
50,268
Charlie Batch
2003; prior to season 6
2
$
2,000,000
$
1,000,000
$
3,826,609
2.27
%
0.05
$
86,996
Josh Freeman
2013; prior to season 5
1
$
2,833,334
$
2,833,334
$
4,157,345
4.54
%
0.05
$
188,842
Bruce Gradkowski
2010; prior to season 5
1
$
1,684,000
$
1,684,000
$
3,294,194
2.23
%
0.02
$
73,315
Bruce Gradkowski
2011; prior to season 6
2
$
4,000,000
$
2,000,000
$
3,554,737
2.23
%
0.04
$
79,114
Ben Roethlisberger
2008; prior to season 5
6
$
87,986,500
$
14,664,417
$
34,748,093
4.25
%
0.26
$
1,477,680
David Carr
2007; prior to season 6
2
$
6,200,000
$
3,100,000
$
8,084,580
4.12
%
0.08
$
332,828
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
Averages
n/a
2.36
$
21,879,926
$
5,791,664
$
11,178,720
100.00
%
2.68
$
13,531,600
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
(1)
Compensation
was adjusted for inflation from the year in which the players entered into a NFL player contract to the year 2017 based on an annual inflation
rate of 10.060%. The inflation rate used was calculated using a weighted average year-to-year growth of earnings from 2000 to 2009 of Pro Bowl and non-Pro Bowl quarterbacks between their fifth season
and seventh season in the NFL.
The
weighted average contract length was 2.68 years which we rounded up to 3 years. We estimated that EJ Manuel will receive a 3 year contract in 2017 with a total
value of $40.59 million.
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EJ Manuel's Third NFL Player Contract
We estimated that EJ Manuel would enter into his third NFL player contract prior to the 2020 season, his eighth NFL season. In
estimating the value of the contract, we reviewed the contracts for quarterbacks in the above described data set have entered into NFL player contracts between their seventh and ninth NFL seasons,
resulting in a set of 11 players who have entered into a total of 18 contracts. Based on a mathematical model taking into account statistical production (a combination of yards per play (rushing and
passing), touchdowns per play (rushing and passing), turnovers per play (interceptions and fumbles) and completion percentage), playing time (total number of plays in the regular season where the
quarterback attempted to pass or run the ball) and draft position, we assigned to each of these quarterbacks a relative weighting with the most comparable quarterbacks to EJ Manuel (based on the above
criteria) receiving a higher weighting. We then calculated the weighted average length and weighted average annual value of the contracts signed by these quarterbacks after adjusting for estimated
inflation in quarterback contract values over time. According to Spotrac.com, a division of MG3 WebWorks, the contract data is as follows:
Quarterback
Calendar Year and
Season in which the
new contract was
executed
Contract
Length
Total
Compensation
under the
contract
Average
Annual
Compensation
under the
Contract
Inflation
Adjusted
Average
Annual
Compensation
amounts
to Year
2020
(1)
Weights
applied to
Contract
Length
and
Contract
Amounts
Weight-
Adjusted
Contract
Length
Weighted
Inflation
Adjusted
Average Annual
Compensation
under the
contract
Matt Leinart
2012; prior to season 7
1
$
700,000
$
700,000
$
1,413,080
14.34
%
0.14
$
202,566
Joey Harrington
2009; prior to season 8
1
$
795,000
$
795,000
$
2,088,510
12.28
%
0.12
$
256,529
Drew Bledsoe
2001; prior to season 9
10
$
103,000,000
$
10,300,000
$
54,622,980
11.40
%
1.14
$
6,228,646
Kyle Boller
2009; prior to season 7
1
$
1,250,000
$
1,250,000
$
3,283,821
3.09
%
0.03
$
101,599
Kyle Boller
2010; prior to season 8
1
$
1,000,000
$
1,000,000
$
2,406,223
3.09
%
0.03
$
74,447
Kyle Boller
2011; prior to season 9
1
$
1,250,000
$
1,250,000
$
2,754,941
3.09
%
0.03
$
85,236
Kyle Orton
2012; prior to season 8
3
$
10,500,000
$
3,500,000
$
7,065,400
9.00
%
0.27
$
635,553
Byron Leftwich
2009; prior to season 7
2
$
7,500,000
$
3,750,000
$
9,851,463
3.99
%
0.08
$
393,312
Byron Leftwich
2011; prior to season 9
1
$
1,750,000
$
1,750,000
$
3,856,917
3.99
%
0.04
$
153,984
Vince Young
2012; prior to season 7
1
$
1,987,500
$
1,987,500
$
4,012,138
3.71
%
0.04
$
148,805
Vince Young
2013; prior to season 8
1
$
715,000
$
715,000
$
1,322,030
3.71
%
0.04
$
49,032
Charlie Batch
2005; prior to season 8
1
$
565,000
$
565,000
$
2,108,882
3.68
%
0.04
$
77,630
Charlie Batch
2006; prior to season 9
3
$
4,220,000
$
1,406,667
$
4,809,074
3.68
%
0.11
$
177,027
Bruce Gradkowski
2013; prior to season 8
3
$
4,950,000
$
1,650,000
$
3,050,837
7.21
%
0.22
$
219,880
Peyton Manning
2004; prior to season 7
7
$
99,200,000
$
14,171,429
$
57,749,873
7.06
%
0.49
$
4,079,519
David Carr
2008; prior to season 7
1
$
1,000,000
$
1,000,000
$
2,868,158
2.22
%
0.02
$
63,729
David Carr
2009; prior to season 8
1
$
2,100,000
$
2,100,000
$
5,516,819
2.22
%
0.02
$
122,581
David Carr
2010; prior to season 9
2
$
6,250,000
$
3,125,000
$
7,519,447
2.22
%
0.04
$
167,078
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
Weighted Averages
2.28
$
13,818,472
$
2,834,200
$
9,794,477
100.00
%
2.91
$
13,237,156
(1)
Compensation
was adjusted for inflation from the year in which the players entered into a NFL player contract to the year 2020 based on an annual inflation
rate of 9.221%. The inflation rate used was calculated using a weighted average year-to-year growth of earnings from 2000 to 2009 of Pro Bowl and non-Pro Bowl quarterbacks between their eighth season
and tenth season in the NFL.
The
weighted average contract length was 2.91 years which we rounded up to 3 years. We estimated that EJ Manuel will receive a 3 year contract in 2020 with a total
value of $39.71 million.
EJ Manuel's Endorsements
In determining that EJ Manuel would enter into and maintain endorsement contracts (or earn other brand income) that compensate him in
amounts that are significantly in excess of compensation that he has had historically from these sources, we considered that endorsement income for players in skill positions increases for those who
demonstrate a sustained and consistently high level of success and achievement at their position. In addition, we have considered that quarterbacks generally have greater endorsement potential than
other skilled players in the NFL. If EJ Manuel can demonstrate
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high
achievement as a quarterback in the NFL, we believe he is a good candidate to realize a higher level of endorsement income.
If
any of our assumptions are incorrect then our estimate of the fair value of EJ Manuel's brand contract may be too high.
Vernon Davis Brand Contract, at Estimated Fair Value
Vernon Davis Estimated Brand Income
On October 30, 2013, we entered into a brand contract with Vernon Davis and his affiliated company, The Duke
Marketing LLC. The table below shows our estimates, based on the quantitative and qualitative factors described above, of Category A, Category B and Category C brand income
for Vernon Davis as a percentage of our estimate of aggregate lifetime brand income, on a gross basis before we applied any discount rates, and on a net basis after we applied our discount rates, as
well as the discount rates that we applied to each of these categories in our estimate of brand value:
Estimated Lifetime
Brand Income
% of Estimated Total
Lifetime Brand Income
Gross amount,
before
applying any
discount
rate
(1)
Net amount,
after
applying
discount
rates
Gross amount,
before
applying any
discount rate
Net amount,
after
applying
discount
rates
Weighted-
Average
Discount Rate
Category A
(2)
$
3,462,900
$
3,425,002
5.7
%
8.7
%
4.5
%
NFL Contract (2013)
(3)
3,414,588
3,377,219
5.6
%
8.6
%
4.5
%
Endorsements (2013)
48,312
47,783
0.1
%
0.1
%
4.5
%
Category B
$
10,663,000
$
9,050,526
17.4
%
23.1
%
10.0
%
NFL Contract (2014 and beyond)
10,250,000
8,699,318
16.7
%
22.2
%
10.0
%
Endorsements (2014 and beyond)
413,000
351,208
0.7
%
0.9
%
10.0
%
Category C
$
47,133,026
$
26,782,368
76.9
%
68.2
%
12.8
%
Projected Player Contract
33,344,338
19,348,544
54.4
%
49.3
%
13.2
%
Projected Endorsements
8,288,689
6,047,439
13.5
%
15.4
%
9.7
%
Projected Post-Career
5,500,000
1,386,385
9.0
%
3.5
%
15.0
%
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
Total
$
61,258,926
$
39,257,896
100
%
100
%
11.4
%
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
(1)
All
amounts presented are gross payments due to Vernon Davis prior to any exclusion for expenses such as legal fees, travel expenses or self-employment
taxes, which are otherwise excluded from brand income.
(2)
All
amounts included in Category A are from and after October 30, 2013.
(3)
The
amounts payable to Vernon Davis under his NFL Player Contract in 2013 are not guaranteed.
•
Category A—
Examples of Category A income that we
included in the model for Vernon Davis are his contractual salary for the 2013 NFL playing season and amounts under existing endorsements through the 2013 NFL playing season, in each case from and
after October 30, 2013.
•
Category B—
Examples of Category B income that we
included in the model for Vernon Davis are the portions of Vernon Davis's current NFL player contract and contracted salary and bonus for seasons 2014 and beyond.
•
Category C—
Examples of Category C income that we
included in the model for Vernon Davis are:
•
Projected Future NFL Contract
—Potential brand income related
to anticipated future NFL playing contracts, following the expiration of Vernon Davis's current NFL player contract.
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•
Projected Endorsements
—Potential brand income related to
anticipated future endorsement contracts during Vernon Davis's NFL playing career. An example of this would include a potential future endorsement contract with a significant new sponsor.
•
Projected Post-Career
—Potential brand income related to
anticipated future contracts, such as future endorsements, and/or additional brand income generated from coaching, broadcasting or the like following Vernon Davis's NFL playing Career. An example of
this would include a potential future contract to be a sports broadcaster.
The
most significant assumptions in our determination of fair value for Vernon Davis's brand contract include:
•
discount rates for each of Category A, Category B and Category C as set forth above;
•
that Vernon Davis would have an NFL career length of at least 14 years; and
•
that during this time he would play out his existing NFL player contract and enter into at least one additional multi-year
NFL player contract for at least $33 million, and that he will be able over the same period and beyond to enter into and maintain endorsement contracts (or earn other brand income) that
compensate him in amounts that are significantly in excess of compensation that he has had historically from these sources.
Vernon Davis Discount Rates
In determining the expected brand income for Vernon Davis, we used discount rates ranging from 4.5% to 15.0%, which we believe
adequately address the uncertainty inherent in our estimates.
Vernon Davis Career Length
To determine the expected career length for Vernon Davis our investment professionals used a proprietary econometric model. The data
set for the model used for Vernon Davis consisted of all tight ends who were drafted in rounds one through seven between 1990 and 2010, who played at least one NFL season and were no longer playing at
the start of the 2013 NFL season. According to www.pro-football-reference.com, there were a total of 212 tight ends in this data set, and the average career length for this group was approximately
5.5 years. Using statistical analysis our investment professionals determined that there were six factors that were the most statistically relevant to a deviation from the average career length
of an NFL tight end. These factors are listed below:
•
Statistical Production.
Our research has indicated that
the relevant statistical measures for a tight end's production are receptions per game, yards per reception and touchdowns per game. Vernon Davis's statistical production based on a weighted
combination of these factors was significantly above the average. In fact, this a majority of the increase in estimated career length for Vernon Davis over the average tight end in our model comes
from this factor.
•
Ability to play positions other than tight end.
Vernon
Davis was determined to play only in one position, and thus this factor did not result in any increase in estimated career length for Vernon Davis in our model.
•
Durability.
Vernon Davis was significantly more durable
than average, and thus this factor results in an increase in estimated career length for Vernon Davis over the average tight end in our model.
•
Super Bowl Participation.
Vernon Davis participated in at
least one Super Bowl, and thus this factor results in an increase in estimated career length for Vernon Davis over the average tight end in our model.
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•
Draft Position.
Vernon Davis was drafted sixth overall and
thus, this factor results in an increase in estimated career length for Vernon Davis over the average tight end in our model.
•
Early Career Injuries.
Vernon Davis did not suffer any
severe injuries in his earlier seasons and thus, this factor results in an increase in estimated career length for Vernon Davis over the average tight end in our model.
Applying
our proprietary econometric model for tight end career length and inputting the values applicable for Vernon Davis for these six factors, we estimated that Vernon Davis's career
length would be approximately 13.4 years. This number was adjusted to produce a total career length for Vernon Davis of 14 years because we do not believe players of Mr. Davis'
caliber are generally cut from the roster in the middle of a season. In addition, we believe that Vernon Davis has a strong desire to, and will attempt to, stay in the NFL for as long as he can
perform in the game, especially given his vocal desire to be an NFL Hall of Fame player. Accordingly, we believe he would be likely to continue to play in the NFL for the length of time that our model
estimates he would continue to play.
Vernon Davis Projected Contract Value
Vernon Davis is currently in his eighth season in the NFL and has a current NFL player contract that expires following his tenth season
in the NFL. In determining that Vernon Davis would play out his existing NFL player contract and enter into at least one additional multi-year NFL player contract, we assumed he would have a career
length of 14 years.
In
determining that Vernon Davis's future NFL player contract would be worth at least $33 million, we reviewed contracts entered into by tight ends within ten years of when Vernon
Davis is expected to enter into his next NFL player contract and who we believed were comparable both in terms of caliber (at least one Pro Bowl and averaged at least 600 receiving yards per season
during their NFL careers), age and stage of their career (played at least eight seasons in the NFL). Only three tight ends met this
criteria. According to Spotrac.com, a division of MG3 WebWorks, the contract data for this comparable group is as follows:
Tight End
Age at
execution of
new contract
Calendar Year
and Season in
which the new
contract was
executed
Length of
the contract
Total
Compensation
under the contract
Average
Annual
Compensation
under the
Contract
(1)
Inflation-adjusted
Compensation
amounts to Year
2016
(2)
Tony Gonzalez
31 years old
2007; prior to Season 11
5 years
$
31.25 million
$
6.25 million
$
8.52 million
Antonio Gates
30 years old
2010; prior to Season 8
6 years
$
39.8 million
$
6.63 million
$
8.15 million
Jeremy Shockey
(3)
30 years old
2011; prior to Season 10
1 year
$
3.81 million
$
3.81 million
$
4.53 million
(1)
Average
amounts include total base salaries and signing bonuses contracted for at the time of entering into the NFL player contract.
(2)
Compensation
was adjusted for inflation from the year in which the players entered into the NFL player contract to the year 2016 based on an annual
inflation rate of 3.5%. The inflation rate used was determined based upon the year-to-year growth from 2000 to 2009 of NFL tight end earnings of players in their tenth season and forward.
(3)
Because
Jeremy Shockey's contract was only for one year in his tenth season, we do not believe that his contract is as relevant a comparable. We believe
that contracts for players of similar caliber and similar stage in their career as Vernon Davis are more comparable metrics in determining the value of a future NFL contract for Vernon Davis.
Therefore, we only used the contracts for Tony Gonzalez and Antonio Gates in evaluating the expected contract value for Vernon Davis' next NFL player contract.
In
determining that Vernon Davis would enter into and maintain endorsement contracts (or earn other brand income) that compensate him in amounts that are slightly in excess of
compensation that he has had historically from these sources and that he would be entitled to other post-career income in the aggregate of $5.5 million over his lifetime, we considered the
following factors:
•
we believe that endorsement income for players in skill positions increases for those who demonstrate a sustained and
consistently high level of success and achievement at their position. Vernon Davis is currently in the midst of a period of high achievement as a tight end in the
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NFL
and has just begun to engage in marketing his brand, and thus we believe he is a good candidate to realize a higher level of endorsement income;
•
we believe that being a member of a team with a consistently high level of achievement in the post-season in a major
market, including, in the recent years, sending five 49ers to the Pro Bowl in 2009, appearing in the NFC Championship in 2011, playing in the Super Bowl in the 2012 season and returning to the NFC
Championship in the 2013 season, will aid in boosting visibility; and
•
we believe that, based principally on a review of the post-career earnings of other athletes who have used their playing
career as a platform to build a post-career brand and available data on such post-career earnings for these athletes, Vernon Davis has the potential for generating other post-career brand income of at
least $5.5 million in the aggregate, such as through broadcasting (as evidenced by his regular appearances on talk shows and/or sports television programs) royalties, and/or other
non-endorsement sources.
If
any of our assumptions are incorrect then our estimate of the fair value of Vernon Davis's brand contract may be too high.
Arian Foster Brand Contract, at Estimated Fair Value
Arian Foster Estimated Brand Income
On February 28, 2013, we entered into a brand contract with Arian Foster and his affiliated company, The Ugly Duck, LLC
and amended and restated such contract on each of May 24, 2013 and August 21, 2013. The table below shows our estimates, based on the quantitative and qualitative factors described
above, of Category A, Category B and Category C brand income for Arian Foster as a percentage of our estimate of aggregate lifetime brand income, on a gross basis before we
applied any discount rates, and on a net basis after we applied our discount rates, as well as the discount rates that we applied to each of these categories in our estimate of brand value:
% of Estimated Lifetime
Brand Income
Gross amount,
before applying
any discount
rate
Net amount,
after applying
discount
rates
Discount Rate
Category A
5.5
%
11
%
3%
Category B
19.5
%
29
%
10%
Category C
75
%
60
%
10% - 16.3%
​
​
​
​
​
​
​
​
​
Total
100
%
100
%
•
Category A
—Examples of Category A income that we
included in the model for Arian Foster are his contractual salary and bonus for the 2013 NFL playing season, which includes the guaranteed portions of Arian Foster's current NFL player contract.
•
Category B—
Examples of Category B income that we
included in the model for Arian Foster are the non-guaranteed portions of Arian Foster's current NFL player contract and contracted salary and bonus for seasons 2014 and beyond.
•
Category C—
Examples of Category C income that we
included in the model for Arian Foster include a potential future endorsement contract with a significant new sponsor or an additional NFL player contract following the expiration of Arian Foster's
current NFL player contract.
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The
most significant assumptions in our determination of fair value for Arian Foster's brand contract include:
•
discount rates for each of Category A, Category B and Category C as set forth above;
•
that Arian Foster would have an NFL career length of at least 12 years; and
•
that during this time he would play out his existing NFL player contract and enter into at least one additional multi-year
NFL player contract on terms that are, on an average annualized basis, economically comparable to his existing NFL player contract, and that he will be able over the same period and beyond to enter
into and maintain endorsement contracts (or earn other brand income) that compensate him in amounts that are significantly in excess of compensation that he has had historically from these sources.
Arian Foster Discount Rates
In determining the expected brand income for Arian Foster, we used discount rates ranging from 10.0% to 16.3%, which we believe
adequately address the uncertainty inherent in our estimates.
Arian Foster Career Length
In our analysis of the estimated fair value of the brand contract with Arian Foster, we considered the average and median career
durations for running backs we considered to be comparable to be in the range of 6-16 years, with an average and median of 10.5 years. We considered the career length of running backs in
the modern era (which we defined as a running back who has retired from the NFL during the 15-year period between 1997 and 2011) who were the featured back on their team, selected to at least one Pro
Bowl and rushed for at least 1,000 yards in at least three of their first four full seasons in which the running back played at least 13 games to be comparable for purposes of our analysis.
In
determining that Arian Foster would have a 12 year NFL playing career, we used a comparable group of running backs, whose average career-length was 10.5 years, but we
used 12 years for Arian Foster's career-length, adding 1.5 years, or an additional 14%, due to characteristics of Arian Foster's career that we believe distinguish him from the
comparable group. For example, we considered that in Arian Foster's first NFL season, he played in only six games, starting in only one and therefore, we believed it was appropriate to assume that
Arian Foster would have one additional season beyond the average for the comparable group.
Arian Foster Projected Contract Value
In determining that Arian Foster would play out his existing NFL player contract and enter into at least one additional multi- year NFL
player contract on terms that are, on an average annualized basis, economically comparable to his existing NFL player contract, in addition to assuming he would have a career of 12 years, we
reviewed contracts entered into by players in the comparable group at approximately the same age as the age at which Arian Foster would be at the end of his current contract.
In
determining that Arian Foster would enter into and maintain endorsement contracts (or earn other brand income) that compensate him in amounts that are significantly in excess of
compensation that he has had historically from these sources, we considered the following factors:
•
Arian Foster was an un-drafted free agent, and thus we believe his historical endorsement earnings in his first several
seasons were significantly lower than his longer-term potential;
•
we believe that endorsement income for players in skill positions increases for those who demonstrate a sustained and
consistently high level of success and achievement at their position.
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Arian
Foster is coming off three consecutive seasons of high achievement as a running back in the NFL and has not yet actively engaged in marketing his brand, and thus we believe he is a good
candidate to begin to realize a higher level of endorsement income; and
•
we believe that Arian Foster has potential for generating other brand income, such as through motion pictures and/or
broadcasting, as evidenced by his recent appearance as himself on an episode of the television series Hawaii Five-O, and his recently landed role as a professional running back in
Draft Day,
a new film
starring Kevin Costner.
If
any of our assumptions are incorrect then our estimate of the fair value of Arian Foster's brand contract may be too high.
Income (Loss) From Brand Contracts
We recognize income from brand contracts when cash or other considerations are received by the contract party under included contracts,
which is the point at which we earn the right to our proportionate share of amounts received by the contract party. Other considerations received by the contract party may include stock, automobiles,
or other items of value. In the event other considerations are received by the contract party, we will recognize income from brand contracts equal to our proportionate share of the estimated fair
value of the other considerations received, and will receive payment in either cash or such other considerations based on the contractual arrangement. Amounts due to us under the brand contract are
either remitted directly from the source of such income or through payment by the contract party. The brand contract stipulates that income once we earn it is not subject to recapture by the contract
party.
For
purposes of our financial statements and the notes thereto, cash received under the brand contract will either be recognized as a reduction of our carrying value (i.e., a
reduction in the brand contract asset) or income (loss) from brand contracts. Whether cash receipts will be recognized as a reduction of carrying value or income (loss) from brand contracts will
depend on the timing of such cash receipt. For example, if we expect to receive $1.0 million from a contract party on January 1, 20X5 after entering into the brand contract on
January 1, 20X4 and based on our discount rate pay $0.9 million for such cash receipt the Company will recognize $0.1 million in income (loss) from brand contracts in the year
ended December 31, 20X4. In this case, the entire $1.0 million received in January 20X5 will be recognized as a reduction of our carrying value. If on the other hand the
$1.0 million cash is received in December 20X4 a portion will be recognized as income (loss) from brand contracts in the fourth quarter of the year ended December 31, 20X4.
Additionally,
the timing of changes in our estimates of future cash flows will impact whether cash receipts are recognized as a reduction of our carrying value or as income (loss) from
brand contracts. If for example we increase our estimate of future cash flows and such increased cash flows are not received until a future period, such increase will be recognized as income (loss)
from brand contracts and the majority of such future cash flow will be recognized as a reduction of carrying value of our investment. If on the other hand our expected cash flows increase and were not
foreseen and therefore not expected until the period in which the cash is actually received the entire cash amount will be recognized as income (loss) from brand contracts.
Expected
cash flows will be based on the included contracts the contract party has in place and the expectations of future contracts. As it becomes more likely that the contract party
will collect contracted amounts the expected discount rate will decrease. A decrease in the discount rate will result in the receipt of cash primarily being allocated to reduction of carrying value of
our investment. The discount rates are determined at the purchase date and are revised each period based on the performance of the tracking stock brand and the likelihood of collection of future
contracted amounts.
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Income
(loss) from brand contracts are based on an estimate of expected cash flows and the associated expected discount rate. Changes in fair value resulting from changes in the expected
performance of the tracking stock brand or market factors are included in income (loss) from brand contracts in the statement of operations.
We
are entitled to certain information and audit rights pursuant to the brand contracts that enable us to adequately calculate and collect the ABI under the brand contract. In addition
to such annual audit rights, we intend to create a contract administration and surveillance division to proactively monitor and administer our rights under the brand contracts. Following the execution
of a brand contract, the contract administration and surveillance division shall prepare a schedule charting the timing and amounts of expected future payments associated with that certain
counterparty's existing contracts that are subject to our brand contract, along with the term and the expected timing each contract would be expected to be renegotiated or renewed. The division will
also be tasked with ensuring that all directives to pay Fantex directly have been executed and accepted by the parties making such payments. We will contact the contract party at renewal terms to
determine whether the contracts will be renewed and take necessary steps to ensure that any new agreements are covered under the brand contract.
The
division will also be tasked with reviewing each brand contract quarterly and to contact each of our contract parties to determine if the parties entered into additional agreements
or renegotiated existing agreements that may impact our ABI. To supplement these direct inquiries, this division will also monitor social and mainstream media on at least a weekly basis for
information relevant to our brand contract or relationship with each of our contract parties, including trade rumors, reports of new endorsements or other agreements that may be subject to our brand
contract with such contract parties, reports of renegotiation of existing agreements and reports of personal behavior that may be beneficial or detrimental to the tracking stock brand in general.
In
addition to the above, in the event that expected payments are not received on a timely basis (generally within five days of receipt of income by the contract party), we will attempt
to contact the contract party and resolve any issues of nonpayment amicably. If our efforts are unsuccessful, any issues with contract payments will initially be escalated to senior management for
resolution. Depending on
the nature and materiality of the contract party's nonperformance, we may initiate legal action to recover any unpaid amounts under the brand contract. Significant or continuous nonpayment may be
material and may trigger additional disclosure under the Securities Act as well as impair the fair value of the asset on our books.
Election to Opt Out of Transition Period
Section 102(b)(1) of the JOBS Act exempts "emerging growth companies" from being required to comply with new or revised
financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered
under the Exchange Act) are required to comply with the new or revised financial accounting standard.
The
JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non- emerging growth companies but any such
election to opt out is irrevocable. Fantex has elected to opt out of the extended transition period.
Off-Balance Sheet Arrangements
We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined in the rules
and regulations of the SEC.
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Qualitative and Quantitative Disclosures of Market Risk
We did not have during the periods presented, and we do not currently have, any market risk sensitive instruments, as defined in the
rules and regulations of the SEC.
Contractual Obligations
Our principal contractual obligations are limited to our obligations under our management agreement with our parent and our brand
contracts with EJ Manuel, Vernon Davis and Arian Foster. We are not committed to any future capital expenditures, including rental commitments, which are solely in the name of our parent. See
"—Results of Operations" for additional information on the allocation of rent expenses from Fantex Holdings to us from inception to December 31, 2012 and for the year ended
December 31, 2013.
Arian Foster Brand Contract
We must pay $10.0 million to Arian Foster upon the consummation of the offering of Fantex Series Arian Foster. We will have no
further financial obligation to Arian Foster under his brand contract once this payment has been made, other than certain indemnity obligations. We have evaluated the impact of these indemnities on
our financial statements and determined that they are not material.
Vernon Davis Brand Contract
We must pay $4.0 million to Vernon Davis upon the consummation of the offering of Fantex Series Vernon Davis. We will have no
further financial obligation to Vernon Davis under the brand contract once this payment has been made, other than certain indemnity obligations. We have evaluated the impact of these indemnities on
our financial statements and determined that they are not material.
EJ Manuel Brand Contract
We must pay $4.98 million to EJ Manuel upon the consummation of this offering. We will have no further financial obligation to
EJ Manuel under the brand contract once this payment has been made, other than certain indemnity obligations. We have evaluated the impact of these indemnities on our financial statements and
determined that they are not material.
Management Agreement
We have entered into a management agreement with our parent that will become effective upon the consummation of our first public
offering. Pursuant to the management agreement, our parent will provide us with management and administrative services, including providing and compensating our executive management and other
personnel, as well as services relating to information technology support, brand management and support operations, facilities, human resources, tax planning and administration, accounting, treasury
and insurance. We have agreed to pay our parent 5% of the amount of the gross cash received by us, if any, pursuant to our brand contracts during any quarterly period as remuneration for the services
provided. The amount of gross cash received used to calculate this 5% fee will include any portion allocated to reduction of carrying value but shall not take into account the changes in fair value of
the brand contracts. As such, the service fee under the management agreement will be determined based on the total amount of cash received under the brand contracts in a given quarterly period prior
to any adjustments for fair value and without regard to the expected cash receipts in such quarter as reflected in the financial statements for that quarter. We may evaluate the service fee from time
to time to assess the continued appropriateness of the percentage of our cash receipts upon which the service fee is calculated, in light of the services being provided by our parent at the time and
the cost of those services.
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The
agreement will have an initial term through December 31, 2014, and will automatically renew for successive one-year terms each December 31 unless either party provides
written notice of its intent not to renew at least three months prior to such renewal. We may also terminate any specific service and/or the agreement, without penalty, with 30 days prior
written notice to Fantex Holdings. Fantex Holdings may terminate any specific service and/or the agreement with 180 days prior written notice to us, but if we, using our commercially reasonable
efforts, are unable to either perform the services ourselves or enter into a reasonable arrangement with a third party to perform the services that we are unable perform ourselves, then Fantex
Holdings will continue to perform such services for an additional period of 180 days.
The
agreement contains certain provisions requiring us to indemnify our parent with respect to all losses or damages arising from acts not constituting bad faith, willful misconduct, or
gross negligence. We have evaluated the impact of these indemnities on our financial statements and determined that they are remote.
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MANAGEMENT AND ATTRIBUTION POLICIES
We have established policies for purposes of managing and attributing our assets and liabilities between and among our platform unit
and various other business units that we intend to establish from time to time.
As
a general principle, we expect that all material matters in which holders of any series of our common stock may have divergent interests (including our platform common stock and any
tracking stocks that we may issue from time to time) will be generally resolved in a manner that is in the best interests of our company and all of our stockholders after giving fair consideration to
the interests of the holders of each series of our common stock, as well as such other or different factors considered relevant by our board of directors (or any committee of our board of directors
authorized for this purpose, including the conflicts committee of our board of directors).
Policies Subject to Change Without Stockholder Approval
Set forth below are the management and attribution policies that will be effective upon the consummation of this offering. Our board of
directors may, without stockholder approval, modify, change, rescind or create exceptions to these policies, or adopt additional policies. Such actions could have different effects on holders of each
different series of our common stock and could include operational and financial decisions that could favor the platform common stock over a tracking stock, or one tracking stock over another. Our
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 our company and the best interests of all of our
stockholders as a whole. In certain circumstances, decisions of our board of directors may also be subject to the approval of the conflicts committee.
Any
such modifications, changes, rescissions, exceptions or additional policies will be binding and conclusive unless otherwise determined by our board of directors. We will notify our
stockholders of any material modification, change or exception made to these policies, any rescission of these policies and the adoption of any material additions to these policies through the filing
of a Current Report on Form 8-K within four business days after the modification, change, exception or addition is made. However, we will not notify our stockholders of any modification,
change, exception, rescission or addition to these policies if we determine that it is not material to the holders of any series of our common stock, in each case with such holders taken together as a
whole.
Attribution
We currently have one business unit, which is our platform unit. We intend to establish additional business units from time to time
concurrently with the issuance of one or more new tracking stocks intended to track and reflect the economic performance of such business unit. We will attribute assets and liabilities to such
business units in accordance with the policies below. By attributing assets and liabilities to a business unit we mean that we will designate such assets and liabilities for the account of that
business unit on our internal financial accounts, and prepare our unaudited attributed financial information in accordance with such attributions.
EJ Manuel Brand
Upon the consummation of this offering we will establish a new tracking unit that we refer to as the EJ Manuel Brand. We will initially
attribute the following assets and liabilities to the EJ Manuel Brand:
•
95% of our acquired brand income, or ABI, that we acquire under our EJ Manuel brand contract;
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•
any and all of our liabilities, costs and expenses that are directly attributable to the EJ Manuel Brand, such as our
direct costs arising out of our promotion of the EJ Manuel Brand or arising out of or related to the maintenance and enforcement of the EJ Manuel brand contract;
•
a pro rata share of our general liabilities, costs and expenses not directly attributable to any specific tracking stock
(calculated based on attributable income), but excluding any non-cash expenses that are allocated from our parent to us. Attributable expenses would include, for example, a pro rata portion of the
service fee we pay to our parent pursuant to the management agreement (5% of our cash receipts, which would be equal to 5% of our ABI under the EJ Manuel brand contract so long as there are no other
tracking stock outstanding). Expenses that would not be attributed would include expenses incurred by our parent, including any expenses incurred in providing services to us under the management
agreement, to the extent in excess of our service fee to them;
•
as income, any covered amounts, as described below, for the EJ Manuel brand contract; and
•
as an expense, the pro rata share of any covered amounts, as described below, relating to any tracking stock brand
(including the pro rata share of any covered amounts for the EJ Manuel Brand).
We
will also attribute the following additional assets and liabilities to the EJ Manuel Brand:
•
all net income or net losses from the assets and liabilities that are included in the EJ Manuel Brand and all net proceeds
from any disposition of any such assets, in each case, after deductions to reflect any dividends paid to holders of shares of Fantex Series EJ Manuel; and
•
any acquisitions or investments made from assets that are included in the EJ Manuel Brand.
Other Tracking Stock Brands
We intend to enter into additional brand contracts on an ongoing basis, and we intend to create a separate business unit in connection
with each new brand contract. We will refer to each of these new business units in general as a tracking unit or a tracking stock brand, though each tracking stock brand will also be given a specific
name at the time we create a new tracking stock brand. We have previously entered into a brand contract with:
Contract Party
Effective Date of
Brand Contract
Percent of Brand
Income Payable
to Us Under
the Brand
Contract (ABI)
Tracking Unit related
to the Brand
Contract
Tracking Stock
related to the
Tracking Stock Brand
Vernon Davis
October 30, 2013
10
%
Vernon Davis Brand
Fantex Series Vernon Davis
Arian Foster
February 28, 2013
20
%
Arian Foster Brand
Fantex Series Arian Foster
We
will attribute the following assets and liabilities to each tracking stock brand:
•
a fixed percentage of our ABI from the brand contract associated with a tracking stock brand, which we expect generally
(though not necessarily) will be 95% for each of our brand contracts;
•
any and all of our liabilities, costs and expenses that are directly attributable to such tracking stock brand, such as
our direct costs arising out of our promotion of the tracking stock brand or arising out of or related to the maintenance and enforcement of the related brand contract;
•
a pro rata share of our general liabilities, costs and expenses not directly attributable to any specific tracking stock
(calculated based on attributable income), but excluding any non-cash expenses that are allocated from our parent to us. Attributable expenses would include, for example, a pro rata portion of the
service fee we pay to our parent pursuant to the management agreement (5% of our cash receipts). Expenses that would not be attributed would include
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expenses
incurred by our parent, including any expenses incurred in providing services to us under the management agreement, to the extent in excess of our service fee to them;
•
as income, any covered amounts, as described below, for the brand contract associated with such tracking stock brand; and
•
as an expense, the pro rata share of any covered amounts, as described below, relating to any tracking stock brand
(including the pro rata share of any covered amounts for such tracking stock brand).
We
will also attribute the following additional assets and liabilities to a tracking stock brand:
•
all net income or net losses from the assets and liabilities that are included in such tracking stock brand and all net
proceeds from any disposition of any such assets, in each case, after deductions to reflect any dividends paid to holders of the tracking stock associated with such tracking stock brand; and
•
any acquisitions or investments made from assets that are included in such tracking stock brand.
Platform Unit
Our platform unit will initially have attributed to it all of our assets and liabilities that are not specifically attributed to our
three current tracking stock brands or to any other tracking stock brands that we may establish from time to time. The assets attributed to the platform unit will thus include, for example, any
portion of the ABI for any brand contract that is not specifically attributed to the associated tracking stock brand. For example, we will attribute the 5% of our ABI under our EJ Manuel brand
contract, Vernon Davis brand contract and Arian Foster brand contract to the platform unit, and expect to attribute a similar amount for each of our future brand contracts.
Covered Amounts
As described above, income (and assets) and liabilities will generally be attributed to a tracking stock brand based on the income and
liabilities of that tracking stock brand. However, if as a result of any debtor relief laws we do not receive any portion of our ABI from a brand contract then we will nonetheless attribute income
during any period to the corresponding tracking stock brand in an amount equal to the difference between any amounts we actually receive under that brand contract and the amounts to which we would
otherwise have been entitled to receive but for the debtor relief law. We refer to such difference as a covered amount.
In
such a case, the covered amount will also be attributed as a general expense of Fantex, and we will attribute the pro rata share of any covered amounts to each tracking stock brand as
an expense, as discussed above.
For
purposes of this policy, "debtor relief laws" means the U.S. Bankruptcy Code, as now and hereafter in effect, or any successor statute to the U.S. Bankruptcy Code, and all other
liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief statute, law,
ordinance, rule or regulation of the United States, any state thereof or the District of Columbia, or other applicable jurisdictions from time to time in effect.
Fiduciary and Management Responsibilities, Conflicts Committee
Because each of our business units will be part of a single company, our directors and officers will have the same fiduciary duties to
stockholders of our company as a whole (and not to any individual business unit or the holders of any specific series of our common stock associated with any of our business units). Under Delaware
law, a director or officer may be deemed to have satisfied his or her
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fiduciary
duties to our company and its stockholders if that person is independent and disinterested with respect to the action taken, is adequately informed with respect to the action taken and acts
in good faith taking into account the interests of all of our stockholders as a whole. Our board of directors and officers, in establishing and applying policies with regard to intra-company matters
such as business transactions between our different business units and series of common stock, and attribution of assets, liabilities, debt, corporate overhead, taxes, interest, corporate
opportunities and other matters, will consider various factors and information that could benefit or cause relative detriment to the stockholders of any individual series of our common stock and will
seek to make determinations that are in our company's best interests and the best interests of our stockholders as a whole. If and when there are conflicting interests between our business units and
consequently any holders of any series of our common stock, our directors will use good faith business judgment to resolve such conflicts, including if applicable in the judgment of our board of
directors, through our conflicts committee.
Our
board of directors has established a conflicts committee that is responsible for reviewing all of our related party transactions in which our parent company, Fantex Holdings, is a
party with an interest adverse to our interests or any outstanding tracking stock, including any decision to convert any of our outstanding tracking stock into our platform common stock following the
two-year anniversary of the filing of a certificate of designation creating such tracking stock. Following the consummation of this offering Fantex Holdings will be the sole holder of shares of our
platform common stock. Our board of directors has also determined that each member of the conflicts committee must (a) satisfy the audit committee independence requirements under the rules and
regulations of the SEC that would be applicable to Fantex if our shares were listed on a national securities exchange such as Nasdaq, (b) not
have been an employee or director of our parent company at any time in the three years prior to his or her appointment to the conflicts committee and (c) not have any material interest in
Fantex or Fantex Holdings.
Dividend Policy
Our board of directors is permitted, but not required, to declare and pay dividends on our platform common stock or any of our tracking
stock in an amount up to the "available dividend amount" for the applicable series, to the extent permitted by the Delaware General Corporation Law.
The
available dividend amount for any tracking stock is as of any date an amount equal to the lesser of (a) total assets of our company legally available for the payment of
dividends under Delaware law and (b) an amount equal to:
•
the excess of the total assets attributed to the tracking stock brand over the total liabilities attributed to the
tracking stock brand, less the par value of the outstanding shares of such tracking stock; or
•
if there is no such excess, the attributable income of the tracking stock brand for the fiscal year in which the dividend
is being declared and/or the preceding fiscal year.
The
available dividend amount for our platform common stock is as of any date an amount equal to the amount of our total assets legally available for the payment of dividends under
Delaware law, less the aggregate amount of the "available dividend amount" for all of our then outstanding tracking stocks.
Following
this offering, we intend to pay periodic cash dividends out of available cash for each tracking stock, if outstanding, equal to an amount in excess of 20% of the "available
dividend amount" for each such tracking stock. Our board of directors has discretion to declare a dividend on any series of common stock without declaring a dividend on any other series of our common
stock. In general,
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our
board of directors does not expect to declare dividends on any series of common stock in an amount greater than the attributed cash on hand for such series.
Our
board of directors may change its dividend policy at any time and from time to time, and we may retain some or all available funds and future income to support our operations and
finance the growth and development of our business. However, our board of directors will not in any event change the definition of "available dividend amount" for any series of our common stock or
declare dividends on any series of our common stock in excess of the "available dividend amount" for that series.
Financing Activities
General
We may from time to time invest surplus cash, issue and repay short-term and long-term debt and the issue and repurchase any
outstanding tracking stocks. However, our board of directors will not in any event reallocate the "underlying assets" for any tracking stock, as such term is defined in the certificate of designation
for that series.
If
we change the attribution of cash or other property from one tracking stock to another, we will account for such change as a short-term loan unless our board of directors determines
that a given change in attribution should be accounted for as a long-term loan, an inter-series equity investment, as a reduction of an inter-series equity investment or as a transfer in exchange for
cash or other assets. See "—Inter-Series Loans" and "—Inter-Series Investments" below.
Our
board of directors will make these determinations, either in specific instances or by setting applicable policies generally, in the exercise of its informed business judgment.
Factors our board of directors may consider in making this determination include:
•
the financing needs and objectives of the receiving tracking stock;
•
the investment objectives of the transferring tracking stock;
•
the current and projected capital structure of each tracking stock;
•
the relative levels of internally generated funds of each tracking stock; and
•
the availability, cost and time associated with alternative financing sources, prevailing interest rates and general
economic conditions.
Our
board of directors will make all changes in the attribution of material assets from one series to the other on a fair value basis, as determined in good faith by the board of
directors. For accounting purposes, all such assets will be deemed reattributed at their carryover basis. To the extent that this amount is different than the fair value of the inter-series loan or
inter-series equity investment created in the transaction, this difference will be recorded as an adjustment to the series equity. No gain or loss will be recognized in the statement of operations
information for the tracking stock due to the related party nature of such transactions.
Inter-Series Loans
If one tracking stock is deemed to lend to the other series, our board of directors will determine the terms of such loan, including
the rate at which it will bear interest. Our board of directors will determine the terms of any inter-series loans, either in specific instances or by setting applicable policies generally, in the
exercise of its informed business judgment. Factors our board of directors may consider in making this determination include:
•
our company's needs;
•
the use of proceeds of the receiving tracking stock;
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•
the capital expenditure plans of and the investment opportunities available to each tracking stock; and
•
the availability, cost and time associated with alternative financing sources.
If
an inter-series loan is made, we intend to account for the loan based on its stated terms, and the resulting activity, such as interest amounts, will be recorded in the separate
series financial results to be included in our financial statements but will be eliminated in preparing our financial statement balances.
Inter-Series Investments
An inter-series investment is an equity investment that holders of one tracking stock may make in another tracking stock. Inter-series
investments would be represented by the issuance of shares of the tracking stock into which an equity investment may be made.
Equity Issuance and Repurchases and Dividends
We will reflect all financial effects of issuances and repurchases of shares relating to any single tracking stock in our own financial
information. We will reflect financial effects of dividends or other distributions on, and purchases of, shares relating to each tracking stock in the unaudited attributed financial information.
Inter-Series Contracts
The terms of all current and future material transactions, relationships and other matters between the platform unit and any tracking
stock brand, including those as to which the holders of any tracking stock may have potentially divergent interests, will be determined in a manner considered by our board of directors to be in our
company's best interests and the best interests of our stockholders as a whole. In certain circumstances, decisions of our board of directors may also be subject to the approval of our conflicts
committee.
Review of Corporate Opportunities
In cases where a material corporate opportunity may appropriately be viewed as one that could be pursued by holders of more than one
tracking stock, our board of directors may, independently or at the request of management, review the attribution of that corporate opportunity to one of, or between, such series. In accordance with
Delaware law, our board of directors will make its determination with regard to the attribution of any such opportunity and the benefit of such opportunity in accordance with their good faith business
judgment of our company's best interests and the best interests of our stockholders as a whole. In certain circumstances, decisions of our board of directors may also be subject to the approval of our
conflicts committee. Among the factors that our board of directors may consider in making this attribution is:
•
whether a particular corporate opportunity is principally related or complementary to the business focus or strategy of
any particular tracking stock;
•
whether one tracking stock brand will be better positioned to undertake the corporate opportunity than another tracking
stock brand;
•
existing contractual agreements and restrictions; and
•
the financial resources and capital structure of each tracking stock.
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Financial Statements and Other Financial Information
We will present financial statements in accordance with GAAP, consistently applied. We will also provide unaudited attributed financial
information as an exhibit to our periodic reports that we file pursuant to the Exchange Act. The unaudited attributed financial information will show the attribution of our assets, liabilities,
revenue, income (loss) from brand contracts expenses and cash flows to each of the tracking stocks and our platform common stock, in accordance with the attribution policies set forth above. Unaudited
attributed financial information will also include, if applicable, attributed portions of our debt, interest and taxes, in accordance with the attribution policies set forth above. We will make these
attributions for the purpose of preparing such information; however, holders of our tracking stocks and our platform common stock will continue to be subject to all of the risks associated with an
investment in our company and all of our company's businesses, assets and liabilities.
In
addition to the unaudited attributed financial information, at least until such time as we no longer have significant concentration among our tracking stock brands relative to our
consolidated financials, we will include in our audited annual reports statements of cash receipts from included contracts with respect to each of our brand contracts.
Taxes
General Policies
Taxes and tax benefits, payments that are required to be made by, or are entitled to be received by, us and certain tax-related losses
will be attributed among the various tracking stock brands in accordance with the following tax sharing policies.
These
tax sharing policies may differ from the manner in which taxes and tax benefits of each tracking stock brand are reflected in our financial statements. For financial statement
purposes, taxes and tax benefits attributable to each tracking stock brand generally will be accounted for in a manner similar to a stand-alone company basis in accordance with GAAP. Any differences
between the tax sharing policies described below and the taxes and tax benefits of each of our business units reported in the financial statements will be reflected in the attributed net assets of the
various tracking stock brand for financial statement purposes.
In
general, for purposes of these tax sharing policies, any tax item (including any tax item arising from a disposition) attributable to an asset, liability or other interest of a
tracking stock brand will be attributed to that tracking stock brand. Tax items that are attributable to any tracking stock brand that are carried forward or back and used as a tax benefit in another
tax year will be attributed to that tracking stock brand.
Income Taxes
To the extent that federal, state, local or foreign income taxes are determined on a basis that includes the assets, liabilities or
other tax items of more than one tracking stock brand then income taxes and income tax benefits will be shared among the tracking stock brands based principally on the taxable income (or loss), tax
credits and other tax items directly related to each tracking stock brand. Such attributions will reflect each tracking stock brand's contribution, whether positive or negative, to our taxable income
(or loss), income tax liabilities and tax credit position. Consistent with the general policies described above, income tax benefits that cannot be used by a tracking stock brand generating such
benefits, but can be used to reduce the taxable income of another tracking stock brand, will be credited to the tracking stock brand that generated such benefits,
and a corresponding amount will be charged to the tracking stock brand utilizing such benefits. As a result, under this tax sharing policy, the amount of income taxes attributed to a tracking stock
brand or the amount credited to a tracking stock brand for income tax benefits may not necessarily be the same as that which would have been
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payable
or received by the tracking stock brand had that tracking stock brand filed separate income tax returns.
Non-Income Taxes and Non-Income Tax Benefits
In any taxable period, if any non-income taxes or non-income tax benefits are determined on a basis that includes the assets,
liabilities or other tax items of more than one tracking stock brand, then any such non- income taxes or non-income tax benefits will be attributed to each tracking stock brand based upon its
contribution to our non-income tax liability (or benefit). Non-income tax benefits that cannot be used by a tracking stock brand generating such benefits, but can be used to reduce taxes of another
tracking stock brand, will be credited to the tracking stock brand that generated such benefits, and a corresponding amount will be charged to the tracking stock brand utilizing such benefit.
Any
income or non-income taxes or tax benefits that are determined on a basis that includes only the assets, liabilities or other tax items of one series will be attributed to that
series.
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BUSINESS
Fantex
Overview
We are a brand acquisition, marketing and brand development company whose focus is on acquiring minority interests in the income
associated with the brands of professional athletes, entertainers and other high-profile individuals and assisting such individuals in enhancing the reach and value of their respective brands. We
intend to focus our business on three core areas:
•
evaluating, targeting and accessing individuals and brands with the potential to generate significant income associated
with these brands, or brand income;
•
acquiring minority interests in such brand income; and
•
assisting our acquired brands in increasing their value via technology and through leveraging our marketing, advertising
and strategic partnering expertise.
Our
management team has significant marketing, operating and investment experience and what we believe are extensive industry contacts. Our team members have been directly involved with
building E*Trade Financial Corporation, Siebel Systems, Inc., Yahoo!Finance and Yahoo!Sports.
Fantex
was incorporated on September 14, 2012 in Delaware and is headquartered in San Francisco, California. To date, our operations have consisted of evaluating, targeting and
accessing brands and negotiating the acquisition of minority interests in those brands that meet our criteria. To date, we have entered into brand contracts with each of the following parties:
Contract Party
Primary Career
Effective Date of
Brand Contract
Percent of
Brand Income
Payable to Us
Under the Brand
Contract (ABI)
Purchase Price
for the
Acquisition of
ABI
Termination Fee
Payable by Contract
Party (under specified
circumstances further
defined below)
EJ Manuel and his affiliated professional services company, Kire Enterprises LLC
Quarterback for the Buffalo Bills
February 14, 2014
10
%
$
4.98 million
$
5.24 million
Vernon Davis and his affiliated professional services company, The Duke Marketing LLC
Tight end for the San Francisco Forty Niners
October 30, 2013
10
%
$
4.00 million
$
4.21 million
Arian Foster and his affiliated professional services company, The Ugly Duck, LLC
Running back for the Houston Texans
February 28, 2013
20
%
$
10.00 million
$
10.55 million
Each
of the foregoing contracts is contingent upon obtaining financing to fund the acquisition of our interest in the brand income under the brand contract.
We
intend to enter into additional brand contracts in the future and we are actively pursuing these brand contracts, although as of February 28, 2014 we have no current
commitments to enter into another brand contract. Any brand contracts that we enter into in the future with other parties, who we refer to as contract parties, are also expected to be contingent upon
obtaining financing to fund the acquisition of the interest in the brand income of the respective brands. We intend to finance the acquisition of additional brand income through the issuance of
additional tracking stocks linked to the value of such brand income.
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Brand Evaluation
Prior to entering into a brand contract, we conduct a detailed evaluation of the contract party and the brand to determine whether, in
our opinion, they would be a suitable brand with the potential to generate significant brand income based on the criteria discussed below. We consider brand to be a distillation of a complex set of
associations people make with respect to an individual, including performance, appearance, history and personal story, products or services they are associated with, public statements or positions on
matters of public concern, how an individual acts or the image they project to the world. We seek brands that convey images and associations that we believe will be recognized and valued in the market
place. Our evaluation activities include, but are not limited to:
•
Reviewing mainstream and social media to understand the individual's relative standing in their field and how they are
viewed by leading commentators and journalists as well as the public at large;
•
Collecting and analyzing widely followed performance metrics as well as recognized honors or awards received by the
individual. Examples might include: batting average, yards per carry, box office receipts, book sales, selection to All Pro or All Star teams, Grammy, Academy or Booker Awards, etc.;
•
Reviewing all existing contracts underlying the brand contract to verify current and future income streams, including
sources of guaranteed income, and income that are based on achievement of performance or other milestones and that may or may not be achieved based on continued performance in the field;
•
Evaluating the character and reputation of the individual through our independent assessments, industry references and
detailed background checks conducted by third parties;
•
collecting financial and other information from each contract party to evaluate financial suitability and brand
sustainability. Key areas of focus include: review of assets, liabilities, existing commitments, tax returns and credit reports and credit scores; and
•
Assessing potential future cash receipts based on our estimate of the value of future contracts that could be included in
brand income, considering factors such as:
•
the age of the individual and the average length of a career in the individual's primary occupation, such as an athlete in
the NFL;
•
length of existing contracts and the potential for renewal or replacement of such contracts;
•
potential for incremental endorsement and other cash flow generating activity, including a comparison against the value of
comparable brands;
•
the individual's aspirations and goals beyond a career in the individual's primary occupation; and
•
our judgment regarding the individual's ongoing appeal and ability to develop as a media talent based upon a variety of
intangibles including onscreen presence and ability to connect and communicate with consumers and the public.
As
part of our brand evaluation, we also examine the brand's current positioning and marketing footprint, including the reach, demographic, engagement level, and potential for growth.
This evaluation provides a framework to develop further marketing strategies to aid us in our efforts to assist the contract party enhance the value of their brand.
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Brand Acquisition
We believe we have extensive industry contacts among our board of directors, employees, consultants and advisors of our company and our
affiliates, which we utilize to access individuals and brands that meet our criteria. Through our contacts we seek to establish working relationships with these brands and their key advisors to begin
the process of educating them about our business and the benefits of a brand contract and a continuing relationship. We enter into an arm's-length negotiation primarily to finalize a purchase price,
our percentage of ABI and the scope of brand income, including whether or not there would be any specific exclusions.
Enhancing Brand Value
Increasing Brand Reach and Consumer Engagement
We intend to build a portfolio of brands and enhance the value of our acquired brands via technology and data applications, as well as
leveraging our marketing, advertising and strategic partnering expertise in collaboration with the contract parties. We believe that developing a diverse portfolio of global brands will enable us to
increase brand reach across our portfolio and allow us to provide unique insights that contract parties may employ to increase consumer awareness of their brands and our brands more generally. We
expect to leverage our data and expertise to assist and supplement our contract parties' efforts to extend the reach of their brands across multiple marketing mediums, including broadcast, print,
digital, live events, and social. For example, each of our acquired brands would have a "brand manager" who would be responsible for monitoring the brand and brand activities and serving as a liaison
to find opportunities for us to provide brand enhancing activities. We believe that, as a result of our combined efforts, there is an opportunity to increase consumer engagement with the acquired
brands by optimizing message delivery, including driving engagement through the use of content developed by us or third parties.
Typically
a contract party's current marketing services focus primarily on endorsement transactions with sponsors that reinforce his brand as a professional athlete. Although this brings
in short term cash flow, we do not believe these sponsorships aid in building a brand that can be sustained beyond a playing career. We intend to assist more broadly on brand building and brand
marketing. Our focus will primarily be on leveraging the platform of being a professional athlete to create a brand that is perceived as more than simply a sportsman, with the goal of having the
contract party's brand thrive beyond his playing career.
We
seek to aid our brands in fostering positive brand associations in order to create a unique position in the marketplace that is independent of their primary occupation, such as an
athlete in the NFL. We believe this will drive greater engagement with a connected audience and lead to greater longevity of the brands. We also believe that investors in a tracking stock linked to a
brand are more likely to be consumer advocates for that brand. Brand development is a long-term strategy of ours intended to create greater longevity in the marketplace for our brands.
Our Brand Platform
We intend to create a brand platform that will leverage social media data and in turn allow our contract parties to grow and develop
their audiences. Through social data and platform analytics, we believe we can better understand the contract parties' audiences, as well as cultivate engagement that supports the contract parties'
multi-dimensional interests and post-career aspirations.
The
brand attributes of our contract parties when viewed solely as professional athletes are:
•
professional sport;
•
position played within that sport;
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•
performance achieved within that sport; and
•
association with team(s) played for within that sport.
However,
we intend to create brands with attributes beyond those of a professional athlete. Our contract parties have interests, opinions, skills, and passions and use certain products
and engage in activities outside of professional sports. These brand attributes might include:
•
an interest in a certain type of music;
•
opinions on relevant social issues;
•
artistic abilities such as to paint, sing or act;
•
wearing a certain style of clothing or jewelry;
•
use of certain household products or services;
•
an interest in travel; and
•
work with a particular charity.
Through
our brand platform we intend to connect our contract parties via social media to mass, engaged audiences that are interested in our contract party not necessarily because he is a
professional athlete, but because he has other brand attributes that are relevant to that target audience. We believe that our brand platform will be uniquely positioned to identify the specific
attributes, demographics, and psychographics of target audiences that were previously unaffiliated with our contract parties. We believe we can utilize this information to drive more and more
engagement within these existing mass audiences, as well as large undiscovered audiences. Our brand platform will allow our contract party to place very targeted messaging within his social media
feeds to connect with these audiences. We believe the ability serve such directed content to a specific target audience would be viewed as valuable by fans, investors in a tracking stock, existing
sponsors, and potential advertisers. Further, the engagement of our contract parties with these mass audiences will support our long-term strategy to create longevity for our contract party brands
beyond their playing careers.
Our
focus would include:
•
assisting our brands in creating and developing a vision for their brand identity and attributes;
•
identify opportunities for re-positioning and/or differentiation;
•
monitoring the brand and brand activities to identify "brand moments" or events or circumstances that we believe present
an opportunity to establish or reinforce elements of the brand;
•
providing marketing strategies to accelerate brand growth and influence of the brand based on a "cross-pollination"
technology to identify consumers that would potentially be interested in the brand;
•
identifying content developed by us or third parties that could be used to increase awareness of the brand;
•
identifying topics and vocabulary that would allow the contract party to increase consumer engagement;
•
identifying trends in consumers' interest in the brand and optimizing messaging consistent with these trends and brand
identity;
•
identifying and understanding, and where possible, influencing key social media thought-leaders;
•
monitoring trends in similar brands that a contract party could leverage to increase the value of its brand;
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•
providing advice on workflow and scheduling of messages to better optimize staging and consumer exposure; and
•
advising on search engine optimization for each brand to better enable discovery, searching, filtering and following by
consumers and media outlets.
We
intend to measure the effectiveness of our strategies to enhance brand value where possible, and use those measurements to assess whether our efforts are successful. For example, we
intend to measure changes in the social media reach of our brands by measuring the change in the number of followers our brands may have on Twitter and Facebook and other social media sites, as well
as measure the demographics of those followers compared to the demographics that our brand vision may target. We also intend to measure the engagement level of these followers to determine brand
enthusiasm. Ultimately our success will be measured by brand income, particularly from new sources, including income from sponsors unrelated to sports, and/or increased brand income from existing
sources. As with other forms or marketing and advertising, however, our ability to precisely measure the impact of our efforts on brand value may be difficult to determine objectively.
Monetization of the Brand
In addition to our brand platform services intended to help optimize the reach of the brand and consumer engagement, we intend to
provide advice to contract parties based both on our experience and through data analysis that would aid them in obtaining more attractive terms in their negotiations with future sponsors. We believe
that building critical mass with a portfolio of brands will enable us to generate meaningful data based on our brands and our continual monitoring of the marketplace, including best practices with
respect to consumer engagement and other critical drivers of brand value, as well as data on demographic metrics and other data relative to brands and their performance. In conjunction with the brand
platform, we intend to provide an accessible report, in customizable and graphical format with data filter capabilities, highlighting the demographic metrics, reach, consumer engagement, strength and
other critical drivers of brand value for sponsors based on our proprietary internal data. We are in the process of developing proprietary brand platform software to be used to produce such reports at
such time as there would be meaningful data. We believe that this information and our marketing insights will assist our contract parties to more accurately evaluate
their brand value in the marketplace and potentially increase future endorsement payments and brand longevity post career in the primary occupation, such as an athlete in the NFL.
Our Brands
To date we have entered into three brand contracts, created a tracking unit related to each of these brand contracts, which we refer to
generally as "tracking stock brands," and created a tracking stock related to such tracking stock brands, with each of:
Contract Party
Tracking Unit related to
the Brand Contract
Tracking Stock related to the
Tracking Stock Brand
EJ Manuel
EJ Manuel Brand
Fantex Series EJ Manuel
Vernon Davis
Vernon Davis Brand
Fantex Series Vernon Davis
Arian Foster
Arian Foster Brand
Fantex Series Arian Foster
This
prospectus is prepared in connection with the offering of shares of Fantex Series EJ Manuel.
Overview of Professional Football, Honors and Awards
The NFL is the premier professional football league in the United States and was founded on August 21, 1920. The NFL is
comprised of 32 teams divided into two conferences, the National Football Conference, or NFC, and the American Football Conference, or AFC, which in turn each
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have
four divisions. The regular season of the NFL consists of 16 games played on a weekly basis over 17 weeks (with one bye week for each team) roughly from September to December, with
up to four post-season games. Football is a physically demanding sport, requiring strength, speed and power. In addition, because of the frequent tackling and other physical contact, football players
are prone to injury. The age at which NFL players peak depends on many factors, including the player's position and the physical training of the player.
The
Associated Press annually publishes a list of the best player for each position, which it designates as the "All-Pro Team." Each year the All-Pro Team is selected by a national panel
of media members, regardless of the conference in which the player competes. The First Team consists of the top one or two players at each position; the Second Team consists of the runners-up at each
position. One player is selected at quarterback, fullback, tight end, center, punter, place kicker, and kick returner, while two players are selected at running back, wide receiver, offensive tackle,
offensive guard, outside linebacker, inside/middle linebacker, defensive end, defensive tackle, cornerback, and safety. In the event of a unanimously selected quarterback, fullback, tight end, center,
punter, place kicker, or kick returner, there will be no Second Team selection at that position. Additional designations, such as NFL "Most Valuable Player" are presented by various media outlets.
Since
the 1938 season, the NFL has held the Pro Bowl. NFL players are invited to attend the Pro Bowl based on votes cast by NFL coaches, NFL players and fans. The players for each
position who receive the highest votes for their respective conferences are selected to play in the Pro Bowl. An invitation to play in the Pro Bowl is generally considered to be a significant honor.
Professional Football Compensation
Overview
Player compensation during the regular season is established by contract between the player and the NFL franchise under the CBA between
the NFL and the National Football League Players' Association, or the NFLPA. On August 4, 2011, the NFL and NFLPA entered into the current CBA which will be effective until the 2020 season,
subject to certain exceptions. NFL player contracts generally conform to the form player contract contained in the CBA, however individual modifications may be made.
Salary Cap
The CBA establishes the maximum amount of compensation each club may pay to its players in a given season. This salary cap is
calculated as a percentage of total league
revenue. The current CBA provides that the salary cap may not exceed in the aggregate 48% of projected league revenues (excluding stadium credit) during the 2012-2014 seasons and 48.5% of projected
league revenues (excluding stadium credit) during the 2015-2020 seasons, except that the salary cap may not be less than $142.5 million per team. The salary cap is divided equally among all 32
teams. The salary cap amount is reduced by retired player benefits, which were approximately $22.0 million in 2011. From 1994 to 2012 the NFL per team salary cap, after reduction for retired
player benefits, rose from approximately $34.6 million to approximately $120.6 million, according to the NFL.
Each
team has discretion to allocate compensation among players, however, the CBA imposes a minimum salary that increases over time based on the number of seasons played and the player's
roster status. Teams may offer signing bonuses to the player and certain amounts of "guaranteed money" that are paid to the player regardless of whether the player is on the club's active roster. For
purposes of determining the salary cap, signing bonuses are prorated over the life of the contract. As a result, teams may sometimes offer a larger percentage of the overall compensation in the form
of a signing bonus to allow for a higher upfront payment while mitigating the impact on the current season's salary cap. However, large signing bonuses will decrease the amount of money available
under the salary cap
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in
successive seasons. In addition, players may sometimes agree to renegotiate contracts in order to accommodate salary cap considerations.
Additional Bonus Opportunities
Each player is compensated for each post-season game in accordance with a schedule established in the CBA. In the years 2011 to 2020,
an NFL Player would be entitled to receive additional compensation ranging between:
•
$20,000 to $30,000 for playing on a wild-card team;
•
$22,000 to $33,000 participating in a division playoff game;
•
$40,000 to $59,000 for participating in a conference championship;
•
$44,000 to $65,000 for participating in the Super Bowl; and
•
$88,000 to $130,000 for winning the Super Bowl.
The
NFL compensates Pro Bowl players based on a schedule established in the CBA between the NFL and the NFLPA. Between the years 2011 and 2020, NFL players participating in the Pro Bowl
are entitled to $25,000 to $37,000, with the players on the winning team receiving compensation ranging from $50,000 to $74,000. To the extent, players are unable to participate in the Pro Bowl due to
the timing of the Super Bowl, they are nonetheless entitled to the compensation discussed above depending on whether they were drafted into the winning or losing team in the Pro Bowl. In addition to
compensation received by the NFL, Pro Bowl players often receive bonuses from their endorsers as a result of being invited to play in the Pro Bowl.
Endorsements
We believe that NFL players, including All Pro or Pro Bowl caliber players, and baseball players generally receive a smaller percentage
of their total compensation than other professional athletes from endorsement and appearance fees. Based on our internal market research we believe this is true for NFL players in part because they
wear helmets and pads during games, and therefore are less recognizable, and they play on a large roster and in fewer games than other major professional sports in the United States. We believe the
endorsement income that NFL players receive is determined by many factors including their position, the market in which the player performs, personal drive and ambition, personality, "likability,"
authenticity, consistency, "mediagenic" qualities, fan base and brand image.
Quarterbacks
are generally considered to be the most marketable NFL players and often garner the largest endorsement contracts, followed by other skilled- position players. Winning
post-season championships and winning individual awards such as being named to the Pro Bowl or All-Pro Team, playoff wins and Super Bowl championships, can increase the earning potential of a
professional football player. Earning most valuable player awards for stand out performances can also increase the
earning potential of NFL players. Endorsement contracts typically have morality clauses and minimum playing requirements that allow the sponsor to terminate the sponsorship.
Our Tracking Units—EJ Manuel Brand, Vernon Davis Brand and Arian Foster Brand
Each of our tracking stocks are intended to reflect the economic performance of the associated tracking stock brands, which initially
consist of our business operations relating to the brand contract with the associated athlete, entertainer or high profile individual. We will initially attribute the following assets and liabilities
to our initial brands:
•
95% of our ABI under the associated brand contract;
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•
any and all of our liabilities, costs and expenses that are directly attributable to the associated tracking stock brand,
such as our direct costs arising out of our promotion of the associated brand or arising out of or related to the maintenance and enforcement of the associated brand contract;
•
a pro rata share of our general liabilities, costs and expenses not directly attributable to any specific tracking stock
(calculated based on attributable income) but excluding any non-cash expenses that are allocated from our parent to us. Attributable expenses would include, for example, a pro rata portion of the
service fee we pay to our parent pursuant to the management agreement (5% of our cash receipts). Expenses that would not be attributed would include expenses incurred by our parent, including any
expenses incurred in providing services to us under the management agreement, to the extent in excess of our service fee to them;
•
as income, any covered amounts, as described in "Management and Attribution
Policies—Attribution—Covered Amounts," for the associated brand contract; and
•
as an expense, the pro rata share of any covered amounts, as described in "Management and Attribution
Policies—Attribution—Covered Amounts," relating to any tracking stock brand (including the pro rata share of any covered amounts for the associated tracking stock brand).
Our
EJ Manuel Brand, any of our other tracking stock brands, are not separate legal entities and cannot issue securities. Holders of shares of Fantex Series EJ Manuel will not
have an ownership interest in our EJ Manuel Brand, or any of our affiliated entities. Rather, investors in our Fantex Series EJ Manuel will be our common stockholders. The issuance of the
Fantex Series EJ Manuel will not result in the actual transfer of our assets or the creation of a separate legal entity. EJ Manuel and his affiliated persons are, and we expect they will
continue to be, individuals and legal entities that are separate and independent from us, with separate ownership, management and operations.
As
described above, income (and assets) will generally be attributed to our Fantex Series EJ Manuel based on the income of the EJ Manuel Brand. However, if we do not receive cash
from one or more of our brand contracts to which we otherwise would have been entitled because of debtor relief laws, then the attributed income for the corresponding tracking stock will nonetheless
be credited with the amount that we would otherwise have been entitled to receive. In such a case, the difference between such attributed amount and the actual income we receive from such brand
contract will be attributed as a general expense of Fantex. As a result, each of our tracking stocks will share on a pro rata basis (calculated based on attributable income) the burden of any non-
performing brand contracts, whether or not included in the assets attributed to such tracking stock, and the economic performance of our Fantex Series EJ Manuel will be dependent, in part, upon
the aggregate financial performance of Fantex. Therefore, prior to purchasing our Fantex Series EJ Manuel, you should understand our aggregate operating performance and our aggregate assets and
liabilities. Until such time as we acquire additional brands, the risk of bankruptcy will be borne solely by holders of our Fantex Series EJ Manuel. Furthermore, we intend to acquire additional
minority interests in other brands in the future, so our operating performance will depend upon the soundness of our business plan and our ability to execute on that plan, including entering into
additional brand contracts in the future.
Given
that the economic performance of each of our tracking stocks is dependent, in part, upon the aggregate financial performance of Fantex, the Fantex Series EJ Manuel could be
affected by any of our current brand contracts or any additional brand contracts we may enter into. The risk profile of the shares of the Fantex Series EJ Manuel could likewise be materially
and adversely impacted by the performance of our other tracking stock brands, including any additional brand contracts entered into or tracking stock brands created subsequent to your investment in
the Fantex Series EJ Manuel.
For
a more detailed description of our tracking stocks and tracking stock brands, please see "Management and Attribution Policies."
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Our Brand Contracts
To date, we have entered into a brand contract with each of EJ Manuel, Vernon Davis and Arian Foster, whom we refer to individually as
a contract party and together as contract parties, and we intend to enter into additional brand contracts on an ongoing basis. The brand contracts entitle us to receive a specified percentage of the
contract party's brand income from and after the effective date of the brand contract. We refer to this percentage of brand income that we are entitled to under the brand contracts as our acquired
brand income, or ABI. Brand income generally means gross monies or other considerations that the contract party receives generally as a result of the contract party's skills and brand, including
salary and wages from being an NFL football player and activities generally in the sport of football (including NFL and non-NFL activities) and consists of other compensation from the contract party's
assignment of rights in his persona, including use of his name, voice, likeness, image, signature, talents, live or taped performances, in connection with motion pictures, television and Internet
programming, radio, music, literary, talent engagements, personal appearances, public appearances, records and recording, or publications; any use of his persona for purposes of advertising,
merchandising, or trade, including sponsorships, endorsements and appearances, and any other assignment of rights in his persona, to generate income; and any other personal services performed by the
contract party which are of the type typically performed by individuals in the field of football because of their status as a professional athlete or other professional within the field of football
(including, without limitation, sports casting, coaching, participating in sports camps, acting as spokesperson).
Brand
income does not include:
•
any cash receipts resulting from the contract party's investments in stocks or other equity, bonds, commodities,
derivatives, debt or real estate, so long as (a) such stocks or other equity, bonds, commodities, derivatives, debt investments and real estate are not received by him as compensation or
consideration for activities (including licensing of rights) in the "field" as defined in his brand contract, (b) the contract party is not obligated to provide any services related to the
"field" in connection with such investment and (c) the business or commercial venture related to such investment does not use the contract party's persona in its legal name or "dba," or in
connection with its marketing, advertising or promotion,
•
any income received from employment, services rendered or other activities not related to professional football and
related fields,
•
any reasonable reimbursement of incidental expenses actually incurred by the contract party, including without limitation,
travel, lodging, per diem and other incidental expenses, or the value of any such items paid by a third party on the contract party's behalf,
•
certain future pension and benefit payments under the CBA, except that income deferred pursuant to Article 26,
Section 6 of such CBA shall not be deemed to be future pension payments and as such, shall be included in brand income; and
•
merchandise, services or service plans or merchandise, service or service plan credit up to the lesser of $40,000 and 4%
of all brand income during any applicable calendar year and as otherwise agreed by Fantex in its discretion; and
•
any otherwise specifically excluded income under each brand contract.
Each
contract party will retain the remainder of his brand income (total brand income less the ABI), subject to other encumbrances that he may have with respect to such income (such as
commissions payable to agents and other parties). However, pursuant to the brand contracts, each contract party has agreed that he will not encumber more than an additional 10% of his brand income
from his NFL player contracts and 30% of his other brand income in any given year.
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As
consideration for the ABI under the brand contract, we will pay the contract party a one-time cash amount of the purchase price negotiated under each brand contract (less 5% of the
purchase price to be held in escrow until six months of consecutive payments due under the brand contract have been timely delivered to us) contingent upon our ability to obtain financing for the
purchase price. We intend to finance the purchase price of each brand contract through the issuance of a tracking stock linked to the value of such brand. Our ABI under each brand contract is
contingent upon our payment of this purchase price. We will have no further financial obligation to the contract parties under a brand contract once this payment has been made, other than the
indemnities described below.
In
addition to the escrow holdback (which will be released after six consecutive months of timely payments of the ABI to us after the closing of the respective offerings), the brand
contracts provide for certain express remedies (without limiting any other rights or remedies that we may have) in the event of late payments, including payment of interest at the then current prime
rate plus 3% per year, compounded monthly, and public disclosure of such late payments (subject to notice and an opportunity to cure with respect to the first or second such late payment in any
12 month period).
The
brand contracts are intended to remain in effect indefinitely and, except as set forth below, may be terminated only upon mutual agreement of the contract party and us. If the
contract party resigns from the NFL within two years of the date of this offering for any reason other than a "good reason," we may elect in our sole discretion to terminate the brand contract and the
contract party will be required to pay us the amounts set forth under the heading "Termination Fee Payable by Contract Party" in the section entitled "—Fantex—Overview" (net of
any amounts previously paid to us by him pursuant to the respective brand contract).
"Good
reason" means resignation from the NFL for any of the following reasons:
•
contract party suffers or sustains any injury, illness or medical condition that renders him incapable of performing in
professional football; or
•
contract party suffers or sustains a major injury and a qualified medical physician (depending on the nature of the major
illness) advises him that as a result he would be putting his physical health at substantial risk (i.e., a risk that is substantially greater than simply by virtue of his participation in
professional football) by continuing to engage in professional football.
Each
of the contract parties has made certain other covenants to us in the brand contract, including providing us with certain information and audit rights, and copies of all new
material agreements, amendments or terminations. They have further agreed to comply with applicable laws and rules and standards or requirements of the league or other association or governing body,
to which he is a member in connection with being an NFL football player.
Following
the closing of this offering with respect to the brand contract with EJ Manuel, or the consummation of the offerings of additional tracking stocks linked to the value of our
other tracking stock brands, and pursuant to each brand contract, the contract party will provide irrevocable instructions to each payor of brand income (requiring them to pay the amounts owed to us
directly) and such other documents as we reasonably request. To the extent that it is not commercially practical, without unreasonable burden to the contract party, for ABI to be delivered directly to
us, or to the extent that any assignment of the ABI (or any portion thereof) is deemed invalid or not enforceable, then the contract party is required to make such payments to us as promptly as
practical after receipt thereof (but not later than 15 days after receipt) including via automatic payments of installments from his bank accounts. We will not know whether there will be any
challenges that could affect whether payments will be made directly by each payor or from the contract party as described in this paragraph until after the payors respond to the irrevocable payment
instructions to be delivered by the contract party to such payors after the consummation of the respective offerings. To the extent that any
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assignment
of such amounts (including wages) is effective under the relevant state law, we may seek to enforce our rights to receive such amounts directly from the payor.
Each
of the contract parties has agreed to indemnify us against damages that may result in connection with his breach of any covenants, representations or warranties in the brand
contract with such contract party. We agreed to indemnify each contract party (and his heirs and assigns) against any third-party
lawsuit arising from the contract party being a party to a brand contract with us, including claims relating to (a) any breach of our representations and warranties in the brand contract,
(b) any violation of law by us and (c) our registration statement with respect to the related offering of tracking stock associated with such contract party, other than, in each case,
those arising out of or relating to any breach of the brand contract by the contract party.
Brand Income
Brand income, as defined above, from each of our contract parties is generally derived from such contract party's NFL player contracts
and other included contracts described in further detail below. Due to the fact that payments under the NFL player contract, and some of the other included contracts, are usually made over the course
of the regular NFL season period, we expect that our tracking stock brands will be subject to seasonal fluctuations in attributed income.
The
player contracts for each of the contract parties generally provide, except as otherwise indicated below, that payments are made in installments over the course of the applicable
regular season period. Each of these payments would be considered brand income when received by the contract parties, and thus we would be entitled to our ABI from these amounts, when paid. To the
extent any of our contract parties elects to defer receipt of his compensation under the NFL player contract, pursuant to Article 26, Section 6 of the CBA, for purposes of the brand
contract, such deferred compensation will be deemed to have been received by such contract party on the due date provided in his NFL player contract, prior to any such deferral, and we will be
entitled to our ABI from these amounts as of such due date.
The
player contracts further provide that if the contract party is injured or dies in the performance of his services under the player contract then the contract party will receive
necessary medical and hospital care during the term of the player contract and will continue to receive his yearly salary during the season of injury or death only (including any guaranteed amounts).
Unless
otherwise stated in the player contract, the NFL teams may generally terminate the player contract at any time, in the sole judgment of the team, if the contract party's skill or
performance has been unsatisfactory as compared with that of other players competing for positions on the team's roster, or if the contract party has engaged in personal conduct reasonably judged by
the team to adversely affect or reflect on the team. In addition, during the period any salary cap is legally in effect, the player contract may be terminated if, in the team's opinion, the contract
party is anticipated to make less of a contribution to the team's ability to compete on the playing field than another player or players whom the team intends to sign or attempts to sign, or another
player or players who is or are already on the team's roster, and for whom the team needs room. The team may also terminate the player contract if the contract party fails to establish or maintain his
excellent physical condition to the satisfaction of the team's physician, or make the required full and complete disclosure and good faith responses to the team's physician of any physical or mental
condition known to him which might impair
his performance under this contract and to respond fully and in good faith when questioned by the team's physician about such condition.
In
addition, the contract party's endorsement agreements and other included contracts may be terminated in the event of breach of contract by the contract party or if the contract party
fails to play in the NFL, is charged with criminal behavior or engages in conduct that adversely reflects on the sponsor. For example, as a result of Vernon Davis tweeting about a competing product, a
coconut
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water
company recently terminated its contract with him as a spokesperson. In addition, certain endorsement contracts may be terminated due to changes to NFL rules preventing reasonable use of the
endorsement product.
EJ Manuel Brand
EJ Manuel Brand Contract
On February 14, 2014, we entered into a brand contract with EJ Manuel and Kire Enterprises LLC, a professional services
company affiliated with EJ Manuel. This brand contract entitles us to receive 10% of EJ Manuel's brand income from and after February 14, 2014. As consideration for the ABI under the brand
contract, we will pay EJ Manuel a one-time cash amount of $4.98 million (less $0.25 million to be held in escrow until six months of consecutive payments due under the brand contract
have been timely delivered to us) contingent upon our ability to obtain financing for the purchase price. Our ABI under the brand contract is contingent upon our payment of the purchase price
following the consummation of this offering. We will have no further financial obligation to EJ Manuel under the brand contract once this payment has been made, other than the indemnities described
above.
EJ Manuel
EJ Manuel is a quarterback for the Bills in the NFL. He has been in the NFL since 2013. EJ Manuel attended Florida State University,
which finished 25-6 in games started by EJ Manuel. EJ Manuel was an All-Atlantic Coast Conference second team selection in 2012 and was the most valuable player in the 2013 Senior Bowl. EJ Manuel was
picked sixteenth overall in the first round of the 2013 NFL draft and signed with the Bills. EJ Manuel was the Bills starting quarterback for the 2013 season, but missed 6 games due to injury. EJ
Manuel was born on March 19, 1990 and will be 24 years old as of the start of the 2014 NFL season.
According
to statistics publically available at NFL.com, EJ Manuel's passing and rushing statistics for the 2013 NFL season are as follows:
PASSING
Year
Team
G
Att
Comp
Pct
Att/G
Yds
Avg
Yds/G
TD
2013
Buffalo Bills
10
306
180
58.8
30.6
1,972
6.4
197.2
11
TOTAL
10
306
180
58.8
30.6
1,972
6.4
197.2
11
RUSHING
Year
Team
G
Att
Att/G
Yds
Avg
Yds/G
TD
2013
Buffalo Bills
10
53
5.3
186
3.5
18.6
2
TOTAL
10
53
5.3
186
3.5
18.6
2
Our
vision for a brand identity for EJ Manuel is to associate him as "fearless." EJ Manuel has had a number of events throughout his life that serve as examples of his ability to succeed
in challenging circumstances that others might have shied away from. EJ Manuel has become a successful football player and intends to use his status as an NFL quarterback to help others. As one of the
first athletes to sign a brand contract with us, he is demonstrating how athletes can look to build and potentially enhance their brands.
As
part of our due diligence of EJ Manuel we reviewed financial and other information from him to evaluate financial suitability and brand sustainability (including credit worthiness).
Other than what has been disclosed elsewhere in this prospectus, we have not been made aware by EJ Manuel of any
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events
or incidents (personal or otherwise) relating to EJ Manuel that we believe would materially negatively impact the EJ Manuel Brand going forward. Among other things we reviewed schedules of his
assets and liabilities and existing commitments, tax returns and credit reports and credit scores. Based on our review we concluded that as of February 14, 2014, EJ Manuel is a sound credit
risk with sufficient financial health and stability, with prudent and manageable levels of indebtedness and other liabilities, to make required payments to us under his brand contract, including if
necessary the repayment to us of approximately $5.23 million if he retires from professional football within two years of the date of this offering for any reason other than a "good reason."
For instance, as part of our due diligence, we were provided information that showed that EJ Manuel has substantial amounts of cash and liquid investments and limited debt, with an asset-to-debt ratio
of greater than 5 to 1. In addition, as of February 14, 2014, EJ Manuel's current assets exceed his current liabilities by an amount at least equal to the anticipated ABI payments to us for the
next 24 months. As a result, we have concluded that he is a sound credit risk. Other than the $0.25 million of the cash consideration to be held in escrow for six months, we have not
required EJ Manuel to place any additional funds in an escrow account as security to cover the repayment of $5.23 million in the event he retires from professional football within two years
following completion of the offering for any reason other than a "good reason." In addition, we intend to monitor the creditworthiness and financial health and stability of EJ Manuel on a periodic
basis in the future through the information and audit rights that we have under our brand contract with him.
Quarterback Position
A quarterback in the NFL is the primary leader of the offense. The quarterback touches the ball on almost every offensive play, and as
his performance can have a significant impact on the success of his team, the quarterback is the most visible and scrutinized positions in professional football. Prior to each play, the quarterback
will tell the rest of his team which play the team will run; after the team is lined up, the center will pass the ball back between his legs to the quarterback (a process called the snap). Once the
quarterback has received the snap, he will do one of several things. On a running play, the quarterback will hand or pitch the ball backwards to a running back. On a passing play, the quarterback will
try and throw the ball downfield to a wide receiver, tight end, or running back. Additionally, the quarterback can run with the ball himself. This could be part of a designed play like the option run
or quarterback sneak, or it could be an impromptu effort to avoid being sacked by the defense. In general, quarterbacks need to have physical skills such as arm strength, mobility, and quick throwing
motion, in addition to intangibles such as competitiveness, leadership, intelligence, and downfield vision.
The
salary for an NFL football player is highly dependent upon his perceived ranking against other players in the position. All Pro or Pro Bowl caliber players generally receive
significantly higher compensation than players that are less well known. In particular, the top quarterbacks in the NFL are among the highest paid players in the NFL. Based on media reports, the
average annual compensation of the five highest paid quarterbacks for the 2013 season was nearly $20.41 million.
Based
on our analysis, the average career length of an NFL quarterback who was retired at the end of the 2013 NFL and qualified for the NFL passing title in his rookie season between
1980 and 2012 is approximately 10.32 years. This group consisted of 28 NFL quarterbacks. Utilizing the methodology described under "Management's Discussion and Analysis of Financial Condition
and Results of Operations—Critical Accounting Policies," we estimated EJ Manuel's expected career length to be 10 years.
EJ Manuel Brand Income
The information below is a summary of currently effective contracts of EJ Manuel that are included in his brand income. We refer to
these as included contracts.
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Included Contracts
The table below lists the included contracts as of February 28, 2014:
Counterparty
Type of contract
Product category
Buffalo Bills, Inc.
NFL Player Contract
N/A
Panini America, Inc.
Endorsement
Sports Cards
Panini Authentic, Inc.
Endorsement
Sports Cards
The Topps Company, Inc.
Endorsement
Sports Cards
NIKE USA, Inc.
Endorsement
Athletic Apparel
The Upper Deck Company, Inc.
Endorsement
Sports Cards and Memorabilia
Northtown Chrysler Jeep Dodge Ram
Merchandise
Automobile
The
following table shows historical information of cash receipts for included contracts for the year ended December 31, 2013, and is derived from our audited statements of cash
receipts from included contracts, included elsewhere in this prospectus.
Year Ended
December 31, 2013
(in thousands)
Receipts from included contracts subject to the brand contract
(1)
Contractual National Football League (NFL) player receipts
(2)
405
Contractual NFL player signing bonus receipts
4,842
​
​
​
​
​
Total receipts from NFL player contract
5,247
Receipts from other included contracts
467
Total receipts from included contracts subject to the brand contract
5,714
​
​
​
​
​
​
​
​
​
​
(1)
Please
see Notes 1 and 2 to the audited statements of cash receipts from included contracts for EJ Manuel for an explanation of the basis of
presentation and summary of significant accounting policies used in presenting these amounts. Receipts shown are for historical periods and are not necessarily indicative of future expected receipts
from current or future included contracts for any period.
(2)
NFL
Player Contract amounts were paid in installments over the course of the applicable regular season period; therefore, a portion of the amounts payable
for the 2012 season was paid 2013.
The
following summaries include descriptions of contracted cash receipts for future years under the included contracts, assuming that the parties perform their obligations under the
included contracts and none of the included contracts are amended, renegotiated or terminated prior to the expected termination date of the included contracts, as well as a summary of material terms
of the included contracts. There can be no assurance that the parties will perform their obligations under the included contracts or that cash receipts with respect to the EJ Manuel Brand will equal
or exceed the aggregate annual cash receipts described in the following summaries.
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NFL Player Contract—Buffalo Bills (the Bills)
EJ Manuel will enter into the second year of a four year player contract with the Bills, with a fifth year option exercisable by the
Bills, pursuant to which EJ Manuel is eligible to receive the following compensation (amounts in thousands and unaudited):
Playing Season
Total
(2013-2017)
2013
2014
2015
2016
2017
(4)
NFL Player Salary
(1)
$
405
$
809
$
1,213
$
1,617
—
$
4,044
Signing Bonus
$
4,842
—
—
—
—
$
4,842
Appearance Fees
(2)
$
—
$
25
$
25
$
25
$
25
$
125
Post-Season and Pro Bowl Compensation
(3)
—
$
189
$
198
$
210
$
219
$
816
Total
$
5,247
$
1,023
$
1,436
$
1,852
$
244
$
9,802
Maximum Available Brand Income Under the NFL Player Contract
—
$
1,023
$
1,436
$
1,852
$
244
$
4,555
(1)
All
amounts are payable in equal weekly or bi-weekly installments over the course of the applicable regular season period, commencing with the first regular
season game played by the Bills in each season, reduced on a pro rata basis for any portion of a season that EJ Manuel is not on the active roster for the Bills. Does not include payment of
incidental expenses or reasonable reimbursement of incidental expenses incurred by the contract party, including travel, lodging, per diem and other incidental expenses, which amounts are not included
in brand income. The NFL Player salary for the 2013, 2014, 2015 and 2016 NFL Seasons are subject to the conditional skill, injury and salary cap guarantee. Therefore, in the event that during these
contract years the Bills terminate the NFL payer contract (1) because in the sole judgment of the Bills, EJ Manuel's skill or performance has been unsatisfactory as compared with that of other
players competing for positions on the Bill's roster, (2) for salary cap reasons or (3) due to professional football injury EJ Manuel is unable to perform his services under the
NFL player contract, then EJ Manuel will receive his NFL Player Salary.
(2)
EJ
Manuel is required to make five appearances under his NFL player contract with the Bills for promotional or charitable purposes for which he shall be
compensated, if at all, in amounts no greater than $5,000 per appearance.
(3)
Amounts
payable for post-season play and Pro Bowl participation are defined in Articles 37 and 38 of the NFL CBA. No amounts were due for post-season
play in the 2013 season. Amounts reflected for seasons 2014 and beyond assume that EJ Manuel qualifies for the maximum available payments under the CBA for being a wild card division winner, appearing
in a division playoff game, conference championship game and for winning the Super Bowl.
(4)
2017
compensation amounts apply only if the Bills exercise their option to extend the contract through the 2017 season.
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Other Included Contracts
The following are aggregate compensation ranges under the included contracts other than the NFL player contract:
Year Ending December 31,
2014
2015
2016
2017
(unaudited)
Other Included Contracts
Contractual amounts from other included Contracts
(1)
$
269,700
$
85,000
$
85,000
$
25,000
Contingent contract performance incentive amounts
(2)
225,050
110,000
117,500
90,000
Maximum amounts due under other included
contracts
$
494,750
$
195,000
$
202,500
$
115,000
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
(1)
Includes
contractual amounts due under the following included contracts: The Upper Deck Company, Inc., Panini America, Inc., Panini
Authentic, Inc., NIKE USA, Inc., The Topps Company, Inc., Northtown Chrysler Jeep Dodge Ram.
(2)
Contingent
amounts include compensation for additional performance and other milestone payments, including $75,000 for being awarded the NFL MVP in each
contract year, under the endorsement agreement with Panini America, Inc., Panini Authentic, Inc., NIKE USA, Inc., The Topps Company, Inc., which payments may never be
earned by BJ Manuel.
EJ
Manuel currently has ongoing endorsement contracts or license agreements with The Upper Deck Company, Inc., Panini America, Inc., Panini Authentic, Inc., NIKE
USA, Inc., The Topps Company, Inc., Northtown Chrysler Jeep Dodge Ram. These endorsement contracts generally have terms that end in 2016, with one contract extending to 2017, and require
EJ Manuel to exclusively endorse certain categories of products, make certain appearances, participate in the production of promotional materials and social media activities and sign autographs.
Other Brands
Vernon Davis Brand
Vernon Davis Brand Contract
On October 30, 2013 we entered into a brand contract with Vernon Davis and The Duke Marketing LLC, a professional
services company affiliated with Vernon Davis. This brand contract entitles us to receive 10% of Vernon Davis's brand income from and after October 30, 2013.
In
addition to the exclusions laid out above under "—Our Brand Contracts," brand income does not include the following specifically excluded
income:
•
any income of: (1) the Vernon Davis Foundation or (2) any other charitable foundation or organization as a
result of personal services performed by Vernon Davis,
•
any proceeds of the insurance policy purchased by Vernon Davis against the risk of injury or disability,
•
income derived from his performance as a painter, sculptor or artist in any other fine or graphic arts medium, related of
Gallery 85 or any other art gallery owned by him or from any school for the arts established in part by him, whether charitable or for profit, regardless of whether he participates or his persona is
used to market or promote such school), and
•
any and all cash or other consideration, in any form whatsoever, received by Vernon Davis from the following entities (or
their affiliates as agreed as of October 30, 2013): (1) Ike Shehadeh and Ike's Love & Sandwiches Franchising LLC and (2) Jamba Juice Company.
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As
consideration for the ABI under the brand contract, we will pay Vernon Davis a one-time cash amount of $4.0 million (less $0.2 million to be held in escrow until six
months of consecutive payments due under the brand contract have been timely delivered to us) contingent upon our ability to obtain financing for the purchase price. Our ABI under the brand contract
is contingent upon our payment of the purchase price following the consummation of an offering of shares of our Fantex Series Vernon Davis. We will have no further financial obligation to Vernon Davis
under the brand contract once this payment has been made, other than the indemnities described above.
Vernon Davis
Vernon Davis is a tight end for the San Francisco 49ers, or the 49ers, in the NFL. He has been in the NFL since 2006. Vernon Davis
attended the University of Maryland, where he was the starting tight end for his sophomore and junior seasons. Vernon Davis entered the NFL draft after his junior year and was selected in the first
round, 6
th
overall, by the San Francisco 49ers. Vernon Davis was born on January 31, 1984 and is 30 years old as of February 28, 2014. He currently lives in
San Jose, California.
During
the 2009 NFL season, Vernon Davis was selected to the Pro Bowl after posting career highs of 78 receptions, 965 yards, and 13 touchdown receptions. At the time, that number of
touchdown receptions tied the NFL single season record for a tight end. According to statistics publically available at NFL.com, Vernon Davis's total receptions and receiving yards during each of the
seven prior seasons he has played in the NFL are as follows:
NFL Season
Receptions
Receiving
Yards
2006
20
265
2007
52
509
2008
31
358
2009
78
965
2010
56
914
2011
67
792
2012
41
548
Our
vision for a brand identity for Vernon Davis is to associate him as "transformational." Vernon Davis has had many inflection points throughout his life that serve as powerful
examples of his ability to persevere and evolve through challenging circumstances. Vernon Davis has become a successful football player, team leader, student of the arts, philanthropist, and
entrepreneur. As one of the first athletes to sign a brand contract with us, he is helping transform how athletes look to build and enhance their brands.
As
part of our due diligence of Vernon Davis we reviewed financial and other information from him to evaluate financial suitability and brand sustainability (including credit
worthiness). Other than what has been disclosed elsewhere in this prospectus, we have not been made aware by Vernon Davis of any events or incidents (personal or otherwise) relating to Vernon Davis
that we believe would materially negatively impact the Vernon Davis Brand going forward. Among other things we reviewed schedules of his assets and liabilities and existing commitments, tax returns
and credit reports and credit scores. Based on our review we concluded that as of October 30, 2013 Vernon Davis is a sound credit risk with sufficient financial health and stability, with
prudent and manageable levels of indebtedness and other liabilities, to make required payments to us under his brand contract, including if necessary the repayment to us of approximately
$4.2 million if he retires from professional football within two years of the date of the offering of shares of our Fantex Series Vernon Davis for any reason other than a "good reason." For
instance, as part of our due diligence, we were provided information that showed that Vernon Davis has substantial amounts of cash and liquid investments and limited debt, with an asset-to-debt ratio
of greater than 4 to 1. In addition, as of October 30, 2013, Vernon
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Davis's
current assets exceed his current liabilities by an amount at least equal to the anticipated ABI payments to us for the next 24 months. As a result, we have concluded that he is a sound
credit risk. Other than the $0.2 million of the cash consideration to be held in escrow for six months, we have not required Vernon Davis to place any additional funds in an escrow account as
security to cover the repayment of $4.2 million in the event he retires from professional football within two years following completion of the offering. In addition, we intend to monitor the
creditworthiness and financial health and stability of Vernon Davis on a periodic basis in the future through the information and audit rights that we have under our brand contract with him.
Tight End Position
A tight end in the NFL is often seen as a hybrid position with the characteristics and roles of both an offensive lineman and a wide
receiver. Like offensive linemen, a tight end is usually lined up on the offensive line and is large enough to be an effective blocker. On the other hand, a tight end is an eligible receiver and must
be skilled enough to warrant a defense's
attention when running pass patterns. Because of the hybrid nature of the position, the tight end's role in any given offense depends on the tactical preferences and philosophy of the head coach and
offensive coordinator. In some systems, the tight end will merely act as a sixth offensive lineman rarely going out for passes. Other systems utilize the tight end primarily as a receiver, frequently
taking advantage of the tight end's size and speed to create mismatches in the defensive secondary. Many coaches will often have one tight end who specializes in blocking in running situations while
utilizing a better pass catching tight end in obvious passing situations. Top tight ends in the NFL usually excel as both a blocker and receiver.
The
salary for an NFL football player is highly dependent upon his perceived ranking against other players in the position. All Pro or Pro Bowl caliber players generally receive
significantly higher compensation than players that are less well known. Based on media reports, the average annual compensation of the five highest paid tight ends for the 2012 season was
approximately $7.1 million. Vernon Davis is reported to make the second highest annual compensation for tight ends in the 2013 season.
NFL
players in the tight end position are generally considered to reach their peak at approximately 26 years of age, and a sharp decline in performance is generally observed at
approximately 30 years of age. Based on our analysis of data from publicly available sources, the average career length of an NFL tight end is approximately 5.5 years. Our analysis
included the 212 NFL tight ends drafted in rounds one through seven between 1990 and 2010, who recorded at least one career NFL reception and were no longer playing at the start of the 2013 NFL
season. Utilizing the methodology described under "Management's Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies," we estimated Vernon
Davis's expected career length to be 14 years.
Vernon Davis Brand Income
The information below is a summary of currently effective contracts of Vernon Davis that are included in his brand income. We refer to
these as included contracts.
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Included Contracts
The table below lists the included contracts as of October 30, 2013:
Counterparty
Type of contract
Product category
San Francisco Forty Niners, Limited
NFL Player Contract
N/A
KGO-TV
Television
Sports Commentary
Krave Pure Foods, Inc.
Endorsement
Food
Hungry Fish Media, LLC (d/b/a NutraClick)
Endorsement
Nutrition
New League Productions, Inc.
Television
TV Appearances
The
following table shows historical information of cash receipts for included contracts for the years ended December 31, 2012 and 2013, and is derived from our audited statements
of cash receipts from included contracts, included elsewhere in this prospectus.
Year Ended
December 31,
2012
2013
(in thousands)
Receipts from included contracts subject to the brand contract
(1)
Contractual National Football League (NFL) player receipts
(2)
$
5,751
$
6,072
Contractual NFL player signing bonus receipts
—
—
Contractual NFL post season roster incentive receipts
62
156
Contractual NFL player performance incentives receipts
600
601
​
​
​
​
​
​
​
​
Total receipts from NFL player contract
6,413
6,829
Receipts from other included contracts
227
382
Total receipts from included contracts subject to the brand contract
$
6,640
$
7,211
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
(1)
Please
see Notes 1 and 2 to the audited statements of cash receipts from included contracts for Vernon Davis for an explanation of the basis of
presentation and summary of significant accounting policies used in presenting these amounts. Receipts shown are for historical periods and are not necessarily indicative of future expected receipts
from current or future included contracts for any period.
(2)
NFL
Player Contract amounts were paid in installments over the course of the applicable regular season period; therefore, a portion of the amounts payable
for the 2011 and 2012 seasons were paid in 2012 and 2013, respectively.
The
following summaries include descriptions of contracted cash receipts for future years under the included contracts, assuming that the parties perform their obligations under the
included contracts and none of the included contracts are amended, renegotiated or terminated prior to the expected termination date of the included contracts, as well as a summary of material terms
of the included contracts. There can be no assurance that the parties will perform their obligations under the included
contracts or that cash receipts with respect to the Vernon Davis Brand will equal or exceed the aggregate annual cash receipts described in the following summaries.
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NFL Player Contract—San Francisco Forty Niners (the 49ers)
Vernon Davis has completed the fourth year of a six year player contract with the 49ers, pursuant to which Vernon Davis is eligible to
receive the following compensation (amounts in thousands and unaudited):
Playing Season
Total
(2010-2015)
2010
2011
2012
2013
2014
2015
NFL Player Salary
(1)
$
3,874
(2)
$
4,708
(2)
$
5,751
(3)
$
6,072
$
4,700
$
4,350
$
29,455
Signing Bonus
$
6,500
(2)
$
3,500
(2)
—
—
—
—
$
10,000
Roster Bonus
(4)
—
$
400
$
400
$
400
$
400
$
400
$
2,000
Workout Bonus
(5)
—
$
200
$
200
$
200
$
200
$
200
$
1,000
Post-Season and Pro Bowl Compensation
(6)
—
$
62
$
156
$
84
$
189
$
198
$
689
Total
$
10,374
$
8,870
$
6,507
$
6,756
$
5,489
$
5,148
$
43,144
Maximum Available Brand Income Under the NFL Player Contract
—
—
—
$
3,499
(7)
$
5,489
$
5,148
$
14,136
(1)
All
amounts are payable in equal weekly or bi-weekly installments over the course of the applicable regular season period, commencing with the first regular
season game played by the 49ers in each season, reduced on a pro rata basis for any portion of a season that Vernon Davis is not on the active roster for the 49ers. Does not include payment of
incidental expenses or reasonable reimbursement of incidental expenses incurred by the contract party, including travel, lodging, per diem and other incidental expenses, which amounts are not included
in brand income.
(2)
Amounts
guaranteed and fully earned.
(3)
$4,418,000
of 2012 NFL Player Salary is guaranteed. All amounts due in 2012 were earned.
(4)
During
each of the 2011, 2012, 2013, 2014 and 2015 NFL Seasons, Vernon Davis has received and will receive a $25,000 "Roster Bonus" for every game in which
he is a member of the 49ers 45-Man Active List. Vernon Davis earned the maximum Roster Bonus amount of $400,000 in 2011 and 2012 and $375,000 in 2013. Vernon Davis was listed as inactive on the 49ers
regular season game on September 22, 2013, and therefore is only be eligible to receive $375,000 in Roster Bonuses during the 2013 NFL Season.
(5)
During
each of his 2011, 2012, 2013, 2014 and 2015 NFL Contract years, Vernon Davis has received and will receive a $200,000 "Workout Bonus" if he
participates in 90% or more of the 49ers off-season conditioning program in that respective year. Vernon Davis has earned this Workout Bonus in each of 2011, 2012 and 2013.
(6)
Amounts
payable for post-season play and Pro Bowl participation are defined in Articles 37 and 38 of the NFL CBA. The amounts for post-season play in
the 2011 season include $40,000 paid as a result of appearing in a conference championship game and $22,000 paid for appearance in a divisional playoff game. The amounts for post-season play in the
2012 season include $50,000 paid for being selected to the winning team in the Pro Bowl, $44,000 paid for participating on the losing team in the Super Bowl, $40,000 paid as a result of appearing in a
conference championship game and $22,000 paid for appearance in a divisional playoff game. The amounts to be paid for post-season play in the 2013 season include $40,000 for appearing in a conference
championship game, $23,000 for appearing in a divisional playoff game and $21,000 for appearance in a wild card game. Amounts reflected for seasons 2014 and beyond, assuming that Vernon Davis
qualifies for the maximum available payments under the CBA for being a wild card division winner, appearing in a division playoff game, conference championship game and for winning the Super Bowl.
(7)
Calculated
based on payments made through October 30, 2013 of $2,857,412 of base salary due under the player contract, $200,000 of the workout bonus
and $175,000 of the roster bonus remaining under the player contract with the 49ers, taking into account the $25,000 roster bonus not earned on September 22, 2013. Vernon Davis has $3,214,588
left to be paid on his base salary, $200,000 in roster bonuses and $84,000 of post-season earnings.
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Other Included Contracts
The following are aggregate compensation ranges under the included contracts other than the NFL player contract:
Year Ending December 31,
2013
(1)
2014
2015
2016
(unaudited)
(in thousands)
Other Included Contracts
Contractual amounts from other included Contracts
(2)
$
48.3
$
238.0
$
80.0
$
20.0
Other included contract performance incentive amounts
(3)
—
$
25.0
$
25.0
$
25.0
​
​
​
​
​
​
​
​
​
​
​
​
​
​
Total amounts from other included contracts
$
48.3
$
263.0
$
105.0
$
45.0
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
(1)
Excludes
amounts previously paid to Vernon Davis as of October 30, 2013.
(2)
Includes
contractual amounts not yet paid as of October 30, 2013 pursuant to the following included contracts: KGO-TV, Krave Pure Foods, New League
Productions and NutraClick. Does not include a September 1, 2013 grant to Vernon Davis of options to purchase 12,000 shares of common stock of Krave Pure Foods because such date of grant was
prior to the effective date of the brand contract.
(3)
Contingent
amounts include compensation for additional performance under the endorsement agreement with Krave Pure Foods, including additional appearances
wearing the marks of Krave Pure Foods products.
Vernon
Davis currently has ongoing endorsement contracts or license agreements with Hungry Fish Media, LLC (d/b/a/ NutraClick), Krave Pure Foods and KGO-TV. These endorsement
contracts have terms that end in 2016 and require Vernon Davis to exclusively endorse certain categories of products, make certain appearances, participate in the production of promotional materials
and social media activities and sign autographs.
Arian Foster Brand
Arian Foster Brand Contract
On February 28, 2013 we entered into a brand contract with Arian Foster and The Ugly Duck, LLC, a professional services
company affiliated with Arian Foster, and amended and restated such contract on May 24, 2013 and August 21, 2013. This brand contract, as amended, entitles us to receive 20% of Arian
Foster's brand income from and after February 28, 2013.
In
addition to the exclusions laid out above under "—Our Brand Contracts," brand income does not include the following specifically excluded
income:
•
income derived from: motion pictures and television (unless, in each case, Arian Foster either performs in the role of a
professional or amateur football player, or performs as himself), music (including writing, recording, publishing, artist management, touring), children's books, and any and all merchandising and
exploitation rights relating to any of these foregoing excluded categories;
•
any and all cash or other consideration, in any form whatsoever, received by Arian Foster from the following entities (or
their affiliates as of February 28, 2013): (A) Fuse Science, Inc. and (B) Mobli Media Inc.;
•
$6.25 million received by Arian Foster in March 2013 as the final payment to him from the Texans for his signing
bonus from the March 5, 2012 contract with the Texans; or
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•
any merchandise credit (or value thereof) payable to Arian Foster pursuant to the agreement, dated effective as of
March 1, 2012, between Arian Foster and Under Armour, Inc. and any merchandise credit of the same or lesser value in any renewals, extensions or amendments and/or restatements thereof
(but all other cash consideration under such contract is included in brand income).
As
consideration for the ABI under the brand contract, we will pay Arian Foster a one-time cash amount of $10.0 million (less $0.5 million to be held in escrow until six
months of consecutive payments due under the brand contract have been timely delivered to us) contingent upon our ability to obtain financing for the purchase price. Our ABI under the brand contract
is contingent upon our payment of the purchase price following the consummation of the offering of Fantex Series Arian Foster. We will have no further financial obligation to Arian Foster under the
brand contract once this payment has been made, other than the indemnities described below.
Arian Foster
Arian Foster is a running back for the Houston Texans, or the Texans, in the NFL. He has been in the NFL since 2009. Arian Foster
attended the University of Tennessee, where he was the starting running back for three seasons. Arian Foster went undrafted in the 2009 draft and signed with the Texans as an undrafted free agent.
Arian Foster was born on August 24, 1986 and is 27 years old as of February 28, 2014. He currently lives in Houston, Texas with his wife, daughter and son.
During
the 2010 NFL season, Arian Foster was the leading rusher in the NFL with 1,616 rushing yards. Arian Foster was named First Team All Pro in 2010 and Second Team All Pro in 2011.
Arian Foster has also been selected to three Pro Bowl appearances, in each of the 2010, 2011 and 2012 seasons. In
addition, Arian Foster led the NFL in carries in 2012, with 351 (405, including post-season games) carries, and was in the top six in carries in 2011 and 2010 with 278 and 327 carries, respectively.
According to statistics publically available at NFL.com, Arian Foster's total carries and rushing yards during each of the four prior seasons he has played in the NFL are as follows:
NFL Season
Carries
Rushing
Yards
2009
54
257
2010
327
1,616
2011
278
1,244
2012
351
1,424
2013
121
542
Our
vision for a brand identity for Arian Foster is to associate him as a "trailblazer." Arian Foster is a modern-day professional athlete who wants to combine his on-field
accomplishments with a desire and confidence to forge his own path in his off-field interests, including poetry, philosophy, humanitarian interests, music and acting. For example, Arian Foster
recently appeared as himself on an episode of the television series Hawaii Five-O, and has also recently been cast as a professional running back in
Draft
Day
, a new film starring Kevin Costner. Arian Foster is more interested in being interested than being known as interesting. By being the first athlete to sign a brand contract
with us he is helping trailblaze a path for others and helping us in our mission to improve how athlete brands are defined and enhanced.
As
part of our due diligence of Arian Foster we reviewed financial and other information from him to evaluate financial suitability and brand sustainability (including credit
worthiness). Other than what has been disclosed elsewhere in this prospectus, we have not been made aware by Arian Foster of any events or incidents (personal or otherwise) relating to Arian Foster
that we believe would materially
negatively impact the Arian Foster Brand going forward. Among other things we reviewed schedules of his assets and liabilities and existing commitments, tax returns and credit reports and
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credit
scores. Based on our review we concluded that as of October 31, 2013 Arian Foster is a sound credit risk with sufficient financial health and stability, with prudent and manageable
levels of indebtedness and other liabilities, to make required payments to us under his brand contract, including if necessary the repayment to us of approximately $10.5 million if he retires
from professional football within two years of the date of the offering of shares of our Fantex Series Arian Foster for any reason other than a "good reason." For instance, as part of our due
diligence, we were provided information that showed that Arian Foster has substantial amounts of cash and liquid investments and no debt, or in other words, a debt-to-asset ratio of zero. In addition,
as of October 31, 2013, Arian Foster had no material current liabilities, and his current assets exceed his current liabilities by an amount at least equal to the anticipated ABI payments to us
for the next 24 months. As a result, we have concluded that he is a sound credit risk. Other than the $0.5 million of the cash consideration to be held in escrow for six months, we have
not required Arian Foster to place any additional funds in an escrow account as security to cover the repayment of $10.5 million in the event he retires from professional football within two
years. In addition, we intend to monitor the creditworthiness and financial health and stability of Arian Foster on a periodic basis in the future through the information and audit rights that we have
under our brand contract with him.
Running Back Position
The salary for an NFL football player is highly dependent upon his perceived ranking against other players in the position. All Pro or
Pro Bowl caliber players generally receive significantly higher compensation than players that are less well known. Based on media reports, the average annual compensation of the five highest paid
running backs for the 2012 season was approximately $9.8 million.
NFL
players in the running back position are generally considered to reach their peak at approximately 25 years of age, and a significant drop off in performance is generally
observed at approximately 30 years of age. In addition, many commentators argue that a high number of carries in any one season, approaching 370 carries or more, may result in a decline in
performance in the following season. Arian Foster led the NFL in carries in 2012, with 351 (405, including post-season games), and was in the top six in carries in 2011 and 2010 with 278 and 327
carries, respectively.
The
average career lengths of NFL players, and NFL running backs, has been widely reported and the reports vary significantly, but the average career length of an NFL running back has
been reported to be as little as less than three years. However, those averages may include groupings of players that are overly broad. For example, the NFLPA issued a report that included all players
on an active roster at the beginning of a season, which means that many of those players included in the sample may simply have a short career because they do not perform at a high enough level to be
the starting running back. As a result, they may either retire for lack of playing time, or be cut from the team for lack of skill, and this may happen in a relatively short period of time. Thus we
believe these averages are not meaningful in assessing the career length of a more specific profile. According to statistics publicly available and compiled by STATS LLC, the average career
length for a running back whose first year in the NFL was between 1980 and 1994 and who has been selected to at least one Pro Bowl is longer and approximately 9.5 years. Further, we believe
that the most meaningful comparison for Arian Foster is to assess the average career length for a running back in the modern era (which we define as a running back who has retired from the NFL during
the 15-year period between 1997 and 2011), who was the featured back on their team, selected to at least one Pro Bowl and rushed for at least 1,000 yards in at least three of their first four full
seasons in which the running back played at least 13 games. According to statistics publicly available and compiled by STATS LLC, the average and
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median
career length of the running backs who fit this criteria is approximately 10.5 years, and a complete list of these players who fit the above criteria are as follows:
Player
Career Length
(1)
Barry Sanders
10
Clinton Portis
9
Corey Dillon
10
Curtis Martin
12
Deuce McAllister
9
Eddie George
9
Edgerrin James
11
Emmitt Smith
15
Fred Taylor
13
Garrison Hearst
12
Jamal Anderson
8
Jamal Lewis
10
Jerome Bettis
13
LaDainian Tomlinson
11
Marcus Allen
16
Marshall Faulk
13
Priest Holmes
11
Ricky Williams
13
Robert Smith
8
Rodney Hampton
8
Rudi Johnson
8
Shaun Alexander
9
Terrell Davis
7
Terry Allen
11
Thurman Thomas
13
Travis Henry
7
Willie Parker
7
(1)
Career
Length is calculated by subtracting the first year the player played from the last year the player played. Therefore, even if a player missed an
entire season for injury or other reason, the year is nevertheless counted towards his Career Length.
Arian Foster Brand Income
The information below is a summary of currently effective contracts of Arian Foster that are included in his brand income. We refer to
these as included contracts.
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Included Contracts
The table below lists the included contracts as of October 31, 2013:
Counterparty
Type of contract
Product category
Houston Texans
NFL Player Contract
N/A
Under Armour, Inc.
Endorsement
Retail Clothing and Equipment
Kroger Texas LP
Endorsement
Grocery
ProCamps, Ltd.
Endorsement
Sports Camps
Gamebreaker Sports LLC
Endorsement
Sports Memorabilia
Health Warrior, Inc.
Endorsement
Superfoods
Saatchi and Saatchi North America, Inc.
Commercial
Automotive
Pro Player Merch LLC
Licensed Apparel
Retail Clothing and Equipment
First Pick Productions LLC
Performer Daily Contract (Acting)
N/A
The
following table shows historical information of cash receipts for included contracts for the years ended December 31, 2012 and 2013, and is derived from our audited statements
of cash receipts from included contracts, included elsewhere in this prospectus.
Year Ended
December 31,
2012
2013
(in thousands)
Receipts from included contracts subject to the brand contract
(1)
Contractual National Football League (NFL) player receipts
(2)
$
4,540
$
5,248
Contractual NFL player signing bonus receipts
6,250
—
(3)
Contractual NFL post season roster incentive receipts
—
69
Contractual NFL player performance incentives receipts
(4)
406
344
​
​
​
​
​
​
​
​
Total receipts from NFL player contract
11,196
5,661
Receipts from other included contracts
482
1,066
Total receipts from included contracts subject to the brand contract
$
11,678
$
6,727
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
(1)
Please
see Notes 1 and 2 to the audited statements of cash receipts from included contracts for Arian Foster for an explanation of the basis of
presentation and summary of significant accounting policies used in presenting these amounts. Receipts shown are for historical periods and are not necessarily indicative of future expected receipts
from current or future included contracts for any period.
(2)
NFL
Player Contract amounts were paid in installments over the course of the applicable regular season period; therefore, a portion of the amounts payable
for the 2011 and 2012 seasons were paid in 2012 and 2013, respectively.
(3)
Does
not include $6.25 million of signing bonus paid in March 2013. Because the final portion of the signing bonus related to the 2012 contract the
contract party entered into with the Houston Texans was expected to be received after the signing of the brand contract but prior to Fantex's purchase of the brand contract, the purchase price and
brand contract excluded the final installment of $6.25 million of the signing bonus. Future signing bonuses received by the contract party for included contracts will be subject to the brand
contract and Fantex will be entitled to its proportionate share. The entire amount of the signing bonus is forfeitable on a pro-rated basis
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during
the five-year term of the NFL Player Contract to the extent permitted under the CBA for certain acts such as voluntary retirement.
(4)
Bonus
of $31,250 received for every game during the NFL regular season that Arian Foster was on the active roster for the Texans, not to exceed $500,000 for
any one season.
The
following summaries include descriptions of contracted cash receipts for future years under the included contracts, assuming that the parties perform their obligations under the
included contracts and none of the included contracts are amended, renegotiated or terminated prior to the expected termination date of the included contracts, as well as a summary of material terms
of the included contracts. There can be no assurance that the parties will perform their obligations under the included contracts or that cash receipts with respect to the Arian Foster Brand will
equal or exceed the aggregate annual cash receipts described in the following summaries.
NFL Player Contract—Houston Texans (the Texans)
Arian Foster has completed the second year of a five year player contract with the Texans, pursuant to which Arian Foster is eligible
to receive the following compensation (amounts in thousands and unaudited):
Playing Season
Total
2013-2016
2013
2014
2015
2016
Salary
(1)
$
5,250
(3)
$
5,750
$
6,000
$
6,500
$
23,500
Maximum Bonus
(2)
500
500
500
500
2,000
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
Total
$
5,750
(3)
$
6,250
$
6,500
$
7,000
$
25,500
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
(1)
All
amounts are payable in equal weekly or bi-weekly installments over the course of the applicable regular season period, commencing with the first regular
season game played by the Texans in each season, reduced on a pro rata basis for any portion of a season that Arian Foster is not on the active roster for the Texans. Does not include necessary
traveling expenses or additional compensation, benefits and reimbursement of expenses as may be called for in any collective bargaining agreement in existence from time to time between the NFL and
NFLPA, which are not included in brand income.
(2)
Bonus
of $31,250 received for every game during the NFL regular season that Arian Foster is on the active roster for the Texans, not to exceed $500,000 for
any one season.
(3)
$3.25 million
of Arian Foster's salary for the 2013 season is guaranteed, and shall be payable in the event that Arian Foster is cut from the Texans,
suffers a football related injury, or the Texans determine to make room under their salary cap on the roster for the Texans during the 2013 season unless, prior to or during the 2013 season, Arian
Foster either fails or refuses to report, practice or play for the team for any reason other than football related injury (or death) or is in material breach of his NFL player contract.
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Other Included Contracts
The following are aggregate compensation ranges under the included contracts other than the NFL player contract:
Year Ended
December 31,
2013
(1)
2014
(unaudited)
(in thousands)
Other Included Contracts
Contractual amounts from other included contracts
(2)
$
383.6
$
190.0
(3)
Other included contract performance incentive amounts
(4)
—
265.0
​
​
​
​
​
​
​
​
Total amounts from other included contracts
$
383.6
$
455.0
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
(1)
Excludes
amounts previously paid to Arian Foster as of February 28, 2013.
(2)
Includes
contractual amounts not yet paid as of February 28, 2013 pursuant to the following included contracts: First Pick Productions, Gamebreaker
Sports, Saatchi and Saatchi North America, Kroger Texas, Pro Player Merch, ProCamps and Under Armour. Does not include a September 3, 2013 grant to Arian Foster of options to purchase 485,000
shares of common stock of Health Warrior with an exercise price of $1.484 per share and a 10 year term in consideration for his services under his agreement with Health Warrior. We are not
guaranteed income under Arian Foster's agreement with Health Warrior and will be entitled to our portion of the ABI if and when Arian Foster receives distributions, dividends, proceeds from sale, or
other monies as a result of his equity interests in Health Warrior. The estimated fair market value of the stock options received by Arian Foster using a Black-Scholes valuation model is approximately
$292,000 based on the fair value for the options at grant date of $1.484 per share and assuming a weighted average term of the options of 5.54 years, a risk-free rate of return of 1.6% using a
30-day average yield for five-year treasury securities and 60% volatility in the price of the options based on the volatilities for companies comparable to Health Warrior. We are entitled to 20% of
any profits related to the exercise of these options. To the extent Arian Foster does not exercise his options or otherwise receive proceeds, in the form of dividends, distributions, proceeds on a
sale or otherwise, we will be entitled to no income under Arian Foster's agreement with Health Warrior, and any such income is further contingent upon a combination of time vesting and certain
performance vesting measures.
(3)
Includes
amounts payable between January 1, 2014 and March 31, 2015.
(4)
Contingent
amounts include maximum merchandise credit available to Arian Foster under the included contracts, that is not otherwise excluded from the brand
income, and maximum bonuses payable to Arian Foster for achieving certain milestones, including reaching 2,000 rushing or receiving yards in a season, making at least ten rushing and/or receiving
touchdowns, appearing in a wild-card playoff game, divisional playoff game, conference championship game or the Super Bowl, being awarded the Super Bowl's Most Valuable Player, being elected to the
NFL Pro Bowl, amongst other milestones.
Arian
Foster currently has ongoing endorsement contracts or license agreements with Under Armour, Kroger Texas, Gamebreaker Sports, Health Warrior, Pro Player Merch and ProCamps. These
endorsement contracts generally have a term that ends in 2014 (with one agreement terminating in the first quarter of 2015) and require Arian Foster to exclusively endorse certain categories of
products,
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make
certain appearances, participate in the production of promotional materials and social media activities and sign autographs.
Arian
Foster will also receive additional compensation for playing in post season games and earning individual honors such as rushing 2,000 yards in a season, scoring 10 touchdowns in a
season, playing in the Pro Bowl, being the NFL rushing leader or Super Bowl Most Valuable Player or breaking the NFL single season rushing record. In addition, Arian Foster receives certain income
from the NFL PLAYERS Inc, the marketing and licensing subsidiary of the NFLPA, which licenses the right to use his name, signature facsimile, voice, picture, photograph, likeness, and/or biographical
information (collectively "image") in group licensing programs. Arian Foster is entitled to no additional income under the CBA or his NFL player contract in exchange for the rights granted to the
NFLPA in Section 4 of his NFL player contract. Nevertheless, Arian Foster has from time to time received income from such sponsorships at the discretion of the NFL PLAYERS Inc and NFLPA.
Competition
Our business is unique and we are not aware of anyone at this time who is attempting to engage in our business model or who is directly
competitive to us. We may if successful face competition from sports management agencies and sports marketing agencies with respect to our marketing activities. We believe that if we did face
competition from these types of agencies it would be based in part on the strength of the relationships they have with professional athletes, entertainers and other high-profile individuals. In this
regard these companies are more established and may have more extensive industry contacts and direct relationships with these brands than we do. However, we also believe that if there were competition
from these types of agencies it would be based on the effectiveness of the marketing efforts and the relative cost to the brand of these services, and we believe that we would be competitively
differentiated from these agencies in each of these areas.
With
respect to the effectiveness of the marketing efforts, although we are a development-stage company and have not engaged in any marketing activities to date, we believe we have
assembled, through Fantex Holdings, a unique team with crossover talent in sports, sports marketing and digital
marketing and technology, which we believe will allow us to be effective at implementing marketing strategies, including with respect to digital marketing as discussed under the section entitled
"Business—Enhancing Brand Value—Increasing Brand Reach and Consumer Engagement" in general to help enhance brand value. We are not aware of any of the major sports management
or marketing agencies who currently are attempting to engage in these types of marketing activities, and we do not believe they would be willing to shift their focus to these activities in the future.
We believe the sports marketing agencies in effect act closer to the capacity as sales agencies. In large part they sell a product (the brand) to the buyer (an endorsement partner). We intend to make
the product (the brand) better, which we believe will ease their ability to sell that product to the buyers (the endorsement partners). We believe this will enhance our relationship with these
agencies and there would be incentives for us to work collaboratively with our brands and their management and marketing agencies to achieve the best results for our mutual brands.
With
respect to the cost to the athlete of the marketing efforts, our business model provides that we make an upfront investment to purchase a minority interest in the future value of
our brands, so the overall cost to a brand will correlate to the longer-term success and sustainability of their brand. Although we currently have limited resources to employ in the enhancement of the
value of the brand contract and have fewer industry relationships than sports management agencies and sports marketing agencies, we believe that building a portfolio of brands will enable us to
achieve economies of scale and increase brand reach across our portfolio more efficiently. We do not believe that sports management agencies or sports marketing agencies would be willing to duplicate
our model.
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Employees
As of December 31, 2013, we had no employees. We are being supported by personnel employed by our parent. As of
December 31, 2013, our parent had 36 full-time employees. Of these full time employees, three were engaged in support administration, including legal and finance, and eight were engaged in
other activities related to our business, five of whom were engaged in our business full-time. None of these employees are represented by labor unions or covered by collective bargaining agreements.
Our parent considers these relationships to be good.
Facilities
We share our parent's 4,483 square foot real estate facility located in San Francisco, California, used primarily for corporate
function. Our parent's lease for this space expires in November 2015. We believe that this facility is sufficient for our needs for the foreseeable future. We have no contractual rights to share this
real estate facility.
Legal Proceedings
We are not currently a party to any material legal proceedings.
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MANAGEMENT
Executive Officers and Directors
The following table sets forth information regarding our executive officers and directors as of February 28, 2014:
Name
Age
Position(s)
Cornell "Buck" French
48
Director and Chief Executive Officer
David Mullin
61
Chief Financial Officer
Matthew Beirne
25
Vice President of Business Development
David Beirne
50
Director
John Costello
66
Director
C. William Hosler
50
Director
Ronald Machtley
65
Director
Shahan Soghikian
55
Director
Terdema Ussery
55
Director
Executive Officers
Cornell "Buck" French
has served as our Director and Chief Executive Officer since our
founding. Mr. French also serves as the Chief Executive Officer of our parent, Fantex Holdings since its inception in September 2012. Mr. French co-founded OnLink Technologies, which was
later sold to Siebel Systems, Inc. in 2000. Mr. French is also a Co-Founder and Director of Zwingit. Mr. French currently serves on the Board of Directors of Prelert, Inc.
Mr. French served as the President, CEO and Chairman of Securify, Inc. from December 2004 to October 2008, through its sale to Secure Computing. Mr. French previously served as a
partner at technology venture capital firm JPMorgan Partners, and held the role of Vice President and General Manager of the Interactive Selling Group at Siebel. He is a former Director of
Zilliant, Inc., WebCollage, Inc., Axentis, Inc. and several other private companies. Mr. French received an MBA from Harvard University in 1996 and a B.S. in Economics and
General Engineering from the U.S. Military Academy at West Point in 1989. Mr. French brings to the Board extensive management, business development, financial and strategic planning experience.
David Mullin
has served as our Chief Financial Officer since our founding. Mr. Mullin also serves as the Chief Financial Officer of
our parent, Fantex Holdings since its inception in September 2012. Mr. Mullin has most recently served as a CFO of Become, Inc. from April 2010 to August 2011. Prior to joining Become,
Mr. Mullin has served as the Chief Operating Officer and CFO of Securify, Inc. from March 2005 to October 2008. Mr. Mullin also served as the Executive Vice President and CFO of
NP Test, Inc. from September 2003 to October 2004, and Terawave Communications, Inc. Mr. Mullin was the CFO of Borland International from 1995 to 1996, Smart Modular Technologies
from 1996 to 2000 and Vice President of Finance and Administration and CFO of OnLink Technologies, Inc. from 2000 to 2001. Mr. Mullin also held several senior finance executive
positions, including at Sun Microsystems, Conner Peripherals, PriceWaterhouse Coopers, and Arthur Anderson. Mr. Mullin is a California Certified Public Accountant and received a B.A. in
Business Administration from San Francisco State University in 1977.
Matthew Beirne
has served as our Vice President of Business Development since our founding. Prior to joining Fantex, Mr. Beirne
served as an analyst at Morgan Stanley & Co. LLC. Mr. Beirne received a B.A. in Biological Anthropology & Human Anatomy from Duke University in 2011.
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Directors
David Beirne
has served as the Chairman of our board of directors since March 2013.
Mr. Beirne also serves as the Chairman on the board of directors of Fantex Holdings since its inception in September 2012. Mr. Beirne was a general partner at Benchmark
Capital, LLC from March 1997 until his retirement from the firm in September 2007. Mr. Beirne served as an advisor and limited partner to Benchmark until 2012. Mr. Beirne served
on the boards of Blazent Corporation, Vontu, Inc., Securify, Inc., 1(800) Flowers, Kana Corp. and several other private companies. Prior to joining Benchmark, Mr. Beirne
was co-founder of Ramsey/Beirne Associates, Inc., an executive search firm, where he served as CEO from October 1987 to June 1997. Mr. Beirne also serves on the Board of Directors of
several nonprofit organizations. Mr. Beirne received a B.S. in Business Administration and Management from Bryant University in 1985. Mr. Beirne has developed a nationwide reputation for
recruiting high-profile executives and brings to the Board extensive recruiting, management and operational experience.
John H. Costello
has served on the board of directors of Fantex, Inc. since July 2013. Mr. Costello has been the President,
Global Marketing & Innovation, at Dunkin Brands Group, Inc. since March 2013 and has previously served as its Chief Global Marketing & Innovation Officer. Mr. Costello
currently also serves as a director on the board of directors of Ace Hardware Corporation, where he also serves as a member of the Compensation Committee and Retail and Supply Chain Committee. He also
serves on the board of directors of Yellowstone Park Foundation and as a Board Advisor to Criteo, Inc. Prior to joining Dunkin Brands in 2009, Mr. Costello served as the Chief Executive
Officer and director of Zounds, Inc. from September 2007 through January 2009. From October 2006 to August 2007, he served as President of Consumer and Retail for Solidus Networks, Inc.
(d/b/a Pay By Touch). Mr. Costello has also previously served on the boards of directors of the Association of National Advertisers Inc., The Quaker Oats Company, The Bombay Company,
Aspen Marketing Services, Inc. and various other public and private companies, as well as serving on the Board of Trustees of the American Film Institute. In addition, Mr. Costello has
held leadership roles at several companies, including serving as President of Nielsen Marketing Research U.S., Chief Executive Officer of MVP.com, Inc., Executive Vice President of
Merchandising and Marketing at The Home Depot, Senior Executive Vice President of Sears, Senior Vice President of Marketing and Sales at Pepsi-Cola, USA and Chief Global Marketing Officer of Yahoo!.
Mr. Costello received a B.S. in Industrial Management from the University of Akron in 1968 and an MBA from Michigan State University in 1970. Mr. Costello brings to our board of
directors extensive operational and marketing experience.
C. William Hosler
has served on the board of Fantex, Inc. since August 2013. Mr. Hosler also currently serves as Chief
Financial Officer and a director of Catellus Acquisition Company, LLC, a company engaged in commercial real estate property ownership, management and development. Prior to
assuming his current role at Catellus Acquisition Company, LLC in March 2011, Mr. Hosler provided consulting services to Rockwood Capital and TPG Capital, two private investment firms,
from November 2008 to March 2011. Mr. Hosler served as Chief Financial Officer of Marcus & Millichap Holding Companies, a privately held investment and real estate services company, from
January 2008 to November 2008. Prior to that, from June 2007 through December 2007 and July 2006 until June 2007 Mr. Hosler was a consultant to and Chief Financial Officer of Mirion
Technologies, a privately-held radiation detection, measuring and monitoring company. Mr. Hosler served as Chief Financial Officer of Catellus Development Corporation, a publicly traded real
estate company, from 1999 to 2005, and, prior to Catellus, he was Chief Financial Officer of the Morgan Stanley Real Estate Funds where he served on the Investment Committee. Mr. Hosler
currently serves as a director of CapitalSource Inc. and as a member of its audit committee, asset/liability committee, and compensation committee, as well as a director of CapitalSource Bank,
its wholly owned subsidiary. In addition, Mr. Hosler serves on the board of directors, audit committee and corporate governance and nominating committee of Parkway Properties, Inc., a
public, self-administered real estate investment trust. Mr. Hosler received a B.S. in
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Chemical
Engineering from the University of Notre Dame and an M.B.A from the University of Virginia. Mr. Hosler brings to the board significant experience in investment and finance, as well as
his experience as a Chief Financial Officer of a publicly traded company.
Ronald Machtley
has served on the board of directors of Fantex, Inc. since June 2013. Mr. Machtley has served as president
of Bryant University since 1996 and was previously a Republican member of the United States House of Representatives from Rhode Island from 1989 to 1995. Mr. Machtley also currently serves on
the boards of directors of five separate affiliate entities of Amica Insurance, including Amica Mutual Insurance Company, where he also served as a member of its Finance, Nominating, Executive
Compensation, and Audit Committees. He also currently serves on the board of directors of Cranston Print Works, Inc., Rhode Island Foundation and Preservation Society of Newport, among other
organizations. From 1994 until 1995, Mr. Machtley served as a Partner at Wilkinson, Barker, Knauer & Quinn, a law firm in Washington D.C. Mr. Machtley has also previously served
as a director of Covansys Corp. Mr. Machtley received a B.S. from the United States Naval Academy in 1970 and a J.D. from Suffolk University Law School in 1978. Mr. Machtley brings to
our board of directors extensive management experience.
Shahan Soghikian
has served on the board of directors of Fantex, Inc. since June 2013. Mr. Soghikian is a co-founder and
Managing Director of Panorama Capital, a venture capital firm which invests in early to mid-stage technology and life sciences companies. Mr. Soghikian began his investment career when he
joined JPMorgan Partners in 1990, where he most recently served as head of its venture capital program until the formation of Panorama in 2006. Between 1994 and 1998, he was responsible for developing
and managing JPMorgan Partners' European investment team and was based in London. Mr. Soghikian was previously a member of the mergers and acquisitions group at both Bankers Trust, Inc.
and Prudential-Bache Securities, Inc. (currently known as Prudential Equity Group, LLC). Mr. Soghikian currently serves on the board of directors of Beyond The Rack, Inc.,
Validity Sensors, Inc. and WGT.com. Prior to this, he served as a director of SquareTrade, Inc., Tidal Software, Inc., Yipes
Communications, Inc. and AECOM, Inc., among other board memberships, including as a member of the audit committee on the board of directors of Digital Island, Inc. and Petco
Animal Supplies, Inc. In addition, Mr. Soghikian is currently a trustee of Pitzer College where he serves as Chair of the Investment Committee and as a member of its Audit Committee, and
also serves as a director of Children's Hospital and Research Center Oakland. Mr. Soghikian received a B.A. in Biology from Pitzer College in 1980 and an M.B.A. from the UCLA Anderson School of
Management. Mr. Soghikian is a longtime investor of over two decades and brings to our board of directors extensive investment and valuation experience.
Terdema Ussery
has served on the board of directors of Fantex, Inc. since June 2013. Mr. Ussery has also served as the
President and Chief Executive Officer of the Dallas Mavericks since April 1997. Prior to joining Fantex, Mr. Ussery has served as Chief Executive Officer of HDNet LLC from September 2001
until June 2012. Mr. Ussery also serves as an Alternate Governor for the Mavericks on the NBA Board of Governors. He has served as Lead Independent Director of Treehouse Foods Inc. since
June 6, 2005 and as a member on its Governance & Nominating, Audit and Compensation Committees. Mr. Ussery previously served as Director of Timberland Co. from
May 19, 2005 until September 13, 2011, where he also served as Timberland's Lead Independent Director and as a member if its Audit, Compensation, Governance & Nominating and
Corporate & Social Responsibility committees. He also served as a director of Entrust, Inc., from December 2006 to November 2009, and as a member of its Audit Committee from 2007 to
2009. In addition, Mr. Ussery served as the President of Nike Sports Management from 1993 to 1996 and was the Commissioner of the Continental Basketball Association ("CBA") from 1991 to 1993,
and Deputy Commissioner and General Counsel of the CBA from 1990 to 1991. Mr. Ussery received a B.A. from Princeton's Woodrow Wilson School of Public and International Affairs in 1981, an
M.P.A. from John F. Kennedy School of Government at Harvard University and a J.D. from the University of California at Berkeley in 1987. Mr. Ussery has
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extensive
experience working with athletes and other high-profile individuals as well as with sports associations and brings to our board of directors extensive industry knowledge and management
experience.
Board Composition and Election of Directors
Our board of directors currently consists of seven directors. In accordance with our amended and restated certificate of incorporation,
our board of directors will be divided into three classes with staggered three-year terms. At each annual meeting of stockholders, the successors to directors whose terms then expire will be elected
to serve from the time of election and qualification
until the third annual meeting following their election. Our directors are divided among the three classes as follows:
•
the Class I directors are David Beirne, C. William Hosler and Ronald Machtley, and their terms will expire at the
annual meeting of stockholders to be held in 2014;
•
the Class II directors are Cornell French and Terdema Ussery, and their terms will expire at the annual meeting of
stockholders to be held in 2015; and
•
the Class III directors are John Costello and Shahan Soghikian, and their terms will expire at the annual meeting
of stockholders to be held in 2016.
Our
amended and restated certificate of incorporation provides that the authorized number of directors may be changed only by resolution of the board of directors. Any additional
directorships resulting from an increase in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the directors.
The division of our board of directors into three classes with staggered three- year terms may delay or prevent a change of our management or a change of control at our company.
Director Independence
Because our common stock is not, and following this offering will not be, listed on a national securities exchange, we are not required
to maintain a board consisting of a majority of independent directors or to maintain an audit committee, nominating committee or compensation committee consisting solely of independent directors.
Nevertheless, our board of directors has determined to generally comply with the listing requirements of the national securities exchanges. The independence definitions of the national securities
exchanges generally include a series of objective tests, such as that the director is not, and has not been for at least three years, one of our employees and that neither the director nor any of his
family members has engaged in various types of business dealings with us. In addition, the rules of the national securities exchanges would require our board of directors to make a subjective
determination as to each independent director that no relationships exist, which, in the opinion of our board of directors, would interfere with the exercise of independent judgment in carrying out
the responsibilities of a director.
Our
board of directors currently consists of seven members. Our board of directors has determined that five of our current directors would qualify as "independent" directors in
accordance with the general listing requirements of the national securities exchanges. Mr. French is not considered independent because he is an officer of Fantex and an employee and director
of our parent company, Fantex Holdings. Mr. Beirne is not considered independent because he is a director and significant stockholder of our parent company, Fantex Holdings. In making these
determinations, our board of directors reviewed and discussed information provided by the directors and us with regard to each director's business and personal activities and relationships as they may
relate to us and our management. Each of Messrs. Costello, Hosler, Machtley, Soghikian and Ussery qualify as independent directors under the corporate governance standards of the NASDAQ Global
Market.
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There
are no family relationships among any of our directors or executive officers, other than Matthew Beirne, our Vice President of Business Development, who is the son of
Mr. David Beirne, Chairman of our board of directors.
Board Committees
Audit Committee and Audit Committee Financial Expert
Our audit committee will oversee our corporate accounting and financial reporting process. Among other matters, the audit committee
will:
•
appoint our independent registered public accounting firm;
•
evaluate the independent registered public accounting firm's qualifications, independence and performance;
•
determine the engagement of the independent registered public accounting firm;
•
review and approve the scope of the annual audit and the audit fee;
•
discuss with management and the independent registered public accounting firm the results of the annual audit and the
review of our quarterly financial statements;
•
approve the retention of the independent registered public accounting firm to perform any proposed permissible non-audit
services;
•
monitor the rotation of partners of the independent registered public accounting firm on our engagement team as required
by law;
•
be responsible for reviewing our financial statements and our management's discussion and analysis of financial condition
and results of operations to be included in our annual and quarterly reports to be filed with the SEC;
•
review our critical accounting policies and estimates; and
•
annually review the audit committee charter and the committee's performance.
The
current members of our audit committee are Messrs. Hosler, Soghikian and Ussery, with Mr. Hosler serving as the chairperson of the committee. All members of our audit
committee meet the requirements for financial literacy under the applicable rules and regulations of the SEC and generally under the rules of the national securities exchanges. Our board of directors
has determined that Mr. Hosler is an audit committee financial expert as defined under the applicable rules of the SEC and has the requisite financial sophistication as defined under the
applicable rules and regulations of national securities exchanges. Under the rules of the SEC, members of the audit committee must also meet heightened independence standards. Our board of directors
has determined that each of the members of the audit committee are independent under the applicable rules of the SEC and the national securities exchanges. The audit committee operates under a written
charter that satisfies the applicable standards of the SEC and the national securities exchanges.
Compensation Committee
Our compensation committee will review and recommend policies relating to compensation and benefits of our officers and employees. The
compensation committee will review and approve corporate goals and objectives relevant to compensation of our chief executive officer and other executive officers, evaluate the performance of these
officers in light of those goals and objectives. The compensation committee will review and evaluate, at least annually, the performance of the compensation committee and its members, including
compliance by the compensation committee with its charter. The current members of our compensation committee are Messrs. Costello, Machtley and
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Ussery,
with Mr. Costello serving as the chairperson of the committee. Each of the members of our compensation committee is independent under the applicable rules and regulations of the
national securities exchanges, is a "non- employee director" as defined in Rule 16b-3 promulgated under the Exchange Act and is an "outside director" as that term is defined in
Section 162(m) of the U.S. Internal Revenue Code of 1986, as amended. The compensation committee operates under a written charter.
Nominating and Corporate Governance Committee
The nominating and corporate governance committee will be responsible for making recommendations to our board of directors regarding
candidates for directorships and the size and composition of our board of directors. In addition, the nominating and corporate governance committee will be responsible for overseeing our corporate
governance policies and reporting and making recommendations to our board of directors concerning governance matters. The current members of our nominating and corporate governance committee are
Messrs. Costello, Machtley and Soghikian, with Mr. Machtley serving as the chairperson of the committee. Each of the members of our nominating and corporate governance committee is an
independent director under the applicable rules and regulations of the national securities exchanges relating to nominating and corporate governance committee independence. The nominating and
corporate governance committee operates under a written charter.
Conflicts Committee
Our conflicts committee will be responsible for reviewing all of our related party transactions in which Fantex Holdings is a party
with an interest adverse to our interests or with an interest adverse to any outstanding series of our common stock, including any decision to convert any tracking stock into our platform common stock
following the two-year anniversary of the filing of a certificate of designation creating such tracking stock. Each member of the conflicts committee must (a) satisfy the audit committee
independence requirements under the rules and regulations of the SEC that would be applicable to Fantex, (b) not have been an employee or director of our parent company at any time in the three
years prior to his or her appointment to the conflicts committee and (c) not have any material interest in Fantex or Fantex Holdings. The current members of the conflicts committee are
Messrs. Hosler, Soghikian and Ussery, with Mr. Soghikian serving as the chairperson of the committee. Each of whom meets the independence requirements described in the immediately
preceding sentence. The conflicts committee operates under a written charter.
Limitations on Officers' and Directors' Liability and Indemnification Agreements
Our amended and restated certificate of incorporation and amended and restated bylaws, which will become effective immediately prior to
the consummation of this offering, limit our directors' and officers' liability to the fullest extent permitted under the Delaware General Corporation Law. Consequently, our directors and officers
will not be personally liable to us or our
stockholders for monetary damages for any breach of their respective fiduciary duties, except liability for:
•
any breach of the director's duty of loyalty to us or our stockholders;
•
any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law;
•
unlawful payments of dividends or unlawful stock repurchases or redemptions as provided in Section 174 of the
Delaware General Corporation Law; or
•
any transaction from which the director derived an improper personal benefit.
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If
Delaware law is amended to authorize corporate action further eliminating or limiting the personal liability of a director, then the liability of our directors will be eliminated or
limited to the fullest extent permitted by Delaware law, as so amended. Our amended and restated certificate of incorporation does not eliminate a director's duty of care and, in appropriate
circumstances, equitable remedies, such as injunctive or other forms of non- monetary relief, remain available under Delaware law. This provision also does not affect a director's responsibilities
under any other laws, such as the federal securities laws or other state or federal laws. Under our amended and restated bylaws, we will also be empowered to enter into indemnification agreements with
our directors, officers, employees and other agents and to purchase insurance on behalf of any person whom we are required or permitted to indemnify.
In
addition to the indemnification and advancement of expenses required in our amended and restated certificate of incorporation and amended and restated bylaws, we have entered into
indemnification agreements with each of our directors, and will enter into new indemnification agreements with each of our current directors, officers and certain employees before the completion of
this offering. These agreements provide for the indemnification of and advancement of expenses of our directors, officers
and certain employees for all reasonable expenses and liabilities incurred in connection with any action or proceeding brought against them by reason of the fact that they are or were our agents. We
believe that these provisions in our amended and restated certificate of incorporation and amended and restated bylaws and indemnification agreements are necessary to attract and retain qualified
persons as directors and officers. Furthermore, we have obtained director and officer liability insurance to cover liabilities our directors and officers may incur in connection with their services to
us. This description of the indemnification provisions of our amended and restated certificate of incorporation, our amended and restated bylaws and our indemnification agreements is qualified in its
entirety by reference to these documents, each of which is attached as an exhibit to this registration statement.
The
limitation of liability and indemnification and advancement of expenses provisions in our amended and restated certificate of incorporation and amended and restated bylaws may
discourage stockholders from bringing a lawsuit against directors for breach of their fiduciary duties. They may also reduce the likelihood of derivative litigation against directors and officers,
even though an action, if successful, might benefit us and our stockholders. A stockholder's investment may be harmed to the extent we pay the costs of settlement and damage awards against directors
and officers pursuant to these indemnification provisions. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling
persons pursuant to the foregoing provisions, or otherwise, we have been advised that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act, and
is, therefore, unenforceable. There is no pending litigation or proceeding naming any of our directors or officers as to which indemnification is being sought, nor are we aware of any pending or
threatened litigation that may result in claims for indemnification by any director or officer.
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EXECUTIVE COMPENSATION
This section discusses the material components of the executive compensation program for our executive officers who are named in the
"Summary Compensation Table" below. In 2013, our "named executive officers" and their positions were as follows:
•
Cornell "Buck" French, Chief Executive Officer;
•
David Mullin, Chief Financial Officer; and
•
Matthew Beirne, Vice President of Business Development.
Currently,
our employees, including our named executive officers, are employed by our parent, Fantex Holdings, and provide services to both Fantex and Fantex Holdings. Except as the
context otherwise requires or as otherwise noted, references in this section to "Fantex Holdings," "company," "we," "us" and "our" refer to both Fantex Holdings and Fantex. This discussion may contain
forward-looking statements that are based on our current plans, considerations, expectations and determinations regarding future compensation programs. Actual compensation programs that we adopt
following the completion of this offering may differ materially from the currently planned programs summarized in this discussion.
Summary Compensation Table
The following table sets forth information concerning the compensation of our named executive officers for the years ended
December 31, 2012 and December 31, 2013.
Name and Principal
Position
Year
Salary
($)
Bonus
($)
Stock
Awards
($)
(1)
Option
Awards
($)
Non-Equity
Incentive Plan
Compensation
($)
Nonqualified
Deferred
Compensation
Earnings
($)
All Other
Compensation
($)
Totals
Cornell "Buck" French
2013
116,667
—
—
—
—
—
—
116,667
Chief Executive Officer
2012
—
—
—
—
—
—
—
—
David Mullin
2013
116,667
—
—
—
—
—
—
116,667
Chief Financial Officer
2012
—
—
—
—
—
—
5,514
5,514
Matthew Beirne
2013
58,333
—
—
—
—
—
—
58,333
Vice President—
2012
—
—
—
—
—
—
—
—
Business Development
(1)
Amounts
reflect the full grant-date fair value of stock awards granted during 2012 and 2013 computed in accordance with ASC Topic 718, rather than the
amounts paid to or realized by the named individual. Mr. Beirne paid a fair market value purchase price per share for his restricted stock, therefore we did not recognize a compensation expense
in connection with this award under ASC Topic 718.
Narrative to Summary Compensation Table
2013 Salaries
In June 2013, Messrs. French, Mullin and Beirne began drawing salaries from our parent, Fantex Holdings, Inc., with
annual base salaries for Messrs. French and Mullin of $200,000 and Mr. Beirne of $100,000. Subsequently, in October 2013, Messrs. French and Mullin entered into employment
agreements with our parent, which memorialized the base salary set forth above. We anticipate that, as of the consummation of this offering, each of our named executive officers will earn annualized
base salaries commensurate with their positions, work duties and responsibilities.
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2013 Bonuses
We have not yet determined whether any of our named executive officers will receive a bonus with respect to services performed in 2013.
Following the completion of this offering, we expect that our named executive officers will be eligible to earn annual bonuses based on the attainment of specified performance objectives established
by our compensation committee. The applicable terms and conditions of the cash bonuses will be determined by our compensation committee.
Equity Compensation
In August 2013, our board of directors adopted our 2013 Equity Incentive Award Plan, referred to below as the 2013 Plan, in order to
facilitate the grant of cash and equity incentives to directors, employees (including our named executive officers) and consultants of our company and certain of its affiliates and to enable our
company and certain of its affiliates to obtain and retain services of these individuals, which is essential to our long-term success. The 2013 Plan will be effective on the date of the consummation
of an initial public offering of our stock. For additional information about the 2013 Plan, please see the section titled "—Equity Plans—2013 Equity Incentive Award Plan"
below. No equity grants were made to our officers in 2013.
Other Elements of Compensation
Retirement Plans
We do not currently maintain a retirement savings plan for any of our employees, including our named executive officers. We intend to
establish a 401(k) retirement savings plan for our employees, including our named executive officers, who satisfy certain eligibility requirements. We expect that our named executive officers will be
eligible to participate in the 401(k) plan on the same terms as other full-time employees. The Internal Revenue Code of 1986, as amended, or the Code, allows eligible employees to defer a portion of
their compensation, within prescribed limits, on a pre-tax basis through contributions to the 401(k) plan. Currently, we do not anticipate matching any portion of the contributions that might be made
by participants in our 401(k) plan once we adopt one. We believe that providing a vehicle for tax-deferred retirement savings though a 401(k) plan will add to the overall desirability of our executive
compensation package and further incentivize our employees, including our named executive officers, in accordance with our compensation policies.
Employee Benefits and Perquisites
All of our full-time employees, including our named executive officers, are eligible to participate in our medical, dental and vision
benefit plans. Following the consummation of this offering, we may also implement additional benefit and other perquisite programs as our compensation committee determines appropriate, though we do
not expect any such additional benefits and perquisites to constitute a material component of our named executive officers' compensation package.
No Tax Gross-Ups
We do not make gross-up payments to cover our named executive officers' personal income taxes that may pertain to any of the
compensation or perquisites paid or provided by our company.
Additional Compensation Components
Following the completion of this offering, as we formulate and implement our compensation program, we may provide different and/or
additional compensation components, benefits and/or perquisites to our named executive officers, to ensure that we provide a balanced and comprehensive compensation structure. We believe that it is
important to maintain flexibility to adapt our
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compensation
structure at this time to properly attract, motivate and retain the top executive talent for which we compete.
Outstanding Equity Awards at Fiscal Year-End
The following table summarizes the number of shares of Fantex Holdings' common stock underlying outstanding equity incentive plan
awards for each named executive officer as of December 31, 2013.
Stock Awards
Name
Grant Date
Number of Shares or
Units of Stock That Have
Not Vested (#)
Market Value of
Shares or Units of
Stock That Have Not
Vested ($)
(1)
Matthew Beirne
(2)
5/9/2012
58,344
$
147,610.32
(1)
The
market value of shares of the restricted Fantex Holdings' common stock that have not vested is calculated based on the fair market value of Fantex
Holdings' common stock on December 31, 2013 ($2.53).
(2)
This
restricted stock award vested as to 25% of the award on the first anniversary of the vesting commencement date, and vested and will continue to vest as
to the remaining 75% of the award in substantially equal installments on each monthly anniversary thereafter, subject to continued employment with Fantex Holdings or any parent or subsidiary of Fantex
Holdings.
Executive Compensation Arrangements
Our parent, Fantex Holdings, has entered into employment agreements with Messrs. French and Mullin on October 16, 2013.
The following is a summary of the material terms of the agreements.
Under
the agreements, Mr. French will serve as the Chief Executive Officer and Mr. Mullin will serve as the Chief Financial Officer of Fantex Holdings, reporting directly
to the board of directors of Fantex Holdings and Chief Executive Officer, respectively. Mr. French will also serve as a member of our board of directors. The term of the agreements will
continue until the executive's employment with Fantex Holdings is terminated.
Pursuant
to the terms of the agreements, Messrs. French and Mullin will each receive annual base salaries in the amount of $200,000. In the event of an "IPO" (as defined in the
applicable employment agreement) during the executive's term of employment, each executive's annual base salary will be increased to $250,000 upon the consummation of the IPO, and which may be
increased from time to time in the discretion of Fantex Holdings' board of directors or the compensation committee. Messrs. French and Mullin will also be eligible to receive an annual
discretionary cash performance bonus. The actual amount of any such bonuses will be based on the attainment of specified performance objectives established by the board of directors of Fantex
Holdings. In addition, each executive will be entitled to participate in customary employee and executive benefit plans and programs as Fantex Holdings may from time to time offer.
In
the event that Mr. French's or Mr. Mullin's employment is terminated without "cause" or by the executive for "good reason" (each, as defined in the applicable employment
agreement), then in addition to any accrued amounts, the executive will be entitled to receive the following:
•
a lump-sum payment in the amount of one times the executive's annual base salary;
•
a lump-sum payment in the amount equal to the pro rata portion of the executive's annual bonus for the partial fiscal year
in which the termination occurs;
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•
company-paid premiums for healthcare coverage continuation for up to 12 months after the date of termination;
and
•
with respect to each then-outstanding Fantex Holdings equity award or Company equity award, accelerated vesting of the
number of shares subject to such award that would have vested during the 12-month period following the termination date.
In
the event that Mr. French's or Mr. Mullin's employment is terminated without "cause" or by the executive for "good reason" on or within the 30 days preceding, or
during the one-year period following, a "change in control" (as defined in the Fantex Holdings, Inc. 2012 Equity Incentive Plan), each executive will be entitled to the severance benefits and
payments described above, except that he will be entitled to a lump-sum payment in the amount of two times, rather than one times, his annual base salary.
The
executive's right to receive the severance payments and benefits described above is subject to his delivery and non-revocation of an effective general release of claims in favor of
Fantex Holdings.
Furthermore,
in the event of a change in control of Fantex Holdings, the executive will be entitled to accelerated vesting of all outstanding Fantex Holdings equity awards and Company
equity awards then held, and in the event of a "change in control" (as defined in the Fantex, Inc. 2013 Equity Incentive Award Plan) of the Company, the executive will be entitled to
accelerated vesting of all outstanding Company equity awards then held. In addition, to the extent that any payment or benefit would be subject to an excise tax imposed in connection with
Section 4999 of the Code, such payments and/or benefits may be subject to a "best pay cap" reduction to the extent necessary so that the executive receives the greater of (i) the net
amount of the payments and benefits reduced such that such payments and benefits will not be subject to the excise tax and (ii) the net amount of the payments and benefits without such
reduction.
Director Compensation
Except with respect to grants of equity awards covering our parent's common stock, none of our directors received any compensation for
service as a member of our board of directors in 2013. We intend to approve and implement a compensation program for our non-employee directors that consists of annual retainer fees and long-term
equity awards.
In
July 2013, our parent, Fantex Holdings, granted stock options covering 20,000 shares of our parent's common stock to each of Messrs. Costello, Machtley, Soghikian and Ussery.
In September 2013, our parent granted stock options covering 20,000 shares of its common stock to Mr. Hosler. Each stock option vests with respect to
1
/
48
th of the
shares each month for four years following the grant date, subject to the director's continued service, and will accelerate and vest in full upon a change in control of our parent.
Equity Plans
2013 Equity Incentive Award Plan
In August 2013, our board of directors adopted our 2013 Equity Incentive Award Plan, or the 2013 Plan, under which we may grant cash
and equity incentive awards to eligible service providers in order to attract, motivate and retain the talent for which we compete. The 2013 Plan was subsequently approved by our stockholders in
September 2013. The material terms of the 2013 Plan are summarized below.
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Eligibility and Administration
Our employees, consultants and directors, and employees and consultants of our affiliates, if any, are eligible to receive awards under
the 2013 Plan. Following our initial public offering, we expect the 2013 Plan will be administered by our board of directors with respect to awards to non- employee directors and by our compensation
committee with respect to other participants, each of which may delegate its duties and responsibilities to committees of our directors and/or officers (referred to collectively as the plan
administrator below), subject to certain limitations that may be imposed under Section 162(m) of the Code, Section 16 of the Exchange Act, and/or stock exchange rules, as applicable. The
plan administrator will have the authority to make all determinations and interpretations under, prescribe all forms for use with, and adopt rules for the administration of, the 2013 Plan, subject to
its express terms and conditions. The plan administrator will also set the terms and conditions of all awards under the 2013 Plan, including any vesting and vesting acceleration conditions.
Limitation on Awards and Shares Available
An aggregate of 7,500,000 shares of our platform common stock is available for issuance under awards granted pursuant to the 2013 Plan,
which shares may be authorized but unissued shares, treasury shares or shares purchased in the open market. If an award under the 2013 Plan is forfeited, expires or is settled for cash, any shares
subject to such award may, to the extent of such forfeiture, expiration or cash settlement, be used again for new grants under the 2013 Plan. However, the following shares may not be used again for
grant under the 2013 Plan: (1) shares tendered or withheld to satisfy grant or exercise price or tax withholding obligations associated with an award; (2) shares subject to a stock
appreciation right, or SAR, that are not issued in connection with the stock settlement of the SAR on its exercise; and (3) shares purchased on the open market with the cash proceeds from the
exercise of options.
Awards
granted under the 2013 Plan upon the assumption of, or in substitution for, awards authorized or outstanding under a qualifying equity plan maintained by an entity with which we
enter into a merger or similar corporate transaction will not reduce the shares available for grant under the 2013 Plan. After the expiration of a transition period that may apply following the
effective date of our initial public offering, the maximum number of shares of our platform common stock that may be subject to one or more awards granted to any participant pursuant to the 2013 Plan
during any calendar year will be 1,000,000 and the maximum amount that may be paid under a cash award pursuant to the 2013 Plan to any one participant during any calendar year period will be
$2,000,000.
Awards
The 2013 Plan provides for the grant of stock options, including incentive stock options, or ISOs, and nonqualified stock options, or
NSOs, restricted stock, dividend equivalents, stock payments, restricted stock units, or RSUs, performance shares, deferred stock, other incentive awards, stock appreciation rights, or SARs, and cash
awards. No determination has been made as to the types or amounts of awards that will be granted to specific individuals pursuant to the 2013 Plan. Certain awards under the 2013 Plan may constitute or
provide for a deferral of compensation, subject to Section 409A of the Code, which may impose additional requirements on the terms and conditions of such awards. All awards under the 2013 Plan
will be set forth in award agreements, which will detail all terms and conditions of the awards, including any applicable vesting and payment terms and post-termination exercise limitations. Awards
other than cash awards generally will be settled in shares of our platform common stock, but the plan administrator may provide for cash settlement of any award. A brief description of each award type
follows.
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•
Stock Options.
Stock options provide for the purchase of
shares of our platform common stock in the future at an exercise price set on the grant date. ISOs, by contrast to NSOs, may provide tax deferral beyond exercise and favorable capital gains tax
treatment to their holders if certain holding period and other requirements of the Code are satisfied. The exercise price of a stock option may not be less than 100% of the fair market value of the
underlying share on the date of grant (or 110% in the case of ISOs granted to certain significant stockholders), except with respect to certain substitute options granted in connection with a
corporate transaction. The term of a stock option may not be longer than ten years (or five years in the case of ISOs granted to certain significant stockholders). Vesting conditions determined by the
plan administrator may apply to stock options and may include continued service, performance and/or other conditions.
•
SARs.
SARs entitle their holder, upon exercise, to receive
from us an amount equal to the appreciation of the shares subject to the award between the grant date and the exercise date. The exercise price of a SAR may not be less than 100% of the fair market
value of the underlying share on the date of grant (except with respect to certain substitute SARs granted in connection with a corporate transaction) and the term of a SAR may not be longer than ten
years. Vesting conditions determined by the plan administrator may apply to SARs and may include continued service, performance and/or other conditions.
•
Restricted Stock, RSUs, Deferred Stock and Performance
Shares.
Restricted stock is an award of nontransferable shares of our platform common stock that remains forfeitable unless and until
specified conditions are met, and which may be subject to a purchase price. RSUs are contractual promises to deliver shares of our platform common stock in the future, which may also remain
forfeitable unless and until specified conditions are met. Delivery of the shares underlying RSUs may be deferred under the terms of the award or at the election of the participant, if the plan
administrator permits such a deferral. Deferred stock awards represent the right to receive shares of our platform common stock on a future date. Deferred stock will not be issued until the deferred
stock award has vested, and recipients of deferred stock generally will have no voting or dividend rights prior to the time when the vesting conditions are satisfied and the shares are issued.
Performance shares are contractual rights to receive a range of shares of our platform common stock in the future based on the attainment of specified performance goals, in addition to other
conditions which may apply to these awards. Conditions applicable to restricted stock, RSUs, deferred stock and performance shares may be based on continuing service, the attainment of performance
goals and/or such other conditions as the plan administrator may determine.
•
Stock Payments, Other Incentive Awards and Cash
Awards.
Stock payments are awards of fully vested shares of our platform common stock that may, but need not, be made in lieu of base
salary, bonus, fees or other cash compensation otherwise payable to any individual who is eligible to receive awards. Other incentive awards are awards other than those enumerated in this summary that
are denominated in, linked to or derived from shares of our platform common stock or value metrics related to our shares, and may remain forfeitable unless and until specified conditions are met. Cash
awards are cash incentive bonuses subject to performance goals.
•
Dividend Equivalents.
Dividend equivalents represent the
right to receive the equivalent value of dividends paid on shares of our platform common stock and may be granted alone or in tandem with awards other than stock options or SARs. Dividend equivalents
generally are credited as of dividend record dates during the period between the date an award is granted and the date such award vests, is exercised, is distributed or expires, as determined by the
plan administrator. Dividend equivalents may not be paid on awards granted under the 2013 Plan unless and until such awards have vested.
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Performance Awards
Performance awards include any of the foregoing awards that are granted subject to vesting and/or payment based on the attainment of
specified performance goals. The plan administrator will determine whether performance awards are intended to constitute "qualified performance-based compensation," or QPBC, within the meaning of
Section 162(m) of the Code, in which case the applicable performance criteria will be selected from the list below in accordance with the requirements of Section 162(m) of the Code.
Section 162(m)
of the Code imposes a $1,000,000 cap on the compensation deduction that a public company may take in respect of compensation paid to its "covered employees" (which
should include our chief executive officer and our next three most highly compensated employees other than our chief financial officer), but excludes from the calculation of amounts subject to this
limitation any amounts that constitute QPBC. Under current tax law, we do not expect Section 162(m) of the Code to apply to certain awards under the 2013 Plan until the earliest to occur of
(1) our annual stockholders' meeting at which members of our board of directors are to be elected that occurs after the close of the third calendar year following the calendar year in which
occurred the first registration of our equity securities under Section 12 of the Exchange Act; (2) a material modification of the 2013 Plan; (3) an exhaustion of the share supply
under the 2013 Plan; or (4) the expiration of the 2013 Plan. However, QPBC performance criteria may be used with respect to performance awards that are not intended to constitute QPBC. In
addition, the company may issue awards that are not intended to constitute QPBC even if such awards might be non-deductible as a result of Section 162(m) of the Code.
In
order to constitute QPBC under Section 162(m) of the Code, in addition to certain other requirements, the relevant amounts must be payable only upon the attainment of
pre-established, objective performance goals set by our compensation committee and linked to stockholder-approved performance criteria. For purposes of the 2013 Plan, one or more of the following
performance criteria will be used in setting performance goals applicable to QPBC, and may be used in setting performance goals applicable to other performance awards: (1) net earnings (either
before or after one or more of the following: (a) interest, (b) taxes, (c) depreciation, (d) amortization and (e) non-cash equity-based compensation expense);
(2) gross or net sales or revenue; (3) net income (either before or after taxes); (4) adjusted net income; (5) operating earnings or profit; (6) cash flow
(including, but not limited to, operating cash flow and free cash flow); (7) return on assets; (8) return on capital; (9) return on stockholders' equity; (10) total
stockholder return; (11) return on sales; (12) gross or net profit or operating margin; (13) costs; (14) funds from operations; (15) expenses; (16) working
capital; (17) earnings per share; (18) adjusted earnings per share; (19) price per share of platform common stock; (20) regulatory body approval for commercialization of a
product; (21) implementation or completion of critical projects; (22) market share; (23) economic value; (24) debt levels or reduction; (25) customer retention;
(26) sales-related goals; (27) comparisons with other stock market indices; (28) operating efficiency; (29) customer satisfaction and/or growth; (30) employee
satisfaction; (31) research and development achievements; (32) financing and other capital raising transactions; (33) recruiting and maintaining personnel; and
(34) year-end cash, any of which may be measured either in absolute terms for us or any operating unit of our company or as compared to any incremental increase or decrease or as compared to
results of a peer group or to market performance indicators or indices. The 2013 Plan also permits the plan administrator to provide for objectively determinable adjustments to the applicable
performance criteria in setting performance goals for QPBC awards.
Certain Transactions
The plan administrator has broad discretion to take action under the 2013 Plan, as well as make adjustments to the terms and conditions
of existing and future awards, to prevent the dilution or enlargement of intended benefits and facilitate necessary or desirable changes in the event of certain
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transactions
and events affecting our platform common stock, such as stock dividends, stock splits, mergers, acquisitions, consolidations and other corporate transactions. In addition, in the event of
certain non-reciprocal transactions with our stockholders known as "equity restructurings," the plan administrator will make equitable adjustments to the 2013 Plan and outstanding awards. In the event
of a change in control of our company (as defined in the 2013 Plan), to the extent that the surviving entity declines to continue, convert, assume or replace outstanding awards, then all such awards
will become fully vested and exercisable in connection with the transaction. Upon or in anticipation of a change of control, the plan administrator may cause any outstanding awards to terminate at a
specified time in the future and give the participant the right to exercise such awards during a period of time determined by the plan administrator in its sole discretion. Individual award agreements
may provide for additional accelerated vesting and payment provisions.
Foreign Participants, Claw-Back Provisions, Transferability, and Participant Payments
The plan administrator may modify award terms, establish subplans and/or adjust other terms and conditions of awards, subject to the
share limits described above, in order to facilitate grants of awards subject to the laws and/or stock exchange rules of countries outside of the United States. All awards will be subject to the
provisions of any claw-back policy implemented by our company to the extent set forth in such claw-back policy and/or in the applicable award agreement. With limited exceptions for estate planning,
domestic relations orders, certain beneficiary designations and the laws of descent and distribution, awards under the 2013 Plan are generally non- transferable prior to vesting, and are exercisable
only by the participant. With regard to tax withholding, exercise price and purchase price obligations arising in connection with awards under the 2013 Plan, the plan administrator may, in its
discretion, accept cash or check, shares of our platform common stock that meet specified conditions, a "market sell order" or such other consideration as it deems suitable.
Plan Amendment and Termination
Our board of directors may amend or terminate the 2013 Plan at any time; however, except in connection with certain changes in our
capital structure, stockholder approval will be required for any amendment that increases the number of shares available under the 2013 Plan, "reprices" any stock option or SAR, or cancels any stock
option or SAR in exchange for cash or another award when the option or SAR price per share exceeds the fair market value of the underlying shares. No award may be granted pursuant to the 2013 Plan
after the ten-year anniversary of the effective date of the 2013 Plan.
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TRANSACTIONS WITH RELATED PERSONS
The following is a description of transactions since our incorporation in September 2012, to which we have been a party, in which the
amount involved exceeds $120,000, and in which any of our directors, executive officers or holders of more than 5% of our capital stock, or an affiliate or immediate family member thereof, had or will
have a direct or indirect material interest, other than compensation, termination and change in control agreements, which are described under "Executive Compensation." We believe that all of the
transactions described below were made on terms no less favorable to us than could have been obtained from unaffiliated third parties.
Equity Contributions
To date, we have relied exclusively on our parent for liquidity and capital resources. Our parent contributed capital in the amount of
$1.1 million from inception through December 31, 2012 and $4.3 million for the year ended December 31, 2013. The contributed capital
includes expenses paid by our parent on our behalf, as well as an equity contribution of $2.0 million on April 3, 2013 to provide additional working capital to finance our operating
expenses.
Indemnity Agreements
Our parent, Fantex Holdings, has agreed to indemnify each of our current contract parties under certain circumstances if the ABI that
we are purchasing from them under their respective brand contracts is reportable income to them and not deductible for United States federal income tax purposes. We are not a party to these indemnity
agreements, and would have no direct or indirect obligation to the contract parties or our parent under these agreements. However, because our parent is a party to these agreements, we may be deemed
to benefit from these agreements. In addition, to the extent such obligation of our parent to the contract parties impacts its financial stability and its continued ability to provide services under
the management agreement, as discussed below, an adverse tax ruling may indirectly impact Fantex as a whole, and therefore, the investors in our Fantex Series EJ Manuel.
Management Agreement
We have entered into a management agreement with Fantex Holdings that will be effective upon the consummation of our first public
offering. Pursuant to this agreement, our parent will provide to us management and administrative services, including providing our executive management and other personnel as well as services
relating to information technology support, brand management and other support operations, facilities, human resources, tax planning and administration, accounting, treasury and insurance. We have
agreed to pay our parent 5% of the amount of the gross cash received by us, if any, pursuant to our brand contracts during any quarterly period as remuneration for the services provided. The amount of
gross cash received used to calculate this 5% fee will include any portion allocated to a reduction of the carrying value on our financial statements but shall not take into account the changes in
fair value of the brand contracts. As such, the service fee under the management agreement will be determined based on the total amount of actual cash received under the brand contracts in a given
quarterly period prior to any adjustments for fair value and without regard to the expected cash receipts in such quarter as reflected in the financial statements for that quarter. To the extent we
receive no cash for any period then we would not owe any fee for any services provided during that period. We may evaluate the service fee from time to time to assess the continued appropriateness of
the percentage of our cash receipts upon which the service fee is calculated, in light of the services being provided by our parent at the time and cost of those services.
The
agreement has an initial term through December 31, 2014, and will automatically renew for successive one-year terms each December 31 unless either party provides
written notice of its intent not
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to
renew at least three months prior to such renewal. We may also terminate any specific service and/or the agreement, without penalty, with 30 days prior written notice to Fantex Holdings.
Fantex Holdings may terminate any specific service and/or the agreement with 180 days prior written notice to us, but if we, using our commercially reasonable efforts, are unable to either
perform the services ourselves or enter into a reasonable arrangement with a third party to perform the services that we are unable perform ourselves, then Fantex Holdings will continue to perform
such services for an additional period of 180 days.
Our
parent company allocated to us an aggregate expense of $1.1 million from our incorporation on September 14, 2012 through December 31, 2012 and approximately
$3.6 million for the year ended December 31, 2013 for such services provided to us. In the immediate future, we do not plan to establish independent infrastructure that is dedicated to
our business and we will continue to rely on our parent company for these services in accordance with the management agreement.
Indemnification Agreements
Our amended and restated certificate of incorporation provides that we will indemnify and advance expenses to our directors and
officers to the fullest extent permitted under the Delaware General Corporation Law. In addition, we have entered into separate indemnification agreements with each of our directors and executive
officers. For more information regarding these agreements, see "Management—Limitations on Officers' and Directors' Liability and Indemnification Agreements."
Policies and Procedures for Related Party Transactions
Our board of directors has adopted a written related person transaction policy, to be effective upon the consummation of this offering,
setting forth the policies and procedures for the review and approval or ratification of related person transactions. This policy will cover, with certain exceptions set forth in Item 404 of
Regulation S-K under the Securities Act, any transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships in which we were or are to be a
participant, where the amount involved exceeds $120,000 and a related person had or will have a direct or indirect material interest, including, without limitation, purchases of goods or services by
or from the related person or entities in which the related person has a material
interest, indebtedness, guarantees of indebtedness and employment by us of a related person. All of the transactions described in this section occurred prior to the adoption of this policy.
All
future material affiliated transactions and loans will be made or entered into on terms that are no less favorable to us than those that can be obtained from unaffiliated third
parties. In addition, all future material affiliated transactions and loans, and any forgiveness of loans, must be approved by a majority of our independent directors who do not have an interest in
the transactions and who have had access, at our expense, to our independent legal counsel.
As
provided by our audit committee charter to be effective upon completion of this offering, our audit committee will be responsible for reviewing and approving in advance any related
party transaction, other than matters relating to our parent company. Our conflicts committee is responsible for reviewing all of our related party transactions in which parent company is a party with
an interest adverse to our interests.
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PRINCIPAL STOCKHOLDERS
The following table sets forth information regarding the beneficial ownership of the common stock of Fantex as of December 31,
2013, by:
•
each of our directors;
•
each of our named executive officers;
•
each person, or group of affiliated persons, who is known by us to beneficially own more than 5% of Fantex common stock;
and
•
all of our directors and executive officers as a group.
Beneficial
ownership is determined in accordance with the rules of the SEC. These rules generally attribute beneficial ownership of securities to persons who possess sole or shared
voting power or investment power with respect to those securities and include shares of Fantex common stock issuable upon the exercise of stock options that are immediately exercisable or exercisable
within 60 days after December 31, 2013. Except as otherwise indicated in the footnotes to the table below, all of the shares reflected in the table are shares of Fantex common stock and
all persons listed below have sole voting and investment power with respect to the shares beneficially owned by them, subject to applicable community property laws. The information is not necessarily
indicative of beneficial ownership for any other purpose.
Percentage
ownership calculations are based on 100,000,000 shares of Fantex common stock outstanding as of December 31, 2013.
Beneficial
ownership representing less than 1% is denoted with an asterisk (*). Except as otherwise indicated in the footnotes to the table below, addresses of named beneficial owners
are in care of Fantex, 330 Townsend Street, Suite 234, San Francisco, CA 94107.
Shares Beneficially
Owned
Name of Beneficial Owner
Number
Percentage
Officers and Directors of Fantex
(1)
Cornell "Buck" French
(2)
—
*
David Mullin
—
*
David Beirne
(2)
—
*
John Costello
—
*
Ronald Machtley
—
*
Shahan Soghikian
—
*
Terdema Ussery
—
*
Matthew Beirne
—
*
​
​
​
​
​
​
​
​
All directors and executive officers as a group (8 persons)
—
*
5% Stockholders of Fantex
Fantex Holdings, Inc.
(1)(2)(3)
100,000,000
100.0
%
(1)
Each
of our officers and directors beneficially owns shares of Fantex Holdings common stock. Cornell "Buck" French and David Beirne, two of our directors,
beneficially own 22.5% and 28.0% of Fantex Holdings common stock, respectively and David Mullin, our Chief Financial Officer, beneficially owns 4.75% of Fantex Holdings common stock. The other
officers and directors own less than 2% of Fantex Holdings common stock in the aggregate. In computing beneficial ownership of Fantex Holdings common stock, we attributed securities to persons who
possess sole or shared voting power or investment power with respect to those securities and included shares of Fantex Holdings common stock issuable upon the exercise of stock options that are
immediately
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exercisable
or exercisable within 60 days after December 31, 2013. Pursuant to their ownership interest in Fantex Holdings, Mr. French, Mr. Beirne and Mr. Mullin
together hold shares with a combined voting power over a majority of Fantex Holdings common stock.
(2)
Cornell
"Buck" French, David Beirne, John Elway, Joshua Levine and Bruce Dunlevie are each members of the board of directors of Fantex Holdings and as such,
in effect, share voting power over 100% of the outstanding Fantex common stock prior to this offering, and substantially all of the total voting power of Fantex common stock immediately after this
offering. Each disclaims beneficial ownership of the shares held by Fantex Holdings, except to the extent of any pecuniary interest therein.
(3)
Fantex
Holdings owns 100% of our issued and outstanding platform common stock, which provides it with sole voting power over our common stock. Each platform
common stock is entitled to one vote per share, giving Fantex Holdings substantially all of the voting power over the Fantex common stock immediately following the consummation of this offering.
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DESCRIPTION OF CAPITAL STOCK
General
We have authorized under our amended and restated certificate of incorporation, 1,500,000,000 shares of common stock, $0.0001 par value
per share, consisting of:
•
1,000,000,000 shares authorized for issuance as shares of tracking stocks, with 523,700 initially designated as Fantex
Series EJ Manuel upon the consummation of this offering, 421,100 shares expected to be designated as Fantex Series Vernon Davis upon the consummation of the offering of Fantex Series Vernon
Davis and 1,055,000 shares expected to be designated as Fantex Series Arian Foster upon the consummation of the offering of Fantex Series Arian Foster; and
•
500,000,000 shares authorized for issuance as platform common stock.
As
of December 31, 2013, there were outstanding 100,000,000 shares of our platform common stock held by one stockholder of record, our parent company, Fantex Holdings.
The
following description of our capital stock and provisions of our amended and restated certificate of incorporation, amended and restated bylaws, and certificates of designation for
each of:
•
Fantex Series Arian Foster to be in effect upon the consummation of the offering of Fantex Series Arian Foster;
•
Fantex Series Vernon Davis to be in effect upon the consummation of the offering of Fantex Series Vernon Davis; and
•
Fantex Series EJ Manuel to be in effect upon the consummation of this offering
is
a summary and is qualified in its entirety by reference to the full copies of these documents, which have been filed with the SEC as exhibits to our registration statement, of which this prospectus
forms a part. Currently, there is no established public trading market for any series of our common stock.
Common Stock
Our board of directors is authorized to establish and issue one or more series of common stock from time to time, and determine the
designation of and the number of shares comprising such series and such other powers, designations, preferences and relative participating, optional and other special rights, and the qualifications,
limitations and restrictions thereof, if any, including without limitation, such voting powers, full or limited, or no voting powers, dividend rights, conversion rights, redemption privileges and
liquidation rights.
Without
limiting the generality of the foregoing, our board of directors may, to the extent permitted by law, provide that any series may be superior to, rank equally with or be junior
to any other series of our common stock. The powers, preferences and relative, participating, optional and other special rights of each series of common stock, and the qualifications, limitations or
restrictions thereof, if any, may be different from those of any and all other series at any time outstanding. No vote of the holders of shares of common stock shall be necessary to issue any shares
of any series of the common stock. The rights, preferences and privileges of the holders of any series of our common stock are subject to and may be adversely affected by the rights of the holders of
shares of any series of our common stock that we may designate in the future.
Upon
the consummation of this offering, the following series of common stock will have been designated or are contemplated to be
designated:
•
Platform Common Stock
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•
Fantex Series Arian Foster (to be designated if and when the offering of Fantex Series Arian Foster pursuant to the Arian
Foster Registration Statement is consummated)
•
Fantex Series Vernon Davis (to be designated if and when the offering of Fantex Series Vernon Davis pursuant to the Vernon
Davis Registration Statement is consummated)
•
Fantex Series EJ Manuel (to be designated if and when the offering of Fantex Series EJ Manuel pursuant to
this Registration Statement is consummated)
Unless
otherwise specified in the corresponding certificate of designation for any tracking stock, our amended and restated certificate of incorporation provides for the following
powers, preferences and relative participating, optional and other special rights, and the qualifications, limitations or restrictions thereof with respect to our platform common stock and our
tracking stocks that we may issue from time to time. We do not intend to provide in any certificate of designations for any of the tracking stocks set forth above rights or restrictions that are
different than the following description of rights and restrictions applicable to tracking stocks.
Voting Rights
The holders of our platform common stock are entitled to one vote per share. Unless otherwise specified in the corresponding
certificate of designation for any tracking stock, the holders of shares of any tracking stock shall also have one vote per share of such tracking stock.
Each
series of our common stock (including our platform common stock and each tracking stock) will vote together as a single class with all other series of common stock, unless otherwise
required by law. Delaware law would require holders of a series of stock to vote separately as a single class if we were to seek to amend our certificate of incorporation in a manner that alters or
changes the powers, preferences or special rights of one or more series of a class of stock in a manner that affected its holders adversely, but shall not so effect the entire class, in which case the
holders of the affected series would be required to vote separately to approve the proposed amendment.
We
have not provided for cumulative voting for the election of directors in our amended and restated certificate of incorporation.
Dividends
Platform Common Stock
We will be permitted, but not required, to pay dividends on our platform common stock in an amount equal to the "platform common stock
available dividend amount" (defined generally as an amount equal to the amount of our total assets legally available for the payment of dividends under Delaware law, less the aggregate amount of the
"available dividend amount" for all of our then outstanding tracking stocks).
Tracking Stocks
We will be permitted, but not required, to pay dividends with respect to any of our tracking stocks out of the lesser of our assets
legally available for the payment of dividends under Delaware law and the "available dividend amount" for such tracking stock.
Unless
otherwise specified in the corresponding certificate of designation for any tracking stock, the "available dividend amount" for any tracking stock as of any date is an amount
equal to the lesser
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of
(a) total assets of our company legally available for the payment of dividends under Delaware law and (b) an amount equal to:
•
the excess of the total assets attributed to the tracking stock brand over the total liabilities attributed to the
tracking stock brand, less the par value of the outstanding shares of such tracking stock; or
•
if there is no such excess, the attributable income of the tracking stock brand for the fiscal year in which the dividend
is being declared and/or the preceding fiscal year.
Conversion
Platform Common Stock
Our platform common stock is not convertible into any other shares of our capital stock. However, at any time following the two-year
anniversary of the filing of a certificate of designation creating a new tracking stock, our board of directors may resolve to convert any such tracking stock into fully paid and non-assessable shares
of our platform common stock at a conversion ratio to be determined by dividing the fair value of a share of that tracking stock by the fair value of a share of our platform common stock (as
determined below).
Tracking Stocks
At any time following the two-year anniversary of the filing of a certificate of designation creating a new tracking stock, our board
of directors may resolve to convert such tracking stock into fully paid and non-assessable shares of our platform common stock at a conversion ratio to be determined by dividing the fair value of a
share of such tracking stock by the fair value of a share of our platform common stock. We expect to file a certificate of designation creating a new tracking stock substantially concurrent
with the consummation of an offering of such tracking stock.
Fair Value
Fair value is established as the volume weighted average of the closing bid or sale prices, whichever is applicable, of the shares of
platform common stock and/or a tracking stock over the 20-trading day period ending on the trading day before the conversion ratio is determined. However, such value will only be used for any series
if our board of directors determines in its good faith judgment that there is an active trading market for that series. If our board of directors makes a determination in good faith that there is no
active trading market for any series, then the fair value for such series will be determined by a reputable and independent investment banking or valuation firm experienced in the valuation of
securities selected in good faith by our board of directors, provided, however, that to the extent that our board of directors determines in its good faith judgment that such series does not have any
material value in terms of assets attributable to such series, including but not limited to any material future brand income or assets, events or circumstances that our management or our board of
directors believe could reasonably result in material brand income in the future, then the fair value for such series may be determined by our board of directors in their good faith judgment alone.
Any such valuation determination will be made, whether by our board of directors or any independent investment banking, financial advisory or other valuation firm, based on the contractual value of
the brand assets related to the applicable tracking stock, and shall not include any discount for lack of marketability or liquidity or any minority interest discount (including that such series may
not have the rights, contractually or otherwise, to receive dividends). Our board of directors intends to use such firm as a general matter unless the assets and expected valuation of the tracking
stocks are not material.
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Liquidation
In the event of a liquidation, dissolution or winding up of Fantex, including a change of control of Fantex, after payment or provision
for payment of our debts and liabilities, each share of our common stock will be entitled to receive a proportionate interest in the net assets of Fantex remaining for distribution to holders of
common stock equal to the fair value (as described above "—Conversion—Fair Value") of such share,
provided
that if the assets
legally available for distribution to the holders of common stock are insufficient to permit the payment in full to each share of common stock the amount to which they would otherwise be entitled,
then such assets available for distribution to the holders of common stock will be distributed to all holders of common stock ratably in proportion to the full amounts which they would be entitled to
receive on shares of common stock held by them.
If
all distributions required above are made and there remain any assets available for distribution to holders of common stock such assets shall be divided among the holders of common
stock in proportion to the amounts that were payable as required above in respect of the shares held by them.
Mandatory Dividend, Redemption and/or Conversion on Disposition of Assets
If, in one transaction or a series of related transactions, we dispose of all or substantially all of the assets of a tracking stock
brand, our board of directors will be required to choose one of the following four alternatives:
•
pay a dividend to holders of the corresponding tracking stock out of the available net proceeds of such disposition;
•
if the disposition involves all of the properties and assets of the tracking stock brand (not merely substantially all),
redeem all outstanding shares of our Fantex Series EJ Manuel in exchange for cash and/or securities or other assets with a fair value equal to the available net proceeds of such disposition;
•
following the two-year anniversary of the filing of a certificate of designation creating any tracking stock, convert each
outstanding share of such tracking stock into our platform common stock at the applicable conversion ratio; or
•
combine a conversion of a portion of the outstanding shares of such tracking stock into a number of shares of our platform
common stock at the applicable conversion ratio with either the payment of a dividend on or a redemption of shares of such tracking stock.
Anti-Takeover Provisions
Fantex Holdings
Following the consummation of this offering, Fantex Holdings, our parent company, will continue to hold substantially all of the voting
power of our outstanding common stock. As a result, our parent company will continue to be able to control all matters submitted to our stockholders for approval. This control could discourage others
from initiating any potential merger, takeover or other change of control transaction that other stockholders might view as beneficial. Our board of directors is authorized, without stockholder
approval, to issue additional series of common stock, with voting rights and other privileges established by a certificate of designation.
Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws to be in Effect upon the Completion of this Offering
Our amended and restated certificate of incorporation provides for our board of directors to be divided into three classes, with
staggered three-year terms. Only one class of directors will be elected at each annual meeting of our stockholders, with the other classes continuing for the remainder of their
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respective
three-year terms. The number of directors constituting our board of directors is permitted to be established only by a resolution adopted by a majority vote of our board of directors, and
only our board of directors is authorized to fill vacant directorships, including newly created directorships, unless our board of directors determines that such vacancy or newly created directorship
shall be filled by the stockholders.
The
holders of our common stock are entitled, by a plurality of the votes cast by the holders of the common stock present in person or represented by proxy, voting as a single voting
group at a meeting at which a quorum is present, to elect directors to our board of directors. Because our stockholders do not have cumulative voting rights, holders of our common stock representing a
majority of the voting rights of our common stock will be able to elect all of our directors up for election at any given stockholders' meeting. Accordingly, until such time as our parent company
beneficially owns shares of our common stock representing less than a majority of the voting rights of our common stock, our parent company will elect our entire board of directors. Our amended and
restated bylaws include advance notice procedures and other content requirements applicable to stockholders other than our parent company for proposals to be brought before a meeting of stockholders,
including proposed nominations of persons for election to our board of directors.
Until
such time as our parent company beneficially owns shares of our common stock representing less than a majority of the voting rights of our common stock, our amended and restated
certificate of incorporation and amended and restated bylaws will require a majority stockholder vote for the removal of a director with or without cause, and for the amendment, repeal or modification
of certain provisions of our amended and restated certificate of incorporation and amended and restated bylaws including, among other things, relating to the classification of our board of directors;
provided that, from and after such time as our parent company ceases to hold a majority of the voting rights of our common stock, any such removal, amendment, repeal or modification will require a 75%
stockholder vote.
Our
amended and restated certificate of incorporation provides and our amended and restated bylaws will provide that, until such time as our parent company beneficially owns shares of
our common stock representing less than a majority of the voting rights of our common stock, our parent company will have the ability to take stockholder action by written consent without calling a
stockholder meeting and to approve amendments to our amended and restated certificate of incorporation and amended and restated bylaws and to take other actions without the vote of any other
stockholder. From and after such time as our parent company beneficially owns shares of our common stock representing less than a majority of the voting rights of our common stock, all stockholder
action must be effected at a duly called meeting of stockholders and not by a consent in writing, and, further, from and after such time as our parent company beneficially owns shares of our common
stock representing less than a majority of the voting rights of our common stock, only our corporate secretary, upon the direction of our board of directors or the Chairman of the Board, may call a
special meeting of stockholders.
The
combination of the classification of our board of directors, lack of cumulative voting rights, prohibitions on stockholder actions by written consent and stockholder ability to call
a special meeting by a stockholder other than our parent company, and supermajority voting requirements make it more difficult for stockholders other than our parent company (for so long as it holds
sufficient voting rights) to replace our board of directors as well as for another party to obtain control of us by replacing our board of directors. Because our board of directors has the power to
retain and discharge our officers, these provisions could also make it more difficult for stockholders other than our parent company (for so long as it holds sufficient voting rights) or another party
to effect a change in management.
These
provisions may have the effect of deterring hostile takeovers or delaying changes in our control or management. These provisions are intended to enhance the likelihood of continued
stability
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in
the composition of our board of directors and its policies and to discourage certain types of transactions that may involve an actual or threatened acquisition of us. These provisions are designed
to reduce our vulnerability to an unsolicited acquisition proposal. The provisions also are intended to discourage certain tactics that may be used in proxy fights. However, such provisions could have
the effect of discouraging others from making tender offers for our shares and, as a consequence, they also may inhibit fluctuations in the market price of our shares that could result from actual or
rumored takeover attempts. Such provisions may also have the effect of preventing changes in our management.
Section 203 of the Delaware General Corporation Law
After our parent company ceases to own 15% of our voting stock, we will be subject to Section 203 of the Delaware General
Corporation Law, which prohibits a Delaware corporation from engaging in any business combination with any interested stockholder for a period of three years after the time that such stockholder
became an interested stockholder, with the following exceptions:
•
if, before such time, the board of directors of the corporation approved either the business combination or the
transaction that resulted in the stockholder becoming an interested stockholder;
•
if, upon completion of the transaction that resulted in the stockholder becoming an interested stockholder, the interested
stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction began, excluding for purposes of determining the voting stock outstanding (but not the
outstanding voting stock owned by the interested stockholder) those shares owned (i) by persons who are directors and also officers and (ii) employee stock plans in which employee
participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or
•
if, at or after such time, the business combination is approved by the board of directors and authorized at an annual or
special meeting of the stockholders, and not by written consent, by the affirmative vote of at least 66
2
/
3
% of the outstanding voting stock that is not owned by the interested
stockholder.
Section 203
defines "business combination" to include, among other things, the following:
•
any merger or consolidation involving the corporation and the interested stockholder;
•
any sale, transfer, pledge or other disposition of 10% or more of the assets of the corporation involving the interested
stockholder;
•
subject to certain exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of
the corporation to the interested stockholder;
•
any transaction involving the corporation that has the effect of increasing the proportionate share of the stock of any
class or series of the corporation beneficially owned by the interested stockholder; or
•
the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial
benefits by or through the corporation.
Section 203
defines an "interested stockholder" as an entity or person who, together with the person's affiliates and associates, owns, or is an affiliate or associate of the
corporation and within three years prior to the time at which determination of interested stockholder status is being made did own, 15% or more of the outstanding voting stock of the corporation.
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Delaware as Sole and Exclusive Forum
Our amended and restated certificate of incorporation provides that unless we consent in writing to an alternative forum, the Court of
Chancery of the State of Delaware shall, to the fullest extent permitted by law, be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of us,
(ii) any action asserting a claim of breach of a fiduciary duty owed by, or other wrongdoing by, any of our directors or officers to us or our stockholders, (iii) any action asserting a
claim against us arising pursuant to any provision of the Delaware General Corporation Law or our amended and restated certificate of incorporation or amended and restated bylaws, (iv) any
action to interpret, apply, enforce or determine the validity of our amended and restated certificate of incorporation or the amended and restated bylaws or (v) any action asserting a claim
against us governed by the internal affairs doctrine. As a result, any action brought by any of our stockholders with regard to any of these matters will generally need to be filed in the Court of
Chancery of the State of Delaware and cannot be filed in any other jurisdiction.
Limitation of Liability and Indemnification of Executive Officers and Directors
For an in depth discussion of liability and indemnification, please see "Management—Limitations on Officers' and Directors'
Liability and Indemnification Agreements."
Transfer Agent and Registrar
We currently act as our own registrar and transfer agent for shares of our Fantex Series EJ Manuel. Shares of Fantex
Series EJ Manuel will be held in book-entry form only on our books and records, and any transfers of shares of our Fantex Series EJ Manuel must be made through a brokerage account with
FBS on the FBS ATS.
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UNDERWRITING (CONFLICTS OF INTEREST)
Under the terms and subject to the conditions contained in an underwriting agreement dated the date of this prospectus, we have agreed
to sell to FBS, the sole book-running manager, and FBS has agreed to offer, shares of Fantex Series EJ Manuel on a best efforts basis as indicated below. FBS is required to use its best efforts
to sell the shares listed below but has no firm commitment or obligation to purchase any such shares.
Underwriter
Number of Shares
Fantex Brokerage Services, LLC
523,700
​
​
​
​
​
Total
523,700
FBS
initially proposes to offer the shares of our Fantex Series EJ Manuel for sale at the price of $10.00 per share on a best efforts, all or none basis. In connection with this
offering, FBS will purchase each share from us at a discount of $0.50 per share, to the extent that any shares are sold. In consideration for its services and expenses as the qualified independent
underwriter, FBS has agreed to pay Stifel, Nicolaus & Company, Incorporated a fee equal to $130,925, assuming the sale of 523,700 shares of the Fantex Series EJ Manuel in this offering
at an initial public offering price of $10.00 per share, which fee constitutes 50% of the underwriting discount that FBS will receive. The expenses of this offering, other than the underwriting
discount, will be paid by our parent, Fantex Holdings, which expenses are estimated to be approximately $        and include legal, accounting and printing costs and various other fees
associated with registration of our Fantex Series EJ Manuel. We and our parent have also agreed to reimburse the underwriters for certain of their fees and expenses in an amount up to
$        as set forth in the underwriting agreement, which reimbursement will be paid by our parent. In addition, subject to FINRA Rule 5110(f)(2)(D), we have granted a right of first
refusal to Stifel, Nicolaus & Company, Incorporated to act as the QIU in a number of our public offerings of one or more series of our common stock, as further specified in our agreement with
Stifel, Nicolaus & Company, Incorporated. FINRA deems such a right of first refusal to be an additional item of compensation received by the underwriters.
Prior
to this offering, there has been no public market for our shares. We initially determined to offer shares at a price of $10.00 per share, and the number of shares to be offered at
that price was determined between us and FBS based on demand in the offering process with the goal of issuing at least $5.23 million of shares in this offering.
Our
Fantex Series EJ Manuel will be quoted on the FBS ATS upon the conclusion of this offering. The FBS ATS is an alternative trading system operated by FBS. We do not intend to
apply for a listing of our Fantex Series EJ Manuel on any securities exchange or for its inclusion in any established automated dealer quotation system. Accordingly, we cannot assure you as to
the development of an active or liquid market for our Fantex Series EJ Manuel.
FBS
may market our Fantex Series EJ Manuel through roadshow presentations. Any roadshow presentations would be open only to residents of states in which the offering has been
registered. We also plan to market our Fantex Series EJ Manuel through media interviews in print and electronic media, including email, and other methods in compliance with applicable laws and
regulations, including securities laws. We plan to permit investors who wish to do so to review this prospectus online at our website at the internet address www.fantexinc.com and online at FBS's
website at the internet address www.fantex.com. We are not incorporating by reference in this prospectus either our website or FBS's website or any material either may include.
You
must open a brokerage account with FBS at www.fantex.com in order to participate in this offering. See below for additional information about opening a brokerage account with FBS.
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In
order to comply with the applicable securities laws of certain states, the securities will be offered or sold in those states only if they have been registered or qualified for sale
or an exemption from such registration is available with which we have complied. In addition, and without limiting the foregoing, we will be subject to applicable provisions, rules and regulations
under the Exchange Act with regard to securities transactions during the period of time when this registration statement is effective.
Offering Process
The process being used for our initial public offering of Fantex Series EJ Manuel differs from methods that have been
traditionally used in most other underwritten initial public offerings in the United States. In particular, the shares of Fantex Series EJ Manuel are being offered at a predetermined price and
orders may only be entered through brokerage accounts with our broker-dealer affiliate, FBS, who is serving as an underwriter of this offering. We plan to conduct this offering in two
stages—Qualification and Allocation. Investors that do not submit orders through the prescribed process will not be eligible for an allocation of shares in our offering.
The Qualification Process
Our objective is to ensure that only investors for whom an investment in the Fantex Series EJ Manuel is suitable may participate
in the offering. Before you can submit a conditional offer to participate in the offering, which FBS refers to as "reserving shares" or a "reservation," you will be required to open a brokerage
account with FBS. You sign up to open a brokerage account with FBS at www.fantex.com.
Upon
review of the information that you provide in the account opening questionnaire, FBS will determine, in its sole discretion, whether you meet the criteria for investing in the
Fantex Series EJ Manuel. If FBS determines that you are eligible to participate in the offering, then your brokerage account will be opened and instructions will be provided on how to make a
reservation and fund your account. Before establishing a brokerage account with FBS and making a reservation for Fantex Series EJ Manuel you
should:
•
read this prospectus, including all the risk factors;
•
understand that our initial public offering price will be predetermined, and, if there is little or no demand for our
shares at or above the initial public offering price once trading in the secondary market begins, the price of our Fantex Series EJ Manuel shares may decline; and
•
understand that all of the outstanding shares of our Fantex Series EJ Manuel may be available for re-sale to the
public immediately after our initial public offering.
We
caution you that our Fantex Series EJ Manuel may not be a suitable investment for you even if you qualify to open a brokerage account with FBS. Moreover, even if you have an
FBS brokerage account, you may not be able to submit a reservation for our Fantex Series EJ Manuel if you do not meet the suitability requirements, as discussed below, for the shares of the
Fantex Series EJ Manuel for which you are seeking to submit a reservation or as a result of other regulatory requirements described below. There is no minimum funding requirement to open an FBS
account or submit reservations. You are not obligated to purchase shares at the time you submit a reservation. However, once we accept your reservation for shares of our Fantex Series EJ
Manuel, you will become obligated to purchase the amount of the reservation accepted. Before we will accept your reservation for shares of our Fantex
Series EJ Manuel in this offering, you must have sufficient funds in your account to cover the purchase price for such shares. You will not be required to deposit funds into your FBS brokerage
account sufficient to cover the purchase price of the shares you reserved until after the registration statement is declared effective by the SEC. Finally, even if you open a brokerage account with
FBS, submit a
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reservation
for shares of our Fantex Series EJ Manuel and have sufficient funds deposited in your brokerage account to cover the entire purchase price for such shares, you still may not receive
your complete allocation of shares in our offering for a number of reasons described below. To the extent that you do not have sufficient funds in your account to cover the purchase price for the
shares specified in your reservation at the time FBS accepts reservations, then we and FBS will disregard that portion of your reservation that is unfunded, and such portion of the reservation will be
deemed to have been withdrawn by you.
Any
funds that you may deposit in your FBS brokerage account, whether before or after the time you submit a reservation, will not be withdrawn by FBS until such time, if at all, as your
reservation has been accepted by FBS. You may withdraw any funds at any time by requesting an electronic transfer of funds or a check from FBS. You may also cancel or modify your reservation at any
time prior to acceptance. Funds in your FBS account will not be designated for use in a particular offering at the time of deposit and any of your deposited funds may be used to purchase securities
other than those offered pursuant to this registration statement. However, at the time FBS accepts any reservations placed by you for a tracking stock, all available funds will first be applied
towards the purchase of the reserved securities.
Neither
we nor the underwriters have undertaken any efforts to qualify this offering for offers to investors in any jurisdiction outside the United States. Investors must have a U.S.
mailing address (other than a P.O. Box) and a U.S. social security number and/or a U.S. tax identification number to be eligible to participate in this offering.
Reconfirmations of Reservations
We will require that potential investors reconfirm their reservations that they have submitted in the offering if any of the following
events shall occur:
•
more than 15 days have elapsed since the potential investor submitted his reservation in the offering;
•
there has been a material change to the prospectus available to the potential investor at the time of such potential
investor's original reservation; or
•
the offering prices below or more than 20% above the estimated initial public offering price of $10 per share.
If
a reconfirmation of reservations is required, we will send an electronic notice, at the email address on file with FBS, notifying such potential investors that they must affirmatively
reconfirm their reservation by visiting their account page on the FBS website to reconfirm the reservation, or by otherwise contacting the lead underwriter, FBS. If a potential investor does not
reconfirm his or her reservation when requested, we and FBS will disregard such reservation in the offering, and such reservations will be deemed to have been withdrawn.
The Closing Process
This offering will terminate upon the earlier to occur of (i) 30 days after this registration statement becomes effective
with the SEC, or (ii) the date on which all shares offered hereby have been sold. You will have the ability to modify or withdraw any reservation you make until your reservation is accepted by
FBS. Such acceptance will occur when and if you are sent a notice of acceptance by FBS, at the email address on file with FBS. As noted above, if you are requested to reconfirm your reservation and
fail to do so, your reservation will be deemed to have been withdrawn.
As
noted above, you may deposit funds in your FBS brokerage account either before or after the time you submit a reservation, but FBS will only accept a reservation to the extent there
are sufficient
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funds
in your account at the time FBS accepts reservations, and FBS will not withdraw any funds from your FBS brokerage account until such time as any portion of your reservation has been accepted by
FBS. You may cancel or modify your reservation at any time prior to acceptance. The offering will not be considered sold until reservations have been accepted by FBS. FBS will provide an electronic
notice of effectiveness to you, at the email address on file with FBS, at least three days prior to accepting and confirming orders, which will be your final notice to withdraw or modify your
reservation. The notice will further inform you that reservations for Fantex Series EJ Manuel will only be considered to the extent you have sufficient funds in your account to cover the
purchase price for such shares. If your reservation is accepted, you will be obligated to purchase the shares allocated to you in the allocation process, and FBS will be authorized to withdraw the
sufficient funds from your FBS brokerage account.
Promptly
after we and the underwriters request the SEC to declare this registration statement effective, FBS will provide an electronic notice to you, at the email address on file with
FBS, that such request for effectiveness has been made. Once the registration statement is effective, FBS will send you a second electronic notice, at the email address on file with FBS, informing you
that the registration statement is effective and that FBS may accept your reservation in as little as three days. In the event reservations are placed subsequent to the SEC declaring this registration
statement effective, you will receive a final electronic notice, at the email address on file with FBS, informing you of your ability to modify or withdraw your reservations or fund your account in
amounts sufficient to cover your reservations and that FBS may accept your reservation in as little as twenty-four hours. FBS will stop allowing reservations to be made at least twenty-four hours
prior to when FBS intends to accept the reservations. Until reservations are accepted by FBS, you may still withdraw your reservations. However, once FBS has sent an electronic notice of acceptance at
the email address on file with FBS, regardless of whether you are aware that the registration statement has been declared effective or that the electronic notice of acceptance of that bid has been
sent, you may no longer withdraw your reservations. At this point, reservations will be deemed accepted orders and FBS will send you a confirmation of the transaction, at the email address on file
with FBS. Reservations must be accepted by FBS for the offering to close.
Following
the acceptance of your reservations, FBS will transmit your funds to an escrow account under the control of        , as the escrow agent, by noon of the next business
day pending closing of the offering. Such funds will be released by the escrow agent upon confirmation by the escrow agent that either (i) the minimum contingency for this offering has been
satisfied, including that all shares in the offering have been sold and the funds should be directed to us in return for shares of Fantex Series EJ Manuel or (ii) all the shares of
Fantex Series EJ Manuel have not been sold and the funds should be directed to FBS for credit to the account of its customers. The escrow agent will invest all funds it receives in an interest
bearing account in accordance with Rule 15c2-4 under the Exchange Act. Assuming the offering is successful, shares of the Fantex Series EJ Manuel would then be credited to your FBS
account. If, on the closing date, sufficient funds are not received for all of the shares being offered, your funds that were deposited into the escrow account will be returned to your FBS account
promptly, with interest and without deduction for expenses and the offering will terminate. All funds returned to your FBS account are available for immediate withdrawal.
You
should understand that the trading price of our Fantex Series EJ Manuel could vary significantly from the initial public offering price. Therefore, we caution you not to
submit a reservation in the initial offering unless you are willing to take the risk that our Fantex Series EJ Manuel price could decline significantly and you could lose your entire investment
in our Fantex Series EJ Manuel. Subsequent trades of Fantex Series EJ Manuel also have associated transaction costs, expected to be up to 1% of the total amount of the purchase or sale,
which could reduce or eliminate your return on investment.
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Acceptance of Offers
If the demand for shares in our initial public offering of Fantex Series EJ Manuel is at least equal to the number of shares set
forth on the cover of this prospectus, FBS may accept reservations at the initial public offering price by sending electronic notices of acceptance to customers, at the email address on file with FBS.
In this case, FBS can accept your order as discussed above.
If
we do not receive sufficient reservations to sell all of the shares being offered hereby, we and FBS will either:
•
provide notice on our and FBS's websites that the offering has been cancelled and send an electronic notice to everyone
who submitted a reservation for the Fantex Series EJ Manuel, at the email address on file with FBS, notifying them that the offering has been cancelled and all reservations will be cancelled
without any further action of the potential investors who have submitted reservations; or
•
revise the terms of the offering.
If
the revised terms of the offering represent a material change in the prospectus available to you at the time of your original reservation, then we will require that you reconfirm
reservations as discussed above under "—Reconfirmation of Reservations." If the revised terms of the offering do
not represent a material change in the prospectus available to you at the time of your original reservation, then FBS may accept your reservation by sending an electronic notice of acceptance to you,
at the email address on file with FBS. In this case, FBS can accept your reservation without further reconfirmation.
The Allocation Process
In the event that the number of shares represented by reservations during the initial offering period exceeds the number of shares we
are offering, the offered shares will need to be allocated across the group of potential investors who have submitted reservations. Immediately prior to acceptance we, in consultation with FBS, will
allocate the shares pro rata to potential investors who have submitted reservations and funded their accounts based on the following rules:
•
a pro rata allocation percentage will be determined by dividing the number of shares we are offering by the number of
shares represented by the reservations received (to the extent accounts are funded at the time); and
•
each potential investor who has submitted a reservation will be allocated a number of shares equal to the pro rata
allocation percentage multiplied by the number of shares represented by the reservation (to the extent accounts are funded at the time), subject to rounding, but not less than one whole share.
The
following simplified, hypothetical example illustrates how pro rata allocation might work in practice:
Assumptions
Shares Offered
523,700
Total Shares Reserved
551,263
Pro Rata Allocation Percentage
95
%
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Potential Investor
Scenario
Shares Represented by
Original Reservation
Pro Rata
Allocation
A
100
95
B
500
475
C
1,200
1,140
D
1,800
1,710
E
2,400
2,280
F
3,000
2,850
Other
(1)
542,263
515,150
Total
551,263
523,700
(1)
No
investor will be allowed to purchase or hold more than 5%, or 26,185 shares, of Fantex Series EJ Manuel.
Maximum Investment Limits and Financial Suitability
Trading on FBS is subject to certain maximum investment limits, some of which are based on financial suitability of the investor. No
investor will be allowed to purchase or hold more than 5% of any tracking stock issued by our company including the Fantex Series EJ Manuel offered hereby. FBS may, in its sole discretion,
increase or decrease this limit on a offering-by-offering basis based upon the facts and circumstances surrounding the offering of any of our tracking stocks. In
addition:
•
investors with an annual gross income of less than $50,000 or a net worth (exclusive of home, home furnishings and
automobile) of less than $50,000 may only invest up to $2,500 in this offering; and
•
investors with an annual gross income of between $50,000 and $100,000 or a net worth (exclusive of home, home furnishings
and automobile) of between $50,000 and $100,000 may only invest up to $7,500 in this offering.
Moreover,
certain states may impose more restrictive suitability and/or other investment limitations and you will be required to represent and warrant in your FBS account agreement that
you meet the applicable state financial suitability and other investment standards before you invest in any series of common stock issued by our company, including the Fantex Series EJ Manuel
offered hereby.
Secondary Trading
This prospectus is not an offer to sell shares of our Fantex Series EJ Manuel and it is not a solicitation of an offer to buy
shares of our Fantex Series EJ Manuel in any jurisdiction where an offer or sale thereof is not permitted. As of February 28, 2014, we are in the process of registering shares of our
Fantex Series EJ Manuel described in this prospectus for sale in the following states:
We
will not sell shares of our Fantex Series EJ Manuel to retail customers in any jurisdiction until registration is complete for that particular jurisdiction, or there is a valid
exemption from such registration in such jurisdiction. As of February 28, 2014, we have been approved or otherwise have a valid exemption to sell shares of our Fantex Series EJ Manuel in
the following states:
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In
addition, after the offering you may not sell your shares of Fantex Series EJ Manuel (a secondary sale) to any person in any jurisdiction in which registration was not complete
for that particular jurisdiction or there was a valid exemption from such registration. There can be no assurance that we will be successful in annually renewing the registration of shares of our
Fantex Series EJ Manuel for resale with the foregoing states.
Market-Making Activities
This prospectus, together with the relevant pricing supplement, if any, product supplement, if any, prospectus supplement and
prospectus describing the terms of the Fantex Series EJ Manuel being offered and sold, may be used by FBS in connection with offers and sales of such securities in secondary market transactions
at prevailing market prices at the time of sale, at prices related thereto or at negotiated prices, including in which FBS acts as a market-maker. FBS may act as principal or agent in these
transactions. FBS has no current intention of acting as a market-maker in the secondary market for the Fantex Series EJ Manuel, but may do so in the future. If FBS decides to make a market in a
tracking stock, it will first amend its Form ATS filed with the SEC to reflect such change. In the event FBS acts as a market-maker in the secondary market from time to time, it is not obligated to
make a market in the Fantex Series EJ Manuel and may discontinue any market-making at any time without notice, in its sole discretion. FBS is a member of FINRA and may participate in
distributions of the Fantex Series EJ Manuel. All secondary market offers and sales made pursuant to this prospectus and the pricing supplement, if any, product supplement, if any, prospectus
supplement and prospectus describing the terms of the Fantex Series EJ Manuel being offered and sold will be for the accounts of customers of FBS or FBS itself in connection with market-making
transactions. We will not receive any proceeds in connection with these secondary market offers and sales.
Conflicts of Interest
Because FBS, an underwriter for this offering, is under common control with us and we will receive all of the net proceeds of the
offering, FBS is deemed to have a "conflict of interest" under FINRA Rule 5121 of the Conduct Rules of FINRA. Accordingly, this offering will be made in compliance with the applicable
provisions of FINRA Rule 5121 which requires, among other things, that a "qualified independent underwriter" participate in the preparation of, and exercise the usual standards of due diligence
with respect to, the registration statement and this prospectus. Stifel, Nicolaus & Company, Incorporated has agreed to act as the "qualified independent underwriter" (as defined by FINRA) for
the offering and to undertake the legal responsibilities and liabilities of an underwriter under the Securities Act, specifically including performing due diligence investigations and reviewing and
participating in the preparation of the registration statement of which this prospectus forms a part. In consideration for its services and expenses as the qualified independent underwriter,
FBS has agreed to pay Stifel, Nicolaus & Company, Incorporated a fee equal to $130,925, assuming the sale of 523,700 shares of Fantex Series EJ Manuel in this offering at an initial
public offering price of $10.00 per share (in each case, the amounts set forth on the front cover of this prospectus), which fee equals 50% of the underwriting discount that FBS will receive. Stifel,
Nicolaus & Company, Incorporated will not be responsible for the final allocation of any shares or any market-making activities. We, Fantex Holdings and FBS have agreed to indemnify Stifel,
Nicolaus & Company, Incorporated for acting as "qualified independent underwriter" against certain liabilities, including liabilities under the Securities Act, and to contribute to payments
that Stifel, Nicolaus & Company, Incorporated may be required to make for those liabilities. Pursuant to FINRA Rule 5121, FBS will not confirm sales to accounts in which it exercises
discretionary authority, if any, without the specific prior written approval of the account holder.
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MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS
Subject to the qualifications, assumptions and limitations contained herein, the statements of law and legal conclusions contained
under this caption "Material U.S. Federal Income Tax Considerations" regarding the material U.S. federal income tax consequences of an investment in the Fantex Series EJ Manuel constitute the
opinion of Latham & Watkins LLP.
U.S. Federal Income Tax Treatment of the Fantex Series EJ Manuel
The Fantex Series EJ Manuel should be treated as stock of Fantex for U.S. federal income tax purposes. There are, however, no
court decisions or other authorities directly bearing on the tax effects of the issuance and classification of stock with the features of Fantex Series EJ Manuel. In addition, the Internal
Revenue Service has announced that it will not issue advance rulings on the classification of an instrument with characteristics similar to those of Fantex
Series EJ Manuel. Accordingly, no assurance can be given that the views expressed in this paragraph, if contested, would be sustained by a court.
If
Fantex Series EJ Manuel is considered property other than common stock of Fantex, Fantex would generally be taxed on a portion of the appreciation of the assets, if any,
attributable to Fantex Series EJ Manuel upon the issuance of such stock. In addition, income, gain, losses and deductions of one tracking stock brand would not be offset against the income,
gain, losses and deductions of another tracking stock brand. Prospective investors are urged to consult their tax advisors regarding the tax consequences of an investment in the Fantex
Series EJ Manuel. The remainder of this discussion assumes the Fantex Series EJ Manuel will be treated as common stock of Fantex.
Taxation of Non-U.S. Holders
The following discussion sets forth the material U.S. federal income tax consequences to non-U.S. holders (as defined below) of the
purchase, ownership and disposition of Fantex Series EJ Manuel issued pursuant to this offering, but does not purport to be a complete analysis of all potential tax effects. The effects of
other U.S. federal tax laws, such as estate and gift tax laws, and any applicable state, local or foreign tax laws are not discussed. This discussion is based on the Code, Treasury Regulations
promulgated thereunder, judicial decisions, and published rulings and administrative pronouncements of the IRS in effect as of February 28, 2014. These authorities may change or be subject to
differing interpretations. Any such change may be applied retroactively in a manner that could adversely affect a non-U.S. holder of our Fantex Series EJ Manuel. We have not sought and will not
seek any rulings from the IRS regarding the matters discussed below. There can be no assurance the IRS or a court will not take a contrary position regarding the tax consequences of the purchase,
ownership and disposition of Fantex Series EJ Manuel.
This
discussion is limited to non-U.S. holders that hold Fantex Series EJ Manuel as a "capital asset" within the meaning of Section 1221 of the Code (property held for
investment). This discussion does not address all U.S. federal income tax consequences relevant to a non-U.S. holder's particular circumstances, including the impact of the unearned income Medicare
contribution tax. In addition, it does not address consequences relevant to non-U.S. holders subject to particular rules, including, without
limitation:
•
U.S. expatriates and certain former citizens or long-term residents of the United States;
•
persons subject to the alternative minimum tax;
•
persons holding Fantex Series EJ Manuel as part of a hedge, straddle or other risk reduction strategy or as part of
a conversion transaction or other integrated investment;
•
banks, insurance companies, and other financial institutions;
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•
real estate investment trusts or regulated investment companies;
•
brokers, dealers or traders in securities;
•
"controlled foreign corporations," "passive foreign investment companies," and corporations that accumulate earnings to
avoid U.S. federal income tax;
•
S corporations, partnerships or other entities or arrangements treated as partnerships for U.S. federal income tax
purposes;
•
tax-exempt organizations or governmental organizations;
•
persons deemed to sell Fantex Series EJ Manuel under the constructive sale provisions of the Code;
•
persons who hold or receive Fantex Series EJ Manuel pursuant to the exercise of any employee stock option or
otherwise as compensation; and
•
tax-qualified retirement plans.
If
a partnership (or other entity treated as a partnership for U.S. federal income tax purposes) holds Fantex Series EJ Manuel, the tax treatment of a partner in the partnership
will depend on the status of the partner, the activities of the partnership and certain determinations made at the partner level. Accordingly, partnerships holding Fantex Series EJ Manuel and
the partners in such partnerships should consult their tax advisors regarding the U.S. federal income tax consequences to them.
THIS DISCUSSION IS NOT INTENDED AS TAX ADVICE. INVESTORS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE APPLICATION OF THE U.S. FEDERAL INCOME TAX LAWS TO
THEIR PARTICULAR SITUATIONS AS WELL AS ANY TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF FANTEX SERIES EJ MANUEL ARISING UNDER THE U.S. FEDERAL ESTATE OR GIFT TAX LAWS OR UNDER THE
LAWS OF ANY STATE, LOCAL OR NON-U.S. TAXING JURISDICTION OR UNDER ANY APPLICABLE INCOME TAX TREATY.
Definition of a Non-U.S. Holder
For purposes of this discussion, a "non-U.S. holder" is any beneficial owner of Fantex Series EJ Manuel that is neither a "U.S.
person" nor a partnership for United States federal income tax purposes. A U.S. person is any of the following:
•
an individual who is a citizen or resident of the United States;
•
a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) created or organized under
the laws of the United States, any state thereof, or the District of Columbia;
•
an estate, the income of which is subject to U.S. federal income tax regardless of its source; or
•
a trust that (1) is subject to the primary supervision of a U.S. court and the control of one or more United States
persons (within the meaning of Section 7701(a)(30) of the Code), or (2) has made a valid election under applicable Treasury Regulations to continue to be treated as a United States
person.
Dividends and Distributions
If we make distributions of cash or property on Fantex Series EJ Manuel, such distributions will constitute dividends for U.S.
federal income tax purposes to the extent paid from our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. Amounts not
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treated
as dividends for U.S. federal income tax purposes will constitute a return of capital and first be applied against and reduce a non-U.S. holder's adjusted tax basis in its Fantex
Series EJ Manuel, but not below zero. Any excess will be treated as capital gain and will be treated as described below under "—Sale or Other Taxable Disposition."
Subject
to the discussion below on backup withholding and foreign accounts, dividends paid to a non-U.S. holder of Fantex Series EJ Manuel that are not effectively connected with
the non-U.S. holder's conduct of a trade or business within the United States will be subject to U.S. federal withholding tax at a rate of 30% of the gross amount of the dividends (or such lower rate
specified by an applicable income tax treaty).
Non-U.S.
holders will be entitled to a reduction in or an exemption from withholding on dividends as a result of either (a) an applicable income tax treaty or (b) the
non-U.S. holder holding Fantex Series EJ Manuel in connection with the conduct of a trade or business within the United States and dividends being paid in connection with that trade or
business. To claim such a reduction in or exemption from withholding, the non-U.S. holder must provide the applicable withholding agent with a properly executed (a) IRS Form W-8BEN
claiming an exemption from or reduction of the withholding tax under the benefit of an income tax treaty between the United States and the country in which the non-U.S. holder resides or is
established, or (b) IRS Form W-8ECI stating that the dividends are not subject to withholding tax because they are effectively connected with the conduct by the non-U.S. holder of a
trade or business within the United States, as may be applicable. These certifications must be provided to the applicable withholding agent prior to the payment of dividends and must be updated
periodically. Non-U.S. holders that do not timely provide the applicable withholding agent with the required certification, but that qualify for a reduced rate under an applicable income tax treaty,
may obtain a refund of any excess amounts withheld by timely filing an appropriate claim for refund with the IRS.
Subject
to the discussion below on backup withholding and foreign accounts, if dividends paid to a non-U.S. holder are effectively connected with the non-U.S. holder's conduct of a trade
or business within the United States (and, if required by an applicable income tax treaty, the non-U.S. holder maintains a permanent establishment in the United States to which such dividends are
attributable), then, although exempt from U.S. federal withholding tax (provided the non-U.S. holder provides appropriate certification, as described above), the non-U.S. holder will be subject to
U.S. federal income tax on such dividends on a net income basis at the regular graduated U.S. federal income tax rates. In addition, a non-U.S. holder that is a corporation may be subject to a branch
profits tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty) on its effectively connected earnings and profits for the taxable year that are attributable to such
dividends, as adjusted for certain items. Non-U.S. holders should consult their tax advisors regarding their entitlement to benefits under any applicable income tax treaty.
Sale or Other Taxable Disposition
Subject to the discussions below on backup withholding and foreign accounts, a non-U.S. holder will not be subject to U.S. federal
income tax on any gain realized upon the sale or other disposition of Fantex Series EJ Manuel unless:
•
the gain is effectively connected with the non-U.S. holder's conduct of a trade or business within the United States (and,
if required by an applicable income tax treaty, the non-U.S. holder maintains a permanent establishment in the United States to which such gain is attributable);
•
the non-U.S. holder is a nonresident alien individual present in the United States for 183 days or more during the
taxable year of the disposition and certain other requirements are met; or
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•
Fantex Series EJ Manuel constitutes a U.S. real property interest ("USRPI") by reason of our status as a U.S. real
property holding corporation (a "USRPHC") for U.S. federal income tax purposes.
Gain
described in the first bullet point above will generally be subject to U.S. federal income tax on a net income basis at the regular graduated U.S. federal income tax rates. A
non-U.S. holder that is a foreign corporation also may be subject to a branch profits tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty) of a portion of its
effectively connected earnings and profits for the taxable year, as adjusted for certain items.
A
non-U.S. holder described in the second bullet point above will be subject to U.S. federal income tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty)
on any gain derived from the disposition, which may be offset by certain U.S. source capital losses of the non-U.S. holder (even though the individual is not considered a resident of the United
States) provided the non-U.S. holder has timely filed U.S. federal income tax returns with respect to such losses.
With
respect to the third bullet point above, we believe we are not currently and do not anticipate becoming a USRPHC. Because the determination of whether we are a USRPHC depends on the
fair market value of our USRPIs relative to the fair market value of our other business assets and our non-U.S. real property interests, however, there can be no assurance we are not a USRPHC or will
not become one in the future. Even if we are or were to become a USRPHC, gain arising from the sale or other taxable disposition by a non-U.S. holder of Fantex Series EJ Manuel will not be
subject to U.S. federal income tax if such class of stock is "regularly traded," as defined by applicable Treasury Regulations, on an established securities market, and such non-U.S. holder owned,
actually or constructively, 5% or less of such class of our stock throughout the shorter of the five-year period ending on the date of the sale or other disposition or the non-U.S. holder's holding
period for such stock.
Non-U.S.
holders should consult their tax advisors regarding potentially applicable income tax treaties that may provide for different rules.
Conversion
Our board of directors may, at any time following the two-year anniversary of the filing of a certificate of designation creating
Fantex Series EJ Manuel resolve to convert our Fantex Series EJ Manuel into fully paid and non-assessable shares of our platform common stock at a conversion ratio to be determined by
dividing the fair value of a share of our Fantex Series EJ Manuel by the fair value of a share of our platform common stock. If the Fantex Series EJ Manuel is treated as the stock of
Fantex, an exchange of stock incident to such a conversion will qualify as a tax-free recapitalization such that no gain or loss should be recognized by Fantex or by holders of Fantex Series EJ
Manuel. If, however, the Fantex Series EJ Manuel is not treated as the stock of Fantex, then a conversion of Fantex Series EJ Manuel into shares of platform common stock would be a
taxable exchange for federal income tax purposes. In such a case, holders of a share of Fantex Series EJ Manuel would recognize gain or loss in an amount equal to the difference between the
fair market value of the platform common stock received and their adjusted basis in the share of Fantex Series EJ Manuel surrendered in the conversion.
Information Reporting and Backup Withholding
Subject to the discussion below on foreign accounts, a non-U.S. holder will not be subject to backup withholding with respect to
payments of dividends on Fantex Series EJ Manuel we make to the non-U.S. holder, provided the applicable withholding agent does not have actual knowledge or reason to know such holder is a
United States person and the holder certifies its non-U.S. status, such as by providing a valid IRS Form W-8BEN or W-8ECI, or other applicable certification. However,
181
Table of Contents
information
returns will be filed with the IRS in connection with any dividends on Fantex Series EJ Manuel paid to the non-U.S. holder, regardless of whether any tax was actually withheld.
Copies of these information returns may also be made available under the provisions of a specific treaty or agreement to the tax authorities of the country in which the non-U.S. holder resides or is
established.
Information
reporting and backup withholding may apply to the proceeds of a sale of Fantex Series EJ Manuel within the United States, and information reporting may (although
backup withholding generally will not) apply to the proceeds of a sale of Fantex Series EJ Manuel outside the United States conducted through certain U.S.-related financial intermediaries, in
each case, unless the beneficial owner certifies under penalty of perjury that it is a non-U.S. holder on IRS Form W-8BEN or other applicable form (and the payor does not have actual knowledge
or reason to know that the beneficial owner is a United States person) or such owner otherwise establishes an exemption.
Backup
withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be allowed as a refund or a credit against a non-U.S. holder's U.S. federal
income tax liability, provided the required information is timely furnished to the IRS.
Additional Withholding Tax on Payments Made to Foreign Accounts
Withholding taxes may be imposed under the Sections 1471 through 1474 of the Code (commonly referred to as FATCA) on certain
types of payments made to non-U.S. financial institutions and certain other non-U.S. entities. Specifically, a 30% withholding tax may be imposed on dividends on, or gross proceeds from the sale or
other disposition of, Fantex Series EJ Manuel paid to a "foreign financial institution" or a "non-financial foreign entity" (each as defined in the Code), unless (1) the foreign
financial institution undertakes certain diligence and reporting obligations, (2) the non-financial foreign entity either certifies it does not have any "substantial United States owners" (as
defined in the Code) or furnishes identifying information regarding each substantial United States owner, or (3) the foreign financial institution or non-financial foreign entity otherwise
qualifies for an exemption from these rules. If the payee is a foreign financial institution and is subject to the diligence and reporting requirements in (1) above, it must enter into an
agreement with the U.S. Department of the Treasury requiring, among other things, that it undertake to identify accounts held by certain "specified United States persons" or "United States-owned
foreign entities" (each as defined in the Code), annually report certain information about such accounts, and withhold 30% on payments to non-compliant foreign financial institutions and certain other
account holders. Foreign financial institutions located in jurisdictions that have an intergovernmental agreement with the United States governing FATCA may be subject to different rules.
Under
the applicable Treasury Regulations, withholding under FATCA generally will apply to payments of dividends on Fantex Series EJ Manuel made on or after July 1, 2014
and to payments of gross proceeds from the sale or other disposition of such stock on or after January 1, 2017.
Prospective
investors should consult their tax advisors regarding the potential application of withholding under FATCA to their investment in Fantex Series EJ Manuel.
182
Table of Contents
LEGAL MATTERS
The validity of the shares of Fantex Series EJ Manuel we are offering, and certain tax matters will be passed upon by
Latham & Watkins LLP, Menlo Park, California. Certain legal matters in connection with this offering will be passed upon for the underwriters by Cooley LLP, Palo Alto, California.
EXPERTS
The financial statements of Fantex, Inc. included in this prospectus have been audited by Deloitte & Touche LLP,
an independent registered public accounting firm, as stated in their report appearing herein (which report expresses an unqualified opinion and includes an explanatory paragraph referring to
Fantex, Inc. being in the development stage). Such financial statements are included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.
The
Statements of Cash Receipts from Included Contracts for each of EJ Manuel, Vernon Davis and Arian Foster included in this prospectus have been audited by Deloitte &
Touche LLP, an independent registered public accounting firm, as stated in their report appearing herein (which report expresses an unqualified opinion and includes an explanatory paragraph
referring to the purpose of the statements). Such Statements of Cash Receipts from Included Contracts have been so included in reliance upon the report of such firm given upon their authority as
experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to the shares of our
Fantex Series EJ Manuel being offered by this prospectus. This prospectus, which constitutes part of that registration statement, does not contain all
of the information set forth in the registration statement or the exhibits and schedules that are part of the registration statement. Some items included in the registration statement are omitted from
the prospectus in accordance with the rules and regulations of the SEC. For further information with respect to us and the Fantex Series EJ Manuel offered in this prospectus, we refer you to
the registration statement and the accompanying exhibits and schedules. Statements contained in this prospectus regarding the contents of any contract, agreement or any other document to which
reference is made are summaries of the material terms of these contracts, agreements or other documents. With respect to each of these contracts, agreements or other documents filed as an exhibit to
the registration statement, reference is made to such exhibit for a more complete description of the matter involved.
A
copy of the registration statement and the accompanying exhibits and schedules and any other document we file may be inspected without charge at the public reference facilities
maintained by the SEC in 100 F Street, N.E., Washington, D.C. 20549 and copies of all or any part of the registration statement may be obtained from this office upon the payment of the fees
prescribed by the SEC. The public may obtain information on the operation of the public reference facilities in Washington, D.C. by calling the SEC at 1-800-SEC-0330. Our filings with the SEC are
available to the public from the SEC's website at www.sec.gov.
Upon
the closing of this offering, we will be subject to the information and periodic reporting requirements of the Exchange Act applicable to a company with securities registered
pursuant to Section 12 of the Exchange Act. In accordance therewith, we will file proxy statements, periodic information and other information with the SEC. All documents filed with the SEC are
available for inspection and copying at the public reference room and website of the SEC referred to above. We maintain a website at www.fantexinc.com. You may access our reports, proxy statements and
other information free of charge at this website as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC. The information contained in, or that can
be accessed through, our website is not incorporated by reference and is not a part of this prospectus.
183
Table of Contents
INDEX TO FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm
F-2
Balance Sheet, as of December 31, 2012 and 2013
F-3
Statement of Operations, for the period from inception to December 31, 2012 and year ended
December 31, 2013
F-4
Statement of Stockholder's Equity, for the period from inception to December 31, 2012 and year ended
December 31, 2013
F-5
Statement of Cash Flows, for the period from inception to December 31, 2012 and year ended
December 31, 2013
F-6
Notes to Financial Statements
F-7
Investors
in our Fantex Series EJ Manuel are investing in Fantex and not in the brand contract or EJ Manuel. However, Fantex Series EJ Manuel is intended to track and
reflect the separate economic performance of the assets to be attributed to the EJ Manuel Brand. Only Fantex will have rights under
the brand contract and recourse against EJ Manuel. We are presenting separate financial information about the EJ Manuel Brand.
F-1
Table of Contents
Report of Independent Registered Public Accounting Firm
To
the Board of Directors and Stockholder of
Fantex, Inc.
We
have audited the accompanying balance sheets of Fantex, Inc. (a development-stage entity) (the "Company") as of December 31, 2013 and 2012, and the related statements of
operations, stockholder's equity, and cash flows for the period from September 14, 2012 (inception) to December 31, 2012, for the year ended December 31, 2013 and for the period
from September 14, 2012 (inception) to December 31, 2013. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We
conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our audits provides a reasonable basis for our opinion.
In
our opinion, such financial statements present fairly, in all material respects, the financial position of Fantex, Inc. as of December 31, 2013 and 2012, and the results
of its operations and its cash flows for the period from September 14, 2012 (inception) to December 31, 2012, for the year ended December 31, 2013 and for the period from
September 14, 2012 (inception) to December 31, 2013, in conformity with accounting principles generally accepted in the United States of America.
The
Company is in the development stage at December 31, 2013. As discussed in Note 1 to the financial statements, the Company is subject to certain significant risks and
uncertainties.
/s/
Deloitte & Touche LLP
San Francisco, CA
February 28, 2014
F-2
Table of Contents
FANTEX, INC. (DEVELOPMENT-STAGE ENTITY)
BALANCE SHEETS
As of December 31
2012
2013
ASSETS
Cash and Cash Equivalents
$
—
$
466,833
Prepaid Assets
$
—
$
306,041
Total Assets
$
—
$
772,874
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
LIABILITIES AND STOCKHOLDER'S EQUITY
Total Liabilities
$
—
$
—
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
Commitments and Contingencies
Contributed Capital
Common stock, $0.0001 par value (authorized 100,000,000 shares, 100,000,000 issued and outstanding)
$
10,000
$
10,000
​
​
​
​
​
​
​
​
Additional Paid in Capital
$
1,053,023
$
5,388,192
​
​
​
​
​
​
​
​
Accumulated Losses
$
(1,063,023
)
$
(4,625,318
)
​
​
​
​
​
​
​
​
Total stockholder's equity
$
—
$
772,874
​
​
​
​
​
​
​
​
Total liabilities and stockholder's equity
$
—
$
772,874
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
See notes to financial statements.
F-3
Table of Contents
FANTEX, INC. (DEVELOPMENT-STAGE ENTITY)
STATEMENTS OF OPERATIONS
Cumulative
Amounts from
September 14,
2012
(Inception) to
December 31,
2013
The Period from
September 14,
2012
(Inception) to
December 31,
2012
Year Ended
December 31,
2013
REVENUES
$
—
$
—
$
—
OPERATING EXPENSES:
Personnel
$
973,892
$
98,174
$
875,718
Professional Services
3,103,251
798,231
2,305,020
General and administrative, exclusive of personnel costs
548,175
166,618
381,557
​
​
​
​
​
​
​
​
​
​
​
Total Operating Expenses
4,625,318
1,063,023
3,562,295
​
​
​
​
​
​
​
​
​
​
​
Net Loss Before Income Taxes
(4,625,318
)
(1,063,023
)
(3,562,295
)
Income Taxes
—
—
—
​
​
​
​
​
​
​
​
​
​
​
Net Loss
$
(4,625,318
)
$
(1,063,023
)
$
(3,562,295
)
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
Loss per share
Basic (weighted average shares—100,000,000)
$
(0.05
)
$
(0.01
)
$
(0.04
)
Diluted (weighted average shares—100,000,000)
$
(0.05
)
$
(0.01
)
$
(0.04
)
See notes to financial statements.
F-4
Table of Contents
FANTEX, INC. (DEVELOPMENT-STAGE ENTITY)
STATEMENTS OF STOCKHOLDER'S EQUITY
Common Stock
Additional
Paid-in-
Capital
Accumulated
Losses
Total
Stockholder's
Equity
Shares
Amount
Balance at September 14, 2012 (Inception)
—
$
—
$
—
$
—
$
—
Common stock
100,000,000
10,000
—
10,000
Contributions from Parent
1,053,023
1,053,023
Net losses
—
(1,063,023
)
(1,063,023
)
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
Balance at December 31, 2012
100,000,000
$
10,000
$
1,053,023
$
(1,063,023
)
$
—
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
Contributions from Parent
4,335,169
4,335,169
Net losses
—
(3,562,295
)
(3,562,295
)
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
Balance at December 31, 2013
100,000,000
$
10,000
$
5,388,192
$
(4,625,318
)
$
772,874
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
See notes to financial statements.
F-5
Table of Contents
FANTEX, INC. (DEVELOPMENT-STAGE ENTITY)
STATEMENTS OF CASH FLOWS
Cumulative
Amounts from
September 14,
2012
(Inception) to
December 31,
2013
The Period from
September 14,
2012
(Inception) to
December 31,
2012
Year Ended
December 31,
2013
Operating Activities
Net loss
$
(4,625,318
)
$
(1,063,023
)
$
(3,562,295
)
​
​
​
​
​
​
​
​
​
​
​
Adjustments to reconcile net loss to net cash used in operating activities:
Change in Due to Parent
(306,041
)
(306,041
)
Non-cash contributions from Parent
3,398,192
1,063,023
2,335,169
​
​
​
​
​
​
​
​
​
​
​
Net cash used in operating activities
(1,533,167
)
—
(1,533,167
)
Financing Activities
Contributed Capital
2,000,000
—
2,000,000
​
​
​
​
​
​
​
​
​
​
​
Net cash provided by financing activities
2,000,000
—
2,000,000
Cash and Cash Equivalents at Beginning of Period
$
—
$
—
$
—
​
​
​
​
​
​
​
​
​
​
​
Cash and Cash Equivalents at End of Period
$
466,833
$
—
$
466,833
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
Cash Paid for Interest
$
—
$
—
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
Cash Paid for Taxes
$
—
$
—
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
Non-Cash Financing Activities:
Contributions from Parent
$
3,398,355
$
1,063,023
$
2,335,169
See notes to financial statements.
F-6
Table of Contents
NOTES TO FINANCIAL STATEMENTS
1. BUSINESS
Nature of Operations
—Fantex, Inc. (the "Company" or "Fantex") was incorporated in Delaware in September 2012 and is a wholly-owned subsidiary
of Fantex Holdings, Inc. (the "Parent"). Fantex is a development-stage entity and has relied on the Parent to date to conduct its operations.
On
November 1, 2013, the Company effected a 1,000,000 to 1 stock split of the Company's common stock outstanding. All common stock share data included in these financial
statements give retroactive effect to the stock split.
Fantex
is a brand acquisition, marketing and brand development company whose focus is on acquiring minority interests in the income associated with the brands of professional athletes,
entertainers and other high-profile individuals (together with affiliated entities, the "Contract Party") and assisting such individuals in enhancing the reach and value of the brands the Company
acquires. The business operates in a single segment and its focus is on three core areas:
•
evaluating, targeting and accessing individuals and brands with the potential to generate significant income associated
with these brands, or brand income;
•
acquiring minority interests in such brand income; and
•
assisting the acquired brands in increasing their value via technology and through leveraging Fantex's marketing,
advertising and strategic partnering expertise.
Fantex
is currently managed by the Parent while the Company is commencing operations. The Company will continue to rely on the Parent to conduct its operations until such time as the
Company's revenues are sufficient to finance operations.
Subsequent
to the successful completion of its first initial public offering, the Company intends to operate under a management agreement with the Parent that will provide Fantex with
management and administrative services, including providing and compensating the Company's executive management and other personnel, as well as services relating to information technology support,
brand management and other support operations, facilities, human resources, tax planning and administration, accounting, treasury and insurance. The Company will begin to assume direct management and
administrative responsibilities at such time in the future as the actual cost of these services is less than the service fee to Parent, which is not anticipated to occur until the Company begins to
generate revenue from multiple contracts with the Contract Parties ("Brand Contracts").
All
expenses incurred for the period ending December 31, 2012 and the majority of expenses incurred for the year ended December 31, 2013 were paid by the Parent and
allocated to Fantex based on the expenses incurred by Fantex in its operations. The allocations were based on the time spent by employees of the Parent on activities of Fantex, the number of full time
equivalent employees performing Fantex activities and direct expenses incurred for the operations of Fantex. The expense allocations have been determined on the basis that Fantex and the Parent
considered to be reasonable reflections of the utilization of services provided or the benefit received by Fantex. Management believes that the expenses allocated to Fantex are representative of the
operating expenses it would have incurred had Fantex been operated on a stand-alone basis.
For
the period from September 14, 2012 to September 30, 2012 no expenses were incurred by the Parent for the operations of the Company; operations and expenses were
incurred by the Parent on behalf of the Company starting after December 31, 2012.
F-7
Table of Contents
NOTES TO FINANCIAL STATEMENTS (Continued)
1. BUSINESS (Continued)
For
the year ended December 31, 2013, the Company paid the Parent $1,533,167 for certain direct expenses incurred on behalf of the Company, the first period in which the Company
paid for certain expenses as opposed to contributions from the Parent.
Certain Significant Risks and Uncertainties
—The Company can be affected by a variety of factors. Management of the Company believes that changes in
any of the following areas could have a significant negative effect on the Company in terms of its future financial position, results of operations or cash flows: the ability to maintain an adequate
rate of growth; the impact of the current economic climate on its business; the ability to effectively manage its growth; the ability to attract new Contract Parties; the ability to improve the
performance of Contract Parties; and the impact of labor issues in any of the major professional sports leagues.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
—The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the
United States of America ("GAAP"). The financial statements include the accounts of the Company.
Use of Estimates
—The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts
reported and disclosed in the financial statements and the accompanying notes. On an ongoing basis, management will evaluate these estimates, including those related to accounts receivable, fair
values of financial instruments, income taxes, and contingent liabilities, among others. Estimates will be based on historical experience and on various other assumptions that are believed to be
reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ materially from these estimates.
Cash and Cash Equivalents
—Cash and cash equivalents include cash on hand, cash held in banks and highly liquid investments with original maturities at
purchase of three months or less.
Income Taxes
—Income taxes are accounted for under the asset and liability method, which requires the recognition of deferred tax assets and
liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the
differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a
change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The current and deferred tax expense is presented under the separate
return method. Under the separate return method, Fantex calculates its tax provision as if it were filing a separate tax return.
Deferred
tax assets are recorded to the extent management believes these assets will more likely than not be realized. In making such a determination, all available positive and negative
evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations is considered. In the event
it is determined that the Company would be able to realize deferred tax assets in the future, an adjustment to the deferred tax asset valuation allowance would be made, which would reduce the
provision for income taxes.
Uncertain
tax positions are recorded on the basis of a two-step process whereby (1) it is determined whether it is more likely than not that the tax positions will be sustained
based on the
F-8
Table of Contents
NOTES TO FINANCIAL STATEMENTS (Continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
technical
merits of the position and (2) those tax positions that meet the more-likely-than-not recognition threshold, the largest amount of tax benefit that is greater than 50 percent
likely to be realized upon ultimate settlement with the related tax authority would be recognized.
Comprehensive Income
—Total comprehensive income/(loss) consists of net loss and other comprehensive income/(loss). For the periods presented herein
the Company did not have any other comprehensive income/(loss).
Fair Value Option
—The brand contracts represent a right to receive certain cash flows from the Contract Parties, and therefore, the brand contracts
meet the definition of a financial asset. As financial assets, the brand contracts are precluded from being accounted for as intangible assets. The Company has elected to adopt the fair value option
to account for the brand contracts at fair value, with changes recognized in income (loss) from brand contracts in the Statement of Operations and presented as a separate line item. The Company
believes that measurement of the brand contracts at fair value provides the most meaningful information to users of the financial statements, because the value of the brand contracts may increase or
decrease over time based on future events. The Company believes that recognizing the change in fair value through net income or loss provides a better indicator of the performance of the brand
contracts for a given year, enhances transparency, and is more in line with how the Company manages the risks of the brand contracts.
Fair Value of Financial Instruments
—Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. Where available, fair value is based on observable market prices or parameters or derived from such prices or parameters. Where
observable prices or inputs are not available, valuation models are applied. These valuation models involve some level of management estimation and judgment, the degree of which is dependent on the
price transparency for the instruments or market and the instruments' complexity for disclosure purposes. Assets and liabilities in the balance sheet are categorized based upon the level of judgment
associated with the inputs used to measure their value. Hierarchical levels, as defined under GAAP, are directly related to the amount of subjectivity associated with the inputs to fair valuations of
these assets and liabilities, and are as follows:
Level 1—
Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. The types of assets
generally
included in this category are mutual funds.
Level 2—
Inputs are other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or
indirectly.
Level 2 inputs include quoted prices for similar instruments in active markets, and inputs other than quoted prices that are observable for the asset or liability.
Level 3—
Inputs are unobservable inputs for the asset or liability, and include situations where there is little, if any, market activity for the
asset or
liability. The types of assets and liabilities generally included in this category are brand contracts.
A
significant decrease in the volume and level of activity for the asset or liability is an indication that transactions or quoted prices may not be representative of fair value because
in such market conditions there may be increased instances of transactions that are not orderly. In those circumstances, further analysis of transactions or quoted prices is needed, and a significant
adjustment to the transactions or quoted prices may be necessary to estimate fair value.
F-9
Table of Contents
NOTES TO FINANCIAL STATEMENTS (Continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
The
availability of observable inputs can vary depending on the financial asset or liability and is affected by a wide variety of factors, including, for example, the type of product,
whether the product is new, whether the product is traded on an active exchange or in the secondary market, and the current market conditions. To the extent that valuation is based on models or inputs
that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value
is greatest for instruments categorized in Level 3. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for
disclosure purposes, the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair
value measurement in its entirety. The Company's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and consideration of factors
specific to the asset. The variability of the observable inputs affected by the factors described above may cause transfers between Levels 1, 2, and/or 3, which the Company recognizes at the
end of the reporting period.
Depending
on the relative liquidity in the markets for certain assets, the Company may classify assets as Level 3 if it determines that observable quoted prices, obtained directly
or indirectly, are not available. The valuation models used for the assets and liabilities that are valued using Level 3 of the fair value hierarchy are described below.
Brand Contracts, at Estimated Fair Value:
Brand contracts, at estimated fair value, are initially valued at transaction price and are
subsequently
valued using observable market prices, if available, or internally developed models in the absence of readily observable market prices. Valuation models are generally based on a discounted cash flow
approach, in which various internal and external factors are considered. Factors include key financial inputs and recent transactions for comparable brands. The Company utilizes several unobservable
pricing inputs and assumptions in determining the fair value of its Level 3 investments. Some of these assumptions include, risk free cost of capital, length of playing career, length of
post-career, future rates of inflation in salaries and endorsement contracts, and amounts that can be potentially realized in the future, and unsigned playing and endorsement contracts. These
unobservable pricing inputs and assumptions may differ by brand contract and in the application of the Company's valuation methodologies. The reported fair value estimates could vary materially if
the Company had chosen to incorporate different unobservable pricing inputs or other assumptions, for applicable investments.
Valuation Process
—The valuation process for the Company's Level 3 measurements for assets and liabilities will be completed on no less than a
quarterly basis and is designed to subject the valuation of Level 3 investments, including brand contracts, to an appropriate level of consistency, oversight and review. The Company's internal
investment professionals are responsible for estimating fair value based on various factors including:
•
current playing contract including: amounts, duration, incentive provisions, guaranteed portions, if any, termination and
other important terms;
•
current endorsement contracts, if any, including: amounts, duration, contract terms;
•
age of the individual associated with the brand and prospects for additional future contracts, both playing and
endorsement;
•
estimate of potential future playing and endorsement contracts, including: duration and value;
F-10
Table of Contents
NOTES TO FINANCIAL STATEMENTS (Continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
•
position and data specific to that position focused on estimating longevity of career;
•
reported contract value increases or decreases for other comparable players (by position and status they hold among their
peers) in order to estimate future contract values; and
•
risk free cost of capital.
In
addition, a number of qualitative factors are considered to develop estimates used in the models including:
•
the stated aspirations and goals of the contract party;
•
certain intangibles of the contract party, including media relationships, communication ability, "likeability," demand as
a product endorser, personal drive and ambition;
•
social footprint (for example, number of Twitter followers);
•
the market in which the contract party performs and how that may impact the number and amount of endorsement
opportunities;
•
the reach of the brand of the contract party;
•
value of TV contracts and the rate of growth in those contracts; and
•
attendance trends in the contract party's primary field of performance.
The
Company considers all of these factors to estimate brand revenue for use in discounted cash flow models. These estimates include amounts based on existing contracts as well as
estimates of amounts to be received for future contracts. With respect to existing contracts, the Company considers that certain amounts are reasonably assured of realization, but that most earnings
from existing contracts depend on continued satisfactory performance. To determine the amount of the purchase price of a brand contract and a fair current value the Company applies discount rates to
the estimates of earnings.
In
general, lower discount rates are applied to amounts associated with existing contracts, particularly portions of those contracts that have a higher degree of certainty of payment,
and higher discount rates to amounts associated with future potential earnings under existing contracts and to potential earnings under anticipated future contracts. Further, discount rates rise over
time to reflect that uncertainty increases over time.
The
Company's internal investment professionals document their considerations of this data that is then reviewed by management, including the Chief Executive Officer and Chief Financial
Officer. The approved valuation is used to negotiate the purchase price of the brand contract. The same valuation process is followed on no less than a quarterly basis to determine fair value of
contracts entered into by the Company.
If
the estimates of brand income are too high and/or the discount rates used in the calculation too low then the valuation of a brand contract may be too high, in which case the Company
may pay too much for a brand contract.
Loss per share
—The Company presents both basic and diluted loss per share ("EPS") in its financial statements. Basic loss per share ("Basic EPS")
excludes dilution and is computed by dividing net loss by the weighted average number of shares outstanding for the period. The Company has no
F-11
Table of Contents
NOTES TO FINANCIAL STATEMENTS (Continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
potentially
dilutive common share options, unvested restricted common shares and convertible senior notes using the treasury method or if-converted method.
Income (Loss) From Brand Contracts
—Following the effective date of the brand contract, revenues are recognized when cash or other considerations are
received by the Contract Party under included contracts, which is the point at which the Company would have the right to receive and recognize its proportionate share of amounts received by the
Contract Party. Other consideration received by the Contract Party under included contracts may include stock, automobiles, or other nonmonetary consideration. In the event nonmonetary consideration
is received by the Contract Party, the Company will recognize income from brand contracts equal to its proportionate share of the estimated fair value of such consideration in either cash or such
other consideration based on the contractual arrangement. Amounts due to the Company under a brand contract are either remitted directly from the source of such income or through payment by the
Contract Party. Brand contracts stipulate that income once earned by Fantex is not subject to recapture by the Contract Party. All amounts received by the Company from the Contract Party will be
allocated between the contract as reduction in carrying value and income (loss) from brand contracts.
Cash
received under the brand contract will either be recognized as a reduction in carrying value (i.e., a reduction in the brand contract asset) or income (loss) from brand
contracts. Whether cash receipts will be recognized as a reduction in carrying value or income (loss) from brand contracts will depend on the timing of such cash receipt.
Additionally,
the timing of changes in the estimates of future cash flows will impact whether cash receipts are recognized as a reduction in carrying value or as income (loss) from brand
contracts. If for example we increase our estimate of future cash flows and such increased cash flows are not received until a future period, such increase will be recognized as income (loss) from
brand contracts and the majority of such future cash flow will be recognized as a reduction in carrying value. If on the other hand our expected cash flows increase and was not foreseen and therefore
not expected until the period in which the cash is actually received the entire cash amount will be recognized as income (loss) from brand contracts.
Expected
cash flows will be based on the included contracts the contract party has in place and the expectations of future contracts. As it becomes more likely that the contract party
will collect contracted amounts the expected discount rate will decrease. A decrease in the discount rate will result in the receipt of cash primarily being allocated to reduction in carrying value.
The discount rates are determined at the purchase date and are revised each period based on the performance of the brand and the likelihood of collection of future contracted amounts.
Income
(loss) from brand contracts are based on an estimate of expected cash flows and the associated expected discount rate. Changes in fair value resulting from changes in the expected
performance of the brand or market factors are included in income (loss) from brand contracts in the statement of operations.
3. RELATED PARTY TRANSACTIONS
The Company will continue to rely on the Parent to conduct its operations until such time as the Company's revenues are sufficient to finance operations. Subsequent to the successful
completion of its first initial public offering, the Company intends to operate under a management agreement with the Parent that will provide Fantex with management and administrative services,
including providing and
F-12
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NOTES TO FINANCIAL STATEMENTS (Continued)
3. RELATED PARTY TRANSACTIONS (Continued)
compensating
the Company's executive management and other personnel, as well as services relating to information technology support, brand management and other support operations, facilities, human
resources, tax planning and administration, accounting, treasury and insurance. The Company will begin to assume direct management and administrative responsibilities at such time in the future as the
actual cost of these services is less than the service fee to Parent, which is not anticipated to occur until the Company begins to generate significant revenue from multiple brand contracts.
All
expenses incurred for the period ending December 31, 2012 and December 31, 2013 were paid by the Parent and allocated to Fantex based on the expenses incurred by Fantex
in its operations. The allocations were based on the time spent by employees of the Parent on activities of Fantex, the number of full time equivalent employees performing Fantex activities and direct
expenses incurred for the operations of Fantex. The expense allocations have been determined on the basis that Fantex and the Parent considered to be reasonable reflections of the utilization of
services provided or the benefit received by Fantex. Management believes that the expenses allocated to Fantex are representative of the operating expenses it would have incurred had Fantex been
operated on a stand-alone basis.
During
the year ended December 31, 2013, the Company incurred $3,562,295 of expenses directly related to its operations and paid by the Parent. The Parent contributed $2,335,169
to the Company's
capital. The Company paid $1,533,167 for certain expenses as opposed to contributions from the Parent for the year ended December 31, 2013.
During
2013 the five independent directors of the Company were granted an aggregate of 100,000 non-qualified options in the Fantex Holdings, Inc. 2012 Equity Incentive Plan. These
options were granted with an exercise price equal to the fair market value of the Fantex Holdings Inc. common stock at the date of grant and have a 10 year contractual term. The stock
options vest ratably over a 4 year period. The fair market value of stock options is estimated using the Black Scholes Merton valuation model and the Company used the following methods to
determine its underlying assumptions: expected volatilities are based on the historical volatilities of the Daily closing price of the public common stock of companies believed comparable to Fantex
Holdings, Inc.; the expected term of options granted is based on the simplified method of using the mid-point between the vesting term and the original contractual term and/or average time
outstanding method; the risk-free interest rate is based on the U.S Treasury daily yield curve on the date of grant; and the expected dividend yield is based on the current dividend trend. Forfeitures
are estimated at the time of grant and adjusted, if necessary, in subsequent periods if actual forfeitures differ from those estimates.
The
Company was allocated from the Parent $9,837 of stock compensation. The key assumptions used by the Parent in the valuation model to value the stock option grants were:
Expected Term:
6.02 years
Risk Free Rate:
1.75%
Weighted Average Volatility:
63.9%
Expected Forfeiture Rate:
35.0%
Expected Dividend Rate:
0%
The
fair value of the options as computed under the Black-Scholes pricing model yielded $0.911. As of December 31, 2013 there are 88,775 shares remaining to be expensed over the
remaining requisite vesting period.
F-13
Table of Contents
NOTES TO FINANCIAL STATEMENTS (Continued)
4. INCOME TAXES
For the year ended December 31, 2013, the period from September 14, 2012 (inception) to December 31, 2012 and the cumulative period from September 14, 2012
(inception) to December 31, 2013, no income tax expense or benefit was recognized.
At
the periods ended below deferred tax assets consisted of the following:
December 31, 2013
December 31, 2012
Deferred tax assets:
Net operating loss carry-forward
$
1,737,000
$
462,000
Valuation allowance
(1,737,000
)
(462,000
)
Total deferred tax assets
$
—
$
—
Because
of the Company's limited operating history and cumulative loss, management believes it is more likely than not that the remaining deferred tax asset will not be realized,
therefore, the Company provided a full valuation allowance of $462,000 and $1,737,000 on the deferred tax asset as of December 31, 2012 and 2013, respectively. The federal statutory income tax
rate of 35% is offset by the valuation allowance to reconcile to the effective income tax rate of 0%.
As
of December 31, 2013 we have federal and state income tax net operating loss carryforwards of $1,413,000 and $339,000 which will expire at various dates from 2032 through 2033.
Such net operating loss carryforwards expire as follows:
2032
$
485,000
2033
$
1,267,000
​
​
​
​
​
Total
$
1,752,000
​
​
​
​
​
​
​
​
​
​
The
Company adopted a policy to classify accrued interest and penalties as part of the accrued liability for uncertain tax positions, if any, in the provision for income taxes. No
accrued interest or penalties were recorded as of December 31, 2013 or 2012. The Company does not anticipate any significant changes to the unrecognized tax benefits within 12 months of this
reporting date.
The
Company files income tax returns in federal and state jurisdictions. At December 31, 2012 and 2013, all tax years were open and may be subject to potential examination in one
or more jurisdictions. There are no ongoing examinations by taxing authorities at this time.
5. STOCKHOLDER'S EQUITY
The Parent received 100,000,000 shares of Fantex's common stock in exchange for services provided for the benefit of Fantex of $10,000.
6. COMMITMENTS AND CONTINGENCIES
On February 28, 2013 Fantex entered into a brand contract with Arian Foster, a professional football player in the National Football League ("NFL") and The Ugly
Duck, LLC, a professional services company affiliated with Arian Foster (together, "Arian Foster"). The brand contract entitles Fantex to 20% of the income that Arian Foster receives from and
after February 28, 2013 as a result of his activities in the NFL and related fields (the "Acquired Brand Income," or "ABI"), including salary and wages from being a football player,
broadcasting or coaching and the use of Arian Foster's name,
F-14
Table of Contents
NOTES TO FINANCIAL STATEMENTS (Continued)
6. COMMITMENTS AND CONTINGENCIES (Continued)
voice,
likeness, biography or talents for purposes of advertising and trade, including without limitation sponsorships, endorsements, merchandising and appearances, subject to certain exceptions.
As
consideration for future ABI under the brand contract, Fantex agreed to pay Arian Foster a one-time cash amount of $10.0 million (less $0.5 million to be held in escrow
until six consecutive payments of brand amounts have been timely delivered to Fantex) contingent upon Fantex's ability to obtain financing. Fantex will have no further financial obligations to Arian
Foster under the brand contract once this payment is made, other than certain obligations to indemnify Arian Foster. According to the terms of the brand contract, Arian Foster is not obligated to make
payments to the Company until the upfront payment is made by the Company; as such there is no currently obligated payment due to Fantex by Arian Foster. Amounts received by Arian Foster subsequent to
the signing of the brand contract will be subject to payment to the Company once the upfront payment is made.
On
October 30, 2013 Fantex entered into a brand contract with Vernon Davis, a professional football player in the NFL and The Duke Marketing, LLC, a professional services
company affiliated with Vernon Davis (together, "Vernon Davis"). The brand contract entitles Fantex to 10% of the income that Vernon Davis receives from and after October 30, 2013 as a result
of his activities in the NFL and related fields (the "Acquired Brand Income," or "ABI"), including salary and wages from being a football player, broadcasting or coaching and the use of Vernon Davis'
name, voice, likeness, biography or talents for purposes of advertising and trade, including without limitation sponsorships, endorsements, merchandising and appearances, subject to certain
exceptions.
As
consideration for future ABI under the brand contract, Fantex agreed to pay Vernon Davis a one-time cash amount of $4.0 million (less $0.2 million to be held in escrow
until six consecutive payments of brand amounts have been timely delivered to Fantex) contingent upon Fantex's ability to obtain financing. Fantex will have no further financial obligations to Vernon
Davis under the brand contract once this payment is made, other than certain obligations to indemnify Vernon Davis. According to the terms of the brand contract, Vernon Davis is not obligated to make
payments to the Company until the upfront payment is made by the Company; as such there is no currently obligated payment due to Fantex by Vernon Davis. Amounts received by Vernon Davis subsequent to
the signing of the brand contract will be subject to payment to the Company once the upfront payment is made.
7. SUBSEQUENT EVENTS
On February 14, 2014 Fantex entered into a brand contract with Erik "EJ" Manuel, Jr., a professional football player in the NFL and Kire Enterprises, LLC, a professional
services company affiliated with Erik "EJ" Manuel, Jr. (together, "Erik "EJ" Manuel, Jr."). The brand contract entitles Fantex to 10% of the income that Erik "EJ" Manuel, Jr. receives from and after
February 14, 2014 as a result of his activities in the NFL and related fields (the "Acquired Brand Income," or "ABI"), including salary and wages from being a football player, broadcasting or
coaching and the use of Erik "EJ" Manuel, Jr.'s name, voice, likeness, biography or talents for purposes of advertising and trade, including without limitation sponsorships, endorsements,
merchandising and appearances, subject to certain exceptions.
As
consideration for future ABI under the brand contract, Fantex agreed to pay Erik "EJ" Manuel, Jr. a one-time cash amount of $4.975 million (less $0.2 million to be held
in escrow until six consecutive payments of brand amounts have been timely delivered to Fantex) contingent upon Fantex's ability to obtain financing. Fantex will have no further financial obligations
to Erik "EJ" Manuel, Jr. under the brand contract once this payment is made, other than certain obligations to indemnify Erik
F-15
Table of Contents
NOTES TO FINANCIAL STATEMENTS (Continued)
7. SUBSEQUENT EVENTS (Continued)
"EJ"
Manuel, Jr. According to the terms of the brand contract, Erik "EJ" Manuel, Jr. is not obligated to make payments to the Company until the upfront payment is made by the Company; as such there is
no currently obligated payment due to Fantex by Erik "EJ" Manuel, Jr. Amounts received by Erik "EJ" Manuel, Jr. subsequent to the signing of the brand contract will be subject to payment to the
Company once the upfront payment is made.
Fantex
has evaluated activity after December 31, 2013 until the date of issuance of the annual audited Financial Statements on February 28, 2014, and other than the events
described above, Fantex is not
aware of any events that have occurred subsequent to December 31, 2013 that would require adjustments to or disclosures in the Financial Statements.
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INDEX TO STATEMENT OF CASH RECEIPTS FROM INCLUDED CONTRACTS
Report of Independent Registered Public Accounting Firm
SR-EM-2
Statement of Cash Receipts from Included Contracts for year ended December 31, 2013
SR-EM-3
Notes to Statement of Cash Receipts from Included
Contracts
SR-EM-4
The
accompanying Statement of Cash Receipts from Included Contracts Subject to the Brand Agreement between Fantex, Inc. ("Fantex") and Erik "EJ" Manuel, Jr. and his affiliate Kire
Enterprises, LLC (together, the "Contract Party") dated February 14, 2014 (the "Brand Contract"), present the cash or other considerations received by the Contract Party from included
contracts subject to the Brand Contract for the year ended December 31, 2013 ("Statement of Cash Receipts from Included Contracts").
The
Statement of Cash Receipts from Included Contracts reflects the historical cash receipts of the Contract Party that would have been subject to the Brand Contract with Fantex had the
brand contract been in place beginning January 1, 2013. The Statements of Cash Receipts from Included Contracts reflect the gross amount received by the Contract Party subject to the Brand
Contract. Had the brand contract been in place beginning January 1, 2013, and subject to the following consideration regarding expired contracts, Fantex would have been entitled to receive 10%
of the gross amount received by the Contract Party. The Statements of Cash Receipts from Included Contracts do not reflect earnings of the Contract Party under contracts that had expired and not been
renewed as of the signing date of the Brand Contract, as it is not possible to determine if the Contract Party would have excluded these
contracts from the Brand Contract. The amounts reflected in the Statements of Cash Receipts from Included Contracts are not necessarily indicative of future cash receipts that will be subject to the
Brand Contract. No amounts would be subject to the Brand Contract prior to January 1, 2013 because the Contract Party was not engaged in brand income generating activities until 2013.
Investors
in our Fantex Series EJ Manuel are investing in Fantex and not in the Brand Contract or EJ Manuel. However, Fantex Series EJ Manuel is intended to track and
reflect the separate economic performance of the assets to be attributed to the EJ Manuel Brand. Only Fantex will have rights under the Brand Contract and recourse against EJ Manuel.
SR-EM-1
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Report of Independent Registered Public Accounting Firm
The
Board of Directors and Stockholder
Fantex, Inc.:
We
have audited the accompanying Statement of Cash Receipts from Included Contracts Subject to the Brand Agreement between Fantex, Inc. ("Fantex") and EJ Manuel and his affiliate
Kire Enterprises, LLC (together, "the Contract Party") dated February 14, 2014 (the "Brand Contract") for the year ended December 31, 2013 ("Statement of Cash Receipts from
Included Contracts"). This Statement of Cash Receipts from Included Contracts is the responsibility of Fantex's management. Our responsibility is to express an opinion on this Statement of Cash
Receipts from Included Contracts based on our audit.
We
conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the Statement of Cash Receipts from Included Contracts is free of
material misstatement. Fantex is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting as it relates to the Statement of Cash Receipts from
Included Contracts. Our audit included consideration of internal control over financial reporting as it relates to the Statement of Cash Receipts from Included Contracts as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Fantex's internal control over financial reporting as it relates to the
Statement of Cash Receipts from Included Contracts. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the
Statement of Cash Receipts from Included Contracts, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the
Statement of Cash Receipts from Included Contracts. We believe that our audit provides a reasonable basis for our opinion.
The
accompanying Statement of Cash Receipts from Included Contracts was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission for
inclusion in a Registration Statement on Form S-1 of Fantex. As discussed in Note 1 to the Statement of Cash Receipts from Included Contracts, the statement is not intended to be a
complete presentation of the Contract Party's cash receipts. Further, Fantex's interest in the Contract Party cash receipts from included contracts, as defined in Note 2 to the Statement of
Cash Receipts from Included Contracts, will commence upon the effective date of the Brand Contract, which has not yet occurred.
In
our opinion, the Statement of Cash Receipts from Included Contracts referred to above present fairly, in all material respects, the cash receipts from included contracts subject to
the Brand Contract for the year ended December 31, 2013, in accordance with accounting principles generally accepted in the United States of America.
/s/
Deloitte & Touche LLP
San Francisco, California
February 28, 2014
SR-EM-2
Table of Contents
Statement of Cash Receipts from Included Contracts Subject to the Brand Agreement between
Fantex, Inc. and
Erik "EJ" Manuel Jr. and his affiliate
Kire Enterprises, LLC dated February 14, 2014
(Amounts in thousands)
Year Ended
December 31,
2013
RECEIPTS FROM INCLUDED CONTRACTS SUBJECT TO THE BRAND CONTRACT
Contractual National Football League (NFL) player receipts
$
405
Contractual NFL player signing bonus receipts
4,842
​
​
​
​
​
Total receipts from NFL player contract
5,247
Receipts from other included contracts
467
TOTAL RECEIPTS FROM INCLUDED CONTRACTS SUBJECT TO THE BRAND CONTRACT
$
5,714
​
​
​
​
​
The notes are an integral part of these statements
SR-EM-3
Table of Contents
Notes to Statement of Cash Receipts from Included Contracts Subject to the Brand Agreement
between Fantex, Inc. and Erik "EJ" Manuel, Jr. and his affiliate Kire Enterprises,
 LLC
dated February 14, 2014
Note 1. Basis of Presentation
The accompanying Statement of Cash Receipts from Included Contracts Subject to the Brand Agreement between Fantex, Inc. ("Fantex") and Erik "EJ" Manuel, Jr. and his affiliate Kire
Enterprises, LLC (together, the "Contract Party") dated February 14, 2014 (the "Brand Contract"), present the cash or other considerations received by the Contract Party from included
contracts (see Note 2) subject to the Brand Contract for the year ended December 31, 2013 ("Statements of Cash Receipts from Included Contracts").
The
Brand Contract will entitle Fantex to 10% of the Contract Party's cash or other considerations received from included contracts from the effective date of the Brand Contract and cash
or other considerations received from future contracts resulting from certain activities of the Contract Party. These certain activities, defined under the terms of the Brand Contract as the "Field,"
include activities in or substantially related to being a football player, broadcasting, coaching, motion pictures, television, radio, music, literary, talent engagements, personal appearances, public
appearances in places of amusement and entertainment, records and recording, publications, and the use of Contract Party's name, voice, likeness, biography or talents for purposes of advertising and
trade, including without limitation sponsorships, endorsements and appearances, and any other activities in which Contract Party uses its name, likeness or reputation to generate cash or other
considerations received, unless such activities are specifically excluded by the Brand Contract. In the event that there is any ambiguity as to whether an activity is in the Field, Fantex and the
Contract party shall discuss in good faith to consider whether such activity is of the type typically performed by the Contract Party in the principal business (such activities may include sports
casting, coaching, acting as spokesperson, etc.). If a resolution is not reached within 30 days from the initial discussions Fantex or the Contract Party may remit the matter to arbitration.
These
Statement of Cash Receipts from Included Contracts reflect the historical cash receipts of the Contract Party that would have been subject to the Brand Contract with Fantex had the
brand contract been in place beginning January 1, 2013. The Statement of Cash Receipts from Included Contracts
reflect the gross amount received by the Contract Party subject to the Brand Contract. Had the brand contract been in place beginning January 1, 2013, and subject to the following consideration
regarding expired contracts, Fantex would have been entitled to receive 10% of the gross amount received by the Contract Party. The Statements of Cash Receipts from Included Contracts do not reflect
earnings of the Contract Party under contracts that had expired and not been renewed as of the signing date of the Brand Contract, as it is not possible to determine if the Contract Party would have
excluded these contracts from the Brand Contract. The Contract Party did not begin generating cash that is or would have been subject to the Brand Contract until 2013.
The
effectiveness of the Brand Contract is subject to the successful acquisition of the financing, which Fantex intends to acquire by conducting a registered public offering
("Offering")of tracking stock intended to track and reflect the separate economic performance of the assets to be attributed to the EJ Manuel brand, unless such condition is otherwise waived by
Fantex. If the Offering is not successful the Brand Contract is not expected to be effective and in such case Fantex will not have rights to collect any future cash receipts under the Brand Contract.
The
Statement of Cash Receipts from Included Contracts was prepared from the historical records of the Contract Party and is not intended to be a complete presentation of the Contract
Party's cash receipts. Cash receipts will only be earned by Fantex under the Brand Contract subsequent to the
SR-EM-4
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Notes to Statement of Cash Receipts from Included Contracts Subject to the Brand Agreement
between Fantex, Inc. and Erik "EJ" Manuel, Jr. and his affiliate Kire Enterprises, LLC
dated February 14, 2014 (Continued)
Note 1. Basis of Presentation (Continued)
effective
date of the Brand Contract. In the event the Contract Party does not receive cash, or other considerations no amounts are due to Fantex. No other considerations were received under the
included contracts for the year ended December 31, 2013. The Statements of Cash Receipts from Included Contracts are presented in accordance with accounting principles generally accepted in the
United States of America.
Note 2. Summary of Significant Accounting Policies
Contractual National Football League (NFL) player receipts
—These receipts are recorded based on the cash received by the Contract Party for being on
the roster for NFL games, paid on a bi-weekly basis throughout the season.
Contractual NFL signing bonus receipts
—These receipts are recorded based on the cash received for the signing of the Contract Party's NFL contract,
paid on multiple dates as set forth in the NFL contract.
Receipts from other included contracts
—These receipts are recorded based on the cash, or other considerations received from the Contract Party's other
contracts subject to the Brand Contract, such as endorsements and cash received from NFL Players, Inc. for licensing the image and likeness of the Contract Party.
Included Contracts
—Included contracts are those that are effective upon the date that the Brand Contract was executed by Fantex and the Contract Party
and that are included in the Brand Contract. For contracts that existed at the signing on February 14, 2014 of the Brand Contract that are renewals of previous contracts with the same
counterparty, those prior contracts, which relate to periods prior to the signing of the Brand Contract, have been considered included contracts.
Note 3. Subsequent events
Fantex has evaluated activity after December 31, 2013 until the date of issuance of the Statements of Cash Receipts from Included Contracts on February 28, 2014, Fantex is
not aware of any events that have occurred subsequent to December 31, 2013 that would require adjustments to or disclosures in the Statements of Cash Receipts from Included Contracts.
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INDEX TO STATEMENTS OF CASH RECEIPTS FROM INCLUDED CONTRACTS
Report of Independent Registered Public Accounting Firm
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Statements of Cash Receipts from Included Contracts for years ended December 31, 2013 and
2012
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Notes to Statements of Cash Receipts from Included Contracts
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The
accompanying Statements of Cash Receipts from Included Contracts Subject to the Brand Agreement between Fantex, Inc. ("Fantex") and Vernon Davis and his affiliate The Duke
Marketing, LLC (together, the "Contract Party") dated October 30, 2013 (the "Brand Contract"), present the cash or other considerations received by the Contract Party from included
contracts subject to the Brand Contract for the years ended December 31, 2013 and 2012 ("Statements of Cash Receipts from Included Contracts").
These
Statements of Cash Receipts from Included Contracts reflect the historical cash receipts of the Contract Party that would have been subject to the Brand Contract with Fantex had
the brand contract been in place beginning January 1, 2012. The Statements of Cash Receipts from Included Contracts reflect the gross amount received by the Contract Party subject to the Brand
Contract. Had the brand contract been in place beginning January 1, 2012, and subject to the following consideration regarding expired contracts, Fantex would have been entitled to receive 10%
of the gross amount received by the Contract Party. The Statements of Cash Receipts from Included Contracts do not reflect earnings of the Contract Party under contracts that had expired and not been
renewed as of the signing date of the
Brand Contract, as it is not possible to determine if the Contract Party would have excluded these contracts from the Brand Contract. The amounts reflected in the Statements of Cash Receipts from
Included Contracts are not necessarily indicative of future cash receipts that will be subject to the Brand Contract.
Investors
in our Fantex Series Vernon Davis are investing in Fantex and not in the Brand Contract or Vernon Davis. However, Fantex Series Vernon Davis is intended to track and reflect
the separate economic performance of the assets to be attributed to the Vernon Davis Brand. Only Fantex will have rights under the Brand Contract and recourse against Vernon Davis.
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Report of Independent Registered Public Accounting Firm
The
Board of Directors and Stockholder
Fantex, Inc.:
We
have audited the accompanying Statements of Cash Receipts from Included Contracts Subject to the Brand Agreement between Fantex, Inc. ("Fantex") and Vernon Davis and his
affiliate The Duke Marketing, LLC (together, "the Contract Party") dated October 30, 2013 (the "Brand Contract"), for the years ended December 31, 2013 and 2012 ("Statements of
Cash Receipts from Included Contracts"). These Statements of Cash Receipts from Included Contracts are the responsibility of Fantex's management. Our responsibility is to express an opinion on these
Statements of Cash Receipts from Included Contracts based on our audits.
We
conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the Statements of Cash Receipts from Included Contracts are free of material misstatement. Fantex is not required to have, nor were we engaged to perform, an
audit of its internal control over financial reporting as it relates to the Statements of Cash Receipts from Included Contracts. Our audits included consideration of internal control over financial
reporting as it relates to the Statements of Cash Receipts from Included Contracts as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of Fantex's internal control over financial reporting as it relates to the Statements of Cash Receipts from Included Contracts. Accordingly, we express no
such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the Statements of Cash Receipts from Included Contracts, assessing the accounting
principles used and significant estimates made by management, as well as evaluating the overall presentation of the Statements of Cash Receipts from Included Contracts. We believe that our audits
provide a reasonable basis for our opinion.
The
accompanying Statements of Cash Receipts from Included Contracts were prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission
for inclusion in a Registration Statement on Form S-1 of Fantex. As discussed in Note 1 to the Statements of Cash Receipts from Included Contracts, the statements are not intended to be
a complete presentation of the Contract Party's cash receipts. Further, Fantex's interest in the Contract Party cash receipts from included contracts, as defined in Note 2 to the Statements of
Cash Receipts from Included Contracts, will commence upon the effective date of the Brand Contract, which has not yet occurred.
In
our opinion, the Statements of Cash Receipts from Included Contracts referred to above present fairly, in all material respects, the cash receipts from included contracts subject to
the Brand Contract for the years ended December 31, 2013 and 2012, in accordance with accounting principles generally accepted in the United States of America.
/s/
Deloitte & Touche LLP
San Francisco, California
February 28, 2014
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Statements of Cash Receipts from Included Contracts Subject to the Brand Agreement between
Fantex, Inc. and
Vernon Davis and his affiliate The Duke Marketing,
 LLC dated October 30, 2013
(Amounts in thousands)
Year Ended
December 31,
2012
2013
RECEIPTS FROM INCLUDED CONTRACTS SUBJECT TO THE BRAND CONTRACT
Contractual National Football League (NFL) player receipts
$
5,751
$
6,072
Contractual NFL player signing bonus receipts
—
—
Contractual NFL post season roster incentive receipts
62
156
Contractual NFL player performance incentives receipts
600
601
Total receipts from NFL player contract
6,413
6,829
Receipts from other included contracts
227
382
TOTAL RECEIPTS FROM INCLUDED CONTRACTS SUBJECT TO THE BRAND CONTRACT
$
6,640
$
7,211
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The notes are an integral part of these statements
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Notes to Statements of Cash Receipts from Included Contracts Subject to the Brand Agreement between
Fantex, Inc. and Vernon Davis and his affiliate The Duke Marketing, LLC
dated October 30, 2013
Note 1. Basis of Presentation
The accompanying Statements of Cash Receipts from Included Contracts Subject to the Brand Agreement between Fantex, Inc. ("Fantex") and Vernon Davis and his affiliate The Duke
Marketing, LLC (together, the "Contract Party") dated October 30, 2013 (the "Brand Contract"), present the cash or other considerations received by the Contract Party from included
contracts (see Note 2) subject to the Brand Contract for the years ended December 31, 2013 and 2012 ("Statements of Cash Receipts from Included Contracts").
The
Brand Contract will entitle Fantex to 10% of the Contract Party's cash or other considerations received from included contracts from the effective date of the Brand Contract and cash
or other considerations received from future contracts resulting from certain activities of the Contract Party. These certain activities, defined under the terms of the Brand Contract as the "Field,"
include activities in or substantially related to being a football player, broadcasting, coaching, motion pictures, television, radio, music, literary, talent engagements, personal appearances, public
appearances in places of amusement and entertainment, records and recording, publications, and the use or license of Contract Party's name, voice, likeness, biography or talents for purposes of
advertising and trade, including without limitation sponsorships, endorsements and appearances, and any other activities in which Contract Party uses or licenses its name, likeness or reputation to
generate cash or other considerations received, unless such activities are specifically excluded by the Brand Contract. In the event that there is any ambiguity as to whether an activity is in the
Field, Fantex and the Contract party shall discuss in good faith to consider whether such activity is of the type typically performed by the Contract Party in the principal business (such activities
may include sports broadcasting, coaching, acting as spokesperson, etc.). If a resolution is not reached within 30 days from the initial discussions Fantex or the Contract Party may remit the
matter to arbitration.
These
Statements of Cash Receipts from Included Contracts reflect the historical cash receipts of the Contract Party that would have been subject to the Brand Contract with Fantex had
the brand contract been in place beginning January 1, 2012. The Statements of Cash Receipts from Included Contracts
reflect the gross amount received by the Contract Party subject to the Brand Contract. Had the brand contract been in place beginning January 1, 2012, and subject to the following consideration
regarding expired contracts, Fantex would have been entitled to receive 10% of the gross amount received by the Contract Party. The Statements of Cash Receipts from Included Contracts do not reflect
earnings of the Contract Party under contracts that had expired and not been renewed as of the signing date of the Brand Contract, as it is not possible to determine if the Contract Party would have
excluded these contracts from the Brand Contract.
The
effectiveness of the Brand Contract is subject to the successful acquisition of financing, which Fantex intends to acquire by conducting a registered public offering ("Offering") of
tracking stock intended to track and reflect the separate economic performance of the assets to be attributed to the Vernon Davis Brand, unless such condition is otherwise waived by Fantex. If the
Offering is not successful the Brand Contract is not expected to be effective and in such case Fantex will not have rights to collect any future cash receipts under the Brand Contract.
These
Statements of Cash Receipts from Included Contracts were prepared from the historical records of the Contract Party and are not intended to be a complete presentation of the
Contract Party's cash receipts. Cash receipts will only be earned by Fantex under the Brand Contract subsequent to the effective date of the Brand Contract. In the event the Contract Party does not
receive cash, or other considerations no amounts are due to Fantex. No other considerations were received under the
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Notes to Statements of Cash Receipts from Included Contracts Subject to the Brand Agreement between
Fantex, Inc. and Vernon Davis and his affiliate The Duke Marketing, LLC dated October 30, 2013 (Continued)
Note 1. Basis of Presentation (Continued)
included
contracts for the years ended December 31, 2013 or 2012. The Statements of Cash Receipts from Included Contracts are presented in accordance with accounting principles generally
accepted in the United States of America. Certain prior period amounts have been presented separately to reflect current period presentation.
Note 2. Summary of Significant Accounting Policies
Contractual National Football League (NFL) player receipts
—These receipts are recorded based on the cash received by the Contract Party for being on
the roster for NFL games, paid on a bi-weekly basis throughout the season. Other receipts such as being on the roster for playoff and Pro Bowl games are also included.
Contractual NFL signing bonus receipts
—These receipts are recorded based on the cash received for the signing of the Contract Party's NFL contract,
paid on multiple dates as set forth in the NFL contract.
Contractual NFL post season roster incentive receipts
—These receipts are recorded based on the cash received for participation in post season games,
including play-offs and the NFL Pro Bowl.
Contractual NFL player performance incentives receipts
—These receipts are recorded based on the cash received from various incentives included in the
Contract Party's NFL contract such as roster bonus and off-season workout bonus. The roster bonus is $25,000 for each regular season game the Contract Party is on the active roster, paid on a
bi-weekly basis throughout the season, up to a maximum bonus of $400,000 in any season during the NFL contract period. The off-season workout bonus is $200,000 paid in a lump sum amount if
Mr. Davis participates in at least 90% of the club's off season conditioning program sessions.
Receipts from other included contracts
—These receipts are recorded based on the cash, or other considerations received from the Contract Party's other
contracts subject to the Brand Contract, such as endorsements and cash received from NFL Players, Inc. for licensing the image and likeness of the Contract Party.
Included Contracts
—Included contracts are those that are effective upon the date that the Brand Contract was executed by Fantex and the Contract Party
and that are included in the Brand Contract. For contracts that existed at the signing on October 30, 2013 of the Brand Contract that are renewals of previous contracts with the same
counterparty, those prior contracts, which relate to periods prior to the signing of the Brand Contract, have been considered included contracts.
Note 3. Subsequent events
Fantex has evaluated activity after December 31, 2013 until the date of issuance of the Statements of Cash Receipts from Included Contracts on February 28, 2014, and Fantex
is not aware of any events that have occurred subsequent to December 31, 2013 that would require adjustments to or disclosures in the Statements of Cash Receipts from Included Contracts.
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INDEX TO STATEMENTS OF CASH RECEIPTS FROM INCLUDED CONTRACTS
Report of Independent Registered Public Accounting Firm
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Statements of Cash Receipts from Included Contracts for years ended December 31, 2013 and
2012
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Notes to Statements of Cash Receipts from Included Contracts
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The
accompanying Statements of Cash Receipts from Included Contracts Subject to the Brand Agreement between Fantex, Inc. ("Fantex") and Arian Foster and his affiliate The Ugly
Duck, LLC (together, the "Contract Party") dated February 28, 2013 (the "Brand Contract"), present the cash or other considerations received by the Contract Party from included contracts
subject to the Brand Contract for the years ended December 31, 2013 and 2012 ("Statements of Cash Receipts from Included Contracts").
These
Statements of Cash Receipts from Included Contracts reflect the historical cash receipts of the Contract Party that would have been subject to the Brand Contract with Fantex had
the brand contract been in place beginning January 1, 2012. The Statements of Cash Receipts from Included Contracts reflect the gross amount received by the Contract Party subject to the Brand
Contract. Had the brand contract been in place beginning January 1, 2012, and subject to the following consideration regarding expired contracts, Fantex would have been entitled to receive 20%
of the gross amount received by the Contract Party. The Statements of Cash Receipts from Included Contracts do not reflect earnings of the Contract Party under contracts that had expired and not been
renewed as of the signing date of the Brand Contract, as it is not possible to determine if the Contract Party would have excluded these contracts from the Brand Contract. The amounts reflected in the
Statements of Cash Receipts from
Included Contracts are not necessarily indicative of future cash receipts that will be subject to the Brand Contract.
Investors
in our Fantex Series Arian Foster are investing in Fantex and not in the Brand Contract or Arian Foster. However, Fantex Series Arian Foster is intended to track and reflect
the separate economic performance of the assets to be attributed to the Arian Foster Brand. Only Fantex will have rights under the Brand Contract and recourse against Arian Foster.
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Report of Independent Registered Public Accounting Firm
The
Board of Directors and Stockholder
Fantex, Inc.:
We
have audited the accompanying Statements of Cash Receipts from Included Contracts Subject to the Brand Agreement between Fantex, Inc. ("Fantex") and Arian Foster and his
affiliate The Ugly Duck, LLC (together, "the Contract Party") dated February 28, 2013 (the "Brand Contract"), for the years ended December 31, 2013 and 2012 ("Statements of Cash
Receipts from Included Contracts"). These Statements of Cash Receipts from Included Contracts are the responsibility of Fantex's management. Our responsibility is to express an opinion on these
Statements of Cash Receipts from Included Contracts based on our audits.
We
conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the Statements of Cash Receipts from Included Contracts are free of material misstatement. Fantex is not required to have, nor were we engaged to perform, an
audit of its internal control over financial reporting as it relates to the Statements of Cash Receipts from Included Contracts. Our audits included consideration of internal control over financial
reporting as it relates to the Statements of Cash Receipts from Included Contracts as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of Fantex's internal control over financial reporting as it relates to the Statements of Cash Receipts from Included Contracts. Accordingly, we express no
such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the Statements of Cash Receipts from Included Contracts, assessing the accounting
principles used and significant estimates made by management, as well as evaluating the overall presentation of the Statements of Cash Receipts from Included Contracts. We believe that our audits
provide a reasonable basis for our opinion.
The
accompanying Statements of Cash Receipts from Included Contracts were prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission
for inclusion in a Registration Statement on Form S-1 of Fantex. As discussed in Note 1 to the Statements of Cash Receipts from Included Contracts, the statements are not intended to be
a complete presentation of the Contract Party's cash receipts. Further, Fantex's interest in the Contract Party cash receipts from included contracts, as defined in Note 2 to the Statements of
Cash Receipts from Included Contracts, will commence upon the effective date of the Brand Contract, which has not yet occurred.
In
our opinion, the Statements of Cash Receipts from Included Contracts referred to above present fairly, in all material respects, the cash receipts from included contracts subject to
the Brand Contract for the years ended December 31, 2013 and 2012, in accordance with accounting principles generally accepted in the United States of America.
/s/
Deloitte & Touche LLP
San
Francisco, California
February 28, 2014
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Statements of Cash Receipts from Included Contracts Subject to the Brand Agreement between
Fantex, Inc. and
Arian Foster and his affiliate The Ugly Duck, LLC
dated February 28, 2013
(Amounts in thousands)
Year Ended
December 31,
2012
2013
RECEIPTS FROM INCLUDED CONTRACTS SUBJECT TO THE BRAND CONTRACT
Contractual National Football League (NFL) player receipts
4,540
5,248
Contractual NFL player signing bonus receipts
6,250
—
Contractual NFL post season roster incentive receipts
—
69
Contractual NFL player performance incentives receipts
406
344
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​
​
​
​
Total receipts from NFL player contract
11,196
5,661
Receipts from other included contracts
482
1,066
TOTAL RECEIPTS FROM INCLUDED CONTRACTS SUBJECT TO THE BRAND CONTRACT
11,678
6,727
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The notes are an integral part of these statements
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Notes to Statements of Cash Receipts from Included Contracts Subject to the Brand Agreement between
Fantex, Inc. and Arian Foster and his affiliate The Ugly Duck, LLC dated
February 28, 2013
Note 1. Basis of Presentation
The accompanying Statements of Cash Receipts from Included Contracts Subject to the Brand Agreement between Fantex, Inc. ("Fantex") and Arian Foster and his affiliate The Ugly
Duck, LLC (together, the "Contract Party") dated February 28, 2013 (the "Brand Contract"), present the cash or other considerations received by the Contract Party from included contracts
(see Note 2) subject to the Brand Contract for the years ended December 31, 2013 and 2012 ("Statements of Cash Receipts from Included Contracts").
The
Brand Contract will entitle Fantex to 20% of the Contract Party's cash or other considerations received from included contracts from the effective date of the Brand Contract and cash
or other considerations received from future contracts resulting from certain activities of the Contract Party. These certain activities, defined under the terms of the Brand Contract as the "Field,"
include activities in connection with being a football player, broadcasting, coaching, motion pictures, television, radio, music, literary, talent engagements, personal appearances, public appearances
in places of amusement and entertainment, records and recording, publications, and the use of Contract Party's name, voice, likeness, biography or talents for purposes of advertising and trade,
including without limitation sponsorships, endorsements and appearances, and any other activities in which Contract Party uses its name, likeness or reputation to generate cash or other considerations
received, unless such activities are specifically excluded by the Brand Contract. In the event that there is any ambiguity as to whether an activity is in the Field, Fantex and the Contract party
shall discuss in good faith to consider whether such activity is of the type typically performed by the Contract Party in the principal business (such activities may include sports casting, coaching,
acting as spokesperson, etc.). If a resolution is not reached within 30 days from the initial discussions Fantex or the Contract Party may remit the matter to arbitration.
These
Statements of Cash Receipts from Included Contracts reflect the historical cash receipts of the Contract Party that would have been subject to the Brand Contract with Fantex had
the brand contract been in place beginning January 1, 2012. The Statements of Cash Receipts from Included Contracts
reflect the gross amount received by the Contract Party subject to the Brand Contract. Had the brand contract been in place beginning January 1, 2012, and subject to the following consideration
regarding expired contracts, Fantex would have been entitled to receive 20% of the gross amount received by the Contract Party. The Statements of Cash Receipts from Included Contracts do not reflect
earnings of the Contract Party under contracts that had expired and not been renewed as of the signing date of the Brand Contract, as it is not possible to determine if the Contract Party would have
excluded these contracts from the Brand Contract.
The
Statement of Cash Receipts from Included Contracts includes cash receipts related to the signing bonus of the Contract Party with the Houston Texans prior to the signing of the Brand
Contract but not the payment made subsequent to the signing. The payment of the signing bonus was included in the currently existing contract between the Contract Party and the Houston Texans (the
"Texans Contract"), and not part of a previously expired contract. The Texans Contract provided for the signing bonus in four separate payments. The final payment of $6.25 million, made
subsequent to the signing of the Brand Contract, was specifically excluded from the Brand Contract. Therefore, as the Texans Contract was not expired and the only amount pertaining to the Texans
Contract that was specifically excluded was the final payment of the signing bonus, the final payment of the signing bonus has been excluded from the Statement of Cash Receipts from Included
Contracts. Future contracts with teams in the National Football League that include signing bonuses will be subject to the Brand Contract.
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Notes to Statements of Cash Receipts from Included Contracts Subject to the Brand Agreement between
Fantex, Inc. and Arian Foster and his affiliate The Ugly Duck, LLC dated February 28, 2013 (Continued)
Note 1. Basis of Presentation (Continued)
The
effectiveness of the Brand Contract is subject to the successful completion of the initial public offering (IPO) of the Fantex Series Arian Foster common stock, unless such condition
is otherwise waived by Fantex. The effective date of the Brand Contract is expected to occur within 30 days of the completion of the IPO. If the IPO is not successful the Brand Contract is not
expected to be effective and in such case Fantex will not have rights to collect any future cash receipts under the Brand Contract.
These
Statements of Cash Receipts from Included Contracts were prepared from the historical records of the Contract Party and are not intended to be a complete presentation of the
Contract Party's cash receipts. Cash receipts will only be earned by Fantex under the Brand Contract subsequent to the effective date of the Brand Contract. In the event the Contract Party does not
receive cash, or other considerations no amounts are due to Fantex. No other considerations were received under the included contracts for the years ended December 31, 2013 or 2012. The
Statements of Cash Receipts from Included Contracts are presented in accordance with accounting principles generally accepted in the United States of America. Certain prior period amounts have been
presented separately to reflect current period presentation.
Note 2. Summary of Significant Accounting Policies
Contractual National Football League (NFL) player receipts
—These receipts are recorded based on the cash received by the Contract Party for being on
the roster for NFL games, paid on a bi-weekly basis throughout the season.
Contractual NFL signing bonus receipts
—These receipts are recorded based on the cash received for the signing of the Contract Party's NFL contract,
paid on multiple dates as set forth in the NFL contract.
Contractual NFL post season roster incentive receipts
—These receipts are recorded based on the cash received for participation in post season games,
including play-offs and the NFL Pro Bowl.
Contractual NFL player performance incentives receipts
—These receipts are recorded based on the cash received from the roster bonus included in the
Contract Party's NFL contract. The roster bonus is $31,250 for each regular season game the Contract Party is on the active roster, paid on a bi-weekly basis throughout the season, up to a maximum
bonus of $500,000 in any season during the NFL contract period.
Receipts from other included contracts
—These receipts are recorded based on the cash, or other considerations received from the Contract Party's other
contracts subject to the Brand Contract, such as endorsements and cash received from NFL Players, Inc. for licensing the image and likeness of the Contract Party.
Included Contracts
—Included contracts are those that are effective upon the date that the Brand Contract was executed by Fantex and the Contract Party
and that are included in the Brand Contract. For contracts that existed at the signing on February 28, 2013 of the Brand Contract that are renewals of previous contracts with the same
counterparty, those prior contracts, which relate to periods prior to the signing of the Brand Contract, have been considered included contracts.
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Notes to Statements of Cash Receipts from Included Contracts Subject to the Brand Agreement between
Fantex, Inc. and Arian Foster and his affiliate The Ugly Duck, LLC dated February 28, 2013 (Continued)
Note 3. Subsequent events
Fantex has evaluated activity after December 31, 2013 until the date of issuance of the Statements of Cash Receipts from Included Contracts on February 28, 2014, and other
than the events described above, Fantex is not aware of any events that have occurred subsequent to December 31, 2013 that would require adjustments to or disclosures in the Statements of Cash
Receipts from Included Contracts.
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[ALTERNATE PAGE FOR MARKET-MAKING PROSPECTUS]
Fantex, Inc.
Fantex Series EJ Manuel Convertible Tracking Stock
and
Shares of Platform Common Stock issuable upon conversion of
the Fantex Series EJ Manuel Convertible Tracking Stock
This prospectus has been prepared by Fantex and may be used by Fantex Brokerage Services, LLC, or FBS, in connection with offers and sales
of these securities in secondary market transactions in these securities, including market-making transactions as may be effected from time to time. However, FBS is not obligated to make a market in
the Fantex Series EJ Manuel Convertible Tracking Stock, which we refer to as Fantex Series EJ Manuel, and if it does so, it may discontinue any market-making activities at any time
without notice, in its sole discretion. To the extent FBS chooses to act as a market-maker, it may act as principal or agent in such transactions, including as agent for the counterparty when acting
as principal or as agent for both counterparties, and may receive compensation in the form of discounts and commissions, including from both counterparties, when it acts as agent for both. Such sales
will be made at prevailing market prices at the time of sale, at prices related thereto or at negotiated prices. Fantex will not receive any proceeds from such secondary market offers and sales. All
such transactions with respect to these securities that are made pursuant to a prospectus after the effectiveness of the registration statement of which this prospectus is a part are being made solely
pursuant to this prospectus, as it may be supplemented from time to time.
Our
tracking stock brands are not separate legal entities and cannot issue securities. Instead, our Fantex Series EJ Manuel is a tracking stock. Each of our tracking stocks,
including our Fantex Series EJ Manuel and any tracking stock that we may create in the future, is intended to track and reflect the separate economic performance of a specific brand contract we
have signed with an athlete, entertainer or other high profile individual, each of which we refer to as a tracking stock brand. However, holders of shares of any of our tracking stocks will have no
direct investment in the associated tracking stock brand, brand contract or individual. Rather, investors in any of our tracking stocks, including our Fantex Series EJ Manuel, will be our
common stockholders and an investment in a tracking stock will represent an ownership interest in our company as a whole, which will expose holders to additional risks associated with any individual
tracking stock that exists at the time of any investment or that we may establish and issue in the future. EJ Manuel and his affiliated persons are, and we expect they will continue to be, individuals
and legal entities that are separate and independent from us, with separate ownership, management and operations. The issuance of Fantex Series EJ Manuel will not result in an actual transfer
of our assets or the creation of a separate legal entity.
The
platform common stock is intended to track and reflect the economic performance of all of our tracking stock brands. The EJ Manuel Brand, tracked by the Fantex
Series EJ Manuel, is our first and only tracking stock brand to date. We would attribute to the EJ Manuel Brand and the platform common stock certain assets and expenses, including in
certain cases expenses related to other series of common stock of Fantex that may be issued from time to time in the future. Our board of directors may convert the shares of Fantex Series EJ
Manuel into platform common stock at any time following the two-year anniversary of the filing of a certificate of designation creating Fantex Series EJ Manuel. For additional information
please see "Management and Attribution Policies" and "Description of Capital Stock" herein.
Holders
of shares of our platform common stock and any of our tracking stocks, including shares of our Fantex Series EJ Manuel are each entitled to one vote per share of such
common stock. Following the consummation of this offering, Fantex Holdings, our parent company, will hold all 100,000,000 outstanding shares of our platform common stock, and thus will hold
substantially all of the voting power of our outstanding common stock.
We are an "emerging growth company," as that term is used in the Jumpstart Our Business Startups Act of 2012, and, as such, are subject to reduced public company
reporting requirements. See "Prospectus Summary—Implications of Being an Emerging Growth Company."
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
Shares
of our Fantex Series EJ Manuel are new securities; there may not be an established market for them. We have not applied for a listing of our Fantex Series EJ Manuel
on any securities exchange or for their inclusion in any established automated dealer quotation system. Our Fantex Series EJ Manuel is offered only through the website of our affiliated
broker-dealer, FBS. Accordingly, we cannot assure you as to the development or liquidity of any market for our Fantex Series EJ Manuel. Currently, there is no trading symbol assigned and there
can be no assurance that we will ever be granted a trading symbol on the OTC Bulletin Board or any other quotation system or exchange. However, shares of our Fantex Series EJ Manuel will be
issued in electronic form and will be listed exclusively on the FBS alternative trading system under the symbol "Fantex EJ Manuel."
Investors
will be required to satisfy the suitability requirements described in the prospectus in order to invest in Fantex Series EJ Manuel.
This offering is highly speculative and the securities involve a high degree of risk. Investing in our Fantex
Series EJ Manuel should be considered only by persons who can afford the loss of their entire investment. See "Risk Factors" beginning on page 35.
According to the NFL Players Association, the average career of a National Football League, or NFL, player lasts about 3 years and according to the NFL
Management Council the average career length for (i) an NFL rookie that makes an opening day NFL roster is 6 years, (ii) an NFL player that is a 1st round draft pick is
9.3 years and (iii) an NFL player that is selected for or plays in at least one Pro Bowl is 11.7 years. We assume that EJ Manuel's career will be 10 years. We have
conducted a valuation analysis and determined that the present value of the brand income that EJ Manuel may earn is approximately $50 million of which we are entitled to 10% under our brand
contract with EJ Manuel. We made a number of assumptions to determine the value of the brand income. We expect to attribute 95% of the income to which we are entitled under our brand contract with EJ
Manuel to the EJ Manuel Brand, while the remaining 5% will be attributed to the platform common stock. If any of our assumptions are materially incorrect, including our assumptions regarding the
projected future earnings of EJ Manuel in football, football related activities and other brand income, the actual value of the brand income could be significantly less than $50 million, 96.3%
of which is estimated to be derived from anticipated future contracts that do not exist as of the date of this prospectus. In such case, the return on investment or rate of return on an investment in
Fantex Series EJ Manuel could be significantly below an investor's expectation.
FANTEX BROKERAGE SERVICES, LLC
The date of this prospectus is                        , 2014.
Table of Contents
[ALTERNATE PAGE FOR MARKET-MAKING PROSPECTUS]
USE OF PROCEEDS
This prospectus is being delivered in connection with the sale of the Fantex Series EJ Manuel by FBS in market-making
transactions. We will not receive any of the proceeds from these transactions.
PLAN OF DISTRIBUTION
This prospectus has been prepared for use by FBS in connection with offers and sales of the Fantex Series EJ Manuel in
market-making transactions effected from time to time. FBS may act as principal or agent in such transactions. Such sales will be made at prevailing market prices at the time of sale, at prices
related thereto or at negotiated prices. We will not receive any of the proceeds from such sales.
We
are an affiliate of FBS. In connection with the initial public offering of the Fantex Series EJ Manuel, we agreed to file a "market-making" prospectus in order to enable
FBS to engage in market-making activities for the Fantex Series EJ Manuel. We have agreed to indemnify FBS against certain liabilities, including liabilities under the Securities Act, and to
contribute payments which FBS might be required to make in connection with the market- making activities.
FBS
may also act as a market-maker in the secondary market from time to time, but it is not obligated to make a market in the Fantex Series EJ Manuel and may discontinue any
market-making at any time without notice, in its sole discretion. FBS is a member of FINRA and may participate in distributions of the Fantex Series EJ Manuel.
A-2
523,700 Shares
Fantex Series EJ Manuel Convertible Tracking Stock
and
Shares of Platform Common Stock issuable upon conversion of
the Fantex Series EJ Manuel Convertible Tracking Stock
PROSPECTUS
, 2014
FANTEX BROKERAGE SERVICES, LLC
STIFEL
Table of Contents
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13.
Other Expenses of Issuance and Distribution
The following table indicates the expenses to be incurred in connection with the offering described in this Registration Statement, all
of which will be paid by Fantex Holdings, Inc. and will be allocated to Fantex, Inc. for financial statement purposes. All amounts are estimated except the Securities and Exchange
Commission registration fee.
Amount
Securities and Exchange Commission registration fee
$
675
FINRA filing fee
*
Accountants' fees and expenses
*
Legal fees and expenses
*
Blue Sky fees and expenses
*
Print and engraving expenses
*
Miscellaneous expenses
*
Total
*
*
to
be filed by amendment.
Item 14.
Indemnification of Directors and Officers
Our amended and restated certificate of incorporation provides that the liability of the directors of Fantex for monetary damages shall
be eliminated to the fullest extent permitted under applicable law.
Section 102
of the General Corporation Law of the State of Delaware permits a corporation to eliminate the personal liability of directors of a corporation to the corporation or
its stockholders for monetary damages for a breach of fiduciary duty as a director, except where the director breached his duty of loyalty, failed to act in good faith, engaged in intentional
misconduct or knowingly violated a law, authorized the payment of a dividend or approved a stock repurchase in violation of Delaware corporate law or obtained an improper personal benefit.
Section 204
of the California General Corporation Law, to the extent it is applicable to Fantex, permits a corporation to eliminate the personal liability of a director for
monetary damages in an action brought by or in the right of the corporation for breach of a director's duties to the corporation and its shareholders, except that a provision may not eliminate or
limit the liability of directors (i) for acts or omissions that involve intentional misconduct or a knowing and culpable violation of law, (ii) for acts or omissions that a director
believes to be contrary to the best interests of the corporation or its shareholders or that involve the absence of good faith on the part of the director, (iii) for any transaction from which
a director derived an improper personal benefit, (iv) for acts or omissions that show a reckless disregard for the director's duty to the corporation or its shareholders in circumstances in
which the director was aware, or should have been aware, in the ordinary course of performing the director's duties, of a risk of serious injury to the corporation or its shareholders, (v) for
acts or omissions that constitute an unexcused pattern of inattention that amounts to an abdication of the director's duty to the corporation or its shareholders, (vi) for contracts or
transactions between the director and the corporation or (vii) for approving a distribution, loan or guaranty in violation of California corporate law.
Section 145
of the General Corporation Law of the State of Delaware provides that a corporation has the power to indemnify a director, officer, employee or agent of the
corporation, or a person serving at the request of the corporation for another corporation, partnership, joint venture, trust or
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other
enterprise in related capacities against expenses (including attorneys' fees), judgments, fines and amounts paid in settlements actually and reasonably incurred by the person in connection with
an action, suit or proceeding to which he was or is a party or is threatened to be made a party to any threatened, ending or completed action, suit or proceeding by reason of such position, if such
person acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, in any criminal action or proceeding, had no reasonable cause
to believe his conduct was unlawful, except that, in the case of actions brought by or in the right of the corporation, no indemnification shall be made with respect to any claim, issue or matter as
to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or other adjudicating court determines that, despite the
adjudication of liability but in view of all of the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other
court shall deem proper.
Section 317
of the California General Corporation Law likewise generally authorizes a court to award, or a corporation's board of directors to grant, indemnity to directors and
officers who are parties or are threatened to be made parties to any proceeding (with certain similar exceptions) by reason of the fact that the person is or was an agent of the corporation, against
expenses, judgments, fines, settlements and other amounts actually and reasonably incurred in connection with the proceeding if that person acted in good faith and in a manner the person reasonably
believed to be in the best interests of the corporation.
Our
amended and restated certificate of incorporation will provide for the indemnification of and advancement of expenses to directors and officers to the fullest extent permissible
under Delaware law.
Our
amended and restated bylaws provide for the indemnification of and advancement of expenses to officers, directors and third parties acting on our behalf if such persons act in good
faith and in a manner reasonably believed to be in and not opposed to our best interest, and, with respect to any criminal action or proceeding, such indemnified party had no reason to believe his or
her conduct was unlawful.
We
are entering into indemnification agreements with each of its directors and executive officers, in addition to the indemnification provisions provided for in its charter documents,
and we intend to enter into indemnification agreements with any new directors and executive officers in the future.
We
maintain a general liability insurance policy that covers certain liabilities of our directors and officers arising out of claims based on acts or omissions in their capacities as
directors or officers.
Item 15.
Recent Sales of Unregistered Securities
Set forth below is information regarding shares of common stock issued, warrants exercisable for common stock issued, convertible notes
issued and options granted by us since our incorporation. Also included is the consideration, if any, received by us for such securities and information relating to the section of the Securities Act,
or rule of the Securities and Exchange Commission, under which exemption from registration was claimed.
(a)    Issuances of Capital Stock, Warrants and Promissory Notes
On September 14, 2012, we issued an aggregate of 100,000,000 shares of our common stock to our parent, Fantex Holdings, at a
price per share of $0.000001 for an aggregate purchase price of $100 (after giving effect to a 1,000,000 for 1 stock split of our common stock effective as of November 1, 2013).
(b)    Stock Options and Restricted Stock
None.
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Item 16.
Exhibits
The exhibits to the registration statement are listed in the Exhibit Index to this registration statement and are incorporated by
reference herein.
Item 17.
Undertakings
Insofar as indemnification for liabilities arising under the Securities Act, as amended, may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
The
undersigned Registrant hereby undertakes:
(a)   To
file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i)  To
include any prospectus required by section 10(a)(3) of the Securities Act of 1933;
(ii)  To
reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may
be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and
(iii)  To
include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such
information in the registration statement.
(b)   That,
for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(c)   To
remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(d)   That,
for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities: The
undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the
securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the
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undersigned
registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(i)  Any
preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
(ii)  Any
free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
(iii)  The
portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided
by or on behalf of the undersigned registrant; and
(iv)  Any
other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
(e)   That
the Registrant will provide to the underwriters at the closing, as specified in the underwriting agreement, certificates in such denominations and registered in
such names as required by the underwriters to permit prompt delivery to each purchaser.
(f)    That,
for purposes of determining any liability under the Securities Act of 1933, as amended, the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in the form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities
Act of 1933, as amended, shall be deemed to be part of this registration statement as of the time it was declared effective.
(g)   That,
for the purpose of determining any liability under the Securities Act of 1933, as amended, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
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SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly caused this Registration Statement on Form S-1 to be
signed on its behalf by the undersigned, thereunto duly authorized, in San Francisco, California, on February 28, 2014.
FANTEX, INC.
By:
/s/
CORNELL "BUCK" FRENCH
Cornell "Buck" French,
Chief Executive Officer
POWERS OF ATTORNEY
Each of the undersigned directors and officers of Fantex, Inc. hereby constitutes and appoints each of Cornell "Buck" French and
David Mullin his or her true and lawful attorneys-in-fact and agents with full power of substitution and resubstitution, for him or her and his or her name, place and stead, in any and all capacities,
to execute any and all amendments (including post-effective amendments) to this registration statement, to sign any registration statement related to this registration statement filed pursuant to
Rule 462(b) of the Securities Act, and to cause the same to be filed with all exhibits thereto, and all documents in connection therewith, with the Securities and Exchange Commission, granting
unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and desirable to be done in and about the premises as fully
and to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all acts and things that said attorneys-in-fact and agents or any of them, or their or
his or her substitute or substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant
to the requirements of the Securities Act, this Registration Statement on Form S-1 has been signed by the following persons in the capacities and on the dates indicated.
Signature
Title
/s/
CORNELL "BUCK" FRENCH
Cornell "Buck" French
Chief Executive Officer and Director (Principal Executive Officer)
February 28, 2014
/s/ DAVID MULLIN
David Mullin
Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
February 28, 2014
/s/ DAVID BEIRNE
David Beirne
Director
February 28, 2014
/s/ JOHN COSTELLO
John Costello
Director
February 28, 2014
/s/ C. WILLIAM HOSLER
C. William Hosler
Director
February 28, 2014
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Table of Contents
Signature
Title
/s/ RONALD MACHTLEY
Ronald Machtley
Director
February 28, 2014
/s/ SHAHAN SOGHIKIAN
Shahan Soghikian
Director
February 28, 2014
/s/ TERDEMA USSERY
Terdema Ussery
Director
February 28, 2014
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Table of Contents
EXHIBIT INDEX
Exhibit
Number
Description
1.1
*
Form of Underwriting Agreement
3.1
†
Amended and Restated Certificate of Incorporation of Fantex, Inc.
3.2
**
Bylaws of Fantex, Inc., currently in effect
3.3
**
Form of Amended and Restated Bylaws of Fantex, Inc., to be in effect prior to the consummation of this offering
3.4
Form of Certificate of Designation for Fantex Series Arian Foster
3.5
Form of Certificate of Designation for Fantex Series Vernon Davis
3.6
Form of Certificate of Designation for Fantex Series EJ Manuel
5.1
*
Opinion of Latham & Watkins LLP
8.1
*
Opinion of Latham & Watkins LLP
10.1
**
Management Agreement, dated July 10, 2013, by and between Fantex, Inc. and Fantex Holdings, Inc.
10.2
Brand Agreement effective as of February 14, 2014 by and between Erik R. Manuel, Jr., Kire Enterprises LLC and Fantex, Inc.
10.3
NFL Player Contract dated as of June 14, 2013, by and between Erik "EJ." Manuel and Buffalo Bills, Inc.
10.4
†
Brand Agreement effective as of October 30, 2013, by and between Vernon Davis, The Duke Marketing LLC and Fantex, Inc.
10.5
†
NFL Player Contract dated as of March 1, 2010, by and between Vernon Davis and San Francisco Forty Niners, Limited
10.6
**
Second Amended and Restated Brand Agreement effective as of February 28, 2013, by and between Arian Foster, The Ugly Duck, LLC and Fantex, Inc.
10.7
**
NFL Player Contract dated as of March 6, 2012, by and between Arian Foster and Houston NFL Holdings, LP
10.8
*
Escrow Agreement dated as of by and between and Fantex, Inc.
10.9
**+
Form of Indemnification Agreement between Fantex, Inc. and each of its directors, officers and certain employees, to be in effect before the completion of the offering.
10.10
**+
Employment Agreement, dated October 16, 2013, by and between Fantex Holdings, Inc., Fantex, Inc. and Cornell "Buck" French
10.11
**+
Employment Agreement, dated October 16, 2013, by and between Fantex Holdings, Inc., Fantex, Inc. and David Mullin
10.12a
**+
Fantex, Inc. 2013 Equity Incentive Award Plan
10.12b
**+
Form of Stock Option Agreement under the 2013 Equity Incentive Award Plan
10.12c
**+
Form of Restricted Stock Award Agreement under the 2013 Equity Incentive Award Plan
23.1
Consent of Deloitte & Touche LLP
23.2
Consent of Deloitte & Touche LLP
23.3
Consent of Deloitte & Touche LLP
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Exhibit
Number
Description
23.4
Consent of Deloitte & Touche LLP
23.5
*
Consent of Latham & Watkins LLP (included in Exhibits 5.1 and 8.1)
24.1
Powers of Attorney (included on the signature page)
*
To
be filed by amendment.
†
Previously
filed by Fantex, Inc. as an exhibit to its Registration Statement on Form S-1, as amended (File No. 333-192476),
as filed with the Securities and Exchange Commission on November 21, 2013.
**
Previously
filed by Fantex, Inc. as an exhibit to its Registration Statement on Form S-1, as amended (File No. 333-191772), as filed
with the Securities and Exchange Commission on October 17, 2013.
+
Indicates
a management contract or compensatory plan.