UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 1-U

CURRENT REPORT

Pursuant to Regulation A of the Securities Act of 1933

August 31, 2023

Date of Report: (Date of earliest event reported)

225 Liberty Street, 29th Floor, New York, NY 10281

(Full mailing address of principal executive offices)

(203) 518-5172

(Issuer’s telephone number, including area code)

www.masterworks.com

(Issuer’s website)

Series 325 Class A Ordinary Shares; Series 327 Class A Ordinary Shares; Series 330 Class A Ordinary Shares;
Series 332 Class A Ordinary Shares; Series 334 Class A Ordinary Shares; Series 337 Class A
Ordinary Shares; Series 349 Class A Ordinary Shares; Series 371 Class A Ordinary Shares; Series 373 Class
A Ordinary Shares; Series 375 Class A Ordinary Shares

(Securities issued pursuant to Regulation A)

Item 9. Other Events

On August 31, 2023, Masterworks Foundry, LLC, as sole member of each of Series 327, Series 337, Series 373 and Series 375 (the “Updated Series”), together with the Board of Managers of Mastworks Vault 3, LLC (the “Company”), executed an Amended and Restated Series Designation for each of the Updated Series, which amends each prior Series Designation for each Updates Series to eliminate the vesting provisions relating to the SPC Preferred shares (as defined therein). As of the date hereof, none of the Updated Series has conducted a closing and no Class A shares of the Updated Series have been issued. A copy of the Form of Amended and Restated Series Designation for each Updated Series is attached to this Form 1-U as Exhibit 2.1.

Upon the first closing of each Updated Series, such Updated Series and relevant segregated portfolio will execute joinders to the Management Services Agreement by and among Masterworks Administrative Services, LLC, the Company, on behalf of its series and Masterworks Cayman, SPC, on behalf of its segregated portfolios. A copy of the Form of Joinder for each Updated Series is attached to this Form 1-U as Exhibit 6.1.

In addition, the Company has made minor changes to the Form of Designation of SPC Ordinary Shares and SPC Preferred Shares previously filed as Exhibit 6.2 to the Company’s Offering Statement on Form 1-A consistent with the events described above. A copy of the revised Form of Designation of SPC Ordinary Shares and SPC Preferred Shares is attached to this Form 1-U as Exhibit 6.2.

Safe Harbor Statement

This Current Report on Form 1-U contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934. You can identify these forward-looking statements by the use of words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “projects,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties, including those described under the section entitled “Risk Factors” in our most recent Offering Circular filed with the Securities and Exchange Commission (“SEC”), as such factors may be updated from time to time in our periodic filings and offering circular supplements filed with the SEC, which are accessible on the SEC’s EDGAR website. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in our filings with the SEC. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.

SIGNATURES

Pursuant to the requirements of Regulation A, the issuer has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Exhibit 2.1

Form of Amended and Restated Series Designation

Amended and Restated Series Designation of

[Series Name], a series of Masterworks Vault 3, LLC

In accordance with the Amended and Restated Limited Liability Company Agreement of Masterworks Vault 3, LLC, a Delaware series limited liability company (the “Company”), dated [______] (as amended, the “Agreement”) and upon the execution of this Amended and Restated Series Designation by Masterworks Foundry, LLC, the sole member of series [         ] of the Company (“Series [___]”) as of the date hereof and by the Board of the Company , this Series Designation shall be attached to, and deemed incorporated in its entirety into, the Agreement as the “[Series Name] A&R Designation Exhibit.” In addition, as of the Effective Date of Establishment, Masterworks Foundry, LLC has issued 1,000 Class B Ordinary Shares of Series [  ], representing 100% of the membership interests in such series as of such date, in return for a capital contribution to such series of $100.

References to Sections and Articles set forth herein are references to Sections and Articles of the Agreement, as in effect as of the date hereof.

Agreed and executed as of [         ] by Masterworks Foundry, LLC and the Board of Managers of the Company:

Exhibit 6.1

JOINDER

WHEREAS, [Masterworks Vault [  ], LLC, on behalf of its Series [*] / Masterworks Cayman, SPC, on behalf of its [*] Segregated Portfolio] (the “Joining Party”) wishes to become a party to that certain Management Services Agreement, dated [         ], by and among Masterworks Administrative Services, LLC, a Delaware limited liability company, Masterworks Vault [  ], LLC, a Delaware series limited liability company, on behalf of its series, Masterworks Cayman, SPC, a Cayman Islands segregated portfolio company, on behalf of its segregated portfolios and the other parties thereto (the “Agreement”), and to avail itself of the Services (as defined in the Agreement) pursuant to the terms and conditions of the Agreement.

NOW, THEREFORE, the Joining Party hereby acknowledges and agrees that it is now signatory and party to the Agreement as of the date set forth below and is hereby entitled to the services, rights and benefits due to a [Series / Segregated Portfolio] thereunder, and is hereby bound and obligated to the duties, obligations and liabilities of a [Series / Segregated Portfolio] thereunder, provided that no provision of the Agreement relating to vesting of SPC Preferred shares set forth therein shall apply to the Joining Party. The undersigned shall not be responsible in any way for duties, obligations and liabilities of any other individual party which has executed a joinder thereto, except as noted in the Agreement.

[MASTERWORKS VAULT [  ], LLC, on behalf of its Series [*] /

MASTERWORKS CAYMAN, SPC, on behalf of its [*] Segregated Portfolio]

Address for Notices:

Masterworks Vault [  ], LLC

Attn: General Counsel

225 Liberty Street, 29th Floor,

New York, NY 10281

MASTERWORKS ADMINISTRATIVE SERVICES, LLC

Exhibit 6.2

Exhibit A to Board Resolutions of Masterworks Cayman SPC

FORM OF DESIGNATION OF [ENTITY NUMBER] SP ORDINARY SHARES

Masterworks Cayman, SPC (the “Company”) shall issue [No. of Shares] ordinary shares of [Entity Number] Segregated Portfolio (“Ordinary Shares”) to Series [Entity Number] (“Series [Entity Number]”) of Masterworks Vault [  ], LLC (“Vault [  ]”) at a purchase price of $20.00 per share or an aggregate subscription price of [Aggregate Subscription Price] in order to raise capital to pursue the investment objective and strategy of [Entity Number] Segregated Portfolio. The aggregate subscription price will be credited to [Entity Number] Segregated Portfolio and the Ordinary Shares will be issued in a single class to be called “[Entity Number] SP Ordinary Shares”. [Entity Number] SP Ordinary Shares shall be entitled to receive 100% of any amounts determined by the Board of Directors to be distributed to shareholders of [Entity Number] Segregated Portfolio, after payment of any obligations to creditors and or any distributions payable to holders of any outstanding SP Preferred Shares of [Entity Number] Segregated Portfolio outstanding, if any, at the time such distribution is paid. [Entity Number] SP Ordinary Shares shall have one vote per Ordinary Share on all matters submitted for a vote or consent to shareholders of [Entity Number] Segregated Portfolio, and in the aggregate shall represent 100% of the shareholder voting rights in [Entity Number] Segregated Portfolio, except for any voting rights afforded to the holders of SP Preferred Shares by operation of law. In the event that any Class A shares of Series [Entity Number] are issued upon conversion of Class B shares of such Series [Entity Number] and or the exchange of [Entity Number] SP Preferred Shares, the Company shall issue additional [Entity Number] SP Ordinary Shares to Series [Entity Number] as a pro rata distribution such that at all relevant times the number of outstanding [Entity Number] SP Ordinary Shares held by Series [Entity Number] shall equal the number of outstanding Class A shares for Series [Entity Number].

Except as provided herein, the terms of the [Entity Number] SP Ordinary Shares are governed by the Memorandum and Articles of Association of the Company.

Exhibit B to Board Resolutions of Masterworks Cayman SPC

FORM OF DESIGNATION OF [ENTITY NUMBER] SP PREFERRED SHARES

1. Designation, Amount. The Company shall issue non-participating preferred shares of [Entity Number] Segregated Portfolio (“SP Preferred Shares”) to Masterworks Administrative Services, LLC or its successor (“MAS”), in consideration for management and administration services rendered to Series [Entity Number] pursuant to a management services agreement by and among the Company on behalf of [Entity Number] Segregated Portfolio, MAS, Vault [     ] and the other parties thereto, dated [              ], as amended (the “Management Services Agreement”), at a rate of 1.5% of the total Shares (i.e. SP Ordinary Shares plus SP Preferred Shares) of [Entity Number] Segregated Portfolio outstanding, after giving effect to such issuance, per annum, commencing on the earliest closing date on which the offering of Series [Entity Number] of Vault [  ] is fully subscribed and at least 95% of the subscription proceeds for such offering have been received by Series [Entity Number] and ending on the date the artwork owned by Series [Entity Number] is sold. The SP Preferred Shares will be issued in a single class to be called “[Entity Number] SP Preferred Shares”.

2. Distribution Rights. The [Entity Number] SP Preferred Shares have a distribution preference of US$20.00 per share over [Entity Number] SP Ordinary Shares. The holder of [Entity Number] SP Preferred Shares is entitled to receive cash upon any distribution by [Entity Number] Segregated Portfolio to holders of share capital in an amount up to US$20 per [Entity Number] SP Preferred Share before any payment is made in respect of the SP Ordinary Shares. SP Preferred Shares shall be non-participating shares and shall have no economic rights with respect to [Entity Number] Segregated Portfolio other than the US$20 per SP Preferred Share distribution preference set forth above.

3. Issuance. The [Entity Number] SP Preferred Shares shall be subject to the compensation and expense provisions set forth in the Management Services Agreement.

4. Voting Rights. Except as may be required by applicable law, the holder of [Entity Number] SP Preferred Shares shall have no voting rights.

5. Exchange. The [Entity Number] SP Preferred Shares shall have no exchange or conversion rights, except as provided herein:

(a) Voluntary. [Entity Number] SP Preferred Shares may be exchanged at any time, in whole or in part, for Class A shares of Series [Entity Number] at an exchange rate of 1 to 1 in accordance with Section 2.04 of the Vault Amended & Restated Operating Agreement dated as of [  ] (as amended, the “Vault [  ] A&R Operating Agreement”).

(b) Automatic. If the sale of the artwork held by [Entity Number] Segregated Portfolio were to result in a distribution to the holders of Class A shares of a series of equal to or greater than $20.00 per share, 100% of the [Entity Number] SP Preferred Shares will automatically be exchanged for Class A shares of Series [Entity Number] at an exchange rate of 1 to 1 in accordance with Section 2.04 of the Vault [  ] A&R Operating Agreement prior to any distribution of funds to Class A shareholders of Series [Entity Number] and no distributions shall be made in respect of the SP Preferred Shares so exchanged.

(c) Upon any exchange pursuant to clause (a) or (b) above, the SP Preferred Shares so exchanged shall be immediately disposed of and shall no longer constitute outstanding share capital of the Company.

6. Miscellaneous.

(a) [Entity Number] SP Preferred Shares can only be issued to, transferred to, or, held by, a Masterworks affiliate.

(b) The [Entity Number] SP Preferred Shares shall be perpetual unless exchanged in accordance herewith.