UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 1−SA
 
SEMIANNUAL REPORT PURSUANT TO REGULATION A
OF THE SECURITIES ACT OF 1933
 
For the fiscal year ended June 30, 2020
 
 
Otis Collection LLC
(Exact name of issuer as specified in its charter)
 
Delaware
 
84-3316802
(State or other jurisdiction of incorporation
or organization)
 
(I.R.S. Employer Identification No.)
 
335 Madison Ave, 16th Floor, New York, NY 10017
(Full mailing address of principal executive offices)
 
201-479-4408
(Issuer’s telephone number, including area code)
1

TABLE OF CONTENTS
 
ITEM 1. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 1
ITEM 2. OTHER INFORMATION 7
ITEM 3. FINANCIAL STATEMENTS F-1
ITEM 4. EXHIBITS 8
i

SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS
The information contained in this report includes some statements that are not historical and that are considered “forward-looking statements.” Such forward-looking statements include, but are not limited to, statements regarding our development plans for our business; our strategies and business outlook; anticipated development of our company, our manager, each series of our company and the Otis Platform; and various other matters (including contingent liabilities and obligations and changes in accounting policies, standards and interpretations). These forward-looking statements express our manager’s expectations, hopes, beliefs, and intentions regarding the future. In addition, without limiting the foregoing, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipates,” “believes,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “might,” “plans,” “possible,” “potential,” “predicts,” “projects,” “seeks,” “should,” “will,” “would” and similar expressions and variations, or comparable terminology, or the negatives of any of the foregoing, may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.
The forward-looking statements contained in this report are based on current expectations and beliefs concerning future developments that are difficult to predict. Neither we nor our manager can guarantee future performance, or that future developments affecting our company, our manager or the Otis Platform will be as currently anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements.
All forward-looking statements attributable to us are expressly qualified in their entirety by these risks and uncertainties. These risks and uncertainties, along with others, are also described under the heading “Risk Factors”  included in the Offering Statement. Should one or more of these risks or uncertainties materialize, or should any of the parties’ assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. You should not place undue reliance on any forward-looking statements and should not make an investment decision based solely on these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
ii

ITEM 1.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
Since its formation in October 2019, Otis Collection LLC, a Delaware series limited liability company (which we refer to as “we,” “us,” “our” or “our company”), has been engaged primarily in acquiring and managing a collection of investment-grade art and collectibles (the “underlying assets”). Otis Wealth, Inc. is the manager of our company (our “manager”) and serves as the asset manager for the underlying assets owned by our company. We acquire the underlying assets from our manager financed through promissory notes issued to our manager, and develop the financial, offering and other materials to begin offering membership interests (“interests”) in series of our company (each, a “series”) through a mobile app-based investment platform called Otis (we refer to as the “Otis Platform”). We offer and sell interests in a number of separate individual series, and investors in any series acquire a proportional share of income and liabilities as they pertain to a particular series. The sole asset of any given series at the time of an offering is the underlying asset related to such series (plus any cash reserves for future operating expenses), and the sole liability of any given series at the time of an offering is the promissory note related to the acquisition of such underlying asset. We conduct separate closings with respect to each offering. See the offering statement filed with the Securities and Exchange Commission (the “Commission”) on Form 1-A under the Securities Act (the “Offering Statement”) for additional details regarding our current offerings.
We are considered to be a development-stage company, since we are devoting substantially all of our efforts to establishing our business and planned principal operations have only recently commenced. As such, the reported financial information herein will likely not be indicative of future operating results or operating conditions. Because of our corporate structure, we are in large part reliant on our manager and its employees to grow and support our business. There are a number of key factors that will have large potential impacts on our operating results going forward, including our manager’s ability to:
continue to source high-quality underlying assets at reasonable prices to securitize through the Otis Platform; 
market the Otis Platform and the offerings in individual series and attract investors to the Otis Platform; 
continue to develop the Otis Platform and provide the information and technology infrastructure to support the issuance of interests; and 
find operating partners to manage the collection of underlying assets at a decreasing marginal cost per asset. 
We have not yet generated any revenues and do not anticipate doing so until the second half of 2021.
Recent Developments
Acquisitions
On April 23, 2020, Series Collection Drop 001, a series of our company, entered into a First Amendment to Purchase and Sale Agreement with our manager, which amendment amended the purchase price and consideration for the acquisition of the Series Collection Drop 001 Asset from our manager set forth in that certain Purchase and Sale Agreement, dated November 22, 2019. Series Collection Drop 001 had issued a promissory note, dated November 22, 2019, to our manager as the original consideration for the asset acquisition. As replacement consideration therefor in connection with the amendment, Series Collection Drop 001 issued a promissory note, dated April 23, 2020, to our manager in the sum of $12,250, which amends and restates in its entirety, and replaces, the original note. Aside from the revised principal amount, the note remains unchanged.
1

On April 23, 2020, Series Collection Drop 003, a series of our company, entered into a First Amendment to Purchase and Sale Agreement with our manager, which amendment amended the purchase price and consideration for the acquisition of the Series Collection Drop 003 Asset from our manager set forth in that certain Purchase and Sale Agreement, dated November 25, 2019. Series Collection Drop 003 had issued a promissory note, dated November 25, 2019, to our manager as the original consideration for the asset acquisition. As replacement consideration therefor in connection with the amendment, Series Collection Drop 003 issued a promissory note, dated April 23, 2020, to our manager in the sum of $11,750, which amends and restates in its entirety, and replaces, the original note. Aside from the revised principal amount, the note remains unchanged.
Impact of Coronavirus Pandemic
In December 2019, a novel strain of coronavirus, referred to as COVID-19, was reported in Wuhan, China. COVID-19 has since spread to other countries, including the United States, and was declared a pandemic by the World Health Organization. Efforts to contain the spread of COVID-19 have intensified, and most states and localities in the United States and countries in Europe and Asia have implemented severe travel and social restrictions, including social distancing, “shelter-in-place” orders and restrictions on the types of businesses that may continue to operate. The impacts of the outbreak are unknown and rapidly evolving. Our principal office in New York State is closed, and we currently have limited access to our storage facility.
Our manager has taken steps to take care of its employees, including providing the ability for employees to work remotely for at least the remainder of 2020. Our manager has also taken precautions with regard to employee, facility and office hygiene and implemented significant travel restrictions. Our manager is also assessing business continuity plans for all business units, including ours, in the context of COVID-19. This is a rapidly evolving situation, and our manager will continue to monitor and mitigate developments affecting its workforce. Our manager has reviewed and will continue to carefully review all rules, regulations and orders and will respond accordingly.
The continued spread of COVID-19 has also led to severe disruption and volatility in the global financial markets, which could increase our cost of capital and adversely affect our liquidity and ability to access capital markets in the future. The continued spread of COVID-19 has caused an economic slowdown and may cause a recession or other unpredictable events, each of which could adversely affect our business, results of operations or financial condition. The pandemic has had, and could have a significantly greater, material adverse effect on the United States economy as a whole and in our industry in particular.
If the spread of COVID-19 cannot be slowed and, ideally, contained, our business operations could be further delayed or interrupted. We expect that government and health authorities will announce new, or extend existing, restrictions, which could require us to make further adjustments to our operations in order to comply with any such restrictions. Our manager may also experience limitations in employee resources. In addition, our operations could be disrupted if any employee of our manager is suspected of having the virus, which could require quarantine of any such employees. The duration of any business disruption cannot be reasonably estimated at this time but may materially affect our ability to operate our business and result in additional costs.
The extent to which COVID-19 may impact our results will depend on future developments, which are highly uncertain and cannot be predicted as of the date of this report, including new information that may emerge concerning the severity of the pandemic and steps taken to contain the pandemic or treat its impact, among others. Nevertheless, the pandemic; the current financial, economic and capital markets environment; and future developments in the global supply chain and other areas present material uncertainty and risk with respect to our performance, financial condition, results of operations and cash flows.
2

Further, the COVID-19 outbreak has caused unprecedented levels of global uncertainty and may impact the value of art and other collectables. We expect the COVID-19 outbreak will result in low transaction volume until confidence in the global economy is restored. The extent and duration of this disruption cannot be accurately estimated, and the art and collectibles industry may take a significant amount of time to recover. Although we intend to hold and manage all of the assets marketed on the Otis Platform for an average of three to seven years, the COVID-19 outbreak and resulting economic uncertainty may impact the value of the underlying assets, and consequently the value of the interests.
Results of Operations
Revenues
Revenues are generated at the series level. As of June 30, 2020, no series has generated any revenues. Our underlying assets are not expected to generate any revenues until the second half of 2021. 
Operating Expenses
The operating expenses incurred prior to the closing of an offering related to any of the underlying assets are being paid by our manager and recognized by our company as capital contributions and will not be reimbursed by the series. Each series will be responsible for its own operating expenses, such as storage, insurance or maintenance, beginning on the closing date of the offering for such series’ interests.
We incurred $300 in operating expenses for the six months ended June 30, 2020, all of which was attributable to accounting and audit expenses, as compared to $0 for the period from October 8, 2019 (inception) to December 31, 2019.
At the close of the respective offerings for the series, each individual series becomes responsible for operating expenses. Pre-closing operating expenses are incurred on the books of our company, and post-closing operating expenses incurred by each series with a closed offering are incurred and recorded on the books of the series. As of June 30, 2020, no series offering had closed. Our manager has agreed to pay and not be reimbursed for operating expenses incurred prior to the initial closing of each offering. See the Offering Statement for additional information regarding the payment of operating expenses.
Other Expenses
We incurred other expenses in the form of interest expenses of $734 for the six months ended June 30, 2020, as compared to $326 for the period from October 8, 2019 (inception) to December 31, 2019. The following table summarizes the interest expenses by series:
       
Series
  Six-Month Period Ended June 30, 2020
Series Collection Drop 001
 
$
207
Series Collection Drop 002
 
$
322
Series Collection Drop 003
 
$
206
TOTAL INTEREST EXPENSES
 
$
734
 
Net Loss
As a result of the cumulative effect of the foregoing factors, we generated a net loss of $1,034 for the six months ended June 30, 2020.
Liquidity and Capital Resources
3

From inception, our company and each series have financed their business activities through capital contributions to our company and individual series from our manager. Our company and each series expect to continue to have access to capital financing from our manager going forward. However, there is no obligation or assurance that our manager will provide such required capital. Until such time as the series have the capacity to generate cash flows from operations, our manager may cover any deficits through additional capital contributions or the issuance of additional interests in any individual series. In addition, parts of the proceeds of future offerings may be used to create reserves for future operating expenses for individual series at the sole discretion of our manager. There can be no assurance that our manager will continue to fund such expenses. These factors raise substantial doubt about our company’s ability to continue as a going concern for the twelve months following the date of this filing.
Cash and Cash Equivalent Balances
As of June 30, 2020, we had no cash or cash equivalents.
Subscription Receivable
Our company records membership contributions at the effective date. If the subscription is not funded upon issuance, we record a subscription receivable as an asset on the balance sheet. When subscription receivables are not received prior to the issuance of financial statements at a reporting date, the subscription receivable is reclassified as a contra account to members’ equity on the balance sheet. Each series has a minimum offering size that once met will result in the eventual successful subscription to and closing of the series offering. Subscription receivable consists of membership subscriptions received prior to June 30, 2020, for which the minimum subscription requirement was met. As of June 30, 2020, there was a subscription receivable of $45,300. The following table summarizes the subscription receivable by series:
Series
  Interests Subscribed For     Subscription Amount
Series Collection Drop 001
  518  
$
12,950
Series Collection Drop 002
  800  
$
20,000
Series Collection Drop 003
  494  
$
12,350
TOTALS
     
$
45,300
 
Promissory Notes
In connection with the acquisition of the underlying assets from our manager, we have issued promissory notes to our manager which are due within 14 business days of the final closing of the related offering (i.e., when the offering is fully funded), provided that we may prepay the notes at any time. The following table summarizes these notes outstanding by series as of June 30, 2020:
Series
  Date Issued     Principal Amount   Interest Rate(1)     Balance June 30, 2020
Series Collection Drop 001
  11/22/19  
$
12,250   7.5%  
$
12,556
Series Collection Drop 002
  11/25/19  
$
18,400   7.5%  
$
18,860
Series Collection Drop 003
  11/25/19  
$
11,750   7.5%  
$
12,044
TOTALS
     
$
42,400      
$
43,460
 
(1)
Interest is per annum, annualized over a three-month period from the date of issuance.
Plan of Operations
We plan to launch approximately 25 to 50 additional offerings in the next twelve months. The proceeds from any offerings closed during the next twelve months will be used to acquire additional investment-grade art and other collectibles.
4

We also intend to develop revenue-generating events (as described in the Offering Statement), allowing investors to enjoy the collection of art and collectibles acquired by us through events, museums and other programs, which we anticipate will enable the underlying assets to generate revenue for the applicable series to distribute dividends on a semi-annual basis at the discretion of our manager. See the Offering Statement for additional information regarding the payment of operating expenses.
We believe that the proceeds from the offerings will satisfy our cash requirements for the next six months to implement the foregoing plan of operations.
Off-Balance Sheet Arrangements
We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements.
Critical Accounting Policies and Estimates
The preparation of financial statements in conformity with GAAP requires our management to make assumptions, estimates and judgments that affect the amounts reported, including the notes thereto, and related disclosures of commitments and contingencies, if any. We have identified certain accounting policies that are significant to the preparation of our financial statements. These accounting policies are important for an understanding of our financial condition and results of operation. Critical accounting policies are those that are most important to the portrayal of our financial condition and results of operations and require management’s difficult, subjective or complex judgment, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. Certain accounting estimates are particularly sensitive because of their significance to financial statements and because of the possibility that future events affecting the estimate may differ significantly from management’s current judgments. We believe the following critical accounting policies involve the most significant estimates and judgments used in the preparation of our financial statements:
Fair Value of Financial Instruments
Financial Accounting Standards Board (“FASB”) guidance specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy are as follows:
Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 1 primarily consists of financial instruments whose value is based on quoted market prices such as exchange-traded instruments and listed equities.
Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly (e.g., quoted prices of similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active).
Level 3 - Unobservable inputs for the asset or liability. Financial instruments are considered Level 3 when their fair values are determined using pricing models, discounted cash flows or similar techniques and at least one significant model assumption or input is unobservable.
The carrying amounts reported in the balance sheets approximate their fair value.
Revenue Recognition
5

We recognize revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the fee for the arrangement is fixed or determinable and collectability is reasonably assured. Revenues are expected to be derived from the sale of each underlying asset in the associated series. As of June 30, 2020, we had recognized no revenue as there have been no sales of underlying assets in any series.
Operating Expenses
After the closing of an offering of interests, each series is responsible for its own operating expenses, including any and all fees, costs and expenses incurred in connection with the management of the underlying assets. Prior to the closing, operating expenses are borne by our manager and not reimbursed by the series. Our manager will bear its own expenses of an ordinary nature. If the operating expenses exceed the amount of revenues generated from an underlying asset and cannot be covered by any operating expense reserves on the balance sheet of such Series, our manager may pay such expenses and not seek reimbursement, loan the amount of the operating expenses to the applicable series or cause additional interests in such series to be issued.
Sourcing Fee: Our asset manager will be paid a fee as compensation for sourcing each underlying asset in an amount equal to up to 10% of the gross offering proceeds of each offering; provided that such sourcing fee may be waived by our asset manager.
Brokerage Fee: The broker of record for each offering is expected to receive a brokerage fee equal to 1% of the amount raised from outside investors through each offering. Notwithstanding the foregoing, such broker will not receive any fee on funds raised from the sale of interests to our manager. We expense brokerage costs as they are incurred.
Organizational Costs: In accordance with FASB ASC 720, organizational costs, including accounting fees, legal fees and costs of incorporation, are expensed as incurred.
See the Offering Statement for additional information.
Recently Issued Accounting Pronouncements
In May 2014, the Financial Accounting Standards Board (the “FASB”) issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). This ASU supersedes the previous revenue recognition requirements in ASC Topic 605—Revenue Recognition and most industry-specific guidance throughout the ASC. The core principle within this ASU is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration expected to be received for those goods or services. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers, which deferred the effective date for ASU 2014-09 by one year to fiscal years beginning after December 15, 2017, while providing the option to early adopt for fiscal years beginning after December 15, 2016. Transition methods under ASU 2014-09 must be through either (i) retrospective application to each prior reporting period presented or (ii) retrospective application with a cumulative effect adjustment at the date of initial application. Our company adopted this new standard effective October 8, 2019 (inception).
In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This ASU requires a lessee to recognize a right-of-use asset and a lease liability under most operating leases in its balance sheet. The ASU is effective for annual and interim periods beginning after December 15, 2020, including interim periods within those fiscal years. Early adoption is permitted. Our company is continuing to evaluate the impact of this new standard on our financial reporting and disclosures.
We do not believe that any other recently issued, but not yet effective, accounting standards could have a material effect on the accompanying consolidated financial statements. As new accounting pronouncements are issued, we will adopt those that are applicable under the circumstances.
6

ITEM 2.  OTHER INFORMATION
On August 26, 2020, Series Collection Drop 001, a series of our company, entered into an Amendment to the Escrow Agreement with North Capital Private Securities Corporation, which amendment amended the offering amount and minimum offering amount set forth in that certain Escrow Agreement, dated November 26, 2019. A copy of the amendment has been filed as Exhibit 8.1.2 to this report. 
On September 22, 2020, Series Collection Drop 003, a series of our company, entered into an Amendment to the Escrow Agreement with North Capital Private Securities Corporation, which amendment amended the offering amount and minimum offering amount set forth in that certain Escrow Agreement, dated November 26, 2019. A copy of the amendment has been filed as Exhibit 8.3.2 to this report. 
7

ITEM 3.  FINANCIAL STATEMENTS
INDEX TO FINANCIAL STATEMENTS
 
Page
Unaudited Consolidated Financial Statements
 
Consolidated Balance Sheets as of June 30, 2020 (Unaudited) and December 31, 2019 (Unaudited)
F-2
Consolidated Statements of Operations for the Six Months Ended June 30, 2020 (Unaudited) and for the Period from October 8, 2019 (Inception) to December 31, 2019 (Unaudited)
F-3
Consolidated Statements of Changes in Members’ Equity for the Six Months Ended June 30, 2020 (Unaudited) and for the Period from October 8, 2019 (Inception) to December 31, 2019 (Unaudited)
F-4
Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2020 (Unaudited) and for the Period from October 8, 2019 (Inception) to December 31, 2019 (Unaudited)
F-5
Notes to Unaudited Consolidated Financial Statements
F-6
F-1

1

OTIS COLLECTION LLC
CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2020 (UNAUDITED) AND DECEMBER 31, 2019 (UNAUDITED)
 
 
 
 
As of June 30, 2020
 
As of Dec 31, 2019
 
 
Total Consolidated (unaudited)
 
Total Consolidated
(unaudited)
ASSETS
 
 
 
 
CURRENT ASSETS
 
 
 
 
Cash and Cash Equivalents
 
$                             -
 
$                             -
Subscription Receivable
 
 45,300
 
-
TOTAL CURRENT ASSETS
 
45,300
 
-
 
 
 
 
 
OTHER ASSETS
 
 
 
 
Art and Other Collectible Assets
 
45,900
 
45,900
TOTAL OTHER ASSETS
 
45,900
 
45,900
 
 
 
 
 
TOTAL ASSETS
 
$                   91,200
 
$                   45,900
 
 
 
 
 
LIABILITIES AND MEMBERS’ EQUITY
 
 
 
 
CURRENT LIABILITIES
 
 
 
 
Interest Payable – related party
 
$                     1,060
 
$                        326
Notes Payable – related party
 
42,400
 
42,400
Due to Manager
 
300
 
-
TOTAL CURRENT LIABILITIES
 
43,760
 
42,726
TOTAL LIABILITIES
 
43,760
 
42,726
 
 
 
 
 
MEMBERS’ EQUITY
 
 
 
 
Contributed Capital
 
3,500
 
3,500
Membership Contributions
 
45,300
 
-
Net Loss
 
(1,034)
 
(326)
Accumulated Deficit
 
(326)
 
-
TOTAL MEMBERS’ EQUITY
 
47,440
 
3,174
 
 
 
 
 
TOTAL LIABILITIES AND MEMBERS’ EQUITY
 
$                   91,200
 
$                   45,900
 
 
 
 
See accompanying notes, which are an integral part of these consolidated financial statements
F-2

2

OTIS COLLECTION LLC
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2020 (UNAUDITED)
AND THE PERIOD FROM OCTOBER 8, 2019 (INCEPTION) TO DECEMBER 31, 2019 (UNAUDITED) 
 
 
 
 
June 30, 2020
 
Dec 31, 2019
 
 
Total Consolidated (unaudited)
 
Total Consolidated (unaudited)
Operating Income
 
 
 
 
Revenue
 
$                             -
 
$                             -
Gross Profit
 
-
 
-
 
 
 
 
 
Operating Expenses
 
 
 
 
Accounting fees
 
300
 
-
Brokerage fees
 
-
 
-
Sourcing fees – related party
 
-
 
-
Other fees
 
-
 
-
Total Operating Expenses
 
300
 
-
Net Loss from Operations
 
(300)
 
-
 
 
 
 
 
Other Expenses
 
 
 
 
Interest expense – related party
 
734
 
326
Total Other Expenses
 
734
 
326
Net Loss
 
$                   (1,034)
 
$                      (326)
 
 
 
 
See accompanying notes, which are an integral part of these consolidated financial statements
F-3

3

OTIS COLLECTION LLC
CONSOLIDATED STATEMENTS OF CHANGES IN MEMBERS’ EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 2020 (UNAUDITED)
AND THE PERIOD FROM OCTOBER 8, 2019 (INCEPTION) TO DECEMBER 31, 2019 (UNAUDITED)
 
 
 
 
June 30, 2020
 
Dec 31, 2019
 
 
Total Consolidated (unaudited)
 
Total Consolidated (unaudited)
Beginning Balance
 
$                     3,174
 
$                             -
 
 
 
 
 
Net Loss
 
(1,034)
 
(326)
 
 
 
 
 
Contributed Capital
 
-
 
3,500
 
 
 
 
 
Membership Contributions
 
45,300
 
-
 
 
 
 
 
Ending Balance
 
$                   47,440
 
$                     3,174
 
 
 
 
See accompanying notes, which are an integral part of these consolidated financial statements
F-4

4

OTIS COLLECTION LLC
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2020 (UNAUDITED)
AND THE PERIOD FROM OCTOBER 8, 2019 (INCEPTION) TO DECEMBER 31, 2019 (UNAUDITED)
 
 
 
 
June 30, 2020
 
Dec 31, 2019
 
 
Total Consolidated (unaudited)
 
Total Consolidated (unaudited)
Cash Flows From Operating Activities:
 
 
 
 
Net Loss For the Period
 
$                   (1,034)
 
$                      (326)
Adjustment to reconcile Net Loss to Net Cash used in operations:
 
 
Interest Payable – related party
 
734
 
326
Total Adjustments
 
734
 
326
Net Cash Flows Used In Operating Activities
 
$                      (300)
 
$                             -
 
 
 
 
 
Cash Flows From Financing Activities:
 
 
 
 
Due to Manager
 
300
 
-
Net Cash Flows From Financing Activities
 
$                        300
 
$                             -
 
 
 
 
 
Cash at Beginning of Period
 
-
 
-
Net Increase (Decrease) In Cash
 
-
 
-
Cash at End of Period
 
$                             -
 
$                             -
 
 
 
 
 
Supplemental Disclosure of Non-Cash Financing Activities:
 
 
 
 
Purchase of Art and Other Collectibles by issuance of Notes Payable – related party
 
$                   42,400
 
$                             -
Total Non-Cash Financing Activities
 
$                   42,400
 
$                             -
 
 
 
 
See accompanying notes, which are an integral part of these consolidated financial statements
F-5

5

OTIS COLLECTION LLC
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2020
 
NOTE 1:  NATURE OF OPERATIONS 
Otis Collection LLC (the “Company”) is a series limited liability company formed on October 8, 2019 pursuant to Section 18-215 of the Delaware Limited Liability Company Act. The Company was formed to engage in the business of acquiring and managing a collection of investment-grade art and collectibles (each asset or group of assets, as applicable, an “Underlying Asset”). The Company has created, and it is expected that the Company will continue to create, separate series of the Company (each, a “Series”), and that each Underlying Asset will be owned by a separate Series and that the assets and liabilities of each Series will be separate in accordance with Delaware law. Investors acquire membership interests (the “Interests”) in each Series and will be entitled to share in the return of that particular Series but will not be entitled to share in the return of any other Series.
The Company is dependent upon additional capital resources for its planned principal operations and subject to significant risks and uncertainties, including failure to secure funding to continue to operationalize the Company’s plans or failing to profitably operate the business.
Otis Wealth, Inc. is the manager of the Company (the “Manager”) and serves as the asset manager for the Underlying Assets owned by the Company and each Series (the “Asset Manager”). The Series acquire the Underlying Assets from the Manager, financed through either non-interest-bearing or interest-bearing promissory notes issued to the Manager, and develop the financial, offering and other materials to begin offering the Interests through a mobile app-based investment platform called Otis (the “Otis Platform”).
The Company sells and intends to continue selling Interests in a number of separate individual Series. Investors in any Series acquire a proportional share of income and liabilities as they pertain to a particular Series, and the sole assets and liabilities of any given Series at the time of the closing of an offering related to that particular Series are an Underlying Asset (plus any cash reserves for future operating expenses). All voting rights, except as specified in the Operating Agreement or required by law, remain with the Manager (e.g., determining the type and quantity of general maintenance and other expenses required for the appropriate upkeep of each Underlying Asset, determining how to best commercialize the applicable Underlying Assets, evaluating potential sale offers and the liquidation of a Series). The Manager manages the ongoing operations of each Series in accordance with the operating agreement of the Company, as amended and restated from time to time (the “Operating Agreement”).
Operating Agreement
General
In accordance with the Operating Agreement, each Interest holder in a Series grants a power of attorney to the Manager. The Manager has the right to appoint officers of the Company and each Series.
F-6

6

OTIS COLLECTION LLC
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2020
 
Voting Rights
The Manager has broad authority to take action with respect to the Company and any Series. Interest holders do not have any voting rights as an Interest holder in the Company or a Series except with respect to:
the removal of the Manager;
the dissolution of the Company upon the for-cause removal of the Managing Member; and
an amendment to the Operating Agreement that would:
o
adversely affect the rights of an Interest holder in any material respect;  
o
reduce the voting percentage required for any action to be taken by the holders of Interests in the Company under the Operating Agreement;
o
change the situations in which the Company and any Series can be dissolved or terminated;
o
change the term of the Company (other than the circumstances provided in the Operating Agreement); or
o
give any person the right to dissolve the Company.
When entitled to vote on a matter, each Interest holder will be entitled to one vote per Interest held by it on all matters submitted to a vote of the Interest holders of an applicable Series or of the Interest holders of all Series of the Company, as applicable. The removal of the Manager as manager of the Company and all Series must be approved by two thirds of the votes that may be cast by all Interest holders in any Series. All other matters to be voted on by the Interest holders must be approved by a majority of the votes cast by all Interest holders in any Series present in person or represented by proxy.
Distributions upon Liquidation
F-7

7

OTIS COLLECTION LLC
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2020
 
Upon the occurrence of a liquidation event relating to the Company as a whole or any Series, the Manager (or a liquidator selected by the Manager) is charged with winding up the affairs of the Series or the Company as a whole, as applicable, and liquidating its assets. Upon the liquidation of a Series or the Company as a whole, as applicable, the Underlying Assets will be liquidated and any after-tax proceeds distributed: (i) first, to any third-party creditors; (ii) second, to any creditors that are the Manager or its affiliates (e.g., payment of any outstanding Operating Expenses Reimbursement Obligation); and thereafter, (iii) first, 100% to the Interest holders of the relevant Series, allocated pro rata based on the number of Interests held by each Interest holder (which may include the Manager, any of its affiliates and asset sellers and which distribution within a Series will be made consistent with any preferences which exist within such Series) until the Interest holders receive back 100% of their capital contribution and second, (A) 10% to the Manager and (B) 90% to the Interest holders of the relevant Series, allocated pro rata based on the number of Interests held by each Interest holder (which may include the Manager, any of its affiliates and asset sellers and which distribution within a Series will be made consistent with any preferences which exist within such Series).
Free Cash Flow Distributions
The Manager has sole discretion in determining what distributions of free cash flow, if any, are made to holders of Interests of each Series. Free cash flow consists of the net income (as determined under accounting principles generally accepted in the United States of America (“GAAP”)) generated by such Series plus any change in net working capital and depreciation and amortization (and any other non-cash operating expenses) and less any capital expenditures related to the Underlying Asset related to such Series. The Manager may maintain free cash flow funds in a deposit account or an investment account for the benefit of the Series.  
Any free cash flow generated by a Series from the utilization of the Underlying Asset related to such Series shall be applied within the Series in the following order of priority: 
repay any amounts outstanding under Operating Expenses Reimbursement Obligations plus accrued interest;
thereafter to create such reserves as the Manager deems necessary, in its sole discretion, to meet future operating expenses; and 
thereafter by way of distribution to holders of the Interests of such Series (net of corporate income taxes applicable to the Series), which may include asset sellers of the Underlying Asset related to such Series or the Manager or any of its affiliates.
Manager’s Interest
F-8

8

OTIS COLLECTION LLC
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2020
 
At the closing of each offering, and unless otherwise set forth in the applicable Series designation, the Manager may acquire a minimum of 2% and up to a maximum of 19.99% of the Interests sold in connection with each offering (of which the Manager may sell all or any portion from time to time following the closing of such offering) for the same price per share offered to all other potential investors.  
NOTE 2:  GOING CONCERN
The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has not generated revenues or profits since inception. The Company’s ability to continue as a going concern for the next twelve months following the date the consolidated financial statements were available to be issued is dependent upon its ability to obtain additional capital financing. No assurance can be given that the Company will be successful in these efforts.
These factors, among others, raise substantial doubt about the ability of the Company to continue as a going concern for a reasonable period of time. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
NOTE 3: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Principles of Consolidation
The accounting and reporting policies of the Company conform to GAAP. The Company adopted the calendar year as its basis of reporting.
The accompanying consolidated financial statements include the accounts of the Company as well as its Series required to be consolidated under GAAP. Significant intercompany accounts and transactions have been eliminated.
Use of Estimates
The preparation of consolidated financial statements in conformity with GAAP requires the Manager to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 
Cash and Cash Equivalents
F-9

9

OTIS COLLECTION LLC
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2020
 
The Company considers short-term, highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents. Cash consists of funds held in the Company’s checking account. As of June 30, 2020, the Company had no cash or cash equivalents on hand.
Subscription Receivable
The Company records membership contributions at the effective date. If the subscription is not funded upon issuance, the Company records a subscription receivable as an asset on the balance sheet. When subscription receivables are not received prior to the issuance of financial statements at a reporting date in satisfaction of the requirements under the Financial Accounting Standards Board (“FASB”) ASC 505-10-45-2, the subscription receivable is reclassified as a contra account to members’ equity on the balance sheet. Each Series has a minimum offering size that once met will result in the eventual successful subscription to and closing of the Series offering. Subscription receivable consists of membership subscriptions received prior to June 30, 2020, for which the minimum subscription requirement was met. As of June 30, 2020, there was a subscription receivable of $45,300.
Art and Other Collectible Assets
The Underlying Assets, including art and other collectible assets, are recorded at cost. The cost of the Underlying Asset includes the purchase price, including any amounts for the Underlying Asset funded by the Manager, and acquisition expenses, which include all fees, costs and expenses incurred in connection with the evaluation, discovery, investigation, development and acquisition of the Underlying Asset related to each Series incurred prior to the closing, including brokerage and sales fees and commissions (but excluding the brokerage fee referred to above), appraisal fees, research fees, transfer taxes, third-party industry and due diligence experts, auction house fees and travel and lodging for inspection purposes.
The Company treats the Underlying Assets as long-lived assets, and the Underlying Assets will be subject to an annual test for impairment and will not be depreciated or amortized. These long-lived assets are reviewed for impairment annually or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset.
F-10

10

OTIS COLLECTION LLC
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2020
 
The Underlying Assets are purchased by the Series from the Manager in exchange for either a non-interest-bearing or an interest-bearing promissory note. The Series uses the proceeds of the offering to pay off the note. Acquisition and operating expenses are typically paid for in advance by the Manager and are reimbursed by the Series from the proceeds of the offering. The Series also distributes the appropriate amounts for the brokerage fee and, if applicable, the sourcing fee, using cash from the offering.
Acquisition expenses related to a particular Series that are incurred prior to the closing of an offering are initially funded by the Manager but will be reimbursed with the proceeds from an offering related to such Series, to the extent described in the applicable offering document.
To the extent that certain expenses are anticipated prior to the closing of an offering but are to be incurred after the closing (e.g., storage fees), additional cash from the proceeds of the offering will be retained on the Series balance sheet as reserves to cover such future anticipated expenses after the closing of the offering. Acquisition expenses are capitalized into the cost of the Underlying Asset. Should a proposed offering prove to be unsuccessful, the Company will not reimburse the Manager, these expenses will be accounted for as capital contributions and the acquisition expenses expensed.
As of June 30, 2020, the total value of the Company’s Underlying Assets across all Series was $45,900 as detailed in the table below. The Company does not believe any of its art and other collectible assets are impaired.
Series
Series Description
Total Investment in Art and Other Collectibles
Series Collection Drop 001
Amazing Spider-Man #129
$14,000
Series Collection Drop 002
Nike x Off White: The Ten
18,400
Series Collection Drop 003
Giant Size X-men #1
13,500
Total
 
$45,900
 
Fair Value of Financial Instruments
FASB guidance specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy are as follows:
F-11

11

OTIS COLLECTION LLC
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2020
 
Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 1 primarily consists of financial instruments whose value is based on quoted market prices such as exchange-traded instruments and listed equities.
Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly (e.g., quoted prices of similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active).
Level 3 - Unobservable inputs for the asset or liability. Financial instruments are considered Level 3 when their fair values are determined using pricing models, discounted cash flows or similar techniques and at least one significant model assumption or input is unobservable.
The carrying amounts reported in the balance sheets approximate their fair value.
Revenue Recognition
The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the fee for the arrangement is fixed or determinable and collectability is reasonably assured. Revenues are expected to be derived from the sale of each Underlying Asset in the associated Series. As of June 30, 2020, the Company had recognized no revenue as there have been no sales of Underlying Assets in any Series.
Operating Expenses
F-12

12

OTIS COLLECTION LLC
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2020
 
After the closing of an offering of Interests, each Series is responsible for its own operating expenses, including any and all fees, costs and expenses incurred in connection with the management of the Underlying Assets. This includes transportation, import taxes, income taxes, storage (including property rental fees should the Manager decide to rent a property to store a number of Underlying Assets), security, valuation, custodial, marketing and utilization of the Underlying Assets; any fees, costs and expenses incurred in connection with preparing any reports and accounts of each Series, including any blue sky filings required in order for a Series to be made available to investors in certain states, any annual audit of the accounts of such Series (if applicable) and any reports to be filed with the Securities and Exchange Commission; any and all insurance premiums or expenses, including directors and officers insurance of the directors and officers of the Manager or Asset Manager, in connection with the Underlying Assets; any withholding or transfer taxes imposed on the Company, a Series or any Interest holders as a result of its or their earnings, investments or withdrawals; any governmental fees imposed on the capital of the Company or a Series or incurred in connection with compliance with applicable regulatory requirements; any legal fees and costs (including settlement costs) arising in connection with any litigation or regulatory investigation instituted against the Company, a Series or the Manager in connection with the affairs of the Company or a Series; the fees and expenses of any administrator, if any, engaged to provide administrative services to the Company or a Series; all custodial fees, costs and expenses in connection with the holding of an Underlying Asset; any fees, costs and expenses of a third-party registrar and transfer agent appointed by the Manager in connection with a Series; the cost of the audit of the annual consolidated financial statements of the Company or a Series and the preparation of tax returns and circulation of reports to Interest holders; any indemnification payments; the fees and expenses of counsel to the Company or a Series in connection with advice directly relating to its legal affairs; the costs of any other outside appraisers, valuation firms, accountants, attorneys or other experts or consultants engaged by the Manager in connection with the operations of the Company or a Series; and any similar expenses that may be determined to be operating expenses, as determined by the Manager in its reasonable discretion.
Prior to the closing, operating expenses are borne by the Manager and not reimbursed by the Series. The Manager will bear its own expenses of an ordinary nature, including all costs and expenses on account of rent (other than for storage of the Underlying Assets), supplies, secretarial expenses, stationery, charges for furniture, fixtures and equipment, payroll taxes, remuneration and expenses paid to employees and utilities expenditures (excluding utilities expenditures in connection with the storage of the Underlying Assets).
F-13

13

OTIS COLLECTION LLC
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2020
 
If the operating expenses exceed the amount of revenues generated from an Underlying Asset and cannot be covered by any operating expense reserves on the balance sheet of such Series, the Manager may (a) pay such operating expenses and not seek reimbursement; (b) loan the amount of the operating expenses to the applicable Series, on which the Manager may impose a reasonable rate of interest, and be entitled to reimbursement of such amount from future revenues generated by such Underlying Asset (“Operating Expenses Reimbursement Obligation(s)”); and/or (c) cause additional Interests to be issued in the such Series in order to cover such additional amounts.
Sourcing Fee: The Asset Manager will be paid a fee as compensation for sourcing each Underlying Asset in an amount equal to up to 10% of the gross offering proceeds of each offering; provided that such sourcing fee may be waived by the Asset Manager.
Brokerage Fee: The broker of record for each offering is expected to receive a brokerage fee equal to 1% of the amount raised from outside investors through each offering. Notwithstanding the foregoing, such broker will not receive any fee on funds raised from the sale of Interests to the Manager. The Company expenses brokerage costs as they are incurred.
Organizational Costs: In accordance with FASB ASC 720, organizational costs, including accounting fees, legal fees and costs of incorporation, are expensed as incurred.
Income Taxes
The Company is a series limited liability company. Accordingly, under the Internal Revenue Code (“IRC”), all taxable income or loss flows through to its members. Therefore, no provision for income tax has been recorded in the statements. Income from the Company is reported and taxed to the members on their individual tax returns. However, the Company has elected, in accordance with IRC, to treat each individual Series as separate subchapter C corporation for tax purposes. No tax provision has been recorded for any Series through the balance sheet date as each is in a taxable loss position and no further tax benefits can be reasonably anticipated.
The Company complies with FASB ASC 740 for accounting for uncertainty in income taxes recognized in a company’s consolidated financial statements, which prescribes a recognition threshold and measurement process for consolidated financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. FASB ASC 740 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. Based on the Company’s evaluation, it has been concluded that there are no significant uncertain tax positions requiring recognition in the Company’s consolidated financial statements. The Company believes that its income tax positions would be sustained on audit and does not anticipate any adjustments that would result in a material change to its financial position.
F-14

14

OTIS COLLECTION LLC
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2020
 
The Company may in the future become subject to federal, state and local income taxation though it has not been since its inception. The Company is not presently subject to any income tax audit in any taxing jurisdiction.
NOTE 4:  RELATED PARTY TRANSACTIONS
In the normal course of business, the Series have and will acquire Underlying Assets from the Manager in exchange for promissory notes, which may or may not be interest bearing. Each note matures, and principal and accrued interest for each is due, within fourteen days of the closing of the offering for the associated Series. The principal balance due to the Manager as of June 30, 2020 was $42,400, with interest payable to Manager of $1,060 as detailed in the table below:
Series Name
Interest Rate
Note Principal Payable
Note Interest Payable  
Total Due to Manager
Series Collection Drop 001
7.50%
$         12,250
$               306
$          12,556
Series Collection Drop 002
7.50%
18,400
460
18,860
Series Collection Drop 003
7.50%
11,750
294
12,044
Totals
 
$         42,400
$            1,060
$          43,460
 
Because these are related party transactions, no guarantee can be made that the terms of the arrangements are at arm’s length.
NOTE 5: DUE TO MANAGER
To fund its organizational and start-up activities as well as to advance funds on behalf of a Series to purchase assets, the Manager has covered the expenses and costs of the Company and its Series thus far on a non-interest-bearing extension of revolving credit. The Company will evaluate when is best to repay the Manager depending on operations and fundraising ability. In general, the Company will repay the Manager for funds extended to acquire assets from the Series subscription proceeds, as they are received. As of June 30, 2020, the Company had $300 of accounting expenses due to the Manager.
NOTE 6: MEMBERS’ LIABILITY
The Company is organized as a series limited liability company. As such, the liability of the members of the Company for the financial obligations of the Company is limited to each member’s contribution of capital.
F-15

15

OTIS COLLECTION LLC
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2020
 
NOTE 7: MEMBERS’ EQUITY
The members of each Series have certain rights with respect to the Series to which they are subscribed. Each Series generally holds a single asset or a collection of assets. A Series member is entitled to their pro rata share of the net profits derived from the Underlying Asset held in that series after deduction of expense allocations and direct expenses attributable to the Underlying Asset, based on their percentage of the total outstanding Interests in that Series.
The debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, are solely the debts, obligations and liabilities of the Company, and no member of the Company is obligated personally for any such debt, obligation or liability.
Series Subscriptions
The Company has received minimum subscriptions for the following Series as of June 30, 2020:
Series Name
Interests Subscribed For
Subscription Amount
Series Collection Drop 001
518
$               12,950
Series Collection Drop 002
800
20,000
Series Collection Drop 003
494
12,350
Total
1,812
$              45,300
 
As of June 30, 2020, subscriptions for $45,300 of membership interests for Series Collection Drop 001, Series Collection Drop 002 and Series Collection Drop 003 were received and recorded as Subscription Receivable. These offerings had not closed as of June 30, 2020.
NOTE 8:  RECENT ACCOUNTING PRONOUNCEMENTS
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). This ASU supersedes the previous revenue recognition requirements in ASC Topic 605—Revenue Recognition and most industry-specific guidance throughout the ASC. The core principle within this ASU is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration expected to be received for those goods or services. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers, which deferred the effective date for ASU 2014-09 by one year to fiscal years beginning after December 15, 2017, while providing the option to early adopt for fiscal years beginning after December 15, 2016. Transition methods under ASU 2014-09 must be through either (i) retrospective application to each prior reporting period presented or (ii) retrospective application with a cumulative effect adjustment at the date of initial application. The Company adopted this new standard effective October 8, 2019 (inception).
F-16

16

OTIS COLLECTION LLC
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2020
 
In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This ASU requires a lessee to recognize a right-of-use asset and a lease liability under most operating leases in its balance sheet. The ASU is effective for annual and interim periods beginning after December 15, 2020, including interim periods within those fiscal years. Early adoption is permitted. The Company is continuing to evaluate the impact of this new standard on our financial reporting and disclosures.
The Company does not believe that any other recently issued, but not yet effective, accounting standards could have a material effect on the accompanying consolidated financial statements. As new accounting pronouncements are issued, the Company will adopt those that are applicable under the circumstances.
NOTE 9: COMMITMENTS AND CONTINGENCIES
The Company is not currently involved with and does not know of any pending or threatened litigation against the Company, the Series or the Manager.
NOTE 10:  SUBSEQUENT EVENTS
The Company has evaluated subsequent events through September 23, 2020, the date the consolidated financial statements were available to be issued. Based on this evaluation, no additional material events were identified which require adjustment or disclosure in these consolidated financial statements, except as set forth below. 
On August 27, 2020, Series Collection Drop 001 closed, and the Company raised $12,848, net of brokerage fees.
On September 4, 2020, Series Collection Drop 002 closed, and the Company raised $19,779, net of brokerage fees.
On September 23, 2020, Series Collection Drop 003 closed, and the Company raised $12,328, net of brokerage fees.
17

F-17

ITEM 4.  EXHIBITS
 
Exhibit Index
Exhibit No.
 
 
Description
2.1
 
2.2
 
2.3
 
3.1
 
3.2
 
3.3
 
4.1
 
4.2
 
4.3
 
6.1.1
 
6.1.2
 
6.2.1
 
6.2.2
 
6.3.1
 
6.3.2
 
8

6.4
 
6.5
 
6.6
 
6.7
 
6.8.1
 
6.8.2
 
6.9.1
 
6.9.2
 
6.10
 
8.1.1
 
8.1.2*
 
8.2
 
8.3.1
 
8.3.2*
 
 
*filed herewith
9

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.
Date: September 24, 2020
OTIS COLLECTION LLC
By: Otis Wealth, Inc., its managing member
 
 
 
/s/ Michael Karnjanaprakorn
 
Name: Michael Karnjanaprakorn
 
Title: Chief Executive Officer
 
Pursuant to the requirements of Regulation A, this report has been signed below by the following persons on behalf of the issuer and in the capacities and on the dates indicated.  
         
SIGNATURE
TITLE
DATE
 
 
 
/s/ Michael Karnjanaprakorn
 
Chief Executive Officer and Director of Otis Wealth, Inc. (principal executive officer and principal financial and accounting officer)
September 24, 2020
Michael Karnjanaprakorn
 
 
 
 
 
Otis Wealth, Inc.
Managing Member
September 24, 2020
 
 
 
By:
/s/ Michael Karnjanaprakorn
 
 
 
Name: Michael Karnjanaprakorn
 
 
Title: Chief Executive Officer
 
 
10

Exhibit 8.1.2
 
AMENDMENT TO THE ESCROW AGREEMENT
This Amendment to the Escrow Agreement (this “Amendment”) is entered into as of 8/26/2020 by North Capital Private Securities Corporation (“NCPS”) as Escrow Agent, Otis Wealth, Inc. (“Platform”), and Series Collection Drop 001, a Series of Otis Collection LLC (“Issuer”). NCPS, Platform, and the Issuer are sometimes referred to herein individually as a “Party” and collectively as the “Parties”.
WHEREAS:
A. The Parties heretofore entered into that certain Escrow Agreement dated as of November 26, 2019. Capitalized terms used herein without definition have the meaning set forth in the Escrow Agreement.
B. The Escrow Agreement set the Offering Amount to be up to $15,000. Exhibit A of the Escrow Agreement set the Minimum Offering Amount to be $14,000. 
C. The Parties desire to amend the Escrow Agreement and set the Offering Amount to be up to $13,000, and the Minimum Offering Amount to be $12,250.
NOW, THEREFORE, the Parties hereby agree as follows:
1.
Amendment. The Offering Amount shall be set at $13,000, and the Minimum Offering Amount shall be set at $12,250. This Amendment may be executed by the Parties in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same instrument. Each counterpart may consist of a number of copies hereof each signed by less than all, but together signed by the Parties.
 
 
[Signature Pages Follow]
1

Issuer: Series Collection Drop 001, a Series of Otis Collection LLC
 
 
By: /s/ Keith Marshall
Name:  Keith Marshall
Title:  General Counsel 
 
 
 
Platform: Otis Wealth, Inc.
 
By: /s/ Keith Marshall
Name:  Keith Marshall
Title:  General Counsel 
 
 
 
North Capital Private Securities Corporation, as Escrow Agent
 
 
 
By: /s/ Linsey Harkness
Name:  Linsey Harkness
Title:  Managing Director
2

Exhibit 8.3.2
 
AMENDMENT TO THE ESCROW AGREEMENT
This Amendment to the Escrow Agreement (this “Amendment”) is entered into as of September 22, 2020 by North Capital Private Securities Corporation (“NCPS”) as Escrow Agent, Otis Wealth, Inc. (“Platform”), and Series Collection Drop 003, a Series of Otis Collection LLC (“Issuer”). NCPS, Platform, and the Issuer are sometimes referred to herein individually as a “Party” and collectively as the “Parties”.
WHEREAS:
A. The Parties heretofore entered into that certain Escrow Agreement dated as of November 26, 2019. Capitalized terms used herein without definition have the meaning set forth in the Escrow Agreement.
B. The Escrow Agreement set the Offering Amount to be up to $14,500. Exhibit A of the Escrow Agreement set the Minimum Offering Amount to be $13,500. 
C. The Parties desire to amend the Escrow Agreement and set the Offering Amount to be up to $12,500, and the Minimum Offering Amount to be $11,750.
NOW, THEREFORE, the Parties hereby agree as follows:
1.
Amendment. The Offering Amount shall be set at $12,500, and the Minimum Offering Amount shall be set at $11,750. This Amendment may be executed by the Parties in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same instrument. Each counterpart may consist of a number of copies hereof each signed by less than all, but together signed by the Parties.
 
 
[Signature Pages Follow]
1

Issuer: Series Collection Drop 003, a Series of Otis Collection LLC
 
 
By: /s/ Keith Marshall
Name:  Keith Marshall
Title:  General Counsel 
 
 
 
Platform: Otis Wealth, Inc.
 
By: /s/ Keith Marshall
Name:  Keith Marshall
Title:  General Counsel 
 
 
 
North Capital Private Securities Corporation, as Escrow Agent
 
 
 
By: /s/ Linsey Harkness
Name:  Linsey Harkness
Title:  Managing Director
2