# Venu Holding Corp: Form 10-Q for the period ended Sep 30, 2024

- Company: [Venu Holding Corp](/companies/venu.md) (CIK 1770501)
- Form: 10-Q
- Filed: 2024-12-23
- Accepted by EDGAR: Dec 23, 2024, 16:05 ET
- Period: 2024-09-30
- Accession: 0001493152-24-051822
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1770501/000149315224051822/form10-q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1770501/000149315224051822/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2024-09-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2024-07-01 to 2024-09-30 | $5.5m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 9 months, 2024-01-01 to 2024-09-30 | $13.6m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Operating income | 3 months, 2024-07-01 to 2024-09-30 | −$3.7m | us-gaap:OperatingIncomeLoss |
| Operating income | 9 months, 2024-01-01 to 2024-09-30 | −$21.0m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2024-07-01 to 2024-09-30 | $1.2m | us-gaap:InterestExpenseNonoperating |
| Interest expense | 9 months, 2024-01-01 to 2024-09-30 | $2.7m | us-gaap:InterestExpenseNonoperating |
| Net income | 3 months, 2024-07-01 to 2024-09-30 | −$3.9m | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2024-01-01 to 2024-09-30 | −$24.1m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2024-07-01 to 2024-09-30 | −$0.13 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 9 months, 2024-01-01 to 2024-09-30 | −$0.58 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2024-07-01 to 2024-09-30 | −$0.13 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months, 2024-01-01 to 2024-09-30 | −$0.58 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2024-07-01 to 2024-09-30 | 3,282,150 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 9 months, 2024-01-01 to 2024-09-30 | 9,775,099 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 9 months, 2024-01-01 to 2024-09-30 | $13.3m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 9 months, 2024-01-01 to 2024-09-30 | $61.6m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | at 2024-09-30 | $35.8m | us-gaap:Cash |
| Current assets | at 2024-09-30 | $38.6m | us-gaap:AssetsCurrent |
| Total assets | at 2024-09-30 | $166.6m | us-gaap:Assets |
| Current liabilities | at 2024-09-30 | $30.6m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2024-09-30 | $52.6m | us-gaap:Liabilities |
| Long-term debt | at 2024-09-30 | $14.0m | us-gaap:LongTermDebtNoncurrent |
| Current portion of debt | at 2024-09-30 | $8.8m | us-gaap:LongTermDebtCurrent |
| Shareholders' equity | at 2024-09-30 | $79.4m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 67,805 characters.

*You should read the following discussion and analysis of Venu’s financial condition and results of operations together with our audited consolidated financial statements as of and for the fiscal years ended December 31, 2023, which are included in our final prospectus on Form 424B4 filed with the SEC on November 27, 2024, in connection with our initial public offering (the “Final Prospectus”), and our unaudited condensed consolidated financial statements as of September 30, 2024 and for the three and nine months ended September 30, 2024 and 2023, which appear at the end of this Quarterly Report on Form 10-Q, in each case together with the related notes thereto. Some of the information contained in this discussion and analysis or set forth at the end of this Quarterly Report, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the section entitled “Risk Factors,” actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. You should carefully read the section of this Quarterly Report entitled “Risk Factors” to gain an understanding of the important factors that could cause actual results to differ materially from forward-looking statements. Please also see the section entitled “Cautionary Note Concerning Forward-Looking Statements.” Forward-looking statements may be identified by words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions. Future operating results, however, are impossible to predict, and no guarantee or warranty is to be inferred from those forward-looking statements.*

### MD&A Overview

This section presents management’s perspective on the financial condition and results of operations of Venu Holding Corporation. Unless otherwise noted, for purposes of this section, the terms “we,” “us,” “our,” “Company,” and “Venu” refer to Venu Holding Corporation and its consolidated subsidiaries. The following discussion and analysis (this “*MD&A”*) is intended to highlight and supplement data and information presented elsewhere in this Quarterly Report and should be read in conjunction with our audited consolidated financial statements as of and for the fiscal years ended December 31, 2023 and 2022, *which are included in our Final Prospectus on Form 424B4 filed with the SEC on November 27, 2024,* and our unaudited condensed consolidated financial statements as of September 30, 2024 and for the three and nine months ended September 30, 2024 and 2023, which are included in this Quarterly Report, in each case together with the related notes thereto. Results for any period or year should not be construed as an inference of what our results would be for any full fiscal year or future period. This MD&A is also intended to provide you with information that will facilitate your understanding of our consolidated financial statements, the changes in key items in those consolidated financial statements from year to year, and the primary factors that accounted for those changes. To the extent that this discussion describes prior performance, the descriptions relate only to the periods listed, which may not be indicative of our future financial outcomes. In addition to historical information, this discussion contains forward-looking statements that involve risks, uncertainties, and assumptions that could cause results to differ materially from management’s expectations. Factors that could cause such differences are discussed in the sections titled “Cautionary Note Concerning Forward-Looking Statements” and “Risk Factors.” Our MD&A is organized as follows:

- *Business Overview —* Discussion of our business plan and strategy in order to provide context for the remainder of this MD&A.
- *Consolidated Results of Operations —* Analysis of our financial results comparing the three and nine months ended September 30, 2024 to the three and nine months ended September 30, 2023.
- *Liquidity and Capital Resources —* Analysis of changes in our cash flows, and discussion of our financial condition and potential sources of liquidity.
- *Significant Accounting Policies and Use of Estimates —* Accounting policies that we believe are important to understanding the assumptions and judgments incorporated in our reported financial results and forecasts.

### Business Overview

### Business

Venu is a Colorado-based hospitality and entertainment corporation that develops, builds, owns, and operates luxury, live-entertainment venue campuses, which consist of music halls, outdoor amphitheaters, restaurants, and bars. As a growing entertainment and hospitality company, we continue to expand our portfolio of indoor and outdoor music venues and entertainment campuses where music, dining, and luxury converge in strategically selected markets.

### Key Milestones and Recent Developments

Our operations to date have enabled us to achieve growth and the following key milestones:

- **March 2017:** Venu was founded as Bourbon Brothers Restaurants, LLC, which converted into Notes Live, Inc. in April 2022 and changed its name to Venu Holding Corporation in September 2024.
- **April 2017:** Venu opened its flagship restaurant, Bourbon Brothers Smokehouse & Tavern, in Colorado Springs, Colorado.
- **March 2019:** Venu opened its first live-entertainment, indoor music hall in Colorado Springs, Colorado, which was originally known as “Boot Barn Hall” but, as of August 2024, is known as “Phil Long Music Hall at Bourbon Brothers.”
- **June 2021:** GA HIA, LLC, a subsidiary of Venu, agreed to purchase land from the Gainesville Redevelopment Authority and entered into a public-private partnership with the City of Gainesville, Georgia pursuant to which Venu agreed to develop its second Bourbon Brothers Presents venue in Gainesville, Georgia.
- **September 2022:** Venu opened its first live music and social bar, known as “Notes”, in Colorado Springs, Colorado.
- **May 2023:** Venu broke ground on Ford Amphitheater in Colorado Springs, Colorado.
- **June 2023:** Venu entered into an operating agreement with AEG with respect to the operation of Ford Amphitheater, which Venu opened in August 2024.
- **June 2023:** Venu opened in second Bourbon Brothers venue and its second BBST restaurant in Gainesville, Georgia.
- **June 2023:** Venu entered into a term sheet to purchase 21 acres of land in Oklahoma City, Oklahoma with the intent of building The Sunset at Mustang Creek, a 12,500-person outdoor amphitheater. In April 2024, the Mustang Creek amphitheater was not approved by city council and Venu is reviewing other properties in the area for development.
- **October 2023:** Venu entered into an Economic Development Agreement with the City of Broken Arrow, Oklahoma, pursuant to which the parties are forming a public-private partnership and intend to open The Sunset BA, a 12,500-capacity amphitheater, by fall 2025.
- **April 2024:** Venu and the City of McKinney, Texas, together with the McKinney Economic Development Corporation and the McKinney Community Development Corporation, entered into a Chapter 380, Grant, and Development Agreement, pursuant to which Venu will develop The Sunset McKinney.
- **June and July 2024:** Venu and the City of El Paso, Texas formed a public-private partnership by entering into a Purchase and Sale Agreement in June 2024 and a Chapter 380 Economic Development Program Agreement in July 2024. Pursuant to the agreements, Venu is acquiring approximately 17 acres of land from the City of El Paso where it will construct and manage The Sunset El Paso, a 12,500-person amphitheater.
- **August 2024:** Venu opened its first amphitheater, Ford Amphitheater, in Colorado Springs, Colorado, and began hosting live concerts and events at the venue.
- **September 2024:** Venu legally changed its name from Notes Live, Inc. to Venu Holding Corporation by filing its Amended and Restated Articles of Incorporation with the Colorado Secretary of State.
- **November 2024:** Venu closed on the initial public offering of its common stock, par value $0.001 per share (the “ *Common Stock”*), generating net proceeds to the Company of approximately $12.3 million, and, in connection therewith, the Company’s Common Stock was listed on the NYSE American LLC Stock Exchange.

### Venue Ownership

Venu primarily generates revenue through restaurant operations, event rentals, and hosting concerts and events. Our business involves developing, owning and operating the following types of venues and entertainment spaces:

*Music Halls —* Music halls are indoor, intimate music and event venues that can accommodate up to approximately 1,400 guests. This venue category includes our *Bourbon Brothers Presents* venues, which are designed to host approximately 1,400 concertgoers at general admission concerts featuring national-touring artists or to seat between 500 and 700 guests at more intimate events such as concerts featuring tribute bands or dueling pianos, corporate functions, or weddings. Our BBP music halls can quickly be transitioned from one configuration to the next. This operational flexibility is intended to maximize our event-rental opportunities by expanding the types of events we can host while minimizing the time it takes to stage one event to the next, allowing us, for example, to host a premier concert one night and a wedding the following afternoon.

*Amphitheaters —* Amphitheaters are typically outdoor venues that accommodate between 8,000 and 20,000 concertgoers and will primarily be operated during the summer through fall seasons. Amphitheaters are designed with special acoustics, premium seat packages, and luxurious suites intended to amplify guests’ music and entertainment experiences. Our first amphitheater venue is the Ford Amphitheater in Colorado Springs, Colorado, which is an open-air, 8,000-person venue. In addition to lawn and stadium-style seating that allows us to offer tickets at an array of price points, Ford Amphitheater has firepit suites that deliver premium hospitality and a more luxurious, personalized concert experience. Each firepit suite can accommodate up to eight guests. Ford Amphitheater, which opened in August 2024, is designed with 92 VIP firepit suites, accommodating a total of 736 VIP guests. Ford Amphitheater will primarily host concerts from May through October each year. The amphitheaters planned for development in Oklahoma and Texas will also have firepit suites.

Certain entities, which own and develop Venu’s venues, are not wholly owned by Venu. For example, Venu has a 10% ownership interest in The Sunset Amphitheater, LLC (which is the owner and developer of the Ford Amphitheater) but holds a 100% voting interest. Venu anticipates it will own 60% of Sunset Hospitality Collection, LLC (which is a company designed to own the building to lease to Roth Seafood & Chophouse and Notes Hospitality Collection) but hold 100% of the voting interest. In addition, the Company expects to own 30% of Sunset at Broken Arrow LLC and Sunset at Mustang Creek LLC (which, respectively, will own and operate the planned amphitheaters in Broken Arrow, Oklahoma and the greater Oklahoma City area) while, in each case, holding a 100% voting interest. With respect to its subsidiaries that own and develop amphitheaters, third-party members, in exchange for their capital contributions, receive an interest in the exclusive use of a specific suite at the applicable venue and also in their capacity as equity owners receive financial interests in their pro rata portion of a defined portion of the revenues generated by the venue for each event. Similarly, third-party members in Sunset Hospitality Collection LLC, receive, in exchange for their capital contribution, distributions from revenues resulting from lease payments received on the property owned by the entity.

*Restaurants —* Bourbon Brothers Smokehouse & Tavern is Venu’s flagship, full-service restaurant concept. BBST serves American classics and Southern staples out of a scratch kitchen, accompanied by a selection of rare bourbons, ryes, whiskies, and local craft beers. Venu develops its BBST restaurants and BBP music halls in close proximity to one another, which allows BBST to serve as the exclusive caterer for BBP events.

*Fine Dining, Hospitality, and Entertainment Campuses —* In May 2025, Venu expects to open Roth’s Seafood & Chophouse, a fine-dining restaurant in a mixed-use development adjacent to Ford Amphitheater. Framing either side of Roth’s will be two, configurable hospitality spaces intended to be used for hosting corporate events, weddings, trade shows, conventions, and other events. Above Roth’s and in between the Notes Hospitality Collection spaces will be a “top-shelf” bar and lounge called Brohan’s, which will offer unobstructed views of the surrounding area Venu intends to monetize during marquee shows at Ford Amphitheater.

The following table summarizes the types of venues we are constructing or plan to develop, describing each by venue type, location, expected opening date, and current status.

| Venue Type | Location | Current Status |
| --- | --- | --- |
| **Music Halls** |  |  |
| BBP CO | Colorado Springs, CO | Opened in March 2019 |
| BBP GA | Gainesville, GA | Opened in June 2023 |
| **Outdoor Amphitheaters** |  |  |
| Ford Amphitheater | Colorado Springs, CO | Opened in August 2024 |
| The Sunset OKC | Mustang Creek, OK | Expected to open in 2026\* |
| The Sunset BA | Broken Arrow, OK | Expected to open in August 2025 |
| The Sunset McKinney | McKinney, TX | Expected to open in second quarter of 2026 |
| The Sunset El Paso | El Paso, TX | Expected to open in second quarter of 2026 |
| **Restaurants** |  |  |
| BBST CO | Colorado Springs, CO | Opened in April 2017 |
| BBST GA | Gainesville, GA | Opened in June 2023 |
| Notes Eatery | Colorado Springs, CO | Opened in September 2022 |
| **Fine Dining & Hospitality Collection** |  |  |
| Roth’s Seafood & Chophouse | Colorado Springs, CO | Expected to open in May 2025 |
| Notes Hospitality Collection | Colorado Springs, CO | Expected to open in May 2025 |
| **Bars** |  |  |
| Brohan’s | Colorado Springs, CO | Expected to open in May 2025 |

\*Venu has not entered into a public-private partnership or secured a location for The Sunset OKC but is actively pursuing potential municipalities to partner with and locations for The Sunset OKC’s development.

### Business Segment

We consider our restaurant and event center operations as similar, in close proximity, and have aggregated them into a single reportable segment. Revenue from our customers is primarily derived from food and beverage (“*F&B”*) services (our “*Restaurant Operations”*) with a portion being served contemporaneously with live entertainment during the events and concerts that we promote and host (our “*Event Operations”).*

*Event Operations.* The Event Operations portion of our business involves the promotion of live music and events in our owned or operated venues, the operation and management of our venues, the creation of content from concerts and events hosted in our venues, and the provision of management and other services to artists. Between BBP CO in Colorado Springs, Colorado, and BBP GA in Gainesville, Georgia, we promote and hold hundreds of live music and other events each year. Our Event Operations business generated $1,104,991, or 21%, of our total revenue during the three months ended September 30, 2024, and $3,755,113, or 28%, of our total revenue during the nine months ended September 30, 2024.

Within our Events Operations, we generate revenues through: (i) ticket sales and fees on tickets sold directly by us or through the ticketing business that we contract with for our events; (ii) fees collected on tickets sold by other third-party platforms, such as convenience and order-processing fees and service charges; (iii) venue rentals, which occur for a variety of corporate and personal events; (iv) pre-selling naming rights to our live-entertainment venues by partnering with industry-leading brands under naming-rights agreements; and (v) sponsorship sales, which allow brands to advertise at our venues by showcasing their names and logos on a variety of sponsorship inventory curated for each of our venues and at each event we promote and host.

*Restaurant Operations.* Revenues generated through restaurant operations included F&B sales at our BBST restaurants and Notes bar (known as Notes Eatery as of May 2024). F&B sales include all revenues recognized with respect to stand-alone F&B sales, along with F&B sales at BBP CO and BBP GA. Our Restaurant Operations business generated $2,740,411, or 50%, of our total revenue for the three months ended September 30, 2024, and $8,144,605 or 60%, for the nine months ended September 30, 2024. The increase in our Restaurant Operations for the nine months ended September 30, 2024 compared to 2023 is primarily due to our increased revenues from our BBST CO restaurant in 2024 and the BBST GA restaurant venue being open and fully operational during the first three quarters of 2024 while still being under construction until June 2023. The net decrease in our Restaurant Operations for the three months ended September 30, 2024 over September 30, 2023 consists of our increased revenues from our BBST CO restaurant in 2024, offset by decreased revenues at the BBST GA venue recognizing grand opening sales above normal levels in 2023 while recognizing stabilizing revenues in 2024 and Notes Eatery changing its operating model and hours in 2024 compared to a higher operating model in 2023.

*Amphitheater Operations.* The Amphitheater Operations began generating revenue in the third quarter of 2024 with the opening of Ford Amphitheater. Through a subsidiary we have entered into an agreement with Anschutz Entertainment Group (“*AEG”*), AEG Presents-Rocky Mountains, LLC, a major music and entertainment events presenter, to operate Ford Amphitheater in Colorado Springs, Colorado. Within our Amphitheater Operations, we pre-sell naming rights to our amphitheater by partnering with industry-leading brands under naming-rights agreements. At the Ford Amphitheater, we generate net profits that are split with AEG through: (i) ticket sales, fees and rebates on tickets for concerts and events held at Ford Amphitheater; (ii) parking fees; (iii) venue rentals, which may occur for a variety of corporate and personal events; (iv) food and beverage sold at the shows and events; and (v) sponsorship sales, which allow brands to advertise at our venue by showcasing their names and logos on a variety of sponsorship inventory curated for the venue and at each event we promote and host, all of which are offset by operating expenses, artist expenses, supplies, security, utilities, insurance, overhead, and other operating costs within our net amphitheater revenue recognition from AEG. For future amphitheater locations we expect to open we anticipate entering into contractual arrangements with third party operators having terms similar to those with AEG. Our Amphitheater Operations generated net revenues of $1,606,573 or 30% of our total revenue for the three months ended September 30, 2024 or 12% of our total revenue for the nine months ended September 30, 2024.

### Financial

#### Private Equity Offerings

Since our formation in 2017, we have funded our operations, in part, through proceeds from private sales of our equity securities.

During the first nine months of 2024, we raised $31,693,410 in a private offering of our Common Stock. We have used, and expect to use, the proceeds of that offering primarily to fund marketing, recruitment and development of staff, pre-opening costs for Ford Amphitheater, Roth’s Seafood and Chophouse, and Notes Hospitality Collection restaurant venues in Colorado Springs, Colorado, and other working capital needs.

We anticipate raising additional cash through the private sales of membership interests in certain of our subsidiary entities (including interests in our firepit suites) at our amphitheater locations, collaborative arrangements such as owner’s clubs, or a combination thereof, to continue to fund our construction of venues. There is no assurance that any such collaborative arrangement will be entered into or that financing will be available to us when needed in order to allow us to continue our operations, or if available, on terms acceptable to us. If we do not raise sufficient funds in a timely manner, we may be forced to curtail operations or revise the timeline of our business plan.

### Overview of the Year-to-Year Third-Quarter Interim Financial Comparison

For the three-month period ended September 30, 2024 and 2023:

- We generated total revenue of $5,451,975 and $3,911,379, respectively, representing growth of $1,540,596 or approximately 39% as compared to the prior-year period;
- We had a net loss of $(4,527,472) and $(2,807,913) respectively, representing an increase in net loss of $(1,719,559) or approximately 61% as compared to the prior-year period.

### Overview of the 2024 Nine-Month Interim Period Financial Comparison

For the nine-month period ended September 30, 2024 and 2023:

- We generated total revenue of $13,566,956 and $8,685,575, respectively, representing growth of $4,881,381 or approximately 56% as compared to the prior-year period;
- We had a net loss of $(25,612,656) and $(8,244,731) respectively, representing an increase in net loss of $(17,367,925) or approximately 211% as compared to the prior-year period, which we attribute primarily to the increase in operating expenses as the result of equity-based compensation that was issued for services and non-cash financing and incurring additional expenses related to our efforts to expand the Company’s growth to the additional states of Oklahoma and Texas, which included expenses such as travel, business development, staff recruitment and development along with pre-opening expenses of Ford Amphitheater in 2024.. Our general and administrative expenses are also included in operating expenses and consist primarily of expenditures related to compensation, legal, auditing and tax, professional services, and general operating expenses;
- Our net cash provided by (used in) operating activities was $13,336,007 and $(6,518,214), respectively, representing an increase in cash provided by operating activities of $19,854,221 or approximately 305% as compared to the prior-year period;
- Our net cash used in investing activities was $(61,541,682) and $(19,190,024), respectively, representing an increase in cash used in investing activities of $(42,351,658) or approximately 221% as compared to the prior-year period; and
- Our net cash provided by financing activities was $63,801,428 and $24,851,531, respectively, representing an increase in cash provided by financing activities of $38,949,897 or approximately 157% as compared to the prior-year period.

33

### Consolidated Results of Operations

### Comparison of the Three Months Ended September 30, 2024 and 2023

To facilitate review of our discussion and analysis, the following table sets forth our financial results for the periods indicated. All information is derived from the unaudited condensed consolidated statements of operations for the three months ended September 30, 2024 and September 30, 2023, respectively.

| Revenues | For the three months ended September 30, 2024 | 2023 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Restaurant including food and beverage revenue | $2,740,411 | $2,892,082 | (151,671) | -5% |
| Event center ticket and fees revenue | 2,002,572 | 961,222 | 1,041,350 | 108% |
| Rental and sponsorship revenue | 708,992 | 58,075 | 650,917 | 1121% |
| **Total revenues** | **$5,451,975** | **$3,911,379** | 1,540,596 | 39% |
| **Operating costs** |  |  |  |  |
| Food and beverage | 653,178 | 712,026 | (58,848) | -8% |
| Event center | 435,841 | 407,889 | 27,952 | 7% |
| Labor | 1,152,909 | 1,188,574 | (35,665) | -3% |
| Rent | 333,192 | 363,032 | (29,840) | -8% |
| Operating expenses | 5,449,396 | 3,428,774 | 2,020,622 | 59% |
| Depreciation and amortization | 1,103,720 | 565,355 | 538,365 | 95% |
| **Total operating costs** | **9,128,236** | **6,665,650** | 2,462,586 | 37% |
| **Loss from operations** | **$(3,676,261)** | **$(2,754,271)** | (921,990) | 33% |
| **Other income (expense), net** |  |  |  |  |
| Interest expense | (1,162,663) | (92,252) | (1,070,411) | 1160% |
| Interest income | 276,452 | - | 276,452 | 100% |
| Other income | 35,000 | 38,610 | (3,610) | -9% |
| Total other expense, net | (851,211) | (53,642) | (797,569) | 1487% |
| Net loss | **$(4,527,472)** | **$(2,807,913)** | (1,719,559) | 61% |
| Net loss attributable to non-controlling interests | (595,251) | (33,707) | (561,544) | 1666% |
| Net loss attributable to common stockholders | **$(3,932,221)** | **$(2,774,206)** | (1,158,015) | 42% |

34

### Comparison of the Nine Months Ended September 30, 2024 and 2023

To facilitate review of our discussion and analysis, the following table sets forth our financial results for the periods indicated. All information is derived from the unaudited condensed consolidated statements of operations for the nine months ended September 30, 2024 and September 30, 2023, respectively.

| Revenues | For the nine months ended September 30, 2024 | 2023 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Restaurant including food and beverage revenue | $8,144,605 | $6,706,719 | 1,437,886 | 21% |
| Event center ticket and fees revenue | 4,663,228 | 1,838,736 | 2,824,492 | 154% |
| Rental and sponsorship revenue | 759,123 | 140,120 | 619,003 | 442% |
| **Total revenues** | **13,566,956** | **8,685,575** | 4,881,381 | 56% |
| **Operating costs** |  |  |  |  |
| Food and beverage | 1,901,590 | 1,530,107 | 371,483 | 24% |
| Event center | 1,727,311 | 634,368 | 1,092,943 | 172% |
| Labor | 3,358,871 | 2,572,382 | 786,489 | 31% |
| Rent | 975,756 | 863,850 | 111,906 | 13% |
| Operating expenses | 24,279,184 | 9,944,662 | 14,334,522 | 144% |
| Depreciation and amortization | 2,319,513 | 1,279,510 | 1,040,003 | 81% |
| **Total operating costs** | **34,562,225** | **16,824,879** | 17,737,346 | 105% |
| **Loss from operations** | **$(20,995,269)** | **$(8,139,304)** | (12,855,965) | 158% |
| **Other income (expense), net** |  |  |  |  |
| Interest expense | (2,717,849) | (222,812) | (2,495,037) | 1120% |
| Other expense | (2,500,000) | - | (2,500,000) | 100% |
| Loss on sale of investments | - | (11,947) | 11,947 | 100% |
| Interest income | 502,962 | 20,153 | 482,809 | 2396% |
| Other income | 97,500 | 109,179 | (11,679) | -11% |
| Total other expense, net | (4,617,387) | (105,427) | (4,511,960) | 4280% |
| Net loss | **$(25,612,656)** | **$(8,244,731)** | (17,367,925) | 211% |
| Net loss attributable to non-controlling interests | (1,560,398) | (538,133) | (1,022,265) | 190% |
| Net loss attributable to common stockholders | **$(24,052,258)** | **$(7,706,598)** | (16,345,660) | 212% |

Ford Amphitheater in Colorado Springs opened August 9, 2024. A fine-dining restaurant, Roth’s Seafood and Chophouse, and a rooftop bar, Brohan’s, along with premier event rental space and suites known as Notes Hospitality Collection surrounding that development, are expected to open in May 2025. Even though this amphitheater had a shortened 2024 season, it positively impacted Venu’s financial performance in 2024.

### Revenue

Total revenue increased $1,540,596 for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. Total revenue increased $4,881,381 for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023.

With respect to the increase in revenue generated during the three and nine months ended September 30, 2024, compared to the same periods in 2023, the increase was primarily attributable to the opening of Ford Amphitheater in August 2024. The opening of Ford Amphitheater in August 2024, and the holding of 17 events through September 30, 2024, was the primary factor that contributed to the increase in our event center ticket and fee revenue during the 2024 period, as well as the increase in our sponsorship revenue as we recognized revenues through our sponsorship agreement for that venue. BBST CO and BBP CO experienced increased revenues for both the three and nine months of September 30, 2024 compared to September 30, 2023, along with our BBST GA restaurant and BBP GA venue being open and fully operational during the first three quarters of 2024 while still being under construction until June 2023. The net decrease in our Restaurant Operations for the three months ended September 30, 2024 over September 30, 2023 included decreased revenues at the BBST GA venue recognizing grand opening sales above normal levels in 2023 while recognizing stabilizing revenues in 2024 and Notes Eatery changing its operating model and hours in 2024 compared to a higher operating model in 2023.

### Operating Expenses

*Food and Beverage Costs.* Our F&B costs decreased $(58,848) and increased $371,483 during the three and nine months ended September 30, 2024, respectively, as compared to the same periods in the prior year. For the three months ended September 30, 2024, the decrease in costs was aligned with the decrease in our restaurant including food and beverage revenue for the same time period at the BBST GA location. This location specifically had elevated sales during the same period in 2023 due to its grand opening period. For the nine months ended September 30, 2024 compared to September 30, 2023, the cost increases were primarily driven by our increase in overall sales volumes for the first nine months of the year, along with increased raw ingredient and food costs due to inflation.

*Event Center Costs.* The costs attributed to our event centers increased $27,952 and $1,092,943 during the three and nine months ended September 30, 2024, respectively, as compared to the same periods in the prior year. In each case, this was primarily due to the added costs of operating our BBP GA venue in Gainesville, Georgia as it was open for a full nine months in 2024 when compared to 2023 as it opened in June 2023.

*Labor Costs.* Our labor costs decreased $(35,665) and increased $786,490 during the three and nine months ended September 30, 2024, respectively, as compared to the same periods in the prior year. Management believes the decrease for the three months ended September 30, 2024 compared to the same period in the prior year occurred because the interim period in 2023 included additional labor costs to train and employ the individuals who operate our BBST GA and BBP GA restaurant and venue following their grand openings in June 2023. The increase in the nine months ended September 30, 2024 was primarily inflation driven with higher wages.

*Rent Costs.* Our rent costs decreased $(29,840) and increased $111,906 during the three and nine months ended September 30, 2024, respectively, as compared to the same periods in the prior year. In regards to the decrease in rent expense for the three months ended September 30, 2024, this was primarily due to Notes Eatery rent expenses being eliminated in consolidations since it began to be consolidated the Company’s financials in late June 2024. The increase for the nine months ended September 30, 2024, this was primarily due to the added costs of operating and paying rent costs for our BBST GA and BBP GA restaurant and venue in Gainesville, Georgia beginning in June 2023.

*Operating Expenses.* Our operating expenses increased $2,020,622 during the three months ended September 30, 2024, as compared to the same period in the prior year, and increased $14,334,522 during the nine months ended September 30, 2024, as compared to the same period in the prior year. In each case, our increases in operating expenses were primarily the result of along with equity-based compensation that was issued for services and non-cash financing and incurring additional expenses related to our efforts to expand the Company’s growth to the additional states of Oklahoma and Texas, which included expenses such as travel, business development, and staff recruitment and development along with pre-opening expenses of Ford Amphitheater in 2024.. Our general and administrative expenses are also included in operating expenses and consist primarily of expenditures related to compensation, legal, auditing and tax, other professional services, and general operating expenses.

*Depreciation and Amortization Costs.* Our depreciation and amortization costs increased $538,365 during the three months ended September 30, 2024, as compared to the same period in the prior year, and increased $1,040,003 during the nine months ended September 30, 2024, as compared to the same period in the prior year. The increases in depreciation and amortization costs during the three and nine months ended September 30, 2024 compared to the same periods the prior year was primarily attributable to our BBST GA and BBP GA restaurant and venue being open and operational during the first three quarters of 2024 but not until late in the second quarter of 2023, along with Ford Amphitheater opening in late third quarter of 2024.

#### Other Expense

For the three months ended September 30, 2024 and 2023, other expense totaled $0 and $0, respectively.

For the nine months ended September 30, 2024 and 2023, other expense totaled $2,500,000 and $0, respectively. This increase for the nine months ended September 30, 2024, was primarily due to the financing expense the Company recognized on a convertible promissory note issued in January 2024.

#### Interest Expense

We had net interest expense of approximately $1,162,663 and $92,252 for the three months ended September 30, 2024 and 2023, respectively. This increase in 2024 was primarily due to the addition of the mortgage on the BBST GA and BBP GA properties, along with the amortization of the debt discount fees on the convertible debt.

We had net interest expense of approximately $2,717,849 and $222,812 for the nine months ended September 30, 2024 and 2023, respectively, which is primarily due to the addition of the mortgage on the BBSTGA and BBP properties, along with the amortization of the debt discount fees on the convertible debt.

#### (Loss) Gain on Sale of Investments, net

During the 2023 fiscal year, we realized a loss on the sale of investments of $75,603, resulting from the sale of our 20% interest in War Hippies, LLC in December 2023.

#### Other Income

Roth Industries, LLC (“*Roth Industries”*), a related party, pays Venu licensing amounts pursuant to a license granted by Venu to Roth Industries to use the trademark, tradename, and likeness of the Bourbon Brothers brand, which Venu exclusively owns, on packaged and prepared food products sold in retail grocery stores and other retail outlets where food products are sold. The licensing fee paid by Roth Industries to Venu is in the form of a royalty equal to $10,000 per month, which did not change from 2023 to 2024. Accordingly, during each of the nine-month periods ended September 30, 2024 and 2023, Roth Industries paid Venu $90,000 in royalty payments.

JW Roth, Venu’s Chairman, CEO, and founder and a principal shareholder of Venu, is also the founder and Chairman of Roth Industries and holds an approximate 20% membership interest in Roth Industries. Mitchell Roth, a director of Venu, is also the CEO and President of Roth Industries and holds an approximate 10% membership interest in Roth Industries. Heather Atkinson, the CFO, Secretary, and a director of Venu, is also the Treasurer and a director of Roth Industries. Additionally, Robert Mudd, Venu’s Senior Vice President of Construction and Market Expansion, and Steve Cominsky, a director of Venu, are also members of Roth Industries. Ms. Atkinson, Mr. Mudd, and Mr. Cominsky each own less than a 1% membership interest in Roth Industries.

### Factors that May Influence Future Results of Operations

#### Impact of Macroeconomic Conditions

We continue to monitor the impact of macroeconomic conditions, including inflationary pressure, potential for recession, instability of capital markets, consumer-spending habits, costs of goods, changes to fiscal and monetary policies, interest rate fluctuations, access to capital, the favorability of lending terms, prolonged supply-chain constraints, and geopolitical trends, on all aspects of our business, including how those factors may impact our operations, workforce, suppliers, ability to raise additional capital to fund operating and capital expenditures, sales, and profitability.

The extent of the impact of these factors on our business will depend on future developments that are highly uncertain and cannot be confidently predicted at this time. To date, these factors have not had a material impact to our results of our operations or development efforts. However, if macroeconomic conditions deteriorate or there are unforeseen developments, our results of operations, financial condition, and cash flows may be adversely affected.

#### Rising Interest Rates

A prevailing trend that has impacted our business is rising and steadily high interest rates. Since March 2022, the Federal Reserve has increased interest rates a total of eleven times, with the last hike occurring in July 2023 when target interest rates reached a range of 5.25% to 5.50%, with a benchmark rate at about 5.4%, the highest level in more than two decades. In September 2024, the Federal Reserve lowered the benchmark rate by 50 basis points, reducing the rate to the range of 4.75% to 5.00%. Although the Federal Reserve has indicated that additional rate reductions could occur in the remainder of 2024 and in 2025, the timing and extent of those rate cuts are uncertain. Although Venu was fortunate to have access to attractive debt capital and to purchase land to be developed into entertainment campuses on favorable terms by negotiating with various municipalities and forming public-private partnerships, had those lending opportunities not been available, volatility in interest rates would have increased the cost of borrowing and required us to agree to loan terms that were less favorable for borrowers. Furthermore, interest-rate increases may reduce the affordability of our land-development projects due to increased debt-servicing costs. Volatility in interest rates affect the demand for, and price of real estate. A rise in interest rates increases the cost while lowering the availability of debt financing. Increased borrowing costs would drive the costs of our development projects and inflate our project budgets.

#### Inflation

Another trend that impacted our business throughout 2023 and that has continued to impact our business during 2024 has been the increase in inflation nationwide, which has gone hand in hand with the rising interest rate environment. With respect to project execution, inflation increased the cost of building materials and labor types, creating upward pressure on the costs of constructing and developing our event venues. Third parties that we contracted with, such as developers and contractors, were impacted by rising inflation rates and the corresponding rise in the costs of goods and services used in their businesses. Their ability to do business with us could be impacted by steadily high rates of interest and inflation, which could impact our profitability.

In addition to impacting our project construction and development costs, inflation also lead to higher costs for ingredients, supplies, utilities, and labor, all of which are essential components of operating restaurants and venues. While we were able to offset some of those costs by adjusting menu prices at our restaurants, we had to balance those adjustments with consumer sentiment to ensure that we did not deter customers from dining with us and in turn impact our overall sales volume. Inflation also impacts consumer-spending habits. As the costs of everyday goods and services rise, customers may become more hesitant to spend discretionary funds on restaurant dining.

We continue to monitor the impacts of high interest rates and inflation on our business and will continue to proactively seek cost-saving measures, negotiate with municipalities to purchase land without being burdened by increased borrowing costs and unfavorable lending terms.

### Liquidity and Capital Resources

We have devoted substantially all of our efforts to developing our business plan of market expansion, growing our staff, raising capital, opening and operating our restaurants and event venues in Colorado and Georgia and planning venues in new markets, such as Oklahoma and Texas, growing into additional markets, while closing on our initial public offering that closed subsequent to period end on November 29, 2024. While our primary focus is building venues in these new markets which drives our balance sheet, our secondary focus is the development agreements in new markets. While we undergo the construction of these venues in 2025 in Colorado, Oklahoma and Texas, we do not anticipate operational profits until we open and operate this new collection of venues.

When comparing our year-after-year interim financials, we had an accumulated deficit of $41,073,711 and $17,021,453 as of September 30, 2024 and 2023, respectively, with cash flows provided by (used in) operations of $13,336,007 and $(6,518,214) as of the nine months ended September 30, 2024 and 2023, respectively. Additionally, we experienced an increase in net loss from $(2,807,913) to $(4,527,472) for the three-month period ended September 30, 2024, compared to the same period in 2023, and we experienced an increase in net loss from $(8,244,731) to $(25,612,656) for the nine-month period ended September 30, 2024, compared to the same period in 2023. The Company believes the majority of net loss in the 2024 period was largely due to our efforts to developing our business plan, growing our staff, raising capital, and opening and operating our restaurants and event venues in Colorado and Georgia, pre-opening expenses related to Ford Amphitheater, and planning venues in new markets, such as Oklahoma and Texas, along with equity based compensation that was issued for services and non-cash financing.

In addition, the Company grew its property and equipment, net, to $125,756,511 as of September 30, 2024 compared to $57,737,763 as of December 31, 2023, which represents an increase of 118%, over the nine-month period.

During the first nine months of 2024, we closed a private placement offering in which we sold 3,169,341 shares of Common Stock and received gross proceeds of $31,693,410.

On January 17, 2024, the Company entered into a convertible promissory note (the “*Note”*) with KWO, LLC (“*KWO”*), that accrues interest at 8.75% per annum, for draws of up to an aggregate of $10,000,000 to occur between March 2024 to May 2024 to be used towards Sunset Colorado construction. The outstanding balance of the Note as of September 30, 2024, was $10,000,000. Interest is to be paid monthly and the maturity date is one year from the date of the first draw. The first draw occurred on March 1, 2024, in the amount of $3,860,582.40, and the maturity date of the Note’s principal balance is March 1, 2025. The second and third draws occurred on April 10, 2024, in the amount of $3,738,030.37, and on May 10, 2024, in the amount of $2,401,387.23. At any time during the period commencing June 1, 2024, and continuing until the date on which the Note is paid in full, KWO may convert the outstanding Note into Company shares of equivalent value, and the Company shares are deemed to have a fixed value of $10 per share.

Kevin O’Neil, a minority stockholder of Venu and owner of the holder of the Note, KWO, along with Mr. JW Roth, both personally guarantee the Note at a fee equal to 1% of the promissory note balance. The holder of the Note financed the asset purchase and paid the draw to the Ford Amphitheater general contractor directly thus became a personal guarantor to the Note. The Company recognized a debt discount for the personal guarantee fee of $100,000 with $25,000 and $58,333 expensed to interest expense in the three and nine months ended September 30, 2024, with the remaining debt discount to be expensed to interest expense over the life of the Note. As consideration of the personal guarantee fee, the Company granted a three-year warrant to purchase 500,000 shares of Venu common stock at $10 per share for both the holder and Mr. Roth, with the Company recognizing a debt discount of $3,000,140 with $750,034 and $1,750,082 expensed to interest expense in the three and nine months ended September 30, 2024, with the remaining to be expensed over the life of the Note. In accordance with ASC 815-10, Derivatives and Hedging, the warrants were recorded at relative fair value within stockholder’s equity in the Condensed Consolidated Balance Sheet. A loan origination fee of $100,000 is recognized as debt discount with $25,000 and $58,333 expensed to interest expense in the three and nine months ended September 30, 2024, with the remaining to be expensed over the life of the Note. The Company leased KWO a suite at the Ford Amphitheater with a fair market value of $200,000 without additional payment or consideration, and is subject to and consistent with the schedule, rights, terms and conditions applicable to other suites offered to the public. The Company treated this leased suite as a debt discount with $50,000 and $116,666 expensed to interest expense in the three and nine months ended September 30, 2024, with the remining to be expensed over the life of the Note. The convertible debt balance of $10,000,000, net by the cumulative debt discounts of $1,416,725, agrees to the net of $8,583,275 shown as convertible debt on the Condensed Consolidated Balance Sheet. In addition, KWO in a related agreement, purchased 500,000 shares of stock from Mr. Roth at a discount as part of this transaction. Per ASC paragraph 718-10-15-4, the economic interest holder makes a capital contribution to the reporting entity, and the reporting entity makes a share-based payment to its grantee in exchange for goods or services provided to the reporting entity. In the Company’s instance, Mr. Roth paid the holder on behalf of the Company. The Company recognized a $0 and $2,500,000 charge in other expense and additional paid in capital related to the exchange for the three and nine months ended September 30, 2024, as Mr. Roth completed this stock transaction on behalf of the Company for KWO completing the Note transaction.

We believe that (i) cash on hand, (ii) improved profitability through the next twelve months from operating venues and restaurants in Colorado Springs, Colorado and Gainesville, Georgia, (iii) opening Ford Amphitheater in Colorado Springs, Colorado in the third quarter of 2024 and the net revenues expected to be generated by that project, (iv) the net cash received from our initial public offering that closed on November 29, 2024 offering, and (v) additional capital raising efforts either at the parent corporation level or through sales of interests in our subsidiaries that own real estate assets related to our amphitheater projects (i.e., our firepit suite related sales and capital raising efforts), and debt financing , will allow us to continue our business operations. Our ability to continue implementing our business plan to add new locations to our portfolio for the purpose of developing entertainment campuses depends on our future engagement in strategic locations, real-estate transactions, capital raising, and debt financing.

### Cash Flows

The following information reflects cash flows for continuing operations for the nine-month periods presented:

|  | Nine Months Ended September 30, 2024 | 2023 |
| --- | ---: | ---: |
| Cash and cash equivalents at beginning of period | $20,201,104 | $23,470,734 |
| Net cash provided by (used in) operating activities | 13,336,007 | (6,518,214) |
| Net cash used in investing activities | (61,541,682) | (19,190,024) |
| Net cash provided by financing activities | 63,801,428 | 24,851,531 |
| Cash and cash equivalents at end of period | $35,796,857 | $22,614,027 |

#### Net Cash Used in Operating Activities

Net cash provided by (used in) operating activities was $13,336,007 and $(6,518,214) during the nine months ended September 30, 2024 and 2023, respectively. The increase of $19,854,221 in cash used during the first three quarters of 2024 compared to the first three quarters of 2023 was primarily attributable to the increases in accounts payables, accrued expenses, deferred revenue and licensing liabilities.

#### Net Cash Used in Investing Activities

Net cash used in investing activities was $(61,541,682) and $(19,190,024) during the nine months ended September 30, 2024 and 2023, respectively. The increase of $(42,351,658) in cash used during the first nine months of 2024 compared to the first nine months of 2023 was primarily attributable to the increase in the purchase of property and equipment over the nine-month period.

#### Net Cash Provided by Financing Activities

Net cash provided by financing activities was $63,801,428 and $24,851,531 during the nine months ended September 30, 2024 and 2023, respectively. The increase of $38,949,897 in cash provided during the first nine months of 2024 compared to the first nine months of 2023 was primarily attributable to issuance of shares of Common Stock and the increased in proceeds from the sale of non-controlling interest equity, along with the proceeds from a municipality promissory note issued by the City of El Paso, Texas.

### Significant Accounting Policies and Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make significant judgments and estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Management bases these significant judgments and estimates on historical experience and other assumptions it believes to be reasonable based on information presently available. Actual results could differ from those estimates under different assumptions, judgments, or conditions.

Significant estimates made by management include, but are not limited to: economic lives of leased assets; impairment assessment of long-lived assets; depreciable lives of property, plant, and equipment; useful lives of intangible assets; accruals for contingencies including tax contingencies; valuation allowances for deferred income-tax assets; estimates of fair value of identifiable assets and liabilities acquired in business combinations; and estimates of fair value used in the private stock valuations used for equity-based compensation and warrants.

### Revenue Recognition

We recognize revenue in accordance with the Financial Accounting Standards Board Accounting Standards Codification (“*ASC”*) 606, *Revenue from Contracts with Customers*, which requires us to allocate the transaction price received from our customers to separate and distinct performance obligations and to recognize revenue upon the satisfaction of our performance obligations. We recognize revenue from our sale to customers of F&B products at our restaurants when the F&B products are transferred to the customer. We recognize revenue from the rental of our venues and from tickets and related fees for concerts or shows performed at our venues when the event, concert, or show occurs. We recognize naming rights and sponsorship revenue over the life of the naming rights and sponsorship agreements.

We record amounts collected prior to the event as deferred revenue until the event occurs. We record amounts collected from our sponsorship agreements, which do not relate to a single event, as deferred revenue and recognize those amounts over the term of the agreements as the sponsorship benefits are provided to our sponsors.

The Company contracted with a subsidiary of the Anschutz Entertainment Group (“*AEG”*), AEG Presents-Rocky Mountains, LLC, a major music and entertainment events presenter, to operate Ford Amphitheater in Colorado Springs, Colorado, which opened in August 2024. Within our Amphitheater Operations, we pre-sell naming rights to our amphitheater by partnering with industry-leading brands under naming-rights agreements. We generate net profits that are split with AEG through: (i) ticket sales, fees and rebates on tickets for concerts and events held at Ford Amphitheater; (ii) parking fees; (iii) venue rentals, which may occur for a variety of corporate and personal events; (iv) food and beverage sold at the shows and events; and (v) sponsorship sales, which allow brands to advertise at our venue by showcasing their names and logos on a variety of sponsorship inventory curated for the venue and at each event we promote and host, all of which are offset by operating expenses, artist expenses, supplies, security, utilities, insurance, overhead, etc. within our net amphitheater revenue recognition from AEG.

### Investments in Related Parties

We have non-controlling interest investments in related parties. We account for certain of our investments in related parties using a practical expedient to measure those investments that do not have a readily determinable fair value in accordance with ASC 321, *Investments — Equity Securities*; ASC 325, *Investments — Other*; ASC 810, *Consolidation*; and ASC 820, *Fair Value Measurement*. Our investments in related parties are initially recognized at cost, and any income or loss resulting from such investments are recognized on our consolidated statements of operations, net of operating expenses. The carrying value of our related-party investments are assessed for indicators or impairment at each balance-sheet date, such that each investment is derecognized upon the sale or impairment of our interest in the investment. See “Non-controlling Interest and Variable Interest Entities” for further discussions of the entities that are majority-owned subsidiaries and variable interest entities. Investments for which the Company exercises significant influence but does not have control are accounted for under the equity method.

We had one investment that we accounted for using the equity method described in ASC 323, *Investments — Equity Method and Joint Ventures*, prior to disposing of that investment on December 31, 2023. Pursuant to that accounting method, we initially recorded the investment as an asset on the balance sheet at its initial cost and then adjusted the investment each reporting period through the income statement for the income or loss for our proportionate share of the investment.

We own 550,000 preferred units, or 2%, of Roth Industries, of which JW Roth, the founder, manager, and chairman, is Venu’s chairman and chief executive officer. Our officers and directors are also minority equity owners of Roth Industries. We currently account for our investment in Roth Industries using ASC 325, *Investments — Other.*

### Leases

We account for our leases in accordance with ASC 842, *Leases*, pursuant to which our leases are classified as either operating or financing leases and recorded in our consolidated balance sheets as both a right-of-use asset and lease liability, calculated by discounting fixed lease payments over the lease term, including any renewal options that are likely to be exercised, at the rate set forth or implied in the lease. In calculating the right-of-use asset and lease liability, we elect to combine lease and non-lease components as permitted under ASC 842. As an accounting-policy election, we exclude short-term leases having initial terms of 12 months or less and expense payments on those short-term leases as they are made.

### Business Combinations

On June 26, 2024, Notes Live Real Estate, LLC, a wholly owned subsidiary of Venu, purchased 100% of the membership units of 13141 BP, LLC from its members for an aggregate purchase price of $2,761,000, which Venu paid to the members on a pro-rata basis through the issuance of 276,100 shares of Common Stock, valued at their current fair market value of $10.00 per share.

### Warrants

On a rolling basis from July 2021 through January 2022, we issued lenders an aggregate of $3,775,000 in convertible promissory notes (the “*July 2021 Notes”*) and 377,500 warrants (exercisable for a three-year term from their date of issuance), which by their original terms are exercisable at the option of the holder to purchase non-voting units of B Entertainment LLC for $2.50 per share (and after our conversion to a corporation in April 2022, and after giving effect to subsequent forward-stock splits, are exercisable to acquire shares of Class B Non-Voting Common Stock for $10.00 per share) prior to the warrants’ expiration. We accounted for the warrants in accordance with ASC 815-10, *Derivatives and Hedging*, pursuant to which the warrants were recorded at relative fair value within stockholders’ equity in our consolidated balance sheets.

During the nine months ended September 30, 2024, we granted a total of 2,285,750 warrants, consisting of 1,285,750 warrants granted to employees and directors and 1,000,000 warrants granted as part of a convertible promissory note. As of September 30, 2024, there was a total of 3,303,829 warrants exercisable with an aggregate intrinsic value of $14,564,986. For the total warrants outstanding of 4,901,458 as of September 30, 2024, the aggregate intrinsic value was $20,352,758.

As of September 30, 2024, there was $3,943,633 of unrecognized compensation cost related to non-vested warrants. The equity-based compensation cost, related to warrants included as a charge to operating expenses in the condensed consolidated statements of operations, was $671,819, $10,927,326, $89,374 and $273,380 for the three and nine months ended September 30, 2024 and September 30, 2023, respectively. The cost is expected to be recognized over a weighted-average period of 3.03 years.

### Non-controlling Interest and Variable Interest Entities

The non-controlling interest (“*NCI”*) represents capital contributions and distributions, income and loss attributable to the owners of less than wholly owned consolidated entities and are reported in equity. NCIs are evaluated by the Company and are shown as permanent equity. Net income (loss) attributable to NCIs reflects the portion of the net income (loss) of consolidated entities applicable to the NCI shareholders in the accompanying Condensed Consolidated Statements of Operations. The net income (loss) attributable to NCIs is classified in the Consolidated Statements of Operations as part of consolidated net income (loss) and deducted from total consolidated net income (loss) to arrive at the net income (loss) attributable to the Company. The Company has evaluated its investments in unconsolidated entities in order to determine if they qualify as variable interest entities (“*VIEs”*). The Company monitors these investments and, to the extent it has determined that it owns a majority of the controlling class of securities of a particular entity, analyzes the entity for potential consolidation. The Company will continually analyze investments, including when there is a reconsideration event, to determine whether such investments are VIEs and whether such VIE should be consolidated. These analyses require considerable judgment in determining the primary beneficiary of a VIE and could result in the consolidation of an entity that would otherwise not have been consolidated or the non-consolidation of an entity that would have otherwise been consolidated.

The Company accounts for the change in its ownership interest while it retains its controlling financial interest in its majority-owned subsidiaries or VIEs as equity transactions. The carrying value of the NCI should be adjusted to reflect the change in the Company’s ownership interest in the subsidiary, and differences between the fair value of the consideration received and the amount by which the NCI is adjusted should be recognized in equity attributable to the Company. This may be shown as NCI and as additional paid in capital to the Company when combined agree to the non-controlling issuance of shares as shown in the Condensed Consolidated Statement of Change in Stockholders’ Equity.

If a change in ownership of a consolidated subsidiary results in a loss of control or deconsolidation, any retained ownership interests are remeasured with the gain or loss reported to net earnings. These may be majority-owned subsidiaries or variable interest entities that the Company has 100% voting control of.

### Off-Balance Sheet Arrangements

We do not engage in transactions that generate relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, as a part of our ongoing business. Accordingly, we did not have any off-balance sheet arrangements during any of the periods presented.

### Stockholders’ Equity

The Company had two membership classes of units while it was a limited liability company: Class A Voting and Class B Non-Voting Units. Upon the Company’s conversion on April 6, 2022 from a Colorado limited liability company to a Colorado C corporation, the Company’s Class A Voting Units became its Class A Common Stock, and the Class B Non-Voting Units became its Class B Non-Voting Common Stock.

On October 25, 2022, Venu amended its Articles of Incorporation to increase the number of shares of its capital stock authorized for issuance, change the voting rights of its Class A Common Stock, and add its Class C Common Stock as a class of stock.

On August 7, 2023, Venu allowed its shareholders to exchange their shares of Class A Common Stock into shares of Class C Common Stock on a 1-for-25 basis and to convert their shares of Class B Non-Voting Common Stock into shares of Class C Common Stock on a 1-for-1 basis. The Company has 76,245 shares of treasury stock that it acquired through the acquisition of HIA.

On November 3, 2023, Venu amended its Articles of Incorporation to increase the number of shares of its capital stock authorized for issuance and to effect a 5-for-1 forward stock split of the issued and outstanding shares of its Class C Common Stock. . On that same date, Venu also began a private placement offering of its shares of Class C Common Stock for $10.00 per share, which later became an offering of Common Stock following Venu’s one-for-one conversion of Class C Common Stock into Common Stock in September 2024. In connection with that offering, Venu issued 3,507,591 shares of Common Stock, including 3,169,341 shares during the nine months ended September 30, 2024. Venu also issued 700,000 shares of Class C Common Stock as payment for services to Sunshine Advisors, LLC, an outside consultant.

On November 15, 2023, Venu amended its Articles of Incorporation to effect a 5-for-1 forward stock split of the issued and outstanding shares of its Class B Non-Voting Common Stock.

On March 5, 2024, Venu and its Class C Common Stock shareholders authorized the creation and issuance of up to 60,000,000 shares of Class D Common Stock. Venu amended its Articles of Incorporation to increase the number of shares of its capital stock authorized for issuance and to add its Class D Common Stock as a class of stock. At that time, Venu allowed shares of Class B Non-Voting Common Stock and of Class C Common Stock to be exchanged for shares of Class D Common Stock on a 1-for-1 basis.

On September 6, 2024, Venu amended and restated is Articles of Incorporation to change its legal name to “Venu Holding Corporation” and cause all outstanding shares of its previously outstanding Class C Common Stock and Class D Common Stock to be converted on a one-for-one basis to shares of “Common Stock.” As of the filing of the Amended and Restated Articles of Incorporation, the Company’s authorized capital does not include Class A Voting Common Stock. As of September 30, 2024, the Company has 383,656 shares of Class B Non-Voting Common Stock and 35,914,923 shares of Common Stock issued and outstanding.

Except for any differences in voting privileges or in the contractual rights or limitations assigned or afforded to a specific series of stock in connection with a merger, acquisition, or strategic transaction, the shares of Common Stock and Class B Non-Voting Common Stock have the same preferences, limitations, and relative rights. Each holder of Common Stock is entitled to one vote per share of Common Stock held of record by such holder on all matters on which shareholders generally are entitled to vote. Except as required by law, holders of the Class B Non-Voting Common Stock have no voting power with respect to their shares of Class B Non-Voting Common Stock, and the shares of Class B Non-Voting Common Stock are not entitled to vote on any matter submitted to the shareholders.

### Quantitative and Qualitative Disclosures About Market Risk

We are a smaller reporting company as defined by Item 10 of Regulation S-K and are not required to provide the information otherwise required under this item.

### JOBS Act Accounting Election

In April 2012, the Jumpstart Our Business Startups Act of 2012 (the “*JOBS Act”*), was enacted. Section 107 of the JOBS Act provides that an “emerging growth company” (an “*EGC”*) may take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended (the “*Securities Act”*), for complying with new or revised accounting standards. As an EGC under the JOBS Act, the extended transition period provided in Section 7(a)(2)(B) of the Securities Act allows us to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to use the extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date we (i) are no longer an EGC, or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public-company effective dates.

Other exemptions and reduced reporting requirements under the JOBS Act for EGCs include presentation of only two years of audited financial statements in a registration statement for an initial public offering, an exemption from the requirement to provide an auditor’s report on internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act, an exemption from any requirement that may be adopted by the Public Company Accounting Oversight Board, along with less extensive disclosure about our executive compensation arrangements. We plan to take advantage of these reduced disclosure requirements and exemptions until we are no longer considered an EGC.

## Market risk

As filed, 427 characters.

### Emerging Growth Company Status

We are a “smaller reporting company” as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and are therefore subject to reduced public company reporting requirements. As a smaller reporting company, pursuant to Item 305(e) of Regulation S-K promulgated under the Securities Act, we are not required to provide the information required by this Item 3.

## Controls and procedures

As filed, 3,519 characters.

### Evaluation of Disclosure Controls and Procedures

As of September 30, 2024, the end of the period covered by this Quarterly Report, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of our “disclosure controls and procedures” (as defined in the Securities Exchange Act of 1934, as amended (the “Exchange Act”) Rules 13a-15(e)and 15d-15(e)) and concluded that the disclosure controls and procedures were not effective due to material weaknesses in our internal control over financial reporting. We had limited accounting and finance personnel which impacted our ability to properly segregate duties relating to the Company’s internal controls over financial reporting. In addition, the Company’s financial close process was not sufficient. While we have processes to identify and appropriately apply applicable accounting requirements, we plan to continue to enhance our systems, processes and human capital resources with respect to our accounting and finance functions The elements of our remediation plan can only be accomplished over time with the addition of experienced accounting and finance employees and, where necessary, external consultants, and with enhanced accounting systems and financial close processes.

### Changes in Internal Control over Financial Reporting

During the quarter ended September 30, 2024, there has been no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Management has identified material weakness in internal controls as described above. We have commenced remediation of the above discussed material weaknesses in that we grew our accounting staff over 100% during the nine months ended September 30, 2024 compared to September 30, 2023. We will continue to evaluate our accounting and finance staffing needs as well as make planned enhancements to our systems and improvements to our financial reporting processes.

### Inherent Limitations on Effectiveness of Controls and Procedures

The Company’s management, including the Chief Executive Officer and Chief Financial Officer, believes that disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving their objectives and are effective at the reasonable assurance level. However, management does not expect that the disclosure controls and procedures or the internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the company have been detected. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

## Risk factors

As filed, 798 characters.

As a smaller reporting company, we are not required to provide disclosure pursuant to this Item 1A. However, in addition to other information set forth in this Quarterly Report, you should carefully consider the “Risk Factors” discussed in our Final Prospectus filed with the SEC on November 27, 2024, pursuant to Rule 424(b)(4) under the Securities Act, and elsewhere in this Quarterly Report for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in this Quarterly Report. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial might materially adversely affect our actual business, financial condition, and operating results.

Filed Dec 23, 2024.
Source: SEC EDGAR, the filing index for accession 0001493152-24-051822. Last ingested by Listed: Oct 26, 2026, 17:16 ET. No prices; not investment advice.