AUCHAMORE STUD

RACING PARTNERSHIP

Example of a racing Partnership proposal

A $25,000 offering in 5 Partnership units of $5,000 each .Welcome to Auchamore Stud's racing partnership proposal which offers the opportunity to participate in the "SPORT OF KINGS " and to experience the excitement of one of the most exhilarating moments in this sport. ""That moment when your winning horse passes the winning post "

Auchamore proposes to syndicate a quality thoroughbred yearling filly as a 2 year old racing prospect . It is proposed to offer the filly in full units representing 20 % of ownership . Details of value and anticipated monthly and yearly carrying costs are outlined below.

. UNNAMED FILLY

ANTICIPATED ANNUAL SCHEDULE From the present until all shares are sold the filly would continue to be boarded at Auchamore Stud. Board costs would not accrue to the partnership until the sale of all units would be concluded

Directly all units are sold the filly would be shipped to commence formal training . (The filly would be broken as a yearling at the farm or local farm  and will be routinely worked at the farm until sold ) .  She would be assigned to a Trainer who has a farm training facility where the filly would be brought along prior to commencing her actual track training at Woodbine. The farm has the capacity to truck the filly on a daily basis to and from the track for workouts and gate exposure as required. Her training would continue until it was felt the time was right to enter her for her maiden race. From that point on her racing career would continue.

PARTNERSHIP ACQUISITION COSTS.

Full price of  Filly Partnership Offering $25,000

4 Full Partnership units of $5,000 each are available.

( half units of $2,500 are also available )

* The partnership comprises 5 full units each representing 20 % of equity ownership

* Each full unit is $5,000 and represents 20 % equity ownership.

* Each half unit is$2,500 and represents 10 % equity ownership.

* One full unit equating to 20 % equity ownership will be retained by Auchamore Stud.

* As compensation for development and ongoing management , Auchamore Stud

receives 20 % carried interest on partnership expenses. This is accomplished as follows.................................

* Each full unit represents 20% equity and is responsible for 25% of expenses.

* Each half unit represents 10% of equity and is responsible for 12 and one half % of expenses.

ESTIMATE OF ON GOING EXPENSES   

The following does not include any projection for purse earnings or sales proceeds.

$25,000 offering.

5 Full partnership Units @ $5000 each ( or half units @ $2,500)

" Yet to be named  Filly."

No Boarding costs until all partnership unit sales are concluded

Breaking and early working

$35.00 per day x 45 days...........................................................$1,575

Training Period Commencing April - ( Training Center ).

$40.00 per day x 90 Days ..........................................................$3,600.

Track Training / Racing Mid May / Mid December ( Woodbine ).

$60.00 per day x 150 Days ............................................................$9,000

Farrier......10 Months x $100. ..........................................................$1,000

Veterinarian........10 Months x. $200.................................................$2,000.

Insurance Mortality & Liability....10 Months .......................................$1,250

Transportation .................................................................................... .. $600.

Partnership Contract...............................................................................$500.

TOTAL ONGOING EXPENSES...............................................$19,475.00.

YEAR ONE

10 Month Expenses per full unit , 1 of 4 Units = $4,869. per half unit $2,434

1 Month Expenses per full unit 1 of 4 units = $486. per half unit $243

Total Acquisition & expenses per full unit. = $5,000 + $4,869 = $9,869

.............................................per half unit = $2,500 + $2,434 = $4,934

Required investment for partnership participation.

10 Month period including 20% ownership 1 full unit $9,869

10 Month " " 10% ownership 1 half unit $4,934.

NOTES:

* Partner funds for Ongoing Expenses would be placed in a Reserve Account with The C.I.B.C. to be used to fund monthly expenses. Bookkeeping would be undertaken by an accredited party. Copies of itemized monthly bills will be sent to CO-owners. Indicated below are some  expenses which would be in addition to those mentioned above.

* Mortality & liability insurance would be retained on the horse from commencement of the partnership.

* A standard racing partnership agreement would be signed by each partner after each is satisfied with the contents of the agreement.

* A share can be sold at any time though the partners would have first right to buy any share.

* The trainer will be chosen on the basis of experience, training / racing record, ethics

his empathy for horses, and very importantly his or her preparedness to deal with the concerns, queries and general hanging around of partners.

* Certain Tax write off benefits may accrue from participation in a horse racing partnership. You can show active participation by keeping a diary of your presence at training sessions and on race days, your conferences with the trainer , manager and your time spent on researching and learning about the industry.. Consult your accountant for details.

* In terms of financial negatives, the worst thing that could happen is the horse could have a catastrophic injury that would require retirement or extended veterinary care. In this case we would probably need to donate the horse to a charitable organization and take the loss.

* On the other hand the best thing that could happen in addition to the primary purpose of having lots of fun is we could win the QUEENS PLATE or the KENTUCKY DERBY and make pots of money on our investment.

* Auchamore Stud would retain the right to choose the training center ,trainer and all management decisions relative to racing in conjunction with the trainer. Auchamore Stud and the trainer would encourage owner involvement , ideas and communication. However to avoid arguments the trainer and Auchamore Stud would have the final say on racing matters.

* Auchamore Stud would also be responsible for all administrative tasks and regular correspondence with partners to ensure the partners receive the information they need to enjoy owning a race horse.

Quite often in the course of training / racing a lay-up period is required either because of a training injury ( e.g.: bone splint ) or perhaps the horse is just not ready physically ,to race. Such a period might extend to 60 days and at such times the filly would lay up at Auchamore Stud which would result in a reduction in day board costs to the partnership.

* The above table "Estimate of Ongoing Expenses " , is for a 10 month period , through the end of the Ontario racing season about mid December. Subsequent to mid December board costs excluding extraordinary costs etc. would be billed to the partners on a monthly basis at an approximate cost of $490.00 per month. This lay up period from mid Dec through mid Feb would normally be at Auchamore Stud with the above as noted commensurate reduction in board costs. Thereafter the horse would be shipped to the training center to be readied for the next racing season.

Please Note : The foregoing projection is an estimate only . It is not intended to be conclusive and limited to the above noted expenses. It is anticipated that further expenses may well accrue to the partnership As .......

* Extraordinary Veterinarian expenses

* Trucking to and from farms and track .

* Race nomination fees.

* Sales Auction fees and related sales expenses.

* Racing colours and tack .

* Licenses

* Jockey Fees.

* Again please note, ( year one) estimate of total expenses includes the cost of the initial unit, thereafter (year two etc. ) only ongoing expenses would obviously apply.

* As mentioned above the estimate of expenses does not take into account any race earning , which one hopes would be substantial !!.

It is our responsibility to point out that while there are substantial costs involved in the ownership of race horses , there is no undertaking or assurance stated or implied in this offering that a profit could or would ever accrue from this investment.

PARTNERSHIP MEMBER BENEFITS

*** Active involvement in the traditional "Sport of Kings "

*** Opportunity to visit the breaking & training farm.

*** Opportunity to visit the Race Track "Backstretch"

*** Opportunity to meet your Horse Trainer .

*** Opportunity to attend the races.

*** Opportunity to attend Thoroughbred Auctions.

*** Opportunity to stand with your winning horse in the "Winner's Circle "

*** Receive updates on your horses training and racing progress.

*** Potential to earn a substantial return on your investment.

*** Obtain an Owner's License with associated privileges.

*** Membership in the N. T.R.A. National Thoroughbred Racing Association

Including * A charter member Go Baby Go Cap,

* A subscription to Ontrack , The N.T.R.A's quarterly newsletter

* The N.T.R.A. wagering guide , " How to Go Baby Go : A little

Black Book Pocket Guide to wagering on the Ponies.

* An N.T.R.A. lapel pin.

* An N.T.R.A. member decal.

ENCLOSURES:

Colour photo of filly

Catalogue Pedigree of Filly highlighting stakes horses.

Info on Training Center

Info On The Ontario Racing Scene Purse structure.

Info on Thoroughbred Improvement Program.

Colour photo of aerial view of Auchamore Stud.