253G2 1 tm211618d3_253g2.htm 253G2

Filed pursuant to rule 253(g)(2)

File Number: 024-11408

OFFERING CIRCULAR DATED FEBRUARY 18, 2021

GOLFSUITES 1, INC.

2738 FALKENBURG ROAD SOUTH

RIVERVIEW, FL 33578

(813) 621-5000

Up to 6,500,000 shares of Preferred Stock and

up to 6,500,000 shares of Class A Common Stock into which the Preferred Stock may convert*

Minimum investment 70 shares of Preferred Stock ($525)

SEE “SECURITIES BEING OFFERED” AT PAGE 37

	Price to Public		Broker-Dealer discount and commissions (1)		Proceeds to issuer (2)		Proceeds to other persons
Price Per share	$	7.50	$	0.075	$	7.425	$	0
Total Maximum	$	48,750,000	$	487,500	$	48,262,500	$	0

*The Preferred Stock is convertible into Class A Common Stock either at the discretion of the investor or automatically upon effectiveness of registration of the securities in an initial public offering. The total number of shares of the Class A Common Stock into which the Preferred may be converted will be determined by dividing the original issue price per share by the conversion price per share. See “Securities Being Offered” at Page 37 for additional details.

(1)

The company has engaged Dalmore Group, LLC, member FINRA/SIPC (“Dalmore”), to perform administrative and technology related functions in connection with this offering, but not for underwriting or placement agent services. This includes the 1% commission, but it does not include the one-time set-up fees payable by the company to Dalmore of 33,000. See “Plan of Distribution” for details.

(2)

The company expects that, not including state filing fees, the minimum amount of expenses of the offering that we will pay will be approximately $50,000 regardless of the number of shares that are sold in this offering. In the event that the maximum offering amount is sold, the total offering expenses will be approximately 487,550.

This offering will terminate at the earlier of (1) the date at which the maximum offering amount has been sold, (2) February 18, 2022, or (3) the date at which the offering is earlier terminated by the company at its sole discretion. The company has engaged Prime Trust, LLC as agent to hold any funds that are tendered by investors. The offering is being conducted on a best-efforts basis without any minimum target. Provided that an investor purchases shares in the amount of the minimum investment, $525 (70 shares), there is no minimum number of shares that needs to be sold in order for funds to be released to the company and for this offering to close, which may mean that the company does not receive sufficient funds to cover the cost of this offering. The company may undertake one or more closings on a rolling basis. After each closing, funds tendered by investors will be made available to the company. After the initial closing of this offering, we expect to hold closings on at least a monthly basis.

Each holder of GolfSuites 1 Preferred Stock (the “Preferred Stock”) is entitled to one vote for each share on all matters submitted to a vote of the stockholders. Holders of Preferred Stock will vote together with the holders of Common Stock as a single class on all matters (including the election of directors) submitted to vote or for the consent of the stockholders of GolfSuites 1. Holders of the Class B Common Stock will continue to hold a majority of the voting power of all of the company’s equity stock at the conclusion of this offering and therefore control the board.

THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION DOES NOT PASS UPON THE MERITS OR GIVE ITS APPROVAL OF ANY SECURITIES OFFERED OR THE TERMS OF THE OFFERING, NOR DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF ANY OFFERING CIRCULAR OR OTHER SOLICITATION MATERIALS. THESE SECURITIES ARE OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION WITH THE COMMISSION; HOWEVER, THE COMMISSION HAS NOT MADE AN INDEPENDENT DETERMINATION THAT THE SECURITIES OFFERED ARE EXEMPT FROM REGISTRATION

GENERALLY, NO SALE MAY BE MADE TO YOU IN THIS OFFERING IF THE AGGREGATE PURCHASE PRICE YOU PAY IS MORE THAN 10% OF THE GREATER OF YOUR ANNUAL INCOME OR NET WORTH. DIFFERENT RULES APPLY TO ACCREDITED INVESTORS AND NON-NATURAL PERSONS. BEFORE MAKING ANY REPRESENTATION THAT YOUR INVESTMENT DOES NOT EXCEED APPLICABLE THRESHOLDS, WE ENCOURAGE YOU TO REVIEW RULE 251(d)(2)(i)(C) OF REGULATION A. FOR GENERAL INFORMATION ON INVESTING, WE ENCOURAGE YOU TO REFER TO www.investor.gov.

This offering is inherently risky. See “Risk Factors” on page 9.

Sales of these securities will commence on approximately February 18, 2021.

The company is following the “Offering Circular” format of disclosure under Regulation A.

In the event that we become a reporting company under the Securities Exchange Act of 1934, we intend to take advantage of the provisions that relate to “Emerging Growth Companies” under the JOBS Act of 2012. See “Implications of Being an Emerging Growth Company.”

TABLE OF CONTENTS

Summary	5
Risk Factors	9
Dilution	17
Plan of Distribution and Selling Securityholders	19
Use of Proceeds to Issuer	22
The Company’s Business	23
The Company’s Property	29
Conflicts of Interest	29
Management’s Discussion and Analysis of Financial Condition and Results of Operations	30
Directors, Executive Officers and Significant Employees	33
Compensation of Directors and Officers	34
Security Ownership of Management and Certain Securityholders	35
Interest of Management and Others in Certain Transactions	36
Securities Being Offered	37
Financial Statements	F-1

In this Offering Circular, the term “GolfSuites,” “we,” “us, “our” or “the company” refers to GolfSuites 1, Inc., a Delaware corporation and its wholly-owned subsidiaries, GolfSuites Lubbock, LLC and GolfSuites 3, Inc. and its subsidiary GolfSuites Tulsa, LLC .

THIS OFFERING CIRCULAR MAY CONTAIN FORWARD-LOOKING STATEMENTS AND INFORMATION RELATING TO, AMONG OTHER THINGS, THE COMPANY, ITS BUSINESS PLAN AND STRATEGY, AND ITS INDUSTRY. THESE FORWARD-LOOKING STATEMENTS ARE BASED ON THE BELIEFS OF, ASSUMPTIONS MADE BY, AND INFORMATION CURRENTLY AVAILABLE TO THE COMPANY’S MANAGEMENT. WHEN USED IN THE OFFERING MATERIALS, THE WORDS “ESTIMATE,” “PROJECT,” “BELIEVE,” “ANTICIPATE,” “INTEND,” “EXPECT” AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS, WHICH CONSTITUTE FORWARD LOOKING STATEMENTS. THESE STATEMENTS REFLECT MANAGEMENT’S CURRENT VIEWS WITH RESPECT TO FUTURE EVENTS AND ARE SUBJECT TO RISKS AND UNCERTAINTIES THAT COULD CAUSE THE COMPANY’S ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTAINED IN THE FORWARD-LOOKING STATEMENTS. INVESTORS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE ON WHICH THEY ARE MADE. THE COMPANY DOES NOT UNDERTAKE ANY OBLIGATION TO REVISE OR UPDATE THESE FORWARD-LOOKING STATEMENTS TO REFLECT EVENTS OR CIRCUMSTANCES AFTER SUCH DATE OR TO REFLECT THE OCCURRENCE OF UNANTICIPATED EVENTS.

SOME IMAGES CONTAINED IN THIS OFFERING CIRCULAR ARE ARTIST’S IMPRESSIONS AND THE ACTUAL FACILITIES MAY VARY.

A LETTER FROM THE FOUNDER TO PROSPECTIVE INVESTORS

Thank you for considering an investment in GolfSuites 1! We couldn’t be more excited about this opportunity and are thrilled that you are considering joining us. Before you get into the offering circular, there are a couple things we want to mention.

GolfSuites 1 is not a conventional company. We don’t intend to become one.

Most of this offering circular describes GolfSuites 1 in conventional business terms. In fact, the whole purpose of this document is to provide a convention for you to evaluate our company and make an informed investment decision. But there are elements of GolfSuites 1 that defy convention and we want to take a moment to explain them in our own words.

What we love

We have merged our passion for entertainment, golf, and hospitality with our business acumen to create an experience that we believe is like no other. GolfSuites offers a FUN, entertainment filled environment with high-quality food, creative menus, unique beverages, and golf. Our goal is to connect communities by providing a FUN and engaging venue through entertainment, food & beverage, technology-driven experiences, and game improvement for anyone looking to have FUN no matter the occasion. We pride ourselves on delivering FUN with passion by building relationships and creating unforgettable experiences for each and every Guest. #thinksuite

We know when it is time to pivot!

We have learned some important lessons along the way. When we launched our first Regulation A offering in 2019 our primary intent was to build large golfing facilities across the county. Each facility would cost approximately $30,000,000 and would focus on golf with food and beverage as a secondary interest. We have since learned that we love FUN, great food and golf. We have learned that we can bring this multi-faceted experience to our guests in various types of venues, including smaller venues that we build, purchase, or lease, indoor lounges and full size new builds if the right incentives are aligned.

So THANK YOU again for considering our company. As with any investment, but especially for new companies, an investment does involve risk, please review the information in this Offering Circular including the risk factors. If you like what you see, we’d be honored to have you join us. And if you’re not sure, please check us out on of our facilities so you can see for yourself what we’re all about.

It’s Time to Tee Off!

Jerry Ellenburg

Chairman, GolfSuites 1

SUMMARY

GolfSuites 1, Inc. (“GolfSuites”) owns, leases, and operates golf driving range entertainment centers in the United States. At our entertainment centers we aim to provide next generation hospitality and dining venues, high-tech gamified golf in climate-controlled suites, live entertainment, and spaces for both social and corporate functions. The company was incorporated in Delaware on October 25, 2018 as KGEM Golf Midwest, Inc. On January15, 2019, the company changed its name to GolfSuites 1, Inc.

As of January 8, 2021 the company operates two facilities. One located in Jenks, Oklahoma a suburb of Tulsa, (the “Tulsa Facility”) and the other located in Lubbock Texas (the “Lubbock Facility”). The Tulsa Facility and the land on which it is located is leased by the company. The Lubbock Facility is owned by the company and the land on which it is located is leased by the company. Below are statistics related to each facility.


TULSA FACILITY	LUBBOCK FACILITY


ENTERTAINMENT AMMENITIES

60 golf suites.	60 golf suites.
These suites open up to the golf target field and incorporate comfortable seating, ball dispensers, club storage, gaming and media displays.	These suites open up to the golf target field and incorporate comfortable seating, ball dispensers, club storage, gaming and media displays.
Private lessons available	Private lessons available
Pinball, pool and corn hole	Pinball, pool and corn hole

HOSPITALITY AMMENITIES

2 Restaurants	2 Restaurants
2 Bars	2 Bars

OPERATIONAL STATISTICS

Multi-floor facility	Multi-floor facility
Average weekly guests: Approximately 2,500 since September 2019 to present.	Average weekly guests: Approximately 2,500 since August 2020 to present.

GolfSuites’ Mission, Vision and Values

Every decision we make for the future of GolfSuites is informed by our collective mission, vision, and values.

Our mission is to provide a fun, all-inclusive engaging and authentic golf-centric entertainment venues focused on ultimate hospitality and game improvement.

Our vision is that GolfSuites is the worldwide destination of choice for gamified golf entertainment, events, performance, golf improvement, and fun for all.

Our Values:

To treat all guests and team partners with care as if they were family.

To deliver exceptional and consistent guest experiences with state-of-the-art technology.

To deliver value to all team partners and offer opportunities for growth and development.

To deliver value to all guests and a fair profit to all shareholders.

To provide an all-inclusive environment supporting fun and collaboration.

GolfSuites’ Plans for the Venues

GolfSuites intends to operate three types of venues:

Multi-floor facilities with 40-100+ golf bays.

Single floor facilities with 25-40 golf bays.

Indoor simulator facilities (“Studios”).

Although different, each venue type will focus on entertainment, hospitality and a technology driven golf experience. GolfSuites believes each type of venue will appeal to a wide demographic because of the multi-faceted experience that each venue can offer.

Financial Milestones

Since GolfSuites 3 began operating the Tulsa Facility in September 2019, the following growth has occurred at the Tulsa Facility:

Average weekly guests have increased from 1,250 to 2,500.

Weekly food and beverage sales and golf suite reservations and rentals have increased from $60,000 to $100,000.

The Offering

Securities offered	Up to 6,500,000 shares of Preferred Stock and up to 6,500,000 shares of Class A Common Stock into which they may convert
Class A Stock Common outstanding before the offering	0 shares of Class A Common Stock.
Preferred Stock outstanding before the offering	278,821 shares of Preferred Stock.
Preferred Stock outstanding after the offering	6,778,821 shares of Preferred Stock
Share Price	$7.50 per share
Minimum Investment	$525
Use of Proceeds	Proceeds from this offering will be used as follows: (i) purchase, rebrand or renovate existing facilities, (ii) fund the company’s construction and development of golf driving range simulators to be installed in malls and office buildings in the United States, (iii) fund the company’s construction and development of gold driving range and entertainment centers in the United States, (iv) marketing efforts, and (v) operational expenses. See “Use of Proceeds to Issuer” section of this Offering Circular.

Terms of the Preferred Stock

Holders of the Preferred Stock are entitled to the following:

Declared dividends

In the event the company declares a dividend distribution to the holders Common Stock, holders of Preferred Stock will receive dividend distribution. Dividends will be distributed to holders on a pro-rata on an as converted basis.

Voting:

Holders of the Preferred Stock are entitled to one vote for each share on all matters submitted to a vote of the shareholders.

Holders of Preferred Stock at all times will vote together with the holders of Common Stock as a single class on all matters (including the election of directors) submitted to vote or for the consent of the stockholders of GolfSuites.

Holders of Class B Common Stock (currently held exclusively GolfSuites) are entitled to five votes per share (see, “Risk Factors – The officers of GolfSuites control the company and the company does not currently have any independent directors”) and thus will control the board.

Liquidation preference:

In the event of a liquidation, investors will be entitled to receive the greater of the amount of their total investment in the shares of Preferred Stock and any accrued and unpaid dividends or their pro rata percentage of the proceeds calculated based on the number of shares owned by each investor on an “as converted to Common Stock” basis.

Conversion:

Holders of the Preferred Stock may convert their shares of Preferred Stock into Class A Common Stock in their sole discretion.

In the event of an initial public offering, as defined in the Certificate of Designations, conversion of the Preferred Stock is mandatory.

Anti-dilution protection is provided to holders of the Preferred Stock using the weighted average method. See, “Securities Being Offered – Preferred Stock – Anti-Dilution Rights”; Section 5 of the Certificate of Designations filed as an exhibit to this Offering Statement of which this Offering Circular forms a part.

Implications of Being an Emerging Growth Company

As an issuer with less than $1 billion in total annual gross revenues during its last fiscal year, the company will qualify as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) and this status will be significant if and when the company becomes subject to the ongoing reporting requirements of the Exchange Act of 1934, as amended. An emerging growth company may take advantage of certain reduced reporting requirements and is relieved of certain other significant requirements that are otherwise generally applicable to public companies. In particular, as an emerging growth company GolfSuites:

will not be required to obtain an auditor attestation on its internal controls over financial reporting pursuant to the Sarbanes-Oxley Act of 2002;

will not be required to provide a detailed narrative disclosure discussing its compensation principles, objectives and elements and analyzing how those elements fit with its principles and objectives (commonly referred to as “compensation discussion and analysis”);

will not be required to obtain a non-binding advisory vote from its shareholders on executive compensation or golden parachute arrangements (commonly referred to as the “say-on-pay,” “say-on-frequency” and “say-on-golden-parachute” votes);

will be exempt from certain executive compensation disclosure provisions requiring a pay-for-performance graph and CEO pay ratio disclosure;

may present only two years of audited financial statements and only two years of related Management’s Discussion and Analysis of Financial Condition and Results of Operations, or MD&A; and

will be eligible to claim longer phase-in periods for the adoption of new or revised financial accounting standards.

The company intends to take advantage of all of these reduced reporting requirements and exemptions, including the longer phase-in periods for the adoption of new or revised financial accounting standards under Section 107 of the JOBS Act. The company’s election to use the phase-in periods may make it difficult to compare its financial statements to those of non-emerging growth companies and other emerging growth companies that have opted out of the phase-in periods under Section 107 of the JOBS Act.

Under the JOBS Act, the company may take advantage of the above-described reduced reporting requirements and exemptions for up to five years after its initial sale of common equity pursuant to a registration statement declared effective under the Securities Act of 1933, as amended, or such earlier time that the company no longer meet the definition of an emerging growth company. Note that this offering, while a public offering, is not a sale of common equity pursuant to a registration statement, since the offering is conducted pursuant to an exemption from the registration requirements. In this regard, the JOBS Act provides that we would cease to be an “emerging growth company” if the company has more than $1 billion in annual revenues, have more than $700 million in market value of its common stock held by non-affiliates, or issue more than $1 billion in principal amount of non-convertible debt over a three-year period.

Certain of these reduced reporting requirements and exemptions are also available to us due to the fact that the company may also qualify, once listed, as a “smaller reporting company” under the Commission’s rules. For instance, smaller reporting companies are not required to obtain an auditor attestation on their assessment of internal control over financial reporting; are not required to provide a compensation discussion and analysis; are not required to provide a pay-for-performance graph or CEO pay ratio disclosure; and may present only two years of audited financial statements and related MD&A disclosure.

Summary Risk Factors

Our business expects to be subject to a number of risks and uncertainties, including those highlighted in the section titled “Risk Factors” immediately following this summary. These risks include, but are not limited to, the following:

This is a very young company.

Our Parent Company has a limited prior performance record.

The company’s auditor has issued a “going concern” opinion.

The company has minimal operating capital, no significant assets and limited revenues from operations.

The success of GolfSuites business is dependent on its ability to lease or purchase parcels of land at favorable prices.

The company plans to raise significantly more capital and future fundraising rounds could result in dilution.

Success in the hospitality and entertainment industry is highly unpredictable and there is no guarantee the company’s content will be successful in the market.

The company may not be able to attract and retain individuals interested in annual memberships at its facilities, and attract drop-in/daily memberships, which could harm its business, financial condition and results of operations.

GolfSuites operates in a highly competitive market.

Competition in the “alternative venues for recreational pursuits” industry could have a material adverse effect on the company’s business and results of operations.

Customer complaints or litigation on behalf of GolfSuites customers or employees may adversely affect its business, results of operations or financial condition.

The company’s insurance may not be sufficient.

The company’s development and growth strategy depends on its ability to identify, and fund new entertainment venues and operate them profitably

GolfSuites depends on a small management team and may need to hire more people to be successful.

Key Man Risk.

GolfSuites may not be able to protect all of its intellectual property.

The Parent Company has not yet entered into master licensing agreements with some of its third party suppliers of technology and GolfSuites has not yet been made a sublicense to the relevant master licensing agreements.

Distributions will be only made if permitted under Delaware law, which is subject to change, and in the sole discretion of the board of directors.

The tax treatment of dividends may vary and distributions to shareholders may be taxed as capital gains.

The company is responsible for certain administrative burdens relating to taxation.

The offering price has been arbitrarily set by the company.

There is no minimum amount set as a condition to closing this offering.

The officers of GolfSuites control the company and the company does not currently have any independent directors.

There is no current market for GolfSuites shares.

There are conflicts of interest between the company, its management and their affiliates.

The interests of the Parent Company, GolfSuites and the company’s other affiliates may conflict with your interests.

Loans issued by The Parent Company to GolfSuites may not be made at arm’s length.

The Parent Company and GolfSuites intend to share some services.

If the Parent Company, the company’s manager, were to file for bankruptcy or otherwise liquidate the company’s result and operations, could be negatively affected.

The company’s results of operations may be negatively impacted by the coronavirus outbreak.

Actual or threatened epidemics, pandemics, outbreaks, or other public health crises may adversely affect the company’s business.

RISK FACTORS

The SEC requires the company to identify risks that are specific to its business and its financial condition. The company is still subject to all the same risks that all companies in its business, and all companies in the economy, are exposed to. These include risks relating to economic downturns, political and economic events and technological developments (such as hacking and the ability to prevent hacking). Additionally, early-stage companies are inherently riskier than more developed companies. You should consider general risks as well as specific risks when deciding whether to invest.

Risks relating to GolfSuites business

This is a very young company. The company was incorporated in October 2018. It is a startup company and currently operates only two facilities. The company and/or its affiliates have been operating the Tulsa Facility since September 2019 and the Lubbock Facility since August 2020. It has not started to build any additional golf facilities. There is only a limited history upon which an evaluation of its past performance and future prospects in the hospitality and entertainment industry can be made. Statistically, most startup companies fail.

Our Parent Company has a limited prior performance record. Just as GolfSuites is a relatively new entrant in the market, GolfSuites, Inc. (our “Parent Company”), which provides management services to GolfSuites, has a limited track record of involvement in hospitality and entertainment that investors may assess. Even if the Parent Company did have such prior experience, that experience would not be indicative of its future performance.

The company’s auditor has issued a “going concern” opinion. GolfSuites auditor has issued a “going concern” opinion on their financial statements, which means the company may not be able to succeed as a business without additional financing. GolfSuites was incorporated in October 2018. It has an accumulated deficit of $767,335 and $1,417,720 as of December 31, 2019 and June 30, 2020, respectively. The audit report states that the company’s ability to continue as a going concern for the next twelve months is dependent upon its ability to generate cash from operating activities and/or to raise additional capital to fund its operations. The company’s failure to raise additional short-term capital could have a negative impact on not only their financial condition but also their ability to remain in business.

The company has minimal operating capital, no significant assets and limited revenues from operations. The company currently has minimal operating capital, limited revenues (only the Tulsa Facility and the Lubbock Facility are operational), and for the foreseeable future will be dependent upon its ability to finance its planned operations from the sale of securities or other financing alternatives. There can be no assurance that it will be able to successfully raise operating capital in this or other offerings of securities, to raise enough funds to operate multiple venues. The failure to successfully raise operating capital and to effectively manage the Tulsa Facility and Lubbock Facilities could result in its inability to execute its business plan and potentially lead to bankruptcy, which would have a material adverse effect on the company and its investors.

The success of GolfSuites business is dependent on its ability to lease or purchase parcels of land at favorable prices. GolfSuites is a capital-intensive operation and requires a three step prior to operating facilities.

First, GolfSuites has to either lease or purchase land that the facility is on (for our one or multi-floor facilities) or rent the commercial space and modify the commercial space to spec (for our studios).

Second, GolfSuites has to lease or purchase the facility (if they are not building a facility from the ground up).

Third, GolfSuites has to re-brand existing facilities, build studios or build new facilities from the ground up.

As of the date of this Offering Circular, the company: (i) leases the Tulsa Facility and leases the property that the Tulsa Facility is on and (ii) owns the Lubbock Facility, but leases the land that the Lubbock facility is on.

If this offering does not raise enough capital to make capital improvements on existing facilities, enter additional lease agreements for facilities and Studios alike, or purchase the land that is necessary to begin construction, the company will need to procure external financing for the purchase of the land and/or construction or improvements of the facility.

In the event the company acquires leased property it may not be able to successfully negotiate satisfactory terms regarding the leased space, renew or replace existing leases, on satisfactory terms or at all, any of these items could restrict the company’s ability to grow and retain its existing customers and annual members. Accordingly, the financial condition and results of operations could be harmed. The company may lease certain real estate for the development of various facilities. Potential hurdles that the company may encounter when leasing land include the following:

Inability to negotiate favorable terms due to market conditions

Inability to negotiate favorable terms due to limited experience to date with these types of transactions.

Inability to renew the lease on favorable terms.

Increase in rental rates in markets in which the company operates.

Inability to expand its portfolio of facilities as quickly as possible.

Long-term and fixed-cost nature of leases in general may limit the company’s operating flexibility.

The company’s ability to negotiate favorable terms to extend an expiring lease or to secure an alternate location will depend on then-prevailing conditions in the real estate market, such as overall rental cost increases, competition from other would-be tenants for desirable leased spaces and its relationships with current and prospective building owners and landlords, and may depend on other factors that are not within the company’s control. If the company is not able to renew or replace an expiring lease, it will incur significant costs related to vacating that space and redeveloping whatever alternative space the company is able to find, if any. In addition, if the company is forced to vacate a space, the company could lose members who purchased memberships based on the design, location or other attributes of that particular facility and may not be interested in becoming members at another facility.

The company plans to raise significantly more capital and future fundraising rounds could result in dilution. GolfSuites will need to raise additional funds to finance its operations or fund its business plan. Even if the company manages to raise subsequent financing or borrowing rounds, the terms of those borrowing rounds might be more favorable to new investors or creditors than to existing investors such as you. New equity investors or lenders could have greater rights to the company’s financial resources (such as liens over its assets) compared to existing shareholders. Additional financings could also dilute your ownership stake, potentially drastically. See “Dilution” and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations– Plan of Operation” for more information.

Success in the hospitality and entertainment industry is highly unpredictable and there is no guarantee the company’s content will be successful in the market. The company’s success will depend on the popularity of its hospitality and entertainment facilities. Consumer tastes, trends and preferences frequently change and are notoriously difficult to predict. If the company fails to anticipate future consumer preferences in the hospitality and entertainment business, its business and financial performance will likely suffer. The hospitality and entertainment industry is fiercely competitive. The company may not be able to develop facilities that will become profitable. The company may also invest in facilities that end up losing money. Even if one of its facilities is successful, the company may lose money in others.

Provide dining and leisure experiences that members are interested in paying for.

Maintain or increase revenues generated from food and beverage sales.

Attract consistent suite rentals.

Attract individuals interested in paying for daily memberships.

Attract individuals interested in paying for annual memberships.

Maintain or increase revenues generated from corporate events.

Maintain or increase revenues from retail sales.

Changes in consumer financial condition, leisure tastes and preferences, particularly those affecting the popularity of golf, and other social and demographic trends could adversely affect its business. Significant periods where attrition rates exceed enrolment rates or where facilities usage is below historical levels would have a material adverse effect on its business, results of operations and financial condition. If the company cannot attract new members, retain its existing members, its financial condition and results of operations could be harmed.

GolfSuites operates in a highly competitive market. GolfSuites plans to operate in a highly competitive market and faces intense competition. Its competitors include:

	·	Top Golf,
	·	DriveShack,
	·	1Up Golf,
	·	Big Shots,
	·	Driv,
	·	ClubCorp, and
	·	Arccis Golf

Many of the company’s current and potential competitors have greater resources, longer histories, more customers, and greater brand recognition. Competitors may secure better terms from vendors, adopt more aggressive pricing and devote more resources to technology, infrastructure, fulfillment, and marketing.

Further, GolfSuites properties will compete on a local and regional level with restaurants and other business, dining and social clubs. The number and variety of competitors in this business will vary based on the location and setting of each facility. Some facilities may be situated in intensely competitive upscale urban areas characterized by frequent innovations in the products and services offered by competing restaurants and other business, dining and social clubs. In addition, in most regions, the competitive landscape is in constant flux as new restaurants and other social and meeting venues open or expand their amenities. As a result of these characteristics, the supply in a given region may exceed the demand for such facilities, and any increase in the number or quality of restaurants and other social and meeting venues, or the products and services they provide, in such region could significantly impact the ability of the company’s properties to attract and retain members, which could harm their business and results of operations.

Competition in the “alternative venues for recreational pursuits” industry could have a material adverse effect on the company’s business and results of operations. GolfSuites properties compete on a local and regional level with alternative venues for recreational pursuits. The company’s results of operations could be affected by the availability of, and demand for, alternative venues for recreational pursuits, such as multi-use sports and athletic centers. In addition, member-owned and individual privately-owned clubs may be able to create a perception of exclusivity that the company has difficulty replicating. To the extent these alternatives succeed in diverting actual or prospective members away from the company’s facilities or affects its membership rates, the company’s business and results of operations could be harmed.

Customer complaints or litigation on behalf of GolfSuites customers or employees may adversely affect its business, results of operations or financial condition. The company’s business may be adversely affected by legal or governmental proceedings brought by or on behalf of their customers or employees. Regardless of whether any claims against the company are valid or whether they are liable, claims may be expensive to defend and may divert time and money away from operations and hurt the company’s financial performance. A judgment significantly in excess of their insurance coverage or not covered by insurance could have a material adverse effect on the company’s business, results of operations or financial condition. Also, adverse publicity resulting from these allegations may materially affect the company.

The company’s insurance may not be sufficient. There can be no assurance that its insurance is sufficient to cover the full extent of all of its losses or liabilities for which it is insured. Further, insurance policies expire annually and the company cannot guarantee that it will be able to renew insurance policies on favorable terms, or at all. In addition, if it, or other leisure facilities, sustain significant losses or make significant insurance claims, then its ability to obtain future insurance coverage at commercially reasonable rates could be materially adversely affected. If the company’s insurance coverage is not adequate, or it becomes subject to damages that cannot by law be insured against, such as punitive damages or certain intentional misconduct by their employees, this could adversely affect the company’s financial condition or results of operations.

The company may not be able to operate its facilities, or obtain and maintain licenses and permits necessary for such operation, in compliance with laws, regulations and other requirements, which could adversely affect its business, results of operations or financial condition. Each facility is subject to licensing and regulation by alcoholic beverage control, amusement, health, sanitation, safety, building code and fire agencies in the state, county and/or municipality in which the facility is located.

Each facility is required to obtain a license to sell alcoholic beverages on the premises from a state authority and, in certain locations, county and municipal authorities. Typically, licenses must be renewed annually and may be revoked or suspended for cause at any time. In some states, the loss of a license for cause with respect to one facility may lead to the loss of licenses at all facilities in that state and could make it more difficult to obtain additional licenses in that state. Alcoholic beverage control regulations relate to numerous aspects of the daily operations of each facility, including minimum age of patrons and employees, hours of operation, advertising, wholesale purchasing, inventory control and handling and storage and dispensing of alcoholic beverages. The failure to receive or retain a liquor license, or any other required permit or license, in a particular location, or to continue to qualify for, or renew licenses, could have a material adverse effect on operations and the company’s ability to obtain such a license or permit in other locations.

The company may be subject to “dram shop” statutes in states where its facilities may be located. These statutes generally provide a person injured by an intoxicated person the right to recover damages from an establishment that wrongfully served alcoholic beverages to the intoxicated individual. Recent litigation against restaurant chains has resulted in significant judgments and settlements under dram shop statutes. Because these cases often seek punitive damages, which may not be covered by insurance, such litigation could have an adverse impact on the company’s business, results of operations or financial condition.

As a result of operating certain entertainment games and attractions, including skill-based games that offer redemption prizes, the company is subject to amusement licensing and regulation by the states, counties and municipalities in which its facilities are to be located. These laws and regulations can vary significantly by state, county, and municipality and, in some jurisdictions, may require the company to modify their business operations or alter the mix of redemption games and simulators that they offer.

Moreover, as more states and local communities implement legalized gambling, the laws and corresponding enabling regulations may also be applicable to the company’s redemption games and regulators may create new licensing requirements, taxes or fees, or restrictions on the various types of redemption games the company offers. Furthermore, other states, counties and municipalities may make changes to existing laws to further regulate legalized gaming and illegal gambling. Adoption of these laws, or adverse interpretation of existing laws, could cause the company to modify its plans for its facilities and if the company creates facilities in these jurisdictions it may be required to alter the mix of games, modify certain games, limit the number of tickets that may be won by a customer from a redemption game, change the mix of prizes that the company may offer or terminate the use of specific games, any of which could adversely affect the company’s operations. If the company fails to comply with such laws and regulations, the company may be subject to various sanctions and/or penalties and fines or may be required to cease operations until it achieves compliance, which could have an adverse effect on the company’s business and financial results.

The company has concentrated its investments in golf-related real estate and facilities, which are subject to numerous risks, including the risk that the values of their investments may decline if there is a prolonged downturn in real estate values. The company’s operations will consist almost entirely of golf properties, some of those facilities will be approximately 15-20 acres in size, that encompass a large amount of real estate holdings. Accordingly, the company is subject to the risks associated with holding real estate investments. A prolonged decline in the popularity of golf could adversely affect the value of its real estate holdings and could make it difficult to sell facilities or businesses.

The company’s real estate holdings will be subject to risks typically associated with investments in real estate. The investment returns available from equity investments in real estate depend in large part on the amount of income earned, expenses incurred and capital appreciation generated by the related properties. In addition, a variety of other factors affect income from properties and real estate values, including governmental regulations, real estate, insurance, zoning, tax and eminent domain laws, interest rate levels and the availability of financing. For example, new or existing real estate zoning or tax laws can make it more expensive and time-consuming to expand, modify or renovate older properties. Under eminent domain laws, governments can take real property. Sometimes this taking is for less compensation than the owner believes the property is worth. Any of these factors could have an adverse impact on the company’s business, financial condition or results of operations.

The illiquidity of real estate may make it difficult for the company to dispose of one or more of its properties or negatively affect its ability to profitably sell such properties and access liquidity. The company may from time to time decide to dispose of one or more of its real estate assets. Because real estate holdings generally, are relatively illiquid, the company may not be able to dispose of one or more real estate assets on a timely basis. In some circumstances, sales may result in investment losses which could adversely affect the company’s financial condition. The illiquidity of its real estate assets could mean that it continues to operate a facility that management has identified for disposition. Failure to dispose of a real estate asset in a timely fashion, or at all, could adversely affect the company’s business, financial condition and results of operations.

The company’s development and growth strategy depends on its ability to identify, and fund new entertainment venues and operate them profitably. The company’s ability to identify and fund various facilities, including Studios, on a timely and cost-effective basis, or at all, is dependent on a number of factors, many of which are beyond its control, including but not limited to the company’s ability to:

	·	Find quality locations.
	·	Reach acceptable agreements regarding the lease or purchase of locations, and comply with the company’s commitments under its lease agreements.

Raise or have available an adequate amount of cash or currently available financing for rebranding, constructing and opening facilities, as applicable.

Comply with applicable zoning, licensing, land use and environmental regulations.

	·	Timely hire, train and retain the skilled management and other employees’ necessary to meet staffing needs.
	·	Obtain, for acceptable cost, required permits and approvals, including liquor licenses

Even if the company succeeds in opening entertainment golf facilities on a timely and cost-effective basis, the company may nonetheless be unable to attract enough customers to these new venues because potential customers may be unfamiliar with its venue or concept, entertainment and menu options might not appeal to them and the company may face competition from other food and leisure venues.

GolfSuites depends on a small management team and may need to hire more people to be successful. The success of GolfSuites will greatly depend on the skills, connections and experiences of the executives, Gerald Ellenburg, Nick Flanagan, Scott McCurry, and Michael Zylstra. Though, the Parent Company has entered into employment agreements with Gerald Ellenburg and Nick Flanagan, the company has not entered into employment agreements with any of the aforementioned executives. There is no guarantee that the executives will agree to terms and execute employment agreements that are favorable to the company. Should any of them discontinue working for GolfSuites, there is no assurance that the company will continue. Further, there is no assurance that the company will be able to identify, hire and retain the right people for the various key positions.

Key Man Risk. The company’s founders and key men are serial entrepreneurs. It is likely that some, if not all of the founders and key men, may exit the business within the next three years. In the event one or more of its founders and/or key men exit the business the company may experience following:

	·	financial loss;
	·	a disruption to the organization's future projects;
	·	damage to the brand; and
	·	potentially supporting a competitor.

GolfSuites may not be able to protect all of its intellectual property. GolfSuites will be using the intellectual property of the Parent Company, including the following trademarks that have been filed: GolfSuites, Off The Deck and FirstCut. The profitability of GolfSuites may depend in part on the Parent Company’s ability, to effectively protect its intellectual property and the ability of GolfSuites to operate without inadvertently infringing on the proprietary rights of others. Any litigation protecting the Parent Company’s intellectual property and defending its original content could have a material adverse effect on the company’s business, operating results and financial condition regardless of the outcome of such litigation.

Risks relating to this offering and GolfSuites shares

Distributions will be only made if the company declares dividends and if permitted under Delaware law, which is subject to change, and in the sole discretion of the board of directors. Pursuant to section 170 of the Delaware General Corporation Law (“Delaware Law”), dividends may be paid out of “surplus” even in the absence of profits. Under section 154, “surplus” may be defined by the board of directors, in their sole discretion, but generally may not be less than the par value of the shares issued. Accordingly, most of the proceeds of this offering may be considered surplus. However, Delaware Law is subject to change, and the company cannot guarantee that dividend payments will always be permitted under Delaware Law. Further, the company in its sole discretion may decide not to declare and pay dividends. At which point, the dividends will accrue to be paid at a later date, or if at all.

The tax treatment of dividends may vary and distributions to shareholders may be taxed as capital gains. The distributions made pursuant to the Preferred Stock dividend provisions will be taxable as dividends to shareholders only to the extent of current and accumulated earnings and profits. To the extent the company does not have current and accumulated earnings and profits, the distributions will be treated as a non-taxable return of capital to the extent of the shareholder’s adjusted basis. If distributions still exceed the amount of adjusted basis, such excess would be considered as capital gains income to the shareholder, who will generally be subject to federal (and possibly State) income tax on such gains at a rate that depends upon the shareholder’s holding period with respect to the shares in question, among other factors. Since the tax treatment of any distributions may vary according to the financial performance of the company, as well as the particular circumstances of the investor, investors should consult their own tax advisers, and should further not assume that the distributions will be subject to the same tax treatment from year to year.

The company is responsible for certain administrative burdens relating to taxation. Federal law required that the company report annually all distributions to shareholders on a Form 1099-DIV. The company is responsible for ensuring that the extent to which such distributions constitute a distribution of earnings and profits is correctly identified on form 1099-DIV. This reporting requirement adds to the administrative burdens of the company.

The offering price has been arbitrarily set by the company. GolfSuites has set the price of its Preferred Stock at $7.50 per share. Valuations for companies at GolfSuites stage are purely speculative. The company’s valuation has not been validated by any independent third party and may fall precipitously. It is a question of whether you, the investor, are willing to pay this price for a percentage ownership of a start-up company. You should not invest if you disagree with this valuation.

There is no minimum amount set as a condition to closing this offering. Because this is a “best efforts” offering with no minimum, the company will have access to any funds tendered. This might mean that any investment made could be the only investment in this offering, leaving the company without adequate capital to pursue its business plan or even to cover the expenses of this offering.

The officers of GolfSuites control the company and the company does not currently have any independent directors. The Parent Company is currently the company’s controlling shareholder. Moreover, the company’s executive officers and directors, through their ownership in the Parent Company, are currently GolfSuites controlling shareholders. As holders of the Class B Common Stock which gives GolfSuites 5 votes per share, as opposed to 1 vote per share for holders of Class A Common Stock and Class A Preferred Stock, the Parent Company will continue to hold a majority of the voting power of all the company’s equity stock and therefore control the board at the conclusion of this offering. Even if the Parent Company were to own as little as 16.7% of the equity securities of the company, the Parent Company would still control a majority of the voting stock. This could lead to unintentional subjectivity in matters of corporate governance, especially in matters of compensation and related party transactions. The company does not benefit from the advantages of having independent directors, including bringing an outside perspective on strategy and control, adding new skills and knowledge that may not be available within the company, and having extra checks and balances to prevent fraud and produce reliable financial reports.

The exclusive forum provision in the company’s Certificate of Incorporation may have the effect of limiting an investor’s ability to bring legal action against the company and could limit an investor’s ability to obtain a favorable judicial forum for disputes. Article VII of the company’s Certificate of Incorporation contain exclusive forum provisions for certain lawsuits, see “Securities Being Offered – All Classes of Stock – Forum Selection Provisions.” Further, Section 6 of the subscription agreement for this offering includes exclusive forum provisions for certain lawsuits pursuant to the subscription agreement; see “Securities Being Offered – All Classes of Stock – Forum Selection Provisions.” The forum for these lawsuits will be the Court of Chancery in the State of Delaware. None of the forum selections provisions will be applicable to lawsuits arising from the federal securities laws. These provisions may have the effect of limiting the ability of investors to bring a legal claim against us due to geographic limitations. There is also the possibility that the exclusive forum provisions may discourage stockholder lawsuits, or limit stockholders’ ability to bring a claim in a judicial forum that it finds favorable for disputes with the company and its officers and directors. Alternatively, if a court were to find this exclusive forum provision inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, the company may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect its business and financial condition.

Investors in this offering may not be entitled to a jury trial with respect to claims arising under the subscription agreement and claims where the forum selection provision is applicable, which could result in less favorable outcomes to the plaintiff(s) in any such action. Investors in this offering will be bound by the subscription agreement, which includes a provision under which investors waive the right to a jury trial of any claim they may have against the company arising out of or relating to the subscription agreement, including any claim under the federal securities laws. Further, the forum selection provisions in the Certificate of Incorporation and the subscription agreement provide that for certain lawsuits the Court of Chancery in Delaware will be the exclusive forum. The Court of Chancery in Delaware is a non-jury trial court and therefore those claims will not be adjudicated by a jury. See “Securities Being Offered – All Classes of Stock – Jury Trial Waiver” and “Securities Being Offered – All Classes of Stock – Forum Selection Provisions.”

If the company opposed a jury trial demand based on the waiver, a court would determine whether the waiver was enforceable based on the facts and circumstances of that case in accordance with the applicable state and federal law. To the company’s knowledge, the enforceability of a contractual pre-dispute jury trial waiver in connection with claims arising under the federal securities laws has not been finally adjudicated by a federal court. However, the company believes that a contractual pre-dispute jury trial waiver provision is generally enforceable, including under the laws of the State of Delaware, which governs the subscription agreement, in the Court of Chancery in the State of Delaware. In determining whether to enforce a contractual pre-dispute jury trial waiver provision, courts will generally consider whether the visibility of the jury trial waiver provision within the agreement is sufficiently prominent such that a party knowingly, intelligently and voluntarily waived the right to a jury trial. The company believes that this is the case with respect to the subscription agreement. Investors should consult legal counsel regarding the jury waiver provision before entering into the subscription agreement.

If an investor brings a claim against the company in connection with matters arising under the subscription agreement, including claims under federal securities laws, an investor may not be entitled to a jury trial with respect to those claims, which may have the effect of limiting and discouraging lawsuits against the company. If a lawsuit is brought against the company under the subscription agreement, it may be heard only by a judge or justice of the applicable trial court, which would be conducted according to different civil procedures and may result in different outcomes than a trial by jury would have had, including results that could be less favorable to the plaintiff(s) in such an action.

Nevertheless, if this jury trial waiver provision is not permitted by applicable law, an action could proceed under the terms of the subscription agreement with a jury trial. No condition, stipulation or provision of the subscription agreement serves as a waiver by any holder of common shares or by us of compliance with any substantive provision of the federal securities laws and the rules and regulations promulgated under those laws.

In addition, when the shares are transferred, the transferee is required to agree to all the same conditions, obligations and restrictions applicable to the shares or to the transferor with regard to ownership of the shares, that were in effect immediately prior to the transfer of the shares of Preferred Stock, including but not limited to the subscription agreement.

There is no current market for GolfSuites' shares. There is no formal marketplace for the resale of the company’s securities. Shares of the company’s Preferred Stock may eventually be traded to the extent any demand and/or trading platform(s) exists. However, there is no guarantee there will be demand for the shares, or a trading platform that allows you to sell them. The company does not have plans to apply for or otherwise seek trading or quotation of its Preferred Stock on an over-the-counter market. It is also hard to predict if the company will ever be acquired by a bigger company. Investors should assume that they may not be able to liquidate their investment or pledge their shares as collateral for some time.

Risks Related to Certain Conflicts of Interest

There are conflicts of interest between the company, its management and their affiliates. The Parent Company currently holds all of the issued Common Stock of GolfSuites. GolfSuites is also affiliated with ERC Communities, Inc. f/ka ERC Home Builders, Inc. and its subsidiaries (the “ERC Entities”). Gerald Ellenburg is the CEO for the Parent Company, GolfSuites, and the ERC Entities. Therefore, it is likely that conflicts of interest will arise between the affiliates. Conflicts of interest could include, but are not limited to the following:

	·	Use of time.
	·	Use of human capital.
	·	Competition regarding the acquisition of properties and other assets.

The interests of the Parent Company the company and the company’s other affiliates may conflict with your interests. The company’s Certificate of Incorporation, Certificate of Designations, bylaws and Delaware law provide company management with broad powers and authority that could result in one or more conflicts of interest between your interests and those of the officers and directors of the Parent Company, the company, and the company’s other affiliates. This risk is increased by the affiliated entities being controlled by the Parent Company who currently owns all of the company’s Common Stock. In addition, all of the company’s officers and directors currently have an interest in the Parent Company, through ownership and/or as an officer or director in the Parent Company. Potential conflicts of interest include, but are not limited to, the following:

The Parent Company and the company’s other affiliates will not be required to disgorge any profits or fees or other compensation they may receive from any other business they own separate from the company, and you will not be entitled to receive or share in any of the profits, return, fees or compensation from any other business owned and operated by the management and their affiliates for their own benefit.

GolfSuites may engage the Parent Company, or other companies affiliated with GolfSuites to perform services, and determination for the terms of those services will not be conducted at arms’ length negotiations.

The company’s officers and directors are not required to devote all of their time and efforts to the affairs of the company.

Loans issued by The Parent Company to GolfSuites may not be made at arm’s length. The Parent Company has made loans to GolfSuites in the amount of $984,485 as of December 31, 2020 and may make additional loans to GolfSuites. It is likely that these transactions have not been at arm’s length and may not be at arms-length in the future. Therefore, there is no way to assure third parties that the Parent Company and GolfSuites will be acting in their own self-interest and not subject to pressure or duress from the other party.

The Parent Company and GolfSuites intend to share some services. The Parent Company and GolfSuites will share the following services:

Intellectual property.

Licensing for the use of the name and brand identity.

Internal transactions incorporating products and services, fee sharing, cost allocations, and financing activities can create inefficiency, financial exposures and reporting risk. This arrangement could result in potential actual or perceived conflicts of interest.

If the Parent Company, the company’s manager, were to file for bankruptcy or otherwise liquidate the company’s result and operations, could be negatively affected. GolfSuites relies on the Parent Company for certain management services. While the company intends to continue its operations if the Parent Company were ever to file for bankruptcy or otherwise liquidate, there is no guarantee that the company would be able to do so. If the Parent Company were to enter bankruptcy proceedings or to otherwise liquidate, the company would be required to find other ways to meet the needs of its operations and business. Obtaining such alternative services, if available at all, could result in delays in the disbursement of distributions or the filing of reports or could require the company to pay significant fees to another company that it would engage to perform management services for it.

Risks Related to COVID-19

The company’s results of operations may continue to be negatively impacted by the coronavirus outbreak. In December 2019, a novel strain of coronavirus, or COVID-19, was reported to have surfaced in Wuhan, China. COVID-19 has spread to many countries, including the United States, and was declared to be a pandemic by the World Health Organization. Various jurisdictions in the U.S., Europe, and Asia have implemented severe travel restrictions and social distancing. The long term impacts of the outbreak are unknown and rapidly evolving. A widespread health crisis has adversely affected and could continue to affect the global economy, resulting in an economic downturn that could negatively impact the value of the shares and investor demand for the shares generally. To date, our facilities have needed to comply with restrictions imposed by local and state governments, including limiting our ability to do group sales and other planned larger events. We believe that this has impacted our revenues from our facilities.

The continued spread of COVID-19 has also led to severe disruption and volatility in the global capital markets, which could increase the company’s cost of capital and adversely affect its ability to access the capital markets in the future. It is possible that the continued spread of COVID-19 could cause a further economic slowdown or recession or cause other unpredictable events, each of which could adversely affect GolfSuites business, results of operations, or financial condition.

The extent to which COVID-19 affects the company’s financial results will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the COVID-19 outbreak and the actions to contain the outbreak or treat its impact, among others. Moreover, the COVID-19 outbreak has had and may continue to have indeterminable adverse effects on general commercial activity and the world economy, and the company’s business and results of operations could be adversely affected to the extent that COVID-19 or any other pandemic harms the global economy generally.

Actual or threatened epidemics, pandemics, outbreaks, or other public health crises may adversely affect the company’s business. The company’s business could be materially and adversely affected by the risks, or the public perception of the risks, related to an epidemic, pandemic, outbreak, or other public health crisis, such as the recent outbreak of COVID-19. The risk, or public perception of the risk, of a pandemic or media coverage of infectious diseases could adversely affect the value of the shares and the financial condition of the company’s investors or prospective investors, resulting in reduced demand for the shares generally. Further, such risks could cause limited attendance to location-based entertainment venues, such as the GolfSuites venues. “Shelter-in-place” or other such orders by governmental entities could also disrupt the company’s operations, if those employees of the company who cannot perform their duties from home are unable to report to work.

DILUTION

Dilution means a reduction in value, control or earnings of the shares the investor owns.

Immediate dilution

An early-stage company typically sells its shares (or grants options over its shares) to its founders and early employees at a very low cash cost, because they are, in effect, putting their “sweat equity” into the company. When the company seeks cash investments from outside investors, like you, the new investors typically pay a much larger sum for their shares than the founders or earlier investors, which means that the cash value of your stake is diluted because all the shares are worth the same amount, and you paid more than earlier investors for your shares.

The following table compares the price that new investors are paying for their shares with the effective cash price paid by existing shareholders, giving effect to full conversion of all outstanding convertible notes and assuming that the shares are sold at $7.50 per share. The schedule presents shares and pricing as issued and reflects all transactions since inception, which gives investors a better picture of what they will pay for their investment compared to the company’s insiders than just including such transactions for the last 12 months, which is what the SEC requires.

The following table presents the approximate effective cash price paid for all shares and potential shares issuable by the company as of December 31, 2020.

	Date Issued	Issued Shares		Potential Shares		Total Issued and Potential Shares		Effective Cash Price per Share at Issuance or Potential Conversion
Common Shares:
Class B Common Stock	1/01/2019		18,000,000		0		18,000,000	$	0. 00001

Preferred Stock:
Preferred Stock	2019		74,038		--		74,038	$	5.14999
Preferred Stock	2020		--		204,783		204,783	$	4.60299
Total Preferred Stock			74,038		204,783		278,821	$	4.74824

Total Common Shares Equivalents
Investors in this offering, assuming $48,750,000 Million raised	2021		--		6,500,000		6,500,000	$	7.50000

Total After Inclusion of this Offering			18,074,038		6,704,783		24,778,821	$	2.02084

The following table illustrates the dilution that new investors will experience upon investment in the company relative to existing holders of its securities. Because this calculation is based on the net tangible assets of the company, the company is calculating based on its net tangible book value of ($385,860) as of December 31, 2019, as included in its audited financial statements.

The offering costs assumed in the following table includes up to $487,550 in commissions as well as marketing, technology, legal, accounting, and Edgarization fees incurred for this offering.

The table presents four scenarios for the convenience of the reader: a $12,000,000 raise, a $24,375,000 raise from this offering, a $36,562,000 raise from this offering, and a fully subscribed $48,750,000 raise from this offering (the maximum offering).

On Basis of Full Conversion of Issued Instruments	$12,000,000 Raise			$24,375,000 Raise			$36,562,000 Raise			$48,750,000 Raise
Price per Share	$	7.50		$	7.50		$	7.50		$	7.50
Shares Issued		1,600,000			3,250,000			4,874,933			6,500,000
Capital Raised	$	12,000,000		$	24,375,000		$	36,562,000		$	48,750,000
Less: Offering Costs		(120,000	)		(243,750	)		(365,620	)		(487,500	)
Net Offering Proceeds	$	11,880,000		$	24,131,250		$	36,196,378		$	48,262,500
Net Tangible Book Value Pre-financing as of December 31, 2019		(385,860	)		(385,860	)		(385,860	)		(385,860	)
Net Tangible Book Value Post-financing	$	11,494,140		$	23,745,390		$	35,810,518		$	47,876,640
Shares issued and outstanding pre-financing as of December 31, 2019(2)		18,256,879			18,256,879			18,256,879			18,256,879
Post-Financing Shares Issued and Outstanding		19,856,879			21,506,879			23,131,812			24,756,879
Net tangible book value per share prior to offering		(0.0211	)		(0.0211	)		(0.0211	)		(0.0211	)
Increase/(Decrease) per share attributable to new investors	$	0.5999		$	1.1252		$	1.5692		$	1.9550
Net tangible book value per share after offering	$	0.5788		$	1.1041		$	1.5481		$	1.9339
Dilution per share to new investors ($)	$	6.9212		$	6.3959		$	5.9519		$	5.5661
Dilution per share to new investors (%)

(2) Includes 18,000,000 shares of Class B Common Stock and 256,879 shares of Class A Preferred Stock.

Future dilution

Another important way of looking at dilution is the dilution that happens due to future actions by the company. The investor’s stake in a company could be diluted due to the company issuing additional shares. In other words, when the company issues more shares, the percentage of the company that you own will go down, even though the value of the company may go up. You will own a smaller piece of a larger company. This increase in number of shares outstanding could result from a stock offering (such as an initial public offering, another crowdfunding round, a venture capital round, angel investment), employees exercising stock options, or by conversion of certain instruments (e.g. convertible bonds, preferred shares or warrants) into stock.

If the company decides to issue more shares, an investor could experience value dilution, with each share being worth less than before, and control dilution, with the total percentage an investor owns being less than before. There may also be earnings dilution, with a reduction in the amount earned per share (though this typically occurs only if the company offers dividends, and most early stage companies are unlikely to offer dividends, preferring to invest any earnings into the company).

The type of dilution that hurts early-stage investors most often occurs when the company sells more shares in a “down round,” meaning at a lower valuation than in earlier offerings. An example of how this might occur is as follows (numbers are for illustrative purposes only):

	·	In June 2014 Jane invests $20,000 for shares that represent 2% of a company valued at $1 million.
	·	In December, the company is doing very well and sells $5 million in shares to venture capitalists on a valuation (before the new investment) of $10 million. Jane now owns only 1.3% of the company but her stake is worth $200,000.
	·	In June 2015, the company has run into serious problems and in order to stay afloat it raises $1 million at a valuation of only $2 million (the “down round”). Jane now owns only 0.89% of the company and her stake is worth only $26,660.

This type of dilution might also happen upon conversion of convertible notes into shares. Typically, the terms of convertible notes issued by early-stage companies provide that in the event of another round of financing, the holders of the convertible notes get to convert their notes into equity at a “discount” to the price paid by the new investors, i.e., they get more shares than the new investors would for the same price. Additionally, convertible notes may have a “price cap” on the conversion price, which effectively acts as a share price ceiling. Either way, the holders of the convertible notes get more shares for their money than new investors. In the event that the financing is a “down round” the holders of the convertible notes will dilute existing equity holders, and even more than the new investors do, because they get more shares for their money. Investors should pay careful attention to number of convertible notes that the company has issued (and may issue in the future, and the terms of those notes.

If you are making an investment expecting to own a certain percentage of the company or expecting each share to hold a certain amount of value, it’s important to realize how the value of those shares can decrease by actions taken by the company. Dilution can make drastic changes to the value of each share, ownership percentage, voting control, and earnings per share.

PLAN OF DISTRIBUTION AND SELLING SECURITYHOLDERS

Plan of Distribution

GolfSuites 1, Inc. is offering a maximum of 6,500,000 shares of Preferred Stock on a “best efforts” basis.

The cash price per share of Preferred Stock is $7.50.

The company intends to market the shares in this offering both through online and offline means. Online marketing may take the form of contacting potential investors through electronic media and posting its Offering Circular or “testing the waters” materials on an online investment platform.

The offering will terminate at the earliest of: (1) the date at which the maximum offering amount has been sold, (2) the date which is one year from this offering being qualified by the Commission, and (3) the date at which the offering is earlier terminated by GolfSuites, Inc. in its sole discretion.

The company may undertake one or more closings on an ongoing basis. After each closing, funds tendered by investors will be available to the company. After the initial closing of this offering, the company expects to hold closings on at least a monthly basis.

The company is offering its securities in all states.

The company has engaged Dalmore Group, LLC (“Dalmore”) a broker-dealer registered with the SEC and a member of FINRA, to perform the following administrative and technology related functions in connection with this offering, but not for underwriting or placement agent services:

	·	Review investor information, including KYC (“Know Your Customer”) data, AML (“Anti Money Laundering”) and other compliance background checks, and provide a recommendation to the company whether or not to accept investor as a customer.
	·	Review each investors subscription agreement to confirm such investors participation in the offering, and provide a determination to the company whether or not to accept the use of the subscription agreement for the investor’s participation.
	·	Contact and/or notify the company, if needed, to gather additional information or clarification on an investor.
	·	Not provide any investment advice nor any investment recommendations to any investor.
	·	Keep investor details and data confidential and not disclose to any third-party except as required by regulators or pursuant to the terms of the agreement (e.g. as needed for AML and background checks).
	·	Coordinate with third party providers to ensure adequate review and compliance.

As compensation for the services listed above, the company has agreed to pay Dalmore $33,000 in one-time set up fees, consisting of the following:

$5,000 advance payment for out of pocket expenses.

$20,000 consulting fee due and payable immediately after FINRA issues a no objection letter.

$8,000 for fees to be paid to FINRA.

In addition, the company will pay Dalmore a commission equal to 1% of the amount raised in the offering to support the offering once the SEC has qualified the Offering Statement and the offering commences. Assuming that the offering is open for 12 months, the company estimates that fees due to pay Dalmore, pursuant to the 1% commission would be $487,500 for a fully-subscribed offering. Finally, the total fees that the company estimates that it will pay Dalmore, pursuant to a fully-subscribed offering would be $520,500. These assumptions were used in estimating the fees due in the “Use of Proceeds.”

No Minimum Offering Amount

The shares being offered will be issued in one or more closings. No minimum number of shares must be sold before a closing can occur; however, investors may only purchase shares in minimum increments of $525. Potential investors should be aware that there can be no assurance that any other funds will be invested in this offering other than their own funds.

No Selling Shareholders

No securities are being sold for the account of security holders; all net proceeds of this offering will go to the company.

Online Platform

The company will be hosting the offering on its own website, www.invest.golfsuites.com. Issuance Inc. (“Issuance”) has agreed to provide their offering subscription platform, Issuance Portal, to process investments from retail investors for an upfront fee of $25,000, a $30 fee per subscription processed, regardless of whether an investment is ultimately accepted by the company. Issuance will design the GolfSuites offering site homepage, FAQ, investor tutorial, privacy policy, and terms of use. Issuance will then integrate its portal platform into the GolfSuites site. Issuance Portal offers account creation, log in, password recovery, investor registration, payment, agreement signature, confirmation and investor dashboard functionality. In addition to the $25,000 upfront fee and $30 fee per subscription processed regardless if the offer is accepted, the company has agreed to pay Issuance a monthly, campaign service fee of $25,000 for the aforementioned services.

Process of Subscribing

After the Offering Statement has been qualified by the Securities and Exchange Commission (the “SEC”), the company will accept tenders of funds to purchase whole and fractional shares. The company may close on investments on a “rolling” basis (so not all investors will receive their shares on the same date). Investors may subscribe by tendering funds by check, wire transfer, credit or debit card or ACH transfer to the escrow account to be setup by the company’s escrow agent, Prime Trust, LLC (the “Escrow Agent.”) The funds tendered by potential investors will be held by the Escrow Agent in a segregated account exclusively for the company’s benefit. Funds will be transferred to the company at each Closing. The escrow agreement can be found in Exhibit 8 to the Offering Statement of which this Offering Circular is a part.

There is no minimum investment in this offering.

Investors will be required to complete a subscription agreement in order to invest. The subscription agreement includes a representation by the investor to the effect that, if the investor is not an “accredited investor” as defined under securities law, the investor is investing an amount that does not exceed the greater of 10% of their annual income or 10% of their net worth (excluding the investor’s principal residence).

Any potential investor will have ample time to review the subscription agreement, along with their counsel, prior to making any final investment decision. Dalmore will review all subscription agreements completed by the investor. After Dalmore has completed its review of a subscription agreement for an investment in the company, the funds may be released by the escrow agent.

If the subscription agreement is not complete or there is other missing or incomplete information, the funds will not be released until the investor provides all required information. In the case of a debit card payment, provided the payment is approved, Dalmore will have up to three days to ensure all the documentation is complete. Dalmore will generally review all subscription agreements on the same day, but not later than the day after the submission of the subscription agreement.

All funds tendered (by check, wire, debit card, or electronic funds transfer via ACH to the specified account or deliver evidence of cancellation of debt) by investors will be deposited into an escrow account at the Escrow Agent for the benefit of the company. All funds received by wire transfer will be made available immediately while funds transferred by ACH will be restricted for a minimum of three days to clear the banking system prior to deposit into an account at the Escrow Agent.

The company maintains the right to accept or reject subscriptions in whole or in part, for any reason or for no reason, including, but not limited to, in the event that an investor fails to provide all necessary information, even after further requests from the company, in the event an investor fails to provide requested follow up information to complete background checks or fails background checks, and in the event the company receives oversubscriptions in excess of the maximum offering amount.

In the interest of allowing interested investors as much time as possible to complete the paperwork associated with a subscription, the company has not set a maximum period of time to decide whether to accept or reject a subscription. If a subscription is rejected, funds will not be accepted by wire transfer or ACH, and payments made by debit card or check will be returned to subscribers within 30 days of such rejection without deduction or interest. Upon acceptance of a subscription, the company will send a confirmation of such acceptance to the subscriber.

Dalmore has not investigated the desirability or advisability of investment in the shares nor approved, endorsed or passed upon the merits of purchasing the Preferred Shares. Dalmore is not participating as an underwriter and under no circumstance will it solicit any investment in the company, recommend the company’s securities or provide investment advice to any prospective investor, or make any securities recommendations to investors. Dalmore is not distributing any offering circulars or making any oral representations concerning this Offering Circular or this offering. Based upon Dalmore’s anticipated limited role in this offering, it has not and will not conduct extensive due diligence of this offering and no investor should rely on the involvement of Dalmore in this offering as any basis for a belief that it has done extensive due diligence. Dalmore does not expressly or impliedly affirm the completeness or accuracy of the Offering Statement and/or Offering Circular presented to investors by the company. All inquiries regarding this offering should be made directly to the company.

Upon confirmation that an investor’s funds have cleared, the company will instruct the Transfer Agent to issue shares to the investor. The Transfer Agent will notify an investor when shares are ready to be issued and the Transfer Agent has set up an account for the investor.

Escrow Agent

The Escrow Agent has not investigated the desirability or advisability of investment in the shares nor approved, endorsed or passed upon the merits of purchasing the securities.

The company has agreed to pay the Escrow Agent:

	·	$400 for escrow account set-up fee,
	·	$30 per month escrow account fee for so long as the offering is being conducted,
	·	a cash management fee of 0.5% of funds processed (up to a maximum of $8,000),
	·	technology platform license fee of $400.00 per month,
	·	transaction fee of $10.00 per investor,
	·	ACH processing fee of $2.00 per transaction,
	·	wire processing fee of $15.00 per transaction (domestic),
	·	check processing of $5.00 per transaction, and
	·	AML check $5.00 per investor

Transfer Agent

The company has also engaged Computershare, a registered transfer agent with the SEC, who will serve as transfer agent to maintain shareholder information on a book-entry basis; there are no set up costs for this service, fees for this service will be limited to secondary market activity. The company estimates the aggregate fee due to Computershare for the above services to be $60,000 annually.

USE OF PROCEEDS TO ISSUER

The following discussion addresses the use of proceeds from this offering. The company currently estimates that, at a per share price of $7.50, the net proceeds from the sale of the 6,500,000 shares of Preferred Stock will likely be $48,262,500 after deducting the estimated offering expenses of approximately $487,500.

The following table breaks down the use of proceeds into different categories under various funding scenarios:

Gross Proceeds	$	12,000,000	$	24,375,000	$	36,562,000	$	48,750,000
Estimated offering expenses (1)		1,200,000		2,437,500		3,656,200		4,875,000
Purchase, rebrand or renovate existing facilities		3,000,000		3,000,000		3,000,000		3,000,000
Construction and development of Studios		1,200,000		2,400,000		2,400,000		2,400,000
Construction, development and acquisition of new golf driving range and entertainment centers in the United States (not including debt financing)		4,200,000		12,137,500		22,505,800		33,475,000
Marketing		600,000		1,000,000		1,000,000		1,000,000
Operational expenses		600,000		1,000,000		1,000,000		1,000,000
Working Capital (2)	$	1,200,000	$	2,400,000		3,000,000		3,000,000
Total Use of Proceeds	$	12,000,000	$	24,375,000		36,562,000	$	48,750,000

	(1)	Estimated offering expenses include legal, accounting, printing, advertising, broker-dealer fees and commissions, technology, marketing and state notice fees and other expenses of this offering.
	(2)	Approximately 25% of gross proceeds are allocated to working capital subject to a maximum working capital amount of $750,000. The above estimates for overhead improvements and working capital are subject to change based upon the timing and amounts of gross proceeds and development timetables.

The company is still in the process of rebranding and upgrading its current facilities. For the Tulsa Facility it anticipates spending an additional $600,000 in the next year for re-branding projects. For the Lubbock Facility it anticipates spending $400,000 in the next year to re-brand the facility.

These costs incorporate expenses related land/annual lease; zoning; architects, designers and engineers; construction and training employees. The company may also buy existing facilities to re-brand. The cost for that will be variable based on the condition and the size of the facility. The company may also finance the construction with mortgage financing. see “Management Discussion and Analysis – Plan of Operations.”

Dividends and profit sharing dividends

Investors in this offering will begin to accrue a monthly dividend payment that pays 8% per annum after the issuance of their Preferred Stock. When the funds are legally available for distributions the company intends to pay these dividends. The dividends will compound annually.

In the event the company declares a dividend distribution to the holders of Common Stock, all holders of Preferred Stock will receive their pro rata share.

There is no guarantee regarding the tax treatment of the 8% dividends. Please see “Securities Being Offered – Tax Treatment.”

The company reserves the right to change the above use of proceeds if management believes it is in the best interest of the company.

THE COMPANY’S BUSINESS

Overview

GolfSuites 1, Inc. (“GolfSuites” or the “company”) owns, leases and operates golf driving range entertainment centers in the United States. The company aims to provide entertainment centers known for their next generation hospitality and dining venues, high-tech gamified golf in climate-controlled suites, live entertainment, and spaces for both social and corporate functions. The company was incorporated in Delaware on October 25, 2018 as KGEM Golf Midwest, Inc. On January15, 2019, the company changed its name to GolfSuites 1, Inc.

The company owns two wholly owned subsidiaries, GolfSuites Tulsa, LLC, an Oklahoma limited liability company (“GolfSuites Tulsa”) and GolfSuites Lubbock, LLC, a Texas limited liability company (“GolfSuites Lubbock”).

The company is a subsidiary of the GolfSuites, Inc. (the “Parent Company”). The Parent Company was incorporated in 2018 as a successor entity to KGE, LLC, which was created in 2016 to develop and operate a national chain of golf driving range entertainment centers. GolfSuites, Inc. started the filing process to change its name from KGEM Golf, Inc. to GolfSuites, Inc in December 2020 and believes that the administrative process will be complete in January 2021.

Timeline

Below is a timeline of the company’s operating history.

On October 25, 2018, the company was incorporated.

In September 2019, GolfSuites 3, Inc. (“GolfSuites 3”), an affiliate of the company, began operating the Tulsa Facility pursuant to a lease agreement governing the Tulsa Facility and an additional agreement governing the land on which it is located. Both lease agreements were entered into by GolfSuite 3’s wholly owned subsidiary, GolfSuites Tulsa. The Tulsa Facility lease and the lease governing the land on which it is located are both included as Exhibits to the Offering Statement of which this Offering Circular forms a part.

On August 6, 2020, GolfSuites Lubbock was formed. It is a wholly owned subsidiary of the company.

In November 2020, the company began discussions and drafting documents to acquire the Tulsa Facility and the land on which it is located. The company believes that it will acquire the facility and land by Q2 2021.

On August 19, 2020, pursuant to the Membership Interest Purchase Agreement (“MIP Agreement”), GolfSuites Lubbock acquired 4ORE Golf, LLC, a Texas Limited Liability Company, (the “Lubbock Facility”). The Membership Interest Purchase Agreement is included as an Exhibit to the Offering Statement of which this Offering Circular forms a part.

On August 19, 2020, GolfSuites Lubbock, pursuant to the MIP Agreement, assumed the lease agreement governing the land on which the Lubbock Facility is located. The related lease agreement is included as an Exhibit to the Offering Statement of which this Offering Circular forms a part.

On December 31, 2020, the company acquired GolfSuites 3 and its subsidiary, GolfSuites Tulsa.

The Facilities

Current Facilities

Currently, the company operates two facilities. The Tulsa Facility and the Lubbock Facility.

The Tulsa Facility: Overview

The Tulsa Facility, located at 600 Riverwalk Terrace in the City of Jenks, County of Tulsa, Oklahoma. Below the company has compiled a list of what it believes to be the most appealing characteristics of the Tulsa Facility.

It is a mid-size venue consisting of approximately 53,102 rentable square feet and a driving range.

It is an entertainment facility, show casing live entertainment, gamified golf and various games such as pinball, pool and corn hole. It is also prides itself on its local chef inspired menus, craft cocktails and full-service restaurants.

It is located in a metropolitan area with a mid-size population.

Multiple university communities are a short distance away (less than ten miles).

There is an established millennial population within the area which fosters a trade market.

It is less than one mile to major highways, interstate access other large entertainment facilities, restaurant and recreational attractions.

During 2019, the company began re-branding and upgrading the facility. To date, the company has invested $275,000 into the Tulsa Facility. The company believes that an additional $600,000 will be needed to complete the rebranding and necessary upgrades of the facility.

The Tulsa Facility: Lease Agreement

The term of the Tulsa Facility lease agreement is 25 years.

Annual base lease payments are $360,000, adjustable throughout the terms of the lease.

GolfSuites Tulsa is entitled to 50% of the net cash flow.

GolfSuites Tulsa had net cash from this facility (net of operating expenses and lease payments) beginning September 2019.

The Tulsa Facility lease agreement, relating to the land on which the facility is located, is for a term of 25 years.

Annual base lease payments are $360,000, adjustable throughout the terms of the lease.

The Lubbock Facility: Overview

The Lubbock Facility is located at 6909 Marsha Sharp Fwy, Lubbock, Texas 79407. Below the company has compiled a list of what it believes to be the most appealing characteristics of the Lubbock Facility.

It is a mid-size venue with a driving range.

It is located in a metropolitan area with a mid-size population.

Multiple university communities are a short distance away (less than ten miles).

There is an established millennial population within the area which fosters a trade market.

It is less than one mile to major highways, interstate access other large entertainment facilities, restaurant and recreational attractions.

The company has not yet begun to re-branding this facility. The company believes it will cost approximately $400,000 to complete the rebranding and necessary upgrades of the Lubbock Facility.

The Lubbock Facility: Lease Agreement

The lease agreement related to the land on which the facility is on is for a term of 5 years, terminating August 8, 2023, however the company has the option to extend the lease for 20 periods of 2 years.

Annual base lease payments are $30,000 during the initial term of 5 years.

Future Facilities

Over the next year the company intends to develop Studios as well as to continue to source existing facilities and/or purchase land for future facilities where such opportunities exist.

Studios

The company intends to begin operating Studios in Q2 2021. Studios will offer high-tech gamified golf in climate controlled suites, while also offering access to high-end hospitality and dining experiences. Studios will be installed in indoor and outdoor shopping centers and office buildings throughout the United States.

Sourcing Facilities

When contemplating leasing already existing facilities, purchasing existing facilities, or building a facility from the ground up the company looks as the following factors to determine whether the project is suited for the company:

Location and size of each future facility.

	·	Large and mid-size populations within metropolitan areas.
	·	University communities with populations of at least 100,000.
	·	Local millennial populations.
	·	The proximity to major highway, interstate access other large entertainment facilities, restaurant and recreational attractions.
	·	Ongoing growth trends in the selected area.
	·	Proximity of select population bases including: university students, types of housing developments and employment rates.
	·	Whether a local government is cooperative and favors the development of leisure facilities.
	·	Cost of land.
	·	Availability and potential threat of competitor facilities within the vicinity.
	·	Favorable mortgage/lender terms and relationships.

When contemplating developing Studios, otherwise known as, golf driving range simulator lounges with full food and beverage to be located in indoor and outdoor shopping centers and office buildings nationwide, the company will look at the following factors to determine whether a project is suited for the company:

Size of the facility.

Speed of developed.

Amount of capital required for development.

Impact of COVID-19 on a particular community.

Financing Facilities

The company intends to lease and/or purchase already existing facilities with a combination of the following:

	·	The proceeds of this offering (see “Use of Proceeds”).
	·	Funds advanced to GolfSuites by the Parent Company.
	·	Mortgage financing provided by banks, private equity funds, lending-REITs and/or other financial institutions.

The company intends to develop Studios with a combination of the following:

	·	The proceeds of this offering (see “Use of Proceeds”).
	·	Funds advanced to GolfSuites by the Parent Company.
	·	Mortgage financing provided by banks, private equity funds, lending-REITs and/or other financial institutions.

The company intends to purchase land to begin the construction of facilities with a combination of the following:

The proceeds of this offering (see “Use of Proceeds”).

Funds advanced to GolfSuites by the Parent Company.

Mortgage financing provided by banks, private equity funds, lending-REITs and/or other financial institutions.

Management of the Facilities

The Parent Company oversees the management of all of the company’s locations and will oversee the management of all future locations. We intend that all the facilities will operate similar to the Tulsa and Lubbock facilities, where the company and/or its subsidiaries employ management teams and staff to operate each facility whether it is leased facility, owned facility, Studio, or built from the ground up.

Market Sector

The company participates in the recreational sporting and entertainment facilities market. The company believes this market to be young, fast-growing and under-served. This market overlaps three growing, highly profitable markets: the golf market, the recreation/sporting entertainment sector and the food and beverage portion of the hospitality industry. The company competes for revenues from customer spending in each of these three sectors.

Target Audience

The company has five primary target audiences:

Families looking for a fun experience for their kids and friends.

Experience Seekers, Millennials, Gen-Xers, Boomers seeking unique, fun night/weekend entertainment.

Recreational and avid golfers.

Businesses wanting team building, business gatherings, incentive rewards and corporate event venues with food and entertainment.

Get together/Fundraiser planners looking for unique locations for parties, celebrations and fund-raising events.

Management Services from GolfSuites

GolfSuites entered into a management services agreement with the Parent Company effective as of August 12, 2019 (the “Management Services Agreement”). Under that agreement, The Parent Company will manage the company and allow the company to use certain intellectual property and business concepts. The company will incur direct capitalized costs and overhead expenses.

Some direct capitalized costs and overhead expenses will be paid by the company directly (e.g., salaries, board of director and board of advisor fees, employee benefits, and general administrative costs) while other capitalized costs and overhead expenses will be paid by the Parent Company and then reimbursed by the company (e.g., architectural costs, engineering, land, zoning and permitting and other costs directly related to assets belonging to the company).

In addition, the company will pay the Parent Company monthly management fees as follows:

Operating facilities: 4% of gross operating revenues once facilities are opened.

Parent Company shall calculate 4% of gross revenue amount of the immediate past month, and the Parent Company shall invoice the company for the specific management fee amount on a monthly basis.

Facilities that are not operational: 3% of all-in development costs.

The “in-development costs” shall be calculated as the total amount of the hard and soft development costs, which include, but are not limited to, the total costs of land, development and entitlement costs, all construction costs, engineering and design costs, and contractor fees (the “In-Development Costs”) paid by the company in the immediate past month. The Parent Company shall invoice the company for the specific management fee amount on a monthly basis.

The Tulsa Facility and the Lubbock Facility are considered operating facilities.

The initial term of the Management Services Agreement is for ten years. Upon expiration of the agreement it will automatically renew for another two years. Either party can terminate the agreement provided 120 days written notice has been given to the other party. The Management Services Agreement may also be terminated upon certain events of default, including but not limited to, material breaches of the agreement and also if one party files for bankruptcy or otherwise liquidates.

In the event the Parent Company were to file for bankruptcy or otherwise liquidate, the company would have to seek another provider of management services or make arrangements for such services to be provided in-house, including the hiring of additional personnel. See “Risk Factors – If the company’s manager, the Parent Company, were to file for bankruptcy or otherwise liquidate the company’s results and operations could be negatively affected.”

This agreement amended and replaced the agreement dated April 15, 2019. The company had previously accrued costs under that agreement.

For additional information please see the Management Services Agreement, which is an Exhibit to the Offering Statement of which this Offering Circular forms a part.

Competition

Direct competitors

The company’s largest competitor in this emerging market is TopGolf. As of December 2020, there are 53 branded TopGolf locations (50 in the United States). Its first facilities were developed less than 20 years ago, and according to public reporting TopGolf intends to add 7 - 10 new venues annually and has 10 facilities listed as “coming soon” on its website. Other competitors include local and regional facilities as well as other national chains, including DriveShack, 1Up Golf, Big Shots, and Driv.

Indirect competitors

Indirect competitors include sports-themed entertainment facilities with food and beverage offerings that revolve around other sports including, but not limited to bowling, ping pong, baseball, NASCAR, etc. These include PINS Mechanical, Main Event (40+ locations), Lucky Strike, Bowl More, iDrive NASCAR, iFly, and Dave & Buster’s (139 locations as of December 2020), to name a few.

In addition, new entertainment themed centers are being developed within the US that merge retail, food and beverage, entertainment and hospitality into single, tightly-packed mixed-use destinations of 1-3 million square feet. These new developments include American Dream (Miami) and American Dream (NYC), as well as numerous other smaller developments throughout the US. Facilities like these typically include entertainment amenities such as water parks, skydiving, surfing, ice-rinks, drive-in movie theatres, hybrid golf facilities, miniature golf, theme parks, observation wheels, climbing walls, X4D movie theatres, and aquariums.

Employees

The company currently has one full-time employee, Scott McCurry, who currently manages the day-to-day operations of the company, including the Tulsa Facility and the Lubbock Facility. The Tulsa Facility and the Lubbock Facility currently employ approximately 250 employees in the following roles: restaurant service, marketing, management, facilities management, event sales, golf instruction and retail.

In addition, the Parent Company employs eight individuals, all of whom spend up to half of their time working on matters related to the company and various related entities. The amount of time that an employee of the Parent Company will dedicate to GolfSuites will vary from week to week depending on the current needs of the company.

Regulation

Currently, the company has obtained a state liquor license in Oklahoma for the Tulsa Facility and is currently pursuing a state liquor license in Texas for the Lubbock Facility. In addition to the liquor licenses, certain other licenses that may be required for the company’s planned operations include:

	·	State liquor license.
	·	State reuse/resale tax for products including but not limited to golf clubs, and apparel.
	·	County resale tax certificate.
	·	“Doing Business As” certificates for applicable states.
	·	Health department and food service license for each facility.
	·	Elevator and Fire department certifications, required annually.

Intellectual Property

The Parent Company has filed the following name trademarks and GolfSuites intends to enter into a license agreement with the Parent Company for use of the following trademarks:

	·	GolfSuites
	·	Off The Deck
	·	FirstCut

Litigation

The company has no litigation pending and the management team is not aware of any pending or threatened legal action relating to the company business, intellectual property, conduct or other business issues.

THE COMPANY’S PROPERTY

The company leases one facility and leases one property at 600 Riverwalk Terrace Jenks, Oklahoma.

The company owns one facility and leases a second property at 6909 Marsha Sharp Fwy, Lubbock, Texas.

CONFLICTS OF INTEREST

The company is subject to various conflicts of interest arising out of its relationship with the Parent Company. The company discusses these conflicts below.

General

The Parent Company currently holds all of the issued Common Stock of GolfSuites. The Parent Company is also affiliated with ERC Communities, Inc, f/k/a ERC Homebuilders, Inc, and its related entities (collectively, the “ERC Entities”). The ERC Entities focus on the development and sale of a built-for rent properties in the United States. Gerald Ellenburg is the CEO for The Parent Company, the company and the ERC Entities (the “Affiliated Executives”).

These Affiliated Executives have legal obligations with respect to the Parent Company and the ERC Entities that are similar to their obligations to the company. In the future, these persons and other affiliates of the Parent Company and the ERC Entities may organize and or acquire for their own account, entertainment and hospitality facilities that may have been suitable for GolfSuites.

Allocation of GolfSuites Affiliates’ Time

Currently, The Tulsa Facility and the Lubbock Facility rely on Scott McCurry, to run the day-to day operations of the facilities. However, the company continues to rely on the Parent Company’s executive officers and other professionals who act on behalf of the Parent Company, for the day-to-day operation of its business, including sourcing locations, developing and/or sourcing future facilities, and capital raising. As the business matures, the company’s intent is to develop its own management team to take over the day-to-day operations of business. Until that occurs and as a result of the Affiliated Executives competing responsibilities, their obligations to other investors and the fact that they will continue to engage in other business activities on behalf of themselves and others, they will face conflicts of interest in allocating their time to GolfSuites and other entities and other business activities in which they are involved.

Receipt of Fees and Other Compensation by the Parent Company and its Affiliates

The Parent Company and its affiliates will receive substantial fees from the company, which fees will not be negotiated at arm’s length. These fees could influence the Parent Company’s advice to the company as well as the judgment of the Affiliated Executives of the Parent Company. For additional information see “The Company’s Business – Management Services from the Parent Company” for conflicts relating to the payments between the Parent Company and GolfSuites.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion includes information from the audited financial statements for the inception period of April 2, 2019 (“Inception”) through December 31, 2019 and for the six months ended December 31, 2019 compared with the six months ended June 30, 2020 and should be read in conjunction with the company’s financial statements and the related notes included in this Offering Circular. The following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. The company’s actual results could differ materially from those discussed in the forward-looking statements.

Overview

GolfSuites 1, Inc. owns, leases and operates golf driving range entertainment centers in the United States. The entertainment centers aim to provide next generation hospitality and dining venues, high-tech gamified golf in climate-controlled suites, live entertainment, and spaces for both social and corporate functions.

GolfSuites 3 began recording revenues for its Tulsa Facility in September 2019 and the company began recording revenues for the Lubbock Facility in August 2020.

To date, revenues have come from the following activities:

Suite rentals.

Food and beverage sales.

Coaching and instruction services.

Individual and corporate membership sales.

Retail sales.

The company collects revenue upon sale of an item (including: membership sales, food and beverage sales, apparel etc.) and recognize the revenue when the sale is made.

Operating expenses currently consist of advertising and marketing expenses and general administrative expenses.

Results of Operations

The company was incorporated on October 25, 2018. For the years ended December 31, 2019 and December 31, 2018, the company had no operations and no revenues. For six months ended June 30, 2020 (“Interim 2020”) and the six months ended June 30, 2019 (“Interim 2019”), the company had no operations and no revenues.

Total operating expenses for the year ended December 31, 2019 increase to $683,814 from $83,521 for the year ended December 31, 2018. Total operating expenses for the year ended December 31, 2019 increase to $455,123 from $157,375. For the year ended December 31, 2019, the company incurred $655,422 in advertising and marketing costs and $28,392 in general and administrative costs. For the year ended December 31, 2018, the company incurred $27,667 in advertising and marketing costs and $55,854 in general and administrative costs. The increase in advertising and marketing costs primarily related to costs associated with the Regulation A campaign.

As a result of the foregoing, the company generated a net loss for the years ended December 31, 2019 and 2018 of $683,814 from $83,521, respectively.

Total operating expenses for Interim 2020 increase to $619,325 from $21,199 for Interim 2019. For Interim 2020, the company incurred $606,584 in advertising and marketing costs and $12,741 in general and administrative costs. For Interim 2019, the company incurred $12,916 in advertising and marketing costs and $8,283 in general and administrative costs. The increase in advertising and marketing costs primarily related to costs associated with the Regulation A campaign.

As a result of the foregoing, the company generated a net loss for Interim 2020 and Interim 2019 of $619,325 from $21,199, respectively.

Liquidity and Capital Resources

As of December 31, 2020, the company’s cash on hand was $742,300. Currently, the company only began receiving revenues in August 2019, and began generating a profit in August 2019. Since inception GolfSuites has also relied upon the cash advances from its current shareholder the Parent Company and management as well as funds raised in the company’s offering under Regulation A. The company plans to continue to try to raise additional capital through additional offerings and mortgage financing. Absent additional capital, the company may be forced to significantly reduce expenses and could become insolvent.

The company launched a Regulation A offering in May 2019, which terminated in May 2020. The total amount raised in the offering was approximately $1,334,218.

The company advanced funds totaling to GolfSuites Tulsa, LLC totaling $680,913 for the six months ended June 30, 2020.

Indebtedness

On November 10, 2018, the company received $65,655 from the Parent Company, pursuant to a Promissory Note for working capital to cover expenses and costs while preparing for the securities offering.

The company has received working capital to cover expenses and costs while preparing for the securities offering from KGEM Golf, Inc. in the amount of $377,300, for the six months ended June 30, 2020, and $11,049 for the year ended December 31, 2019. The balance of these covered costs is recorded as a liability of the company. The company has formalized some of these borrowings, but expects to repay all of these amounts whether a formal promissory note exists or not. As of December 31, 2020, the total amount due to the Parent Company is $984,485.

On April 24, 2020 GolfSuites Tulsa received $475,000 under the Paycheck Protection Program (”PPP”)of the Small Business Administration (“SBA”). The lender is the is First Oklahoma Bank. The loan accrues an annual interest rate of 1% and is due April 24, 2022.

On October 1, 2020 GolfSuites Tulsa applied for $150,000 under the EIDL. The loan has not been granted as of December 31, 2020.

On April 14, 2020, 4ORE Golf, LLC received $408,100 under the PPP of the SBA. The lender is First United Bank. The loan accrues an annual interest rate and is calculated pursuant to the “Interest Calculation Method” described therein. The loan is due April 14, 2022. GolfSuites Lubbock acquired 4ORE Golf, LLC in August 2020 and is responsible for the repayment of this loan when and if it comes due.

On June 25, 2020, 4ORE Golf, LLC obtained an EIDL loan of $149,900 and a $10,000 EIDL grant. The loan accrues an annual interest rate of 3.75% and is due on June 24, 2050. GolfSuites Lubbock acquired 4ORE Golf, LLC in August 2020 and is responsible for the repayment of this loan when and if it comes due.

Trends

GolfSuites 3 began operating the Tulsa Facility in September 2019. The company took over operations for the Tulsa Facility on December 31, 2020 and the Lubbock Facility in August 2020. Those facilities will be reflected in our fiscal year financials ending December 31, 2020.

GolfSuites participates in the recreational sporting and entertainment facilities market. It believes this market to be young, fast-growing and under-served. This market overlaps three growing, highly profitable markets: the golf market, the recreation/sporting entertainment sector and the food and beverage portion of the hospitality industry. GolfSuites competes for revenues from customer spending in each of these three sectors. Since money spent in those sectors is discretionary income, the company believes it is reliant on economic trends in the United States.

COVID-19 pandemic has had an impact on the company’s plans. For example, the company intends to acquire the Tulsa Facility, however the company has begun to see delays in this acquisition pursuant to COVID-19 pandemic. While social distancing is still required, the Tulsa Facility and the Lubbock Facility have had to limit the number of potential customers and limit their ability to function at capacity. However, due to the open air nature of our facilities, the limitations have been less restrictive than other sporting and entertainment facilities. To date, there have been limited restrictions on construction so the company has been able to continue the rebranding of the Tulsa Facility and plan for the rebranding of the Lubbock Facility.

Plan of Operation

Milestones to achieve over the next 12 months

Over the course of the next twelve months the company intends to do the following:

Acquire for lease or purchase 3 additional facilities of varying size.

Construct 3 Studios located in 3 indoor or outdoor malls across the United States.

Begin sourcing facilities to build from the ground up.

Goals for current facilities over the next 12 months

The company intends to do the following as it relates to the Tulsa Facility and the Lubbock Facility

Complete the rebranding of the Tulsa Facility by June 30, 20201.

Complete the rebranding of the Lubbock Facility by June 30, 2021.

Goals for future facilities over the course of the next 12 months:

Upon completion of this offering, the company intends to fund operations with the proceeds from this offering to advance the purchase or lease of sites related to the Studios.

Relaxed Ongoing Reporting Requirements

If the company becomes a public reporting company in the future, the company will be required to publicly report on an ongoing basis as an “emerging growth company” (as defined in the Jumpstart Our Business Startups Act of 2012, which the company refers to as the JOBS Act) under the reporting rules set forth under the Exchange Act. For so long as the company remains an “emerging growth company”, the company may take advantage of certain exemptions from various reporting requirements that are applicable to other Exchange Act reporting companies that are not “emerging growth companies”, including but not limited to:

not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act;

taking advantage of extensions of time to comply with certain new or revised financial accounting standards;

being permitted to comply with reduced disclosure obligations regarding executive compensation in the company’s periodic reports and proxy statements; and

being exempt from the requirement to hold a non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

If the company becomes a public reporting company in the future, the company expects to take advantage of these reporting exemptions until it is no longer an emerging growth company. The company would remain an “emerging growth company” for up to five years, although if the market value of the company’s Common Stock that is held by non-affiliates exceeds $700 million as of any June 30 before that time, the company would cease to be an “emerging growth company” as of the following December 31.

If the company does not become a public reporting company under the Exchange Act for any reason, it will be required to publicly report on an ongoing basis under the reporting rules set forth in Regulation A for Tier 2 issuers. The ongoing reporting requirements under Regulation A are more relaxed than for “emerging growth companies” under the Exchange Act. The differences include, but are not limited to, being required to file only annual and semiannual reports, rather than annual and quarterly reports. Annual reports are due within 120 calendar days after the end of the issuer’s fiscal year, and semiannual reports are due within 90 calendar days after the end of the first six months of the issuer’s fiscal year.

In either case, the company will be subject to ongoing public reporting requirements that are less rigorous than Exchange Act rules for companies that are not “emerging growth companies”, and the company’s shareholders could receive less information than they might expect to receive from more mature public companies.

DIRECTORS, EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES

The table below sets forth the officers and directors of the company.

Name

Position

Employer

Age

Term of Office (If

indefinite give date

of appointment)

Gerald Ellenburg

CEO, Director, Secretary, Treasurer

GolfSuites 1, Inc.

March 14, 2019

The table below sets forth the officers and directors of the Parent Company.

Name	Position	Employer	Age	Term of Office (If indefinite give date of appointment)
Gerald Ellenburg	Director Chairman Chief Executive Officer and Secretary	GolfSuites, Inc.	71	November 8, 2018
Ryan Koenig	Director, Development Director	GolfSuites, Inc.	42	November 8, 2018
John Galvin	Director	GolfSuites, Inc.	56	November 8, 2018
Nicholas Flanagan	President, Chief Operating Officer	GolfSuites, Inc.	54	July 1, 2019
Scott McCurry	VP Operations

David A. Morris III	Consulting CFO	GolfSuites, Inc.	63	November 8, 2018
Michael Zylstra	VP, Chief Administrative Officer	GolfSuites, Inc.	54	July 1, 2019
Ryan Ellenburg	Capital Markets Directors	GolfSuites, Inc.	39	July 1, 2019

Gerald Ellenburg

Gerald Ellenburg (“Jerry”) is the Chairman and Chief Executive Officer of the Parent Company since November 2018 and GolfSuites since March 2019. Jerry also serves as the Chairman and Chief Executive Officer of ERC Home Builders, Inc. (f/k/a, ERC Investment Properties, LLC) since March 2011. Jerry has a total of 35 years of experience in real estate ownership, management and financing of multi-family properties, management of over $750 million in debt and equity financing. Jerry graduated from the University of California, Berkeley in 1971, and is a California-licensed CPA (inactive).

Nicholas Flanagan

Nick Flanagan is the Chief Operating Officer of the Parent Company since July 1, 2019. Nick is a 30 year veteran of major restaurant and retail branded companies. From 1989 to 2004 he served in various roles with Steak & Ale Restaurant Corp. From 2004 to June 2019 Nick served in various roles at Cracker Barrel Old Country Store, Inc. (“Cracker Barrel”). Nick’s most recent role at Cracker Barrel was Senior Vice President of Restaurant & Retail Operations. While in this role, he served on the company’s executive team. Nick graduated from the University of Central Florida in 1989 with a Bachelor of Business Administration degree.

John Galvin

John Galvin is a Director and Development Director of the Parent Company since November 2018. From June 2017 until present, John has served as the Chief Branding and Experience Officer at Boulevard Strategies. John is the Founder and Chief Experience Officer of 7Nine Partners since January 2014. John has a total of 31 years in marketing, branding, experience design, advertising and promotion for companies including, but not limited to, Ford, JP Morgan Chase, Citi, Lowe’s, Victoria’s Secret, Champion Sportswear, and Dick’s Sporting Goods. John graduated from The Ohio State University in 1987.

Ryan Koenig

Ryan Koenig is a Director and the Chief Development Officer of the Parent Company since November 2018. Ryan also serves as President and Chief Operating Officer of ERC Homebuilders, Inc., a position he has held since December 2018. From March 2011 until the present, he has been the Chief Development Officer at eResidential and Commercial LLC (eRC Homes). Ryan has over 20 years of experience in real estate development and construction with the following companies: Wood Partners Camden Properties, Turner Construction and Zaremba Development. Ryan has overseen approximately $500 million in completed construction projects.

Scott McCurry

Scott McCurry has been the Vice President of Operations for the company since September 1, 2019. Scott is an operations executive with over 25 years of experience in the Hospitality and Entertainment Industry. Previously, Scott was the National Director of Operations for K1 Speed from September 2017 to September 2019, helping it grow in domestic and international size while adding food beverage to the brand while improving the guest experience. Prior to K1Speed, Scott was the National Director of Operations of Topgolf from February 2014 to September 2017. Prior to that Scott was their Director of Operations, a position he held since July 2012. At Topgolf, Scott helped build the brand from six venues to over 40 venues each averaging $20 million in revenue a year.

David A. Morris III

David Morris is the Consulting Chief Financial Officer of the Parent Company since November 2018. David is also the Consulting Chief Financial Officer at ERC Homebuilders since March 2011 until present. David has over 30 years of experience in finance and financial forensics. During his tenure at GolfSuites, David oversees the following:

	·	tax planning,
	·	compliance,
	·	accounting,
	·	audit,
	·	forecasts and
	·	investment analysis.

David’s’ career has included the Vice-Presidency of Finance at Belz Enterprises, a large real estate development and management company. David graduated from the University of Wisconsin, La Crosse, in 1980 and is a Tennessee-licensed CPA.

Michael Zylstra

Michael Zylstra is the Chief Administrative Officer of the Parent Company since July 1, 2019. From 1992 until 2017 Michael has worked extensively in the restaurant and retail industry with Cracker Barrel. In his most recent role at Cracker Barrel Michael served as VP, General Counsel & Corporate Secretary. Michael graduated from the University of Western Ontario in 1988 and from Cumberland School of Law at Samford University in 1991.

COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS

For the fiscal year ended December 31, 2020, the company compensated one of its executive officers and directors. Scott McCurry was paid as follows:

Name	Capacities in which compensation was received	Cash compensation ($)		Other compensation ($)		Total compensation ($)
Scott McCurry	VP of Operations	$	240,000	$	0	$	240,000

For the fiscal year ended December 31, 2020, the company did not pay its directors in their capacity as directors. There is one director in this group.

In the future, the company will have to pay Mr. McCurry as well as additional officers, directors and other employees, which will impact the company’s financial condition and results of operations, as discussed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The company may choose to establish an equity compensation plan for its management and other employees in the future. Further, as the company grows, the company intends to add other executives, including but not limited to, a General Manager, a Food and Beverage Manager and a Golf Manager.

SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITYHOLDERS

The following table sets out, as of December 31, 2020, GolfSuites voting securities that are owned by its executive officers, directors and other persons holding more than 10% of the company’s voting securities.

Title of class

Name and
address of
beneficial
owner

Amount and
nature
of beneficial
ownership

Amount and
nature
of beneficial
ownership
acquirable

Percent of
class

Class B Common Stock

GolfSuites, Inc.
2738 Falkenburg
Road South,
Riverview, FL 33578

18,000,000

N/A

100

There are currently no outstanding shares of the company’s Class A Common Stock and 345,172 shares outstanding of the company’s Preferred Stock.

The following table sets out, as of December 31, 2020, the Parent Company’s voting securities that are owned by the company’s executive officers, directors and other persons holding more than 10% of the company’s voting securities.

Title of class	Name and address of beneficial owner	Amount and nature of beneficial ownership		Amount and nature of beneficial ownership acquirable	Percent of class
Common Stock	Gerald Ellenburg		24,000,000	N/A		12.45	%
	John Galvin		19,950,000	N/A		10.35	%
	Ryan Koenig		19,950,000	N/A		10.35	%
	Kyle Morris		19,950,000	N/A		10.35	%

(1)

The address for all the executive officers, directors, and beneficial owners is c/o GolfSuites, Inc. 2738 Falkenburg Road South, Riverview, FL 33578.

INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS

Relationship with the Parent Company

The company has received working capital to cover expenses and costs while preparing for the securities offering from the Parent Company in the amount of $984,485. The balance of these covered costs is recorded as a liability of the company.

The company has issued 18,000,000 shares of Class B Common Stock to the Parent Company, at par, in exchange for $180.

Management Services Agreement

The company has entered into a Management Services Agreement with the Parent Company. Pursuant to this agreement, the Parent Company will license all intellectual property and business concepts and design necessary for GolfSuites to conduct its business and under the direction of our Board of Directors, the Parent Company is to provide services to GolfSuites including: Supervision the operations of GolfSuites, and Management all necessary negotiations relating to the business, personnel, etc. In return for the aforementioned services GolfSuites agrees to pay the Parent Company a monthly management fee:

	•	Operational facilities: 4% of gross operating revenues

	•	Facilities that are not operational: 3% of all In-Development Costs

The initial term of the agreement is for ten years. Upon expiration of the agreement it shall automatically renew for another two years. Either party can terminate the agreement provided 120 days written notice has been given to the other party. see “The Company’s Business – Management Services from GolfSuites

Relationship with ERC Communities, Inc.

Some of the parties involved with the operation and management of the company, including Gerald Ellenburg, Rod Turner, David Morris, and Ryan Koenig, have other relationships that may create disincentives to act in the best interest of the company and its investors. These parties are also involved with ERC Communities, Inc. and its subsidiaries in similar capacities. These conflicts may inhibit or interfere with the sound and profitable operation of the company. See “Risk Factors — Risks Related to Certain Conflicts of Interest.”

SECURITIES BEING OFFERED

GolfSuites 1 is offering Preferred Stock in this offering. The Preferred Stock may be converted into the Common Stock of the company at the discretion of each investor, or automatically upon the occurrence of certain events, like an initial public offering. As such, the company is qualifying up to 6,500,000 shares of Preferred Stock and up to 6,500,000 shares of Class A Common Stock under this Offering Statement, of which this Offering Circular is part.

GolfSuites authorized capital stock consists of 200,000,000 shares of capital stock, of which 150,000,000 shares are designated Common Stock (the “Common Stock”), at $0.00001 par value, of which 132,000,000 shares are Class A Common Stock (“Class A Common Stock”) and 18,000,000 shares are Class B Common Stock (“Class B Common Stock”) and 50,000,000 shares of Preferred Stock, at $0.00001 par value, of which 10,000,000 shares are Class A Preferred Stock (the “Preferred Stock” or “Class A Preferred Stock”). Class A Common Stock has the same rights and powers of, ranks equally to, shares ratably with and is identical in all respects, and as to all matters to Class B Common Stock; except that each holder of Class B Common Stock is entitled to 5 votes per share of Class B Common Stock whereas each holder of Class A Common Stock is entitled to only 1 vote per share of Class A Common Stock. The company may issue fractions of shares.

The following is a summary of the rights of GolfSuites capital stock as provided in its Certificate of Amendment to the Certificate of Incorporation, Certificate of Incorporation, Certificate of Designations, and Bylaws, which have been filed as exhibits to the Offering Statement of which this Offering Circular is a part.

For a complete description of GolfSuites capital stock, you should refer to its Certificate of Amendment to the Certificate of Incorporation, Certificate of Incorporation, Certificate of Designations and Bylaws, and applicable provisions of the Delaware General Corporation Law.

Class A Common Stock

Voting Rights.

Each holder of GolfSuites Class A Common Stock is entitled to one vote for each share on all matters submitted to a vote of the shareholders. Holders of Class A Common Stock at all times shall vote together with the holders of Class B Common Stock and Class A Preferred Stock as a single class on all matters (including the election of directors) submitted to vote or for the consent of the stockholders of GolfSuites.

Class B Common Stock

Voting Rights.

Each holder of GolfSuites Class B Common Stock is entitled to five votes for each share on all matters submitted to a vote of the shareholders. Holders of Class B Common Stock at all times shall vote together with the holders of Class A Common Stock and Class A Preferred Stock as a single class on all matters (including the election of directors) submitted to vote or for the consent of the stockholders of GolfSuites.

Conversion Rights.

Each share of Class B Common Stock is convertible into one share of Class A Common Stock at the option of the holder at any time upon written notice to GolfSuites.

All Classes of Common Stock

Dividends.

Subject to preferences that may be applicable to any then outstanding class of capital stock having prior rights to dividends (including the company’s Class A Preferred Stock), shareholders of GolfSuites Class A Common Stock and Class B Common Stock are entitled to receive dividends, if any, as may be declared from time to time by the board of directors out of legally-available funds. Any dividends in excess of dividends payable to holders of the Class A Preferred Stock, will be paid ratably among the holders of Class A Common Stock, Class B Common Stock and Class A Preferred Stock on an as-converted basis. GolfSuites has never declared nor paid cash dividends on any of its capital stock and currently does not anticipate paying any cash dividends after this offering or in the foreseeable future on its Common Stock.

Liquidation Rights.

In the event of GolfSuites liquidation, dissolution or winding up, holders of GolfSuites Class A and Class B Common Stock will be entitled to share ratably in the net assets legally available for distribution to stockholders after the payment of all of GolfSuites debts and other liabilities and the satisfaction of any liquidation preference granted to holders of Class A Preferred Stock; however if the amount that the holders of Class A Preferred Stock would receive based on the pro rata percentage of the proceeds calculated based on the number of shares owned by each investor on an “as converted to Common Stock” basis is greater than the then applicable liquidation preference available to Class A Preferred Stock, the holders of Class A Preferred Stock, Class A Common Stock and Class B Common Stock will receive that amount.

Other Rights.

Holders of GolfSuites Class A and Class B Common Stock have no preemptive, subscription or other rights, and there are no redemption or sinking fund provisions applicable to GolfSuites Class A or Class B Common Stock.

Preferred Stock

Voting Rights

Each holder of GolfSuites Preferred Stock is entitled to one vote for each share on all matters submitted to a vote of the shareholders. Holders of Preferred Stock at all times shall vote together with holders of the Common Stock as a single class on all matters (including the election of directors) submitted to vote or for the consent of the stockholders of GolfSuites.

Dividends

Each share of Preferred Stock is entitled to cumulative dividends which shall accrue, whether or not declared by the Board and whether or not there are funds legally available for the payment of dividends, on a daily basis in arrears at the rate of 8% per annum on the sum of the invested amount sum plus all unpaid accrued and accumulated dividends thereon. The dividends will be paid monthly

In the event the company declares a dividend distribution to the Common Stock holders, all Preferred Stockholders will receive their pro rata share.

Liquidation preference

In the event of a liquidation, investors will be entitled to receive the greater of their total investment amount in the shares of Preferred Stock and any accrued and unpaid dividends or their pro rata percentage of the proceeds calculated based on the number of shares owned by each investor on an “as converted to Common Stock” basis.

Conversion

The Preferred Stock is convertible into the Class A Common Stock of the company as provided by Section 5 of the Certificate of Designations. Each share of Preferred Stock shall be convertible, at the option of the holder thereof, at any time after the date of issuance of such share into that number of fully-paid, nonassessable shares of Class A Common Stock determined by dividing the Conversion Price (defined therein), as adjusted for any accrued and unpaid dividends, by the original purchase price. The Conversion Price is the original purchase price, adjusted from time to time as described below under “Anti-Dilution Rights”.

Holders of the Preferred Stock, may convert their shares of Preferred Stock into Common Stock in their sole discretion. In the event of a Qualified Public Offering, as defined in the Certificate of Designations conversion of the Preferred Stock is mandatory.

Anti-Dilution Rights

Holders of Preferred Stock have the benefit of anti-dilution protective provisions that will be applied to adjust the number of shares of Class A Common Stock issuable upon conversion of the shares of the Preferred Stock. If equity securities are subsequently issued by the company at a price per share less than the conversion price of the Preferred Stock then in effect, the conversion price of the Preferred Stock will be adjusted using a broad-based, weighted-average adjustment formula as set out in the Certificate of Designations.

These terms generally provide that if the company issues certain additional shares of Common Stock (as detailed in the Certificate of Designations) without consideration or for a consideration per share less than the Conversion Price, in effect on the date of and immediately prior to such issue, then, the Conversion Price will be reduced. The new Conversion Price will be the amount equal to the quotient obtained by dividing the (i) the sum of (A) the number of shares of Common Stock deemed outstanding prior to such issuance (as determined on an as-converted basis) times the Conversion Price then in effect with (B) the consideration, if any, from that issuances by (ii) the sum of (A) the number of shares of Common Stock deemed outstanding prior to such issuance (a determined on an as-converted basis) plus the number of such additional shares of Common Stock so issued.

Other Rights

Holders of GolfSuites Preferred Stock have no preemptive, subscription or other rights, and there is no redemption or sinking fund provisions applicable to its’ Preferred Stock.

All Classes of Stock

Forum Selection Provisions

Article VII of the Certificate of Incorporation contain exclusive forum provisions. With a few exceptions, the Court of Chancery in the State of Delaware will be the sole and exclusive forum for any holder of GolfSuites Class A and Class B Common Stock (including a beneficial owner) to bring (i) any derivative action or proceeding brought on the company’s behalf, (ii) any action asserting a claim of breach of fiduciary duty owed by any director, officer or other employee, (iii) any action asserting a claim against the company, its directors, officers or employees arising pursuant to any provision of the Delaware General Corporation Law or the Corporation’s certificate of amendment to the certificate of incorporation, the certificate of incorporation or bylaws or (iv) any action asserting a claim against the company, its directors, officers or employees governed by the internal affairs doctrine. These sections shall not apply to actions arising under the federal securities laws.

Section 6 of the subscription agreement (which appears as an exhibit to the offering statement of which this offering circular forms a part) provides that the Court of Chancery in the State of Delaware is the exclusive forum for all actions or proceedings relating to the subscription agreement. However, this exclusive forum provision does not apply to actions arising under the federal securities laws.

Jury Trial Waiver

The Court of Chancery in the State of Delaware is a non-jury trial court. The parties in any lawsuits where the forum selection provisions are applicable will not be entitled to a jury.

Moreover, holders of Shares of Class A Preferred Stock as well as holders of Class A Common Stock converted from Class A Preferred Stock will be bound by the subscription agreement, which provides that subscribers waive the right to a jury trial of any claim they may have against us arising out of or relating to the subscription agreement, including any claim under federal securities laws. If the company opposed a jury trial demand based on the waiver, a court would determine whether the waiver was enforceable given the facts and circumstances of that case in accordance with applicable case law.

Tax Treatment of Dividends

The 8% dividends will likely be treated as a corporate distribution on equity. Corporate distributions on equity are not deductible to the corporation but are generally taxable to the shareholder, subject to various exceptions and limitations. The distributions made pursuant to the Preferred Stock dividend provisions will be taxable as dividends to shareholders only to the extent of current and accumulated earnings and profits. To the extent the company does not have current and accumulated earnings and profits, the distributions will be treated as a non-taxable return of capital to the extent of the shareholder’s adjusted basis. If distributions still exceed the amount of adjusted basis, such excess would be considered as capital gains income to the shareholder, who will generally be subject to federal (and possibly state) income tax on such gains at a rate that depends upon the shareholder’s holding period with respect to the shares in question, among other factors. Since the tax treatment of any distributions may vary according to the financial performance of the company, as well as the particular circumstances of the investor, investors should consult their own tax advisers, and should further not assume that the distributions will be subject to the same tax treatment from year to year.

These amounts will be reported to shareholders on Form 1099-DIV each year as part of their investment reporting package.

ONGOING REPORTING AND SUPPLEMENTS TO THIS OFFERING CIRCULAR

The company will be required to make annual and semi-annual filings with the SEC. The company will make annual filings on Form 1-K, which will be due by the end of April each year and will include audited financial statements for the previous fiscal year. The company will make semi-annual filings on Form 1-SA, which will be due by September 28 each year, which will include unaudited financial statements for the six months to June 30. The company will also file a Form 1-U to announce important events such as the loss of a senior officer, a change in auditors or certain types of capital-raising. The company will be required to keep making these reports unless we file a Form 1-Z to exit the reporting system, which it will only be able to do if it has less than 300 shareholders of record and have filed at least one Form 1-K.

The company may supplement the information in this Offering Circular by filing a Supplement with the SEC. The company hereby incorporate by reference into this Offering Circular all such Supplements, and the information on any Form 1-K, 1-SA or 1-U filed after the date of this Offering Circular.

All these filings will be available on the SEC’s EDGAR filing system. You should read all the available information before investing.

Financial Statements

GolfSuites 1, Inc.

Table of Contents

Independent Accountant’s Audit Report		F-2

Financial Statements and Supplementary Notes

	Balance Sheets as of December 31, 2019 and 2018	F-4

	Statement of Operations for the calendar year period of 2019 and the period of October 25, 2018 (inception) through December 31, 2018	F-5

	Statement of Changes in Shareholders’ Equity/Deficit for the calendar year period of 2019 and the period of October 25, 2018 (inception) through December 31, 2018	F-6

	Statement of Cash Flows for the calendar year period of 2019 and the period of October 25, 2018 (inception) through December 31, 2018	F-7

	Notes and Additional Disclosures to the Financial Statements as of December 31, 2019	F-8

INDEPENDENT AUDITOR’S REPORT

June 12, 2020

To:	Board of Directors, GolfSuites 1, Inc.
	Attn: Gerald D. Ellenburg

Re:	2019-2018 Financial Statement Audit

We have audited the accompanying consolidated financial statements of GolfSuites 1, Inc. (a corporation organized in Delaware) (the “Company”) formerly known as KGEM Golf Midwest Inc., which comprise the balance sheets as of December 31, 2019 and 2018, and the related statements of operations, stockholders’ equity/deficit, and cash flows for the calendar year period of 2019 and the period of October 25, 2018 (inception) and ending December 31, 2018, and the related notes to the financial statements.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of the Company’s financial statements in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion.

An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

F-2

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations, shareholders’ equity and its cash flows for the calendar year period of 2019 and the period October 25, 2018 (inception) through December 31, 2018 in accordance with accounting principles generally accepted in the United States of America.

Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Notes to the financial statements, the Company has suffered recurring losses from operations, has a net capital deficiency, and has stated that substantial doubt exists about the Company's ability to continue as a going concern. Management's evaluation of the events and conditions and management's plans regarding these matters are also described in the Notes to the financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Our opinion is not modified with respect to this matter.

Sincerely,

IndigoSpire CPA Group

IndigoSpire CPA Group, LLC

Aurora, Colorado

June 12, 2020

F-3

GOLFSUITES 1, INC.

BALANCE SHEETS

As of December 31, 2019 and 2018

See accompanying Auditor’s Report and Notes to these Statements

	2019			2018
ASSETS
Current Assets:
Cash and cash equivalents	$	32,866		$	180
Deferred offering costs		0			3,333
Total Current Assets		32,866			3,513

Property, Plant and Equipment, net		NONE			NONE

TOTAL ASSETS	$	32,866		$	3,513

LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Current Liabilities:
Advances from parent entity	$	1,028,739		$	86,854
Total Current Liabilities		1,028,739			86,854

Non-current Liabilities:
None		0			0

TOTAL LIABILITIES		1,028,739			86,854

Shareholders’ Equity:
Common stock, 200,000,000 authorized, $0.00001 par, 18,000,000 shares issued and outstanding		180			180
Preferred Stock, less current and deferred offering costs		(228,718	)		0
Retained earnings, net of distributions		(767,335	)		(83,521	)
Total Stockholder’s Equity		(995,873	)		(83,341	)

TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY	$	32,866		$	3,513

F-4

GOLFSUITES 1, INC.

STATEMENT OF OPERATIONS

For the period calendar year period of 2019
and for the period of October 25, 2018 (inception) to December 31, 2018

See accompanying Auditor’s Report and Notes to these Statements

	2019			2018
Revenues	$	0		$	0
Cost of revenues		0			0
Gross Profit (Loss)		0			0

Operating Expenses:
Advertising and Marketing		655,422			27,667
General and administrative		28,392			55,854
Total Operating Expenses		683,814			83,521

Operating Income		(683,814	)		(83,521	)

Provision for Income Taxes		0			0

Net Income		(683,814	)		(83,521	)

F-5

GOLFSUITES 1, INC.

STATEMENT OF STOCKHOLDER’S EQUITY

For the period calendar year period of 2019
and for the period of October 25, 2018 (inception) to December 31, 2018

See accompanying Auditor’s Report and Notes to these Statements

	Common Stock							Accumulated			Total Stockholder’s
	Shares		Value		Preferred Stock			Earnings/Deficit			Equity (Deficit)
As of October 25, 2018 (inception)		0	$	0	$	0		$	0		$	0
Initial Share Issuance		18,000,000	$	180								180
Net Income/(Loss)									(83,521	)		(83,521	)
Balance as of December 31, 2018		18,000,000		180					(83,521	)		(83,341	)
Share Issuance						381,295						381,295
Less: Current and deferred offering costs						(610,013	)					(610,013	)
Net Income/(Loss)									(683,814	)		(683,814	)
Balance as of December 31, 2019		18,000,000	$	180	$	(228,718	)	$	(767,335	)	$	(995,873	)

F-6

GOLFSUITES 1, INC.

STATEMENT OF CASH FLOWS

For the period calendar year period of 2019
and for the period of October 25, 2018 (inception) to December 31, 2018

See accompanying Auditor’s Report and Notes to these Statements

	2019			2018
Cash Flows from Operating Activities
Net Income	$	(683,814	)	$	(83,521	)
Adjustments to reconcile net loss to net cash used in operating activities:
Changes in operating assets and liabilities:
None		0			0
Net Cash Used in Operating Activities		(683,814	)		(83,521	)

Cash Flows from Investing Activities
None		0			0
Net Cash Used in Investing Activities		0			0

Cash Flows from Financing Activities
Advances from parent entity		941,885			86,854
Costs of offering		(606,680	)		(3,333	)
Issuance of shares		381,295			180
Net Cash Provided by Financing Activities		716,500			83,701

Net Change In Cash and Cash Equivalents		32,686			180

Cash and Cash Equivalents at Beginning of Period		180			0
Cash and Cash Equivalents at End of Period		32,866		$	180

Supplemental Disclosure of Cash Flow Information
Cash paid for interest	$	0		$	0
Cash paid for income taxes		0			0

F-7

GOLFSUITES 1, INC.

NOTES TO FINANCIAL STATEMENTS

As of December 31, 2019
See accompanying Auditors’ Report

NOTE 1 - NATURE OF OPERATIONS

GolfSuites 1, Inc. (which may be referred to as the “Company,” “we,” “us,” or “our”) is an early stage company devoted to devoted to the development and operation of golf driving range and entertainment centers in the United States. The Company will operate under the brand GOLFSUITES. The Company will oversee the acquisition of land, zoning, entitlement, design, construction and operation of the planned facilities.

The Company incorporated in 2018 in the state of Delaware as KGEM Golf Midwest Inc. and changed its name in January 2019.

Since Inception, the Company has relied on advances from its current shareholder(s) to fund its operations. As of December 31, 2019, the Company had little working capital and will likely incur losses prior to generating positive working capital. These matters raise substantial concern about the Company’s ability to continue as a going concern (see Note 6). During the next 12 months, the Company intends to fund its operations with funding from a securities offering campaign (see Note 8) and funds from revenue producing activities, if and when such can be realized. If the Company cannot secure additional short-term capital, it may cease operations. These financial statements and related notes thereto do not include any adjustments that might result from these uncertainties.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America ("GAAP"). The Company has selected December 31 as the year end as the basis for its reporting.

Use of Estimates

The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the footnotes thereto. Actual results could differ from those estimates. It is reasonably possible that changes in estimates will occur in the near term.

Risks and Uncertainties

The Company has a limited operating history. The Company's business and operations are sensitive to general business and economic conditions in the United States. A host of factors beyond the Company's control could cause fluctuations in these conditions. Adverse conditions may include: recession, downturn or otherwise, local competition or changes in consumer taste. These adverse conditions could affect the Company's financial condition and the results of its operations. As of December 31, 2019, the Company is operating as a going concern.

Cash and Cash Equivalents

The Company considers short-term, highly liquid investment with original maturities of three months or less at the time of purchase to be cash equivalents. Cash consists of currency held in the Company’s checking account. As of December 31, 2019, the Company had $32,866 in a corporate checking account.

Receivables and Credit Policy

Trade receivables from customers are uncollateralized customer obligations due under normal trade terms, primarily requiring payment before services are rendered. Trade receivables are stated at the amount billed to the customer. Payments of trade receivables are allocated to the specific invoices identified on the customer’s remittance advice or, if unspecified, are applied to the earliest unpaid invoice. The Company, by policy, routinely assesses the financial strength of its customer. As a result, the Company believes that its accounts receivable credit risk exposure is limited and it has not experienced significant write-downs in its accounts receivable balances. As of December 31, 2019, the Company did not have any outstanding accounts receivable.

F-8

Property and Equipment

Property and equipment are recorded at cost. Expenditures for renewals and improvements that significantly add to the productive capacity or extend the useful life of an asset are capitalized. Expenditures for maintenance and repairs are expensed as incurred. When equipment is retired or sold, the cost and related accumulated depreciation are eliminated from the balance sheet accounts and the resultant gain or loss is reflected in income.

Depreciation is provided using the straight-line method, based on useful lives of the assets. As of December 31, 2019, the Company had recorded no depreciation.

The Company reviews the carrying value of property and equipment for impairment whenever events and circumstances indicate that the carrying value of an asset may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss is recognized equal to an amount by which the carrying value exceeds the fair value of assets. The factors considered by management in performing this assessment include current operating results, trends and prospects, the manner in which the property is used, and the effects of obsolescence, demand, competition, and other economic factors. As of December 31, 2019, the Company had no fixed assets.

Deferred Offering Costs

The Company complies with the requirements of ASC 340-10. The Deferred Offering Costs of the Company consist solely of legal and other fees incurred in connection with the capital raising efforts of the Company. Under ASC 340-10, costs incurred are capitalized until the offering whereupon the offering costs are charged to members’ equity or expensed depending on whether the offering is successful or not successful, respectively.

During 2019 (and still ongoing in 2020), the Company is offering its securities in a Regulation A securities offering. In 2019, the Company raised approximately $381,295 by issuing shares of preferred stock. As of December 31, 2018, the Company had recorded a balance of deferred offering costs of $3,333. In 2019, the Company incurred an additional $606,680 in offering costs including legal costs, broker licensing and other costs. The Company is recording these current and deferred offering costs as a reduction of the equity raised in the securities offering. In 2019, the Company spent more in offering costs than the offering yielded.

Income Taxes

Income taxes are provided for the tax effects of transactions reporting in the financial statements and consist of taxes currently due plus deferred taxes related primarily to differences between the basis of receivables, inventory, property and equipment, intangible assets, cryptocurrency valuation and accrued expenses for financial and income tax reporting. The deferred tax assets and liabilities represent the future tax return consequences of those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all the deferred tax assets will not be realized.

The Company is taxed as a C Corporation for federal and state income tax purposes. As the Company has recently been formed, no material tax provision exists as of the balance sheet date.

The Company evaluates its tax positions that have been taken or are expected to be taken on income tax returns to determine if an accrual is necessary for uncertain tax positions. As of December 31, 2019, the unrecognized tax benefits accrual was zero.

The Company is current with its foreign, US federal and state income tax filing obligations and is not currently under examination from any taxing authority.

F-9

Revenue Recognition

In 2019, the Company adopted ASC 606, Revenue from Contracts with Customers, as of inception. There was no transition adjustment recorded upon the adoption of ASC 606. Under ASC 606, revenue is recognized when a customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services.

To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the Company performs the following steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract and (v) recognize revenue when (or as) the entity satisfies a performance obligation. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

Since inception, the Company has not yet recognized any revenue.

Advertising Expenses

The Company expenses advertising costs as they are incurred.

Organizational Costs

In accordance with GAAP, organizational costs, including accounting fees, legal fees, and costs of incorporation, are expensed as incurred.

Concentration of Credit Risk

The Company maintains its cash with a major financial institution located in the United States of America, which it believes to be credit worthy. The Federal Deposit Insurance Corporation insures balances up to $250,000. At times, the Company may maintain balances in excess of the federally insured limits.

Recent Accounting Pronouncements

In February 2016, FASB issued ASU No. 2016-02, Leases, that requires organizations that lease assets, referred to as "lessees", to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases with lease terms of more than 12 months. ASU 2016-02 will also require disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases and will include qualitative and quantitative requirements. The new standard for nonpublic entities will be effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020, and early application is permitted. We are currently evaluating the effect that the updated standard will have on our financial statements and related disclosures.

In August 2016, FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230).” ASU 2016-15 provides classification guidance for certain cash receipts and cash payments including payment of debt extinguishment costs, settlement of zero-coupon debt instruments, insurance claim payments and distributions from equity method investees. The standard is effective on January 1, 2018, with early adoption permitted. The Company is currently in the process of evaluating the impact the adoption will have on its financial statements and related disclosures.

The FASB issues ASUs to amend the authoritative literature in ASC. There have been a number of ASUs to date, including those above, that amend the original text of ASC. Management believes that those issued to date either (i) provide supplemental guidance, (ii) are technical corrections, (iii) are not applicable to us or (iv) are not expected to have a significant impact our balance sheet.

NOTE 3 – INCOME TAX PROVISION

As described above, the Company was recently formed and has only incurred costs of its start-up operations and capital raising. As such, no material tax provision yet exists.

F-10

NOTE 4 – COMMITMENTS AND CONTINGENCIES

Legal Matters

Company is not currently involved with and does not know of any pending or threatening litigation against the Company or founders.

NOTE 5 –EQUITY

As of December 31, 2018, the Company had authorized 200,000,000 shares of common stock, of which, 18,000,000 shares had been issued to its parent company, at par, in exchange for $180. In January 2019, the Company underwent a recapitalization of its share structure.

The Company converted the 18,000,000 shares of common stock into 18,000,000 shares of Class B Common Stock (which are still held by the Company’s parent).

Additionally, the Company has authorized 132,000,000 shares of Class A Common Stock and 50,000,000 shares of preferred stock, of which 10,000,000 shares are designated as Class A Preferred Stock which is convertible into Class A Common Stock. None of the shares of the Class A Common Stock has been issued. In 2019, approximately $381,295 worth of shares of Preferred Stock have been issued. The company intends to offer and sell the 10,000,000 shares of Class A Preferred Stock as part of a Regulation A securities offering (discussed more below).

Class A Common stockholders are entitled to a single vote per share and have equal dividend and liquidation preferences as Class B Common stockholders. Class B Common stockholders have five votes per share and shares of Class B Common Stock can be converted into shares of Class A Common Stock at the option of the holder. Class A Preferred stockholders are entitled to a single vote per share and to an 8 percent annual dividend, which will accrue if funds are not legally available to distribute, in addition to a liquidation preference. Shares of Class A Preferred Stock can be converted into shares of Class A Common Stock at the option of the holder and shares will automatically converted in the event of a qualified public offering, as defined in the Certificate of Incorporation, as amended.

NOTE 6 – GOING CONCERN

These financial statements are prepared on a going concern basis. The Company began operation in 2018 and has limited operating history. The Company’s ability to continue is dependent upon management’s plan to raise additional funds (see Note 7) and achieve and sustain profitable operations. The Company has borrowed significantly from an affiliate company for financial support during since inception. The financial statements do not include any adjustments that might be necessary if the Company is not able to continue as a going concern.

NOTE 7 – RELATED PARTY TRANSACTIONS

Related Party Transactions

The Company has received working capital to cover expenses and costs while preparing for the securities offering from parent company in the amount of $1,028,739 as of the balance sheet date. The balance of these covered costs is recorded as a liability of the Company. The Company has formalized some of these borrowings, but expects to repay all of these amounts whether a formal promissory note exists or not.

As these are agreements between related parties, there is no guarantee that these rates or costs are commensurate with an arm’s-length arrangement.

F-11

NOTE 8 – SUBSEQUENT EVENTS

Securities Offering

The Company continued a securities offering started in 2019 where we offered up to 10,000,000 shares of Class A Preferred Stock in a securities offering exempt from SEC registration under Regulation A, tier 2. The Company received qualification from the US Securities and Exchange Commission to proceed with the offering in May 2019 and closed the offering in May 2020. The Company engaged with various advisors and other professionals to facilitate the offering who were paid customary fees and equity interests for their work.

Management’s Evaluation

Management has evaluated subsequent events through June 12, 2020, the date the financial statements were available to be issued. Based on this evaluation, no additional material events were identified which require adjustment or disclosure in the financial statements.

F-12

GolfSuites 1, Inc.

(a Delaware corporation)

Financial Statements

For the Six Months Ended June 30, 2020 and 2019

UNAUDITED - no assurance given

F-13

GolfSuites 1, Inc.

Financial Statements

Table of Contents

Balance Sheets as of June 30, 2020 and 2019 (unaudited) and December 31, 2019	F-15

Statement of Operations for the six months ended June 30, 2020 and 2019 (unaudited)	F-16

Statement of Changes in Shareholders' Equity for the six months ended June 30, 2020 and 2019 (unaudited)	F-17

Statement of Changes in Cash Flows for the six months ended June 30, 2020 and 2019 (unaudited)	F-18

Notes and Additional Disclosures to the Financial Statements as of June 30, 2020 (unaudited)	F-19

F-14

GolfSuites 1, Inc.

Balance Sheets

As of June 30, 2020 and 2019 (unaudited) and December 31, 2019

	6/30/2020			12/31/2019			6/30/2019
	(unaudited)						(unaudited)
ASSETS

Current assets
Cash and cash equivalents	$	20,483		$	32,866		$	19,030

Property, plant and equipment, net		-			-			-

Other assets
Related party receivable - Advance to GolfSuites Tulsa, LLC		680,913			-			-
TOTAL ASSETS	$	701,396		$	32,866		$	19,030

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities
Current liabilities
Advances from parent entity	$	796,026		$	418,726		$	94,570

Non-current Liabilities		-			-			-
TOTAL LIABILITIES		796,026			418,726			94,570

Stockholders' equity
Common stock: Class A: 132,000,000 shares authorized, $0.00001 par, no shares issued and outstanding		-			-			-
Common stock, Class B: 18,000,000 shares authorized, $0.00001 par, 18,000,000 shares issued and outstanding		180			180			180
Preferred stock, Class A: 10,000,000 shares authorized, 256,879 shares issued and outstanding		1,322,910			381,295			29,000
Preferred stock, other , 40,000,000 shares authorized, no shares issued and outstanding		-			-			-
Retained earnings, net of distributions		(1,417,720	)		(767,335	)		(104,720	)
TOTAL STOCKHOLDERS' EQUITY		(94,630	)		(385,860	)		(75,540	)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	701,396		$	32,866		$	19,030

The accompanying notes are an integral part of these financial statements.

F-15

GolfSuites 1, Inc.

Statement of Operations

For the Six Months Ended June 30, 2020 and 2019

UNAUDITED - no assurance given

	2020			2019
Revenues	$	-		$	-
Cost of revenues	-			-

Gross profit (loss)	-			-
Operating expenses
Advertising and marketing		606,584			12,916
General and administrative		12,741			8,283

Total operating expenses		619,325			21,199

Operating loss		(619,325	)		(21,199	)

Provision for income taxes		-			-

Net loss	$	(619,325	)	$	(21,199	)

The accompanying notes are an integral part of these financial statements. In the opinion of management all adjustments necessary in order to make the interim financial statements not misleading have been included.

F-16

GolfSuites 1, Inc.

Statement of Stockholders' Equity (Deficit)

For the Six Months Ended June 30, 2020 and 2019

UNAUDITED - no assurance given

																			Retained			Total
	Class A						Class B				Class A				Other				Earnings,			Stockholders'
		Common Stock						Common Stock				Preferred Stock				Preferred Stock			Net of			Equity
		Shares			Value			Shares		Value		Shares		Value		Shares		Value	Distributions			(Deficit)
Balance as of December 31, 2018		18,000,000		$	180			-	$	-		-	$	-		-	$	-	$	(83,521	)	$	(83,341	)
Recapitalization		(18,000,000	)		(180	)		18,000,000		180		-		-		-		-		-			-
Share issuance		-			-			-		-		5,800		29,000		-		-		-			29,000
Net loss		-			-			-		-		-		-		-		-		(21,199	)		(21,199	)
Balance as of June 30, 2019		-			-			18,000,000		180		5,800		29,000		-		-		(104,720	)		(75,540	)
Share issuance		-			-			-		-		68,238		352,295		-		-		-			352,295
Net loss		-			-			-		-		-		-		-		-		(662,615	)		(662,615	)
Balance as of December 31, 2019		-			-			18,000,000		180		74,038		381,295		-		-		(767,335	)		(385,860	)
Share issuance		-			-			-		-		182,841		941,615		-		-		-			941,615
Net loss		-			-			-		-		-		-		-		-		(619,325	)		(619,325	)
Dividends		-			-			-		-		-		-		-		-		(31,060	)		(31,060	)
Balance as of June 30, 2020		-		$	-			18,000,000	$	180		256,879	$	1,322,910		-	$	-	$	(1,417,720	)	$	(94,630	)

The accompanying notes are an integral part of these financial statements.

F-17

GolfSuites 1, Inc.

Statement of Cash Flows

For the Six Months Ended June 30, 2020 and 2019

	2020			2019
Cash Flows from Operating Activities
Net loss	$	(619,325	)	$	(21,199	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Changes in operating assets and liabilities None		-			-
Net cash used in operating activities		(619,325	)		(21,199	)

Cash Flows from Investing Activities
None		-			-

Cash Flows from Financing Activities
Proceeds from preferred stock issuance		941,615			29,000
Advances from parent entity		377,300			11,049
Advances to related party		(680,913	)		-
Dividend payments		(31,060	)		-
Net cash provided by financing activities		606,942			40,049
Net Change In Cash and Cash Equivalents		(12,383	)		18,850
Cash and Cash Equivalents, Beginning of Period		32,866			180
Cash and Cash Equivalents, End of Period	$	20,483		$	19,030

The accompanying notes are an integral part of these financial statements.

F-18

GolfSuites 1, Inc.

Notes to Financial Statements

As of June 30, 2020 (unaudited)

NOTE 1 - NATURE OF OPERATIONS

GolfSuites 1, Inc. (which may be referred to as the “Company,” “we,” “us,” or “our”) is an early stage company devoted to the development and operation of golf driving range and entertainment centers in the United States. The Company will operate under the brand GOLFSUITES. The Company will oversee the acquisition of land, zoning, entitlement, design, construction and operation of the planned facilities.

The Company incorporated in 2018 in the state of Delaware as KGEM Golf Midwest Inc. and changed its name in January 2019.

Since inception, the Company has relied on advances from its current shareholder(s) to fund its operations. As of June 30, 2020, the Company had little working capital and will likely incur losses prior to generating positive working capital. These matters raise substantial concern about the Company’s ability to continue as a going concern (see Note below). During the next 12 months, the Company intends to fund its operations with funding from a securities offering campaign (see Note below) and funds from revenue producing activities, if and when such operations and offerings can be realized. If the Company cannot secure additional short-term capital, it may cease operations. These financial statements and related notes thereto do not include any adjustments that might result from these uncertainties.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America ("GAAP"). The Company has adopted December 31 as the year end for reporting purposes.

Use of Estimates

Risks and Uncertainties

The Company has a limited operating history. The Company's business and operations are sensitive to general business and economic conditions in the United States. A host of factors beyond the Company's control could cause fluctuations in these conditions. Adverse conditions may include: recession, downturn or otherwise, local competition or changes in consumer taste. These adverse conditions could affect the Company's financial condition and the results of its operations. As of June 30, 2020 the Company is operating as a going concern.

Cash and Cash Equivalents

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 currency held in the Company’s checking accounts. As of June 30, 2020, the Company had $20,483 in a corporate checking account.

Receivables and Credit Policy

Trade receivables from customers are uncollateralized customer obligations due under normal trade terms, primarily requiring payment before services are rendered. Trade receivables are stated at the amount billed to the customer. Payments of trade receivables are allocated to the specific invoices identified on the customer’s remittance advice or, if unspecified, are applied to the earliest unpaid invoice. The Company, by policy, routinely assesses the financial strength of its customer. As a result, the Company believes that its accounts receivable credit risk exposure is limited and it has not experienced significant write-downs in its accounts receivable balances. As of June 30, 2020 the Company did not have any outstanding accounts receivable.

F-19

Property and Equipment

Depreciation is provided using the straight-line method, based on useful lives of the assets. As of June 30, 2020 the Company had recorded no depreciation.

Deferred Offering Costs

As of December 31, 2019, the Company recorded deferred offering costs totaling $610,013, as an offset to preferred stock. These offering costs consist of legal and other fees incurred in connection with the capital raising efforts of the parent entity of the Company. Therefore, these costs should have been recorded by the parent entity, and the balance sheet included in these statements has been restated to reflect a transfer of these offering costs to the parent entity, as summarized below.

		Deferred Offering Costs Netted Against Preferred Stock			Advances from Parent Entity
Balance recorded on statements issued as of December 31, 2019	$	610,013		$	1,028,739
Restatement adjustment to transfer deferred offering costs to the parent entity		(610,013	)		(610,013	)
Restated balance sheet totals as of December 31, 2019	$	-		$	418,726

Income Taxes

F-20

The Company is taxed as a C Corporation for federal and state income tax purposes. As the Company has recently been formed, no material tax provision exists as of the balance sheet date.

The Company evaluates its tax positions that have been taken or are expected to be taken on income tax returns to determine if an accrual is necessary for uncertain tax positions. As of June 30, 2020 the unrecognized tax benefits accrual was zero.

The Company is current with its foreign, US federal and state income tax filing obligations and is not currently under examination from any taxing authority.

Revenue Recognition

Since inception, the Company has not yet recognized any revenue.

Advertising Expenses

The Company expenses advertising costs as they are incurred.

Organizational Costs

In accordance with GAAP, organizational costs, including accounting fees, legal fees, and costs of incorporation, are expensed as incurred.

Concentration of Credit Risk

Recent Accounting Pronouncements

In February 2016, FASB issued ASU No. 2016-02, Leases, that require organizations that lease assets, referred to as "lessees", to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases with lease terms of more than 12 months. ASU 2016-02 will also require disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases and will include qualitative and quantitative requirements. The new standard for nonpublic entities will be effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020, and early application is permitted. We are currently evaluating the effect that the updated standard will have on our financial statements and related disclosures.

F-21

NOTE 3 – INCOME TAX PROVISION

As described above, the Company was recently formed and has only incurred costs of its start-up operations and capital raising. As such, no material tax provision yet exists.

NOTE 4 – COMMITMENTS AND CONTINGENCIES

Legal Matters

The Company is not currently involved with and does not know of any pending or threatening litigation against the Company or founders.

NOTE 5 – EQUITY

As of December 31, 2018, the Company had authorized 200,000,000 shares of common stock, of which 18,000,000 shares had been issued to its parent company, at par, in exchange for $180. In January 2019, the Company underwent a recapitalization of its share structure. The Company converted the 18,000,000 shares of common stock into 18,000,000 shares of Class B common stock (which is still held by the Company's parent).

Additionally, the Company has authorized 132,000,000 shares of Class A common stock and 50,000,000 shares of preferred stock, of which 10,000,000 shares are designated as Class A preferred stock, which is convertible into Class A common stock. None of the shares of the Class A common stock has been issued. The company issued preferred stock valued at $381,295 and $941,615 in 2019 and the six months ended June 30, 2020, respectively. The Company intends to offer and sell the 10,000,000 shares of Class A preferred stock as part of a Regulation A securities offering (discussed further below).

Class A common stockholders are entitled to a single vote per share and have equal dividend and liquidation preferences as Class B common stockholders. Class B common stockholders have five votes per share and shares of Class B common stock can be converted into shares of Class A common stock at the option of the holder. Class A preferred stockholders are entitled to a single vote per share and to an 8 percent annual dividend, which will accrue if funds are not legally available to distribute, in addition to a liquidation preference. Shares of Class A preferred stock can be converted into shares of Class A common stock at the option of the holder and shares will be automatically converted in the event of a qualified public offering, as defined in the certificate of incorporation, as amended.

NOTE 6 – RELATED PARTY TRANSACTIONS

The Company has received working capital to cover expenses and costs while preparing for the securities offering from its parent entity in the amount of $377,300, for the six months ended June 30, 2020, and $11,049 for the year ended December 31, 2019. The balance of these covered costs is recorded as a liability of the Company. The Company has formalized some of these borrowings, but expects to repay all of these amounts whether a formal promissory note exists or not.

The Company advanced funds totaling to GolfSuites Tulsa, LLC ("Tulsa") totaling $680,913 for the six months ended June 30, 2020. Tulsa is a related party and the operating entity for the first GolfSuites operation.

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As these are agreements between related parties, there is no guarantee that these rates or costs are commensurate with an arm’s-length arrangement.

NOTE 7 – GOING CONCERN

These financial statements are prepared on a going concern basis. The Company began operation in 2018 and has limited operating history. The Company’s ability to continue is dependent upon management’s plan to raise additional funds (see Notes 2 and 8) and achieve and sustain profitable operations. The financial statements do not include any adjustments that might be necessary if the Company is not able to continue as a going concern.

NOTE 8 – SUBSEQUENT EVENTS

Securities Offering

The Company is continuing a securities offering started in 2019 where we are offering up to 10,000,000 shares of Class A preferred stock in a securities offering planned to be exempt from SEC registration under Regulation A, tier 2. The Company received qualification from the US Securities and Exchange Commission to proceed with the offering in May 2019. The Company has engaged with various advisors and other professionals to facilitate the offering who are being paid customary fees and equity interests for their work.

Management’s Evaluation

Management has evaluated subsequent events through September 25, 2020, the date these financial statements were available to be issued. Based on this evaluation, the following subsequent event is disclosed. No additional material events were identified which require adjustment or disclosure in the restated financial statements.

GolfSuites Tulsa, LLC, an Oklahoma limited liability company, is currently owned by GolfSuites 3, Inc., a sister subsidiary to the Company. The Company is in contract now to acquire GolfSuites Tulsa, LLC from GolfSuites 3, Inc., and this acquisition is planned to be complete by October 31, 2020. Additionally, once the Company has completed this transaction, it plans to acquire all the real estate and buildings from the property lessor for a price of $6.55 million. This amount is planned to be provided by mortgage financing approximating $5,250,000 and by equity that the Company plans to procure approximating $1,300,000. These amounts may vary. The Tulsa location is amidst final re-branding from its original Flying Tee brand to GolfSuites.

On August 19, 2020, the Company formed a new LLC – GolfSuites Lubbock, LLC ("Lubbock"), a Texas limited liability company which acquired a 75% ownership interest in 4ORE! Golf, LLC in Lubbock, Texas, a 60-bay golf driving range facility similar to Tulsa and in line with the Company’s overall development plans. Lubbock paid $1,150,000 for the 25% interest. Currently, Lubbock plans to acquire the remaining 25% ownership for a sum of $333,333. The funds used for this acquisition were provided by KGEM Golf, Inc. and select KGEM shareholders. Lubbock is just now commencing its re-branding from 4ORE! Golf to GolfSuites.

The Company’s Regulation A Plus offering expired its first year in May of 2020. The Company plans on re-filing with the SEC for new qualification by early November.

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