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1 Source: Duval & Stachenfeld LLP, October 25, 2018
2 Source: Stroock & Stroock & Lavan LLP, August 28, 2018
This presentation has been prepared by Quadro Partners, Inc. (together with its affiliates and their respective employees, agents, directors and officers, RealCadre LLC, a broker/dealer registered with FINRA and a member SIPC, and CCV LLC, an SEC registered investment advisor, collectively, “Cadre”) on the basis of information obtained from a variety of sources, some of which may be public, as of the specified date. Cadre does not undertake any duty or obligation to update the information. Cadre does not make nor give any representation, warranty or guarantee, whether express or implied, that the information contained in this presentation or otherwise supplied to the recipient, at any time by or on behalf of Cadre whether in writing or not, relating to the opportunity discussed herein is complete or accurate or that it has been or will be audited or independently verified, or that reasonable care has been taken in compiling, preparing or furnishing the information. This presentation is not intended to be exhaustive and, in particular, may not contain disclosure of all of the risks associated with any opportunity described herein; potential investors must perform their own examination and inspection of any opportunity and information relating to same, and shall rely solely on such examination and investigation and not on this presentation or any materials, statements or information contained herein or otherwise provided. This presentation is not to be construed as investment, tax or legal advice in relation to the relevant subject matter; potential investors must seek their own legal or other professional advice.
This presentation contains forward-looking statements. These forward-looking statements, which are subject to numerous risks, uncertainties and assumptions, may include projections of future financial performance, anticipated growth strategies and anticipated trends in the business, the market and otherwise. These statements are only predictions based on current expectations and/or projections about future events, subject to change due to actual results, level of activity, performance or achievements. Any forward-looking statement, including any estimate or forecast, contained in this presentation is not a guaranty, assurance or representation by Cadre as to future matters and nothing contained herein should be relied upon as a guaranty, assurance or representation as to future matters.
The projections based on financial and other pro forma data set forth in this presentation were not prepared with a view toward compliance with U.S. Generally Accepted Accounting Principles or any other published standards. Projections and other pro forma data are derived from estimates, as of the date of this presentation, based on certain hypothetical assumptions, which are inherently subject to significant business, economic and competitive uncertainties and contingencies. Independent estimates about the future benefits of any opportunity and pro forma data should be developed by investors before any decision is made on whether or not to invest in any opportunity and investors should not rely on the projections and pro forma data contained herein. Summaries of any documents discussed herein are not intended to be comprehensive or all inclusive, but rather only outline some of the provisions contained therein and are qualified in their entirety by the actual document to which they relate.
This presentation does not constitute an offer or invitation to make an investment, in any form, in any opportunity discussed herein. Any investment or commitment in any opportunity or offering should only be made upon the basis of the full review, negotiation and execution of full investment information and documentation. This is not an offer of an investment opportunity in any jurisdiction where it is prohibited or where a pre-filing or other action is required. The information in this presentation is confidential and is furnished solely for the purpose of review in connection with the opportunity discussed herein. The information is not to be used or reproduced for any other purpose or distributed or made available to any other person without the express written consent of Cadre. This offering is subject to prior placement and withdrawal, change, cancellation or modification, all without notice.
The above calculations use the following assumptions. Where applicable, either a federal long-term capital gains tax rate of 23.8% or short-term capital gains tax rate of 40.8% is used. The rates include the highest federal gains rate (of 20% or 37%, as applicable) and a 3.8% net investment income tax that applies to taxpayers in certain circumstances. We also assume no state income tax for both the standard portfolio and the Opportunity Fund Investment and that the selected assumed tax rates remain in effect for the entire time frame indicated.
The expected annual return selected is used to calculate a compounded return on an annual basis for the holding period indicated and is the same rate for all scenarios being compared. It is also assumed that the investment is made on or prior to December 31, 2019 and held for at least 10 years. The expected annual return is used only as an example and is not intended to represent expected performance of any specific investment.
The assumption for the traditional stock portfolio is that tax is paid at the time the gain is realized using either the above mentioned 23.8% long-term capital gains or 40.8% short-term capital gains tax rate. The after-tax remainder is assumed to be invested and held for the time period indicated, and then sold, with tax being paid on additional gains realized at a long term capital gains rate of 23.8%.
The gain calculation on the Opportunity Fund Investment is done under the assumption that the full realized gain for the specified amount is rolled into the Opportunity Fund and that tax is initially deferred. The investment gain is compounded annually at the indicated rate selected and after seven years the investment has received a 15% step-up in basis. As of December 31, 2026, the deferred tax is due and 85% of the deferred gain is taxed at either the long-term capital gains tax rate of 23.8% or the short-term capital gains tax rate of 40.8%. For the remaining time period of the ten-year hold, the investment returns continue to compound at the selected annual rate and after the investment has been held for ten years, the investment is sold, and no tax is due on the additional appreciation that has compounded over the ten-year period.
Additional Important Disclosures regarding taxes and other matters can be found at the end of the Cadre Opportunity Zone web page.