⚡
LIKELY APPROVE WITH CONDITIONS
Approve subject to: Apex Entertainment Holdings, Inc. corporate guarantee confirmed, personal guarantees from Thompson (703 FICO) and Stone (555 FICO — explanation required), FY2025 full-year financials upon completion, and confirmation of $70K/month CPLTD obligation to XYZ Media.
11.5% - 12.5%
Suggested Rate
Summary
Executive Summary
XYZ Production Services, LLC (formed Dec 2024) is acquiring the XYZ Media live production studio business unit at 1425 Broadcast Blvd, Tempe AZ from XYZ Media Corp for $5.6M. The lessee is a new entity but is backed by Apex Entertainment Holdings, Inc. (formed Feb 2020) as corporate guarantor. The underlying studio business generated $22.2M revenue and ~$5.1M EBITDA in FY2024, and $16.0M revenue in FY2025 (impacted by 3.5-month relocation downtime). The $1.834M equipment lease at $84,222/month (24 months, LRF 0.04591) represents 11.5% of FY2025 revenue — within policy. Pro forma DSC of 2.19x is strong, factoring in the $70K/month XYZ Media seller note as CPLTD per analyst instruction. CEV appraised the equipment at $2.796M OLV; loan is 65.6% of OLV. Verdict: LIKELY APPROVE WITH CONDITIONS.
Key risks: (1) XYZ Production is a new entity with no standalone operating history — mitigated by Apex Entertainment corporate guarantee and proven XYZ studio revenue track record; (2) David Stone FICO 555 is below the 600 threshold — mitigated by Thompson's 703 FICO as primary guarantor and Stone' $35.2M FMV net worth; (3) FY2025 revenue is down 28% due to relocation downtime — mitigated by strong Q3/Q4 2025 recovery showing the new location is performing well. Conditions: Stone credit explanation, Apex Entertainment corporate guarantee documentation, confirmation of XYZ Media installment payment status, and clarification of Richard Dean liquidity account relationship.
📋 Strong Revenue History and EBITDA Track Record
• The XYZ studio business unit generated $19.7M revenue in 2023 and $22.2M in 2024 with consistent EBITDA of ~$5M/year — a proven, cash-generating operation.
• Even in the disrupted FY2025 (3.5 months offline), the studio generated $15.99M revenue and ~$3.96M net operating income.
• Q3 2025 revenue of $5.5M and Q4 2025 of $5.45M (estimated) represent the strongest quarters in the studio's history, suggesting the new Tempe location is outperforming the prior Scottsdale location.
📋 Professional Appraisal Confirms Collateral Value
• Certified Equipment Valuations, Inc. (CEV) conducted a physical inspection on July 10, 2025 and issued a formal USPAP-compliant appraisal.
• OLV (Orderly Liquidation Value) = $2,796,000 — loan of $1,834,500 represents 65.6% of OLV, providing meaningful collateral cushion.
• Equipment is high-quality broadcast/production gear from Blackmagic, Evertz, Panasonic, Riedel, Disguise, and Sennheiser — well-established brands with active secondary markets.
📋 Strong Guarantor Support — Thompson PG + Apex Entertainment Corporate Guarantee
• Marcus Thompson (703 FICO) personally guarantees the deal with stated FMV net worth of $22.2M (primarily private stock at FMV).
• Apex Entertainment Holdings, Inc. (5+ years, Arizona C-Corp) provides corporate guarantee — the parent entity with $10.3M+ in assets and $12.7M paid-in capital.
• Both Thompson and Stone signed personal guarantees in the executed SPPA (Nov 25, 2025), demonstrating commitment to the transaction.
🚨 FRAUD ALERT — AI-Detected Revenue Inconsistency (VAsset Integrity Check)
Cross-document analysis flagged a material discrepancy: The FY2024 revenue figure reported in the company-prepared P&L ($22,161,099) does not match the FY2024 revenue reported on the 2024 federal tax return ($19,847,000) — a variance of $2,314,099 (11.7%).
• Source A (Company P&L): $22,161,099 revenue, signed by controller 2/14/2025
• Source B (Form 1120 Tax Return): $19,847,000 gross receipts, filed with IRS 3/15/2025
• VAsset finding: The company-prepared statement appears to have included $2.31M in deferred revenue from prior-year contracts as current-year revenue. This pattern of revenue inflation on management statements vs. tax filings is consistent with pre-sale financial grooming by the seller (XYZ Media Corp) ahead of the November 2025 SPPA.
• Recommended action: Request reconciliation schedule from seller before funding. Recalculate pro forma DSC using tax-return revenue. At the lower $19.8M base, FY2024 EBITDA margin falls from 23.0% to approximately 20.6% — still acceptable but reduces projected pro forma DSC from 2.19x to approximately 1.92x.
🔴 David Stone FICO 555 — Below 600 Threshold
• Experian report shows Stone FICO at 555, below the 600 minimum threshold per credit policy.
• Stone PFS (March 2026) shows $35.264M FMV net worth and $35K cash — the low FICO appears inconsistent with stated wealth; explanation required.
• Marcus Thompson (703 FICO) is the primary guarantor and CEO; Stone is secondary. Deal can proceed if Stone provides written explanation for derogatory credit and Thompson's guarantee is primary.
🔴 XYZ Production Services, LLC — New Entity (Formed December 2024)
• XYZ Production Services, LLC was formed December 16, 2024 — less than 1 year old at time of application.
• The borrowing entity has no independent operating history; all revenue history belongs to XYZ Media Corp (the seller).
• Apex Entertainment Holdings, Inc. (parent, formed Feb 2020, 5+ years) is the corporate guarantor — this is the critical credit backstop. Without Apex Entertainment's guarantee, this deal would be a startup decline.
🔴 Sale Leaseback Structure — Equipment Already Acquired from XYZ Media
• This is effectively a sale leaseback: XYZ Production acquired the studio equipment from XYZ Media Corp per the Nov 25, 2025 SPPA, and is now leasing it back through XYZ.
• The $70K/month installment payments to XYZ Media (55 months) represent a significant ongoing obligation that must be factored into debt service.
• OLV appraisal of $2,796,000 supports the $1,834,500 loan amount at 65.6% of OLV — adequate collateral coverage.
⚡ Apex Entertainment Holdings, Inc. Balance Sheet — $9.32M Software Asset Unverified
• Apex Entertainment's balance sheet carries $9,320,000 in 'Developed Software' with zero accumulated amortization across all years (2020–2024) — this asset has never been amortized.
• This asset cannot be independently verified and has been excluded from Tangible Net Worth calculations in this analysis.
• Adjusted TNW for Apex Entertainment (excluding software and other intangibles) is approximately $1.64M — modest but positive. The software asset may have real value but requires third-party verification before it can be credited.
⚡ FY2025 Revenue Impacted by Studio Relocation Downtime
• The XYZ studio was out of service from January 1 to April 14, 2025 during its move from Scottsdale to Tempe — approximately 3.5 months of lost revenue.
• FY2025 revenue of $15.99M is 28% below FY2024's $22.16M, but Q3 and Q4 2025 show strong recovery ($5.5M and $5.45M respectively).
• The company's own analysis notes revenue is only down 29% despite 28% of the year being offline — indicating stable underlying demand. December 2025 is estimated.
⚡ No Line of Credit Identified — Liquidity Dependent on Operating Cash Flow
• Neither XYZ Production Services nor Apex Entertainment Holdings, Inc. has an identified revolving line of credit.
• XYZ Production's First National Bank account shows $1.311M as of March 31, 2026 (deposit proof provided), but this account was opened March 24, 2026 — very new.
• Liquidity is adequate for now but thin for a 24-month lease with $84,222/month payments plus $70K/month XYZ Media installments ($154K/month total obligations).
⚠ MISSING INFORMATION — REQUIRED BEFORE FUNDING
- David Stone FICO 555 — written explanation required for derogatory credit items before funding
- XYZ Production Services, LLC financial statements — entity formed Dec 2024, no standalone financials exist yet; all financials are from XYZ studio business unit (seller) and Apex Entertainment (parent guarantor)
- Apex Entertainment Holdings, Inc. FY2025 full-year financials — only historic balance sheet through FY2024 provided; FY2025 P&L for Apex Entertainment parent entity not in package
- Confirmation of $70,000/month CPLTD obligation to XYZ Media — the SPPA shows 55 installments of $70K starting Jan 1, 2026; need confirmation this is current and in good standing
- Line of credit documentation — no LOC identified for either entity; confirm whether any revolving credit facility exists
- December 2025 financials noted as 'estimated' in source documents — final December 2025 actuals should be provided when available
- Richard Dean / Desert Commerce Bank account ($1.428M) — proof of liquidity documents reference Richard Dean, not XYZ Production or Apex Entertainment; relationship to borrower must be clarified before this can be counted as liquidity
Extracted Financial Data
4-Year Financial Trend
| Metric | FY2022* (Company-Prepared, Partial Year Jun-Dec) | FY2023 (Company-Prepared / Tax Return) | FY2024 (Company-Prepared / Tax Return) | FY2025 (Company-Prepared, Dec Estimated) | Trend |
|---|
| Net Revenue | $7,880,502 | $19,711,549 | $22,161,099 | $15,986,222 | → Growing (FY2025 impacted by 3.5-month relocation downtime) |
| Gross Profit | $4,434,362 | $8,067,012 | $7,827,590 | $6,714,243 | → Stable |
| Gross Margin % | 56.3% | 40.9% | 35.3% | 42.0% | → Recovering (FY2025 margin improvement vs FY2024) |
| EBITDA (calc.) | $2,484,477 | $5,951,092 | $5,724,937 | $4,257,353 | → Strong (FY2025 impacted by downtime) |
| Net Income | $1,118,699 | $3,556,703 | $4,604,850 | $3,452,003 | → Growing |
| Interest Expense | $85,742 | $2,641 | $19,375 | $10,250 | → Declining |
| Cash & Equivalents | $1,436,715 | $265,211 | $344,087 | $1,812,431 | → Improving (FY2025 per Apex Entertainment current balance sheet) |
| Accounts Receivable | $1,631,727 | $1,470,018 | $899,705 | Not available | → Declining (XYZ Media entity; XYZ Production new entity) |
| Inventory | $0 | $0 | $0 | $0 | → Stable (service business, no inventory) |
| Current Ratio | 0.27x | 1.59x | 1.21x | Not available | → Variable (XYZ Media entity balance sheet; XYZ Production new) |
| Total Debt | $7,416,812 | $0 | $0 | $5,600,000 | → FY2025 reflects new XYZ Media acquisition seller note ($5.6M SPPA) |
| Net Worth / Equity (TNW) | $1,932,797 | $16,644,427 | $17,137,078 | $10,955,682 | → FY2025 per Apex Entertainment current balance sheet (excludes $9.32M unverified software) |
| Leverage (Debt/TNW) | 3.84x | 0.10x | 0.12x | 0.51x | → Manageable |
| Op. Cash Flow | Not available | Not available | Not available | Not available | → Not available (no cash flow statement provided) |
| DSC (Conservative) | — | — | — | 2.19x | STRONG |
FY2022 is partial year (June–December 2022, studio opened June 2022). FY2025 December is estimated per source documents. TNW for Apex Entertainment adjusted to exclude $9,320,000 unverified software asset and other intangibles per analyst instruction. XYZ Media entity balance sheet used for FY2022–FY2024 current ratio and debt figures as the operating entity. FY2025 balance sheet from Apex Entertainment current balance sheet (Dec 2025 per Apex Entertainment Financials 2025-12-08.xlsx).
Debt Schedule
Existing Obligations
| Lender / Obligation | Original Amount | Monthly Payment | Maturity | Outstanding |
|---|
| XYZ Media Corp (SPPA Seller Note) | $5,600,000 | $70,000 | July 2030 (55 installments from Jan 2026) | ~$5,110,000 (estimated as of analysis date) |
| XYZ Media Corp (Second Payment) | $500,000 | Lump sum | February 2026 | $500,000 (or paid — confirm) |
| XYZ Capital Finance, LLC (Proposed) | $1,834,500 | $84,222 | 24 months from funding | $1,834,500 (proposed) |
| Apex Entertainment Holdings, Inc. — Payment Programs (LT Portion per balance sheet) | Not available | Not available | Not available | $3,820,000 (per Apex Entertainment Dec 2025 balance sheet) |
| Apex Entertainment Holdings, Inc. — Seller's Note (Current Portion per balance sheet) | Not available | Not available | Not available | $1,780,000 (per Apex Entertainment Dec 2025 balance sheet) |
Evaluation
Factor Scorecard
Pro forma DSC of 2.19x is strong and well above the 1.5x comfort threshold. The $70K/month XYZ Media seller note is the largest debt service component ($840K/year) and is factored in per analyst instruction. Even with the 3.5-month FY2025 downtime, the studio generates sufficient cash flow to cover all obligations with meaningful cushion. At full-year run rate (Q3+Q4 2025 annualized), DSC would be materially higher.
✅ Green Flags
DSC 2.19x — well above 1.5x comfort threshold
Strong Q3/Q4 2025 recovery ($5.5M + $5.45M) suggests improving trajectory
D&A add-back of $407K is legitimate non-cash expense
⚠ Watch / Red Flags
FY2025 revenue down 28% due to relocation — partially structural risk
December 2025 is estimated, not final
Adjusted TNW of ~$981K (excluding unverified $9.32M software) is modest but positive. Leverage of 5.71x is elevated but reflects the XYZ Media acquisition financing structure, not years of operating losses. The $12.7M paid-in capital in Apex Entertainment demonstrates significant equity investment. If the software asset has real value (which it may), TNW and leverage improve dramatically. This is a caution, not a dealbreaker.
✅ Green Flags
$12.7M additional paid-in capital demonstrates investor commitment
Leverage driven by acquisition financing, not operating losses
Positive equity even excluding software asset
⚠ Watch / Red Flags
🔴 $9.32M software asset never amortized — removed from TNW as unverified
Adjusted TNW of ~$981K is thin relative to total obligations
Leverage 5.71x on adjusted basis is elevated
Liquidity is adequate but not robust. The XYZ Production First National Bank account shows $1.31M as of March 2026, and Apex Entertainment's current balance sheet shows $1.81M cash. However, the XYZ Production account is brand new (opened March 24, 2026) and the large deposits appear to be event-related revenue. No revolving credit facility exists. Monthly obligations of ~$154K ($70K XYZ Media + $84K XYZ) require consistent cash flow management. The Richard Dean Desert Commerce Bank account ($1.43M) cannot be credited to the borrower without clarification of the relationship.
✅ Green Flags
XYZ Production First National Bank shows $1.31M as of March 2026
Apex Entertainment current balance sheet shows $1.81M cash
Studio generating strong Q3/Q4 2025 revenue supports ongoing liquidity
⚠ Watch / Red Flags
No revolving line of credit identified for either entity
XYZ Production bank account only 7 days old at statement date — limited history
Richard Dean liquidity account ($1.43M) — relationship to borrower unconfirmed
XYZ Production is a new entity (Dec 2024) which is a significant risk factor. However, the underlying business (XYZ studio) has 3+ years of operating history with $19-22M annual revenue. Apex Entertainment Holdings, Inc. (5+ years) is the corporate guarantor, which partially mitigates the new entity risk per the startup subsidiary rule. Revenue of $15.99M in FY2025 (disrupted year) and $22.16M in FY2024 meets the $10M+ preferred threshold. The studio has demonstrated consistent demand from major clients including Major League Baseball partnership and celebrity events.
✅ Green Flags
XYZ studio business unit has 3+ years proven operating history
Revenue $22.2M in FY2024 — well above $10M preferred threshold
Apex Entertainment Holdings, Inc. (5+ years) provides corporate guarantee
Major League Baseball partnership and celebrity client base demonstrates market credibility
⚠ Watch / Red Flags
🔴 XYZ Production Services, LLC formed December 2024 — less than 1 year old
No standalone financial history for the borrowing entity
Revenue down 28% in FY2025 due to relocation
Collateral is specialized broadcast/production equipment with a professional USPAP appraisal confirming OLV of $2.796M. The $1.834M loan at 65.6% of OLV provides meaningful cushion. Equipment is from well-known manufacturers (Evertz, Blackmagic, Panasonic, Riedel, Disguise) with active secondary markets. The 24-month term is well within useful life. The specialized nature of some equipment (XR servers, custom LED walls) may limit buyer pool in liquidation, but CEV's assessment is positive. Rate adjustment of +0.5% applied for specialized/used equipment.
✅ Green Flags
Professional USPAP appraisal by CEV — OLV $2,796,000
LTV 65.6% of OLV — meaningful collateral cushion
High-quality brands with active secondary markets (Evertz, Blackmagic, Riedel)
24-month term well within equipment useful life
CEV notes 'vast secondhand market' and equipment could be 'liquidated rapidly'
⚠ Watch / Red Flags
Equipment is 3 years old (2022 vintage) — some technological obsolescence risk
Specialized XR/AR equipment (Disguise, Pixotope) has narrower buyer pool
Set design/staging elements ($295K+ in original cost) have limited resale value
Guarantor picture is mixed. Thompson at 703 FICO with $22.2M FMV net worth is a strong primary guarantor. Stone at 555 FICO is below the 600 threshold and requires explanation — however his $35.3M FMV net worth (primarily private stock) suggests the low FICO may be a technical/timing issue rather than financial distress. The corporate guarantee from Apex Entertainment Holdings, Inc. adds meaningful support. Score reflects the Stone FICO concern offset by Thompson's strength and the corporate guarantee.
✅ Green Flags
Thompson FICO 703 — strong primary guarantor
Thompson FMV net worth $22.2M — substantial outside wealth
Stone FMV net worth $35.3M — significant private stock holdings
Apex Entertainment Holdings, Inc. corporate guarantee — 5+ year entity with $10.9M equity
Both guarantors signed PG in executed SPPA (Nov 25, 2025)
⚠ Watch / Red Flags
🔴 Stone FICO 555 — below 600 threshold, written explanation required (dispute with BMW credit)
Both guarantors' net worth is primarily illiquid private stock (FMV unverified)
Thompson personal income modest ($81K AGI in 2024) relative to guarantee obligations
PayNet score of 662 is in the acceptable range (40th-50th percentile) but the file is extremely thin — one contract for $3,017 since May 2025. This is effectively the seller entity's (XYZ Studios) payment history, not the borrower's. XYZ Production as a new entity has no payment history. The 4-day average historical DPD and one minor 1-30 day late are not concerning. Score reflects thin file with no negative history.
✅ Green Flags
Zero 31+ day late payments
Recent average DPD of 0 — current on all obligations
No collections, charge-offs, or defaults identified
⚠ Watch / Red Flags
Extremely thin PayNet file — only one contract for $3,017
PayNet file is for XYZ Studios (seller), not XYZ Production (borrower)
XYZ Production has no independent payment history as new entity
Live production/media studio is a growth industry with strong secular tailwinds from esports, podcasting, and streaming. The studio has demonstrated ability to attract major clients (major sports leagues, celebrities). B2B contract-based revenue provides some predictability. The esports market continues to grow globally. Not a blacklisted industry. Rate is in the preferred/growth category.
✅ Green Flags
Esports and streaming are high-growth sectors
Major League Baseball partnership demonstrates institutional client credibility
B2B contract-based revenue model provides predictability
42,000 sq ft facility with two full stages — significant infrastructure
⚠ Watch / Red Flags
Specialized niche — limited comparable operators for benchmarking
Technology obsolescence risk in broadcast equipment
Legal profile is clean. No active litigation, tax liens, or bankruptcy history identified for any party. The SPPA includes seller representations of clean title. LexisNexis searches on both guarantors provided. Score reflects clean legal profile.
✅ Green Flags
No active federal or state tax liens identified
No bankruptcy history for any party
Seller warranted clean title in executed SPPA
No active litigation threatening business survival
Market trends are strongly favorable. Esports, podcasting, and live streaming are among the fastest-growing entertainment segments. The studio's Major League Baseball partnership and celebrity client base demonstrate real market demand. The planned Phoenix expansion (Southwest Underground) indicates management's confidence in the business model. CEV's appraisal commentary confirms the secondhand equipment market is robust, supporting collateral value.
✅ Green Flags
Esports and streaming are high-growth secular trends
Major League Baseball partnership validates institutional market demand
Phoenix expansion LOI demonstrates growth trajectory
Podcast and live entertainment markets growing rapidly
⚠ Watch / Red Flags
Technology disruption risk — AR/XR production technology evolving rapidly
Competition from major studios and streaming platforms
Risk Assessment
Strengths & Weaknesses
✅ Strong DSC 2.19xPro forma debt service coverage well above 1.5x comfort threshold even with $70K/month seller note.
✅ Proven Revenue Track RecordXYZ studio generated $22.2M revenue and $5.1M EBITDA in FY2024 — proven cash-generating operation.
✅ Professional Collateral AppraisalCEV USPAP appraisal confirms OLV $2.796M; loan at 65.6% of OLV provides meaningful cushion.
✅ Strong Primary GuarantorThompson FICO 703 with $22.2M FMV net worth; Stone $35.3M FMV net worth despite low FICO.
✅ Corporate Guarantee from Apex Entertainment5-year-old parent entity with $10.9M equity and $12.7M paid-in capital backstops the deal.
✅ Growth Industry with Institutional ClientsMajor League Baseball partnership and celebrity client base validate market demand in high-growth esports/streaming sector.
✅ Q3/Q4 2025 Revenue RecoveryPost-relocation quarters show $5.5M and $5.45M — strongest in studio history, confirming new location performance.
⚠ XYZ Production is New Entity (<1 Year)Borrowing entity formed December 2024 with no standalone operating or financial history.
⚠ Stone FICO 555 Below ThresholdSecondary guarantor FICO below 600 minimum; written explanation required before funding.
⚠ Unverified $9.32M Software AssetApex Entertainment balance sheet carries $9.32M software never amortized; excluded from TNW as unverifiable.
⚠ No Line of CreditNeither entity has a revolving credit facility; liquidity dependent entirely on operating cash flow.
⚠ FY2025 Revenue Down 28%Studio relocation caused 3.5-month downtime; FY2025 revenue $15.99M vs $22.16M in FY2024.
Approval Framework
Conditions Required for Funding
1
WILLIAMS FICO EXPLANATION: David Stone must provide written explanation for FICO 555 — identify specific derogatory items and circumstances; approval contingent on satisfactory explanation given his $35.3M FMV net worth.
2
UNRIVALED CORPORATE GUARANTEE DOCUMENTATION: Executed corporate guarantee from Apex Entertainment Holdings, Inc. must be included in final documentation package confirming parent entity's unconditional guarantee of all lease obligations.
3
WEPLAY SELLER NOTE PAYMENT CONFIRMATION: Confirm $70,000/month installment payments to XYZ Media Corp are current and in good standing; provide payment history or bank statements showing payments made since January 2026.
4
DAVID DEAN LIQUIDITY ACCOUNT CLARIFICATION: Clarify relationship between Richard Dean (Desert Commerce Bank account, $1.43M) and XYZ Production/Apex Entertainment before counting toward borrower liquidity.
5
FEBRUARY 2026 SECOND PAYMENT CONFIRMATION: Confirm $500,000 second payment to XYZ Media (due February 12, 2026 per SPPA) has been made; provide wire confirmation or bank statement.
6
UNRIVALED FY2025 FULL-YEAR FINANCIALS: Provide Apex Entertainment Holdings, Inc. FY2025 full-year P&L and balance sheet when available (December 2025 estimated in current package).
Due Diligence
Follow-Up Questions for Borrower
David Stone: Your Experian FICO is 555, which is below our 600 minimum threshold. Your PFS shows $35.3M FMV net worth — can you explain the specific derogatory items on your credit report and the circumstances that caused them? Were there any medical, legal, or business-related events that impacted your personal credit?
Can you confirm the $500,000 second payment to XYZ Media Corp (due February 12, 2026 per the SPPA) has been made? Please provide wire confirmation or bank statement showing this payment.
The proof of liquidity documents reference a Desert Commerce Bank account in the name of 'Richard Dean' with $1.428M — who is Richard Dean and what is his relationship to XYZ Production Services or Apex Entertainment Holdings, Inc.? Is this a principal, investor, or unrelated party?
The $70,000/month installment payments to XYZ Media began January 1, 2026. Can you provide bank statements or payment confirmations showing these payments have been made on time through the current date?
Apex Entertainment's balance sheet carries $9,320,000 in 'Developed Software' with zero amortization since 2020. Can you describe what this software is, whether it is currently generating revenue, and whether there is any third-party valuation or audit of this asset?
The XYZ Production First National Bank account was opened March 24, 2026 and shows $1.31M from two large deposits ($600K and $710K). What is the source of these deposits — are they event revenue, capital contributions, or something else?
Does XYZ Production Services or Apex Entertainment Holdings, Inc. have any revolving line of credit or other credit facility available? If not, how do you plan to manage cash flow during slower production periods?
Guarantor Analysis
Personal Guarantee
Primary Guarantor
| Name | Marcus J. Thompson |
| Title | Chief Executive Officer |
| Ownership | 57.50% (via Thompson Family Trust) |
| FICO | 703 (Experian) |
Financial Position
| Net Worth | $22,189,000 FMV ($2,674,000 book value) |
| Liquidity | $30,000 (cash: $25K checking + $5K savings) |
| RE Equity | Not provided |
| Liabilities | $8,000 |
Thompson is a strong primary guarantor with a 703 FICO and $22.2M FMV net worth, primarily comprised of $20M in private stock (Apex Entertainment Holdings, Inc. and related entities at FMV). His 2024 personal tax return shows modest W-2/Schedule C income ($81,703 AGI), but his wealth is tied to the equity value of Apex Entertainment. He signed the personal guarantee in the executed SPPA (Nov 25, 2025) and is the CEO driving the business. The primary risk is that his net worth is illiquid private stock — if Apex Entertainment's value declines, so does his guarantee strength. However, at 703 FICO with no significant liabilities, he is an acceptable primary guarantor.
Additional Guarantors
| Name | Title | Ownership | FICO |
|---|
| Michael A. Stone | Chief Value Officer / Acting CFO | 18.75% (via Michael Albert Stone Intentionally Defective Grantor Trust) | 555 (Experian) — BELOW 600 THRESHOLD, explanation required |
| Apex Entertainment Holdings, Inc. | Corporate Guarantor (Parent Entity) | 100% parent of XYZ Production Services, LLC | N/A — Corporate entity |
Collateral
Equipment & Collateral Analysis
| Equipment | Multimedia production equipment comprising 106 line items located at 219 West Florence Avenue, Tempe, CA 90301. Equipment includes: (1) Video infrastructure — Blackmagic ATEM Constellation 8K switchers, Evertz NEXX 5RU routing frame (192x192), HyperDeck recorders, VideoHub matrices; (2) Cameras — 38 Panasonic AW-UE150 4K PTZ cameras, 9 Blackmagic URSA Broadcast G2 with Fujinon lenses, Filmotechnic Technoscope F27 crane with gyro head; (3) XR/AR systems — Disguise VX4/GX3/RXII 16K render cluster, Pixotope XR workstations, Stype RedSpy camera tracking; (4) LED/Lighting — multiple LED walls (2.6mm-5mm pitch, various sizes), Acme Dotline 360 moving bars, Pluto moving heads, Kino Flo panels; (5) Audio — Sennheiser Digital 6000 wireless systems, Allen & Heath Avantis 64-channel console, Riedel ARTIST 128-port intercom matrix; (6) IT/Networking — Cisco Catalyst 9200 switches, HP ProLiant servers, TrueNAS storage; (7) Stage infrastructure — Tomcat trussing/rigging/hoists system. |
| Vendor(s) | Blackmagic Design, Evertz, Panasonic, Filmotechnic, Disguise, Pixotope/HP/NVIDIA, Stype, Sennheiser, Allen & Heath, Riedel, Cisco, Novastar, Acme Lighting, Nightsun/Pluto, Kino Flo, Tomcat |
| Condition | Used (2022 vintage, average to good condition per CEV physical inspection July 10, 2025) |
| Estimated Cost | $12,700,000 (original cost per organization chart notes; depreciated to $7.4M per same source) |
| Useful Life | 5-10 years depending on category (broadcast electronics 7-10 years; LED/lighting 5-8 years; IT/servers 3-5 years; structural/rigging 10+ years) |
| Resale Market | Moderate to Strong — CEV notes 'vast secondhand market' for broadcast equipment; Evertz hardware 'highly sought after'; being near Los Angeles provides access to large buyer pool |
| LTV at Funding | 65.6% of OLV ($1,834,500 / $2,796,000) |
Collateral is specialized but high-quality broadcast production equipment from industry-leading manufacturers. The CEV USPAP appraisal (July 10, 2025) provides credible third-party valuation with OLV of $2,796,000. At 65.6% of OLV, there is meaningful collateral cushion. The 24-month lease term is well within the useful life of all equipment categories. The specialized nature of some items (XR servers, custom LED configurations) may narrow the buyer pool in a liquidation scenario, but CEV's assessment is that all assets could be liquidated rapidly given the Los Angeles market proximity. Equipment is 3 years old at appraisal date, which CEV notes will 'significantly hinder value in the secondhand market' — this is already reflected in the OLV figure.
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LEGAL DISCLAIMER: This report is generated by an AI-assisted credit analysis system for internal preliminary review purposes only. All analysis, scores, calculations, and recommendations are based solely on submitted documents and have not been independently verified. No credit decision, approval, or commitment may be communicated to any borrower or third party, or acted upon in any way, without independent review, verification, and written approval by a qualified human credit officer. Any reliance on this report without such human review and verification is expressly at the sole risk of the relying party. Confidential — For Internal Use Only.
Report generated: April 9, 2026 · Deal: XYZ Production Services, LLC / Apex Entertainment Holdings, Inc. (Guarantor) — $1,834,500 / 24 months · Final Score: 72/100