KOTA Longboards Investment Opportunity

• KOTA Longboards LLC is offering a maximum of 33,437 shares of Non-Voting Membership Units for $106,998.40, subject to adjustment for bonus units, and a minimum of 3,125 shares for $10,000.
• The company is located at 1400 S. Lipan St., Denver, Colorado 80223 and manufactures, sells, and distributes longboard skateboards, electric longboards, and branded merchandise.
• The security offered are Non-Voting Membership Units at a purchase price of $3.20 per unit.
• The minimum investment amount per investor is $400.
• Investing a minimum of $400 means believing that the company's future value will exceed $3.0 million.
• All investment levels receive a KOTA Membership Unit Certificate, a KOTA Coffee mug, early bird access to specials, and an option to become a KOTA Affiliate with a 5% dividend on net revenue.
• Investing $400 entitles you to a Personal Coupon Code for a free KOTA electric longboard when directing friends to the KOTA website resulting in 15 sales over $300.
• Investing $1,000 entitles you to a Personal Coupon Code for a free KOTA electric longboard when directing friends to the KOTA website resulting in 10 sales over $300.
• Investing $10,000 entitles you to a Personal Coupon Code for a free KOTA electric longboard when directing friends to the KOTA website resulting in 5 sales over $300.
• Investing $15,000 entitles you to a sponsored trip to KOTA in Denver, CO (up to $1,000) where you can meet KOTA's Founders, and receive lessons from KOTA Escadrille team riders; also a Personal Coupon Code for a free KOTA electric longboard when directing friends to the KOTA website resulting in 5 sales over $300.
• All investment perks are completed after the offering.
• A 10% bonus in additional units is offered for all investments committed by StartEngine Crowdfunding Inc. shareholders (with ≥ $1,000 invested in the StartEngine Reg A+ campaign) within 24 hours of this offering going live within a year from the StartEngine CrowdFunding Inc. subscription agreement.
• If the target offering amount is reached prior to the deadline,closings of the offering may happen early if notice is provided five business days before the new deadline.
• KOTA LLC manufactures and distributes high-performance longboard skateboards, electric skateboards and branded products to a mainstream market.
• KOTA’s market channels currently include: direct sales via kotalongboards.com, email, phone, or drop-ins; CoBrands; and specialty retail.
• KOTA clients include Anheuser Busch and Vail Resorts and Scheels.
• KOTA products began selling in 7 of 27 Scheels locations as of 2017.
• Main competitors include Sector 9, Arbor, Loaded, LandYachtz, though they target a younger demographic through online web distributors and skate shops.
• KOTA also competes with electric skateboard companies such as Boosted Boards and Inboard, with most KOTA electric sales being direct and some through Scheels.
• KOTA carries a significant amount of product liability insurance, but no claims have been made to date.
• Neither KOTA nor its Founders have been involved in litigation of any kind.

Mike Maloney, Manager, Founder and CEO

• Key background: Former Navy F-14 pilot and TOPGUN graduate.

Important Notes Regarding Risk

• Investments in crowdfunding involves risk, and you should only invest if you can afford to lose your entire investment.
• Investors must rely on their examination of the issuer and offering terms, including the risks involved.
• Securities are not recommended or approved by federal or state securities commissions or regulatory authority and these authorities do not guarantee the accuracy or adequacy of the document.
• The U.S. Securities and Exchange Commission does not pass upon the merits, accuracy, or completeness of any securities offered.
• These securities are offered under an exemption from registration with the U.S. Securities and Exchange Commission, however, the Commission has not made an independent determination that these securities are exempt from registration.
• KOTA's intellectual property is one of its most valuable assets; Trade Secrets, trademarks, copyrights, and internet domain names are maintained and efforts to file for patents are being advanced.
• Potential competitors may be better positioned than KOTA to take the larger portion of the market.
• KOTA is still a start-up and is not yet profitable.
• KOTA may require further funding to achieve sustainable profitability.
• There is no re-sale market for KOTA securities.
• KOTA's financial review includes a going concern note and the company may not be able to operate for the next 12 months.
• The Financial Review and KOTA's statements differ because the Review was done on an accrual accounting basis, instead of, the KOTA's cash accounting statements generated by the issuance of invoices and their subsequent cancellation as funds are received and deposited.
• KOTA's business projections are only estimates.
• Negative market events could impact the company's viability.
• A disruption in the supply chain could impact product delivery to the marketplace.
• A product liability suit could negatively impact the future viability of KOTA.
• A loss of corporate knowledge and impact of KOTA's viability if key people were incapacitated or died etc
• KOTA units are subject to rights and preferences that could be adversely by previous of any future offering of units.
• Minor holders of KOTA do not have control over corporate policies, governance, directors or advisors.
• KOTA will distribute K-1s to members as required by law ad/or by Operating Agreement.

Transferability of Securities

• These securities are restricted from being resold within a year from acquisition, except a resale in: -an IPO -to the company -to any credited investor -to a member of the family of the purchaser.

Financial statements

• Financial statements are attached for year ending 12/31/2017
• KOTA revenue increased for the first 3 years (2012-2015).
• There was a 29% revenue reduction when the factory was relocated in 2016.
• 2017 revenue rebounds 32% growth.
• Burn rate was cut by 21% from 2016 to 2017.
• Joos hot lease was paid off in 2017.
• KOTA aims to return to 100% (or greater) revenue growth
• Expect biggest marketing overhead to be post-capitalization.
• Plan to add a part time CFO, also hire FT marketing lead for scale
• Expects to double revenue to reach cash flow and profitability.

Liquidity and Capital Resources:

• The company is currently generating operating losses and requires the continued infusion of new capital.

Indebtedness:

• In Jun 2018, Mr. Maloney's personal debt was restructured to Nicole Maloney for $81,723.36 at 5.75%, maturing in May 2023, paid $1,570 per month that is collateralized by company assets.
• June 2018 Debt -2018: $ 10,815 -2019: $ 15,164 -2020: $ 16,059 -2021: $ 17,007 -2022: $ 18,011 -2023: $ 4,667 -Total: $ 81,723

Recent offerings of securities:

• 2/15/2013, Regulation D, 125000 KOTA, seed funding to move into first factory.
• 9/15/2014, Regulation D, 139118 KOTA, Series A for expansion and growth.
• 7/27/2015, Regulation D, 109170 KOTA, Series B for expansion and growth.
• 6/15/2016, Regulation D, 160698 KOTA, Series C capital for factory move re-establishment of operations, tooling to scale and full time personnel.
• 9/15/2017, Regulation D, 34408 KOTA Cash Call, capital to cover operations and overhead.

Use of Prodeeds

• Minimum fundraising ($10,000) of the proceeds will spent on: -net proceeds ($9,400) for working capital

• $106,998 (overallotment amount) of the proceeds of:

  • Marketing: ($30,000 over 3+ months) -Working Capital including additional management staffing ($60,000) -R&D primarily of electric board systems ($10,578)

• Over $10,000 the company may use capital for the following, which is an irregular use of proceeds: -additional R&D -equipment purchases -factory improvements

Regulatory

• No disqualifying event has been recorded in respect to KOTA, its officers or directors.
• KOTA has not previously failed to follow Regulation CF
• KOTA will make annual reports in 120 days of the end of KOTA's fiscal year and be available it’s website at www.kotalongboards.com/contact/.

Financial Details

• KOTA Financial Statement and Independent Accountant's Review is done by Artisans CPA, LLC.
• KOTA is a business in Denver, Colorado.
• The company may not be ab le to continue to exist as a going concern.

LLC statements, December 31, 2017 and 2016.

• See attached for full Financial Statement, the financials consist of balance sheets as well as statement of operations.
• Statement of cash flows is set to reconcile net lost set to net cash.

Loans Payable

• 2014, the Company financed an equipment purchase under a capital lease arrangement for $15,000 (10.7% interest).
• $489 monthly payment for 36 months.
• The balance due under this lease as of December 31, 2016 was $3,680.
• Interest expense on this lease in 2017/$2016 was $707 / $153
• November, 2016, the Company entered into a 10-year loan agreement with a bank, of $22,381. -Additional $58,832 on loan in 2017.
  • Loan bears interest at 5.75%
  • Term of 10 years
  • Matures in November 2026. -Collateralized by all assets and SBA guarantees 85% balance. Outstanding balance as of December 31, 2017/2016 was $75,203 / $22,381 Future payments on payments by December 31, 2017: -2018 - $8,754 -2019 $8,903 -2020 $9,429 -2021 $ 9,986 -2022 $10,575 -Thereafter $27,556 -Total: $75,203

Member's equity,

• The company issued 69,869 membership shares per year for total capital contribution to $160.000.
• Company with issued 207,778 shared at capital contribution as of December 31, 2017, and December 31, 2016, the company had 932,198 and 840,497 membership units that were issued.

Regarding Accounting Pronouncements, the FASB has taken the following actions:

• July 2015: simplified measurement of inventory
• May 2014: revenue from contracts with customers
• August 2015: Revenue from Contracts with Customers, which then deferred the effective date for ASU 2014-09
• February 2016: requires a lessee to recognize a right-of-use asset and a lease liability.

KOTA Commitments, Contingencies, and Concentrations:

• There may be pending regal proceedings and regulatory actions taken against KOTA, but the results cannot be predicted.

NOTE 10

-the business has taken action to analyze their account for things to be reported under the terms for such financial circumstances it is reported under.

KOTA's membership:

     Michael P. Maloney: loan of $50,000 under agreement with 12.75% interest.
     Loan requires payment of $2788.00
     Future payments total 2018 19$ 12,658 and $10749

Lease obligations,

-A August 2016: the business entered into a lease agreement for manufacturing space. The lease term is from September 1, 2016 to September 30, 2019, with monthly lease obligations under that lease are ranged $3,850 per month.

• Future rent obligations under this lease agreement are $46,200 for 2018 and $34,650 for 2019.

RECENT ACCOUNTING PRONOUNCEMENTS

In July 2015, the FASB issued ASU 2015-11, simplifying the measurement of inventory, requiring entities to compare the cost of inventory to only one measure, its net realizable value, and not the three measures required by Topic 330

1.First Amendment to Amended and restated Operating Agreement of KOTA

• Parties to the document (dated July 9, 2018): KOTA Longboards, LLC, Michael P. Maloney ("Maloney"),Jeff Ludwig ("Ludwig"),, Don Evans ("Evans") and Rick Whipple ("Whipple").

• They are amending the KOTA Operating Agreement for the purposes of raising additional capital for the purposes of getting start capital through Start Engine,LLC. Amending details include the following: -7.20 to allow addition of members,

            -Section 7.2(m):increasing amount to 4250,000