SecProbe.io

CORRESP
1
filename1.htm

January
31, 2025

VIA
ELECTRONIC EDGAR FILING

Office
of Trade & Services

Division
of Corporation Finance

Securities
and Exchange Commission

100
F. Street, N.E.

Washington,
D.C. 20549

    Re:
    Masterworks
    Vault 10, LLC

    Amendment
    No. 5 to Offering Statement on Form 1-A

    Filed
    November 7, 2024

    File
    No. 024-12323

Dear
Sir or Madam:

We
have electronically filed herewith on behalf of Masterworks Vault 10, LLC (the “Company”) Amendment No. 6 (“Amendment
No. 6”) to the above-referenced offering statement on Form 1-A originally filed on August 23, 2023 (the “Original Filing”),
as amended by Amendment No. 1 on October 16, 2023 (“Amendment No. 1”), Amendment No. 2 on May 7, 2024 (“Amendment No.
2”), Amendment No. 3 on August 6, 2024 (“Amendment No. 3”), Amendment No. 4 on October 2, 2024 (“Amendment No.
4”) and Amendment No. 5 on November 7, 2024 (“Amendment No. 5” and together with the Original Filing, Amendment No.
1, Amendment No. 2, Amendment No. 3 and Amendment No. 4, the “Form 1-A”). Amendment No. 6 is marked with < R > tags
to show changes made from the Form 1-A filing. In addition, we have included a narrative response keyed to the comments of the staff
of the Division of Corporation Finance (the “Staff”) set forth in the Staff’s comment letter to Joshua B. Goldstein
dated December 23, 2024. We trust you shall deem the contents of this transmittal letter responsive to your comment letter.

Amendment
No. 5 to Offering Statement on Form 1-A

Cover
Page

    1.
    Comment:
    Your disclosure of the “Price to Public” on the offering circular cover page differs from the disclosure on page 5
    under “Determination of Offering Price.” Explain why.

    Response:
    The aggregate offering proceeds for each series equals the total cash held by the applicable Predecessor Issuer prior to the
    Restructuring Transactions, which in the case of each series of the Company is $140. However, for the limited purpose of ensuring
    compliance with the $75 million offering limit, instead of using the nominal $140 amounts, the Company deemed it appropriate
    to assume for such purposes the aggregate offering size is equal to the total number of Class A shares offered hereby, multiplied
    by $20.00, which is the value ascribed to each Class A share offered and sold in each Predecessor Issuer’s initial offering,
    as further described in our response to Comment 12 below. The Company has amended its disclosure on the cover page of Amendment No.
    6 to be consistent with the disclosure on page 5 of Amendment No. 6.

    2.

    Comment:
    Revise your offering circular cover page to distinguish between the rights, especially voting rights, available to the Class A
    shares as compared to the Class B and C shares.

    Response:
    The Company has added disclosure distinguishing between the rights, including voting rights, available to the Class A shares
    compared to the Class B and Class C shares on page 2 of Amendment No. 6.

    3.
    Comment:
    Identify the ATS upon which you expect secondary sales for the Class A shares will be made available.

    Response:
     The secondary sale for the Class A shares will be made available on an ATS operated by North Capital Private Securities
    Corporation (“North Capital”). Each Predecessor Issuer has filed a 1-U with additional information on the North Capital
    ATS. The Company has also revised its disclosure throughout Amendment No. 6 to reflect the same.

    4.

    Comment:
    Clarify the purpose and function of the online investment platform owned by your affiliate that allows for investors to acquire
    ownership “in special purpose companies that invest in distinct Artworks or a collection of Artworks.” Clarify whether
    these investment opportunities are in solely Masterworks entities. Explain what you mean on page 25 where you indicate that investors
    can execute trades in shares issued by Masterworks issuers when you also state that investors can post live bids and offers that
    are settled by a Settling Broker.

    Response:
    The online investment platform referred to as the “Masterworks Platform” facilitates investment opportunities
    solely in entities controlled and administered by Masterworks that invest in artwork. The Masterworks Platform allows potential
    investors to browse offering materials, sign subscription documents and purchase shares in such offerings and manage and track all
    such investments. Investors may also access the ATS (operated by North Capital, an SEC-registered broker-dealer and FINRA member
    firm) via the Masterworks Platform and post live bids and offers on such ATS; however, to participate on the ATS, investors must
    open a custodial brokerage account with North Capital, to facilitate settlement of cash payments related to such trades. The Company
    has also revised its disclosure on page 26 of Amendment No. 6 to provide greater clarity.

Incorporation
of Certain Information by Reference, page v

    5.
    Comment:
    Please also include a balance sheet as of the end of the preceding fiscal year (i.e., December 31, 2023) in your future Forms
    1-SA. An interim balance sheet as of the end of the corresponding six-month interim period of the preceding fiscal year (i.e., June
    30, 2023) need not be provided unless necessary for an understanding of the impact of seasonal fluctuations on the issuer’s
    financial condition. Refer to Item 3(a) of Form 1-SA.

    Response:
    The Company notes the Staff’s comment and will include a balance sheet as of the end of the preceding fiscal year in future
    Forms 1-SA. The Company also notes that as of December 31, 2024 and as of the date hereof the Company has no material
    assets or liabilities and has conducted no operations.

    6.

    Comment:
General Instruction III(a)(2)(B) of Form 1-A requires that the issuer make any financial statement information that is incorporated
by reference readily available and accessible on a website maintained by or for the issuer. Please revise to disclose the website which
satisfies this incorporation by reference requirement.

    Response:
The financial statement information for each Predecessor Issuer that is incorporated by reference will be available on the www.masterworks.com
website prior to qualification of the 1-A and the disclosure on page v of Amendment No. 6 will be updated to reflect the same.

Questions
and Answers About this Offering

Q:
Will this Offering and the Restructuring Transactions have a tax impact on U.S. investors, page vi

    7.
    Comment:
    We note your disclosure that “we do not believe these transactions will have any tax impact on U.S. investors.” Please
    revise to discuss in greater detail the basis for this conclusion. In this regard, we note that the offering and restructuring transactions
    contemplate a number of steps which will affect Predecessor Issuer shareholders security holdings, i.e. a distribution of a new security
    and the dissolution and extinguishment of an old security.

    Response:
    The Offering and Restructuring Transactions represents a continuation of the same business enterprise with no substantive economic
    change for investors. Each series of the Company replicates the capital structure of each Predecessor Issuer, and the new securities
    issued by such series mirror the Predecessor Issuer securities in terms of economic and voting rights. The Company has added a cross
    reference on page vi of Amendment No. 6 under the caption “Material U.S. Federal Tax Considerations - Taxation of the Restructuring
    Transactions” and has added additional detail on page 43 of Amendment No. 6 to explain the rationale for its determination
    that the Offering and Restructuring Transactions should not have any economic tax impact on investors.

Series
Offering Table, page 1

    8.

    Comment:
    Please revise the table to include an additional column to identify the applicable “Artwork” owned by each series.

    Response:
The Company has revised its disclosure in the series offering table on page 1 to include an additional column to identify the applicable
“Artwork” owned by each series.

The
Restructuring Transactions, page 2

    9.
    Comment:
    We note your disclosure about the “Distribution” and that you describe it as occurring after this “Offering,”
    but you also acknowledge “the interconnectedness between the Offering and th[e] Restructuring Transactions.” Please ensure
    your offering statement includes sufficient disclosure to explain how the Class A shares will be offered and sold to the shareholders
    of the Predecessor Issuers and any other additional disclosure that is needed to provide clarity to investors with respect to this
    transaction structure as required by Rule 252(a). Also, we note that you state that you will “notify all existing shareholders
    of these transactions prior to the consummation of this offering by electronic communications or via the Masterworks Platform.”
    Tell us what communications you intend to provide to such shareholders, if not this or a separate offering circular, and how you
    intend to identify or fix the population of shareholders participating in the exchange offer, such as by setting a record date.

    Response: While
    the Company acknowledges that the Offering and the Restructuring Transactions are interconnected, the Company believes that the
    application of the Securities Act of 1933 to each respective element of the transactions should be analyzed separately. Accordingly,
    the distribution of shares following the Offering is a transaction that involves no “offering or sale” of securities
    under applicable SEC guidance since there is neither an investment decision on the part of shareholders of the Predecessor Issuers
    nor will any consideration change hands. The Company has added disclosure regarding the mechanics of the distribution on pages 2, 15
    and 16 of Amendment No. 6. The Company and each Predecessor Issuer intend to notify existing shareholders of the Restructuring
    Transactions and Offering via email, which will include a copy of this offering circular for informational purposes. In addition,
    the Company will add the Predecessor Issuers as co-issuers to the Form 1-A such that the SEC filing record for each Predecessor
    Issuer will include this offering statement. In addition, the Board of Managers of each Predecessor Issuer will approve the
    transactions contemplated in the Form 1-A and set a record date and effective time for the Distribution. At the
    effective time of the Distribution, the transfer agent for the Company will update the Company’s share register such that all
    shareholders who purchased securities in the Predecessor Issuers originally sold in Regulation A offerings will receive the same
    number of shares in the applicable series of the Company. The effective time of the Distribution shall be at 12:00 a.m. midnight on
    the record date after all trades occurring on or prior to the record date have settled. At such time trading in Class A shares of
    Predecessor Issuers shall cease and no transfers of Class A shares of the Predecessor Issuers shall be approved by the Predecessor
    Issuers prior to the dissolution of the Predecessor Issuers and any purported transfer shall be null and void. Promptly following the record date, trading in Class A shares of each series of the Company shall commence. All
    participants on the trading platform will be informed of this change by email and disclosures on the trading pages of the
    Masterworks website.

    10.

    Comment:
    Disclose the consideration given for the Asset Contribution to you from each Predecessor Issuer. If no such consideration will
    be given, please clearly state so in your offering statement.

    Response:
    The Company has revised Amendment No. 6 to clearly state that no consideration is given for the Asset Contribution.

    11.
    Comment:
    We note your response to comment 1 in our letter dated August 28, 2024. Please revise your disclosure in the offering statement
    to provide an explanation of how a dissolution can be effectuated once the assets are distributed, as you do in your response.

    Response:
The Company has revised its disclosure in Amendment No. 6 to provide an explanation of how a dissolution can be effectuated once
the assets of the Predecessor Issuers are distributed.

Determination
of Offering Price, page 5

    12.

    Comment:
    We note your disclosure that “for purposes of ensuring compliance with the $75 million offering size limitation applicable
    to Tier 2 offerings, we have assumed the aggregate offering size is equal to the total number of Class A shares offered hereby, multiplied
    by $20.00, which is the value ascribed to each Class A share offered and sold in each Predecessor Issuer’s initial offering.”
    Please advise why you used the initial offering price of $20.00 per share to calculate the aggregate offering size rather than the
    value of the consideration to be received in these interconnected transactions as established by bona fide sales of that consideration
    made within a reasonable time, or, in the absence of sales, on the fair value as determined by an accepted standard. Refer to Rule
    251(a) of the Securities Act of 1933 and the note to paragraph (a) thereto. In this regard, we note that prior amendments contemplated
    using the net asset value per Class A share as of the most recent practicable date.

    Response:
    The Company determined to use the initial offering price of $20.00 per share to calculate the aggregate offering size for the
    limited purpose of ensuring substantive compliance with the $75 million offering limit rather than the value of the consideration
    to be received or the fair market value for various reasons. First, the net asset value per Class A share for the majority of Predecessor
    Issuers (and in the aggregate) is lower than $20.00, making the use of the initial offering price a more conservative method. In
    addition, the Company has capped the offering size at $60 million to ensure that the $75 million threshold will not
    be violated no matter which valuation method is used and similar issuers conducting offerings in connection with these restructuring
    transactions will adhere to the same cap.

The
Formation and Restructuring Transactions, page 14

    13.
    Comment:
    For each new series, please provide a detailed post-offering and restructuring chart (or detailed table) which specifically details
    and quantifies the post-offering capital structure of each series (i.e. Class A ordinary shares, Class A preferred shares (if applicable),
    Class B shares and Class C shares). In this regard, the included charts are generic and are not specific to the actual series which
    are being offered pursuant to this offering circular.

    Response:
    The Company has added a detailed table on page 16 that quantifies the post-offering capital structure of each series.

Description
of Business

Our
Series LLC and Offering Structure, page 17

    14.

    Comment:
    You disclose that each segregated portfolio will be treated as a consolidated subsidiary for accounting purposes. Please tell
    us in detail how each segregated portfolio meets the requirements for consolidation. Also, tell us whether each segregated portfolio
    is a variable interest entity and explain in detail how you reached your conclusions. Refer to ASC 810.

    Response:
    The segregated portfolios each meet the definition of a Variable Interest Entity (“VIE”) under ASC 810-10-15-14
    to 15-17 because (1) the Board of Directors of Masterworks Cayman, rather than the shareholders, governs the significant activities,
    indicating the