--- title: "Finlete Wrote Its Emmanuel Clase Contract to $0 After a $315,924 Raise, and Did Not Say Why" url: https://altstreet.investments/news/finlete-emmanuel-clase-athlete-contract-impaired-to-zero-2026-09-21 kind: news-article updated: 2026-09-21 description: "Finlete's FY2025 annual report carries its $315,924 Emmanuel Clase athlete contract at $0 with no cause given. Nothing was filed on the offering for 248 days." publisher: AltStreet (https://altstreet.investments) license: Public factual pages may be read, quoted and cited with attribution and a link. Bulk redistribution is not permitted. --- # Finlete Wrote Its Emmanuel Clase Contract to $0 After a $315,924 Raise, and Did Not Say Why Finlete Funding's FY2025 annual report impairs the athlete agreement behind its largest offering to $0 carrying value in a footnote, with no cause given. Between the offering's closing update and that annual report, 248 days in which the athlete was placed on leave and a federal indictment was unsealed, the issuer filed nothing at all on that offering. Published September 21, 2026. Platform: Finlete (https://altstreet.investments/platforms/reviews/finlete). Entity: Finlete Funding, Inc. (CIK 2010670, https://altstreet.investments/edgar/2010670). Finlete Funding, Inc. sold retail investors $315,924 of preferred stock tied to the future baseball earnings of Cleveland Guardians pitcher Emmanuel Clase. The offering closed on July 15, 2025. In the company's FY2025 annual report, filed April 24, 2026, the athlete agreement behind that stock is listed as "fully impaired to $0 carrying value as of December 31, 2025". The filing states the write-down and gives no reason for it. The public record supplies a candidate the filing does not name. Clase was placed on non-disciplinary leave by Major League Baseball on July 28, 2025, thirteen days after the offering closed. On November 9, 2025, an indictment was unsealed in the Eastern District of New York charging him with four felony counts over an alleged scheme to rig bets on his own pitches. He has pleaded not guilty. His attorney, Michael J. Ferrara, said Clase "is innocent of all charges and looks forward to clearing his name in court." Between those two events and the annual report, Finlete filed nothing whatsoever on that offering. ## What the filings show The Clase offering was the largest Finlete has ever attempted. Its Form C (accession 0001099910-24-000319, SEC file number 020-34769) was filed September 13, 2024 against a $3,600,000 maximum. The underlying athlete agreement, dated July 16, 2024, committed the company to pay up to $2,500,000 for up to a 3% interest in Clase's pre-tax future professional baseball earnings over 25 years. The offering raised 8.8% of its maximum. The last SEC filing on that offering was a Form C-U filed August 19, 2025 (accession 0002010670-25-000018). AltStreet read it in full. It says, in its entirety on the substance: "At the close of the Emmanuel Clase Preferred Stock offering, the issuer closed on $315,924 and 28,471 shares of Emmanuel Clase Preferred Stock, inclusive of any Bonus Shares." It was signed by chief executive George Connolly and filed twenty-two days after his athlete was placed on leave. It does not mention the leave. The next filing on that offering is the FY2025 Form C-AR of April 24, 2026, 248 days later. Its Future Earning Contracts note reads: "This balance includes investments of $10,000 in Aaron Escobar, $237,258 in Emmanuel Clase, (fully impaired to $0 carrying value as of December 31, 2025), $50,000 in Echedry Vargas..." The impairment appears as a parenthetical inside a list. - Offering: Form C filed 2024-09-13, file number 020-34769, $3,600,000 maximum, closed 2025-07-15 at $315,924 and 28,471 shares, acquiring a 0.28471% interest in Clase's future earnings - Capitalized by the company into the athlete agreement: $237,258, carried at $0 as of 2025-12-31 - FY2025 income statement: $12,811 revenue, a $171,232 impairment loss, $82,911 of amortisation, and a $316,131 net loss on one employee - The Clase class received $6,762 of dividends in 2025 with $1,528 payable, the only distribution Finlete has disclosed on any of its sixteen offerings - Filings on file number 020-34769 between 2025-08-19 and 2026-04-24: none ## Background Finlete sells a separate designated class of preferred stock for each athlete it signs, under Regulation CF through DealMaker Securities LLC, a registered broker-dealer acting as the Reg CF intermediary. Holders are entitled to a stated share of whatever the company collects under that one athlete agreement, and nothing is payable unless the athlete is "Selected", a defined term that broadly means reaching the major leagues or a top Asian league. AltStreet's [Finlete review](/platforms/reviews/finlete) covers the structure, the fee stack and the disclosure record in full. The sequence around the closing matters, and it cuts in the issuer's favour on the question that matters most. Luis Ortiz, Clase's teammate on the Guardians pitching staff, was pulled from a start on July 3, 2025 amid a sports-betting investigation, and that was public. The Clase offering closed twelve days later, on July 15. Clase himself was not named until July 28. No investor bought into the class after the athlete's own situation became public, because the class was already closed. The indictment alleges conduct running from May 2023 through at least June 2025, and says bettors won at least $450,000 on pitches thrown by the two men. The Finlete offering was signed in July 2024 and sold between September 2024 and July 2025, entirely inside that alleged window. AltStreet notes the overlap as a matter of dates only. Nothing in the record suggests Finlete knew anything, and nothing in this article should be read as suggesting it did. The sequence of the write-down is worth stating precisely. Clase was on paid leave through the end of the 2025 season, so he was still earning at the December 31, 2025 balance sheet date the impairment is dated to. On March 20, 2026, Major League Baseball and the players' union moved him and Ortiz to unpaid non-disciplinary leave to start the 2026 season, an agreement that relieved the Guardians of his $6.4 million 2026 salary and that the union stated is not an admission of wrongdoing by either player. Finlete's annual report carrying the contract at zero was filed five weeks later, on April 24, 2026. He has not pitched in 2026. Judge Kiyo A. Matsumoto denied motions to dismiss the wire fraud conspiracy count on September 9, 2026, writing that "such deception has been sufficiently alleged here". A denial of a motion to dismiss tests the sufficiency of the charges, not their truth. Trial is set for November 2, 2026. ## The pattern in AltStreet's data AltStreet's data layer carries all sixteen Finlete offerings grouped by SEC file number, with realized capital reconciled from the Form C-U series to $804,738.77 since February 2024. The Clase class is 39% of that by itself. The next largest is $169,403. Three closed offerings stopped between $10,118 and $10,669, and two more were withdrawn in March 2026 without reporting a single sale. The book is thin and concentrated, and its largest position is the one carried at zero. Impairment and amortisation of athlete contracts account for most of the year's reported loss. Against $12,811 of revenue, FY2025 shows a $171,232 impairment and $82,911 of amortisation, producing a $241,331 gross loss before $74,799 of operating expenses. The impairment alone is about 54% of the $316,131 net loss; with amortisation the two total $254,143, or about 80%. The auditor, Artesian CPA, LLC, attached a going-concern paragraph citing limited liquid assets, a $52,301 working capital deficit and the net loss. Cash on hand fell from $20,503 to $8,631 over the year. One more detail sharpens what the class was actually worth. The company acquired a 0.28471% interest in Clase's future earnings for the $315,924 investors paid in. On AltStreet's arithmetic, the minimum gross future baseball earnings required to equal the original $315,924 raise, before class-level sharing and other deductions, is about $110.9 million. That is a threshold, not a break-even: it is undiscounted for a 25-year wait, and the class is entitled only to a share of what the company collects, less amounts withheld, so the real hurdle is higher. He had earned more than $12 million across seven major league seasons before the leave began. The remaining Finlete offerings, and the full sixteen-offering book, are on the [Finlete platform data page](/platforms/finlete). ## Why it matters This is the clearest marked adverse outcome yet in retail athlete income-share investing, and it is not the failure mode the offering documents prepare investors for. Finlete's circulars warn about injury, underperformance and never reaching the majors. The thing that preceded the write-down was a criminal case, and the structure has no answer for it: the class's entitlement is a share of baseball earnings, and an athlete on unpaid leave earns nothing. Note that a $0 carrying value is an accounting measurement. Nothing in the filings establishes that the athlete agreement has terminated, that the class's rights have been extinguished, or that its 25-year term has ended. The disclosure gap is the more general lesson, and it is structural rather than a failure by this issuer. Regulation CF requires a Form C/A for material changes only while an offering is open. Once an offering has closed, the only scheduled disclosure is the annual Form C-AR. There is no Reg CF equivalent of the Form 1-U that Regulation A issuers must file within four business days of specified material events. So a Reg CF investor whose sole underlying asset deteriorates materially can learn about it up to sixteen months later, in a footnote, with no cause given. The absence of an interim SEC filing would not by itself depart from Reg CF's scheduled post-offering disclosure framework. That is a narrow point about this filing regime, not a conclusion that an issuer has satisfied every obligation that might apply to it, including antifraud, contractual and state-law duties, on which AltStreet takes no position. That is what happened here. A holder of Emmanuel Clase Preferred Stock who read only what Finlete filed would have gone from an August 2025 progress update announcing a successful close to an April 2026 annual report carrying the asset at zero, with nothing in between and no explanation at either end. Everything that mattered in those 248 days was in the newspapers and none of it was in the filings. For anyone weighing a live Finlete offering, the practical consequence is that the annual report is the only scheduled SEC channel, and it is a slow one. For the wider Reg CF market it is worth stating plainly: the absence of an event-driven disclosure obligation is a known feature of the exemption, and it is most costly exactly where a single named asset sits behind a single share class. ## What the filings do not show The filings do not state why the Clase contract was impaired. AltStreet has set the write-down alongside the athlete's leave and indictment because the class's entitlement is a percentage of his baseball earnings, but the company has not given a reason and this article does not assert one on its behalf. Note also that the impairment is dated to December 31, 2025, when Clase was still on paid leave, and that the annual report recording it was filed on April 24, 2026, after he had been moved to unpaid leave. No filing AltStreet reviewed explains the timing or the cause. The $110.9 million figure is AltStreet's arithmetic from the 0.28471% interest and the $315,924 raised, not a figure in any filing. It is the minimum gross earnings required to equal the raise before class-level sharing and other deductions, and it is undiscounted. It is a floor: the class is entitled to a share of what the company collects rather than to the whole of it, and the filings do not state the Clase class's dividend percentage, so the true break-even is higher by an amount AltStreet cannot compute from the record. The criminal charges are allegations. Clase has pleaded not guilty, his attorney says he is innocent, and the September 2026 denial of the motions to dismiss decided only that the charges were adequately pleaded. Nothing here should be read as a finding that he did what the indictment alleges. AltStreet has not contacted Finlete, DealMaker Securities or counsel for Mr Clase about this article, and takes no position on whether Finlete knew or could have known anything about the athlete's situation at any point. The offering closed before Clase was publicly named. ## Key facts - Finlete Funding, Inc. (CIK 2010670) raised $315,924 from retail investors in the Emmanuel Clase Preferred Stock offering, SEC file number 020-34769, which closed July 15, 2025 and issued 28,471 shares, acquiring a 0.28471% interest in his future professional baseball earnings. - The FY2025 Form C-AR filed April 24, 2026 (accession 0001872856-26-000123) lists the Clase athlete agreement, into which the company had put $237,258, as "fully impaired to $0 carrying value as of December 31, 2025", and gives no cause. - The last filing on that offering before the annual report was a Form C-U of August 19, 2025 (accession 0002010670-25-000018) reporting the close in a single sentence, filed 22 days after Clase was placed on leave and making no mention of it. Nothing else was filed on the offering for 248 days. - Clase was placed on paid non-disciplinary leave on July 28, 2025 and moved to unpaid non-disciplinary leave on March 20, 2026, an agreement the players' union stated is not an admission of wrongdoing. An indictment unsealed in the Eastern District of New York on November 9, 2025 charges wire fraud conspiracy, honest services wire fraud conspiracy, conspiracy to influence sporting contests by bribery, and money laundering conspiracy. He has pleaded not guilty; trial is set for November 2, 2026. - The impairment drove the company's year: against $12,811 of revenue, FY2025 shows a $171,232 impairment loss, $82,911 of amortisation and a $316,131 net loss, with a going-concern paragraph from Artesian CPA, LLC and cash down from $20,503 to $8,631. - Regulation CF requires a Form C/A for material changes only while an offering is open; once closed, the annual Form C-AR is the only scheduled disclosure, with no equivalent of the Form 1-U that Regulation A issuers file within four business days of a material event. ## Sources - Form C-AR, Finlete Funding, Inc., FY2025 annual report filed April 24, 2026, including the Future Earning Contracts note and the audited financial statements (accession 0001872856-26-000123): https://www.sec.gov/Archives/edgar/data/2010670/000187285626000123/ - Form C-U, Finlete Funding, Inc., closing the Emmanuel Clase Preferred Stock offering at $315,924 and 28,471 shares, filed August 19, 2025 (accession 0002010670-25-000018): https://www.sec.gov/Archives/edgar/data/2010670/000201067025000018/ - Form C, Finlete Funding, Inc., Emmanuel Clase Preferred Stock offering, filed September 13, 2024, SEC file number 020-34769 (accession 0001099910-24-000319): https://www.sec.gov/Archives/edgar/data/2010670/000109991024000319/ - Form C/A for the LUINDER AVILA offering, file number 020-36253, filed October 30, 2025 (accession 0002010670-25-000022). This is a different offering from the Clase one; its circular narrates the company's full offering history, which is the source for the July 15, 2025 Clase close date. It is not a filing on the Clase offering and does not affect the 248-day gap on file number 020-34769.: https://www.sec.gov/Archives/edgar/data/2010670/000201067025000022/ - Two Current Major League Baseball Players Charged in Sports Betting and Money Laundering Conspiracy, indictment unsealed November 9, 2025: https://www.justice.gov/usao-edny/pr/two-current-major-league-baseball-players-charged-sports-betting-and-money-laundering - Guardians' Emmanuel Clase, Luis Ortiz indicted in pitch-rigging case, including the charge list, the alleged May 2023 to June 2025 conduct window and counsel's statement: https://www.espn.com/mlb/story/_/id/46906636/guardians-emmanuel-clase-luis-ortiz-indicted-pitch-rigging - Emmanuel Clase placed on leave amid MLB's sports-betting investigation, July 28, 2025: https://www.cnn.com/2025/07/28/sport/emmanuel-clase-investigation-gambling-spt - Judge Kiyo Matsumoto denies motions to dismiss the wire fraud conspiracy count, September 9, 2026; trial set for November 2, 2026: https://www.ingame.com/clase-ortiz-update-090926/ - AltStreet: Finlete review, covering the fee stack, the dividend-share mechanics and the full sixteen-offering filing record: https://altstreet.investments/platforms/reviews/finlete - Guardians' Clase, Ortiz moved to unpaid non-disciplinary leave, March 20, 2026: https://www.espn.com/mlb/story/_/id/48259978/guardians-clase-ortiz-moved-unpaid-non-disciplinary-leave ## SEC accession numbers - 0001872856-26-000123 - 0002010670-25-000018 - 0001099910-24-000319 --- Source page: https://altstreet.investments/news/finlete-emmanuel-clase-athlete-contract-impaired-to-zero-2026-09-21 Machine index: https://altstreet.investments/llms.txt AltStreet reads what platforms, funds and issuers file with the SEC and what they tell investors, and publishes the difference. Figures are as filed or as captured on the date stated; nothing here is investment advice.