CMI started to assemble a group of broodmares beginning in the mid 1990s from which we would begin to breed our future prospects. We based our judgements on our broodmares from research we conducted. We did an analysis of all Breeders! Cup winner through 1994 and identified patterns in the dams of these winners. These patterns were translated into speed figures which were used to identify levels of performance by these dams that would give them a better chance to produce a superior performer. In 1995 based on other research and with consultation from Michael Sedlacek, our trainer, it became clear that the minimum speed figure, or performance level we had identified for our broodmares was potentially linked to the heart size of the individual. In 1998, researchers began to conclude that heart size was probably the biggest componant in racing performance, perhaps being on the order of 25% of the total influence on performance. Further, research has also concluding that heart size was probably a sex linked trait carried on the X chromosome. This confirms the importance of the dam as the most significant influence in racing performance and confirms our approach of assembling a band of broodmares who, by measurement, have large hearts and who, through genetic analysis, have the makeup to transmit this to their offspring.

As we have moved into the 2000s we now can offer homebreds for syndication that have been bred for racing success at the highest levels. We have not ignored the sires influence either. Our yearling crop of 2002 features offspring: by the horse with the fastest speed figure ever as a two year old, Rodeo; by the Breeder's Cup Mile runnerup and multiple Grade 1 winner, Fastness, and by the very successful young sire Petionville. Our 2002 two year old crop features two outstanding prospects: Chute the Breeze, a colt by Rodeo out of the stakes placed mare, Breezethruthetrees; and Lord General, a colt by Outflanker out of Montgomery by Kentucky Derby winner Dust Commander.

We think the future is bright at Cedar Meadow. We invite you to consider talking with us about that future if you are interested in investing in thoroughbred racing. We believe our approach of combining the best science with careful product and cost management gives all of us an excellent chance of success.

"Providing Affordable Thoroughbred Racing for the Investor ...With An Eye on the Bottom Line."

Cedar Meadow, Inc., (CMI) was started in 1990 with the purpose of making investments in thoroughbred racehorses both in the area of breeding and racing. Early in the 1990s the company enjoyed success racing (campaigning Stakes horses Pacem in Kristie, Breezethruthetrees and Country Way) and doing syndications of race horses it would purchase either privately or at public auction. CMI enjoyed a very high percentage of winners to horses purchased, achieving close to 90%. Further, well over 50% of the wins occurred either in the New York or New Jersey racing circuits where the purse money then was some of the highest in the nation. Syndicate members generally were those interested in racing and who did not have the resources or expertise to enjoy ownership as an individual. CMI maintained a policy of retaining at least a 50% ownership in all of its syndications so that any of the minority owners would have the assurance that any management decisions made by CMI would have a greater impact on CMI. In the mid-1990s CMI began to change its business strategy, in part driven by market conditions. Auction prices of thoroughbred racehorses began to increase rapidly and to such a point that quality horses were beginning to cost more than any realistic potential earnings could be projected. Second, research in the field showed that traditional techniques of evaluating prospects based largely on the sire line was not effective.

To adjust to this demand, CMI virtually ceased buying at auction and began concentrating on breeding its own race horses with the goal of syndicating a portion of these homebreds. Our strategy now is to keep a broodmare band of between 2 and 5 mares of high quality and to endeavor to produce foals from each annually. These foals are then usually offered once for sale at public auction where we set a reserve. The reserve is based on our estimation of the particular foals potential. Those that do not reach the reserve, or for other reasons are not sold, are then subject to syndication in which, and as always, we retain at least 50%. This by the way does not mean that we keep the inferior foals, quite to the contrary we keep those that we believe have high potential and don't meet a high reserve.

Our foals of 1997 were our first full year using this new approach. As of the end of 2001 the two horses in that crop, Secret Breeze and Right Ascension, won a total of nine races, all in New York State, and earned about $160,000. These two horses were "on the board" in over half of their starts. Secret Breeze was an open allowance winner at Aqueduct and was just beaten in the "two other than". Earnings from racing exceeded racing expenses for the 1997 crop and Secret Breeze has been retired to be a broodmare and Right Ascension has been sold. The market and/or sale value of both horses is greater or equal to its original syndication value.