What Is Crowdfunding?
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Feb 13, 2019
Crowdfunding is when businesses, organizations or individuals fund a project or venture with small donations from many people. Put simply...
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- Using high-quality, real food ingredients, Ample’s science-based original, keto, and plant-based meal replacement drinks deliver fast, optimal nutrition in a bottle
- Well-positioned in growing $18 billion meal replacement category where market leaders are out-of-touch with changing consumer demands for higher quality products
- Multi-million dollar revenue stream and high customer lifetime value, with over 60% of revenue from loyal subscribers who spend $100+/month on Ample
- Over $4 million raised from well-respected private investors and institutional firms
- Led by experienced team, including a former R&D executive at General Mills, Target, and Clif Bar
We're Ample Foods
And we’re ready to add fuel to the fire to accelerate our company's growth.
By investing in Ample, you'll enable us capitalize on our continued success—improving brand awareness, expanding distribution, and bringing new, high-demand flavors and form factors to market.
With your support, we can create meaningful change in the food industry—improving transparency and ingredient quality, so everyone can eat and live better.
Our busy schedules force us to choose convenience over health.
Our lifestyles today are busier than ever. With demanding careers, social commitments, staying fit, and a whole lot more, we juggle long to-do lists that can feel overwhelming. We all know our health is vitally important, but when we're busy, we sometimes find ourselves reaching for convenient food options that, while fast—just don’t cut it.
Current "healthy" convenience foods fall short.
In these product categories, taste can definitely leave something to be desired. But trading our health for convenience or taste shouldn't be a compromise we have to make.
We’re ready for better.
Ample: Optimal Nutrition, Simplified
Introducing Ample: a satisfying, real-food meal in a bottle that combines optimal nutrition and great taste in a convenient format you can take anywhere. Using high-quality ingredients backed by sound science, Ample's Original, Ketogenic, and Plant-Based formulas provide a fast, easy solution for eating well on your busiest days.
High-Quality Ingredients
In all three Ample formulas, you'll find complete proteins from quality sources, premium fats like coconut, macadamia, and high-oleic sunflower oil, organic greens, fiber, and 6 strains of probiotics to support a healthy gut microbiome. All with 4 grams of sugar or less per 400-calorie meal.
Smart Macronutrient Ratios
For us, it was mission-critical that all three Ample formulas aligned with sound nutritional science and considered our diets’ effect on things like inflammation, the gut microbiome, and hormone levels. We did extensive research to determine what ingredients and macronutrient ratios would deliver an optimal, complete meal that leaves people feeling satisfied and energized. We did the legwork to make eating well a no-brainer.
What Our Nutrition Advisors are Saying:
Optimized for Convenience
Designed for maximum portability, Ample comes as a dry powder, pre-portioned and sealed in its own 400- or 600-calorie recyclable bottle. Just toss it in your bag and you’ve got a healthy, nutritious meal that’s ready to go wherever the day takes you.
Easy to Prepare:
When to Drink Ample:
Three Great-Tasting Formulas to Suit a Variety of Diets
See complete product and nutrition information for Ample, Ample V, and Ample K.
Two and a half years ago, we launched a record-breaking Indiegogo campaign, becoming the #1 food and beverage campaign of its time. Since then, we've built an experienced R&D, marketing, and operations team, including a former R&D executive for General Mills, Target, and Clif Bar.
Investment raised to date:
We’ve also raised $4 million in investment from:
Strong Sales Numbers
Fueled by our loyal customer base, Ample’s sales have grown more than 500% since our launch in January 2017, resulting in a multi-million dollar revenue stream selling direct-to-consumers via our website.
Predictable Subscription Revenue. Category-Leading Customer Lifetime Value.
As our customers are always looking for simple solutions for eating well, Ample quickly becomes a staple in their diets—creating loyal, high-value customers and predictable revenue streams.
Supportive Community of Loyal Customers
High Net Promoter Score: 64
A Net Promoter Score measures the likelihood of customers recommending Ample to their family and friends. Ample has an NPS score of 64—with all scores of 50 and above rated Excellent.
Hundreds of Positive Product Reviews
Happy Customers from our Website:
Customers love us on Facebook:
Continuing to Grow
We’ve recently launched new and improved versions of all three of our formulas and have started selling on Amazon—with sales growing more than 150% month-over-month so far.
In spring 2019, we’ll be releasing the number one most requested product variation from our customers: bulk versions of all three formulas, which we expect to sell well online— and even better in retail stores.
The size of the market opportunity for Ample means that if we are successful, we could become one of the world's most valuable food brands. We’re focusing initially on the $18 billion meal replacement market—then expanding into the $3 trillion CPG food category.
Immediate Opportunity: Meal Replacement Market
Despite rapid growth in the $18 billion meal replacement market, major players like Soylent, Ensure, Muscle Milk, and Boost are out of step with growing consumer demands for healthier products and better ingredient quality.
- 39% of U.S. consumers are already using nutrition and performance drinks to replace breakfast, which is expected to grow as more consumers seek convenient, time-saving meal solutions.
- 2 in 5 U.S. consumers agree “no artificial ingredients” is important when shopping for food and drink. But products with clean claims struggle to meet consumer needs for taste and trustworthiness.
- Interest in health is skyrocketing, with consumers increasingly going on plant-based and keto diets. Interest in keto alone has increased >14x in the last 2 years.
As an R&D-focused company committed to delivering the highest quality products, Ample is ideally positioned to keep pace with growing consumer demands for better nutrition—not just taste and convenience.
Larger Opportunity: Convenience Packaged Food & Beverage Market
As we scale, we plan to expand beyond the meal replacement category to the overall $3 trillion convenience packaged food market, which is ripe for innovation.
- Compared to Tech companies, large CPG brands spend almost nothing on R&D. Instead, they funnel their budgets into marketing convenient food options that are tasty and inexpensive, but not necessarily good for you.
Source: CircleUp, Data from 2017 form 10-Ks
- Emerging food companies like Ample are already stealing market share from the larger companies, as they develop new solutions that are better aligned with changing consumer demands.
Shaping the Future of the Food Industry
By establishing our reputation as a trustworthy, product-centric company focused on improving nutrition at scale, Ample will be ideally positioned to expand into other products that align with changing consumer habits and health trends.
In doing so, we hope to improve access to proper nutrition and reshape the food industry for the better.
To date, we’ve focused sales efforts on the most health-conscious niches with the highest need—selling directly to this audience via our website to establish community, customer relationships, and generate quick product feedback loops.
As we scale, we’ll expand our targeting to broader, health-conscious markets—widening distribution to retail and B2B channels.
Customer segmentation
In January 2019, we released new and improved versions of all three Ample formulas—delivering better taste and texture, without sacrificing ingredient quality or nutrition. Here’s what’s next:
Bulk powder
Over the course of the next few months, we'll be releasing our #1 most requested product: bulk versions of all of our formulas. This new format will allow customers to customize their meal size and reduce plastic waste. It will also position Ample to compete more directly with existing meal replacement and protein powder categories.
New Flavors
Next, we’re developing new, high-demand flavors like Chocolate and Coffee to give our customers more options for great-tasting, optimal nutrition. The addition of new flavors will provide variety for customers, and is expected to increase conversion rate, average order value, and customer loyalty.
Ready to Drink (RTD)
Then, we’ll develop pre-mixed, ready-to-drink (RTD) versions of Ample. This ultra-convenient form factor will enable us to target a more mainstream customer demographic and strengthen our retail and B2B product offering.
Join Us in Our Mission to Make Optimal Nutrition Simple
We’ve spent the last 2 ½ years creating the most nutritious, great-tasting, and convenient products on the market, as demonstrated by our strong base of loyal, high-value customers.
Long-term, we hope to shape massive change in the food industry—forcing companies to level up in their nutrition, ingredient quality, environmental impact, and transparency. Through economies of scale, we can also reduce the cost of healthy food and make convenient, optimal nutrition accessible to all.
By investing in Ample today, you can help us become a major player in the global meal replacement market and later, expand into the larger global CPG market. Your investment will accelerate our growth—helping us expand into retail stores and new distribution channels, while bringing more nutritious, great-tasting, fast meal options to market.
While today's modern world doesn't make it easy to be healthy, Ample does. And with your support, we can help people everywhere eat, work, and live better—now and for years to come.
Ample's Leadership Team
Connor’s passion for nutrition and health led him to complete a biology degree from St. Olaf College—and land deep in the CrossFit movement after graduation. Starting with co-founding a CrossFit gym after graduation, Connor found it immensely gratifying to help others improve their health through exercise and diet. Later, when he joined the medical sales team at Johnson & Johnson in 2013, Connor found himself in operating rooms, witnessing thousands of patients with chronic diseases that could have been prevented by making healthier lifestyle choices. That's when he knew he needed to shift his efforts to the preventive side of health.
After moving to San Francisco in 2014, Connor began this quest by forming a health startup—a physical therapy patient engagement platform. However, while living in a co-op community of entrepreneurs, his sights shifted to Ample when a friend asked him for a not-so-simple request: to make it easy for him to eat well, while working long startup hours. Connor worked tirelessly to make him a drinkable meal that aligned with the emerging nutrition research he voraciously followed. That's when Ample was born—a company committed to making it simple for people everywhere to have access to an easy, healthy meal.
With extensive experience in the food and consumer packaged goods industries, Julie has served in leadership, R&D, and board member capacities at major brands like General Mills, Target, Clif Bar, and more.
As the VP of R&D for Pillsbury (General Mills), she led a staff of 80 technical personnel responsible for all product, process, and packaging development. As a consultant, she worked with Land O'Lakes to evaluate their existing technical capabilities and intellectual properties, customer needs, and competition, leading to the development of 10 new product concepts. Next, she served as the Director of Food Product Development for Target, building their new Archer Farms and Market Pantry businesses from scratch. In this role, she established key product development processes, recruited 25 new product developers and managers, built 4 state-of-the-art product development labs, and led the cross-functional team that launched Archer Farms' Simply Balanced line.
Prior to joining Ample, Julie also served as the Director of Craft, Quality, and Innovation at Clif Bar and as a technical advisory board member at Bush Brothers & Company. At Ample, she utilizes her immense industry experience to lead our product development and expansion efforts, overseeing the creation of new flavors and form factors to accelerate our company's growth.
Amauri is passionate about helping people solve real problems with high-quality products, which is exactly what led him to join the Ample team. Working with companies like Symantec, Nokia, RingCentral, and more, Amauri has extensive experience building consumer brands, taking new products to market, and driving startup growth using an omni-channel approach. He's already hit the ground running at Ample, driven by a mission to educate consumers about ingredient quality and improve transparency in the food industry. Ultimately, he hopes to help customers make more educated decisions about their health and diet. In his spare time, Amauri gives back by mentoring early-stage startups at Google Launchpad and volunteering at nonprofits. He's Brazilian, has two kids, loves downhill skiing, and has been drinking an Ample for breakfast every day since joining our team.
As a former consultant in industries ranging from financial services to education, Rona’s personal passions and professional interests ultimately coalesced in the food and beverage space. While living in Shanghai, she worked as a brand consultant at Equancy China, developing growth strategies for international food and beverage brands including Bacardi and Bel Cheeses. She then served as an operations and project manager for a major hospitality group—overseeing the operations of eight restaurants and bars, as well as the construction and opening of two new restaurants. Upon moving back to the U.S., Rona landed in San Francisco with the intent of growing a mission-driven food startup. Joining the Ample team as employee #1, she applied her broad set of skills to establish our operational infrastructure and currently oversees our supply chain. She feels extremely proud of the company and our product, and is inspired by the many people living healthier lives as a direct result of our efforts.
Team Experience:
Our Investors:
“After graduating with a biology degree and starting a CrossFit gym in 2011, it was easy for me to maintain a healthy lifestyle. I coached similarly-minded people on health for a living and read nutrition medical journals just for fun. But after moving to San Francisco and into healthcare entrepreneurship in 2014, my intention to eat well was quickly buried by the grim reality of my busy work schedule. Instantly, my free time vanished as I worked to get my business off the ground, and it became difficult to carve out time for my healthy diet.
Many of my friends and housemates had a similar problem. They were starting new tech companies, conducting groundbreaking genetics research, and launching promising sales careers. But their health was suffering under their busy schedules. They knew that health and nutrition was important, but they had no idea how to prioritize their diet. They resorted to convenient snacks or the most-hyped meal replacement drinks, powders, or bars—without understanding the types and quality of ingredients, caloric makeup, and overall nutrition they were actually putting into their bodies.
I tried to help by holding nutrition lectures and cooking classes, but it was more than they could handle. One day, my friend told me, “Connor, don’t give me more work to do. Just give me a solution.” He was right. We can’t spend half of our time, energy, or paychecks optimizing our health, while leading busy lives. That’s when the idea for Ample was born.
I set out to create a quick, healthy meal that solved my friends' problems—starting by mixing powders in my own kitchen. After my early versions of Ample received a positive reception, I launched an Indiegogo campaign to turn my vision into a viable business—which soon became the top food and beverage campaign of its time. This allowed me to recruit a fantastic team and since then, Ample has grown significantly, receiving $4 million in funding from angel investors and reputable VC firms. We've launched three incredible products and impacted thousands of lives—with the customer reviews and sales numbers to prove it!
But we're just getting started on our mission to simplify optimal nutrition and are excited for the bright future ahead of us. In the next couple decades, there will be a ton of changes happening in the food industry and we're excited to help set the standard for what it means to be a modern health food company.”
—Connor Young, Founder & CEO of Ample
Deal terms
Deadline
Mar 17
Ample Foods needs to reach their minimum funding goal before
the deadline. If they don’t, all investments will be refunded.
Learn more
Type of security
Crowd SAFE
·
Learn more
The Crowd SAFE is an agreement for future equity in the startup,
meaning that it can convert to equity in the future.
Discount
20%
If a trigger event for Ample Foods occurs, the discount provision
gives investors equity shares (or equal value in cash) at a reduced price.
Learn more.
Valuation cap
$15,000,000
The maximum valuation at which your investment converts
into equity shares or cash.
Learn more.
Funding goal
$25,000 – $1,070,000
Ample Foods needs to raise
$1M
before the deadline. The maximum amount Ample Foods is willing
to raise is $1.07M.
Learn more
Documents
Official filing on SEC.gov
Form C
About Ample Foods
Legal Name
Ample Foods, Inc.
Founded
Oct 2015
Form
Delaware
Corporation
Headquarters
55 Rodgers Street
, San Francisco, CA
Headquarters
55 Rodgers Street, San Francisco, CA, US
Ample Foods Team
Connor Young
CEO and Founder
Julie Zimmerman
VP of Product Development
Amauri Campos
VP of Marketing
Rona Chen
Director of Operations
Christine Khalil
Marketing Manager
Pablo Gabatto
Operations Manager
Michelle Ho
Customer Support Manager
Troy Doerr
Customer Support
Kenny Handel
Food Scientist
Connor Young
CEO and Founder
Julie Zimmerman
VP of Product Development
Amauri Campos
VP of Marketing
Rona Chen
Director of Operations
Christine Khalil
Marketing Manager
Pablo Gabatto
Operations Manager
Michelle Ho
Customer Support Manager
Troy Doerr
Customer Support
Kenny Handel
Food Scientist
Press
FAQ
What is Ample?
What is Ample?
Using high-quality, real-food ingredients, Ample is a science-based meal replacement drink that delivers fast, optimal nutrition in a bottle—making it simple to eat well on your busiest days. Designed to meet a wide variety of dietary needs, Ample offers complete Original, Ketogenic, and Vegan formulas, available in 400- or 600-calorie sizes. Each formula contains carefully considered macronutrient ratios of high-quality proteins, fats, carbohydrates, and fiber to keep you full and energized for 4+ hours. Pre-portioned and sealed as a dry powder in its own recyclable, BPA-free bottle, simply add water and shake for a simple, delicious, and filling meal in 30 seconds or less.
How does Ample compare to Soylent?
How does Ample compare to Soylent?
Soylent targets a cost-conscious demographic with the value proposition of complete nutrition that’s affordable. Instead, Ample targets a health-conscious, health-educated demographic that’s willing to pay more for quality ingredients and smart macronutrient ratios. While Soylent has one primary formula intended for a general audience, Ample has three formulas that are intended for different nutritional needs: keto, original (higher protein), and plant-based. Ample contains probiotics, organic greens, more fiber, and less than half the sugar of Soylent. Unlike Soylent, Ample is also free of GMOs, soy, gluten, and artificial sweeteners.
What is the company structure and fundraising history?
What is the company structure and fundraising history?
Ample is a Delaware C-Corp founded in October 2015. We’ve gone through a few rounds of pre-seed and seed funding. We graduated from the 500 Startups accelerator in May 2016, then raised ~$1 million after our successful Indiegogo campaign in June 2016, $800k after launching our product a year later in April 2017 in a round led by Compound, and $2 million in May 2018 in a round led by Slow Ventures.
How is Ample manufactured?
How is Ample manufactured?
Our product development team led by Julie Zimmerman sources only the best ingredients from certified non-GMO suppliers—constantly vetting additional suppliers to ensure reliable supply and quality. To mix our ingredients and fill the bottles, we partner with a U.S.-based, certified organic, and NSF contract manufacturer who undergoes eight audits per year. The finished products are sent to our warehouses, which are then shipped after customers place orders.
How does Ample manage its environmental sustainability?
How does Ample manage its environmental sustainability?
We care deeply about the environment, with sustainability efforts that range from how we package and ship our products to what ingredients and suppliers we use. We are always looking for opportunities to reduce our environmental impact, with our current efforts listed below:
Recycled Bottles:
Our PET bottles are made from the most recyclable type of plastic. Our HDPE caps are also highly recyclable and made from post-consumer recycled materials.
New Bulk Versions of Ample:
Later this spring, we’ll be releasing bulk versions of our products to help reduce plastic waste.
Printed Materials:
We use FSC Certified Paper and carbon neutral printing presses (HP Indigo), and our inks contain no heavy metals, aromatic amines, or other environmentally harmful substances (HP ElectroInk).
Shipping Boxes:
Our shipping boxes are made from 100% post-consumer recycled materials and are Sustainable Forestry Initiative (SFI) certified.
What will funds be used for?
What will funds be used for?
We’ll use funds to bolster our product development and marketing teams. Adding new team members to our product development team will allow us to get out high-demand flavors like Chocolate and Coffee to customers faster, and to accelerate our ready-to-drink product launch. Additional marketing resources will allow us to produce high-end, engaging content that educates our customer base and creates community around nutrition, and also scale our retail and corporate channels faster.
What is the threat from large food company competition?
What is the threat from large food company competition?
Large food companies are spending 1-3% of total sales on R&D these days. Ultimately, it’s much too risky for them to create a new brand and hope it works out. Instead, most large food companies are in the game of acquiring smaller brands that have already proven to be successful, then helping them scale.
What’s your exit strategy?
What’s your exit strategy?
We’re open to two exit strategies. One scenario is that Ample goes public. As our investor Martin Green mentioned, he believes we could be the “Apple” of the nutrition world, helping to level up the food industry by way of making nutrition simple for others. The other potential exit is that we partner and are eventually acquired by a larger food company who believes in our mission and can help drive it forward.
Still have questions? Check the
discussion section.
Risks
The Companys business and operations are sensitive to general business and economic conditions in the United States.
The Companys business and operations are sensitive to general business and economic conditions in the United States. A host of factors beyond the Companys control could cause fluctuations in these conditions. Adverse conditions may include: recession, downturn or otherwise, local competition or changes in consumer taste. The Company maintains its cash with a major financial institution located in the United States of America, which it believes to be credit worthy. The Federal Deposit Insurance Corporation insures balances up to $250,000. At times, the Company may maintain balances in excess of the federally insured limits. These adverse conditions could affect the Companys financial condition and the results of its operations.
To date, the Company has not become profitable and relies on external financing to fund its operations.
The Company is a startup company. Since inception, the Company has relied upon issuances of securities to fund operating losses. The Company has not achieved profitable results and will incur additional costs prior to becoming profitable. These matters raise substantial doubt about the Company's ability to continue as a going concern.
While the Company intends to become profitable in the future, it cannot assure when or if it will be able to do so. If the Company fails to raise the Minimum Amount in this Offering or fail to execute its business plan successfully, then the Company will need to raise additional money in the future. Additional financing may not be available on favorable terms, or at all. The exact amount of funds raised, if any, will determine how quickly the Company can reach profitability on its operations. No assurance can be given that the Company will be able to raise capital when needed or at all, or that such capital, if available, will be on terms acceptable to us. If the Company is not able to raise additional capital, it will likely need to curtail its expansion plans or possibly cease operations.
The Company may have difficulty obtaining additional funding and the Company cannot assure you that additional capital will be available when needed, if at all, or if available, will be obtained on terms acceptable to the Company. If the Company raises additional funds by issuing debt securities, such debt instruments may provide for rights, preferences or privileges senior to the Securities. In addition, the terms of the debt securities issued could impose significant restrictions on the Companys operations. If the Company raises additional funds through collaborations and licensing arrangements, it might be required to relinquish significant rights to our technologies or product candidates or grant licenses on terms that are not favorable to the Company. If adequate funds are not available, the Company may have to delay, scale back, or eliminate some of its operations or our research development and commercialization activities. Under these circumstances, if the Company is unable to acquire additional capital or is required to raise it on terms that are less satisfactory than desired, it may have a material adverse effect on its financial condition.
The amount of capital the Company is attempting to raise in this Offering is not enough to sustain the Companys current business plan.
In order to achieve the Companys near and long-term goals, the Company will need to procure funds in addition to the amount raised in the Offering. There is no guarantee the Company will be able to raise such funds on acceptable terms or at all. If we are not able to raise sufficient capital in the future, we will not be able to execute our business plan, our continued operations will be in jeopardy and we may be forced to cease operations and sell or otherwise transfer all or substantially all of our remaining assets, which could cause a Purchaser to lose all or a portion of his or her investment.
The Company may face potential difficulties in obtaining capital.
The Company may have difficulty raising capital in the future as a result of, among other factors, its unprofitability, the inherent business risks associated with the Company, and present and future market conditions. The Companys future sources of revenue may not be sufficient to meet its future capital requirements. We will require additional funds to execute our business strategy and conduct our operations. If adequate funds are unavailable, we may be required to delay, reduce the scope of or eliminate one or more of our research, development or commercialization programs, product launches or marketing efforts, any of which may materially harm our business, financial condition and results of operations.
The Company may be adversely affected if found to have been non-compliant with the FDA regulations because of its employees, suppliers, or contractors.
The Products and marketing of the Products must be compliant with the Food and Drug Administration (the FDA) regulations. The Company trusts its employees and contractors with ensuring that the Companys labels and website are FDA compliant and factually accurate. If contractors manufacturing the Products fail to satisfy the FDA safety standard, the Company could be adversely affected and subject to harsh penalties.
The Company depends on suppliers and contractors to meet its regulatory and contractual obligations to its customers and conduct its operations.
Our ability to meet our obligations to our customers may be adversely affected if suppliers or contractors do not provide the agreed-upon supplies or perform the agreed-upon services in compliance with the FDA requirements, customer requirements, and in a timely and cost-effective manner. Likewise, the quality of the Products may be adversely impacted if a contractor or a supplier of the Products ingredients, do not meet required specifications and perform to our and our customers expectations. Our suppliers may be unable to quickly recover from natural disasters and other events beyond their control and may be subject to additional risks such as financial problems that limit their ability to conduct their operations. The risk of these adverse effects may be greater in circumstances where we rely on only one or two contractors or suppliers for a particular component.
The Products may utilize custom ingredients available from only one source. Continued availability of those ingredients at acceptable prices, or at all, may be affected for any number of reasons. The supply of components for a new or existing product could be delayed or constrained, or a key manufacturing contractor could delay shipments of completed Products to us adversely affecting our business and results of operations.
Negative public opinion, including on social media, could damage the Companys reputation and adversely affect its business.
Our reputation and the quality of our brand are critical to our business and success in existing markets, and will be critical to our success as we enter new markets. Any incident that erodes consumer loyalty for our brand could significantly reduce its value and damage our business. Reputation risk, or the risk to our business from negative public opinion, is inherent in our business. Negative public opinion can result from the Companys actual or alleged conduct. Because every customers taste preferences and reactions of the organism to the Products are different, there may be times when customers dislike the Products. The customers who dislike the Products may leave negative reviews, including on Amazon, which may influence other potential customers opinion about the Products and decrease the Companys sales. This may result in negative public opinion about the Company and the Products. Negative public opinion can adversely affect the Companys ability to attract and retain customers and employees and can expose the Company to litigation and regulatory action, which may be expensive and time-consuming.
Also, there has been a marked increase in the use of social media platforms and similar devices, including blogs, social media websites and other forms of internet-based communications that provide individuals with access to a broad audience of consumers and other interested persons. The availability of information on social media platforms is virtually immediate as is its impact. Information posted may be adverse to our interests or may be inaccurate, each of which may harm our performance, prospects or business. The harm may be immediate and may disseminate rapidly and broadly, without affording us an opportunity for redress or correction.
The Companys success depends on the experience and skill of the board of directors, its executive officers and key employees.
In particular, the Company is dependent on Connor Young who is the Chief Executive Officer of the Company. The Company has or intends to enter into employment agreement with Connor Young although there can be no assurance that it will do so or that he will continue to be employed by the Company for a particular period of time. The loss of Connor Young or any member of the board of directors or executive officer could harm the Companys business, financial condition, cash flow and results of operations.
In order for the Company to compete and grow, it must attract, recruit, retain and develop the necessary personnel who have the needed experience.
Recruiting and retaining highly qualified personnel is critical to our success. These demands may require us to hire additional personnel and will require our existing management personnel to develop additional expertise. We face intense competition for personnel. The failure to attract and retain personnel or to develop such expertise could delay or halt the development and commercialization of the Products. If we experience difficulties in hiring and retaining personnel in key positions, we could suffer from delays in product development, loss of customers and sales and diversion of management resources, which could adversely affect operating results. Our consultants and advisors may be employed by third parties and may have commitments under consulting or advisory contracts with third parties that may limit their availability to us.
The Company may implement new lines of business or offer new products and services within existing lines of business, which may not prove successful.
There are substantial risks and uncertainties associated with these efforts, particularly in instances where the markets are not fully developed. In developing and marketing new lines of business and/or new products and services, we may invest significant time and resources. Initial timetables for the introduction and development of new lines of business and/or new products or services may not be achieved, and price and profitability targets may not prove feasible. We may not be successful in introducing new products and services in response to industry trends or developments in technology, or those new products may not achieve market acceptance. As a result, we could lose business, be forced to price products and services on less advantageous terms to retain or attract clients, or be subject to cost increases. As a result, our business, financial condition or results of operations may be adversely affected.
The development and commercialization of the Products is highly competitive.
We face competition with respect to any products that we may seek to develop or commercialize in the future. The main competing products are Soylent, Huel, and Bear Power Foods. Many of our competitors have significantly greater financial, technical and human resources than we have and superior expertise in research and development and marketing approved products and services and thus may be better equipped than us to develop and commercialize products and services. These competitors also compete with us in recruiting and retaining qualified personnel and acquiring technologies. Smaller or early stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. Accordingly, our competitors may commercialize products more rapidly or effectively than we are able to, which would adversely affect our competitive position, the likelihood that our products and services will achieve initial market acceptance and our ability to generate meaningful additional revenues from our products.
Quality management plays an essential role in determining and meeting customer requirements, improving and maintaining the safety and efficacy of the Products.
Our future success depends on our ability to maintain and continuously improve our quality management program. An inability to address a quality or safety issue in an effective and timely manner may also cause negative publicity, a loss of customer confidence in us or our current or future products, and regulatory penalties, which may result in the loss of sales and difficulty in successfully launching new products. In addition, a successful claim brought against us in excess of available insurance or not covered by indemnification agreements, or any claim that results in significant adverse publicity against us, could have an adverse effect on our business and our reputation.
The Company relies on various intellectual property rights, including trademarks, in order to operate its business.
Such intellectual property rights, however, may not be sufficiently broad or otherwise may not provide us a significant competitive advantage. In addition, the steps that we have taken to maintain and protect our intellectual property may not prevent it from being challenged, invalidated, circumvented or designed-around, particularly in countries where intellectual property rights are not highly developed or protected. In some circumstances, enforcement may not be available to us because an infringer has a dominant intellectual property position or for other business reasons, or countries may require compulsory licensing of our intellectual property. Our failure to obtain or maintain intellectual property rights that convey competitive advantage, adequately protect our intellectual property or detect or prevent circumvention or unauthorized use of such property, could adversely impact our competitive position and results of operations. We also rely on nondisclosure and noncompetition agreements with employees, consultants and other parties to protect, in part, trade secrets and other proprietary rights. There can be no assurance that these agreements will adequately protect our trade secrets and other proprietary rights and will not be breached, that we will have adequate remedies for any breach, that others will not independently develop substantially equivalent proprietary information or that third parties will not otherwise gain access to our trade secrets or other proprietary rights.
As we expand our business, protecting our intellectual property will become increasingly important. The protective steps we have taken may be inadequate to deter our competitors from using our proprietary information. In order to protect or enforce our trademark rights, we may be required to initiate litigation against third parties, such as infringement lawsuits. Also, these third parties may assert claims against us with or without provocation. These lawsuits could be expensive, take significant time and could divert managements attention from other business concerns. The law relating to the scope and validity of claims in the technology field in which we operate is still evolving and, consequently, intellectual property positions in our industry are generally uncertain. We cannot assure you that we will prevail in any of these potential suits or that the damages or other remedies awarded, if any, would be commercially valuable.
From time to time, third parties may claim that one or more of the Products infringe their intellectual property rights.
Any dispute or litigation regarding trademarks or other intellectual property could be costly and time-consuming due to the uncertainty of intellectual property litigation and could divert our management and key personnel from our business operations. A claim of intellectual property infringement could force us to enter into a costly or restrictive license agreement, which might not be available under acceptable terms or at all, could require us to redesign the Products, which would be costly and time-consuming, and/or could subject us to an injunction against development and sale of the Products. We may have to pay substantial damages, including damages for past infringement if it is ultimately determined that the Products infringe third partys proprietary rights. Even if these claims are without merit, defending a lawsuit takes significant time, may be expensive and may divert managements attention from other business concerns. Any public announcements related to litigation or interference proceedings initiated or threatened against us could cause our business to be harmed. Our intellectual property portfolio may not be useful in asserting a counterclaim, or negotiating a license, in response to a claim of intellectual property infringement. In certain of our businesses we rely on third party intellectual property licenses and we cannot ensure that these licenses will be available to us in the future on favorable terms or at all.
The Company is subject to income taxes as well as non-income-based taxes, such as payroll, sales, use, value-added, net worth, property and goods and services taxes.
Significant judgment is required in determining our provision for income taxes and other tax liabilities. In the ordinary course of our business, there are many transactions and calculations where the ultimate tax determination is uncertain. Although we believe that our tax estimates are reasonable: (i) there is no assurance that the final determination of tax audits or tax disputes will not be different from what is reflected in our income tax provisions, expense amounts for non-income-based taxes and accruals, and (ii) any material differences could have an adverse effect on our financial position and results of operations in the period or periods for which determination is made.
The Company has not prepared any audited financial statements.
You have no audited financial information regarding the Companys capitalization or assets or liabilities on which to make your investment decision. If you feel the information provided is insufficient, you should not invest in the Company.
The Company is not subject to Sarbanes-Oxley regulations and may lack the financial controls and procedures of public companies.
The Company may not have the internal control infrastructure that would meet the standards of a public company, including the requirements of the Sarbanes Oxley Act of 2002. As a privately-held (non-public) Company, the Company is currently not subject to the Sarbanes Oxley Act of 2002, and its financial and disclosure controls and procedures reflect its status as a development stage, non-public company. There can be no guarantee that there are no significant deficiencies or material weaknesses in the quality of the Companys financial and disclosure controls and procedures. If it were necessary to implement such financial and disclosure controls and procedures, the cost to the Company of such compliance could be substantial and could have a material adverse effect on the Companys results of operations.
The SEC does not pass upon the merits of the Securities or the terms of this Offering, nor does it pass upon the accuracy or completeness of any offering document or literature.
You should not rely on the fact that our Form C is accessible through the SECs EDGAR filing system as an approval, endorsement or guarantee of compliance as it relates to this Offering.
The Companys management may have broad discretion in how the Company uses the net proceeds of this Offering.
Unless the Company has agreed to a specific use of the proceeds from this Offering, the Companys management will have considerable discretion over the use of proceeds from this Offering. You may not have the opportunity, as part of your investment decision, to assess whether the proceeds are being used appropriately.
The Company has the right to limit individual Purchasers commitment amount based on the Companys determination of a Purchasers sophistication.
The Company may prevent Purchasers from committing more than a certain amount to this Offering based on the Companys belief of the Purchasers sophistication and ability to assume the risk of the investment. This means that your desired investment amount may be limited or lowered based solely on the Companys determination and not in line with relevant investment limits set forth by the Regulation CF rules. This also means that other Purchasers may receive larger allocations of the Offering based solely on the Companys determination.
The Securities will not be freely tradable until one year from the initial purchase date. Although the Securities may be tradable under federal securities law, state securities regulations may apply, and each Purchaser should consult with his or her attorney.
You should be aware of the long-term nature of this investment. There is not now and likely will not be a public market for the Securities. Because the Securities have not been registered under the Securities Act or under the securities laws of any state or non-United States jurisdiction, the Securities have transfer restrictions and cannot be resold in the United States except pursuant to Rule 501 of Regulation CF. It is not currently contemplated that registration under the Securities Act or other securities laws will be effected. Limitations on the transfer of the Securities may also adversely affect the price that you may be able to obtain for the Securities in a private sale. Purchasers should be aware of the long-term nature of their investment in the Company. Each Purchaser in this Offering will be required to represent that it is purchasing the Securities for its own account, for investment purposes and not with a view to resale or distribution thereof.
Neither the Offering nor the Securities have been registered under federal or state securities laws, leading to an absence of certain regulation applicable to the Company.
No governmental agency has reviewed or passed upon this Offering, the Company or any Securities of the Company. The Company also has relied on exemptions from securities registration requirements under applicable state securities laws. Investors in the Company, therefore, will not receive any of the benefits that such registration would otherwise provide. Prospective investors must therefore assess the adequacy of disclosure and the fairness of the terms of this Offering on their own or in conjunction with their personal advisors.
Compliance with the criteria for securing exemptions under federal securities laws and the securities laws of the various states is extremely complex, especially in respect of those exemptions affording flexibility and the elimination of trading restrictions in respect of securities received in exempt transactions and subsequently disposed of without registration under the Securities Act or state securities laws. If, and to the extent that, claims or suits for rescission are brought and successfully concluded for failure to register any offering or other offerings or for acts or omissions constituting offenses under the Securities Act, the Exchange Act, or applicable state securities laws, the Company could be materially adversely affected, jeopardizing the Companys ability to operate successfully. Furthermore, the human and capital resources of the Company could be adversely affected by the need to defend actions under these laws, even if the Company is ultimately successful in its defense.
There is no guarantee of a return on Purchasers investment.
There is no assurance that a Purchaser will realize a return on its investment or that it will not lose its entire investment. For this reason, each Purchaser should read the Form C and all Exhibits carefully and should consult with its own attorney and business advisor prior to making any investment decision.
The Company has the right to extend the Offering deadline and to end the Offering early.
The Company may extend the Offering deadline beyond what is currently stated herein. This means that your investment may continue to be held with the Escrow Agent while the Company attempts to raise the Minimum Amount even after the Offering deadline stated herein is reached. You have the right to cancel your investment in the event the Company extends the Offering. If you choose to reconfirm your investment, your investment will not be accruing interest during this time and will simply be held until such time as the new Offering deadline is reached. Before the new Offering deadline is reached, if the Company does not receive the Minimum Amount, your investment will be returned to you without interest or deduction, or if the Company receives the Minimum Amount, funds will be released to the Company to be used as set forth herein. Upon or shortly after release of such funds to the Company, the Securities will be issued and distributed to you. The Company may also end the Offering early; if the Offering reaches its Target Offering Amount after 21 calendar days but before the Offering deadline, the Company can end the Offering with 5 business days notice. This means your failure to participate in the Offering in a timely manner, may prevent you from being able to participate it also means the Company may limit the amount of capital it can raise during the Offering by ending it early.
Purchasers will not become equity holders until the Company decides to convert the Securities into CF Shadow Securities or until an IPO or sale of the Company.
Purchasers will not have an ownership claim to the Company or to any of its assets or revenues for an indefinite amount of time, and depending on when and how the Securities are converted, Purchasers may never become equity holders of the Company. Purchasers will not become equity holders of the Company unless the Company receives a future round of financing great enough to trigger a conversion and the Company elects to convert the Securities. The Company is generally under no obligation to convert the Securities into CF Shadow Securities (the type of equity Securities Purchasers are entitled to receive upon such conversion). In certain instances, such as a sale of the Company, an IPO or a dissolution or bankruptcy, Purchasers may only have a right to receive cash, to the extent available, rather than equity in the Company.
The Securities do not provide Purchasers with voting rights, and even upon the conversion of the Security to CF Shadow Securities (which cannot be guaranteed), Purchasers will be required to enter into a proxy with the Intermediary to ensure any statutory voting rights are voted in tandem with the majority holders of whichever series of securities the CF Shadow Securities follow.
Purchasers will not have the right to vote upon matters of the Company even if and when their Securities are converted into CF Shadow Securities (which cannot be guaranteed). Upon such conversion, CF Shadow Securities will have no voting rights and even in circumstances where a statutory right to vote is provided by state law, the Purchasers are required to enter into a proxy agreement with the Intermediary ensuring they will vote with the majority of the security holders in the new round of equity financing upon which the Securities were converted. For example, if the Securities are converted upon a round offering Series B Preferred Shares, the Series B-CF Shadow Security holders will be required to enter into a proxy that allows the Intermediary to vote the same way as a majority of the Series B Preferred Shareholders vote. Thus, Purchasers will never be able to freely vote upon any director or other matters of the Company.
Purchasers will not be entitled to any inspection or information rights other than those required by Regulation CF.
Purchasers will not have the right to inspect the books and records of the Company or to receive financial or other information from the Company, other than as required by Regulation CF. Other security holders may have such rights. Regulation CF requires only the provision of an annual report on Form C and no additional information. This lack of information could put Purchasers at a disadvantage in general and with respect to other security holders.
In a dissolution or bankruptcy of the Company, Purchasers will be treated the same as common equity holders.
In a dissolution or bankruptcy of the Company, Purchasers which have not been converted will be entitled to distributions as if they were common stockholders. This means that such Purchasers will be at the lowest level of priority and will only receive distributions once all creditors as well as holders of more senior securities, including any preferred stockholders, have been paid in full.
Purchasers will be unable to declare the Security in default and demand repayment.
Unlike convertible notes and some other securities, the Securities do not have any default provisions upon which Purchasers will be able to demand repayment of their investment. The Company has ultimate discretion as to whether or not to convert the Securities upon a future equity financing and Purchasers have no right to demand such conversion. Only in limited circumstances, such as a Liquidity Event (as defined below), may Purchasers demand payment and even then, such payments will be limited to the amount of cash available to the Company.
There is no present market for the Securities and the Company has arbitrarily set the price.
The offering price was not established in a competitive market. We have arbitrarily set the price of the Securities with reference to the general status of the securities market and other relevant factors. The Offering price for the Securities should not be considered an indication of the actual value of the Securities and is not based on our net worth or prior earnings. We cannot assure you that the Securities could be resold by you at the Offering price or at any other price.
The Company may never elect to convert the Securities or undergo a Liquidity Event.
The Company may never receive a future equity financing or elect to convert the Securities upon such future financing. In addition, the Company may never undergo a Liquidity Event such as a sale of the Company or an IPO. If neither the conversion of the Securities nor a Liquidity Event occurs, Purchasers could be left holding the Securities in perpetuity. The Securities have numerous transfer restrictions and will likely be highly illiquid, with no secondary market on which to sell them. The Securities are not equity interests, have no ownership rights, have no rights to the Companys assets or profits and have no voting rights or ability to direct the Company or its actions.
The Company’s business and operations are sensitive to general business and economic conditions in the United States.
The Company’s business and operations are sensitive to general business and economic conditions in the United States. A host of factors beyond the Company’s control could cause fluctuations in these conditions. Adverse conditions may include: recession, downturn or otherwise, local competition or changes in consumer taste. The Company maintains its cash with a major financial institution located in the United States of America, which it believes to be credit worthy. The Federal Deposit Insurance Corporation insures balances up to $250,000. At times, the Company may maintain balances in excess of the federally insured limits. These adverse conditions could affect the Company’s financial condition and the results of its operations.
To date, the Company has not become profitable and relies on external financing to fund its operations
The Company is a startup company. Since inception, the Company has relied upon issuances of securities to fund operating losses. The Company has not achieved profitable results and will incur additional costs prior to becoming profitable. These matters raise substantial doubt about the Company's ability to continue as a going concern.
While the Company intends to become profitable in the future, it cannot assure when or if it will be able to do so. If the Company fails to raise the Minimum Amount in this Offering or fail to execute its business plan successfully, then the Company will need to raise additional money in the future. Additional financing may not be available on favorable terms, or at all. The exact amount of funds raised, if any, will determine how quickly the Company can reach profitability on its operations. No assurance can be given that the Company will be able to raise capital when needed or at all, or that such capital, if available, will be on terms acceptable to us. If the Company is not able to raise additional capital, it will likely need to curtail its expansion plans or possibly cease operations.
The Company may have difficulty obtaining additional funding and the Company cannot assure you that additional capital will be available when needed, if at all, or if available, will be obtained on terms acceptable to the Company. If the Company raises additional funds by issuing debt securities, such debt instruments may provide for rights, preferences or privileges senior to the Securities. In addition, the terms of the debt securities issued could impose significant restrictions on the Company’s operations. If the Company raises additional funds through collaborations and licensing arrangements, it might be required to relinquish significant rights to our technologies or product candidates or grant licenses on terms that are not favorable to the Company. If adequate funds are not available, the Company may have to delay, scale back, or eliminate some of its operations or our research development and commercialization activities. Under these circumstances, if the Company is unable to acquire additional capital or is required to raise it on terms that are less satisfactory than desired, it may have a material adverse effect on its financial condition.
The amount of capital the Company is attempting to raise in this Offering is not enough to sustain the Company’s current business plan
In order to achieve the Company’s near and long-term goals, the Company will need to procure funds in addition to the amount raised in the Offering. There is no guarantee the Company will be able to raise such funds on acceptable terms or at all. If we are not able to raise sufficient capital in the future, we will not be able to execute our business plan, our continued operations will be in jeopardy and we may be forced to cease operations and sell or otherwise transfer all or substantially all of our remaining assets, which could cause a Purchaser to lose all or a portion of his or her investment.
The Company may face potential difficulties in obtaining capital.
The Company may have difficulty raising capital in the future as a result of, among other factors, its unprofitability, the inherent business risks associated with the Company, and present and future market conditions. The Company’s future sources of revenue may not be sufficient to meet its future capital requirements. We will require additional funds to execute our business strategy and conduct our operations. If adequate funds are unavailable, we may be required to delay, reduce the scope of or eliminate one or more of our research, development or commercialization programs, product launches or marketing efforts, any of which may materially harm our business, financial condition and results of operations.
The Company may be adversely affected if found to have been non-compliant with the FDA regulations because of its employees, suppliers, or contractors.
The Products and marketing of the Products must be compliant with the Food and Drug Administration (the “FDA”) regulations. The Company trusts its employees and contractors with ensuring that the Company’s labels and website are FDA compliant and factually accurate. If contractors manufacturing the Products fail to satisfy the FDA safety standard, the Company could be adversely affected and subject to harsh penalties.
The Company depends on suppliers and contractors to meet its regulatory and contractual obligations to its customers and conduct its operations.
Our ability to meet our obligations to our customers may be adversely affected if suppliers or contractors do not provide the agreed-upon supplies or perform the agreed-upon services in compliance with the FDA requirements, customer requirements, and in a timely and cost-effective manner. Likewise, the quality of the Products may be adversely impacted if a contractor or a supplier of the Products’ ingredients, do not meet required specifications and perform to our and our customers’ expectations. Our suppliers may be unable to quickly recover from natural disasters and other events beyond their control and may be subject to additional risks such as financial problems that limit their ability to conduct their operations. The risk of these adverse effects may be greater in circumstances where we rely on only one or two contractors or suppliers for a particular component.
The Products may utilize custom ingredients available from only one source. Continued availability of those ingredients at acceptable prices, or at all, may be affected for any number of reasons. The supply of components for a new or existing product could be delayed or constrained, or a key manufacturing contractor could delay shipments of completed Products to us adversely affecting our business and results of operations.
Negative public opinion, including on social media, could damage the Company’s reputation and adversely affect its business.
Our reputation and the quality of our brand are critical to our business and success in existing markets, and will be critical to our success as we enter new markets. Any incident that erodes consumer loyalty for our brand could significantly reduce its value and damage our business. Reputation risk, or the risk to our business from negative public opinion, is inherent in our business. Negative public opinion can result from the Company’s actual or alleged conduct. Because every customer’s taste preferences and reactions of the organism to the Products are different, there may be times when customers dislike the Products. The customers who dislike the Products may leave negative reviews, including on Amazon, which may influence other potential customers’ opinion about the Products and decrease the Company’s sales. This may result in negative public opinion about the Company and the Products. Negative public opinion can adversely affect the Company’s ability to attract and retain customers and employees and can expose the Company to litigation and regulatory action, which may be expensive and time-consuming.
Also, there has been a marked increase in the use of social media platforms and similar devices, including blogs, social media websites and other forms of internet-based communications that provide individuals with access to a broad audience of consumers and other interested persons. The availability of information on social media platforms is virtually immediate as is its impact. Information posted may be adverse to our interests or may be inaccurate, each of which may harm our performance, prospects or business. The harm may be immediate and may disseminate rapidly and broadly, without affording us an opportunity for redress or correction.
The Company’s success depends on the experience and skill of the board of directors, its executive officers and key employees.
In particular, the Company is dependent on Connor Young who is the Chief Executive Officer of the Company. The Company has or intends to enter into employment agreement with Connor Young although there can be no assurance that it will do so or that he will continue to be employed by the Company for a particular period of time. The loss of Connor Young or any member of the board of directors or executive officer could harm the Company’s business, financial condition, cash flow and results of operations.
In order for the Company to compete and grow, it must attract, recruit, retain and develop the necessary personnel who have the needed experience.
Recruiting and retaining highly qualified personnel is critical to our success. These demands may require us to hire additional personnel and will require our existing management personnel to develop additional expertise. We face intense competition for personnel. The failure to attract and retain personnel or to develop such expertise could delay or halt the development and commercialization of the Products. If we experience difficulties in hiring and retaining personnel in key positions, we could suffer from delays in product development, loss of customers and sales and diversion of management resources, which could adversely affect operating results. Our consultants and advisors may be employed by third parties and may have commitments under consulting or advisory contracts with third parties that may limit their availability to us.
The Company may implement new lines of business or offer new products and services within existing lines of business, which may not prove successful.
There are substantial risks and uncertainties associated with these efforts, particularly in instances where the markets are not fully developed. In developing and marketing new lines of business and/or new products and services, we may invest significant time and resources. Initial timetables for the introduction and development of new lines of business and/or new products or services may not be achieved, and price and profitability targets may not prove feasible. We may not be successful in introducing new products and services in response to industry trends or developments in technology, or those new products may not achieve market acceptance. As a result, we could lose business, be forced to price products and services on less advantageous terms to retain or attract clients, or be subject to cost increases. As a result, our business, financial condition or results of operations may be adversely affected.
The development and commercialization of the Products is highly competitive.
We face competition with respect to any products that we may seek to develop or commercialize in the future. The main competing products are Soylent, Huel, and Bear Power Foods. Many of our competitors have significantly greater financial, technical and human resources than we have and superior expertise in research and development and marketing approved products and services and thus may be better equipped than us to develop and commercialize products and services. These competitors also compete with us in recruiting and retaining qualified personnel and acquiring technologies. Smaller or early stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. Accordingly, our competitors may commercialize products more rapidly or effectively than we are able to, which would adversely affect our competitive position, the likelihood that our products and services will achieve initial market acceptance and our ability to generate meaningful additional revenues from our products.
Quality management plays an essential role in determining and meeting customer requirements, improving and maintaining the safety and efficacy of the Products.
Our future success depends on our ability to maintain and continuously improve our quality management program. An inability to address a quality or safety issue in an effective and timely manner may also cause negative publicity, a loss of customer confidence in us or our current or future products, and regulatory penalties, which may result in the loss of sales and difficulty in successfully launching new products. In addition, a successful claim brought against us in excess of available insurance or not covered by indemnification agreements, or any claim that results in significant adverse publicity against us, could have an adverse effect on our business and our reputation.
The Company relies on various intellectual property rights, including trademarks, in order to operate its business.
Such intellectual property rights, however, may not be sufficiently broad or otherwise may not provide us a significant competitive advantage. In addition, the steps that we have taken to maintain and protect our intellectual property may not prevent it from being challenged, invalidated, circumvented or designed-around, particularly in countries where intellectual property rights are not highly developed or protected. In some circumstances, enforcement may not be available to us because an infringer has a dominant intellectual property position or for other business reasons, or countries may require compulsory licensing of our intellectual property. Our failure to obtain or maintain intellectual property rights that convey competitive advantage, adequately protect our intellectual property or detect or prevent circumvention or unauthorized use of such property, could adversely impact our competitive position and results of operations. We also rely on nondisclosure and noncompetition agreements with employees, consultants and other parties to protect, in part, trade secrets and other proprietary rights. There can be no assurance that these agreements will adequately protect our trade secrets and other proprietary rights and will not be breached, that we will have adequate remedies for any breach, that others will not independently develop substantially equivalent proprietary information or that third parties will not otherwise gain access to our trade secrets or other proprietary rights.
As we expand our business, protecting our intellectual property will become increasingly important. The protective steps we have taken may be inadequate to deter our competitors from using our proprietary information. In order to protect or enforce our trademark rights, we may be required to initiate litigation against third parties, such as infringement lawsuits. Also, these third parties may assert claims against us with or without provocation. These lawsuits could be expensive, take significant time and could divert management’s attention from other business concerns. The law relating to the scope and validity of claims in the technology field in which we operate is still evolving and, consequently, intellectual property positions in our industry are generally uncertain. We cannot assure you that we will prevail in any of these potential suits or that the damages or other remedies awarded, if any, would be commercially valuable.
From time to time, third parties may claim that one or more of the Products infringe their intellectual property rights.
Any dispute or litigation regarding trademarks or other intellectual property could be costly and time-consuming due to the uncertainty of intellectual property litigation and could divert our management and key personnel from our business operations. A claim of intellectual property infringement could force us to enter into a costly or restrictive license agreement, which might not be available under acceptable terms or at all, could require us to redesign the Products, which would be costly and time-consuming, and/or could subject us to an injunction against development and sale of the Products. We may have to pay substantial damages, including damages for past infringement if it is ultimately determined that the Products infringe third party’s proprietary rights. Even if these claims are without merit, defending a lawsuit takes significant time, may be expensive and may divert management’s attention from other business concerns. Any public announcements related to litigation or interference proceedings initiated or threatened against us could cause our business to be harmed. Our intellectual property portfolio may not be useful in asserting a counterclaim, or negotiating a license, in response to a claim of intellectual property infringement. In certain of our businesses we rely on third party intellectual property licenses and we cannot ensure that these licenses will be available to us in the future on favorable terms or at all.
The Company is subject to income taxes as well as non-income-based taxes, such as payroll, sales, use, value-added, net worth, property and goods and services taxes.
Significant judgment is required in determining our provision for income taxes and other tax liabilities. In the ordinary course of our business, there are many transactions and calculations where the ultimate tax determination is uncertain. Although we believe that our tax estimates are reasonable: (i) there is no assurance that the final determination of tax audits or tax disputes will not be different from what is reflected in our income tax provisions, expense amounts for non-income-based taxes and accruals, and (ii) any material differences could have an adverse effect on our financial position and results of operations in the period or periods for which determination is made.
The Company has not prepared any audited financial statements.
You have no audited financial information regarding the Company’s capitalization or assets or liabilities on which to make your investment decision. If you feel the information provided is insufficient, you should not invest in the Company.
The Company may compensate affiliates and partners for promotional activities.
Certain of the Company’s existing stockholders and other affiliates and partners of the Company may be compensated as a result of their efforts to promote the success of the Company. The interests of these parties may not always coincide with the Company or purchasers of the Company’s stock.
The Company is not subject to Sarbanes-Oxley regulations and may lack the financial controls and procedures of public companies.
The Company may not have the internal control infrastructure that would meet the standards of a public company, including the requirements of the Sarbanes Oxley Act of 2002. As a privately-held (non-public) Company, the Company is currently not subject to the Sarbanes Oxley Act of 2002, and it’s financial and disclosure controls and procedures reflect its status as a development stage, non-public company. There can be no guarantee that there are no significant deficiencies or material weaknesses in the quality of the Company’s financial and disclosure controls and procedures. If it were necessary to implement such financial and disclosure controls and procedures, the cost to the Company of such compliance could be substantial and could have a material adverse effect on the Company’s results of operations.
The SEC does not pass upon the merits of the Securities or the terms of this Offering, nor does it pass upon the accuracy or completeness of any offering document or literature.
You should not rely on the fact that our Form C is accessible through the SEC’s EDGAR filing system as an approval, endorsement or guarantee of compliance as it relates to this Offering.
The Company’s management may have broad discretion in how the Company uses the net proceeds of this Offering.
Unless the Company has agreed to a specific use of the proceeds from this Offering, the Company’s management will have considerable discretion over the use of proceeds from this Offering. You may not have the opportunity, as part of your investment decision, to assess whether the proceeds are being used appropriately.
The Company has the right to limit individual Purchasers’ commitment amount based on the Company’s determination of a Purchaser’s sophistication.
The Company may prevent Purchasers from committing more than a certain amount to this Offering based on the Company’s belief of the Purchaser’s sophistication and ability to assume the risk of the investment. This means that your desired investment amount may be limited or lowered based solely on the Company’s determination and not in line with relevant investment limits set forth by the Regulation CF rules. This also means that other Purchasers may receive larger allocations of the Offering based solely on the Company’s determination.
The Securities will not be freely tradable until one year from the initial purchase date. Although the Securities may be tradable under federal securities law, state securities regulations may apply, and each Purchaser should consult with his or her attorney.
You should be aware of the long-term nature of this investment. There is not now and likely will not be a public market for the Securities. Because the Securities have not been registered under the Securities Act or under the securities laws of any state or non-United States jurisdiction, the Securities have transfer restrictions and cannot be resold in the United States except pursuant to Rule 501 of Regulation CF. It is not currently contemplated that registration under the Securities Act or other securities laws will be effected. Limitations on the transfer of the Securities may also adversely affect the price that you may be able to obtain for the Securities in a private sale. Purchasers should be aware of the long-term nature of their investment in the Company. Each Purchaser in this Offering will be required to represent that it is purchasing the Securities for its own account, for investment purposes and not with a view to resale or distribution thereof.
Neither the Offering nor the Securities have been registered under federal or state securities laws, leading to an absence of certain regulation applicable to the Company.
No governmental agency has reviewed or passed upon this Offering, the Company or any Securities of the Company. The Company also has relied on exemptions from securities registration requirements under applicable state securities laws. Investors in the Company, therefore, will not receive any of the benefits that such registration would otherwise provide. Prospective investors must therefore assess the adequacy of disclosure and the fairness of the terms of this Offering on their own or in conjunction with their personal advisors.
Compliance with the criteria for securing exemptions under federal securities laws and the securities laws of the various states is extremely complex, especially in respect of those exemptions affording flexibility and the elimination of trading restrictions in respect of securities received in exempt transactions and subsequently disposed of without registration under the Securities Act or state securities laws. If, and to the extent that, claims or suits for rescission are brought and successfully concluded for failure to register any offering or other offerings or for acts or omissions constituting offenses under the Securities Act, the Exchange Act, or applicable state securities laws, the Company could be materially adversely affected, jeopardizing the Company’s ability to operate successfully. Furthermore, the human and capital resources of the Company could be adversely affected by the need to defend actions under these laws, even if the Company is ultimately successful in its defense.
There is no guarantee of a return on Purchaser’s investment.
There is no assurance that a Purchaser will realize a return on its investment or that it will not lose its entire investment. For this reason, each Purchaser should read the Form C and all Exhibits carefully and should consult with its own attorney and business advisor prior to making any investment decision.
The Company has the right to extend the Offering deadline and to end the Offering early.
The Company may extend the Offering deadline beyond what is currently stated herein. This means that your investment may continue to be held with the Escrow Agent while the Company attempts to raise the Minimum Amount even after the Offering deadline stated herein is reached. You have the right to cancel your investment in the event the Company extends the Offering. If you choose to reconfirm your investment, your investment will not be accruing interest during this time and will simply be held until such time as the new Offering deadline is reached. Before the new Offering deadline is reached, if the Company does not receive the Minimum Amount, your investment will be returned to you without interest or deduction, or if the Company receives the Minimum Amount, funds will be released to the Company to be used as set forth herein. Upon or shortly after release of such funds to the Company, the Securities will be issued and distributed to you. The Company may also end the Offering early; if the Offering reaches its Target Offering Amount after 21 calendar days but before the Offering deadline, the Company can end the Offering with 5 business days’ notice. This means your failure to participate in the Offering in a timely manner, may prevent you from being able to participate – it also means the Company may limit the amount of capital it can raise during the Offering by ending it early.
Purchasers will not become equity holders until the Company decides to convert the Securities into CF Shadow Securities or until an IPO or sale of the Company.
Purchasers will not have an ownership claim to the Company or to any of its assets or revenues for an indefinite amount of time, and depending on when and how the Securities are converted, Purchasers may never become equity holders of the Company. Purchasers will not become equity holders of the Company unless the Company receives a future round of financing great enough to trigger a conversion and the Company elects to convert the Securities. The Company is generally under no obligation to convert the Securities into CF Shadow Securities (the type of equity Securities Purchasers are entitled to receive upon such conversion). In certain instances, such as a sale of the Company, an IPO or a dissolution or bankruptcy, Purchasers may only have a right to receive cash, to the extent available, rather than equity in the Company.
The Securities do not provide Purchasers with voting rights, and even upon the conversion of the Security to CF Shadow Securities (which cannot be guaranteed), Purchasers will be required to enter into a proxy with the Intermediary to ensure any statutory voting rights are voted in tandem with the majority holders of whichever series of securities the CF Shadow Securities follow.
Purchasers will not have the right to vote upon matters of the Company even if and when their Securities are converted into CF Shadow Securities (which cannot be guaranteed). Upon such conversion, CF Shadow Securities will have no voting rights and even in circumstances where a statutory right to vote is provided by state law, the Purchasers are required to enter into a proxy agreement with the Intermediary ensuring they will vote with the majority of the security holders in the new round of equity financing upon which the Securities were converted. For example, if the Securities are converted upon a round offering Series B Preferred Shares, the Series B-CF Shadow Security holders will be required to enter into a proxy that allows the Intermediary to vote the same way as a majority of the Series B Preferred Shareholders vote. Thus, Purchasers will never be able to freely vote upon any director or other matters of the Company.
Purchasers will not be entitled to any inspection or information rights other than those required by Regulation CF.
Purchasers will not have the right to inspect the books and records of the Company or to receive financial or other information from the Company, other than as required by Regulation CF. Other security holders may have such rights. Regulation CF requires only the provision of an annual report on Form C and no additional information. This lack of information could put Purchasers at a disadvantage in general and with respect to other security holders.
In a dissolution or bankruptcy of the Company, Purchasers will be treated the same as common equity holders.
In a dissolution or bankruptcy of the Company, Purchasers which have not been converted will be entitled to distributions as if they were common stockholders. This means that such Purchasers will be at the lowest level of priority and will only receive distributions once all creditors as well as holders of more senior securities, including any preferred stockholders, have been paid in full.
Purchasers will be unable to declare the Security in “default” and demand repayment.
Unlike convertible notes and some other securities, the Securities do not have any “default” provisions upon which Purchasers will be able to demand repayment of their investment. The Company has ultimate discretion as to whether or not to convert the Securities upon a future equity financing and Purchasers have no right to demand such conversion. Only in limited circumstances, such as a Liquidity Event (as defined below), may Purchasers demand payment and even then, such payments will be limited to the amount of cash available to the Company.
There is no present market for the Securities and the Company has arbitrarily set the price.
The offering price was not established in a competitive market. We have arbitrarily set the price of the Securities with reference to the general status of the securities market and other relevant factors. The Offering price for the Securities should not be considered an indication of the actual value of the Securities and is not based on our net worth or prior earnings. We cannot assure you that the Securities could be resold by you at the Offering price or at any other price.
The Company may never elect to convert the Securities or undergo a Liquidity Event.
The Company may never receive a future equity financing or elect to convert the Securities upon such future financing. In addition, the Company may never undergo a Liquidity Event such as a sale of the Company or an IPO. If neither the conversion of the Securities nor a Liquidity Event occurs, Purchasers could be left holding the Securities in perpetuity. The Securities have numerous transfer restrictions and will likely be highly illiquid, with no secondary market on which to sell them. The Securities are not equity interests, have no ownership rights, have no rights to the Company’s assets or profits and have no voting rights or ability to direct the Company or its actions.
Discussion
$336,154
raised from
396 investors
Bonnie YoungInvested about 1 month ago
Jack SmithInvested about 1 month ago
Bradley TuneInvested about 1 month ago
Tessa GeeInvested about 1 month ago
Vivek RaghunathanInvested about 1 month ago
Collin YoungInvested about 1 month ago
Hatem BarhumInvested about 1 month ago
Ashwin VidiyalaInvested about 1 month ago
David LongoInvested about 1 month ago
Steven CoxInvested about 1 month ago
