The Company will be taking advantage of temporary rules that relax some of the requirements
for a crowdfund offering.
In March 2020, the SEC passed a Temporary Final Rule intended to assist small businesses with
capital raising in the Regulation Crowdfunding market due to the COVID-19 pandemic and
relaxed or modified some rules for offerings initiated through February 28, 2021 (as extended in
August 2020.). This offering is taking advantage of some or all of these relaxed rules which may
create additional risks for investors.
Pursuant to SEC Rule §227.201(z)(2) the Company is launching the Offering prior to providing
The financial information that has been omitted is not currently available and will be provided by
an amendment to the offering materials. Following the filing of this amendment investors should
review the complete set of offering materials including previously omitted financial information prior to making an investment decision. No investment commitments will be accepted until after
such financial information has been provided. Failure of the investor to review these financial
statements when they are provided could result in the investor not understanding the Company’s
The Company may choose to close the Offering as soon as the target fundraising amount is met.
Pursuant to SEC Rule §227.201(z)(1)(iv)(C) the Company may close the Offering sooner than the
required 21 days should the Target Amount be met early. While investors will be notified in
advance if the Offering is closed early, this creates additional risks for investors by not allowing
additional time to fully assess the transaction.
Investors may only cancel their commitment to invest during the first 48 hours after such
Pursuant to SEC Rule §227.201(z)(1)(iv)(D) the Company may limit investor cancellations after
48 hours following their commitment unless there is a material change in the Offering. This
increases risk for investors as they will be fully committed to the Offering 48 hours after their
Risks Related to the Company’s Business and Industry
The development and commercialization of our services is highly competitive.
We face competition with respect to any services that we may seek to develop or commercialize
in the future. Our competitors include major companies worldwide. 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 services and thus may be better equipped than us to develop and commercialize 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 services more rapidly or effectively than we are able to, which would adversely
affect our competitive position, the likelihood that our services will achieve initial market
acceptance and our ability to generate meaningful additional revenues from our services.
Quality management plays an essential role in determining and meeting customer requirements,
preventing defects, improving the Company’s services and services and maintaining the
integrity of the data that supports the safety and efficacy of our services.
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 services, which may result in the loss of sales and difficulty in successfully launching new
services. 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.
We may implement new lines of business or offer new products and services within existing lines of business.
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.
Security breaches and other disruptions could compromise our information and expose us to
liability, which would cause our business and reputation to suffer.
We collect and store sensitive data, including intellectual property, our proprietary business
information and that of our customers, and personally identifiable information of our customers
and employees, in our data centers and on our networks. The secure processing, maintenance and transmission of this information is critical to our operations and business strategy. Despite our security measures, our information technology and infrastructure may be vulnerable to attacks by hackers or breached due to employee error, malfeasance or other disruptions. Any such breach could compromise our networks and the information stored there could be accessed, publicly disclosed, lost or stolen. Any such access, disclosure or other loss of information could result in legal claims or proceedings, liability under laws that protect the privacy of personal information, and regulatory penalties, disrupt our operations and the services we provide to customers, and damage our reputation, and cause a loss of confidence in our services, which could adversely affect our business/operating margins, revenues and competitive position.
The secure processing, maintenance and transmission of this information is critical to our
operations and business strategy, and we devote significant resources to protecting our information by API key authentication for limited access to proprietary software, password protection tools, password management software, employee cybersecurity training, advance phishing and malware detection software. The expenses associated with protecting our information/ these steps could reduce our operating margins.
An intentional or unintentional disruption, failure, misappropriation or corruption of our
network and information systems could severely affect our business.
Such an event might be caused by computer hacking, computer viruses, worms and other
destructive or disruptive software, "cyber attacks" and other malicious activity, as well as natural
disasters, power outages, terrorist attacks and similar events. Such events could have an adverse
impact on us and our customers, including degradation of service, service disruption, excessive
call volume to call centers and damage to our plant, equipment and data. In addition, our future
results could be adversely affected due to the theft, destruction, loss, misappropriation or release
of confidential customer data or intellectual property. Operational or business delays may result
from the disruption of network or information systems and the subsequent remediation activities.
Moreover, these events may create negative publicity resulting in reputation or brand damage with
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 Christian Rodriguez and Adrian E. Garcia who are the
Lead Engineer and Chief Executive Officer of the Company, respectively. The Company has or
intends to enter into employment agreements with Christian and Adrian although there can be no
assurance that it will do so or that they will continue to be employed by the Company for a
particular period of time. The loss of Christian and Adrian or any member of the board of directors
or executive officer could harm the Company’s business, financial condition, cash flow and results
We rely on various intellectual property rights, including patents and trademarks in order to
operate our 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 patent 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 our services infringe their
intellectual property rights.
Any dispute or litigation regarding patents or other intellectual property could be costly and timeconsuming due to the complexity of our technology and 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 our services, which would be costly and time-consuming, and/or could subject us to an
injunction against development and sale of certain services. We may have to pay substantial
damages, including damages for past infringement if it is ultimately determined that our services
infringe on a 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.
Although dependent on certain key personnel, the Company does not have any key man life
insurance policies on any such people.
The Company is dependent on Christian and Adrian in order to conduct its operations and execute
its business plan, however, the Company has not purchased any insurance policies with respect to
those individuals in the event of their death or disability. Therefore, if Christian and Adrian die or
become disabled, the Company will not receive any compensation to assist with such person’s
absence. The loss of such person could negatively affect the Company and its operations.
We are subject to income taxes as well as non-income based taxes, such as payroll, sales, use,
value-added, net worth, and goods and services taxes, in both the U.S. and various foreign
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 nonincome 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
We are not subject to Sarbanes-Oxley regulations and lack the financial controls and safeguards
required of public companies.
We do not have the internal infrastructure necessary, and are not required, to complete an
attestation about our financial controls that would be required under Section 404 of the SarbanesOxley Act of 2002. There can be no assurance that there are no significant deficiencies or material
weaknesses in the quality of our financial controls. We expect to incur additional expenses and
diversion of management’s time if and when it becomes necessary to perform the system and
process evaluation, testing and remediation required in order to comply with the management
certification and auditor attestation requirements.
The Company has indicated that it has engaged in certain transactions with related persons.
Please see the section of this Memorandum entitled "Transactions with Related Persons and
Conflicts of Interest" for further details.
Changes in employment laws or regulation could harm our performance.
Various federal and state labor laws govern our relationship with our employees and affect
operating costs. These laws include minimum wage requirements, overtime pay, healthcare reform
and the implementation of the Patient Protection and Affordable Care Act, unemployment tax
rates, workers’ compensation rates, citizenship requirements, union membership and sales taxes.
A number of factors could adversely affect our operating results, including additional governmentimposed increases in minimum wages, overtime pay, paid leaves of absence and mandated health
benefits, mandated training for employees, increased tax reporting and tax payment, changing
regulations from the National Labor Relations Board and increased employee litigation including
claims relating to the Fair Labor Standards Act.
The Company’s business operations may be materially adversely affected by a pandemic such
as the Coronavirus (COVID-19) outbreak.
In December 2019, a novel strain of coronavirus was reported to have surfaced in Wuhan, China,
which spread throughout other parts of the world, including the United States. On January 30,
2020, the World Health Organization declared the outbreak of the coronavirus disease (COVID19) a “Public Health Emergency of International Concern.” On January 31, 2020, U.S. Health and
Human Services Secretary Alex M. Azar II declared a public health emergency for the United
States to aid the U.S. healthcare community in responding to COVID-19, and on March 11, 2020
the World Health Organization characterized the outbreak as a “pandemic.” COVID-19 resulted
in a widespread health crisis that adversely affected the economies and financial markets
worldwide. The Company’s business could be materially and adversely affected. The extent to
which COVID-19 impacts the Company’s business will depend on future developments, which
are highly uncertain and cannot be predicted, including new information which may emerge
concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact,
among others. If the disruptions posed by COVID-19 or other matters of global concern continue
for an extended period of time, the Company’s operations may be materially adversely affected.
We face risks related to health epidemics and other outbreaks, which could significantly disrupt
the Company’s operations and could have a material adverse impact on us.
The outbreak of pandemics and epidemics could materially and adversely affect the Company’s
business, financial condition, and results of operations. If a pandemic occurs in areas in which we
have material operations or sales, the Company’s business activities originating from affected
areas, including sales, materials, and supply chain related activities, could be adversely affected.
Disruptive activities could include the temporary closure of facilities used in the Company’s
supply chain processes, restrictions on the export or shipment of products necessary to run the
Company’s business, business closures in impacted areas, and restrictions on the Company’s
employees’ or consultants’ ability to travel and to meet with customers, vendors or other business
relationships. The extent to which a pandemic or other health outbreak impacts the Company’s
results will depend on future developments, which are highly uncertain and cannot be predicted,
including new information which may emerge concerning the severity of a virus and the actions
to contain it or treat its impact, among others. Pandemics can also result in social, economic, and
labor instability which may adversely impact the Company’s business.
If the Company’s employees or employees of any of the Company’s vendors, suppliers or
customers become ill or are quarantined and in either or both events are therefore unable to work,
the Company’s operations could be subject to disruption. The extent to which a pandemic affects
the Company’s results will depend on future developments that are highly uncertain and cannot be
We face risks relating to public health conditions such as the COVID-19 pandemic, which could
adversely affect the Company’s customers, business, and results of operations.
Our business and prospects could be materially adversely affected by the COVID-19 pandemic or
recurrences of that or any other such disease in the future. Material adverse effects from COVID19 and similar occurrences could result in numerous known and currently unknown ways including
from quarantines and lockdowns which impair the Company’s business including marketing and
sales efforts. [Describe how a quarantine has or may in the future negatively affect your employees
and their ability to perform their duties]. [Describe how a quarantine has or may in the future
negatively affect your suppliers, their employees, and overall ability to fulfill orders]. If the
Company purchases materials from suppliers in affected areas, the Company may not be able to
procure such products in a timely manner. The effects of a pandemic can place travel restrictions
on key personnel which could have a material impact on the business. In addition, a significant
outbreak of contagious diseases in the human population could result in a widespread health crisis
that could adversely affect the economies and financial markets of many countries, resulting in an
economic downturn that could reduce the demand for the Company’s products and impair the
Company’s business prospects including as a result of being unable to raise additional capital on
acceptable terms to us, if at all.
The United States tax rules applicable to an investment in the Securities and the underlying
Nano are uncertain and the tax consequences to an investor of an investment in the Securities
could differ from the investor’s expectations.
The tax rules applicable to the Securities and the underlying Nano held by the Company are
complex, and no statutory, judicial, or administrative authority directly addresses the
characterization of an investment in Nano. The tax consequences to an Investor of the Securities
could differ from the Investor’s expectations. Investor’s should consult their own tax advisors.
Regulatory changes or actions may alter the nature of an investment in the Securities or restrict
the use of Nano or the operation of the Nano network in a manner that adversely affects an
investment in the Securities.
Until recently, little or no regulatory attention has been directed toward cryptocurrencies and the
Nano network by U.S. federal and state governments, foreign governments and self-regulatory
agencies. As cryptocurrencies have grown in popularity and in market size, the U.S. Congress and
certain U.S. agencies (e.g., FinCEN and the Federal Bureau of Investigation) have begun to
examine the operations of cryptocurrency networks, cryptocurrency users and cryptocurrency
exchange markets. Local state regulators such as the California Department of Financial
Institutions and the New York State Department of Financial Services have also initiated
examinations of cryptocurrencies. Additionally, a U.S. federal magistrate judge in the U.S. District
Court for the Eastern District of Texas has ruled that "Bitcoin is a currency or form of money,"
although there is no indication yet whether other courts or federal or state regulators will follow
the federal magistrate’s opinion. There is a possibility of future regulatory change altering, perhaps
to a material extent, the nature of an investment in the Securities or the ability of the Company to
continue to operate. Currently, neither the SEC nor the CFTC has formally asserted regulatory
authority over the Bitcoin network or Bitcoin trading and ownership. To the extent that Bitcoins
are determined to be a security, commodity future or other regulated asset, or to the extent that a
U.S. or foreign government or quasi-governmental agency exerts regulatory authority over the
Nano network or Nano trading and ownership, trading or ownership in Nano or the Securities may
be adversely affected.
To the extent that future regulatory actions or policies limit the ability to exchange Nano or
utilize them for payments, the demand for Nano will decrease.
New regulations may make it more difficult to acquire and/or use Nano. Furthermore, regulatory
actions may limit the ability of end-users to convert Nano into fiat currency (e.g., U.S. Dollars) or
use Nano to pay for goods and services. Such regulatory actions or policies would negatively affect
our business and decrease the value of the Securities.
Bitcoin currently faces an uncertain regulatory landscape in not only the United States but also
in many foreign jurisdictions such as the European Union.
While the German Ministry of Finance has declared Bitcoin to be "Rechnungseinheiten" (a form
of private money that is recognized as a unit of account, but not recognized in the same manner as
fiat currency), most regulatory bodies have not yet issued official statements regarding intention
to regulate or determinations on regulation of Nano, Nano users and the Nano network.
Conversely, regulatory bodies in some countries such as Canada and India have declined to
exercise regulatory authority when afforded the opportunity. Various foreign jurisdictions may, in
the near future, adopt laws, regulations or directives that affect the Nano network and its users,
particularly Nano exchanges and service providers that fall within such jurisdictions’ regulatory
scope. Such laws, regulations or directives may conflict with those of the United States and may
negatively impact the acceptance of Nano by users, merchants and service providers outside of the
United States and may therefore impede the growth of the Nano economy. We are not able to
predict the effect of any future regulatory change on the Company or Nano, but such change could
be substantial and adverse to the Company or the value of the Securities.
It may be illegal now, or in the future, to acquire, own, hold, sell or use Nano in one or more
Although currently Nano is not regulated or is lightly regulated in most countries, including the
United States, one or more countries may take regulatory actions in the future that severely restricts
the right to acquire, own, hold, sell or use Nano or to exchange Nano for fiat currency. Such an
action may also result in the restriction of ownership, holding or trading in the Securities. Such a
restriction could result in the termination and liquidation of the Company at a time that is
disadvantageous to Investor, or may adversely affect an investment in the Company.
The Company may be deemed a "money transmitter."
To the extent that the activities of the Company cause it to be deemed a "money transmitter" under
the regulations promulgated by FinCEN under the authority of the U.S. Bank Secrecy Act, the
Company may be required to comply with FinCEN regulations, including those that would
mandate the Company to implement anti-money laundering programs, make certain reports to
FinCEN and maintain certain records. Such additional regulatory obligations may cause the
Company to incur extraordinary expenses, possibly affecting an investment in the Securities in a
material and adverse manner. Additionally, certain states including California, Idaho and New
York require Nano businesses to register on the state level as money transmitters.
Current and future legislation, CFTC and SEC rulemaking and other regulatory developments
may impact the manner in which Nano are treated for classification and clearing purposes.
In particular, Nano may not be excluded from the definition of "commodity future" or "security"
by such future CFTC and SEC rulemaking, respectively. As of the date of this Memorandum, the
Company is not aware of any rules that have been proposed to regulate Nano as commodity futures
or securities. The Company cannot be certain as to how future regulatory developments will impact
the treatment of Nano under the law. Such additional registrations may result in extraordinary
expenses of the Company thereby materially and adversely impacting the Securities.
We operate in a highly regulated environment, and if we are found to be in violation of any of
the federal, state, or local laws or regulations applicable to us, our business could suffer.
We are also subject to a wide range of federal, state, and local laws and regulations, such as local
licensing requirements, and retail financing, debt collection, consumer protection, environmental,
health and safety, creditor, wage-hour, anti-discrimination, whistleblower and other employment
practices laws and regulations and we expect these costs to increase going forward. The violation
of these or future requirements or laws and regulations could result in administrative, civil, or
criminal sanctions against us, which may include fines, a cease and desist order against the subject
operations or even revocation or suspension of our license to operate the subject business. As a
result, we have incurred and will continue to incur capital and operating expenditures and other
costs to comply with these requirements and laws and regulations.
The collection, processing, storage, use and disclosure of personal data could give rise to
liabilities as a result of governmental regulation, conflicting legal requirements or differing
views of personal privacy rights.
We receive, collect, process, transmit, store and use a large volume of personally identifiable
information and other sensitive data from customers and potential customers. There are federal,
state and foreign laws regarding privacy, recording telephone calls and the storing, sharing, use,
disclosure and protection of personally identifiable information and sensitive data. Specifically,
personally identifiable information is increasingly subject to legislation and regulations to protect
the privacy of personal information that is collected, processed and transmitted. Any violations of
these laws and regulations may require us to change our business practices or operational structure,
address legal claims and sustain monetary penalties and/or other harms to our business.
The regulatory framework for privacy issues in the United States and internationally is constantly
evolving and is likely to remain uncertain for the foreseeable future. The interpretation and
application of such laws is often uncertain, and such laws may be interpreted and applied in a
manner inconsistent with our current policies and practices or require changes to the features of
our platform. If either we or our third party service providers are unable to address any privacy
concerns, even if unfounded, or to comply with applicable laws and regulations, it could result in
additional costs and liability, damage our reputation and harm our business.
Negative public opinion could damage our reputation and adversely affect 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 our actual or alleged conduct in any number of
activities, including corporate governance, and actions taken by government regulators and
community organizations in response to those activities. Negative public opinion can also result
from media coverage, whether accurate or not. Negative public opinion can adversely affect our
ability to attract and retain customers and employees and can expose us to litigation and regulatory
Our business and operating results may be impacted by adverse economic conditions.
General economic factors and conditions in the United States or worldwide, including the general
interest rate environment, unemployment rates and residential home values, may affect borrower
willingness to seek loans and investor ability and desire to invest in loans. For example, during the
2008 financial crisis, banks severely constrained lending activities, which caused a decline in loan
issuances. A similar crisis could negatively impact the willingness of investors and borrowers to
participate on our marketplace. Although the U.S. and global economies have shown
improvement, the recovery remains modest and uncertain. If present U.S. and global economic
uncertainties persist, many of our investors may delay or reduce their investment in the loans
facilitated through our marketplace. Adverse economic conditions could also reduce the number
of individuals seeking to invest in loans facilitated on our marketplace, reduce the number of
qualified borrowers seeking loans on our marketplace and result in borrowers being unable to make
payments. Should any of these situations occur, our revenue and transactions on our marketplace
would decline and our business would be negatively impacted.
Our regulatory compliance programs and other enterprise risk management efforts cannot
eliminate all systemic risk.
We have devoted significant time and energy to develop our enterprise risk management program,
including substantially expanded regulatory compliance policies and procedures. We expect to
continue to do so in the future. The goal of enterprise risk management is not to eliminate all risk,
but rather to identify, assess and rank risk. The goal of regulatory compliance policies is to have
formal written procedures in place that are intended to reduce the risk of inadvertent regulatory
violations. Nonetheless, our efforts to identify, monitor and manage risks may not be fully
effective. Many of our methods of managing risk and exposures depend upon the implementation
of federal and state regulations and other policies or procedures affecting our customers or
employees. Management of operational, legal and regulatory risks requires, among other things,
policies and procedures, and these policies and procedures may not be fully effective in managing
While many of the risks that we monitor and manage are described in this Risk Factors section of
this Memorandum, our business operations could also be affected by additional factors that are not
presently described in this section or known to us or that we currently consider immaterial to our
We may face competition from other companies that offer smart card technology, other
innovative payment technologies and payment processing, which could result in loss of our
existing business and adversely impact our ability to successfully market additional services.
Our primary competitors in the payment processing market include other independent processors,
as well as financial institutions, independent sales organizations, and, potentially card networks.
Many of our competitors are companies who are larger than we are and have greater financial and
operational resources than we have. These factors may allow them to offer better pricing terms or
incentives to customers, which could result in a loss of our potential or current customers or could
force us to lower our prices as well. Either of these actions could have a significant effect on our
revenues and earnings.
In addition to competition that our system faces from the use of cash, checks, credit and debit
cards, existing payment systems and the providers of financial services and low cost bank
accounts, there are a number of other products that use smart card technology in connection with
a funds transfer system. During the past several years, smart card technology has become
increasingly prevalent. We believe that the most competitive product in this marketplace is EMV,
a system that is promoted by most of the major card companies such as Visa, MasterCard, JCB
and American Express. Also, governments and financial institutions are, to an increasing extent,
implementing general-purpose reloadable prepaid cards as a low-cost alternative to provide
financial services to the unbanked population. Moreover, while we see the acceptance over time
of using a mobile phone to facilitate financial services as an opportunity, there is a risk that other
companies will be able to introduce such services to the marketplace successfully and that
customers may prefer those services to ours, based on technology, price or other factors.
If our payment processors and disbursement partners experience an interruption in service, our
business and revenue would be harmed.
Our payment processors and disbursement partners have experienced service outages or an
inability to connect with our processing systems and this may reoccur in the future. If a payment
processor experiences a service outage or service interruption that results in our being unable to
collect funds from customers, our liquidity could be harmed and we may not meet our capital
requirements. We do not directly access the ACH system or payment card networks such as Visa
and MasterCard, which systems enable our acceptance of bank account-funded transactions, credit
cards and debit cards. As a result, we rely on banks and other payment processors and disbursement
partners to process transactions. In the event of service outages in the payment card or ACH
networks, or if our payment processors or disbursement partners were unable to access the payment
card or ACH networks, our business would be harmed.
The Company could be negatively impacted if found to have infringed on intellectual property
Technology companies, including many of the Company’s competitors, frequently enter into
litigation based on allegations of patent infringement or other violations of intellectual property
rights. In addition, patent holding companies seek to monetize patents they have purchased or
otherwise obtained. As the Company grows, the intellectual property rights claims against it will
likely increase. The Company intends to vigorously defend infringement actions in court and
before the U.S. International Trade Commission. The plaintiffs in these actions frequently seek
injunctions and substantial damages. Regardless of the scope or validity of such patents or other
intellectual property rights, or the merits of any claims by potential or actual litigants, the Company
may have to engage in protracted litigation. If the Company is found to infringe one or more patents
or other intellectual property rights, regardless of whether it can develop non-infringing
technology, it may be required to pay substantial damages or royalties to a third-party, or it may
be subject to a temporary or permanent injunction prohibiting the Company from marketing or
selling certain services. In certain cases, the Company may consider the desirability of entering
into licensing agreements, although no assurance can be given that such licenses can be obtained
on acceptable terms or that litigation will not occur. These licenses may also significantly increase
the Company’s operating expenses.
Regardless of the merit of particular claims, litigation may be expensive, time-consuming,
disruptive to the Company’s operations and distracting to management. In recognition of these
considerations, the Company may enter into arrangements to settle litigation. If one or more legal
matters were resolved against the Company’s consolidated financial statements for that reporting
period could be materially adversely affected. Further, such an outcome could result in significant
compensatory, punitive or trebled monetary damages, disgorgement of revenue or profits, remedial
corporate measures or injunctive relief against the Company that could adversely affect its
financial condition and results of operations.
Indemnity provisions in various agreements potentially expose us to substantial liability for
intellectual property infringement and other losses.
Our agreements with advertisers, advertising agencies, customers and other third parties may
include indemnification provisions under which we agree to indemnify them for losses suffered or
incurred as a result of claims of intellectual property infringement, damages caused by us to
property or persons, or other liabilities relating to or arising from our products, services or other
contractual obligations. The term of these indemnity provisions generally survives termination or
expiration of the applicable agreement. Large indemnity payments would harm our business,
financial condition and results of operations. In addition, any type of intellectual property lawsuit,
whether initiated by us or a third party, would likely be time consuming and expensive to resolve
and would divert management’s time and attention.
We rely heavily on our technology and intellectual property, but we may be unable to adequately
or cost-effectively protect or enforce our intellectual property rights, thereby weakening our
competitive position and increasing operating costs.
To protect our rights in our services and technology, we rely on a combination of copyright and
trademark laws, patents, trade secrets, confidentiality agreements with employees and third parties,
and protective contractual provisions. We also rely on laws pertaining to trademarks and domain
names to protect the value of our corporate brands and reputation. Despite our efforts to protect
our proprietary rights, unauthorized parties may copy aspects of our services or technology, obtain
and use information, marks, or technology that we regard as proprietary, or otherwise violate or
infringe our intellectual property rights. In addition, it is possible that others could independently
develop substantially equivalent intellectual property. If we do not effectively protect our
intellectual property, or if others independently develop substantially equivalent intellectual
property, our competitive position could be weakened.
Effectively policing the unauthorized use of our services and technology is time-consuming and
costly, and the steps taken by us may not prevent misappropriation of our technology or other
proprietary assets. The efforts we have taken to protect our proprietary rights may not be sufficient
or effective, and unauthorized parties may copy aspects of our services, use similar marks or
domain names, or obtain and use information, marks, or technology that we regard as proprietary.
We may have to litigate to enforce our intellectual property rights, to protect our trade secrets, or
to determine the validity and scope of others’ proprietary rights, which are sometimes not clear or
may change. Litigation can be time consuming and expensive, and the outcome can be difficult to
We rely on agreements with third parties to provide certain services, goods, technology, and
intellectual property rights necessary to enable us to implement some of our applications.
Our ability to implement and provide our applications and services to our clients depends, in part,
on services, goods, technology, and intellectual property rights owned or controlled by third
parties. These third parties may become unable to or refuse to continue to provide these services,
goods, technology, or intellectual property rights on commercially reasonable terms consistent
with our business practices, or otherwise discontinue a service important for us to continue to
operate our applications. If we fail to replace these services, goods, technologies, or intellectual
property rights in a timely manner or on commercially reasonable terms, our operating results and
financial condition could be harmed. In addition, we exercise limited control over our third-party
vendors, which increases our vulnerability to problems with technology and services those vendors
provide. If the services, technology, or intellectual property of third parties were to fail to perform
as expected, it could subject us to potential liability, adversely affect our renewal rates, and have
an adverse effect on our financial condition and results of operations.
We depend on profitable royalty-bearing licenses of our technology, and if we are unable to
maintain and generate such license agreements, then we may not be able to sustain existing
levels of revenue or increase revenue.
We depend upon the identification, investment in and license of new patents for our revenues. If
we are unable to maintain such license agreements and to continue to develop new license
arrangements, then we may not have the resources to identify new technology-based opportunities
for future patents and inventions in order to maintain sustainable revenue and growth.
Our current or future license agreements may not provide the volume or quality of royalty revenue
to sustain our business. In some cases, other technology sources may compete against us as they
seek to license and commercialize technologies. These and other strategies may reduce the number
of technology sources and potential clients to whom we can market our services. Our inability to
maintain current relationships and sources of technology or to secure new licensees, may have a
material adverse effect on our business and results of operations.
If we fail to maintain or expand our relationships with our suppliers, we may not have adequate
access to new or key technology necessary for our services, which may impair our ability to
deliver leading-edge services.
In addition to the technologies we develop, our suppliers develop product innovations at our
direction that are requested by our customers. Further, we rely heavily on our component suppliers,
such as Amazon Web Services, Nano, Twilio, SendGrid, Hetzner, to provide us with leading-edge
components that conform to required specifications or contractual arrangements on time and in
accordance with a product roadmap. If we are not able to maintain or expand our relationships
with our suppliers or continue to leverage their research and development capabilities to develop
new technologies desired by our customers, our ability to deliver leading-edge products in a timely
manner may be impaired and we could be required to incur additional research and development
expenses. Also, disruption in our supply chain or the need to find alternative suppliers could impact
the costs and/or timing associated with procuring necessary products, components and services.
Similarly, suppliers have operating risks that could impact our business. These risks could create
product time delays, inventory and invoicing problems, staging delays, and other operational
We must acquire or develop new products, evolve existing ones, address any defects or errors,
and adapt to technology change.
Technical developments, client requirements, programming languages, and industry standards
change frequently in our markets. As a result, success in current markets and new markets will
depend upon our ability to enhance current products, address any product defects or errors, acquire
or develop and introduce new products that meet client needs, keep pace with technology changes,
respond to competitive products, and achieve market acceptance. Product development requires
substantial investments for research, refinement, and testing. We may not have sufficient resources
to make necessary product development investments. We may experience technical or other
difficulties that will delay or prevent the successful development, introduction, or implementation
of new or enhanced products. We may also experience technical or other difficulties in the
integration of acquired technologies into our existing platform and applications. Inability to
introduce or implement new or enhanced products in a timely manner could result in loss of market
share if competitors are able to provide solutions to meet customer needs before we do, give rise
to unanticipated expenses related to further development or modification of acquired technologies
as a result of integration issues, and adversely affect future performance.
Our failure to deliver high quality server solutions could damage our reputation and diminish
demand for our products, and subject us to liability.
Our customers require our products to perform at a high level, contain valuable features and be
extremely reliable. The design of our server solutions is sophisticated and complex, and the process
for manufacturing, assembling and testing our server solutions is challenging. Occasionally, our
design or manufacturing processes may fail to deliver products of the quality that our customers
require. For example, a vendor may provide us with a defective component that failed under certain
heavy use applications. As a result, our product would need to be repaired. The vendor may agree
to pay for the costs of the repairs, but we may incur costs in connection with the recall and diverted
resources from other projects. New flaws or limitations in our products may be detected in the
future. Part of our strategy is to bring new products to market quickly, and first-generation products
may have a higher likelihood of containing undetected flaws. If our customers discover defects or
other performance problems with our products, our customers’ businesses, and our reputation, may
be damaged. Customers may elect to delay or withhold payment for defective or underperforming
products, request remedial action, terminate contracts for untimely delivery, or elect not to order
additional products. If we do not properly address customer concerns about our products, our
reputation and relationships with our customers may be harmed. In addition, we may be subject to
product liability claims for a defective product. Any of the foregoing could have an adverse effect
on our business and results of operations.
Cyclical and seasonal fluctuations in the economy, in internet usage and in traditional retail
shopping may have an effect on our business.
Both cyclical and seasonal fluctuations in internet usage and traditional retail seasonality may
affect our business. Internet usage generally slows during the summer months, and queries
typically increase significantly in the fourth quarter of each year. These seasonal trends may cause
fluctuations in our quarterly results, including fluctuations in revenues.
The products we sell are advanced, and we need to rapidly and successfully develop and
introduce new products in a competitive, demanding and rapidly changing environment.
To succeed in our intensely competitive industry, we must continually improve, refresh and expand
our product and service offerings to include newer features, functionality or solutions, and keep
pace with price-to-performance gains in the industry. Shortened product life cycles due to
customer demands and competitive pressures impact the pace at which we must introduce and
implement new technology. This requires a high level of innovation by both our software
developers and the suppliers of the third-party software components included in our systems. In
addition, bringing new solutions to the market entails a costly and lengthy process, and requires
us to accurately anticipate customer needs and technology trends. We must continue to respond to
market demands, develop leading technologies and maintain leadership in analytic data solutions
performance and scalability, or our business operations may be adversely affected.
We must also anticipate and respond to customer demands regarding the compatibility of our
current and prior offerings. These demands could hinder the pace of introducing and implementing
new technology. Our future results may be affected if our products cannot effectively interface and
perform well with software products of other companies and with our customers’ existing IT
infrastructures, or if we are unsuccessful in our efforts to enter into agreements allowing
integration of third-party technology with our database and software platforms. Our efforts to
develop the interoperability of our products may require significant investments of capital and
employee resources. In addition, many of our principal products are used with products offered by
third parties and, in the future, some vendors of non-Company products may become less willing
to provide us with access to their products, technical information and marketing and sales support.
As a result of these and other factors, our ability to introduce new or improved solutions could be
adversely impacted and our business would be negatively affected.
Industry consolidation may result in increased competition, which could result in a loss of
customers or a reduction in revenue.
Some of our competitors have made or may make acquisitions or may enter into partnerships or
other strategic relationships to offer more comprehensive services than they individually had
offered or achieve greater economies of scale. In addition, new entrants not currently considered
to be competitors may enter our market through acquisitions, partnerships or strategic
relationships. We expect these trends to continue as companies attempt to strengthen or maintain
their market positions. The potential entrants may have competitive advantages over us, such as
greater name recognition, longer operating histories, more varied services and larger marketing
budgets, as well as greater financial, technical and other resources. The companies resulting from
combinations or that expand or vertically integrate their business to include the market that we
address may create more compelling service offerings and may offer greater pricing flexibility
than we can or may engage in business practices that make it more difficult for us to compete
effectively, including on the basis of price, sales and marketing programs, technology or service
functionality. These pressures could result in a substantial loss of our customers or a reduction in
Our business could be negatively impacted by cyber security threats, attacks and other
Like others in our industry, we continue to face advanced and persistent attacks on our information
infrastructure where we manage and store various proprietary information and
sensitive/confidential data relating to our operations. These attacks may include sophisticated
malware (viruses, worms, and other malicious software programs) and phishing emails that attack
our products or otherwise exploit any security vulnerabilities. These intrusions sometimes may be
zero-day malware that are difficult to identify because they are not included in the signature set of
commercially available antivirus scanning programs. Experienced computer programmers and
hackers may be able to penetrate our network security and misappropriate or compromise our
confidential information or that of our customers or other third-parties, create system disruptions,
or cause shutdowns. Additionally, sophisticated software and applications that we produce or
procure from third-parties may contain defects in design or manufacture, including "bugs" and
other problems that could unexpectedly interfere with the operation of the information
infrastructure. A disruption, infiltration or failure of our information infrastructure systems or any
of our data centers as a result of software or hardware malfunctions, computer viruses, cyber
attacks, employee theft or misuse, power disruptions, natural disasters or accidents could cause
breaches of data security, loss of critical data and performance delays, which in turn could
adversely affect our business.
If we do not respond to technological changes or upgrade our websites and technology systems,
our growth prospects and results of operations could be adversely affected.
To remain competitive, we must continue to enhance and improve the functionality and features
of our websites and technology infrastructure. As a result, we will need to continue to improve and
expand our hosting and network infrastructure and related software capabilities. These
improvements may require greater levels of spending than we have experienced in the past.
Without such improvements, our operations might suffer from unanticipated system disruptions,
slow application performance or unreliable service levels, any of which could negatively affect
our reputation and ability to attract and retain customers and contributors. Furthermore, in order
to continue to attract and retain new customers, we are likely to incur expenses in connection with
continuously updating and improving our user interface and experience. We may face significant
delays in introducing new services, products and enhancements. If competitors introduce new
products and services using new technologies or if new industry standards and practices emerge,
our existing websites and our proprietary technology and systems may become obsolete or less
competitive, and our business may be harmed. In addition, the expansion and improvement of our
systems and infrastructure may require us to commit substantial financial, operational and
technical resources, with no assurance that our business will improve.
The Company depends on the performance of distributors, carriers and other resellers.
The Company distributes its products through cellular network carriers, wholesalers, national and
regional retailers, and value-added resellers, many of whom distribute products from competing
manufacturers. The Company also sells its products and third-party products in most of its major
markets directly to education, enterprise and government customers, and consumers and small and
mid-sized businesses through its online and retail stores.
Carriers providing cellular network service for iPhone typically subsidize users’ purchases of the
device. There is no assurance that such subsidies will be continued at all or in the same amounts
upon renewal of the Company’s agreements with these carriers or in agreements the Company
enters into with new carriers.
Many resellers have narrow operating margins and have been adversely affected in the past by
weak economic conditions. Some resellers have perceived the expansion of the Company’s direct
sales as conflicting with their business interests as distributors and resellers of the Company’s
products. Such a perception could discourage resellers from investing resources in the distribution
and sale of the Company’s products or lead them to limit or cease distribution of those products.
The Company has invested and will continue to invest in programs to enhance reseller sales,
including staffing selected resellers’ stores with Company employees and contractors, and
improving product placement displays. These programs could require a substantial investment
while providing no assurance of return or incremental revenue. The financial condition of these
resellers could weaken, these resellers could stop distributing the Company’s products, or
uncertainty regarding demand for the Company’s products could cause resellers to reduce their
ordering and marketing of the Company’s products.
Risks Related to the Securities
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 might 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.
No Guarantee of Return on 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
A majority of the Company is owned by a small number of owners.
Prior to the Offering the Company’s current owners of 20% or more beneficially own up to 52.8%
of the Company. Subject to any fiduciary duties owed to our other owners or investors under
Delaware law, these owners may be able to exercise significant influence over matters requiring
owner approval, including the election of directors or managers and approval of significant
Company transactions, and will have significant control over the Company’s management and
policies. Some of these persons may have interests that are different from yours. For example,
these owners may support proposals and actions with which you may disagree. The concentration
of ownership could delay or prevent a change in control of the Company or otherwise discourage
a potential acquirer from attempting to obtain control of the Company, which in turn could reduce
the price potential investors are willing to pay for the Company. In addition, these owners could
use their voting influence to maintain the Company’s existing management, delay or prevent
changes in control of the Company, or support or reject other management and board proposals
that are subject to owner approval.
The Company has the right to extend the Offering deadline.
The Company may extend the Offering deadline beyond what is currently stated herein. This
means that your investment may continue to be held in escrow while the Company attempts to
raise the Minimum Amount even after the Offering deadline stated herein is reached. 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 without the Company receiving the Minimum Amount, at
which time it will be returned to you without interest or deduction, or the Company receives the
Minimum Amount, at which time it 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 Securities will be effectively subordinate to any of our debt that is secured.
The Securities will be unsecured, unguaranteed obligations of the Company and will be effectively
subordinated to any present or future secured debt obligations that we may incur in the future to
the extent of the value of the assets securing that debt. The effect of this subordination is that if we
are involved in a bankruptcy, liquidation, dissolution, reorganization or similar proceeding, or
upon a default in payment on, or the acceleration of, any of our secured debt, if any, our assets that
secure debt will be available to pay obligations on the Securities only after all debt under our
secured debt, if any, has been paid in full from those assets. Holders of the Securities will
participate in any remaining assets ratably with all of our other unsecured and unsubordinated
creditors, including trade creditors. We may not have sufficient assets remaining to pay amounts
due on any or all of the Securities then outstanding.
We are permitted to incur more debt, which may increase our risk of the inability to pay interest
and principal on the Securities when it comes due.
We are not restricted from incurring additional secured and/or unsecured debt or other liabilities.
If we incur additional debt or liabilities, your security may be subordinate to the payment of
principal or interest on such other future debt and our ability to pay our obligations on the
Securities could be adversely affected. We expect that we will from time to time incur additional
debt and other liabilities. In addition, we are not restricted from paying dividends or issuing or
repurchasing our equity interests.
The provisions of the Securities relating to a liquidation event or change of control transactions
will not necessarily protect you.
The provisions in the Securities will not necessarily afford you protection in the event of a
transaction that may adversely affect you, including a reorganization, restructuring, merger or
other similar transaction involving us. These transactions may not involve a "liquidation event" or
"change of control" which would trigger these protective provisions. Except in certain
circumstances, the Securities will not permit the holders of the Securities to require us to
repurchase the Securities in the event of a takeover, recapitalization or similar transaction.
We may not be able to repurchase all of the Securities upon a liquidation event or change of
control repurchase event.
Upon the occurrence of events constituting a liquidation event or change of control, we will be
required to offer to repurchase the Securities. We may not have sufficient funds to repurchase the
Securities in cash at such time or have the ability to arrange necessary financing on acceptable
terms. In addition, our ability to repurchase the Securities for cash may be limited by law or the
terms of other agreements relating to our indebtedness outstanding at the time.
We may not be able to generate sufficient cash flow to meet our interest payment obligations on
Our ability to generate sufficient cash flow from operations to make scheduled interest payments
on the Securities will depend on our future financial performance, which will be affected by a
range of economic, competitive, and business factors, many of which are outside of our control.
The Company will be in default if it is unable to pay interest or principal when due, which could
force us to discontinue our business. If we do not generate sufficient cash flow from operations,
we may have to undertake alternative financing plans, such as refinancing or restructuring our
debt, selling assets, reducing or delaying capital investments, or seeking to raise additional capital.
We cannot assure you that any refinancing would be possible, that any assets could be sold, or, if
sold, of the timing of the sales and the amount of proceeds realized from those sales, or that
additional financing could be obtained on acceptable terms, if at all, or would be permitted under
the terms of the agreements governing our indebtedness then outstanding. Our inability to generate
sufficient cash flow to satisfy our interest payments on the Securities would severely negatively
impact your investment in the Securities.
You will not have a vote or influence on the management of the Company.
Substantially all decisions with respect to the management of the Company will be made
exclusively by the officers, directors, managers or employees of the Company. You, as a
Purchaser, will have a very limited ability to vote on issues of Company management and will not
have the right or power to take part in the management of the Company and will not be represented
on the board of directors or managers of the Company. Accordingly, no person should purchase a
Security unless he or she is willing to entrust all aspects of management to the Company.
You have limited opportunities to convert your Securities into common stock.
You will only be able to convert your Securities into common stock upon the occurrence of one or
more of the following events: upon the (i) maturity of your Securities; (ii) occurrence of any
conversion event and/or event of default under your Securities (please see the section entitled "The
Offering and The Securities" below for more information about the conversion events and events
of default under the Securities); or (iii) listing of shares of the common stock for public trading on
any exchange, quotation system or bulletin board. There are no other events which will trigger
your right to convert your Securities and you should factor that into your criteria for determining
whether an investment in the Securities is appropriate for you.
Debt holders have priority over shareholders in the event of the Company’s bankruptcy or
In the event of our bankruptcy or liquidation, debt holders, will have priority to the Company’s
assets prior to any preferred or common shareholders receiving any assets upon liquidation. After
repayment of all indebtedness, the Company may not have any assets to distribute to shareholders.
The conversion price of the common stock, which shall be determined by the Company (please
see the section entitled "The Offering and The Securities" below for more information on the
determination of conversion price) and may be substantially higher than the pro forma net tangible
book value per share of the Company’s outstanding common stock at the time of conversion. As a
result, you may incur immediate and substantial dilution in the per share net tangible book value
of your shares of common stock when you convert. Additionally, if the Company issues additional
shares of common stock in the future, you may experience further dilution.
The Company has the right to conduct multiple closings during the Offering.
If the Company meets certain terms and conditions, and more than thirty (30) days remain before
the Offering Deadline, an intermediate close of the Offering can occur, which will allow the
Company to draw down on the first $100,000 of the proceeds of the offering committed and
captured during the relevant period, as well as any amounts raised after. The Company may choose
to continue the Offering thereafter. Purchasers should be mindful that this means they can make
multiple investment commitments in the Offering, which may be subject to different cancellation
rights. For example, if an intermediate close occurs and later a material change occurs as the
Offering continues, Purchasers previously closed upon will not have the right to re-confirm their
investment as it will be deemed completed.
In addition to the risks listed above, businesses are often subject to risks not foreseen or fully
appreciated by the management. It is not possible to foresee all risks that may affect us. Moreover,
the Company cannot predict whether the Company will successfully effectuate the Company’s
current business plan. Each prospective Purchaser is encouraged to carefully analyze the risks and
merits of an investment in the Securities and should take into consideration when making such
analysis, among other, the Risk Factors discussed above.
THE SECURITIES OFFERED INVOLVE A HIGH DEGREE OF RISK AND MAY RESULT
IN THE LOSS OF YOUR ENTIRE INVESTMENT. ANY PERSON CONSIDERING THE
PURCHASE OF THESE SECURITIES SHOULD BE AWARE OF THESE AND OTHER
FACTORS SET FORTH IN THIS FORM C AND SHOULD CONSULT WITH HIS OR HER
LEGAL, TAX AND FINANCIAL ADVISORS PRIOR TO MAKING AN INVESTMENT IN
THE SECURITIES. THE SECURITIES SHOULD ONLY BE PURCHASED BY PERSONS
WHO CAN AFFORD TO LOSE ALL OF THEIR INVESTMENT.