The Truth is in the Tone | An AI-based platform for voice and emotion analytics
- AI-based voice analytics platform that can understand a person’s voice tone
- Small and focused team with high-margin data product
- Rapidly increasing sales pipeline (Q1/2022 is 3x of all of 2021)
- Two products with existing customers (six figures per license)
- No competitor in our current field of business
- Raised $750k from angel investors to date
Note: This deal is being conducted pursuant to the SEC's temporary relief rules, and therefore has provided self-certified financials instead of reviewed financial statements in compliance with Reg CF Rule 201(bb).
The world understands you, but does not hear youEdit
When was the last time you had a conversation on a robotic customer service call and all you wanted was to be heard? Why can the software understand your commands but not hear your frustration?
Research shows that 40% of the information in a message is in the tone of the voice, so our words and their tone go together like peanut butter and jelly. Alexa, Siri, Google Assistant, and other tools have made great strides towards bringing voice technology into everyone’s hands.
Technology has also made much progress in teaching computers the meaning of our words through the exploding field of Natural Language Processing (NLP).
With all of this existing technology, we are still missing the 40% of the message that is embedded in the tone of our voice. In essence, existing technologies are tone-deaf.
Our vision at Helios is to make this crucial component of human verbal communication universally available by systematically translating the tone of the voice into valuable pieces of information that increase the emotional intelligence of our future voice platforms.
Emotional intelligence is on the decline globallyEdit
It doesn't have to be this way. Helios' ground-breaking platform can analyze voice and provide unique tonal signatures that identify the emotion of the speaker (such as hesitancy, anger, confidence and others). This new world of emotion AI and speech analytics is just starting to be explored by scientists and startups around the world.
Emotional intelligence (EQ) has been negatively impacted with the rise of social media, always-on computing, and an experience that does not consider emotions.
Prof. Earl Miller, a neuroscientist at Massachusetts Institute of Technology, told The Guardian “your brain can only produce one or two thoughts” in your conscious mind at once. That’s it. “We’re very, very single-minded.” We have “very limited cognitive capacity”.
This new wave of tonal analysis that Helios provides is an imperative for the next-generation of voice-first communication.
A 2018 Science Alert article by Peter Dockrill notes "An analysis of some 730,000 IQ test results by researchers from the Ragnar Frisch Centre for Economic Research in Norway reveals that the Flynn effect hit its peak for people born during the mid-1970s and has significantly declined ever since." In other words, our EQ and IQ are being negatively impacted in our current world of technology, and we at Helios are trying to do our part to reverse this trend.
Helios allows us all to be truly heardEdit
Close your eyes and picture the last time you had one of those long, grueling and exhausting days. Now find one of these moments when you had the opportunity to discuss your day with your partner or best friend. Those subtle nuances of your voice that capture the experiences from that long day can be instantly detected by those that know you best. This innately human ability lets us connect and be closer.
We at Helios have developed groundbreaking tonal analysis technology that allows us to unlock this nuanced potential for voice interactions everywhere. No longer will voice be missing those crucial tonal components that are necessary to be fully understood. Customers plug their software into our unique data feed and can learn about the emotions in people’s voices!
What exactly do we provide?Edit
We create simple ways so that our customers (such as other audio technology companies) can tap into this brand new field of tonal analysis. We enable them to access a programmatic data feed that allows them to incorporate tone into their own products. With Helios technology, an automated call center can detect when a customer gets frustrated, or an investor can know when a corporate executive is hesitating with an answer to a pressing question by an analyst.
A platform for tonal analyticsEdit
Helios' Comprehend product provides tonal fingerprints for financial services
Helios’ first and flagship product is called Comprehend. This product analyzes corporate communications and generates a “tonal fingerprint” of about 200 numbers for each speaker in a voice recording. The tonal fingerprint is delivered in a data feed that explains tonal qualities of the speakers during the audio.
Product Roadmap (2022+)Edit
Tonal data to generate better investment portfoliosEdit
Comprehend: Elite - A financial audio analysis suite meant for quantitative hedge funds. By analyzing over 1,000,000 audio events from corporate entities, Helios provides unique investment opportunities via the voice tone. Just imagine knowing that WHAT the executive is saying does not match HOW he is saying it!
The following graph showcases an investment portfolio utilizing the Helios Comprehend: Elite data (in yellow) against the S&P index performance during the same period. This result from an independent third-party analytics firm demonstrates that the portfolio using Comprehend: Elite outperformed its benchmark!
(Portfolio backtesting research shown above provided by Althub's Invisage platform.)
Major hedge funds signed in 2021Edit
Dozens of trials have provided unique feedback to date that we have incorporated into our product roadmap
Our current customers are some of the most sophisticated data buyers on the planet: investment funds with over $100B in assets under management.
- Several paying customers with annual contracts
- Dozens of new prospects in the 2022 sales pipeline
- Recognized in Reuters, IR Magazine, and other leading outlets.
- 2023 forecast: $5.5M revenue on $4.2M OpEx*
- We believe that it is just a matter of time until every platform must have our data integrated to power their offerings.
A sea of customersEdit
Our current customers are systematic hedge funds that can leverage data to derive better portfolios. There are thousands of hedge funds and the appetite for data is only growing. We are currently expanding our product line to also serve different types of investors.
- Quantitative researchers in systematic data-driven hedge funds
- Fundamental / Discretionary buy-side portfolio managers
- Corporate investor relations teams
- Consultant investor relations firms
- Equity research analysts
In ongoing research, we are preparing to expand our platform so that it can provide valuable tonal analysis for any kind of audio event — imagine a company with audio ads that wants to increase the efficacy of their advertisements.
Built for voice platforms to augment their offeringsEdit
Helios enables voice platforms to build programmatic intelligence features, such as better trading signals through emotion detection and real-time tonal analysis, via a web API.
At our core, we are bringing research and development technology of tonal analytics to the exploding world of voice emotion analyses. We provide our current products through a subscription model so that data scientists, developers and business decision makers can derive value from these new tonal qualities.
We believe that a "developer first" approach is the most important component of our business strategy. We're putting a new tool in the toolkit of the world’s developers, so that when one day they have an audio problem that needs solving—whether it’s unlocking the tone for understanding a CEO call, or understanding voice tone from a scene for ad optimization—they'll be able to say, “Aha! I know how to do that. Use Helios.”
Voice tone is everywhere and untappedEdit
We believe that this new frontier of emotional understanding through tonal analytics will become a standard necessity for automated analyses of any voice communication in the future. We anticipate that such tonal analyses will mirror the development of automatic speech recognition (ASR) and natural language processing (NLP)—toolsets that have been in development for decades, and have become integrated into most voice platforms that support billions of voice interactions globally.
Other data companies in the financial space are achieving unicorn status.Edit
- YipitData was just valued at over $1B by the Carlyle Group (2021).
Since we are starting in a specific segment of voice communications, we are just scratching the surface of what's available across all existing voice communications.
No other tonal analytics company in the financial space
Helios has created a new categoryEdit
We have been operating in the financial space since 2019 as the first and still only provider of this unique form of data.
Helios Proprietary IPEdit
All IP developed in-house*; no licenses to external partners.
*In-house code and development of infrastructure to allow what we do. No formal IP protection or filings that have been done as of the Form C filing.
Vision and strategyEdit
Your additional capital allows us to unlock our next productEdit
Comprehend: Composites - Building upon the Comprehend: Elite dataset, we will be bringing an easier-to-navigate interface for the world of discretionary traders, investor relations and other corporate buyers who want to fully understand the corporate communication like the Street does.
Built upon our powerful dataset - This is the future of investor relations powered by Helios. This unlocks video and audio streams across the world for unprecedented understanding. Voice tonal dimensions across every source of news provides unique insights into companies, topics and corporate speakers.
Access to 1000s of customers - Since Day 1, we have been asked to develop a product that enables massive scale to the investment world. This crowdfunding campaigns represents the pinnacle of this journey. By funding now, you'll be driving the Comprehend: Composites dashboard into reality! Thousands of potential customers would jump at the chance to access tonal analysis in a simple, easy-to-use, way.
Former NBA All-Star
Baron Davis is a two-time NBA All-Star, serial entrepreneur, investor and creator of thought-provoking content and digital platforms. An entrepreneur, investor, and businessman, Baron has created several companies under the BDE banner. These include No Label, a premium production entity; SLIC Studios with focused content and IP development within Sports, Lifestyle and Culture; and The Black Santa Company, a new media company.
Baron is an American former professional basketball player who is a studio analyst for the NBA on TNT. He is a 2-time NBA All-Star, made the All-NBA Third Team in 2004, and led the NBA in steals twice. He has played in the NBA for the New Orleans Hornets, Golden State Warriors, Los Angeles Clippers, Cleveland Cavaliers and New York Knicks.
Baron Davis Enterprises
Vy Le is the COO for BIG Factory (Business Inside the Game) and Baron Davis Enterprise. BIG is a collective of successful engineers, marketers, investors, operators, and entrepreneurs who have come together to invest in next-gen leaders solving complex problems. In addition to funding, our portfolio has access to the BIG Factory—where we have built the right infrastructure to safeguard investments, find, incubate and package the right entrepreneurs and follow after some of the best venture investors in the game. She also provided strategic direction in a variety of C-level roles for companies like Wheelhouse, Wings and Horn, Ace Hotel, The Standard Hotel, Bunkhouse Hotel, Verve Coffee, Black Creek Capital and Gran Ciudad in Mexico City.
Built for growth
Chief Executive Officer
As Chief Product Officer for aptihealth, Sean had lead every piece of product since Day 1. The firm has raised over $70m to date; but more importantly, aptihealth has changed thousands of lives and transformed behavioral health. Their product operates in the highly complex regulated healthcare environment, across members, providers, payers, practices, hospitals and beyond. This recent startup experience allows fundraising, sales and product excellence to be incorporated directly into the Helios mission.
Over 15 years ago, when Sean heard about this “brain scientist” at his alma mater of Rensselaer, it was his vision to bring together the charisma of a product visionary with the scientific prowess of a modern (bench-pressing) Wozniak. Through his 20s, he crafted the trajectory to make sure the world-leading scientific mind of Dr. Schalk could be paired with an appropriate “Steve Jobs”.
It started with founding his own biometric analysis company at 19 years old, advised by Dr. Schalk. Later, he joined another audio startup that would be Spotify’s first acquisition in 2013. After 3 years leading Spotify’s global audio team to dominance, he sought harder tech and machine learning at-scale; so, a move to Stockholm and a core ML role in the unicorn Klarna followed. These audio and big data experiences allow Sean to have unprecedented expertise for the future of Helios.
Gerwin Schalk, PhD
Chief Scientific Officer
Ever since he watched the 1982 movie "Firefox" with Clint Eastwood that features a fighter jet with thought-controlled weapons, Gerwin dreamed to use a machine to decode thoughts and emotions from human bio-markers, and to use the results to drive novel and important applications. Because this endeavor requires deep understanding of software technology, signal processing, AI/ machine learning, and biosignals, he first acquired a strong academic background in all these fields, and then further expanded his understanding by conducting leading academic research over two decades.
A founder who has impacted millionsEdit
Dr. Schalk’s expertise has been of good use to say the least. Currently, he is the co-founder of Helios which started in 2017. He has also applied his skills in multiple other companies as co-founder, namely:
- Co-founder of Neuroanalytics, Inc. (2014 – 2015): Neuroanalytics focuses on the interpretation of brain signals to optimize information from focus groups.
- Co-founder of Neurolutions, Inc. (2008 – present): Neurolutions focuses on brain-based rehabilitation of people with chronic stroke; currently in Series B round of funding.
- Co-founder of FSSF Software Training, Inc. (1990 – 1995): A European software training company.
It’s no wonder Dr. Schalk is considered an expert in both science and technology. His accomplishments are many, including:
- Conceived, implemented, and project managed the most widely used general-purpose software for brain-computer interface research. The use of the software was featured numerous times in the media (e.g., Scott Pelley/60 Minutes, Katy Couric/MSNBC, CBS Sunday Morning).
- International recognition as neuroscientist/neuroengineer (130+ papers, 1 book, 17 chapters; several patents; 18k total citations; H factor 54; listed as 5th most productive scientist worldwide in brain-computer interface research; organizer of 26 workshops; >230 talks worldwide; acquired >$18m in federal grants).
- Invented, developed, and licensed a novel functional mapping procedure that improves brain surgery, leading to an entirely new product line.
- Invented, developed, and licensed a novel device for material testing, leading to an entirely new product line.
Furthermore, Dr. Schalk has been featured over 100+ times in numerous in national/international media such as:
- New York Times Magazine
- Discover Magazine
- Michio Kaku’s “I know what you are thinking”
- Technology Review
- The Atlantic
He has also been highlighted in several well-known science books such as:
- Al Gore’s “The Future: Six Drivers of Global Change”
- “The Brain Electric: The Dramatic High-Tech Race to Merge Minds and Machines”
- “The Body Builders: Inside the Science of the Engineered Human.”
His research demonstrated that humans can control machines just by thinking—that it is possible to decode emotions and aspects of language from brain signals—and was featured many times in prime national and international media outlets. With the world-class understanding of the mind, the Helios platform has unmatched IP.
CEO & Co-Founder
Dominated the music world at Spotify... wanted more.
CSO & Co-Founder
Elon called me when he needed advice on Neuralink.
Head of Design
Strategic Data Architect
Head of Technology
This Offering is being conducted under the COVID-19 Rules.
On May 4, 2020, the Securities and Exchange Commission issued the COVID-19 Rules under Regulation CF to expedite the offering process for smaller, previously established companies like ours that have been directly or indirectly affected by COVID-19. This Offering is being conducted under the COVID-19 Rules and its terms are materially different from offerings that are not being conducted under the COVID-19 rules.
We have a limited operating history upon which you can evaluate our performance, and accordingly, our prospects must be considered in light of the risks that any new company encounters.
The Company is still in an early phase and we are just beginning to implement our business plan. There can be no assurance that we will ever operate profitably. The likelihood of our success should be considered in light of the problems, expenses, difficulties, complications and delays usually encountered by early stage companies. The Company may not be successful in attaining the objectives necessary for it to overcome these risks and uncertainties.
Global crises such as COVID-19 can have a significant effect on our business operations and revenue projections.
With shelter-in-place orders and non-essential business closings potentially happening throughout 2020, 2021, 2022 and into the future due to COVID-19, the Company’s revenue has been adversely affected.
The amount of capital the Company is attempting to raise in this Offering may not be enough to sustain the Company’s current business plan.
In order to achieve the Company’s near and long-term goals, the Company may 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 may 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 an Investor to lose all or a portion of their investment.
We may face potential difficulties in obtaining capital.
We may have difficulty raising needed capital in the future as a result of, among other factors, our lack of revenues from sales, as well as the inherent business risks associated with our Company and present and future market conditions. 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.
We may not have enough authorized capital stock to issue shares of common stock to investors upon the conversion of any security convertible into shares of our common stock, including the Securities.
Currently, our authorized capital stock consists of 10,000,000 shares of common stock, of which 8,157,230 shares of common stock are issued and outstanding. Unless we increase our authorized capital stock, we may not have enough authorized common stock to be able to obtain funding by issuing shares of our common stock or securities convertible into shares of our common stock. We may also not have enough authorized capital stock to issue shares of common stock to investors upon the conversion of any security convertible into shares of our common stock, including the Securities.
The financial statements attached to this Form C/A have been certified by our Chief Executive Officer pursuant to the COVID-19 Rules.
We are offering a maximum aggregate amount of $250,000 of the Securities and are permitted to provide financial statements that have been certified by our Chief Executive Officer under the COVID-19 Rules. Such financial statements would otherwise need to be reviewed or audited by an independent public accountant. As such, the financial statements being provided as part of this Offering have not been reviewed or audited by an independent public accountant, nor has any outside party verified the accuracy of the information in such financial statements.
Under the COVID-19 Rules, the Company may end the Offering early.
If the Target Offering Amount is met before the Offering Deadline, the Company can end the Offering by providing notice to Investors at least 5 business days prior to the end of the Offering. This means your failure to participate in the Offering in a timely manner, may prevent you from being able to invest in this Offering – it also means the Company may limit the amount of capital it can raise during the Offering by ending the Offering early.
We may implement new lines of business or offer new products and services within existing lines of business.
As an early-stage company, we may implement new lines of business at any time. 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.
We rely on other companies to provide components and services for our products.
We depend on suppliers and contractors to meet our contractual obligations to our customers and conduct our 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 customer requirements and in a timely and cost-effective manner. Likewise, the quality of our products may be adversely impacted if companies to whom we delegate manufacture of major components or subsystems for our products, or from whom we acquire such items, do not provide components which 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. Our products may utilize custom components available from only one source. Continued availability of those components at acceptable prices, or at all, may be affected for any number of reasons, including if those suppliers decide to concentrate on the production of common components instead of components customized to meet our requirements. The supply of components for a new or existing product could be delayed or constrained, or a key manufacturing vendor could delay shipments of completed products to us adversely affecting our business and results of operations.
We rely on various intellectual property rights, including trademarks, in order to operate our business.
The Company relies on certain intellectual property rights to operate its business. The Company’s intellectual property rights 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.
The Company’s success depends on the experience and skill of the board of directors, its executive officers and key employees.
We are dependent on our board of directors, executive officers and key employees. These persons may not devote their full time and attention to the matters of the Company. The loss of our board of directors, executive officers and key employees could harm the Company’s business, financial condition, cash flow and results of operations.
Although dependent on certain key personnel, the Company does not have any key person life insurance policies on any such people.
We are dependent on certain key personnel in order to conduct our operations and execute our 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 any of these personnel 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 our operations. We have no way to guarantee key personnel will stay with the Company, as many states do not enforce non-competition agreements, and therefore acquiring key man insurance will not ameliorate all of the risk of relying on key personnel.
Damage to our reputation could negatively impact our business, financial condition and results of operations.
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. We may be adversely affected by any negative publicity, regardless of its accuracy. 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.
Our business could be negatively impacted by cyber security threats, attacks and other disruptions.
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.
Security breaches of confidential customer information, in connection with our electronic processing of credit and debit card transactions, or confidential employee information may adversely affect our business.
Our business requires the collection, transmission and retention of personally identifiable information, in various information technology systems that we maintain and in those maintained by third parties with whom we contract to provide services. The integrity and protection of that data is critical to us. The information, security and privacy requirements imposed by governmental regulation are increasingly demanding. Our systems may not be able to satisfy these changing requirements and customer and employee expectations, or may require significant additional investments or time in order to do so. A breach in the security of our information technology systems or those of our service providers could lead to an interruption in the operation of our systems, resulting in operational inefficiencies and a loss of profits. Additionally, a significant theft, loss or misappropriation of, or access to, customers’ or other proprietary data or other breach of our information technology systems could result in fines, legal claims or proceedings.
The use of individually identifiable data by our business, our business associates and third parties is regulated at the state, federal and international levels.
The regulation of individual data is changing rapidly, and in unpredictable ways. A change in regulation could adversely affect our business, including causing our business model to no longer be viable. Costs associated with information security – such as investment in technology, the costs of compliance with consumer protection laws and costs resulting from consumer fraud – could cause our business and results of operations to suffer materially. Additionally, the success of our online operations depends upon the secure transmission of confidential information over public networks, including the use of cashless payments. The intentional or negligent actions of employees, business associates or third parties may undermine our security measures. As a result, unauthorized parties may obtain access to our data systems and misappropriate confidential data. There can be no assurance that advances in computer capabilities, new discoveries in the field of cryptography or other developments will prevent the compromise of our customer transaction processing capabilities and personal data. If any such compromise of our security or the security of information residing with our business associates or third parties were to occur, it could have a material adverse effect on our reputation, operating results and financial condition. Any compromise of our data security may materially increase the costs we incur to protect against such breaches and could subject us to additional legal risk.
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 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.
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.
New features or changes could fail to attract new users, retain existing users or generate revenue.
Staffing changes, changes in user behavior or development of competing platforms may cause Users to switch to alternative platforms. There is no guarantee that companies will use these features and we may fail to generate revenue. Additionally, any of the following events may cause decreased use of our services: • Emergence of competing platforms and applications; • Inability to convince potential companies to use our services; • Technical issues on certain platforms or in the cross-compatibility of multiple platforms; • Securities breaches with respect to our data; • A rise in safety or privacy concerns; and • An increase in the level of spam or undesired content on the network.
Failure to generate user growth or engagement could greatly harm our business model.
Our business model involves attracting building and maintaining an active audience. There is no guarantee that growth strategies used in the past will continue to bring new users to use our services. Changes in relationships with our partners, contractors and businesses we retain to grow our network may result in significant increases in the cost to acquire new users and audience members. Decreases in the size of our audience and/or decreased engagement on our network may impair our ability to generate revenue.
We may be unable to manage growth.
Successful implementation of our business strategy requires us to manage our growth. Growth could place an increasing strain on our management and financial resources. To manage growth effectively, we need to continuously: • Evaluate definitive business strategies, goals and objectives; • Maintain a system of management controls; and • Attract and retain qualified personnel, as well as, develop, train and manage management-level and other employees. If we fail to manage our growth effectively, our business, financial condition or operating results could be materially harmed.
Our financial statements attached to this Form C have been prepared assuming that the Company will continue as a going concern. The Company began operation in 2017 and has incurred net losses since inception. The losses were anticipated and approved by the Company's Board of Directors to accelerate Company's growth and R&D. The company's ability to continue is dependent upon management's plan to raise additional funds and achieve profitable operations. Management has evaluated these conditions and raised an additional $125,000 in 2022.
State and federal securities laws are complex, and the Company could potentially be found to have not complied with all relevant state and federal securities law in prior offerings of securities.
The Company has conducted previous offerings of securities and may not have complied with all relevant state and federal securities laws. If a court or regulatory body with the required jurisdiction ever concluded that the Company may have violated state or federal securities laws, any such violation could result in the Company being required to offer rescission rights to investors in such offering. If such investors exercised their rescission rights, the Company would have to pay to such investors an amount of funds equal to the purchase price paid by such investors plus interest from the date of any such purchase. No assurances can be given the Company will, if it is required to offer such investors a rescission right, have sufficient funds to pay the prior investors the amounts required or that proceeds from this Offering would not be used to pay such amounts. In addition, if the Company violated federal or state securities laws in connection with a prior offering and/or sale of its securities, federal or state regulators could bring an enforcement, regulatory and/or other legal action against the Company which, among other things, could result in the Company having to pay substantial fines and be prohibited from selling securities in the future.
The U.S. Securities and Exchange Commission does not pass upon the merits of the Securities or the terms of the 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 U.S. Securities and Exchange Commission’s EDGAR filing system as an approval, endorsement or guarantee of compliance as it relates to this Offering. The U.S. Securities and Exchange Commission has not reviewed this Form C, nor any document or literature related to this Offering.
Neither the Offering nor the Securities have been registered under federal or state securities laws.
No governmental agency has reviewed or passed upon this Offering or the Securities. Neither the Offering nor the Securities have been registered under federal or state securities laws. Investors will not receive any of the benefits available in registered offerings, which may include access to quarterly and annual financial statements that have been audited by an independent accounting firm. Investors must therefore assess the adequacy of disclosure and the fairness of the terms of this Offering based on the information provided in this Form C and the accompanying exhibits.
The Company's management may have broad discretion in how the Company uses the net proceeds of the Offering.
Unless the Company has agreed to a specific use of the proceeds from the Offering, the Company’s management will have considerable discretion over the use of proceeds from the 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 Investor commitment amounts based on the Company’s determination of an Investor’s sophistication.
The Company may prevent any Investor from committing more than a certain amount in this Offering based on the Company’s determination of the Investor’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 Investors may receive larger allocations of the Offering based solely on the Company’s determination.
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 Target Offering Amount even after the Offering Deadline stated herein is reached. While you have the right to cancel your investment in the event the Company extends the Offering Deadline, 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 without the Company receiving the Target Offering Amount, at which time it will be returned to you without interest or deduction, or the Company receives the Target Offering Amount, at which time it will be released to the Company to be used as set forth herein. Upon or shortly after the 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 Target Offering Amount is met after 21 calendar days, but before the Offering Deadline, the Company can end the Offering by providing notice to Investors at least 5 business days prior to the end of the Offering. This means your failure to participate in the Offering in a timely manner, may prevent you from being able to invest in this Offering – it also means the Company may limit the amount of capital it can raise during the Offering by ending the Offering early.
The Company has the right to conduct multiple closings during the Offering.
If the Company meets certain terms and conditions, an intermediate close of the Offering can occur, which will allow the Company to draw down on seventy percent (70%) of the proceeds committed and captured in the Offering during the relevant period. The Company may choose to continue the Offering thereafter. Investors 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, Investors whose investment commitments were previously closed upon will not have the right to re-confirm their investment as it will be deemed to have been completed prior to the material change.
The Securities will not be freely tradable under the Securities Act 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 Investor should consult with their attorney.
You should be aware of the long-term nature of this investment. There is not now and likely will not ever 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 foreign 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. Investors should be aware of the long-term nature of their investment in the Company. Each Investor in this Offering will be required to represent that they are purchasing the Securities for their own account, for investment purposes and not with a view to resale or distribution thereof.
Investors will not have voting rights, even upon conversion of the Securities and will grant a third-party nominee broad power and authority to act on their behalf.
In connection with investing in this Offering to purchase a Crowd SAFE ((Simple Agreement for Future Equity) investors will designate Republic Investment Services LLC (f/k/a NextSeed Services, LLC) (“Nominee”) to act on their behalf as agent and proxy in all respects. The Nominee will be entitled, among other things, to exercise any voting rights (if any) conferred upon the holder of a Crowd SAFE or any securities acquired upon their conversion, to execute on behalf of an investor all transaction documents related to the transaction or other corporate event causing the conversion of the Crowd SAFE, and as part of the conversion process the Nominee has the authority to open an account in the name of a qualified custodian, of the Nominee’s sole discretion, to take custody of any securities acquired upon conversion of the Crowd SAFE. Thus, by participating in the Offering, investors will grant broad discretion to a third party (the Nominee and its agents) to take various actions on their behalf, and investors will essentially not be able to vote upon matters related to the governance and affairs of the Company nor take or effect actions that might otherwise be available to holders of the Crowd SAFE and any securities acquired upon their conversion. Investors should not participate in the Offering unless he, she or it is willing to waive or assign certain rights that might otherwise be afforded to a holder of the Crowd SAFE to the Nominee and grant broad authority to the Nominee to take certain actions on behalf of the investor, including changing title to the Security.
Investors will not become equity holders until the Company decides to convert the Securities into “CF Shadow Securities” (the type of equity securities issuable upon conversion of the Securities) or until there is a change of control or sale of substantially all of the Company’s assets.
Investors 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, the Investors may never become equity holders of the Company. Investors 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 into CF Shadow Securities. The Company is under no obligation to convert the Securities into CF Shadow Securities. In certain instances, such as a sale of the Company or substantially all of its assets, an initial public offering or a dissolution or bankruptcy, the Investors may only have a right to receive cash, to the extent available, rather than equity in the Company. Further, the Investor may never become an equity holder, merely a beneficial owner of an equity interest, should the Company or the Nominee decide to move the Crowd SAFE or the securities issuable thereto into a custodial relationship.
Investors will not have voting rights, even upon conversion of the Securities into CF Shadow Securities.
Investors will not have the right to vote upon matters of the Company even if and when their Securities are converted into CF Shadow Securities (the occurrence of which cannot be guaranteed). Upon such conversion, the CF Shadow Securities will have no voting rights and, in circumstances where a statutory right to vote is provided by state law, the CF Shadow Security holders or the party holding the CF Shadow Securities on behalf of the Investors are required to enter into a proxy agreement with its designee to vote their CF Shadow Securities with the majority of the holder(s) of the securities issued in the round of equity financing that triggered the conversion right. For example, if the Securities are converted in connection with an offering of Series B Preferred Stock, Investors would directly or beneficially receive CF Shadow Securities in the form of shares of Series B-CF Shadow Preferred Stock and such shares would be required to be subject to a proxy that allows a designee to vote their shares of Series B-CF Shadow Preferred Stock consistent with the majority of the Series B Preferred Stockholders. Thus, Investors will essentially never be able to vote upon any matters of the Company unless otherwise provided for by the Company.
Investors will not be entitled to any inspection or information rights other than those required by law.
Investors 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 law. Other security holders of the Company may have such rights. Regulation CF requires only the provision of an annual report on Form C and no additional information. Additionally, there are numerous methods by which the Company can terminate annual report obligations, resulting in no information rights, contractual, statutory or otherwise, owed to Investors. This lack of information could put Investors at a disadvantage in general and with respect to other security holders, including certain security holders who have rights to periodic financial statements and updates from the Company such as quarterly unaudited financials, annual projections and budgets, and monthly progress reports, among other things.
Investors 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 Investors 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 Investors have no right to demand such conversion. Only in limited circumstances, such as a liquidity event, may Investors demand payment and even then, such payments will be limited to the amount of cash available to the Company.
The Company may never elect to convert the Securities or undergo a liquidity event and Investors may have to hold the Securities indefinitely.
The Company may never conduct a future equity financing or elect to convert the Securities if such future equity financing does occur. In addition, the Company may never undergo a liquidity event such as a sale of the Company or an initial public offering. If neither the conversion of the Securities nor a liquidity event occurs, Investors 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.
Equity securities acquired upon conversion of the Securities may be significantly diluted as a consequence of subsequent equity financings.
The Company’s equity securities will be subject to dilution. The Company intends to issue additional equity to employees and third-party financing sources in amounts that are uncertain at this time, and as a consequence holders of equity securities resulting from the conversion of the Securities will be subject to dilution in an unpredictable amount. Such dilution may reduce the Investor’s control and economic interests in the Company. The amount of additional financing needed by the Company will depend upon several contingencies not foreseen at the time of this Offering. Generally, additional financing (whether in the form of loans or the issuance of other securities) will be intended to provide the Company with enough capital to reach the next major corporate milestone. If the funds received in any additional financing are not sufficient to meet the Company’s needs, the Company may have to raise additional capital at a price unfavorable to their existing investors, including the holders of the Securities. The availability of capital is at least partially a function of capital market conditions that are beyond the control of the Company. There can be no assurance that the Company will be able to accurately predict the future capital requirements necessary for success or that additional funds will be available from any source. Failure to obtain financing on favorable terms could dilute or otherwise severely impair the value of the Securities. In addition, the Company has certain equity grants and convertible securities outstanding. Should the Company enter into a financing that would trigger any conversion rights, the converting securities would further dilute the equity securities receivable by the holders of the Securities upon a qualifying financing.
Equity securities issued upon conversion of the Securities may be substantially different from other equity securities offered or issued by the Company at the time of conversion.
In the event the Company decides to exercise the conversion right, the Company will convert the Securities into equity securities that are materially different from the equity securities being issued to new investors at the time of conversion in many ways, including, but not limited to, liquidation preferences, dividend rights, or anti-dilution protection. Additionally, any equity securities issued at the First Equity Financing Price (as defined in the Crowd SAFE agreement) shall have only such preferences, rights, and protections in proportion to the First Equity Financing Price and not in proportion to the price per share paid by new investors receiving the equity securities. Upon conversion of the Securities, the Company may not provide the holders of such Securities with the same rights, preferences, protections, and other benefits or privileges provided to other investors of the Company. The forgoing paragraph is only a summary of a portion of the conversion feature of the Securities; it is not intended to be complete, and is qualified in its entirety by reference to the full text of the Crowd SAFE agreement, which is attached as Exhibit C.
There is no present market for the Securities and we have 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 asset value, net worth, revenues or other established criteria of value. We cannot guarantee that the Securities can be resold at the Offering price or at any other price.
In the event of the dissolution or bankruptcy of the Company, Investors will not be treated as debt holders and therefore are unlikely to recover any proceeds.
In the event of the dissolution or bankruptcy of the Company, the holders of the Securities that have not been converted will be entitled to distributions as described in the Securities. This means that such holders will only receive distributions once all of the creditors and more senior security holders, including any holders of preferred stock, have been paid in full. Neither holders of the Securities nor holders of CF Shadow Securities can be guaranteed any proceeds in the event of the dissolution or bankruptcy of the Company.
While the Securities provide mechanisms whereby holders of the Securities would be entitled to a return of their purchase amount upon the occurrence of certain events, if the Company does not have sufficient cash on hand, this obligation may not be fulfilled.
Upon the occurrence of certain events, as provided in the Securities, holders of the Securities may be entitled to a return of the principal amount invested. Despite the contractual provisions in the Securities, this right cannot be guaranteed if the Company does not have sufficient liquid assets on hand. Therefore, potential Investors should not assume a guaranteed return of their investment amount.
There is no guarantee of a return on an Investor’s investment.
There is no assurance that an Investor will realize a return on their investment or that they will not lose their entire investment. For this reason, each Investor should read this Form C and all exhibits carefully and should consult with their attorney and business advisor prior to making any investment decision.