All forms of investment in companies listed on the Seats platform (“Companies”) are very risky. There is no guarantee that the Company’s forecasts will be met. There is no guarantee that a Company’s anticipated payments on a Seats contract will be met. All users of the Seats platform should consider the following before making any form of investment.
Investors frequently lose all of their money when investing in businesses such as those shown of the Seats platform.
Investment in any type of business is risky and can involve loss of all of your investment. Many, if not all, of the Companies shown on the Seats platform are particularly risky as they are either very young or involve high risk strategies.
Investments in Companies involve a high degree of risk. Financial and operating risks confronting Companies are significant. While targeted revenue or returns should reflect the perceived level of risk in any investment situation, such revenue or returns may never be realized and/or may not be adequate to compensate an investor. Loss of an investor’s entire investment is possible and can easily occur. The timing of any return on investment is highly uncertain.
The percentage of Companies that survive and prosper is small. Companies often experience unexpected problems in the areas of product development, manufacturing, marketing, financing, and general management, among others, which frequently cannot be solved. In addition, Companies may require substantial amounts of financing, which may not be available.
Risk of change in a Company’s plans, markets and products.
Many of the Companies are technology-based startups. The value of such companies may be susceptible to factors affecting the technology industry generally. Investments in these types of companies is riskier than an investment in a broad range of securities.
The success of companies in the technology industry will likely be dependent on the strength of the overall technology industry, which is characterized by rapidly changing technology, evolving industry standards, new service and product introductions and changing customer demands. The changes and developments taking place in this industry may require the companies to reevaluate its business models and adopt significant changes to their long-term strategies and business plan. The failure of such companies to make such changes would materially adversely affect the business of such company, and potentially have a material negative impact on the return of an investment in such Company, including potentially a complete loss of investment.
Some of the many specific risks faced by such companies include:
Changing Economic Conditions
The success of any investment activity is determined to some degree by general economic conditions. The availability, unavailability, or hindered operation of external credit markets, equity markets and other economic systems which an individual Company may depend upon to achieve its objectives may have a significant negative impact on a Company’s operations and profitability. The stability and sustainability of growth in global economies may be impacted by terrorism, acts of war or a variety of other unpredictable events. There can be no assurance that such markets and economic systems will be available or will be available as anticipated or needed for an investment in a Company to be successful.
Future and Past Performance
The past performance of a Company or its management is not predictive of a Company’s future results. There can be no assurance that targeted results will be achieved. Loss of principal is possible, and even likely, on any given investment.
Difficulty in Valuing Company Investments
It is enormously difficult to determine objective values for any Company or revenue band for a Seats contract. In addition to the difficulty of determining the magnitude of the risks applicable to a given Company and the likelihood that a given Company’s business will be a success or a revenue band will be achieved, there generally will be no readily available market for a Company’s equity securities, and hence, an Investor’s investments will be difficult to value.
Minority and Non-Voting Investments
A significant portion of an investor’s investments (either directly or through Funds) will represent minority stakes in privately held companies or, in the case of Seats contracts, a non-voting position. Such stakes will have neither the control characteristics of majority stakes nor the valuation premiums accorded majority or controlling stakes. Investors will be reliant on the existing management and board of directors of such Company, which may include representatives of other financial investors with whom the investor is not affiliated and whose interests may conflict with the interests of the investor.
Lack of Information for Monitoring and Valuing Companys
Investors may not obtain information rights from the Companies they invest in. Accordingly, the investor may not be able to obtain all information it would want regarding a particular Company, on a timely basis or at all. It is, therefore, possible that the investor may not be aware on a timely basis of material adverse changes that have occurred with respect to certain of its investments. As a result of these difficulties, as well as other uncertainties, an investor may not have accurate information about a Company’s current value or the value of a Seats contract.
No Assurance of Additional Capital for Companies
After an investor has invested in a Company, continued development and marketing of the Company’s products or services, or administrative, legal, regulatory or other needs, may require that it obtain additional financing. In particular, technology companies generally have substantial capital needs that are typically funded over several stages of investment. Such additional financing may not be available on favorable terms, or at all.
Absence of Liquidity and Public Markets
An Investor’s investments will generally be private, illiquid holdings. As such, there will be no public markets for the securities held by the Investor and no readily available liquidity mechanism at any particular time for any of the investments.
Seats are a new form of investment
Seats are a new form of investment. As such, many legal aspects of the investments have not been confirmed by the appropriate regulatory body. Any user of Seats should obtain their own counsel with respect to all of these issues.
There are many tax risks relating to Seats investments that are difficult to address and complicated. You should consult your tax advisor for information about the tax consequences of purchasing Seats contracts.
Certain information regarding the Companies will be highly confidential. Competitors may benefit from such information if it is ever made public, and that could result in adverse economic consequences to the investors.
Forward Looking Statements
The information available to investors may contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements often include words such as “forecasts”, "anticipates," "estimates," "expects," "projects," "intends," "plans," "believes" and words and terms of similar substance in connection with discussions of future operating or financial performance. Examples of forward-looking statements include, but are not limited to, statements regarding: (i) revenue forecasts, (ii) the adequacy of a Company’s funding to meet its future needs, (iii) the revenue and expenses expected over the life of the Company, (iv) the market for a Company’s goods or services, or (v) other similar maters.
Each Company’s forward-looking statements are based on management's current expectations and assumptions regarding the Company’s business and performance, the economy and other future conditions and forecasts of future events, circumstances and results. As with any projection or forecast, forward-looking statements are inherently susceptible to uncertainty and changes in circumstances. The Company’s actual results may vary materially from those expressed or implied in its forward-looking statements. Important factors that could cause the Company’s actual results to differ materially from those in its forward-looking statements include government regulation, economic, strategic, political and social conditions and the following factors:
Any forward-looking statement made by a Company speaks only as of the date on which it is made. Companies are under no obligation to, and generally expressly disclaim any obligation to, update or alter their forward-looking statements, whether as a result of new information, subsequent events or otherwise.
The foregoing risks do not purport to be a complete explanation of all the risks involved in acquiring Seats or other types of investments in a Company. Each user of the Seats platform is urged to seek its own independent legal and tax advice and read the relevant investment documents before making a determination whether to invest in a Company.
Last updated: June 22, 2020