Risk Warnings

Every investor (“Investor”) should be aware that an investment in a single company or multiple companies on the InCrowdEquity platform (each, a “Business” and together the “Businesses”) involves a high degree of risk, regardless of whether such investment is direct or through a vehicle (“Fund”) formed for purposes of accommodating co-investment arrangement (“Syndicate”) with a lead investor. There can be no assurance that (i) a Fund’s investment objectives will be achieved, (ii) a Business will achieve its business plan, or (iii) an Investor will receive a return of any part of its investment. The following considerations, among others, should be carefully evaluated before making an investment in a Business.

Risk Inherent in Investments; an Investor May, and Frequently Does, Lose All of Its Investment

Investments in Businesses involve a high degree of risk. Financial and operating risks confronting Businesses are significant. While targeted returns should reflect the perceived level of risk in any investment situation, such returns may never be realized and/or may not be adequate to compensate an Investor or a Fund for risks taken. Loss of an Investor’s entire investment is possible and can easily occur. Moreover, the timing of any return on investment is highly uncertain.

Business investments 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, Businesses may require substantial amounts of financing, which may not be available through institutional private placements, the public markets or otherwise. The following include a number of non-exhaustive risk factors which Investors should take into account, and agree that they have taken into account, when they invest in a Business on the InCrowdEquity platform:

  • Some Businesses’ extremely limited operating histories makes it difficult to evaluate such businesses and prospects.
  • Businesses may incur substantial operating and net losses due to substantial expenditures.
  • Businesses may not be able to carry out our proposed plan of operations.
  • Businesses may not be able to manage their growth.
  • Businesses may need additional personnel to grow our business, and the loss of key personnel could adversely affect their business.
  • Businesses may not be able to keep up with rapid technological changes.
  • Businesses will face intense competition.
  • Businesses’ network operations may be vulnerable to hacking, viruses and other disruptions, which may make their services less attractive and reliable.
  • Regulatory and legal uncertainties could harm a Business.
  • Business securities are subject to restrictions on resale.
  • Businesses may be unable to meet their current and future capital requirements from capital raised.

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 “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) the adequacy of a Business’s funding to meet its future needs, (ii) the revenue and expenses expected over the life of the Business, (iii) the market for a Business’s goods or services, or (iv) other similar maters.

Each Business’s forward-looking statements are based on management’s current expectations and assumptions regarding the Business’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 Business’s actual results may vary materially from those expressed or implied in its forward-looking statements. Important factors that could cause the Business’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:

  • recent and future changes in technology, services and standards;
  • changes in consumer behavior;
  • changes in a Business’s plans, initiatives and strategies, and consumer acceptance thereof;
  • changes in the plans, initiatives and strategies of the third parties that are necessary or important to the Business’s success;
  • competitive pressures, including as a result of changes in technology;
  • the Business’s ability to deal effectively with economic slowdowns or other economic or market difficulties;
  • increased volatility or decreased liquidity in the capital markets, including any limitation on the Business’s ability to access the capital markets for debt securities, refinance its outstanding indebtedness or obtain equity, debt or bank financings on acceptable terms;
  • the failure to meet earnings expectations;
  • the adequacy of the Business’s risk management framework;
  • changes in U.S. GAAP or other applicable accounting policies;
  • the impact of terrorist acts, hostilities, natural disasters (including extreme weather) and pandemic viruses;
  • a disruption or failure of the Business’s or its vendors’ network and information systems or other technology on which the Company’s businesses rely;
  • changes in tax, federal communication and other laws and regulations;
  • changes in foreign exchange rates and in the stability and existence of foreign currencies; and
  • other risks and uncertainties which may or may not be specifically discussed in materials provided to Investors.

Any forward-looking statement made by a Business speaks only as of the date on which it is made. Businesses 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 equity securities in a Business. Each Investor 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 Business.

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