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Warning - Equity Investments are Risky
Risk Warning

BlazeFund does not provide investment advice or make investment recommendations; solicit purchases, sales, or offers to buy the securities offered or displayed by the companies on its website or portal; compensate employees, agents, or other persons for such solicitation or based on the sale of securities displayed or referenced on our website/portal. We also do not hold, manage, possess, or otherwise handle investor funds or securities; nor do our directors and officers have a financial interest in any offering.

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Warning - Equity Investments are Risky

RISK FACTORS RELATED TO THE INVESTMENT

If the company is newly formed or a “developmental stage” company, it will have no operating history or results.

The Company, if recently formed, is a “development stage” or “start-up” company with no history of operations. This makes it difficult to effectively assess the future prospects even though the company may be in the process of pursuing intellectual property.

Accordingly, you should consider future prospects of the company in light of the costs, uncertainties, delays and difficulties frequently encountered by companies in the early stages of development.  Potential investors should carefully consider the risks and uncertainties that a new company with no operating history will face.  In particular, potential investors should consider that there is a significant risk that the Company will not be able to:

  • meet approvals as necessary;
  • attract partners as planned;
  • create an intellectual property transaction or implement a commercial business model based on the work done;
  • implement or execute the current business plan, or that the business plan is sound;
  • maintain the management and advisory team;
  • raise sufficient funds to effectuate the business plan;
  • control development costs; and/or
  • efficiently compete with competitors or potential competitors

If the Company cannot execute any one of the foregoing, the business may fail, in which case you would lose the entire amount of the investment in the Company.

Given the lack of revenue and cash flow, if applicable, the Company will require additional capital to support business growth, and this capital might not be available on acceptable terms, if at all.

The Company intends to continue to make investments to support the business growth and may require additional funds to respond to business challenges, including the need to develop new features and products or enhance the existing solutions, improve the operating infrastructure or acquire complementary businesses and technologies. Accordingly, it is likely that the Company will engage in additional equity or debt financings to secure additional funds. If the Company raise additional funds through future issuances of equity or convertible debt securities, the existing members could suffer significant dilution, and any new equity securities the Company issue could have rights, preferences and privileges superior to those of holders of the securities. Any debt financing the Company may secure in the future could involve restrictive covenants relating to the capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions.

The Company may not be able to obtain additional financing on terms favorable to us, if at all. If the Company is unable to obtain adequate financing or financing on terms satisfactory to us when the Company requires it, the ability to continue to support the business growth and to respond to business challenges could be significantly impaired, and the business may be harmed. Debt financing, if obtained, may involve agreements that include liens on the assets, covenants limiting or restricting the ability to take specific actions, such as incurring additional debt, could increase the expenses and require that the assets be provided as a security for such debt.  If the Company raises additional capital by issuing equity securities, the percentage ownership of the existing members (including investors in this Offering) will be reduced, and accordingly these members may experience substantial dilution.  The Company may also issue equity securities that provide for rights, preferences and privileges senior to those of the Notes sold in this Offering. 

The future performance will depend on the continued engagement of key members of the management team, some of whom are rendering services on a part-time basis.

The future performance depends to a large extent on the continued services of members of the current management and other key personnel including, in particular, the key founder/promoter. In the event that the Company loses the continued services of such key personnel for any reason, this could have a material adverse effect on the business, operations and prospects. The Company does not maintain key-man insurance for any member of the management team. The loss of the founder, even temporarily or any other member of senior management would harm the business.

Moreover, members of the management team may provide services on a part-time basis. Although the Company expects that each of such individuals will enter into consulting or service agreements with us which will require them to expend a minimum number on the Company’s behalf, there is a risk that other obligations they may have could distract them from the business, which could have a negative impact on the ability to effectuate the business plans.

If the Company is not able to attract and retain highly skilled managerial, scientific and technical personnel, the Company may not be able to implement the business model successfully.

The Company will rely upon technical and scientific employees or third party contractors to effectively further develop and test the technology and on consultants from the pharmaceutical and biotech industry to both advise and promote the development of products. The Company may need to pay higher compensation or fees to the employees, advisers or consultants than the Company currently expects and such higher compensation payments would have a negative effect on the operating results.  The Company may not be able to hire or retain the necessary personnel to implement the business strategy.  The failure to hire and retain such personnel could impair the ability to carry out the business plan.

The Company may not have fully established internal controls over financial accounting and reporting.  Even if established, there are limitations on the effectiveness of controls, and a failure of the control systems to prevent error or fraud may materially harm the company.

The Company may not have established adequate internal controls over financial accounting and reporting, and the Company may be unable to effectively do so. This would leave the Company without the ability to reliably assimilate and compile financial information about the Company and significantly impair the ability to prevent error and detect fraud, all of which would have a negative impact on the Company from many perspectives.

Moreover, the Company does not expect that disclosure controls or internal control over financial reporting, even if established, will prevent all error and all fraud.  A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met.  Failure of the control systems to prevent error or fraud could materially adversely impact the Company.

Any failure or significant interruption in the development process could impact and harm the business.

The technology infrastructure is critical to the performance of business and to attract both corporate partners and investors. The Company do not own, operate and maintain laboratories, but some elements of development and testing are operated by third parties that the Company do not control and which would require significant time to replace.

The Company expects this dependence on third parties such as university and other labs to continue. A failure or to have access to such facilities or significant interruption in future would harm the progress and reputation. The Company expects to continue to make significant investments in the infrastructure to maintain and improve all aspects of the development. The Company does not maintain insurance policies covering losses relating to the systems and the Company does not have business interruption insurance.

 If the Company fails to effectively manage the growth, the business and operating results could be harmed.

The Company must expend significant resources to identify, hire, integrate, develop and motivate a large number of qualified employees. If the Company fails to effectively manage the hiring needs and successfully integrate the new hires, the ability to launching new services and features on the site. To effectively manage the growth of the business and operations, the Company will need to continue spending significant resources to improve the technology infrastructure, the operational, and financial and management controls, and the reporting systems and procedures by, among other things:

  • monitoring and updating the technology infrastructure to maintain high performance and minimize down time;
  • enhancing information and communication systems to ensure that the employees and offices around the world are well-coordinated and can effectively communicate with each other;
  • enhancing the internal controls to ensure timely and accurate reporting of all of the operations; and
  • appropriately documenting the technology and developmental efforts.

Any such enhancements and improvements will require significant capital expenditures and allocation of valuable management and employees. If the Company fails to implement these enhancements and improvements effectively, the ability to manage the expected growth and comply with the rules and regulations that are applicable to public reporting companies will be impaired.

Failure to properly register, protect or enforce the intellectual property rights or the costs involved in such actions could harm the business and operating results.   

The Company is in the process of filing applications to register the intellectual property and intend to protect any such rights by relying on federal, state and common law rights, as well as contractual restrictions. The Company intends to enter into confidentiality and invention assignment agreements with the employees and contractors and confidentiality agreements with parties with whom the Company conduct business in order to limit access to, and disclosure and use of, the proprietary information. However, these contractual arrangements and the other steps the Company has taken to protect the intellectual property may not prevent the misappropriation of the proprietary information or deter independent development of similar technologies by others.

The Company may, over time, increase the investment in protecting the innovations through patent filings that are expensive and time-consuming and may not result in issued patents that can be effectively enforced. The Leahy-Smith America Invents Act (the “Leahy-Smith Act”) was adopted in September 2011. The Leahy-Smith Act includes a number of significant changes to United States patent law, including provisions that affect the way patent applications will be prosecuted and may also affect patent litigation. The United States Patent and Trademark Office is currently developing regulations and procedures to govern administration of the Leahy-Smith Act, and many of the substantive changes to patent law associated with the Leahy-Smith Act will not become effective until up to 18 months after its enactment. Accordingly, it is not clear what, if any, impact the Leahy-Smith Act will have on the operation of the business. However, the Leahy-Smith Act and its implementation could increase the uncertainties and costs surrounding the prosecution of the patent applications and the enforcement or defense of the issued patents, all of which could harm the business.

Litigation may be necessary to enforce the intellectual property rights, protect the trade secrets or determine the validity and scope of proprietary rights claimed by others. Any litigation of this nature, regardless of outcome or merit, could result in substantial costs, adverse publicity or diversion of management and technical resources, any of which could adversely affect the business and operating results. If the Company fails to maintain, protect and enhance the intellectual property rights, the business and operating results may be harmed.

The Company may in the future be subject to intellectual property disputes, which are costly to defend and could require the Company to pay significant damages and could limit the ability to use certain technologies in the future.

The Company may face in the future allegations that the Company has infringed the trademarks, copyrights, patents and other intellectual property rights of third parties, including from the competitors, non-practicing entities and former employers of the personnel. The Company has filed several non-provisional patent applications for new composition matter. The Company can provide no assurance that the Company will not receive any challenges to the applications. Patent and other intellectual property litigation may be protracted and expensive, and the results are difficult to predict. If the Company is unable to successfully defend any such allegations, the business may be significantly harmed. Even if these matters do not result in litigation or are resolved in the favor or without significant cash settlements, these matters, and the time and resources necessary to litigate or resolve them, could harm the business, operating results, financial condition, reputation or the market price of the securities.

Failure in pursuing or executing new business development initiatives could have a material adverse impact on the business and future growth.

The growth strategy includes evaluating, considering and effectively executing new business development initiatives, which can be difficult. Management may not properly ascertain or assess the risks of new initiatives, and subsequent events may alter the risks that were evaluated at the time the Company decided to execute any new initiative. Entering into any new initiatives can also divert the management’s attention from other business issues and opportunities. Failure to effectively identify, pursue and execute new business initiatives may adversely affect the reputation, business, financial condition and results of operations.

A change in the application of the tax laws of various jurisdictions could result in an increase to the worldwide effective tax rate and a change in how the Company operates the business.

The Company intends to expand globally. The application of the tax laws of various jurisdictions, including the United States, to the contemplated international business activities is subject to interpretation and depends on the ability to operate the business in a manner consistent with the corporate structure and intercompany arrangements. The taxing authorities of the jurisdictions in which the Company operate may challenge the methodologies for valuing developed technology or intercompany arrangements, including the transfer pricing, or determine that the manner in which the Company intend to operate the business is not consistent with the manner in which the Company report the income to the jurisdictions, which could increase the worldwide effective tax rate and harm the financial position and results of operations.

The Company may not be successful in the efforts to grow and further monetize the developmental efforts.

The Company may not be successful in attracting investors and/or corporate sponsors and fail to monetize the developmental efforts.

The business may be highly competitive. Competition presents an ongoing threat to the success of the business.

The Company faces significant competition in almost every aspect of the business. The Company also faces competition from traditional pharmaceutical companies who are all working on developing a pipeline in the same space of diabetes drugs.   Some of the current and potential competitors have significantly greater resources and better competitive positions in certain markets than the Company do. These factors may allow the competitors to respond more effectively than us to new or emerging technologies and changes in market requirements. Certain competitors could use strong or dominant positions in one or more markets to gain competitive advantage against us. The Company believes that the ability to compete effectively depends upon many factors both within and beyond the control.

If the Company is not able to effectively compete, the user base and level of user engagement may decrease, which could make us less attractive to issuers, investors and advertisers which will materially and adversely affect the revenue and results of operations.

The costs could grow rapidly, which could harm the business and profitability.

The Company is currently in the development phase of the company and the Company expects the expenses to continue to increase in the future as the Company continues to develop and test new compositions and as the Company hire additional employees. The expenses may be greater than the Company anticipates, and the investments to make the business and the technical infrastructure more efficient may not be successful. In addition, the Company may increase marketing, sales, and other operating expenses in order to grow and expand the operations and to remain competitive. Increases in the costs may adversely affect the business and profitability. The Company is unable to predict with any certainty the extent of any future revenues, cash flows, profits or losses or when the Company will generate positive cash flow or become profitable, if at all.  The Company expects that the Company may incur significant and increasing operating losses while the Company develops the portal and the business. These losses, among other things, will have an adverse effect on the members’ equity and working capital.  Failure to generate revenue or achieve profitability would materially adversely affect the value of the Company, the ability to establish and grow the business and cause us to suspend or crease operations.

A substantial portion of the network infrastructure is provided by third parties. Any disruption or failure in the services the Company receive from these providers could harm the ability to handle existing or increased traffic and could significantly harm the business. Any financial or other difficulties these providers face may adversely affect the business, and the Company exercise little control over these providers, which increases the vulnerability to problems with the services they provide.

Legal risks related to employee misconduct are difficult to detect and deter.

It is not always possible to detect employee misconduct and the precautions the Company takes to prevent and detect this activity may not be effective in all cases. Fraud or other employee misconduct could result in unknown and unmanaged risks or losses in the Company. Employee misconduct could include binding us to transactions that exceed authorized limits or present unacceptable risks, or hiding unauthorized or unsuccessful activities. There is also a risk that such actions will result in monetary settlements or awards against us and the principals. The Company may incur significant legal expenses in defending against litigation in the future.

Increased operating costs could affect the profitability.

A material increase in costs at any significant aspect of the business could have a significant effect on the profitability and operating cash flow.  The Company could have significant increases in capital and operating costs over the next several years in connection with the development of new projects in challenging jurisdictions and in sustaining existing operations. Costs associated with capital expenditures have escalated on an industry-wide basis over the last several years, as a result of major factors beyond the control, including the prices of oil, steel and other commodities and labor. Increased costs for capital expenditures may have an adverse effect on the profitability of mining operations and economic returns anticipated from new mining projects.

Risks Related to the Offering and the Securities

There currently is no trading market for the shares of common stock or other instruments offered and one may never develop.  There are restrictions on the transferability of the shares of common stock or other forms of securities

There is no active trading market for the shares of common stock and no market may develop in the foreseeable future for any of such shares of common stock.  Further, there can be no assurance that the Company will ever consummate a public offering of any of the securities.  Accordingly, investors must bear the economic risk of an investment in the shares of common stock for an indefinite period of time.  Even if an active market develops for the shares of common stock , Rule 144 promulgated under the Securities Act (“Rule 144”), which provides for an exemption from the registration requirements under the Securities Act under certain conditions, requires, among other conditions, for re-sales of securities acquired in a non‑public offering without having to satisfy such registration requirements, a six-month holding period following acquisition of and payment in full for such securities assuming the issuer of such securities has filed periodic reports with the SEC under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) for a period of 90 days prior to the proposed sale.  If the issuer of such securities has not made such filings, such securities will be subject to a one-year holding period before they can be resold under Rule 144.  There can be no assurance that the Company will fulfill any reporting requirements in the future under the Exchange Act or disseminate to the public any current financial or other information concerning us, as is required by Rule 144 as part of the conditions of its availability.

The shares of common stock and the equity securities underlying the shares of common stock have not been, nor will they be, registered pursuant to the Securities Act except pursuant to the registration rights granted to holders of the Common stock.  If the Company desire, the Company may permit the transfer of the shares of common stock out of a subscriber’s name only when his or her request for transfer is accompanied by an opinion of counsel reasonably satisfactory to us that neither the sale nor the proposed transfer results in a violation of the Securities Act or any applicable state securities or “blue sky” laws.

The Company does not expect to pay dividends for the foreseeable future.

The Company does not expect to pay dividends on the capital stock for the foreseeable future. Accordingly, any potential investor who anticipates the need for current dividends from his investment should not purchase any of the Shares. 

The majority members will control the company for the foreseeable future, including the outcome of matters requiring member approval.

If the maximum amount is raised, the founders and initial investors will collectively own the majority of the Company.  As a result, such entities and individuals will have the ability, acting together, to control the election of the directors and the outcome of corporate actions requiring member approval, such as: (i) a merger or a sale of the Company, (ii) a sale of all or substantially all of the assets, and (iii) amendments to the articles of incorporation and bylaws.  This concentration of voting power and control could have a significant effect in delaying, deferring or preventing an action that might otherwise be beneficial to the other members and be disadvantageous to the members (including investors in this Offering) with interests different from those entities and individuals.  Certain of these individuals also have significant control over the business, policies and affairs as officers or directors of the Company.  Therefore, you should not invest in reliance on the ability to have any control over the Company.  

Securities may be purchased by related parties to the Company.

The Company and its officers, directors, and affiliates may purchase securities in this Offering.  Investors in this Offering should understand and recognize that not all subscribers may have made an independent investment decision and certain subscribers may be related parties of the Company.

The terms of this Offering have been arbitrarily determined.

If you purchase the securities in this Offering, you will pay a price that was not established in a competitive market.  Rather, you will pay a price that was arbitrarily determined by the Company.  The Offering price for the securities may bear no relationship to the assets, book value, historical results of operations or any other established criterion of value, and may not be indicative of the fair value of the securities.  The trading price, if any, of the securities that may prevail in any market that may develop in the future, for which there can be no assurance, may be higher or lower than the price you pay.

The management has broad discretion in using the net proceeds from this Offering.

The Company will have broad discretion in the timing of the expenditures and application of proceeds received in this Offering.  If the Company fails to apply the proceeds effectively, the Company may not be successful in carry out the proposed business plan to market.  You will not have the opportunity to evaluate all of the economic, financial or other information upon which the Company may base the decisions to use the net proceeds from this Offering. (See “Use of Proceeds”)

The Company has not retained independent professionals for subscribers.

The Company has not retained any independent professionals to review or comment on this Offering or otherwise protects the interests of the subscribers hereunder.  Although the Company has retained the own counsel, neither such firm nor any other firm has made any independent examination of any factual matters represented by management herein, and purchasers of the securities offered hereby should not rely on the firm so retained with respect to any matters herein described.

There can be no assurance of a resale registration or any other liquidity event.

An investment in the securities may offer the opportunity for gains, but such investment involves a very high degree of business and financial risk that can result in substantial losses.  No assurance can be given that a resale registration or other liquidity event will be consummated or that, if consummated, it would result in increased value of the shares of the securities. 

Upon dissolution of the Company, you may not recoup all or any portion of the investment.

In the event of a liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, the proceeds and/or assets of the Company remaining after giving effect to such transaction, and the payment of all of the debts and liabilities will be distributed to the members on a pro rata basis.  There can be no assurance that the Company will have available assets to pay to the members, or any amounts, upon such a liquidation, dissolution or winding-up of the Company.  In this event, you could lose some or all of the investment.

An active and visible public trading market for the shares of common stock may not develop.

Even if the Company becomes a publicly-listed and reporting company, of which no assurances can be given, the Company cannot predict whether an active market for the common stock will ever develop in the future.  In the absence of an active trading market:

  • Investors may have difficulty buying and selling or obtaining market quotations;
  • Market visibility for shares of the common stock may be limited; and
  • A lack of visibility for shares of shares of common stock may have a depressive effect on the market price for such shares.

If the resale registration statement is declared effective, and assuming the Company can find market makers to establish quotations for the common stock, the Company expects that the shares of common stock will be quoted on the OTC Bulletin Board (known as the OTCBB) or OTCQB market operated by OTC Markets Group, Inc.  These markets are relatively unorganized, inter-dealer, over-the-counter markets that provide significantly less liquidity than NASDAQ or the NYSE AMEX.  No assurances can be given that the shares of common stock , even if quoted on such markets, will ever trade on such markets, much less a senior market like NASDAQ or NYSE AMEX.  In this event, there would be a highly illiquid market for the shares of common stock and you may be unable to dispose of the shares of common stock at desirable prices or at all. Moreover, there is a risk that the shares of common stock could be delisted from the OTCBB/OTCQB, in which case it might be listed on the so called “Pink Sheets”, which is even more illiquid than the OTC Bulletin Board.

If the shares of common stock become subject to the SEC’s penny stock rules, broker-dealers may experience difficulty in completing customer transactions and trading activity in the securities may be adversely affected.

The SEC has adopted regulations which generally define “penny stock” to be an equity security that has a market price of less than $5.00 per share, subject to specific exemptions.  Assuming the Notes or the shares of common stock becomes publicly trading, of which no assurances can be given, the market price of the shares of common stock will potentially be less than $5.00 per share and therefore would be a “penny stock” according to SEC rules, unless the Company is listed on a national securities exchange.  Under these rules, broker-dealers who recommend such securities to persons other than institutional accredited investors must:

  • make a special written suitability determination for the purchaser;
  • receive the purchaser’s prior written agreement to the transaction;
  • provide the purchaser with risk disclosure documents which identify certain risks associated with investing in “penny stocks” and which describe the market for these “penny stocks” as well as a purchaser’s legal remedies; and
  • obtain a signed and dated acknowledgment from the purchaser demonstrating that the purchaser has actually received the required risk disclosure document before a transaction in a “penny stock” can be completed.

If the shares of common stock become subject to these rules, broker-dealers may find it difficult to effectuate customer transactions and trading activity in its securities may be adversely affected. As a result, the market price of the securities may be depressed, and you may find it more difficult to sell the securities. 

Future issuance of preferred stock could adversely affect the position of holders of Common Stock.

The charter authorizes the issuance of up to a certain number of shares of preferred stock with designations, rights, and preferences determined from time to time by the board of directors. Accordingly, the board of directors is empowered, without stockholder approval, to issue preferred stock with dividends, liquidation, conversion, voting, or other rights that could adversely affect the voting power or other rights of the holders of the common stock.

In the event of issuance, the preferred stock could be used, under certain circumstances, as a method of delaying or preventing a change in control of the company or, alternatively, granting the holders of preferred stock rights that would entrench management. If the holders of the common stock desired to remove current management, it is possible that the board of directors could issue common stock and grant the holders thereof such rights and preferences so as to discharge or frustrate attempts by the common stockholders to remove current management. In doing so, management would be able to severely limit the rights of common stockholders to elect the board of directors.

If the Company goes into bankruptcy, you may not receive the entire investment back.

If the Company is forced to file a bankruptcy case or an involuntary bankruptcy case is filed against us under Chapters 7 or 11 of the United States Bankruptcy Code, and that claim is not dismissed, the Company will be subject to applicable bankruptcy law and invested funds may be included in the bankruptcy estate.  Furthermore, the estate may be subject to administrative expenses, including but not limited to post-petition legal fees including costs, the securitization of cash collateral to maintain the business as a going concern, obtaining additional financing, taxes owed, and claims of both secured and unsecured third parties with priority over those claims of the stockholders.

To the extent bankruptcy claims deplete the bankruptcy estate; the Company cannot assure you the Company will be able to return to the stockholders the liquidation amounts due to them. Accordingly, the actual per share amount distributed from the estate to holders of the common stock could be significantly less than the issue price of the shares as a result of the claims of creditors.  

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