Private Placement Risk Disclosure
The purchase of the privately placed Securities of a non-public company or enter into agreement, including revenue share agreement, which can constitute issue of Securities (“Securities”) are, in general, a highly speculative investment and should be undertaken only by persons who are financially able to bear the loss of their entire investment and who have no need for liquidity of their investment in the Wonder Family Inc. of such Securities (“Issuer”). Such investments involve various risks relating to the nature of the financing and potentially the state and federal legalities surrounding the Issuer, the nature and stage of development of the Issuer’s business, and the business sector in which it operates.
The listing below is not meant to be an all-inclusive description of such risks, but rather highlights some of the more significant factors and special risks relating to offerings of privately placed Securities of companies with limited operating histories in particular and should be used as guidance only.
For a description of the business, operations, and financial condition of a specific issuer, and the particular risks arising from an investment in an issuer’s Securities, investors should obtain and carefully read the available offering materials provided by such issuer, including any private placement memorandum, offering circular or prospectus prepared by the Issuer before making any investment.
Each potential investor, in considering the purchase of Securities, must perform its own evaluation of whether investing in Securities generally or purchasing Securities in a particular offering is consistent with its investment objectives, risk tolerance, and financial situation.
There are a variety of risk factors typically associated with investing in new issue Securities, any one of which may have a material and adverse effect on the price of such security. Prospective purchasers should consider the following factors, among others, before deciding to purchase Securities, and should consult with their own legal, tax and financial advisors with respect to these matters.
Lack of Operating History
The Issuer may be in the early stages of development with a history of little or no revenues and may have historically operated at a loss before, during, and may continue to, following the offering of the Securities. Such issuers are typically subject to the difficulties, uncertainties, and risks associated with the establishment of a new or early stage business such as manufacturing capability, limited product lines, lack of marketing expertise, the existence of more experienced or better capitalized competition, and reliance on a few large suppliers or customers.
No Prior Market for the Issuer’s Securities; Determination of Offering Price
For the Securities of non-publicly traded issuers, there is no or only a very limited secondary trading market and it is unlikely that an active secondary trading market will develop or be sustained following a privately placed offering of such issuer’s Securities. There is no assurance that an investor in such Securities will be able to sell them at a particular time or that the price received upon any sale will be favorable or receive revenue share that was presumptive for such Security. Securities issued by private companies have not been registered under the Securities Act or under the Securities laws of any State of the United States or any other jurisdiction, including outside the United States. Therefore, Securities purchased in these unregistered offerings may not be offered, resold, pledged or otherwise transferred, including without limitation in the United States or to U.S. persons, (i) unless the Securities are registered under the Securities Act or an exemption from the registration requirements of the Securities Act is available, and hedging transactions involving the Securities may not be conducted unless in compliance with the Securities Act, and (ii) except as permitted under any applicable Securities laws of the U.S. States and other jurisdictions. The Issuer of the Securities may require an opinion of counsel in form and substance satisfactory to the Issuer to the effect that any proposed transfer is in compliance with the Securities Act and all applicable Securities laws of the U.S. States and other jurisdictions.
Uncertainty of Financial Projections
Business plans and financial projections provided by the Issuer of Securities are based on assumptions and projections that may not prove accurate. No assurance can be given regarding the validity of the Issuer’s assumptions or the attainability of its financial projections. Although an issuer may believe that the assumptions underlying its business plan are reasonable, future operating results and growth projections are inherently uncertain and may differ materially from the projections presented to potential investors.
Proceeds of the Offering May Be Insufficient to Execute on the Issuer’s Business
Plan
The Securities are in most instances being offered on a "best efforts" basis. In this type of offering structure, the placement Issuer is not required to sell any specific number or dollar amount of Securities but will use its best efforts to sell the Securities being offered. Accordingly, the funds raised in the offering may not meet the amounts contemplated to be required to effectuate the business plan or otherwise be sufficient to permit the company to develop and conduct operations consistent with its projected performances.
You may submit a notification pursuant to the Digital Millennium Copyright Act (DMCA) by providing our Copyright Agent with the following information in writing (see 17 U.S.C 512(c)(3) for further detail):- An electronic or physical signature of the person authorized to act on behalf of the owner of the copyright's interest.- A description of the copyrighted work that You claim has been infringed, including the URL (i.e., web page address) of the location where the copyrighted work exists or a copy of the copyrighted work.- Identification of the URL or other specific location on the Service where the material that You claim is infringing is located.- Your address, telephone number, and email address.- A statement by You that You have a good faith belief that the disputed use is not authorized by the copyright owner, its agent, or the law.- A statement by You, made under penalty of perjury, that the above information in Your notice is accurate and that You are the copyright owner or authorized to act on the copyright owner's behalf.You can contact our copyright agent via email at info@wonderfamily.co. Upon receipt of a notification, the Company will take whatever action, in its sole discretion, it deems appropriate, including removal of the challenged content from the Service.
Additional Financing May Be Required
An issuer that operates at a loss or with limited cash flow following an offering of its Securities, may be required to secure additional financing in order to fund its operations. If the Issuer decides to issue additional equity Securities, it is possible that their issuance will result in dilution of the interests of its existing shareholders, an increase in indebtedness to the detriment of existing lenders or other effects on the issued and outstanding Securities of such issuer. To the extent that the Issuer incurs indebtedness, the Issuer will be subject to certain risks including interest rate fluctuations and inability to generate sufficient cash flow to make scheduled payments. In addition, indebtedness generally ranks prior to the equity of an issuer for purposes of distributing the Issuer’s assets in the event of bankruptcy. There is also the possibility that the Issuer will be unable to locate financing on satisfactory terms or may be required to significantly curtail its operations.
Management’s Discretion in the Application of Proceeds
Unless specified in the Issuer’s private placement memorandum, offering circular or prospectus, the Issuer’s management team will have broad discretion as to the use of the net proceeds from an offering of its Securities. This could result in the proceeds being applied to uses that investors may not deem desirable or with which they may not agree.
Dependence on Key Personnel
The Issuer may be highly dependent on the services of key technical and management personnel the loss of whose services could have a material adverse effect on the Issuer’s business or operations. If the Issuer loses the services of key management personnel, or if it fails to recruit additional highly skilled personnel as needed, its ability to expand its operations and increase the size of the company will be impaired, and it may experience loss of markets or market share and become less competitive.
Proprietary Rights and Licenses
If an issuer is dependent on proprietary and/or licensed technology in its operations, its success will be closely related to its ability to obtain and enforce intellectual property protection for such technology. There exists the possibility that certain patents would not be sufficiently broad to protect key aspects of such an issuer’s or its licensor’s technology, so that competitors would be able to duplicate the Issuer’s products or that patent laws would not provide effective legal or
injunctive remedies to prevent infringement. Patents are also frequently challenged, invalidated, or circumvented by competitors; litigation of patent or infringement claims may result in substantial cost and diversion of resources.
Competition
Most companies experience significant competition in their market sectors from other companies, including larger companies which may have access to greater financial, technical, and other resources. It may be difficult for an issuer, particularly an issuer in the early stages of its business development, to continue to make investments necessary to maintain its competitive position.
The Securities Offered May Be Subject to Registration
If at a point in time following an offering, the Issuer has assets above $10 million and more than 2,000 holders of its equity Securities (or 500 holders of record who are not accredited investors), it would be subject to registration under the Securities Exchange Act of 1934, triggering public company reporting requirements which require substantial management attention and materially higher compliance and reporting costs going forward. The Issuer may incur expenses tracking holders of record to avoid needing to register, such expenses may include the engagement of a transfer agent and other services to account for and properly designate the status of such holders.
Significant Transfer Restrictions
Generally, persons in the United States will be required by law to hold such non-registered Securities for at least one (1) year. Non-U.S. Persons who purchase the Securities will initially be restricted from reselling them to U.S. persons in accordance with Rule 901 of Regulation S and will otherwise be required to hold the Securities for any period required by the laws of the jurisdiction in which they reside. In addition, an issuer or a secondary trading platform may designate a lockup period longer than required by applicable law. These restrictions will have an adverse impact on an investor’s ability to resell the Securities and on the price at which that investor may be able to resell them, if at all.
Purchasers May Lack Information for Monitoring Their Investment
The Issuer is not registered with the Securities and Exchange Commission and currently has no periodic reporting requirements. Accordingly, the Securities offered may not have any special information rights attached to them and purchasers may not be able to obtain all the information they would want regarding the Issuer or the Securities offered.
Cautionary Note Regarding Forward-looking Statements
Issuers make “forward-looking statements” in various of their offering materials. In some cases, these statements may be identified by forward-looking words such as “may,” “might,” “should,” “would,” “could,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “predict,” “potential” or “continue,” and the negative of these terms and other comparable terminology. These forward-looking statements, which are subject to known and unknown risks, uncertainties and assumptions about the Issuer, may include projections of an issuer’s future financial performance based on its growth strategies and anticipated trends in its business. These statements are only predictions based on the Issuer’s current expectations and projections about future events. There are important factors that could cause actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements.
Although the Issuer’s management believes the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, level of activity, performance or achievements. Moreover, neither an issuer nor any other person assumes responsibility for the accuracy or completeness of any of these forward-looking statements. Investors should not rely upon forward looking statements as predictions of future events.
Neither the Issuer nor the placement agent is under any duty to update any of these forward-looking statements contained in its offering materials after the date thereof to conform prior statements to actual results or revised expectations, and neither the Issuer nor the placement agent intends to do so.
We caution investors not to place undue reliance on the forward-looking statements, which speak only as of the date of the offering materials in which they appear.
