Risk Factors
You should carefully consider the risks described below before making a decision to buy securities in any private placement. If any of the following risks actually occur, the business of the company offering the securities may be harmed, the value of the securities could decline, and you may lose part or all of your investment. You should also refer to information contained in the private placement memorandum for risks specific to each private placement transaction offered.
Limited Operating History
Many companies that raise capital through private placements are in the early stages of development. Such companies thus have limited operating histories, and it is difficult to predict future revenues and results of operations. This may result in financial outcomes that fall below investor expectations.
Control by Existing Shareholders
Existing shareholders in companies offering private placements often control enough of the company to make decisions that could have a direct effect on business and management.
Difficulty of Managing Growth
Companies offering private placements may not always be capable of handling managerial, operational, or financial growth.
No Public Market/Illiquidity of Securities
The securities offered through private placements are illiquid as they are not available for sale to the general public. A market may never develop for privately placed securities. Therefore, investors must not require short term liquidity as they may have to hold the securities indefinitely.
Legal and Regulatory Uncertainties
Because areas such as technology, telecommunications and health sciences sectors are constantly evolving, government regulations and legal uncertainties exist or could exist that may adversely affect the business of some of the companies offering private placements.
