- iEntertainment Game Portfolio: 40 games
- Global Digital Gaming Market (projected): 18%+ CAGR
- Licensing Agreements with Discovery Communications and Valiant Entertainment.
- Leadership Team has been instrumental in producing 150+ games, including Sid Meier's Civilization, Gunship, and more.
- CEO, Bill Stealey, has founded and taken public two game companies (MicroProse and iEntertainment).
- Development agreement with Gamaga, independent game producer of Banana Kong and Operate Now: Hospital
- Total Amount Raised: US $2,100
- Total Round Size: US $3,000,000
- Seed :
- Minimum Investment: US $500 per investor
- : Crowd Note
- Side by Side Offering
- : US $8,000,000 until May 4, 2018
- Valuation Cap Schedule: See Full Schedule
It is estimated that the digital game market will produce more than $115 billion in revenue worldwide in 2018 and it is growing at a rate of more than 18% per year. In fact, this market is estimated to be nearly 3 times the size of the worldwide movie market.
iMagic Games, Inc. is a game developer and publisher of online, mobile, and PC/Mac games, built by industry veterans. iMagic Games has an existing portfolio of successful computer games with a focus on military simulation, that it believes can be updated and re-released (primarily by improving graphics and making the game compatible with existing digital play systems). The Company's current product lines include the World War II Combat Flight Simulation series, WarBirds; a mobile WarBirds game for iOS; a series of Bow Hunting mobile games; and a series of single player military simulation games. In addition, the Company plans to release a new series of mobile and online games with Discovery Communications (Red Crimes: Hidden Murders) and Valiant Entertainment (Valiant Puzzle Warriors) in 2018 and beyond.
In order to conduct this Offering, the Parent Company (iEntertainment Network, Inc.) reorganized whereby it formed iMagic Games as a North Carolina c-corporation on March 22, 2018. The reorganization will be completed after this Combined Offering by the Parent Company’s shareholders contributing their shares in the Parent Company in exchange for shares in the Company. At that time, iEntertainment, the Parent Company, will transfer all assets of iEntertainment Network Inc. to iMagic Games Inc. pursuant to the Asset Assignment Agreement. The Company has not yet commenced principal operations, and plans to commence principal operations after this Combined Offering. There is a risk that if sufficient financing is not received as part of the current capital raise, the commencement of principal operations may be delayed for a period of time, or indefinitely. For more information about this subsequent transaction, please see the Financial Discussion section below.
Planned Games: 2018 and Beyond
The leadership team believes that publishing games for audiences with subject-matter or character affinities will help reduce player acquisition costs and increase the odds of game success. To accomplish this, iMagic Games has two signed media partners with large audiences: Discovery Communications and Valiant Entertainment.
- With Discovery Communications, iMagic Games intends to produce three murder/mystery/crime games for Investigation Discovery (ID), one of Discovery's fastest growing networks. The first release, expected July 2018, is Red Crimes: Hidden Murders. To produce this game, iMagic Games has teamed up with the Gamaga development company. Gamaga has a track record of producing successful games: its simulation game in 2017 generated over 10 million downloads in six months and significant revenues. iMagic Games' planned versions II and III are proposed to be released in 2019 for ID Network.
- Valiant Entertainment is a comic book company, recently acquired by a Chinese backed company. iMagic Games has its first game for Valiant in production currently intended for a mid-2018 release.
iMagic Games intends to leverage its development capabilities to make games that can be serialized with multiple releases, and partner with media companies to leverage their recognized intellectual properties.
The development team at iMagic Games has strong prior experience in game development and publishing, having been instrumental in releasing over 150 games throughout their careers. They bring this experience to iMagic Games, the products of which demonstrate great game play, excellent graphics, competition between players, and dynamic monetization techniques including premium retail, subscription, free to play, and in game purchases to help maximize revenue potential for the company. Some of the leadership team's games from prior companies have sold more than 1,000,000 copies, including the best-selling games F-15 Strike Eagle, F-19 Stealth Fighter, Tom Clancy’s Red Storm Rising, M1 Tank Platoon, Silent Service, Pirates, Sid Meier's Civilization, and more.
iMagic Games focuses on building game franchises. Red Crimes: Hidden Murders is planned for four Seasons of mystery/crime games releases. Four Seasons mean four releases of new or upgraded versions of the Red Crimes game to increase total potential revenue generation. WarBirds, iMagic Games's premier air combat simulation game, is now on its 56th iteration and has been generating revenues since 1997. WarBirds will be updated in 2018 with new graphics and the introduction of Virtual Reality 3D versions in 2018/2019. This WarBirds update will enable iMagic Games to release single player games on digital formats of the four games currently developed from the WarBirds base computer code.
Leadership Team Approach to Game Publishing
Although a few break-out hit games generate hundreds of millions of dollars in revenues in the games industry, the iMagic Games leadership team believes in a portfolio theory of company management.The leadership team believes that the right strategy for a growing and prosperous game company to generate equity value for all stockholders is to make unique games with the expectation of sequels for reasonable development costs and with medium revenue expectations.
The team also believes that making games with recognized media partners, with recognized intellectual properties where possible, can reduce the costs of player acquisition and increase the profitability of each game product. Further, making sequels of successful games, without the full cost of the original development effort, can increase the total return of each product release.
For iMagic Games's new Red Crimes game, iMagic Games will advance $250,000 for the development, will spend a comparable amount for marketing, and receive 50% of the net revenues, which management currently projects will be $5 million over two years after release. iMagic Games will later release, with Discovery’s help, a Season II of Red Crimes, in October 2018. A Season III and IV of Red Crimes are also planned to maximize the return from the initial Red Crimes development.
iMagic Games intends to use this same strategy for every game it builds, making as many sequels as possible. iMagic Games will focus on mobile games primarily for Google and Apple devices with conversions to other formats where recognized as profitable versus the costs. Many of our development efforts will be to use external development companies as we are doing now with the Gamaga development team for Red Crimes.
In 1982, iEntertainment CEO Stealey launched MicroProse Software, (MPS), doing military simulation games as he was an active military flyer at the time. MPS went public in 1991 and was sold to a Kleiner Perkins company in 1993. In 1995, he founded Interactive Magic with a focus on military simulation and online games. Interactive Magic went public in 1998 and was sold in 1999. The Leadership Team of iMagic Games has decades of experience developing and publishing games.
iMagic Games is a team of industry professionals who have been working in the games industry since 1982 producing over 150 games and selling hundreds of millions of copies worldwide and now are back to do it again with well known media companies Discovery Communications, Valiant Entertainment, and more. CEO, JW Stealey, took Sid Meier's early games and turned them into the famous MicroProse Software (MPS) company, one of the top publishers of the 1980s and 1990s, and took MPS public in 1991. Stealey and some MicroProse veterans then started Interactive Magic in 1995 taking it public in 1998. Today Stealey, Dan Hammer, (formerly Interactive Magic), Jeff Peters (formerly EA), David Terry (former investment banker for Interactive Magic), John Jones Steele (former MicroProse contractor), Allan Kalbarczyk (Controller at MPS), Barb Wendel (Interactive Magic), John Ewan (MPGNet and Interactive Magic), are back together with developers around the world with the goal to build more great games and another successful game company.
iMagic Games operates several online games, including WarBirds, Dawn of Aces, and M4 Tank Brigade. WarBirds has just been signed by Discovery Communications for their American Heroes Network and TV advertising will start in February 2018. iMagic Games has two mobile games, Bow Hunter and WarBirds Fighter Pilot Academy. iMagic Games is developing two games for our Media Partners, Discovery Communications and Valiant Entertainment. Red Crimes is for Discovery’s ID Channel for release in July 2018. Valiant Puzzle Warriors is for Valiant Entertainment (a comic book company with five superhero movies coming with present potential opportunities for iMagic Games) and due by March 2018. Discovery has also asked us to create a game for their Diesel Brothers series. iMagic Games has four retail games selling on Steam that all could be updated and rereleased. iMagic Games has a catalog of over 40 successful games we could update and rerelease.
We own WarBirds, have 40 games in our catalog, and license partner content via revenue share agreements.
A Side by Side offering refers to a deal that is raising capital under two offering types. If you plan on investing less than US $20,000.00, you will automatically invest under the Regulation CF offering type. If you invest more than US $20,000.00, you must be an accredited investor and invest under the Regulation D offering type.
US $2,100 (under Reg CF only)
US $9,000,000 before May 18, 2018
US $10,000,000 Final
All non-Major Purchasers will be subject to an Investor Proxy Agreement (“IPA”). The IPA will authorize SeedInvest to act as representative for each non-Major Purchaser and take certain actions for their benefit and on their behalf. Please see a copy of the IPA included with the Company's offering materials for additional details.
- Free WarBirds play for one year.
- $100 in game credit in all iEntertainment Mobile games released for 2 years starting with Red Crimes game release expected July 2018.
- Free WarBirds play for two years.
$100 in game credit in all iEntertainment Mobile games released for 2 years starting with Red Crimes game release expected July 2018.
- Free WarBirds play for two years.
- Executive Producer recognition of all iEntertainment games in game and on the iEntertainment website for two years.
$100 in game credit in all iEntertainment Mobile games released for 2 years starting with Red Crimes game release expected July 2018.
- Free WarBirds play for five years.
- Invite to a free round of golf at www.MountainAirNC.com, Summer 2018, to have dinner with the CEO to discuss iEntertainment and the future of the company.
- Executive Producer recognition of all iEntertainment games in game and on the iEntertainment website for two years.
- Free WarBirds play for life of game.
It is advised that you consult a tax professional to fully understand any potential tax implications of receiving investor perks before making an investment.
Please see the financial information listed on the cover page of this Form C and attached hereto in addition to the following information. Financial statements are attached to the Form C as Exhibit B.
iEntertainment Network, Inc., which is the Parent Company of iMagic Games, is a North Carolina corporation headquartered in Cary, North Carolina. The Company is a game developer and publisher of online, mobile, and PC/Mac games. The Company’s current product line includes the World War II combat flight simulation, WarBirds, a mobile WarBirds game for iOS, a series of Bow Hunting mobile games, a series of single player military simulation games, and new series of mobile and online games for its Media Partners in 2018 and beyond.
The Company primarily records revenue from two sources, royalties from third parties for the rights to use the Company’s games, and from in-game purchases through the Company’s own online and mobile applications. Revenue from monthly royalties paid by third parties are recorded when due to the Company based on contractual agreements. The Company recognizes revenue for in-game at the time of purchase.
The Company has incurred losses from inception of approximately $49,151,306. For the Financial Year ended 2016, the Company received revenues of $164,063, and experienced a net loss of $627,678, and for the Financial Year ended 2017, the Company received revenues of $150,944, and experienced a loss of $352,483.
iMagic Games, the subsidiary of iEntertainment Network, Inc., although formed, does not currently contain any assets. Upon campaign success, iEntertainment has agreed to contribute the business to iMagic Games. This requires the assignment of each individual asset and the assignment and assumption of each assumed liability. In addition to the assignment of assets and assumptions of liabilities, outstanding iEntertainment option agreements would be replaced by iMagic Games option agreements. Furthermore, this subsequent transaction would include an iMagic Games restrictive covenant (to be executed by all iMagic Games employees that would include:
- An agreement by the employee to keep iMagic Games’s proprietary information confidential and to use it only in his employment by iMagic Games.
- The employee’s assignment to iMagic Games of all intellectual property developed by the employee during his or her employment by iMagic Games.
- An agreement by the employee not to compete with iMagic Games during his or her employment by iMagic Games and for a specified period thereafter.
- An agreement by the employee not to solicit for employment or contractor services by a third party any of iMagic Games’ employees/contractors during his or her employment by iMagic Games and for a specified period thereafter.
Liquidity and Capital Resources
The proceeds from the Offering are essential to our operations. We plan to use the proceeds as set forth above under "Use of Proceeds", which is an indispensable element of our business strategy. The Offering proceeds will have a beneficial effect on our liquidity, as we have approximately $17,605 in cash on hand as of January 31, 2018 which will be augmented by the Offering proceeds and used to execute our business strategy.
The Company currently does not have any additional outside sources of capital other than the proceeds from the Combined Offerings.
Capital Expenditures and Other Obligations
The Company does not intend to make any material capital expenditures in the future.
Trends and Uncertainties
After reviewing the above discussion of the steps the Company intends to take, potential Purchasers should consider whether achievement of each step within the estimated time frame is realistic in their judgment. Potential Purchasers should also assess the consequences to the Company of any delays in taking these steps and whether the Company will need additional financing to accomplish them.
The financial statements are an important part of this Form C and should be reviewed in their entirety. The financial statements of the Company are attached to the Form C as Exhibit B.
The Games Market for iEntertainment Network
According to New Zoo, 2.2 billion gamers across the globe were expected to generate $108.9 billion in game revenues in 2017. This represents an increase of $7.8 billion, or 7.8%, from the year before. Digital game revenues will account for $94.4 billion or 87% of the global market. Mobile is the most lucrative segment, with smartphone and tablet gaming growing 19% year on year to $46.1 billion, claiming approximately 42% of the market. In 2020, it is estimated that mobile gaming will represent just more than half of the total games market. New Zoo expects the global market to grow at a CAGR of +6.2% toward 2020 to reach $128.5 billion.
iMagic Games is focusing on the fast-growing mobile gaming market with its media partners to develop, market, and publish games specifically targeted to the media partners' audiences and, in some cases, using the media partners' intellectual properties for better and less expensive acquisition of players.
Mobile Revenues on the Rise
Mobile gaming is expected to generate $46.1 billion this year, or 42% of all global game revenues. More than three-quarters of this, or $35.3 billion, will come from smartphone gaming, with tablet games accounting for the remaining $10.8 billion. Tablet unit sales have plummeted over the years, but with 280 million tablets used actively, the segment contributes significantly to the success of mobile games. The console gaming segment performed better than expected in 2016 thanks to console manufacturers, publishers, and consumers embracing of a variety of digital business models. Microsoft and Sony generated more than $14 billion in combined revenues from first-party games, third-party game fees, and subscription revenues. In 2017, we expect console gaming to generate a total of $33.5 billion in revenues worldwide, of which 65.8% is expected to be digital.
Downloaded/Boxed PC Games Revenues Decrease, Despite Higher Engagement
Revenues for both PC gaming segments are anticipated to drop slightly in the coming year. PC browser revenues have been decreasing since 2015 because of the transition of casual gaming to mobile devices. In 2016, Facebook’s revenues from gaming were at its lowest since 2011, while Zynga’s PC revenues dropped more than 30%. Newzoo expects the segment to generate $4.5 billion in 2017, a year-on-year decrease of 9.3%. Its full-year revenue analysis showed that PC revenues of public companies decreased in both Western and Asian markets last year, while emerging markets had single-digit growth rates. This decrease also has a significant impact on its longer-term forecasts. New Zoo now expects downloaded/boxed PC games to reach $24.5 billion in 2019, a significant adjustment downward compared to the $29.0 billion global figure for PC games in its January update.
iMagic Games intends to monitor new technology developments and add Augmented Reality features into its mobile games for 2019. For 2019, iMagic Games' premier 3D combat flight simulator will be updated with new graphics, new combat scenarios, and new Virtual Reality versions will be released. While we believe these new V/R versions will be very impressive to view, they will mostly be a marketing opportunity with most of revenues coming from traditional devices and graphic systems including mobile, computer, and console systems.
The Company operates in highly competitive industries and its success depends on its ability to effectively compete with numerous domestic and foreign businesses. The Company faces significant competition in their businesses and in the evolving gaming industry, not only from traditional competitors but also from a number of other domestic and foreign providers, some of which have substantially greater financial resources and/or experience than the Company. Many of the Company’s competitors are large, well-established companies, with substantially larger operating staffs and greater capital resources and have been engaged in the design, manufacture, and operation of gaming products for many years. These competitors also compete with the Company in recruiting and retaining qualified personnel and acquiring technologies. Smaller or early stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. Accordingly, competitors may commercialize products more rapidly or effectively than the Company is able to, which would adversely affect the Company’s competitive position, the likelihood that the Company’s products and services will achieve initial market acceptance and an ability to generate meaningful additional revenues from products.
The Company’s success depends in part on its ability to develop, enhance and/or introduce successful gaming concepts and game content. Demand for its products and the level of play of its products could be adversely affected by changes in player preferences. The Company believes that creative and appealing game content will produce significant revenue for its games and will provide them with a competitive advantage, which in turn would enhance revenue and the Company’s ability to attract new business and to retain existing business. There can be no assurance that the Company will be able to create or sustain the success of its planned game content or effectively develop or obtain from third parties game content that would be widely accepted by customers. The Company’s revenues are dependent on the earning power and life span of its games. The Company therefore faces continuous pressure to design and deploy new and successful game themes and technologically innovative products to maintain revenue and remain competitive. If the Company is unable to anticipate or react timely to significant changes in player preferences, the demand for its gaming products and the level of play of its gaming products could decline.
If the Company is unable to protect its intellectual property, the value of its brand and other intangible assets may be diminished, and its business may be seriously harmed. A need to license or acquire new intellectual property, could cause the Company to incur substantial costs. The Company aims to protect its confidential proprietary information, in part, by entering into confidentiality agreements and invention assignment agreements with its employees, consultants, advisors, and third parties who access or contribute to its proprietary know-how, information, or technology. The Company also relies on trademark, copyright, patent, trade secret, and domain-name-protection laws to protect its proprietary rights. In the United States and internationally, the Company has filed various applications to protect aspects of its intellectual property, and it currently holds trademarks and registered copyrights. In the future the Company may acquire additional intellectual property, which could require significant cash expenditures. However, third parties may knowingly or unknowingly infringe its proprietary rights, third parties may challenge the Company’s proprietary rights, and pending and future trademark and patent applications may not be approved. In addition, effective intellectual property protection may not be available in every country in which the Company operates or intends to operate. In any of these cases, it may be required to expend significant time and expense to prevent infringement or to enforce its rights. Although the Company has taken measures to protect its proprietary rights, there can be no assurance that others will not offer products or concepts that are substantially similar to compete with its business. From time to time, the Company may face claims from third parties claiming ownership of, or demanding release of, the open-source software or derivative works that the Company has developed using such software, which could include proprietary source code. Any intellectual enforcement efforts iMagic Games seeks to undertake, including litigation, could be time-consuming and expensive and could divert management’s attention.
The Company has permitted its intellectual property to lapse. Obtaining and maintaining intellectual property protection depends on compliance with various procedural, document submissions, fee payment and other requirements imposed by governmental agencies, and the Company’s protection could be reduced or eliminated for noncompliance with these requirements. The USPTO and various foreign governmental agencies require compliance with a number of procedural, documentary, fee payment and other similar provisions during the application process. Although an inadvertent lapse can in many cases be cured by payment of a late fee or by other means in accordance with the applicable rules, there are situations in which noncompliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of rights in the relevant jurisdiction. Noncompliance events that could result in abandonment or lapse of intellectual property include, but are not limited to, failure to respond to official actions within prescribed time limits, non-payment of fees and failure to properly legalize and submit formal documents. In particular, the Company has permitted its trademarks to lapse and be abandoned for: “iEntertainment”, “WarBirds”, “Warbirds II”, “Warbirds III”, “Rated I”, “Woogle”, “INetwork”, among others. A dead or abandoned status for a trademark application means that specific application is no longer under prosecution within the USPTO, and would not prevent another party from filing for that same trademark protection.
The Company’s success depends on the experience and skill of the board of directors, its executive officers and key employees. In particular, the Company is dependent on John Stealey who is a founder and key employee of the Company. The loss of John Stealey or any member of the board of directors or executive officer could harm the Company’s business, financial condition, cash flow and results of operations.
The reviewing CPA has included a “going concern” note in the reviewed financials. Specifically, the CPA has noted that the Company has incurred losses from inception of approximately $49,151,306 which, among other factors, raises substantial doubt about the Company's ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent upon management's plans to raise additional capital from the issuance of debt or the sale of stock, its ability to commence profitable sales of its flagship products, and its ability to generate positive operational cash flow. The accompanying financial statements do not include any adjustments that might be required should the Company be unable to continue as a going concern.
The Company has not prepared any audited financial statements. Therefore, you have no audited financial information regarding the Company’s capitalization or assets or liabilities on which to make your investment decision. If you feel the information provided is insufficient, you should not invest in the Company.
The Parent Company has a complicated operating history which includes being taken public, being taken private, retiring of debt, and the sale of common stock to friends and family of the management team. This has resulted in the Parent Company having several thousand investors which may pose operational challenges to the Company. The complicated history may be an indication of executive mismanagement and may be an indicator of future financial and governance issues.
If the Company fails to implement proper and effective internal controls, disclosure controls, and/or corporate governance procedures, its ability to operate could be substantially impaired. Prior to this offering, the Parent Company has had a complicated operating history, and has, on at least one occasion, failed to implement or maintain an effective system of corporate governance. In particular, on August 13, 2010, the Parent Company was temporarily dissolved pursuant to N.C.G.S. Section 55-14-21 for failure to file an annual report. On November 23, 2010, the Company filed for reinstatement, which reinstatement was granted. This occurrence may indicate ineffective current controls, mismanagement, or failure by executives to perform routine duties. In addition, in the course of producing the Reviewed Financials, which are attached to the Form C as Exhibit B, independent registered accountants found deficiencies in internal controls with respect to the Company’s issuances of equity securities and granting of stock options, as well as the booking of equity and debt. Due in part to these deficiencies, certain issuances of capital stock and option grants were not documented or properly authorized in compliance with all corporate law requirements. The Company has taken actions to remediate the deficiencies with respect to the issuance of equity securities and the granting of stock options. The Company, however, cannot assure that such actions will be successful in remediating the deficiencies.
The majority of the Company’s projected revenue is based on media partner games which have yet to be released. If the Company is unable to deliver these games to their media promotion partners or if these games are not well received by the market, the Company may be unable to meet its growth projections and may be unable to meet its financial obligations.
The Company’s projections rely substantially on products which have not yet been fully developed or launched, and do not represent revenue from the Company’s current portfolio of games. iMagic Game’s largest game is currently generating approximately $9,000 in revenue each month, substantially less than the projected revenue in its business model. If the Company’s new releases cannot generate more meaningful revenue, the Company may be unable to meet its financial obligations and may be unable to meet its growth projections.
iMagic Games is dependent upon third-party development companies to built its games. These third-party development groups may be unable to meet the Company’s timeline or quality expectations. If the Company is unable to pay these third-party development groups or if these groups experience financial distress, iMagic Games may be left with no product to deliver to its media partners. The Company’s operating results could be adversely affected by an interruption or cessation in the development of this content or a serious quality assurance lapse. The Company may be unable to find adequate replacements for its developers within a reasonable time frame, on favorable commercial terms or at all. Development costs may unexpectedly increase and the Company may not be able to successfully recover any or all of such cost increases.
The Company has a cash position of approximately $17,600, which represents approximately less than two months of runway. If the Company is unable to raise additional capital, it may be unable to meet its financial obligations and may miss its growth projections.
The Company's quarterly operating results have fluctuated significantly in the past and will likely fluctuate significantly in the future depending on a variety of factors, several of which are not in the Company's control. Such factors include the demand for the Company's products and the products of its competitors, the size and rate of growth of the interactive entertainment software market, development and promotional expenses related to the introduction of new products or enhancements, the degree of market acceptance for the Company's new product introductions and enhancements, the timing of orders from significant customers, delays in shipment, the level of price competition, changes in computing platforms, the nature and magnitude of product returns, order cancellations, software defects and other quality problems, the length of product life cycles, the percentage of the Company's sales related to international sales and changes in personnel. A significant portion of the Company's operating expenses is relatively fixed, and planned expenditures are primarily based on expectations regarding future sales; as a result, operating results in any given quarter would be disproportionately adversely affected by a decrease in sales or a failure to meet the Company's sales expectations. Operating results for future periods are subject to numerous uncertainties, and there can be no assurance that the Company will become profitable or sustain profitability on an annual or quarterly basis. Based on the foregoing, the Company believes that period-to-period comparisons of operating results should not be relied upon as indicative of future results.
The Company's success depends on the timely introduction of successful new products. The development of new products is lengthy, expensive and uncertain, and a product's development typically requires six to 24 months to complete from the time a new concept is approved. In addition, product development of online products continues for the life of the product. Many of the Company's proposed products are in early stages of development, and the Company will be required to commit considerable time, effort and resources to complete development of its currently proposed products. The Company has, in the past, experienced significant delays in the introduction of certain new products and there will likely be delays in developing and introducing new products in the future. In addition, because many of the Company's products are developed for it by third parties, the Company cannot always control the timing of their introduction. While the Company maintains production arrangements with its third-party developers, provides them with certain software tool kits to promote quality control and monitors their progress, there can be no assurance that delays in the work performed by third parties or poor quality of such work will not result in product delays. Unanticipated delays, expenses, technical problems or difficulties could cause the Company to miss an important selling season with a corresponding negative impact on revenues and net income or result in abandonment or material change in product commercialization.
There can be no assurance that the Company will be able to successfully develop any new products on a timely basis or that technical or other problems will not occur which would result in increased costs or material delays. In addition, software products as complex as those offered by the Company may contain undetected errors when first introduced. Despite extensive product testing, the Company has, in the past, released products with defects and has discovered software errors in certain of its product offerings after their introduction. In particular, the personal computer hardware environment is characterized by a wide variety of non-standard peripherals (such as sound cards and graphics cards) and configurations that make pre-release testing for programming or compatibility errors very difficult and time-consuming. There can be no assurance that, despite testing by the Company, errors will not be found in new products or releases after commencement of commercial shipments. Remedying such errors may delay the Company's plans, cause it to incur additional costs and adversely affect its reputation.
The level of demand and market acceptance for the Company's newly introduced products is subject to a high degree of uncertainty. Software acquisition and development costs, as well as promotion and marketing expenses, royalties and third-party participations payable to software developers, creative personnel, musicians and others, which reduce potential revenues derived from software sales, have increased significantly in recent years. The Company's future operating results will depend on numerous factors beyond its control, including the popularity, price and timing of new entertainment software products being released and distributed, international, national, regional and local economic conditions (particularly economic conditions adversely affecting discretionary consumer spending), changes in consumer demographics, the availability of other forms of entertainment, critical reviews and public tastes and preferences, all of which change rapidly and cannot be predicted. The Company's ability to plan for product development and promotional activities will be significantly affected by its ability to anticipate and respond to relatively rapid changes in consumer tastes and preferences, particularly those of the consumers. A decline in the popularity of software games or in the interactive entertainment software industry generally or in particular market segments could adversely affect the Company's business and prospects. In addition, the success of the Company's strategy to capitalize on online games will depend in part upon market acceptance of online games and a "pay-for-play" model. Online game play is a new and evolving concept, and it is difficult to assess or predict with any assurance the size of the market for online games or its prospects for growth. There can be no assurance that a viable market for online games will develop, that the Company will be successful in developing additional products for online use or that the Company's products for this market will achieve widespread market acceptance.
Start-up investing is risky. Investing in startups is very risky, highly speculative, and should not be made by anyone who cannot afford to lose their entire investment. Unlike an investment in a mature business where there is a track record of revenue and income, the success of a startup or early-stage venture often relies on the development of a new product or service that may or may not find a market. Before investing, you should carefully consider the specific risks and disclosures related to both this offering type and the company which can be found in this company profile and the documents in the data room below.
Your shares are not easily transferable. You should not plan on being able to readily transfer and/or resell your security. Currently there is no market or liquidity for these shares and the company does not have any plans to list these shares on an exchange or other secondary market. At some point the company may choose to do so, but until then you should plan to hold your investment for a significant period of time before a “liquidation event” occurs. A “liquidation event” is when the company either lists their shares on an exchange, is acquired, or goes bankrupt.
The Company may not pay dividends for the foreseeable future. Unless otherwise specified in the offering documents and subject to state law, you are not entitled to receive any dividends on your interest in the Company. Accordingly, any potential investor who anticipates the need for current dividends or income from an investment should not purchase any of the securities offered on the Site.
Valuation and capitalization. Unlike listed companies that are valued publicly through market-driven stock prices, the valuation of private companies, especially startups, is difficult to assess and you may risk overpaying for your investment. In addition, there may be additional classes of equity with rights that are superior to the class of equity being sold.
You may only receive limited disclosure. While the company must disclose certain information, since the company is at an early-stage they may only be able to provide limited information about its business plan and operations because it does not have fully developed operations or a long history. The company may also only obligated to file information periodically regarding its business, including financial statements. A publicly listed company, in contrast, is required to file annual and quarterly reports and promptly disclose certain events — through continuing disclosure that you can use to evaluate the status of your investment.
Investment in personnel. An early-stage investment is also an investment in the entrepreneur or management of the company. Being able to execute on the business plan is often an important factor in whether the business is viable and successful. You should be aware that a portion of your investment may fund the compensation of the company’s employees, including its management. You should carefully review any disclosure regarding the company’s use of proceeds.
Possibility of fraud. In light of the relative ease with which early-stage companies can raise funds, it may be the case that certain opportunities turn out to be money-losing fraudulent schemes. As with other investments, there is no guarantee that investments will be immune from fraud.
Lack of professional guidance. Many successful companies partially attribute their early success to the guidance of professional early-stage investors (e.g., angel investors and venture capital firms). These investors often negotiate for seats on the company’s board of directors and play an important role through their resources, contacts and experience in assisting early-stage companies in executing on their business plans. An early-stage company may not have the benefit of such professional investors.
Frequently Asked Questions
A Side by Side offering refers to a deal that is raising capital under two offering types. This Side by Side offering is raising under Regulation CF and Rule 506(c) of Regulation D.
The Form C is a document the company must file with the Securities and Exchange Commission (“SEC”) which includes basic information about the company and its offering and is a condition to making a Reg CF offering available to investors. It is important to note that the SEC does not review the Form C, and therefore is not recommending and/or approving any of the securities being offered.
Before making any investment decision, it is highly recommended that prospective investors review the Form C filed with the SEC (included in the company's profile) before making any investment decision.
Rule 506(c) under Regulation D is a type of offering with no limits on how much a company may raise. The company may generally solicit their offering, but the company must verify each investor’s status as an accredited investor prior to closing and accepting funds. To learn more about Rule 506(c) under Regulation D and other offering types check out our blog and academy.
Title III of the JOBS Act outlines Reg CF, a type of offering allowing private companies to raise up to $1 million from all Americans. Prior capital raising options limited private companies to raising money only from accredited investors, historically the wealthiest ~2% of Americans. Like a Kickstarter campaign, Reg CF allows companies to raise funds online from their early adopters and the crowd. However, instead of providing investors a reward such as a t-shirt or a card, investors receive securities, typically equity, in the startups they back. To learn more about Reg CF and other offering types check out our blog and academy.
When you complete your investment on SeedInvest, your money will be transferred to an escrow account where an independent escrow agent will watch over your investment until it is accepted by iMagic Games. Once iMagic Games accepts your investment, and certain regulatory procedures are completed, your money will be transferred from the escrow account to iMagic Games in exchange for your securities. At that point, you will be a proud owner in iMagic Games.
To make an investment, you will need the following information readily available:
- Personal information such as your current address and phone number
- Employment and employer information
- Net worth and income information
- Social Security Number or government-issued identification
- ABA bank routing number and checking account number (typically found on a personal check or bank statement)
If you are investing under Rule 506(c) of Regulation D, your status as an Accredited Investor will also need to be verified and you will be asked to provide documentation supporting your income, net worth, revenue, or net assets or a letter from a qualified advisor such as a Registered Investment Advisor, Registered Broker Dealer, Lawyer, or CPA.
An investor is limited in the amount that he or she may invest in a Reg CF offering during any 12-month period:
- If either the annual income or the net worth of the investor is less than $100,000, the investor is limited to the greater of $2,000 or 5% of the lesser of his or her annual income or net worth.
- If the annual income and net worth of the investor are both greater than $100,000, the investor is limited to 10% of the lesser of his or her annual income or net worth, to a maximum of $100,000.
Separately, iMagic Games has set a minimum investment amount of US $500.
Accredited investors investing $20,000 or over do not have investment limits.
You are a partial owner of the company, you do own securities after all! But more importantly, companies which have raised money via Regulation CF must file information with the SEC and post it on their websites on an annual basis. Receiving regular company updates is important to keep shareholders educated and informed about the progress of the company and their investment. This annual report includes information similar to a company’s initial Reg CF filing and key information that a company will want to share with its investors to foster a dynamic and healthy relationship.
In certain circumstances a company may terminate its ongoing reporting requirement if:
- The company becomes a fully-reporting registrant with the SEC
- The company has filed at least one annual report, but has no more than 300 shareholders of record
- The company has filed at least three annual reports, and has no more than $10 million in assets
- The company or another party purchases or repurchases all the securities sold in reliance on Section 4(a)(6)
- The company ceases to do business
However, regardless of whether a company has terminated its ongoing reporting requirement per SEC rules, SeedInvest works with all companies on its platform to ensure that investors are provided quarterly updates. These quarterly reports will include information such as: (i) quarterly net sales, (ii) quarterly change in cash and cash on hand, (iii) material updates on the business, (iv) fundraising updates (any plans for next round, current round status, etc.), and (v) any notable press and news.
Currently there is no market or liquidity for these securities. Right now iMagic Games does not plan to list these securities on a national exchange or another secondary market. At some point iMagic Games may choose to do so, but until then you should plan to hold your investment for a significant period of time before a “liquidation event” occurs. A “liquidation event” is when iMagic Games either lists their securities on an exchange, is acquired, or goes bankrupt.
You can return to SeedInvest at any time to view your portfolio of investments and obtain a summary statement. If invested under Regulation CF you may also receive periodic updates from the company about their business, in addition to monthly account statements.
This is iMagic Games's fundraising profile page, where you can find information that may be helpful for you to make an investment decision in their company. The information on this page includes the company overview, team bios, and the risks and disclosures related to this investment opportunity. If the company runs a side by side offering that includes an offering under Regulation CF, you may also find a copy of the iMagic Games's Form C. The Form C includes important details about iMagic Games's fundraise that you should review before investing.
For offerings made under Regulation CF, you may cancel your investment at any time up to 48 hours before a closing occurs or an earlier date set by the company. You will be sent a reminder notification approximately five days before the closing or set date giving you an opportunity to cancel your investment if you had not already done so. Once a closing occurs, and if you have not canceled your investment, you will receive an email notifying you that your securities have been issued. If you have already funded your investment, your funds will be promptly refunded to you upon cancellation. To cancel your investment, you may go to your portfolio page
If you invest under any other offering type, you may cancel your investment at any time, for any reason until a closing occurs. You will receive an email when the closing occurs and your securities have been issued. If you have already funded your investment and your funds are in escrow, your funds will be promptly refunded to you upon cancellation. To cancel your investment, please go to your portfolio page.