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Pongalo

Mobile-focused streaming service founded by a prominent media executive

Pongalo is offering securities under both Regulation D and Regulation CF through SI Securities, LLC ("SI Securities"). SI Securities is an affiliate of SeedInvest Technology, LLC, a registered broker-dealer, and member FINRA/SIPC. SI Securities will receive cash compensation equal to 7.50% of the value of the securities sold and equity compensation equal to 5.00% of the number of securities sold. Investments made under both Regulation D and Regulation CF involve a high degree of risk and those investors who cannot afford to lose their entire investment should not invest. Furthermore, the contents of the Highlights, Term Sheet sections have been prepared by SI Securities and shall be deemed broker-dealer communications subject to FINRA Rule 2210 (the “Excluded Sections”). With the exception of the Excluded Sections noted above, this profile contains offering materials prepared solely by Pongalo without the assistance of SI Securities, and not subject to FINRA Rule 2210 (the “Issuer Profile”). The Issuer Profile may contain forward-looking statements and information relating to, among other things, the company, its business plan and strategy, and its industry. Investors should review the risks and disclosures in the offering's draft. The contents of this profile are meant to be a summary of the information found in the company’s Form C. Before making an investment decision, investors should review the company’s Form C for a complete description of its business and offering information, a copy of which may be found both here and below.


Company Highlights

  • Investors include 500 Startups, Canyon Creek Capital, Digital Bridge Capital, and Revolution Studios.
  • 90,000+ registered users for its Pongalo subscription app and over 350,000 followers across all media channels.
  • Streamed 200+ million minutes of film and TV content in July, up from 50 million minutes in the month of May (+400% growth).
  • Key distribution partnerships with Amazon, Roku, YouTube, Google, Xumo, and Vewd, among others.
  • Advisors include high-profile media figures like the former Co-Chairman of MTV Networks, the former Chief Strategy Officer of Univision, and the current head of Mergers & Acquisitions at Sony Pictures.

Fundraise Highlights

  • Total Amount Raised: US $671,419
  • Total Round Size: US $3,500,000
  • Raise Description:  Bridge
  • Minimum Investment:  US $500 per investor
  • Security Type:  Crowd Note
  • Valuation Cap:  US $8,000,000
  • Offering Type:   Side by Side Offering

Pongalo is a rapidly-growing media company that distributes popular programming to one of the fastest-growing ethnic demographics in the US: Latinos. Our goal is to create a worldwide, multi-platform media company that dominates not only content distribution to Latinos, but also to other under-served ethnic groups globally.


U.S. Hispanics are the second fastest-growing ethnic demographic in America, representing almost 20% of the population. In fact, there are more Spanish speakers in the world than there are English speakers. But here’s the problem -- the U.S. Hispanic media market has traditionally consisted of only two major brands, which were essentially broadcast TV channels that fewer and fewer people under the age of 45 have been watching.

We saw an opportunity to create something disruptive, so, over the past four years, we’ve built a mobile-first media company for the next generation of Hispanic content consumers. It’s our goal to be the Hulu for Hispanics. By removing the fixed overhead costs of a traditional TV company, we are able to distribute our content efficiently at scale to our eager, targeted, under-served Latino audiences.

Building our library.  The first 3 years of our business were spent building a library of about 13,000 hours of Spanish-language films and TV shows. Now we control one of the largest libraries of Latino-focused films and TV shows in the world, which includes premium titles from Latin American and U.S. producers, including Hollywood blockbuster films from studios as such as Warner Bros and Sony.

Validation.  In addition, we validated our content by originally licensing some of it to partners like Netflix, Amazon, Google and Hulu, and it's that success which gave us the confidence and learnings to launch our own services. Our content portfolio, curated specifically for Latino women and men, includes major telenovelas, such as Kassandra, Mi Gorda Bella and the Pongalo Premieres Piel Salvaje and Corazon Traicionado...programmed next to the films of emerging new female directors like Dorie Barton and Argentinian Academy Award winner Miguel Cohan...right alongside major Hollywood movies with global stars like Jennifer Lopez and Harrison Ford.  

Our tech.  Our proprietary technology platform allows us to stream that content to consumers on their mobile devices, the web, and all sorts of other platforms ranging from televisions to public libraries.

We are based in Los Angeles, and currently are a team of seven.

Pitch Deck

Product & Service

So far, we’ve launched two services -- Moovimex with action and comedy movies from Mexico for men, which makes money through advertising, and our namesake Pongalo for women, which makes money through a recurring $5.99 per month subscription.

We’ve launched great apps that allow people to watch our content on their mobile devices and connected TVs, as well as through our high-profile partnerships with distributors like Amazon, where we make our service available to their estimated 100 million Prime members.  In the month of July alone, we streamed 200+ million minutes of content on our services. 

And, in addition to using our video streaming platform for ourselves, we've now created a secondary revenue stream by white-labeling it for other non-competitive content services.  As validation for this, we recently launched a white-label product for a high-profile content service.

Media Mentions

Team Story

Our Founder and CEO, Rich Hull, is an accomplished and award-winning Hollywood professional with more than 20 years experience in media. His 25+ films and TV shows have generated over $100 million of revenue, and he has been a trusted advisor to major media companies.

He grew up in Texas, so Hispanic media has always been a part of his world. A few years ago, he realized that the traditional U.S. Hispanic TV players were largely ignoring the audiences who were consuming content on mobile devices. In fact, he similarly believed that, in Latin America, most of the traditional media players were ignoring them too. So, Rich set out to disrupt them all.

He gathered support and capital from a blue chip team of shareholders who include the former Co-Chairman of MTV Networks, the Chief Strategy Officer of Univision, and the current Head of Mergers and Acquisitions for Sony Pictures...not to mention institutional investors who believed in him, such as 500 Startups, Canyon Creek Capital, Digital Bridge, and Revolution Studios.

Under Rich's leadership, Pongalo's team grew to include industry pros such as Head of Programming, Rick Rodriguez (who previously led the international roll-out of many of Discovery's major TV networks) and Head of Distribution, Daniel Schnider (former partner of Latina superstar Zoe Saldana). The company is based in Los Angeles.

Founders and Officers

Rich Hull

Founder & CEO

 Rich Hull is a proven leader of private equity-backed media and entertainment companies, and is an expert at monetizing media in a digital age. He is a recognized steward of investor capital who occupies a rare position at the heart of traditional entertainment, digital media, and finance. 

He has worked on media deals and turnarounds totaling over a billion dollars with major media companies such as Disney, Universal, Warner Bros, and Microsoft. Based on these experiences, he co-authored the award-winning book “Dancing With Digital Natives: Staying in Step With the Generation That's Transforming the Way Business Is Done."

Hull’s ability to create simple solutions for complicated problems was developed in his role as an award-winning film and TV financier and producer. He has led the creation of 25+ produced projects, which have generated hundreds of millions of dollars, and range from young-adult movies, such as SHE'S ALL THAT, one of the most successful teen movies in history, and GET OVER IT with Kirsten Dunst and Martin Short...to studio sequels, such as those for DADDY DAY CARE and AMERICAN PSYCHO...to award-winning documentaries, such as his collaboration with Matthew McConaughey, THE STORY OF DARRELL ROYAL, and his collaboration with Halle Berry, FOR LOVE OF LIBERTY: THE STORY OF AMERICA'S BLACK PATRIOTS, for which he and Berry won an NAACP Image Award.

Hull serves on the Alumni Board at Vanderbilt University, and as Co-Founder of Vanderbilt-in-Hollywood, which places about 30 students per summer into life-changing entertainment internships. He's a member of the Academy of Motion Picture Arts & Sciences, the Academy of Television Arts & Sciences, and the Producers Guild of America, and he is a well-known investor, board member, and mentor.

Rich Hull

Founder & CEO

 Rich Hull is a proven leader of private equity-backed media and entertainment companies, and is an expert at monetizing media in a digital age. He is a recognized steward of investor capital who occupies a rare position at the heart of traditional entertainment, digital media, and finance. 

He has worked on media deals and turnarounds totaling over a billion dollars with major media companies such as Disney, Universal, Warner Bros, and Microsoft. Based on these experiences, he co-authored the award-winning book “Dancing With Digital Natives: Staying in Step With the Generation That's Transforming the Way Business Is Done."

Hull’s ability to create simple solutions for complicated problems was developed in his role as an award-winning film and TV financier and producer. He has led the creation of 25+ produced projects, which have generated hundreds of millions of dollars, and range from young-adult movies, such as SHE'S ALL THAT, one of the most successful teen movies in history, and GET OVER IT with Kirsten Dunst and Martin Short...to studio sequels, such as those for DADDY DAY CARE and AMERICAN PSYCHO...to award-winning documentaries, such as his collaboration with Matthew McConaughey, THE STORY OF DARRELL ROYAL, and his collaboration with Halle Berry, FOR LOVE OF LIBERTY: THE STORY OF AMERICA'S BLACK PATRIOTS, for which he and Berry won an NAACP Image Award.

Hull serves on the Alumni Board at Vanderbilt University, and as Co-Founder of Vanderbilt-in-Hollywood, which places about 30 students per summer into life-changing entertainment internships. He's a member of the Academy of Motion Picture Arts & Sciences, the Academy of Television Arts & Sciences, and the Producers Guild of America, and he is a well-known investor, board member, and mentor.

Key Team Members

Rick Rodriguez

Head of Content

Daniel Schnider

Distribution & Business Development

Notable Advisors & Investors

500 Startups

Investor, Venture Capital Fund

Canyon Creek Capital

Investor, Venture Capital Fund

Revolution Studios (Backed by Fortress/Carlyle)

Investor, Media IP investment fund backed by The Carlyle Group (and formerly Fortress)

Digital Bridge

Investor, A media and telecom fund with over $5 billion under management

John Waller

Investor, Partner, Okapi Capital

James Harpel

Investor, Partner, Palm Beach Capital

James Hauslein

Investor, Former CEO, Sunglass Hut

Marc Ganzi

Investor, CEO, Digital Bridge

Buck Jordan

Advisor, Founder - Future VC, Founder - Canyon Creek Capital; Former Black Hawk Captain

Herb Scannell

Advisor, Former Co-Chairman - MTV Networks; Pres. - Nickelodeon, Pres. - BBC Worldwide

Kevin Conroy

Advisor, Former Pres., Digital & New Platforms - MGM, Chief Strategy Officer - Univision

Erik Moreno

Advisor, EVP and Head of Mergers & Acquisitions at Sony Pictures

Michael Barnes

Advisor, Corporate Media Attorney, Founder - Barnes Law, Variety's Dealmaker of the Year

Q&A with the Founder

  • Can you summarize your business and business model?
    We're a direct-to-consumer, mobile-focused Latino media company. Like all media companies, we make money from our content.

    As we were building our business over the first 3 years, we licensed our content to mega-players like Netflix, Hulu and Google, in order to both generate revenue and validate our content and audience. We then built our own video streaming technology and stopped licensing our content to other people so that we could use our tech to reach our customers directly. We knew this would allow us to gather massive amounts of data -- a very valuable IP asset in its own right.

    Over the past year, we've rolled out 2 different media products, a premium subscription service for women called Pongalo (which means "Play it" in Spanish) and an ad-supported service for men called Moovimex. Accordingly, our business models include both subscriptions and advertising.

    Recently, we've also begun experimenting with an additional revenue stream, which is white labeling our video streaming technology for other companies. We just closed our first white label deal and launched a white label service on Roku for a high-profile client.

  • What is your current stage of your product/platform development?

    Our Pongalo subscription product for women is live and fully operational for Android, iOS, web, Roku, Amazon Channels, public libraries, and other platforms. Our Moovimex ad-supported service for men is live and full operational on platforms such as Xumo, TubiTV, Vewd, Opera TV, YouTube, and others. We continue to expand our distribution and drive engagement. 

  • Are any founders no longer with the company? If yes, please explain.

     Yes. Two early founders previously exited the company, and returned all of their equity. The company received a full release from both, as well as customary non-competes. 

  • What do you view as your market opportunity?
    There are more Spanish speakers in the world than English speakers. U.S. Hispanics are the second fastest-growing ethnic demographic in America, encompassing 65 million who represent almost 20% of the U.S. population. Hispanics represent 25% of the movie-going audience, and they over-index for mobile device usage. And yet, while two dominant Hispanic TV channels fight each other for TV viewers, Latinos have been virtually ignored in digital media.

    The two major U.S. Hispanic media companies are essentially just TV channels with outdated brands. For example, Univision's TV ratings are down 50% over the past 4 years. I thought we could do better, and we set out to create a marketplace of mobile-focused Latino media brands that were much more accessible, highly curated, and simply cooler. 

  • Who is your typical user?

    Bilingual (Spanish/English) women and men 18-54. Virtually all of our customers access our content through mobile devices.

  • The Q&A with the Founder is based on due diligence activities conducted by SI Securities, LLC. The verbal and/or written responses transcribed above may have been modified to address grammatical, typographical, or factual errors, or by special request of the company to protect confidential information.

    Term Sheet

    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.

    Fundraising Description

  • Round type:
    Bridge

  • Round size:
    US $3,500,000

  • Raised to date:
    US $671,419
    US $372,765 (under Reg CF only)

  • Minimum investment:
    US $500

  • Target Minimum:
    US $300,000
  • Key Terms

  • Security Type:
    Crowd Note

  • Conversion discount:
    20.0%

  • Valuation Cap:
    US $8,000,000

  • Interest rate:
    5.0%

  • Note term:
    24 months
  • Additional Terms

  • Closing conditions:
    While Pongalo has set an overall target minimum of US $300,000 for the round, Pongalo must raise at least US $25,000 of that amount through the Regulation CF portion of their raise before being able to conduct a close on any investments below $20,000. For further information please refer to Pongalo's Form C.

  • Regulation CF cap:
    While Pongalo is offering up to US $3,500,000 worth of securities in its Bridge, only up to US $1,070,000 of that amount may be raised through Regulation CF.

  • Transfer restrictions:
    Securities issued through Regulation CF have a one year restriction on transfer from the date of purchase (except to certain qualified parties as specified under Section 4(a)(6) of the Securities Act of 1933), after which they become freely transferable. While securities issued through Regulation D are similarly considered "restricted securities" and investors must hold their securities indefinitely unless they are registered with the SEC and qualified by state authorities, or an exemption from such registration and qualification requirements is available.

  • Use of Proceeds

    Investor Perks

    All investors receive a free lifetime subscription to the Pongalo on-demand film and TV subscription service.  Use it yourself, or gift it to a friend.  Plus, 25% off an ad campaign for your :15 video ad on our Roku and other available ad-supported channels for up to $10,000.

    • $5,000 ("Premium") - All of the above, plus a DVD pack featuring at least 3 Moovimex Spanish-language movies from Mexico.
    • $10,000 ("Bronze") - All of the above, plus a Pongalo t-shirt to wow your friends as a Pongalo investor.
    • $50,000 ("Silver") - All of the above, plus $1,000 in ad credits for your :15 video ad on our Roku and other available ad-supported channels.
    • $100,000 ("Gold") - All of the above, plus a one-on-one evening with Pongalo Founder and CEO Rich Hull that will include dinner in Los Angeles and an insiders-only pre-release screening of an upcoming major Hollywood movie.
    • $200,000 ("Platinum") - All of the above, plus you will be included in quarterly investor calls & exclusive investor meetings.

    It is advised that you consult a tax professional to fully understand any potential tax implications of receiving investor perks before making an investment.

    Prior Rounds

    The graph below illustrates the valuation cap or the pre-money valuation of Pongalo's prior rounds by year.


    This chart does not represent guarantees of future valuation growth and/or declines.

    Seed

  • Round Size
    US $1,875,000
  • Closed Date
    Mar 1, 2017
  • Security Type
    Preferred Equity
  • Financial Discussion

    Operations

    Formation: Pongalo Inc. (the "Company") is a Delaware C-corporation formed on June 26, 2014. It is headquartered in Los Angeles, CA, and its year-end is December 31. The Company was originally incorporated as GoTV Media Inc., and later changed its name to Latin Everywhere Inc. and then again to Pongalo Inc. in 2016. After its formation, it acquired or merged with three entities: Latin Anywhere, Inc. (which controlled a large library of movies and was founded by Pongalo Founder Rich Hull); Inmoo, Inc. (which controlled had built a platform for streaming video content and was founded by Pongalo board member Sergio Radovcic); and GoTV, LLC (which controlled a large library of television programming). The Company was formed to create a marketplace of mobile-first Latino media services.

    Phase One: The first phase of the Company's operation (2014-2017) primarily focused on building its library of film and television content, and building-out its video streaming technology. In particular, this required a sizable operational team to digitize, on-board, and organize new content assets (including video, art and meta-data files), and to engineer its video streaming product. During this period, the Company licensed some of its content to third-party platforms, such as Netflix, Hulu and Google, in order to generate revenue, and validate its content and thesis.

    Phase Two: In its second phase (2017-2018), the Company focused on using its technology and content to launch two content services for Latino audiences: Moovimex, which makes money from advertising, and its namesake Pongalo, which makes money from a recurring monthly subscription. The Company also entered into various partnerships with third-party distribution platforms, such as Amazon (which agreed to advance various content-related costs on behalf of the Company), along with Roku, Vewd, YouTube, Xumo, RB Digital, Daily Motion, and others to distribute the Company's content services. As its own direct-to-consumer offerings went live, the Company did not seek to renew most of its efforts to license its content to major providers such as Netflix and Hulu. This was an effort to push audiences to find the Company's content on the Company's own services, instead of on other services. This resulted in an expected wind-down of much of the Company's revenue related to content licensing. Management believes that greater enterprise value is created by building direct-to-consumer services with recurring revenue, instead of being dependent upon the whims of third-party platforms which sit between a content licensor and the consumer.

    Phase Three: The Company is currently entering the third phase of its business as it now focuses on scaling its services through customer acquisition and increased engagement.

    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 $192,026 in cash on hand as of June 29, 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.

    Market Landscape

    There are more Spanish speakers in the world than English speakers.  

    In the US alone, Latinos make up almost 20% of the population, and represent almost $2 trillion of buying power.  US Hispanics account for a whopping 25% of all US movie tickets sold, and, according to estimates, digital ad spend on Hispanic targeted ads will reach $1.5 billion in 2020.  

    And yet, there are still only two major US Hispanic TV channels -- both of whom are struggling to stay relevant in a digital world.  Case in point: Univision's TV ratings are down 50% over the past 4 years.  And both have been slow to react to the shift to audiences consuming on-demand content on mobile devices.

    The Latin American TV companies are largely in the same boat.  And yet, analysts expect the Latin American streaming market to double in the next 5 years -- a major growth area for us.

    So far, we've launched two mobile-focused, global content services for Latinos -- Moovimex for men 18-54 (which makes its money from advertising) and our namesake Pongalo for women 18-54 (which makes its money from subscriptions).  

    We included an advertising model because we believed that there a lot of US advertisers wanting to reach Hispanics, but not enough ad inventory available.  We think that our results so far are proving us right.   For subscription services, there are few major competitors right now.  Pantaya is a US-only premium movie service for Latinos.  Univision Now is a struggling app that primarily carries a live feed of Univision's linear TV feed for a fee.  Netflix and Hulu (which is US-only) serve general audiences, and don't have the deep bench of content from Latin America that we do.

    Risks and Disclosures

    The Company forecasts project aggressive growth post-raise compared to historical performance. If its assumptions are wrong, and its projections regarding market penetration are too aggressive, its financial projections may overstate its viability. In addition, the forward-looking statements are only predictions. The Company has based these forward-looking statements largely on its current expectations and projections about future events and financial trends that it believes may affect its business, financial condition and results of operations. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.

    The Company has generated substantial net losses and negative operating cash flows since its inception as part of the development of its business. The Company has generated substantial net losses and negative cash flows from operating activities since it commenced operations. It has incurred losses of approximately $1,807,760 from its inception through December 31, 2017. For the year ended 2017, it incurred a net loss of $504,994. Before achieving profitability it will generate continued losses. Its costs may also increase due to such factors as higher than anticipated financing and other costs; non-performance by third-party suppliers, licensees, partners or subcontractors; and increases in the costs of labor or materials. If any of these or similar factors occur, its net losses and accumulated deficit could increase significantly and the value of its stock could decline.

    Industry consolidation may result in increased competition, which could result in a loss of customers or a reduction in revenue. Some of our competitors have made or may make acquisitions or may enter into partnerships or other strategic relationships to offer more comprehensive services than they individually had offered or achieve greater economies of scale. In addition, new entrants not currently considered to be competitors may enter our market through acquisitions, partnerships or strategic relationships. We expect these trends to continue as companies attempt to strengthen or maintain their market positions. The potential entrants may have competitive advantages over us, such as greater name recognition, longer operating histories, more varied services and larger marketing budgets, as well as greater financial, technical and other resources. The companies resulting from combinations or that expand or vertically integrate their business to include the market that we address may create more compelling service offerings and may offer greater pricing flexibility than we can or may engage in business practices that make it more difficult for us to compete effectively, including on the basis of price, sales and marketing programs, technology or service functionality. These pressures could result in a substantial loss of our customers or a reduction in our revenue.

    The development and commercialization of the Company’s products and services are highly competitive. It faces competition with respect to any products and services that it may seek to develop or commercialize in the future. The Company’s competitors include major companies worldwide. Many of its competitors have significantly greater financial, technical, and human resources and may have superior expertise in research and development and marketing approved services and thus may be better equipped to develop and commercialize services. 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 its competitive position, the likelihood that its services will achieve initial market acceptance and its ability to generate meaningful additional revenues from products and services.

    We must correctly predict, identify, and interpret changes in consumer preferences and demand, offer new products to meet those changes, and respond to competitive innovation. Consumer preferences for our products change continually. Our success depends on our ability to predict, identify, and interpret the tastes and habits of consumers and to offer products that appeal to consumer preferences. If we do not offer products that appeal to consumers, our sales and market share will decrease. We must distinguish between short-term fads, mid-term trends, and long-term changes in consumer preferences. If we do not accurately predict which shifts in consumer preferences will be long-term, or if we fail to introduce new and improved products to satisfy those preferences, our sales could decline. In addition, because of our varied customer base, we must offer an array of products that satisfy the broad spectrum of consumer preferences. If we fail to expand our product offerings successfully across product categories, or if we do not rapidly develop products in faster growing and more profitable categories, demand for our products could decrease, which could materially and adversely affect our product sales, financial condition, and results of operations.

    In addition, achieving growth depends on our successful development, introduction, and marketing of innovative new products and line extensions. Successful innovation depends on our ability to correctly anticipate customer and consumer acceptance, to obtain, protect and maintain necessary intellectual property rights, and to avoid infringing the intellectual property rights of others and failure to do so could compromise our competitive position and adversely impact our business

    The Company may be unable to maintain, promote, and grow its brand through marketing and communications strategies. It may prove difficult for the Company to dramatically increase the number of customers that it serves or to establish itself as a well-known brand in the competitive digital media space. Additionally, the product may be in a market where customers will not have brand loyalty.

    The Company depends on the performance of distributors, carriers and other resellers. The Company distributes its products through competing players in the space through licensing agreements. Many such players have narrow operating margins and have been adversely affected in the past by weak economic conditions. Some resellers have perceived the expansion of the Company’s direct sales as conflicting with their business interests as distributors and resellers of the Company’s products. Such a perception could discourage resellers from investing resources in the distribution and sale of the Company’s products or lead them to limit or cease distribution of those products. The Company has invested and will continue to invest in programs to enhance reseller sales. These programs could require a substantial investment while providing no assurance of return or incremental revenue. The financial condition of these resellers could weaken, these resellers could stop distributing the Company’s products, or uncertainty regarding demand for the Company’s products could cause resellers to reduce their ordering and marketing of the Company’s products.

    The Company’s recent pivot to a more direct to consumer model has resulted in a substantial decrease in monthly revenue. If the Company is unable to prove its direct to consumer model and its new ad supported model, the Company may be unable to meet its growth projections and meet its financial obligations. This may result in a complete loss of capital for investors.

    The Company has not filed a Form D for its Seed offering from March 2017. The SEC rules require a Form D to be filed by companies within 15 days after the first sale of securities in the offering relying on Regulation D. Failing to register with the SEC or get an exemption may lead to fines or the right of investors to get their investments back. There is a risk that a late penalty could apply.

    The reviewing CPA has included a “going concern” note in the reviewed financials. In particular, the CPA has noted that the Company has incurred losses from inception of approximately $1,807,760 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, through a Regulation Equity Crowdfunding campaign, or additional equity financing, and its ultimate ability to commence profitable sales and positive cash flows from its app subscriptions, content licensing, and advertising services. There are no assurances that management will be able to raise a sufficient amount of capital on acceptable terms to the Company, and the inability to do so would require a reduction in the scope of its planned development which would be detrimental to the Company’s business, financial condition and operating results. The accompanying financial statements do not include any adjustments that might be required should the Company be unable to continue as a going concern.

    We have 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.

    General Risks and Disclosures

    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.

    Representatives of SI Securities, LLC are affiliated with SI Advisors, LLC (“SI Advisors”). SI Advisors is an exempt investment advisor that acts as the General Partner of SI Selections Fund I, L.P. (“SI Selections Fund”). SI Selections Fund is an early stage venture capital fund owned by third-party investors. From time to time, SI Selections Fund may invest in offerings made available on the SeedInvest platform, including this offering. Investments made by SI Selections Fund may be counted towards the total funds raised necessary to reach the minimum funding target as disclosed in the applicable offering materials.

    Pongalo's Form C

    The Form C is a document the company must file with the Securities and Exchange Commission, 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.

    Download Pongalo's  Form C

    Frequently Asked Questions

    About Side by Side Offerings
    What is Side by Side?

    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.


    What is a Form C?

    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.


    What is Rule 506(c) under Regulation D?

    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.


    What is Reg CF?

    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.


    Making an Investment in Pongalo
    How does investing work?

    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 Pongalo. Once Pongalo accepts your investment, and certain regulatory procedures are completed, your money will be transferred from the escrow account to Pongalo in exchange for your securities. At that point, you will be a proud owner in Pongalo.


    What will I need to complete my investment?

    To make an investment, you will need the following information readily available:

    1. Personal information such as your current address and phone number
    2. Employment and employer information
    3. Net worth and income information
    4. Social Security Number or passport
    5. 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.


    How much can I invest?

    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, Pongalo has set a minimum investment amount of US $500.

    Accredited investors investing $20,000 or over do not have investment limits.


    After My Investment
    What is my ongoing relationship with the Issuer?

    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:

    1. The company becomes a fully-reporting registrant with the SEC
    2. The company has filed at least one annual report, but has no more than 300 shareholders of record
    3. The company has filed at least three annual reports, and has no more than $10 million in assets
    4. The company or another party purchases or repurchases all the securities sold in reliance on Section 4(a)(6)
    5. 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.


    How can I sell my securities in the future?

    Currently there is no market or liquidity for these securities. Right now Pongalo does not plan to list these securities on a national exchange or another secondary market. At some point Pongalo 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 Pongalo either lists their securities on an exchange, is acquired, or goes bankrupt.


    How do I keep track of this investment?

    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.


    Other General Questions
    What is this page about?

    This is Pongalo'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 Pongalo's Form C. The Form C includes important details about Pongalo's fundraise that you should review before investing.


    How can I (or the company) cancel my investment under Regulation CF?

    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


    What if I change my mind about investing?

    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.