- Successfully forecasted over 50 seismic events in five different countries.
- Awarded a joint contract from the US and UK defense departments as a result of winning their International Space Pitch Day event. precursor is finalizing agreements to deploy and operate its Earthquake Forecasting System in seismically active regions of North America.
- Addressing the global challenge of disaster preparedness. Each year, hundreds of millions of people and several billions of dollars are impacted by earthquakes.
- Singularity University chose precursor as the winner of the Grand Challenge: ‘Disaster Resilience’ with the ability to impact over a billion people. To do so, precursor is engaged with leading innovators in (re)insurance, technology and emergency management from the private sector and government.
- Led by a unique, multi-disciplinary team that is purpose-built to deliver capabilities to meet the challenges of commercial earthquake forecasting.
- Total Amount Raised: US $1,906,388
- Total Round Size: US $5,000,000
- Seed :
- Minimum Investment: US $1,000 per investor
- : Crowd Note
- US $25,000,000 :
- Side by Side Offering
precursor SPC (Social Purpose Corporation) measures the seismic energy build-up that precedes an earthquake and uses Artificial Intelligence (AI) to forecast earthquakes. precursor monitors long-term seismic risk and forecasts earthquakes days to weeks before they occur enhancing safety, security, and sustainability. We have done this successfully over 50 times.
precursor SPC is a commercial enterprise with a social purpose to deliver unique Earthquake Intelligence Services to enable preparedness. precursor’s business model is to sell earthquake forecasting systems and high value, actionable subscription data services to (re)insurance companies, large asset based corporations, regional governments and news organizations.
The problem has always been that there is limited ability to establish Earthquake Preparedness and minimal actionable Earthquake Forecasting capability to mitigate the consequences of the costliest and deadliest recurring natural disaster, earthquakes.
precursor’s solution is to provide commercial Earthquake Forecasting Services utilizing recent advances in sensor technology, satellite systems, data science and Artificial Intelligence.
The value proposition of providing days to weeks advance warning of an Earthquake allowing corporations to take action, (re)insurance companies to reprice risk, and regional governments to establish preparedness is significant, especially considering the consequences of an unforeseen seismic event.
We believe precursor’s traction in three years of operation is considerable. precursor has implemented five successful pilot projects. precursor is also finalizing agreements for deployments in North America and has collaborated with a risk analytics firm to launch precursor’s capabilities into (re)insurance. The US DoD and UK MoD have jointly awarded a contract to precursor to introduce our capability.
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 $53,100 (under Reg CF only)
Investors who invest less than $50,000 will have their securities held in trust with a Custodian that will serve as a single shareholder of record. These investors will be subject to the Custodian’s Account Agreement, including the electronic delivery of all required information.
precursor SPC measures the seismic energy build-up that precedes an earthquake and uses Artificial Intelligence (AI) to forecast earthquakes. precursor monitors long-term seismic risk and forecasts earthquakes days to weeks before they occur enhancing safety, security, and sustainability.
precursor’s initial go-to-market plans are to provide coverage of its Earthquake Forecasting Systems to the seismically active regions of California, Mexico and the Caribbean. precursor will focus initially on providing Earthquake Forecasting Services to corporations in the (re)insurance industry serving these regions and to large asset or commercial property owners in these seismically active regions.
precursor’s long-term vision is to establish itself within a multi-national private/public partnership. This partnership will provide an array of Earthquake Intelligence Services to businesses and industry in both the private and public sectors.
The market for precursor’s Earthquake Forecasting services is at the intersection of multiple markets. precursor is seeking to re-segment established markets and create new markets. precursor provides prospective Earthquake Forecasting services. This unique capability enables precursor to launch services into the Emergency Management ($117 billion worldwide) and Critical Event Management (up to $6 billion by 2026) markets. Furthermore, precursor can take a lead role in creating the Earthquake Forecasting Systems and Services market, akin to the Weather Forecasting Systems and Services market ($15 billion US only). precursor plans to provide services to mitigate the insured loss due to Earthquakes (worth up to $35 billion). precursor’s prospective capabilities can become an important service to the re-insurance industry for analysis and financial products, the latter is a $36 billion marketplace annually.
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 mobile app and laundry service. Additionally, the product may be in a market where customers will not have brand loyalty.
Failure to obtain new clients or customers on favorable terms could adversely affect results of operations. The Company may face pricing pressure in obtaining and retaining their clients and customers. Their customers and clients may reduce services if they decide to move services in-house. On some occasions, customer activity results in lower revenue from a client than the Company had anticipated based on their previous results with that client. This reduction in revenue could result in an adverse effect on their business and results of operations.
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. Its competitors include major companies worldwide. The market is an emerging industry where new competitors are entering the market frequently. Many of the Company’s 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 than the Company 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, the Company’s 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 its products and services.
Evolving government regulations may require increased costs or adversely affect the Company’s results of operations. In a regulatory climate that is uncertain, the Company’s operations may be subject to direct and indirect adoption, expansion, or reinterpretation of various laws and regulations. Compliance with these future laws and regulations may require the Company to change its practices at an undeterminable and possibly significant initial monetary and annual expense. These additional monetary expenditures may increase future overhead, which could have a material adverse effect on its results of operations. Additionally, the introduction of new services may require the Company to comply with additional, yet undetermined, laws and regulations. Compliance may require obtaining appropriate state medical board licenses or certificates, increasing security measures and expending additional resources to monitor developments in applicable rules and ensure compliance. The failure to adequately comply with these future laws and regulations may delay or possibly prevent some of the products or services from being offered to Clients and Members, which could have a material adverse effect on the business, financial condition and results of operations.
The Company may not be successful in obtaining further issued patents. The Company's success depends significantly on their ability to obtain, maintain and protect their proprietary rights to the technologies used in their services. Moreover, any patents issued to them may be challenged, invalidated, found unenforceable or circumvented in the future. The ability to obtain protection for their intellectual property, whether through patent, trademark, copyright, or other IP right, is uncertain due to a number of factors, including that the Company may not have been the first to make the inventions. Further, changes in U.S. and foreign intellectual property law may also impact their ability to successfully prosecute their IP applications. For example, the United States Congress and other foreign legislative bodies may amend their respective IP laws in a manner that makes obtaining IP more difficult or costly. Courts may also render decisions that alter the application of IP laws and detrimentally affect their ability to obtain such protection. Even with successfully registered IP, this intellectual property may not provide meaningful protection or commercial advantage. Such IP may not be broad enough to prevent others from developing technologies that are similar or that achieve similar results to theirs. It is also possible that the intellectual property rights of others will bar the Company from licensing their technology and bar them or their customer licensees from exploiting any patents that issue from the pending applications. Any intellectual enforcement efforts the Company seeks to undertake, including litigation, could be time-consuming and expensive and could divert management’s attention.
The Company is party to a license agreement that may no longer be enforceable. The Company is party to a license agreement for the use of developmental intellectual property on earthquake forecasting. The intellectual property protected by this license agreement has not been patented by the licensor, and the obligations and liabilities in the form of royalty and licensing payments have not been met by the Company as the licensee. Therefore, the Company states that the license agreement has not been maintained by either party. As the license agreement may no longer be enforceable, the Company may lack the right to use the intellectual property protected by this license agreement, and the licensor reserves the right to terminate the agreement and/or determine the agreement as non-exclusive. The Company believes that its current intellectual property and technology has surpassed that protected by the license agreement. The Company believes the intellectual property protected by this license agreement is ancillary to their business, and has limited impact on the Company’s operations and is not key to the Company’s current core intellectual property. Generally, to protect its rights in its services and core technology, the Company relies on a combination of copyright and trademark laws, trade secrets, confidentiality agreements with employees and third parties, and protective contractual provisions. If the Company does not effectively protect its core intellectual property, or if others independently develop substantially equivalent intellectual property, its competitive position could be weakened. There is a potential risk for litigation with regard to this license agreement, in the event that the licensor decides to attempt to enforce the agreement and demand certain obligations and liabilities promised by this license agreement. These obligations and liabilities in the form of royalty and licensing payments are material and could significantly weaken the Company’s cash position if enforced by a court. The potential litigation could negatively impact the Company in the form of demands for missed obligations or liabilities under the license agreement, loss of right of use of intellectual property under the license agreement, and/or legal fees.
The Company’s expenses will significantly increase as they seek to execute their current business model. Although the Company estimates that it has enough runway until the end of the year, they will be ramping up cash burn to promote revenue growth, further develop R&D, and fund other Company operations after the raise. Doing so could require significant effort and expense or may not be feasible.
The Company’s cash position is relatively low. The Company currently has $133,000 in cash balances as of December 17, 2020. This equates to 3-4 months of runway. The Company believes that it is able to continue extracting cash from sales to extend its runway. The Company could be harmed if it is unable to meet its cash demands, and the Company may not be able to continue operations if they are not able to raise additional funds.
The Company projects aggressive growth. If these assumptions are wrong and the projections regarding market penetration are too aggressive, then the financial forecast may overstate the Company's overall 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 Total Amount Raised may include investments made outside of the SeedInvest platform via Regulation D. $1,833,188 has been raised prior to the launch of the SeedInvest campaign. The earliest investment counted towards the escrow target was made on December 1, 2016. There is no guarantee that the Company has this cash available for operations as of the date of launch.
The Total Amount Raised, as reflected on the SeedInvest platform, may be partially comprised of investments from the Company’s management or affiliates. Such investments are not being counted towards the escrow minimum. If the sum of the investment commitments does not equal or exceed the escrow minimum at the offering end date, no securities will be sold in the offering, investment commitments will be cancelled, and committed funds will be returned. As a result, the Total Amount Raised may not be reflective of the Company's ability to conduct a closing.
The Company has not filed a Form D for its current Seed Note offering with first sale in 2018. 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, the right of investors to get their investments back, and even criminal charges. There is a risk that a late penalty could apply.
The Company has not prepared any audited financial statements. Therefore, investors have no audited financial information regarding the Company’s capitalization or assets or liabilities on which to make investment decisions. If investors feel the information provided is insufficient, then they should not invest in the Company.
The reviewing CPA has included a “going concern” note in the reviewed financials. The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred losses from inception of $1,575,929 which, among other factors, raises substantial doubt about the Company's ability to continue as a going concern. The Company has determined without significant capital resources, the Company will not be able to meet its obligations as they become due and sustain its operations, 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 product, and its ability to generate positive operational cash flow. Management has determined, based on its recent history and its liquidity issues that it must develop and implement plans that will sufficiently alleviate or mitigate, to a sufficient level, the relevant conditions or events noted above. Accordingly, the management of the Company has concluded that there is substantial doubt about the Company’s ability to continue as a going concern within one year after the issuance date of these financial statements. 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 participated in related party transactions. The Company has participated in related party transactions with current management related parties. During the years ended December 31, 2019 and 2018, a shareholder of the Company advanced funds for operations. These advances are non‐interest bearing and have no maturity date. As of December 31, 2019 and 2018, the amount of advances outstanding is $51,983 and $26,034, respectively. During the years ended December 31, 2019 and 2018, the company issued convertible debt to related parties. Interest on debt accrues at a rate of 6%. As of December 31, 2019 and 2018, total outstanding principal is $775,188 and $435,188, respectively. As of December 31, 2019, and 2018, total accrued interest on outstanding convertible notes with related parties is $18,730 and $4,243, respectively. In June 2020, the Company rolled related party payables totaling $30,850 into a promissory note. The note carries interest at 6% per annum and matures June 2022. Future minimum principal payments on this note are included in the schedule of minimum principal payments in Note 7 in the Financial Statements in the Data Room.
The Company has outstanding convertible debt. The Company issued a total of seventeen convertible equity securities for cash proceeds of $1,400,188 between November 28, 2016 and December 19, 2019. The securities are all convertible into common shares of the Company and carry interest at 6% per annum. A number of outstanding notes and accrued interest mature in November 2021, January 2023, and January 2025. All of the securities, totaling $1,400,188, may be converted upon the following: (1) Upon the Company receiving cash of no less than $5,000,000 for the sale of the Company’s equity securities, all outstanding principal and accrued interest will be automatically convert in whole without any further action by the Holder into common shares sold in the financing at a conversion price equal to the lesser of the cash price paid per share for Equity Securities by the Investors in the Qualified Financing multiplied by 0.80, and (ii) the quotient resulting from dividing $25,000,000 by the number of outstanding shares of common stock of the Company immediately prior to the financing. (2) Upon the sale, transfer, or other disposition of substantially all of the Company’s assets (except one in which the holders of capital stock of the Company immediately prior to such action continue to hold at least 50% of the voting power of the Company), the Company shall repay the Holder in cash in an amount equal to (i) the outstanding principal amount of this Note plus any unpaid accrued interest on the original principal, plus (ii) a repayment premium equal to 100% of the outstanding principal amount of this note. (3) Upon maturity, a certain majority of holders may elect at any time to convert the security to common shares of the Company at a price equal to the quotient dividing $25,000,000 by the number of outstanding shares of common stock of the company as of the maturity date. The Company recognized interest expenses of $68,682 and $40,290 during the years ended December 31, 2019 and 2018, respectively. At December 31, 2019 and 2018, outstanding accrued interest, including amounts due to related parties totaled, $107,347.67 and $39,753.37, respectively. In June 2020, the Company rolled related party payables totaling $30,850 into a promissory note. The note carries interest at 6% per annum and matures June 2022. In January, February, September, and November 2020, the Company issued four convertible promissory notes to a shareholder for total proceeds of $125,000. The notes carry interest at 6% per annum and mature January 30, 2025. In March and April 2020, the Company issued three convertible promissory notes for total proceeds of $200,000. The notes carry interest at 6% per annum and mature January 30, 2025. All of these convertible notes have the same conversion feature as disclosed above. Future minimum principal payment schedule including all of the above Notes is included in Note 7 in the Financial Statements in the Data Room.
Of the outstanding convertible debt described above, certain related party investors have agreed to amend and restate their securities into the Crowd Note. The Company intends to offer to the remaining outstanding convertible debt holders to amend and restate their securities into the Crowd Note, which will contribute to the minimum Closing Amount.
The Company has an outstanding PPP loan. The Company owes Silicon Valley Bank for a Small Business Association Paycheck Protection Program loan totaling $22,917. This loan has been granted in April 2020 and accrues at an interest rate of 1% per annum and a maturity of April 2022.
The outbreak of the novel coronavirus, COVID-19, has adversely impacted global commercial activity and contributed to significant declines and volatility in financial markets. The coronavirus pandemic and government responses are creating disruption in global supply chains and adversely impacting many industries. The outbreak could have a continued material adverse impact on economic and market conditions and trigger a period of global economic slowdown. The rapid development and fluidity of this situation precludes any prediction as to the ultimate material adverse impact of the novel coronavirus. Nevertheless, the novel coronavirus presents material uncertainty and risk with respect to the Funds, their performance, and their financial results.
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 theseshares 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 \u2014 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 entrepreneuror 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 nothave 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 precursor SPC. Once precursor SPC accepts your investment, and certain regulatory procedures are completed, your money will be transferred from the escrow account to precursor SPC in exchange for your securities. At that point, you will be a proud owner in precursor SPC.
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 passport
- 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, precursor SPC has set a minimum investment amount of US $1,000.
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 precursor SPC does not plan to list these securities on a national exchange or another secondary market. At some point precursor SPC 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 precursor SPC 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 precursor SPC'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 precursor SPC's Form C. The Form C includes important details about precursor SPC'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 account's portfolio page by clicking your profile icon in the top right corner.
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 account's portfolio page by clicking your profile icon in the top right corner.