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Invest in SapientX

Voice-enabled A.I. for automotive and consumer companies

  • $152,265Amount raised
  • $1,000Minimum
  • $5,000,000Pre-Money valuation

Purchased securities are not currently tradeable. Expect to hold your investment until the company lists on a national exchange or is acquired.

Share:

SapientX 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 SapientX 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

  • Technology license agreement with Mitsubishi to develop an A.I. assistant for their 2020 cars
  • Chief Scientist, Bruce Wilcox, won the Loebner Prize (Turing Test) 4 times for best conversational A.I.
  • By 2021, the market for virtual digital assistants is expected to exceed $15 billion from $1.6 billion in 2015.
  • Parent Company, Planet 9 Studios, began AI work in 2003, and served both government and private clients.

Fundraise Highlights

  • Total Amount Raised: US $152,265
  • Total Round Size: US $1,500,000
  • Raise Description:  Seed
  • Minimum Investment:  US $1,000 per investor
  • Security Type:  Preferred Equity
  • Pre-Money Valuation:  US $5,000,000
  • Offering Type:   Side by Side Offering

"The future lies in the ability to converse naturally with your technology. We designed SapientX, from the ground up, as a system to let our technology talk to us... like we were talking to our best friend." - David Colleen, CEO


Siri and Alexa helped introduce the world to talking products. Unfortunately, there was a lot they didn't understand, they forced users to learn commands, they required an Internet connection, and they collected sensitive user data. Many companies, who wanted to voice enable their products, saw these drawbacks as show stoppers. These companies want a voice A.I. product that that can integrate with their own products and will be driven by their needs--not the needs of an ad serving network. We are here to supply that product and fill that need.

SapientX is white-label software that began with the notion that you should be able to speak conversationally to your technology without having to use commands. We understand context, emotion, complex sentences and we learn about a user's preferences to better serve them. We can run on devices as small as a wrist watch and we can work with or without an Internet connection. We respect the privacy of our users' data and do not profile them for targeted advertising. Our optional avatars can increase user satisfaction and trust scores.

Our team is busy helping our first customers add SapientX A.I. software to their cars and consumer products. We have a variety of companies in our pipeline, from electronics companies, automotive companies, robotics companies, and navigation companies.

Product & Service

Product

SapientX is white-label software designed to be embedded in our customers products to add a conversational voice and intelligence. We are working with our first customers to develop prototypes for user testing prior to product launch. We are developing authoring tools and an SDK to empower our customers and allow us to focus on product licensing so that we can scale SapientX. We are focusing on customers within the "Home to Car to Office" experience chain. This includes smart home work with a leading electronics company and automotive work with Mitsubishi. 

Technology 

SapientX's technology began 15 years ago, with millions of dollars of government and private R&D funding. Our current technology is based on computational linguistics pattern and concept matching techniques inspired by Carnegie Mellon's Scone program. This technology has been used by our Chief Scientist, Bruce Wilcox, to win the Loebner Prize Turing Test four times. 

Conversational A.I. is hard... we have been at it for 15 years. We ran a test to evaluate the conversational ability of our AI Platform and found that our system out performed other platforms in accuracy and relevancy. We believe this is because we were designed from the ground up to support normal conversation, rather than commands, and in part because we have not followed the pack in A.I. architecture. 

We also have advanced features, such as understanding emotion and user sentiment, comprehending context, handling complex, multi-part sentences and remembering user preferences and prior conversations. We feature high resolution avatars that we believe lead to higher user trust and satisfaction scores. Our team is continuing to work on a new generation of exciting technology advances.

Business 

Our revenue model adapts to the norms of the industries that we work in. Typically, we license our software on a per unit basis with recurring revenue for updates, customization, user testing and support. We offer SapientX on a monthly SaaS basis for our smart home customers. 

Our automotive sales approach includes aggressive interaction with car companies, their R&D centers and their Tier 1 suppliers. Sales cycles are 2-3 years with paid prototyping and user testing in the interim. We have positioned ourselves as thought leaders, regularly circulating white papers on emerging topics and by speaking at conferences and trade shows. With funding, we plan to exhibit at trade shows several times each year and to open sales offices in Detroit, Munich and Japan to better serve our customers. We will also use part of our funding to develop support for Japanese (already in beta), German, French and Spanish roughly doubling our market reach.

Our consumer electronics sales approach is based on a combination of focused marketing and direct engagement. We are keying on the SmartHome and Mobile markets. Unpaid prototyping, on the customers hardware, is normal. Sales cycles can be as short as two months.

Media Mentions

Team Story

As A.I. technologists, we were excited when Siri and then Alexa first came out. Excited... but also disappointed that they failed to do the things that we really wanted such as remembering our names and preferences, being able to converse with us without learning commands, understanding context, emotion, and complex statements. 

We began to compare notes with our friends who build cars, robots, and TVs and found that they wanted to add conversational abilities to their own products but they were afraid that the tech giants wouldn't listen to their needs, that they would impose their brands on them and that they would have an insatiable appetite for devouring sensitive user data to feed their ad networks. These were no gos for them.

It was then, that we realized that we could offer our friends an alternative A.I. product that delivered exactly what they needed. And so, SapientX was born. We assembled a team of passionate A.I. scientists, software developers and world class animators to build software to help make our customers products come alive. Our team is committed to the notion that you should be able to just talk to your technology products as if you were talking with your best friend.

Founders and Officers

David likes to build things. He's an AI and VR entrepreneur, he studied architecture and business at Cornell and has been running companies for 27 years. Previously, he founded Planet 9 Studios and he helped Matterport launch their products and attract their first customers. During this time, he has developed customer relationships with 17 Fortune 100 companies. 

David Colleen

CEO

David likes to build things. He's an AI and VR entrepreneur, he studied architecture and business at Cornell and has been running companies for 27 years. Previously, he founded Planet 9 Studios and he helped Matterport launch their products and attract their first customers. During this time, he has developed customer relationships with 17 Fortune 100 companies. 

Hira Daud

Interim CTO

Hira has a great passion for engineering mobile systems. She is a full stack developer and is at home in developing applications for Android, iOS and HTML5. 

Hira Daud

Interim CTO

Hira has a great passion for engineering mobile systems. She is a full stack developer and is at home in developing applications for Android, iOS and HTML5. 

Bruce Wilcox

Chief Scientist

Bruce has deep experience in A.I., having won the Loebner Prize 4 times (more than anyone else) in a yearly attempt to pass the Turing Test. Bruce is a devoted Go player and has written strategy classics on the topic along with the first A.I. driven Go game. He has worked with Fujitsu, 3DO and Amazon where he co-wrote patents on motion control and for gesture interfaces.


Bruce Wilcox

Chief Scientist

Bruce has deep experience in A.I., having won the Loebner Prize 4 times (more than anyone else) in a yearly attempt to pass the Turing Test. Bruce is a devoted Go player and has written strategy classics on the topic along with the first A.I. driven Go game. He has worked with Fujitsu, 3DO and Amazon where he co-wrote patents on motion control and for gesture interfaces.


Key Team Members

Afshin Mobramaein

AI Engineer (Consultant)

Alex Hessler

Special Effects Engineer (Consultant)

Michael Pacchioli

Embedded Systems Engineer (Consultant)

Adriano Dipierro

Avatar Artist (Consultant)

Igor Pichardo

Avatar Animator (Consultant)

Alberto Rodriguez

Bookeeping (Consultant)

Roger Nelson

Consumer Electronics Sales (Consultant)

Elizabeth Koshy

Business Development (consultant)

Notable Advisors & Investors

Patti Glovsky
Mike Beebe
Dave Lorenzini

Q&A with the Founder

  • Can you elaborate on your customer acquisition strategy and how you plan to scale? How are you going to grow this business exponentially? 

    We have deep experience in working with consumer electronics and automotive customers including 17 Fortune 100 companies. Besides a great contact list, we cultivate strategic partners to sell our products. We like to choose market partners that are envied by their competitors. After successfully working with them, their competitors seek us out. We also work closely with industry press to help tell our story. We came out of stealth at CES in January this year. We had an overwhelmingly positive reception and captured ~250 qualified leads from visits to our booth. When I speak at a conference, I typically get 5-10 qualified leads. I’m speaking at about one show per month including international shows. Next week, I’ll be speaking at the AutoTech council where last year, a leading automotive talent scouts found us. Post funding, we will increase our booth presence with a goal of showing 6 times per year initially. We will also increase our PR activity with the goal of both focused industry press as well as broader coverage in magazines like Wired and TV shows like CNN.

  • Can you provide more color to your multiple revenue models? 

    Our revenue models are adapted to the norms of the industries that we work in. In the consumer electronics market, we work on a per unit licensing model. In automotive, we typically have two years of paid prototyping (NRE) followed by per unit licensing as cars ship. Our unit pricing goal is $20 per car plus $5 per year for updates and support. As a reference point, Apple tries to sell CarPlay thru BMW for $300. We also have yearly recurring revenues to provide software updates and support. For smart home customers, we use a SaaS model charging users on a monthly or yearly service model. Our yearly, per home revenue goals are $200 per home. For our TV licensing, we seek $5-10 per TV sold (Samsung sells about 100 mil. TVs per year). 

  • Can you please provide color on your product roadmap? Both future and historical (when things were launched) and what you plan to launch in the coming months? 

    Our MVP was completed in 2016 and was released publicly for beta testing to improve it. In 2017, we added support for Android and iOS and published our API. In 2018, we launched our automotive beta under development (we are beginning year 2 of 3 with them). This year, we will continue to develop our home and Linux auto products, complete our SDK and tools and we will initiate support for new languages such as Japanese, Spanish and French. The product cycle for cars is three years in our product category. Typically year 1 is prototyping, year 2 is testing and integration and year 3 is road testing before going into cars. Our CE customers are on 6-12 month product cycles. We hope to ship in their TV’s next year. We think that it’s key to develop customer facing tools so that they can maintain and develop new conversations to run with our software. We are currently in teaming discussions with several tool companies.

  • What is Planet 9 Studios and what is your involvement there? 

    Planet 9 was one of the first companies to do VR on the internet in 1995 and became known for 3D interfaces for a lot of different products. Everything from virtual places to talking characters. The first product was developing navigation systems. The second main product came out of government research is the AI work. I technically still have this business, but the revenues now are helping a few customers. The company has a few thousand dollars of revenue. All my effort is behind SapientX. If this becomes an issue, I am happy to hire a new President for this business.

  • Please detail and explain your exit expectations.

    Our focus is on building great AI driven voice products. We came out of stealth at CES in January. We may well be an acquisition target. We track about 100 peer companies. Of the top 21, 9 have had successful exits after an average of 4 years in business. Of the nine, on average, they had raised $14 mil. after their series A rounds. Six of the remaining 12 companies seemed to have missed profitability goals and had to continue with added funding rounds.

  • 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:
    Seed

  • Round size:
    US $1,500,000

  • Raised to date:
    US $152,265
    US $152,265 (under Reg CF only)

  • Minimum investment:
    US $1,000

  • Target Minimum:
    US $300,000

  • Maximum Raise Amount:
    US $1,500,000
  • Key Terms

  • Security Type:
    Preferred Equity

  • Share price:
    US $2.5000

  • Pre-money valuation:
    US $5,000,000

  • Option pool:
    15.21%

  • Liquidation preference:
    1.0x
  • Additional Terms

  • Investment Proxy Agreement

    All non-Major Purchasers will be subject to an Investment 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.


  • Closing conditions:
    While SapientX Inc. has set an overall target minimum of US $300,000 for the round, SapientX Inc. 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 SapientX Inc.'s Form C.

  • Regulation CF cap:
    While SapientX Inc. is offering up to US $1,500,000 worth of securities in its Seed, 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

    $5,000 ("Copper") - Limited edition SapientX investor t-shirt.

    $10,000 ("Bronze") - The above, plus always find your car keys with a custom, SapientX branded Tile key / phone finder on a custom leather key fob from Etsy. Tile connects to your smart phone to give you an audio chirp or map location of the item connected to your Tile. Your Tile can also make your lost phone chirp. (https://www.thetileapp.com/en-us/corporate-promotions)

    $25,000 ("Silver") - The above, plus participation in an online team strategy session in November 2018. Help chart the course of SapientX and hear our plans for 2019.

    $50,000 ("Gold") - All of the above, plus an invitation to join us at FlipJack Ranch for a "Farm to Table" dinner to meet the founders in November of 2018 (www.flipjackranch.com).

    $100,000 ("Platinum") - All of the above, plus an invitation to join us at FlipJack Ranch (Bonny Doon, California) for a day-long team strategy retreat in November 2018. FlipJack Ranch is a working ranch and B&B in the Santa Cruz Mountains and a great place to discuss long term company plans among the redwoods!

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

    Financial Discussion

    Operations

    SapientX Inc. (“the Company”) is a Delaware C-corporation that was founded on April 6, 2016, and is headquartered in San Francisco, California. The Company develops and markets conversational artificial intelligence (“AI”) software that can be integrated into any platform, and works with or without an internet connection.

    The Company’s MVP was completed in 2016 and was released publicly for beta testing to improve it. In 2017, it added support for Android and iOS and published its API. In 2018, the Company launched its automotive beta under development funding from Mitsubishi . This year, the Company intends to continue to develop its home and Linux auto products, complete its SDK and tools and to initiate support for new languages such as Japanese, Spanish and French.

    The Company has incurred losses from inception of $190,818. In particular, the Company earned $53,490 in revenue for the FYE January 31, 2018 and accrued expenses of $145,891, resulting in a net loss of $92,401. The Company earned $1,000 in revenue for the FYE January 31, 2017 and accrued expenses of $99,417, resulting in a net loss of $98,417.

    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 $352 in cash on hand as of July 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 the 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

    Automotive AI Market. Source: https://www.marketsandmarkets.com/PressReleases/automotive-artificial-intelligence.asp


    Markets

    Our focus spans both automotive and consumer electronics markets. We see a blurring of these markets as cars become more like living rooms and as consumers desire a uniform voice interface from "home to car to office". We like these markets because there is an established demand for voice controlled products. The automotive AI market is projected to be at $10.5 billion in 2025 with a 48% growth rate and AI driven virtual assistants, in consumer electronics, is projected to be a $12 billion dollar market, in 2021, with a 37% growth rate. 

    Competitors 

    We categorize our competitors into three camps:"fading incumbents", white-label " and "advertising ecosystem".

    Fading incumbents include Sensory, Nuance and Voicebox. These companies adapted telephone IVR technologies to be used in cars. Their products have low user ratings, low accuracy, their technology has fallen behind and several of our customers have commented that they can't wait for these companies to leave the playing field.

    The white label companies license their software and they require no product branding. Typical competitors include IBM Watson and SoundHound. Both of these companies offer second generation A.I. approaches. Soundhound scored last place in our benchmark tests and we have spoken to six companies that tried to use Watson, got frustrated, and abandoned their efforts.

    The advertising ecosystem companies include Amazon Alexa, Microsoft Cortana, Google Assistant and Apple Siri. Each of these companies uses second generations A.I. approaches and they require that your customers learn commands, that you use their product branding and that you deliver profiling data, from your users, that can be used for targeted advertising. To deliver that sensitive user data, your product needs a steady Internet connection. Each of these products offers relatively good performance and a developed ecosystem but many of our customers are uncomfortable with depending on the whims of huge companies, having to call Siri, Alexa or the like and on transmitting sensitive user data back to these companies.

    Pricing 

    IBM is promoting a SaaS model of $10/month per device in order to use Watson as an assistant. Our economic goals are a one time fee of $20 per car and a support and maintenance fee of $5/year at volume. For consumer electronics we offer a hosted service priced at $10/month to control all connected devices in a home.

    Risks and Disclosures

    SapientX faces competition from other companies in the Voice AI space. Existing companies that engage in the Voice AI space could introduce new or enhance existing products. If SapientX is able to establish a market around its product, it may find that larger, better funded companies may enter the market, which could negatively impact SapientX’s growth. Companies such as Amazon have products such as Alexa that could license the technology to a number of SapientX’s competitors. 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.

    SapientX’s expenses may increase as they seek to execute its current business model. Although the company has kept historical burn to a minimum, as they ramp up execution with new clients and beta testing, their expenses could increase which would ramp up its cash burn after the raise. Doing so could require significant effort and expense or may not be feasible.

    The Company forecasts project it obtaining a large number of prospects in a short amount of time. 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.

    SapientX is targeting a new and unproven segment within the Voice AI Market, which introduces unknowns. The Company plans to implement new lines of business or offer new products and services within existing lines of business. There are substantial risks and uncertainties associated with these efforts, particularly in instances where the markets are not fully developed. In developing and marketing new lines of business and/or new products and services, we may invest significant time and resources. Initial timetables for the introduction and development of new lines of business and/or new products or services may not be achieved and price and profitability targets may not prove feasible. We may not be successful in introducing new products and services in response to industry trends or developments in technology, or those new products may not achieve market acceptance. As a result, we could lose business, be forced to price products and services on less advantageous terms to retain or attract clients, or be subject to cost increases. As a result, our business, financial condition or results of operations may be adversely affected.

    Despite running paid demos, SapientX remains substantially “pre revenue” without long term contracts. They will need to execute on these contracts quickly to maintain and grow the business. The Company may not be successful in its efforts to grow and monetize its product. It has limited operating capital and for the foreseeable future will be dependent upon its ability to finance operations from the sale of equity or other financing alternatives. There can be no assurance that the Company will be able to successfully raise operating capital. The failure to successfully raise operating capital, and the failure to effectively monetize its products, could result in bankruptcy or other event which would have a material adverse effect on the Company and the value of its shares. The Company has limited assets and financial resources, so such adverse event could put investors’ dollars at significant risk.

    The Company relies heavily on their technology and intellectual property, but they may be unable to adequately or cost-effectively protect or enforce their intellectual property rights, thereby weakening their competitive position and increasing operating costs. To protect their rights in services and technology, they rely on a combination of copyright and trademark laws, patents, trade secrets, confidentiality agreements with employees and third parties, and protective contractual provisions. They also rely on laws pertaining to trademarks and domain names to protect the value of their corporate brands and reputation. Despite their efforts to protect their proprietary rights, unauthorized parties may copy aspects of their services or technology, obtain and use information, marks, or technology that they regard as proprietary, or otherwise violate or infringe their intellectual property rights. In addition, it is possible that others could independently develop substantially equivalent intellectual property. If they do not effectively protect their intellectual property, or if others independently develop substantially equivalent intellectual property, their competitive position could be weakened. Effectively policing the unauthorized use of their services and technology is time-consuming and costly, and the steps taken by them may not prevent misappropriation of their technology or other proprietary assets. The efforts they have taken to protect our proprietary rights may not be sufficient or effective, and unauthorized parties may copy aspects of their services, use similar marks or domain names, or obtain and use information, marks, or technology that they regard as proprietary. They may have to litigate to enforce their intellectual property rights, to protect their trade secrets, or to determine the validity and scope of others’ proprietary rights, which are sometimes not clear or may change. Litigation can be time consuming and expensive, and the outcome can be difficult to predict.

    The Company depends on a limited number of customers for a substantial majority of its revenue. As of January 31, 2018, all revenue recognized was from two customers. At January 31, 2018, all accounts receivable were from one customer. If the Company fails to retain or expand its customer relationships or if its customers cancel or reduce their purchase commitments, its revenue could decline significantly. As a result of this customer concentration, the Company’s revenue could fluctuate materially and could be materially and disproportionately impacted by purchasing decisions of its significant customer. In the future, any significant customer may alter their purchasing patterns at any time with limited notice, or may decide not to continue to purchase the Company’s solutions at all, which could cause its revenue to decline materially and materially harm its financial condition and results of operations. If the Company is not able to diversify its customer base, it will continue to be susceptible to risks associated with customer concentration. Additionally, if the Company were to lose these clients, it could be harmed and may not be able to continue operations if they are not able to add additional clients to fill the loss.

    We are not subject to Sarbanes-Oxley regulations and lack the financial controls and safeguards required of public companies. We do not have the internal infrastructure necessary, and are not required, to complete an attestation about our financial controls that would be required under Section 404 of the Sarbanes-Oxley Act of 2002. There can be no assurance that there are no significant deficiencies or material weaknesses in the quality of our financial controls. We expect to incur additional expenses and diversion of management’s time if and when it becomes necessary to perform the system and process evaluation, testing and remediation required in order to comply with the management certification and auditor attestation requirements.

    The reviewing CPA has included a “going concern” note in the reviewed financials. In particular, the CPA noted that the Company has incurred losses from inception of $190,818 which, among other factors, raises substantial doubt about the Company's ability to continue as a going concern for the twelve-month period from the report date. 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 common shares, its ability to attract new customers, 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.

    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.

    Although the Company has filed an extension, it has not yet completed its 2017 tax filing, which could subject it to penalties, fines, or interest changes. In particular, the Internal Revenue Service (IRS) could impose the Company with costly penalty and interest charges if the Company has filed its tax return late, or has not furnished certain information by the due date. In addition, in its extension, if it underestimated its taxes, the IRS could penalize it. Potential tax consequences could adversely affect the Company’s results of operations or financial condition.

    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.

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


    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, SapientX has set a minimum investment amount of US $1,000.

    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 SapientX does not plan to list these securities on a national exchange or another secondary market. At some point SapientX 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 SapientX 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 SapientX'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 SapientX's Form C. The Form C includes important details about SapientX'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.