- Launched in 10 REI Locations in Fall 2018; grew to 47 by summer 2019
- Doubled total 2018 revenue in the first half of 2019 (unaudited)
- Named 2019 Social Impact Start-up of the Year of Northern Colorado by Colorado Institute for Social Impact
- Selected to participate in FoodFutureCo's scale-up accelerator program for 2019
- Total Amount Raised: US $25,000
- Total Round Size: US $500,000
- Seed :
- Minimum Investment: US $1,000 per investor
- : Crowd Note
- US $3,000,000 :
- Side by Side Offering
We're sick and tired of convenient food being high-waste.
Traditionally, adventurers have had to settle when it comes to eating on the trail. We've found that freeze-dried meals—the typical solution for hikers and campers—lack flavor and nutrition, their ingredients are mysterious, and they're packed in heavy mylar pouches that can't be recycled.
More and more people are getting outside to recreate. According to the Outdoor Industry Association, in 2017, 145 million people participated in outdoor sports—that's more than the attendance of NBA, NFL, and NHL games combined.
Unfortunately, more people eating freeze-dried meals means more plastic waste on our trails and in our environment. By 2050, the MacArthur Foundation reports that our oceans will contain more plastic by weight than fish.
So, the outdoor consumer faces a big pain point:
"The food I eat in the outdoors isn't good for me, and it's not good for the planet."
TrailFork offers healthy, sustainably sourced dehydrated meals in biodegradable packaging.
Our portions are substantial, our ingredients clean, and our nutrition facts impressive. We believe we are the only brand in the category to use fully home compostable packaging, so that the consumer no longer has to make a choice between sustaining themselves and sustaining the environment they love to spend time in.
Our solution has resonated with consumers: we've grown 9900% since our launch in 2017.
By May of 2018, sporting goods powerhouse, Recreational Equipment, Inc. (REI) announced it would carry TrailFork in 10 stores. In January 2019, that number grew to 37 and in July 2019 it grew further to 47. Including independent retailers, this brings our total brick and mortar presence to 67 stores nationwide.
The Beginning: TrailFork Custom Meal Kits
TrailFork's line-up of meals were borne out of a frustration with the backcountry meal marketplace. Most freeze-dried meals were made of unrecognizable ingredients, the portions were inadequate for active adventures, and the packaging was offensively high-waste for someone concerned about the health of the environment. Seeking to meet the needs of backcountry adventurers and consumers, CEO Lillian Hoodes launched TrailFork's personalized meal kit service. At mytrailfork.com, customers can enter their trip length, height and weight, and dietary preferences, and TrailFork will ship custom-portioned meals appropriate for any backcountry adventure.
Out of this personalized meal service and much R&D were borne 11 different greatest-hit meals. Lillian took the most-raved-about meals from TrailFork's meal boxes, and launched them into TrailFork's retail line. Its custom kits still serve as valuable R&D, where the TrailFork team can test new recipes, solicit customer feedback, and build its products according to customer needs, desires, and tastes.
TrailFork Retail Line: 11 Healthy Meals in Biodegradable Packaging
TrailFork offers a retail line-up of 11 different meals—4 breakfasts and 7 entrées. Nine out of eleven are both vegan and gluten-free; two are vegetarian.
All TrailFork products are packaged in biodegradable packaging. Our meals are all made simply by adding hot or cold water, making them a convenient and nutritious option for the backcountry or every day.
TrailFork is the passion project of a group of like-minded and incredibly driven friends.
TrailFork was born in the Noe Valley neighborhood of San Francisco, where Mike Lalli and Lillian Hoodes were roommates, living just down the street from Kira Hill-Filben. When Lillian brought her idea for a backpacking food company to Mike, a CPG industry veteran with experience at White Wave Foods and Clif Bar, Mike was immediately on board. Kira, then working in the beauty industry as a merchandiser and buyer, brought an understanding of how to develop consumable goods into well-loved brands. And of course, TrailFork wouldn't be TrailFork without its distinctive logo and branding, designed by co-founder Cristyn Hypnar. Friends from their shared time in Chicago, Lillian and Cristyn had long dreamed of founding a company together, and TrailFork brought their love of healthy food, the environment, and adventure together in one biodegradable package. In October of 2017 Scot Frank rounded out TrailFork's founding crew with experience in entrepreneurship and management. A classmate of Lillian's from high school and listed as one of Forbes' 30 under 30, Scot is a trusted source of valuable business and strategic advice.
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 $5,000 (under Reg CF only)
All non-Major Purchasers will be subject to an Investment Proxy Agreement (“IPA”). The IPA will authorize an investment Manager 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 Company's offering materials for additional details.
Investors who invest $50,000 or less 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.
Invest before August 30, 2019, and receive an invitation to TrailFork's Birthday Party in September 2019 hosted at Avery Brewing Company in Boulder, Colorado.
All investors will receive a lifetime discount on TrailFork products.
- TrailFork Day Supply (breakfast, lunch, dinner)
- TrailFork Day Supply
- TrailFork Klean Kanteen
- TrailFork Day Supply
- TrailFork Klean Kanteen
- Branded TrailFork Swag from fellow 1% for the Planet member, Toad & Co.
- All benefits above
- Monthly investor call
- All benefits above
- Monthly investor call
- Invitation to yearly leadership team retreats in Boulder, Colorado
It is advised that you consult a tax professional to fully understand any potential tax implications of receiving investor perks before making an investment.
TrailFork, Inc. (“the Company”) was originally formed on June 12, 2017 as a Limited Liability Company under the laws of the State of Colorado and later on March 12, 2018 absorbed all business operations of the Limited Liability Company as a C‐Corporation under the laws of the State of Delaware, and is headquartered in Broomfield, Colorado. The Company sells an innovative nutritional solution for outdoor adventurists by combining simple to make meals in a fully compostable packaging.
The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
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 $19,406.44 in cash on hand as of July 29, 2019, 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 in the Data Room.
TrailFork intends to establish itself within the outdoor industry's freeze-dried and dehydrated food segment, before expanding in 2021 to grocery and convenience food.
The outdoor recreation market is growing rapidly. According to the Bureau of Economic Analysis, the industry contributed $412 billion to the US GDP in 2017. This represents 2.2% of the overall US economy. In fact, the outdoor recreation market grew faster in 2017 than did the overall US GDP: 1.7% compared with 1.6%.
Of the overall outdoor recreation market, we estimate that the market for freeze-dried and dehydrated food is approximately $300 million.
Further, the European outdoor recreation market is on the rise as well. In 2017, the market was valued at $5.86 billion, with approximately $4.03 million spent on outdoor accessories including camping equipment. This represented 7.2% growth over 2016.
Because TrailFork intends to expand to grocery and convenience food within the next 24 months, the overall "plant-based" food market is relevant as well. Once we make that leap, TrailFork will be playing in a market that is increasingly moving from niche to mainstream. In 2018, sales of plant-based products topped $3.3 billion -- up a staggering 20% over 2017.
The Company’s cash position is relatively weak. The Company currently has only $19,406.44 in cash balances as of July 29, 2019. This equates to 2-3months of 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’s business model is capital intensive. The amount of capital the Company is attempting to raise in this Offering is not enough to sustain the Company’s current business plan. In order to achieve near and long-term goals, the Company will need to procure funds in addition to the amount raised in the Offering. There is no guarantee the Company will be able to raise such funds on acceptable terms or at all. If the Company is not able to raise sufficient capital in the future, then it will not be able to execute its business plan, its continued operations will be in jeopardy and it may be forced to cease operations and sell or otherwise transfer all or substantially all of its remaining assets, which could cause a Purchaser to lose all or a portion of his or her investment.
Failure to obtain new clients or renew client contracts on favorable terms could adversely affect results of operations. The Company may face pricing pressure in obtaining and retaining their clients. Their clients may be able to seek price reductions from them when they renew a contract, when a contract is extended, or when the client’s business has significant volume changes. Their clients may also reduce services if they decide to move services in-house. On some occasions, pricing pressure results in lower revenue from a client than the Company had anticipated based on their previous agreement with that client. This reduction in revenue could result in an adverse effect on their business and results of operations. Further, failure to renew client contracts on favorable terms could adversely affect the Company's business. The Company's contracts with clients generally run for several years and include liquidated damage provisions that provide for early termination fees. Terms are generally renegotiated prior to the end of a contract’s term. If they are not successful in achieving a high rate of contract renewals on favorable terms, their business and results of operations could be adversely affected.
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 backpacking food 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.
The amount of capital the Company is attempting to raise in this Offering is not enough to sustain the Company’s current business plan. In order to achieve the Company’s near and long-term goals, the Company will need to procure funds in addition to the amount raised in the Offering. There is no guarantee the Company will be able to raise such funds on acceptable terms or at all. If the Company is not able to raise sufficient capital in the future, the Company will not be able to execute its business plan, its continued operations will be in jeopardy and it may be forced to cease operations and sell or otherwise transfer all or substantially all of its remaining assets, which could cause a Purchaser to lose all or a portion of his or her investment.
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 $117,835 from its inception through December 21, 2018. 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 valuation could decline.
The Company has outstanding liabilities. The Company owes approximately $259,000 in debt broken up between $250,000 SBA Loan ($215k balance), $24,121 credit cards, and $19,648 PayPal loan.
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 backpacking food space. Additionally, the product may be in a market where customers will not have brand loyalty.
The Company relies heavily on its technology and intellectual property, but it may be unable to adequately or cost-effectively protect or enforce its intellectual property rights, thereby weakening its competitive position and increasing operating costs. To protect its rights in its services and technology, the Company relies on a combination of copyright and trademark laws, patents, trade secrets, confidentiality agreements with employees and third parties, and protective contractual provisions. It also relies on laws pertaining to trademarks and domain names to protect the value of its corporate brands and reputation. Despite efforts to protect its proprietary rights, unauthorized parties may copy aspects of its services or technology, obtain and use information, marks, or technology that it regards as proprietary, or otherwise violate or infringe its intellectual property rights. In addition, it is possible that others could independently develop substantially equivalent intellectual property. If the Company does not effectively protect its intellectual property, or if others independently develop substantially equivalent intellectual property, its competitive position could be weakened.
Effectively policing the unauthorized use of its services and technology is time-consuming and costly, and the steps it takes may not prevent misappropriation of its technology or other proprietary assets. The Company's efforts to protect its proprietary rights may not be sufficient or effective, and unauthorized parties may copy aspects of its services, use similar marks or domain names, or obtain and use information, marks, or technology that it regards as proprietary. The Company may have to litigate to enforce its intellectual property rights, to protect 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 currently has litigation pending against it. Specifically, in April of 2019, Trailfork, Inc. received notice that the proprietor of a website and blog known as ‘Trailforked’, http://www.trailforked.com ("Claimant"), alleged that the Company’s use of the mark “Trailfork” infringed Claimant’s trademark rights in and to the mark ‘Trailforked’. Further, on June 6, 2019, the Company received notice that Claimant had filed a Complaint against the Company in the United States District Court for the District of Oregon, Portland Division, alleging unfair competition under both state and federal trademark law. As of July 29, 2019, the Complaint has not yet been served on the Company. Counsel for the Company and the Claimant have been involved in settlement negotiations, which are ongoing.
The Company continues to analyze the potential merits of the Claimant’s claims, the potential defenses to such claims and potential counterclaims, and the possibility of a commercially reasonable settlement in lieu of further litigation. However, there can be no assurance that such settlement negotiations will be fruitful. Moreover, the outcome of any litigation is inherently uncertain, and the ongoing litigation may require the expenditure of significant time and Company resources which may have a material impact on the Company’s financial performance. Any intellectual property claims, including the one referenced above, with or without merit, could be time-consuming and expensive to resolve, could divert management attention from executing the Company’s business plan, could require the Company to change its trade name and logo, and could require the Company to pay monetary damages or enter into license agreements with monetary payments in the short and long term. Any adverse determination related to intellectual property claims or litigation could prevent the Company from offering its products to others as presently packaged and branded, could be material to the Company’s net income or cash flows, and could otherwise adversely affect the Company’s operating results.
Industry consolidation may result in increased competition, which could result in a loss of customers or a reduction in revenue. Some of the Company's competitors have made or may make acquisitions or may enter into partnerships or other strategic relationships to offer more comprehensive services or achieve greater economies of scale. In addition, new entrants not currently considered to be competitors may enter the Company's market through acquisitions, partnerships or strategic relationships. The Company expects these trends to continue as competitors attempt to strengthen or maintain their market positions. Potential entrants may have competitive advantages over the Company's operations, such as greater name recognition, longer operating histories, more varied services and larger marketing budgets, as well as greater financial, technical and other resources. Competitors that expand or vertically integrate their business may create more compelling service offerings, may offer greater pricing flexibility, or may engage in business practices that make it more difficult 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 customers or a reduction in revenue.
The Company 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 the Company's products change continually. Its success depends on its ability to predict, identify, and interpret the tastes and habits of consumers and to offer products that appeal to consumer preferences. If the Company does not offer products that appeal to consumers, its sales and market share will decrease. It must distinguish between short-term fads, mid-term trends, and long-term changes in consumer preferences. If the Company does not accurately predict which shifts in consumer preferences will be long-term, or if it fails to introduce new and improved products to satisfy those preferences, its sales could decline. In addition, because of its varied customer base, it must offer an array of products that satisfy the broad spectrum of consumer preferences. If the Company fails to expand its product offerings successfully across product categories, or if it does not rapidly develop products in faster growing and more profitable categories, demand for its products could decrease, which could materially and adversely affect its product sales, financial condition, and results of operations.
In addition, achieving growth depends on its successful development, introduction, and marketing of innovative new products and line extensions. Successful innovation depends on its 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 its competitive position and adversely impact its business
Maintaining, extending, and expanding the Company's reputation and brand image are essential to the Company's business success. The Company seeks to maintain, extend, and expand their brand image through marketing investments, including advertising and consumer promotions, and product innovation. Increasing attention on marketing could adversely affect the Company's brand image. It could also lead to stricter regulations and greater scrutiny of marketing practices. Existing or increased legal or regulatory restrictions on the Company's advertising, consumer promotions and marketing, or their response to those restrictions, could limit their efforts to maintain, extend and expand their brands. Moreover, adverse publicity about regulatory or legal action against the Company could damage the Company's reputation and brand image, undermine their customers’ confidence and reduce long-term demand for their products, even if the regulatory or legal action is unfounded or not material to their operations.
As a food production company, all of the Company's products must be compliant with regulations by the Food and Drug Administration (FDA). The Company must comply with various FDA rules and regulations, including those regarding product manufacturing, food safety, required testing, and appropriate labeling of the products. It is possible that regulations by the FDA and its interpretation thereof may change over time. As such, there is a risk that the Company's products could become non-compliant with the FDA’s regulations and any such non-compliance could harm the business.
Product safety and quality concerns, including concerns related to perceived quality of ingredients, or product recalls could negatively affect the Company’s business. The Company’s success depends in large part on its ability to maintain consumer confidence in the safety and quality of all its products. The Company has rigorous product safety and quality standards. However, if products taken to market are, or become, contaminated or adulterated, the Company may be required to conduct costly product recalls and may become subject to product liability claims and negative publicity, which would cause its business to suffer. In addition, regulatory actions, activities by nongovernmental organizations and public debate, and concerns about perceived negative safety and quality consequences of certain ingredients in its products may erode consumers’ confidence in the safety and quality issues, whether or not justified, and could result in additional governmental regulations concerning the marketing and labeling of the Company’s products, negative publicity, or actual or threatened legal actions, all of which could damage the reputation of the Company’s products and may reduce demand for the Company’s products.
A product recall or an adverse result in litigation could have an adverse effect on the Company's business, depending on the costs of the recall, the destruction of product inventory, competitive reaction, and consumer attitudes. Even if a product liability claim is unsuccessful or without merit, the negative publicity surrounding such assertions could adversely affect their reputation and brand image. The Company also could be adversely affected if consumers in their principal markets lose confidence in the safety and quality of their products.
The Company is vulnerable to fluctuations in the price and supply of ingredients, packaging materials, and freight. The Company purchases large quantities of raw materials, including ingredients such as organic raw fruits and organic vegetables. Costs of ingredients and packaging, including its bottles, are volatile and can fluctuate due to conditions that are difficult to predict, including global competition for resources, weather conditions, natural or man-made disasters, consumer demand, and changes in governmental trade and agricultural programs. Additionally, the prices of packaging materials and freight are subject to fluctuations in price. The sales prices to the Companies' customers are a delivered price. Therefore, changes in the Company's input costs could impact their gross margins. Their ability to pass along higher costs through price increases to their customers is dependent upon competitive conditions and pricing methodologies employed in the various markets in which the Company competes. To the extent competitors do not also increase their prices, customers and consumers may choose to purchase competing products or may shift purchases to lower-priced private label or other value offerings which may adversely affect the Company's results of operations. The Company buys from a variety of producers and manufacturers, and alternate sources of supply are generally available. However, the supply and price are subject to market conditions and are influenced by other factors beyond the Company's control. The Company does not have long-term contracts with many of their suppliers, and, as a result, they could increase prices or fail to deliver. The occurrence of any of the foregoing could increase their costs and disrupt their operations.
The consolidation of retail customers could adversely affect the Company. Retail customers in major markets may consolidate, resulting in fewer customers for the business. Consolidation also produces larger retail customers that may seek to leverage their position to improve their profitability by demanding improved efficiency, lower pricing, increased promotional programs, or specifically tailored products. In addition, larger retailers have the scale to develop supply chains that permit them to operate with reduced inventories or to develop and market their own white-label brands. Retail consolidation and increasing retailer power could adversely affect the Company's sales and results of operations. Retail consolidation also increases the risk that adverse changes in customers’ business operations or financial performance will have a corresponding material and adverse effect on the Company. For example, if customers cannot access sufficient funds or financing, then they may delay, decrease, or cancel purchases of products, or delay or fail to pay the Company for previous purchases, which could materially and adversely affect product sales, financial condition, and operating results.
Failure by the Company's transportation providers to deliver their products on time or at all could result in lost sales. The Company currently relies upon third-party transportation providers for a significant portion of their product shipments. The Company utilization of delivery services for shipments is subject to risks, including increases in fuel prices, which would increase their shipping costs, employee strikes, and inclement weather, which may impact the ability of providers to provide delivery services that adequately meet their shipping needs. The Company may, from time to time, change third-party transportation providers, and the Company could therefore face logistical difficulties that could adversely affect deliveries. The Company may not be able to obtain terms as favorable as those they receive from the third-party transportation providers that they currently use or may incur additional costs, which in turn would increase their costs and thereby adversely affect their operating results
Not all of the founders or key employees are currently working full time for the Company. As a result, certain of the Company's employees, officers, directors or consultants may not devote all of their time to the business, and may from time to time serve as employees, officers, directors, and consultants of other companies. These other companies may have interests in conflict with the Company.
Trailfork, Inc. (the “Parent”), a Delaware Corporation, has a subsidiary, Trailfork Custom, Inc. (the “Subsidiary”), which was formed in Delaware on February 28, 2019. Although the Subsidiary authorized the issuance of 1,800,000 shares of Common Stock and 200,000 shares of Preferred Stock, only 800,000 of Common Stock have been issued to the Parent. This introduces the risk that the Subsidiary could issue shares to other stockholders, diluting the Parent’s ownership of the Subsidiary. At this time, the Subsidiary is wholly owned by the Parent. Although the Company does not currently conduct significant operations through the Subsidiary and has indicated their intent to keep the Subsidiary fully owned by the Parent, there is no guarantee that they will do so. The Parent may not have full access to the cash flows of the subsidiary, depending on the management structure and on the amount of control it exercises on the subsidiary. The Parent may need to guarantee the loans of its subsidiaries, thereby directly exposing itself to the liabilities of its subsidiaries.
The Company is not current with its taxes and has not filed an Annual Report, and as a result, it has forfeited its good standing status in Delaware. Loss of Good Standing could impact the Company's ability to do business, as the negative consequences potentially include: losing access to the courts, as a company that is not in good standing may not bring a lawsuit in that state until good standing is restored; tax liens; making it more difficult to secure capital or financing; losing naming rights; being subject to fines and penalties; or administrative dissolution or revocation. Although the Company has stated that the error is clerical, and in the process of being corrected, in additional to the above consequences, the lapse of good standing may also indicate poor corporate governance or legal oversight.
The Company is overdue on its 2018 tax filing, which could subject it to penalties, fines, or interest changes, and which could indicate a failure to maintain adequate financial controls and safeguards. In particular, the Internal Revenue Service (IRS) could impose the Company with costly penalties and interest charges if the Company has filed its tax return late, or has not furnished certain information by the due date. In addition, even though the Company has confirmed it has filed an 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.
The Company not prepared any audited financial statements. Therefore, you have no audited financial information regarding the Company’s capitalization or assets or liabilities on which to make your investment decision. If you feel the information provided is insufficient, you should not invest in the Company.
The Company has conducted related party transactions. During the years ended December 31, 2018 and 2017, a shareholder of the Company advanced funds for operations. These advances are non‐interest bearing. At December 31, 2018 and 2017, the amount of advances outstanding is $0 and $16,617, respectively, and are recorded under ‘Advances – related party’ on the balance sheets.
The Company has not filed a Form D for its prior offering. 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 is subject to many U.S. federal and state laws and regulations, including those related to privacy, rights of publicity, and law enforcement. These laws and regulations are constantly evolving and may be interpreted, applied, created, or amended, in a manner that could harm our business. The technology and use of the technology in our product may not be legislated, and it is uncertain whether different states will legislate around this technology, and, if they do, how they will do so. Violating existing or future regulatory orders or consent decrees could subject us to substantial monetary fines and other penalties that could negatively affect our financial condition and results of operations.
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") 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.
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 TrailFork. Once TrailFork accepts your investment, and certain regulatory procedures are completed, your money will be transferred from the escrow account to TrailFork in exchange for your securities. At that point, you will be a proud owner in TrailFork.
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, TrailFork 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 TrailFork does not plan to list these securities on a national exchange or another secondary market. At some point TrailFork 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 TrailFork 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 TrailFork'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 TrailFork's Form C. The Form C includes important details about TrailFork'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.