- ZenSpace ZenPods featured at Microsoft Ignite event (over 25,000 attendees), IMEX America (a top exhibition industry event with over12,000 attendees), and IAEE Expo! Expo.
- The first pod prototype was displayed at CES in Jan 2018; Featured by Entrepreneur, as part of their CES coverage.
- Approved to be an official vendor of Microsoft.
- Provisional Patent filed by the founder for the ZenSpace SmartBox.
- The global workspace as a service (WaaS) market was valued at $6.12 billion in 2016 and is expected to reach a value of $12.9 billion by 2022.
- Total Amount Raised: US $416,020
- Total Round Size: US $2,400,000
- Seed :
- Minimum Investment: US $1,000 per investor
- : Preferred Equity
- US $7,000,000 :
- Side by Side Offering
The Workspace-as-a-Service sector is estimated to reach $12.8B in 2022. Our research has established a clear need for on-demand, quiet meeting/work spaces for business people in office spaces, events/conventions, and public spaces. These people seek a conveniently located, comfortable workspace that reduces noise and offers the functional amenities of an enclosed space (privacy, solid Internet access, etc.). In turn, this creates an opportunity for Event Managers, Public Space Operators, and Office Facilities Managers to fill.
To address this need, ZenSpace has developed the ZenPod™. ZenPods combine a noise reducing, comfortable meeting/work space, a technology platform, a mobile/web app (currently in Beta), and a “SmartBox” control system to create a highly flexible, on-demand system, an IoT-enabled space for conducting business and/or private meetings. Our vision for the ZenPods is to allow people to search, select, and schedule time in a ZenPod as easily as ordering a ride share.
Since our launch in 2017, we have piloted programs with marquee customers and are in conversations with more, including:
- Events - Event managers at Microsoft, ICSC, and Realcomm, as well as the leading exhibition industry associations IMEX and IAEE.
- Public Spaces - We are in conversations with Bespoke at Westfield Mall/San Francisco.
- Office Solutions - Our target customers are Pinterest, Twillio, and ThermoFisher.
In addition, we are now an official vendor of Microsoft.
With an experienced team covering major areas of execution and market experience, we are poised for growth with multiple verticals in which to expand our business.
ZenSpace is a B2B2C company; our market opportunity extends across three key verticals, with varying solutions and business models for each.
We provide a “smart pod,” a modular, on-demand meeting/workspace that delivers a solution for the business professional in need of a private, quiet space to meet or work.
ZenPods combine hardware and technology to create a fully automated, technology-enabled workspace. People can search, select, and schedule time in a ZenPod via our ZenSpace app (in Beta) with the touch of a finger. When they arrive at their scheduled pod, they enter a secure, quiet, comfortable, IoT environment that provides the space and functionality they need to get down to business.
What makes a ZenPod smart?
- The ZenSpace Pod – A modular, flexible unit, with seating from 1 to 4, provides a private, quiet, comfortable place to work and/or meet. Our walls, interior insulation, and glass are uniquely constructed to achieve noise reduction. Key features include controllable lighting and air circulation, WiFi, ports for all your gadgets and a touchscreen tabletop control pad.
- The ZenSpace App (in Beta) – Our mobile/web app links to a cloud platform that makes finding, scheduling, and paying for meeting space in short time increments as easy as hailing a ride share.
- The ZenSpace SmartBox – Our secret sauce. This patent-pending control unit turns an ordinary pod into a tech-enabled IoT environment, with a secure schedule/locking system and a variety of “smart” features to manage SmartPod features.
The above combine to create a unique, highly flexible work and meeting space people can schedule on demand, all in a small form factor that facilitates placement in almost any location. That’s smart.
Our ZenPods in the Market
Overall, we believe SmartPods are perfectly suited for environments with high concentrations of business people away from their office – e.g., events, convention centers, hotels, airports – while our ZenPods fill a need for private space in office environments.
Our schedulable, flexible SmartPod is uniquely suited for the event industry where millions of people convene to conduct business, network, and gather information, making it a target rich environment for users and customers of our product.
We believe ZenSpace offers benefits for all stakeholders in this ecosystem – Attendees get a private work/meeting space to conduct business, while our B2B customers, Event Organizers, Exhibitors, and Sponsors, benefit from a turnkey solution that enhances the event experience and provides new sponsorship (revenue generating) opportunities.
Open office environments provide many benefits, but also create a problem – lack of privacy and quiet space in which employees can get work done, hold a private conversation or make a call without everyone hearing their business.
Our ZenPod offering (the baseline pod without the “smart” technology and scheduling components) provides a quiet and less disruptive space for employees. At the same time, ZenPods can be an economical, simple, flexible solution for a Facilities Manager vs. the cost and disruption of office construction.
Public Space Solutions
Public spaces – convention centers, hotels, airports, selected malls and/or commercial real estate –generate strong traffic from traveling business people as well as local freelance, consultant, and gig economy workers.
Based on our observations, 40% of public convention center and hotel space is underutilized lobby, hall or patio space. ZenSpace enables public space venues, our customer, to activate and monetize previously underutilized real estate while providing added service and value to their user/customers.
It was April 2017. Mayank Agrawal had recently left a successful engineering and sales career path to pursue his dream of starting his own company. He had a product concept and was in the process of developing a business plan with several colleagues, meeting wherever and whenever they could to work on the plan. There was one nagging problem – finding a quiet, private place to meet so they could focus on their plans. As any road warrior or remote worker knows, working out of busy public spaces can be a pain. Noise, crowds, distractions – hardly an environment conducive to getting work done.
Dealing with the chaos of this public setting, Mayank had a Eureka moment. Looking at an unused space in the coffee shop, he mused, “If only there was a private space here so we could complete our business plan without any noise and distractions. I bet the coffee shop owner could also make money renting out the little space we need.” In that instant, the ZenSpace concept was born.
Since then, we have self-funded our way through 3 rounds of pod development, worked with prestigious customers and assembled a team of product, marketing, engineering, and sales experts to drive the ZenSpace concept forward. As a team, our passion is second to none.
I do not plan to take any salary until the company is profitable saleswise.
Who do you view as your closest competitors and what are your key differentiators?
Co-working spaces and their meeting rooms: Our advantage is that we provide modular meeting rooms that can be installed in underutilized space at a lower cost. This gives us pervasiveness.
Apps like Breather and LiquidSpace which allow reservation of any spare room: We believe they are the Airbnb and Craigslist of meeting spaces. However, they do not offer a hardware solution that can provide highly consistent user experience. They are limited by the availability of the rooms.
There are also furniture companies worldwide who offer a pod as a furniture. Their products do not come with smart features and an integrated app.
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 $341,019 (under Reg CF only)
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.
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.
While ZenSpace is offering up to US $2,400,000 worth of securities in its Seed Round, only up to US $1,070,000 of that amount may be raised through Regulation CF.
ZenSpace is offering the following perks (bonus perks for investors investing by January 20th at 11:59pm ET).
- $1,000: Invest before January 21st, 2019 and receive a $100 ZenSpace gift voucher to be used across ZenSpace deployments in public and event spaces.
- $5,000: Receive a $250 voucher to use across any ZenPods deployed across public and event spaces. Early Investor Reward: Receive a 20% flat discount voucher to use across ZenSpace products & services (valid for 6 months from the issue date) when you invest before January 21st, 2019.
- $10,000: Receive a $1,000 ZenSpace gift voucher for use across any ZenPods deployed in public and event spaces. Early Investor Reward: Receive a 20% flat discount voucher to use across ZenSpace products & services (valid for 6 months from the issue date) when you invest before January 21st, 2019.
- $25,000: Receive a 20% discount voucher on all of our products & services (valid for 1 year). Plus an invitation to participate in a strategy workshop, including dinner and cocktails (does not include travel or accommodation). Early Investor Reward: Receive a personalized 1-seater ZenPod engraved with your name and delivered to you within 60 days of the close of the fundraising round when you invest before January 21st, 2019.
- $50,000: Receive a 25% discount voucher on all of our products & services (valid for 1 year). Plus an invitation to participate in a strategy workshop, including dinner and cocktails (does not include travel or accommodation). Early Investor Reward: Receive a personalized 2-seater ZenPod engraved with your name and delivered to you within 60 days of the close of the fundraising round when you invest before January 21st, 2019.
- $100,000: Receive a 30% discount voucher on all of our products & services (valid for 1 year). Plus an invitation to participate in a strategy workshop, including dinner and cocktails (does not include travel or accommodation). Early Investor Reward: Receive a personalized 4-seater ZenPod engraved with your name and delivered to you within 60 days of the close of the fundraising round when you invest before January 21st, 2019.
It is advised that you consult a tax professional to fully understand any potential tax implications of receiving investor perks before making an investment.
ZenSpace, Inc. (a Delaware Corporation) created SmartPods, which combine hardware (a meeting pod) with a technology platform to create on-demand meeting spaces that provide a private, tech-enabled oasis of calm for conducting your business. People can search, select, schedule and pay for use of the SmartPods by the hour with the touch of a finger (like ordering a ride share).
The Company incorporated in 2017 and is headquartered in San Jose, California. The Company has incurred losses from inception of approximately $5,271 in 2017, and has limited operations, which raises substantial doubt about the Company's ability to continue as a going concern. As of November 2018, the Company has incurred losses of $427,233 (not reviewed by an independent CPA).
At inception, the Company authorized 15,000,000 shares of common stock with a par value of $0.0001. As of December 31, 2017, no shares had been issued.
During 2018, the Company issued 9,500,000 common shares to Mayank Agrawal as founders shares.
On January 25, 2018, the Company granted 696,000 stock options to consultants. These options are exercisable at $0.0001 per share. 325,000 of the options have been canceled and another 125,000 have been exercised. The remaining 246,000 are fully vested.
On August 1, 2018, the Company entered into a consulting agreement with Apptimia to continue development of a Web and Mobile Application. Payments will be made upon completion of milestones, with a maximum compensation of $8,400 and 150,000 common shares.
On November 1, 2018, the Company entered into a consulting agreement with Apptimia to continue development of a Web and Mobile Application. Payments will be made upon completion of milestones, with a maximum compensation of $5,600 and 100,000 common shares.
During 2018, the Company issued 3,250,833 common shares to various consultants for services, 125,000 of which were from an exercised option.
During 2018, the Company borrowed an aggregate of $520,000 from related parties. There are minimal loan-repayment risks or contingencies for these non-interest-bearing loans due to the flexible payment terms. $500,000 of the aggregate loan value is from the founder, Mayank Agrawal and shall be repaid only after the Company generates over one million in income attributed to sales and has sufficient funds to begin payments.
Cash and Cash Equivalents
The Company considers all highly liquid investments with an original maturity of 90 days or less to be cash equivalents. At December 31, 2017, the Company had no items, other than bank deposits, that would be considered cash equivalents. The Company maintains its cash in bank deposit accounts, insured up to $250,000 by FDIC. The Company had $155,000 in cash as of November 30, 2018.
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 $155,000 in cash on hand as of November 30, 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.
ZenSpace is serving 3 key verticals – Events, Public Spaces, and Offices – with solutions and models tailored differently to each segment.
B2B events account for $512 billion in annual spend. In a market where millions of people convene to conduct business, network, and gather information, we believe all sector participants are potential users or customers.
Business model: Rent SmartPods to Event Organizers and Exhibitors at an average price of $7.5K per pod, per event (each pod can be deployed multiple times over its lifetime).
Based on our research, $38Bn was spent on office constructions in 2017. We estimate that less than 4% of the construction cost was spent on huddle meeting room constructions.
Business model: Sell ZenPods via direct channels at an average price of $12K per pod.
Public Space Solutions
Public Spaces (e.g., convention centers, hotels, airports, malls) generate strong traffic from traveling business people as well as local freelancers and entrepreneurs in need of quiet workspaces.
Based on our observations, roughly 40% of public convention centers, hotel spaces are underutilized lobby or hall space. This represents a multi-billion-dollar new market (blue ocean) for ZenSpace.
Business model: Annual lease to Public Space operators at an average of $15K per pod and 5% technology fee from the pod revenue.
*These statements represent management’s estimates and are meant for illustrative purposes. They do not represent guarantees of future results, levels of activity, performance, or achievements.
Risks Related to the Company’s Business and Industry
The reviewing CPA has included a “going concern” note in the reviewed financials for the period of October 10, 2017 (inception) to December 31, 2017. The Company has incurred losses from inception of approximately $5,271, and has limited operations, which, raises substantial doubt about the Company's ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent upon management's plans to raise additional capital from the issuance of debt, through a Regulation Equity Crowdfunding campaign, or additional equity financing, and its ultimate ability to commence profitable sales and positive cash flows from its product sales. There are no assurances that management will be able to raise a sufficient amount of capital on acceptable terms to the Company, and the inability to do so would require a reduction in the scope of the Company’s planned development which would be detrimental to the Company’s business, financial condition and operating results. The accompanying financial statements do not include any adjustments that might be required should the Company be unable to continue as a going concern.
We have not prepared any audited financial statements. Therefore, you have no audited financial information regarding the Company’s capitalization or assets or liabilities on which to make your investment decision. If you feel the information provided is insufficient, you should not invest in the Company.
The Company’s cash position is relatively weak. The Company currently has only $155,000 in cash balances as of November 30, 2108. This equates to 2.5 months of runway. The Company believes that it is able to continue extracting cash from sales and extended loan from the founder to extend its runway. The Company could be harmed if it is unable to meet its cash demands, and the Company may not be able to continue operations if they are not able to raise additional funds.
The Company’s expenses will significantly increase as they seek to execute their current business model. Although the Company estimates that it has enough runway until end of year, they will be ramping up cash burn to promote revenue growth, further develop R&D, and fund other Company operations after the raise. Doing so could require significant effort and expense or may not be feasible.
The Company has a high valuation based on its time in the market to date. Since the Company is relatively new to the untested marketplace, Investors may not be adequately compensated for the risk they are taking on when investing in the Company.
The Company’s projections are aggressive and are subject to risks and uncertainties. The Company currently anticipates significant revenue growth over in 2019-2021. If its assumptions are wrong, and its projections regarding market penetration are too aggressive, its financial projections may overstate its viability. In addition, the forward-looking statements are only predictions. The Company has based these forward-looking statements largely on its current expectations and projections about future events and financial trends that it believes may affect its business, financial condition and results of operations. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.
The Company’s sales cycle is long and may be unpredictable, which can result in variability of its financial performance. Additionally, long sales cycles may require the Company to incur high sales and marketing expenses with no assurance that a sale will result, which could adversely affect its profitability. The Company’s results of operations may fluctuate, in part, because of the resource-intensive nature of its sales efforts and the length and variability of the sales cycle. During the sales cycle, the Company may expend significant time and money on sales and marketing activities or make other expenditures, all of which lower its operating margins, particularly if no sale occurs or if the sale is delayed as a result of extended qualification processes or delays. It is difficult to predict when, or even if, it will make a sale to a potential customer or if the Company can increase sales to existing customers. As a result, the Company may not recognize revenue from sales efforts for extended periods of time, or at all. The loss or delay of one or more large transactions in a quarter could impact its results of operations for that quarter and any future quarters for which revenue from that transaction is lost or delayed.
The Company has a limited operating history upon which you can evaluate its performance. Since the Company’s inception on October 10, 2017, it has been engaged primarily in designing and developing its product. While limited sales efforts have been made, and the Company has manufactured and delivered products in trial implementations, the Company requires additional capital to expand its manufacturing capacity and its sales and marketing efforts. Accordingly, the Company has little history upon which an evaluation of its prospects and future performance can be made. Its proposed operations are subject to all business risks associated with new enterprises. The likelihood of its creation of a viable business must be considered in light of the problems, expenses, difficulties, complications, and delays frequently encountered in connection with the inception of a business, operation in a competitive industry, and the continued development of advertising, promotions, and a corresponding client base. The management team anticipates that the operating expenses may increase for the near future. There can be no assurances that the Company will ever operate profitably. You should consider the Company's business, operations and prospects in light of the risks, expenses and challenges faced as an early-stage company.
New entrants may result in increased competition, which could result in a loss of customers or a reduction in revenue. Although we believe that our market will stay a new and fragmented market, new entrants not currently considered to be competitors may still enter our market through acquisitions, partnerships or strategic relationships. The potential entrants may have competitive advantages over us, such as greater name recognition, longer operating histories, more varied services and larger marketing budgets, as well as greater financial, technical and other resources. These pressures could result in a substantial loss of our customers or a reduction in our revenue.
The Company may raise additional capital, which may cause dilution to existing stockholders, restrict the Company’s operations or require it to relinquish rights on unfavorable terms. The Company may seek additional capital through a variety of means, including through public or private equity, debt financings or other sources, including up-front payments and milestone payments from strategic collaborations. To the extent that the Company raises additional capital through the sale of equity or convertible debt or equity securities, an investor’s ownership interest will be diluted, and the terms may include liquidation or other preferences that adversely affect shareholder rights. Such financing may result in dilution to stockholders, imposition of debt covenants, increased fixed payment obligations, or other restrictions that may affect the Company’s business.
The Company has outstanding liabilities. The Company owes (i) Mayank Agrawal (a Related Party), the sole officer and director of the Company, $500,000, which sum does not bear interest and is due and payable at such time as the Company recognizes, as of the end of any fiscal year on an annual basis, $1,000,000.00 in EBITDA, as such term is customarily understood; (ii) Aseem Gupta (a Related Party) $10,000, which sum does not bear interest and is due and payable at such time the Company recognizes, as of the end of any fiscal year on an annual basis, $1,000,000.00 in gross revenue, as such term is customarily understood and (iii) Mark Bailey $10,000, which sum does not bear interest and is due and payable on June 19, 2019.
We must correctly predict, identify, and interpret changes in consumer preferences and demand, offer new products to meet those changes, and respond to competitive innovation. Consumer preferences for our products change continually. Our success depends on our ability to predict, identify, and interpret the tastes and habits of consumers and to offer products that appeal to consumer preferences. If we do not offer products that appeal to consumers, our sales and market share will decrease. We must distinguish between short-term fads, mid-term trends, and long-term changes in consumer preferences. If we do not accurately predict which shifts in consumer preferences will be long-term, or if we fail to introduce new and improved products to satisfy those preferences, our sales could decline. In addition, because of our varied customer base, we must offer an array of products that satisfy the broad spectrum of consumer preferences. If we fail to expand our product offerings successfully across product categories, or if we do not rapidly develop products in faster growing and more profitable categories, demand for our products could decrease, which could materially and adversely affect our product sales, financial condition, and results of operations.
In addition, achieving growth depends on our successful development, introduction, and marketing of innovative new products and line extensions. Successful innovation depends on our ability to correctly anticipate customer and consumer acceptance, to obtain, protect and maintain necessary intellectual property rights, and to avoid infringing the intellectual property rights of others and failure to do so could compromise our competitive position and adversely impact our business
Use of our products is subject to many national, state and local laws and regulations, including those related to privacy, access, safety, zoning, permitting 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 use of our products in certain contexts 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.
Quality and safety management plays an essential role in determining and meeting customer requirements, preventing defects, improving the Company’s products and services and maintaining the integrity of the data that supports the safety and efficacy of our products. Our future success depends on our ability to maintain and continuously improve our quality-management program. We may be subject to claims for product liability arising from failure to maintain adequate quality- and safety-management programs, in addition to factors beyond our control. An inability to address a quality or safety issue in an effective and timely manner may also cause negative publicity, a loss of customer confidence in us or our current or future products, which may result in the loss of sales and difficulty in successfully launching new products. In addition, a successful claim brought against us in excess of available insurance or not covered by indemnification agreements, or any claim that results in significant adverse publicity against us, could have an adverse effect on our business and our reputation.
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 space. Additionally, the product may be in a market where customers will not have brand loyalty.
If we fail to maintain or expand our relationships with our suppliers, in some cases single-source suppliers, we may not have adequate access to new or key technology necessary for our products, which may impair our ability to deliver leading-edge products. In addition to the technologies we develop, our suppliers develop product innovations at our direction that are requested by our customers. Further, we rely heavily on our component suppliers, to provide us with leading-edge components that conform to required specifications or contractual arrangements on time and in accordance with a product roadmap. If we are not able to maintain or expand our relationships with our suppliers or continue to leverage their research and development capabilities to develop new technologies desired by our customers, our ability to deliver leading-edge products in a timely manner may be impaired and we could be required to incur additional research and development expenses. Also, disruption in our supply chain or the need to find alternative suppliers could impact the costs and/or timing associated with procuring necessary products, components and services. Similarly, suppliers have operating risks that could impact our business. These risks could create product time delays, inventory and invoicing problems, staging delays, and other operational difficulties.
The Company does not have confidential information and invention assignment agreements with two former consultants. Neither individual contributed intellectual property to the Company nor had access to confidential information. Further, the Company does not know if these consultants have filed elections under Section 83(b) of the Internal Revenue Code of 1986, as amended: One individual is not a United States taxpayer and his vesting has terminated. The other individual resides in Canada, and her stock fully vested prior to the Closing.
The Company’s success depends on the experience and skill of its executive officer and key employees. In particular, the Company is highly dependent on Mayank Agrawal, founder and Chief Executive Officer, Ted Simon, Chief Marketing Officer, and Mark Wright, Vice President of Operations. All U.S. employees have consulting agreements rather than employment agreements. After the current round, key people will be offered full time letters. There can be no assurance that these individuals will continue to be employed by the Company for a particular period of time. The loss of our key employees or executive officer could harm the Company’s business, financial condition, cash flow and results of operations.
Additionally, the Company does not have confidential information and invention assignment agreements with two of its former consultants. Neither individual contributed intellectual property to the Company nor had access to confidential information.
The Company is in the process of recording a few patent and trademark assignments. Mayank Agrawal has assigned patent application 62752909 to the Company, but such assignment has not yet been recorded by the U.S. Patent and Trademark Office (the “USPTO”). Zenesis Networks Inc., a Delaware corporation controlled by Mayank Agrawal, has assigned four trademarks, with the serial numbers 87579432, 88210567, 88210579, and 88210611, to the Company, but such assignment has not yet been recorded by the USPTO. The Company is in the process of recording all such assignments.
Risks Related to the Securities
The Series Seed Preferred Stock will not be freely tradable until one year from the initial purchase date. Although the Series Seed Preferred Stock may be tradable under federal securities law, state securities regulations may apply, and each Purchaser should consult with his or her attorney. You should be aware of the long-term nature of this investment. There is not now and likely will not be a public market for the Series Seed Preferred Stock. Because the Series Seed Preferred Stock have not been registered under the 1933 Act or under the securities laws of any state or non-United States jurisdiction, the Series Seed Preferred Stock have transfer restrictions and cannot be resold in the United States except pursuant to Rule 501 of Regulation CF. It is not currently contemplated that registration under the 1933 Act or other securities laws will be effected. Limitations on the transfer of the Series Seed Preferred Stock may also adversely affect the price that you might be able to obtain for the Series Seed Preferred Stock in a private sale. Purchasers should be aware of the long-term nature of their investment in the Company. Each Purchaser in this Offering will be required to represent that it is purchasing the Securities for its own account, for investment purposes and not with a view to resale or distribution thereof.
A majority of the Company is owned by a small number of owners. Prior to the Offering the Company’s current owners of 20% or more beneficially own up to 78% of the Company. Subject to any fiduciary duties owed to our other owners or investors under Delaware law, these owners may be able to exercise significant influence over matters requiring owner approval, including the election of directors or managers and approval of significant Company transactions, and will have significant control over the Company’s management and policies. Some of these persons may have interests that are different from yours. For example, these owners may support proposals and actions with which you may disagree. The concentration of ownership could delay or prevent a change in control of the Company or otherwise discourage a potential acquirer from attempting to obtain control of the Company, which in turn could reduce the price potential investors are willing to pay for the Company. In addition, these owners could use their voting influence to maintain the Company’s existing management, delay or prevent changes in control of the Company, or support or reject other management and board proposals that are subject to owner approval.
Your ownership of the shares of preferred stock may be subject to dilution. Non-Major Purchasers (as defined below) of preferred stock do not have preemptive rights. If the Company conducts subsequent offerings of preferred stock or Securities convertible into preferred stock, issues shares pursuant to a compensation or distribution reinvestment plan or otherwise issues additional shares, investors who purchase shares in this Offering who do not participate in those other stock issuances will experience dilution in their percentage ownership of the Company’s outstanding shares. Furthermore, Purchasers may experience a dilution in the value of their shares depending on the terms and pricing of any future share issuances (including the shares being sold in this Offering) and the value of the Company’s assets at the time of issuance.
You will be bound by an investment management agreement, which limits your voting rights. All Non-Major Purchasers of Series Seed Preferred Stock will be bound by an investment management agreement. This agreement will limit your voting rights and at a later time may require you to convert your shares of Series Seed Preferred Stock into shares of common stock without your consent. Non-Major Purchasers will be bound by this agreement, unless Non-Major Purchasers holding a majority of the principal amount outstanding of the Series Seed Preferred Stock held by Non-Major Purchasers vote to terminate the agreement.
The Securities will be equity interests in the Company and will not constitute indebtedness. The Securities will rank junior to all existing and future indebtedness and other non-equity claims on the Company with respect to assets available to satisfy claims on the Company, including in a liquidation of the Company. Additionally, unlike indebtedness, for which principal and interest would customarily be payable on specified due dates, there will be no specified payments of dividends with respect to the Securities and dividends are payable only if, when and as authorized and declared by the Company and depend on, among other matters, the Company’s historical and projected results of operations, liquidity, cash flows, capital levels, financial condition, debt service requirements and other cash needs, financing covenants, applicable state law, federal and state regulatory prohibitions and other restrictions and any other factors the Company’s board of directors deems relevant at the time. In addition, the terms of the Securities will not limit the amount of debt or other obligations the Company may incur in the future. Accordingly, the Company may incur substantial amounts of additional debt and other obligations that will rank senior to the Securities.
There can be no assurance that we will ever provide liquidity to Purchasers through either a sale of the Company or a registration of the Securities. There can be no assurance that any form of merger, combination, or sale of the Company will take place, or that any merger, combination, or sale would provide liquidity for Purchasers. Furthermore, we may be unable to register the Securities for resale by Purchasers for legal, commercial, regulatory, market-related or other reasons. In the event that we are unable to effect a registration, Purchasers could be unable to sell their Securities unless an exemption from registration is available.
The Company does not anticipate paying any cash dividends for the foreseeable future. The Company currently intends to retain future earnings, if any, for the foreseeable future, to repay indebtedness and to support its business. The Company does not intend in the foreseeable future to pay any dividends to holders of its shares of preferred stock.
Any valuation at this stage is difficult to assess. 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.
Start-up investing is risky. Investing in startups is very risky, highly speculative, and should not be made by anyone who cannot afford to lose their entire investment. Unlike an investment in a mature business where there is a track record of revenue and income, the success of a startup or early-stage venture often relies on the development of a new product or service that may or may not find a market. Before investing, you should carefully consider the specific risks and disclosures related to both this offering type and the company which can be found in this company profile and the documents in the data room below.
Your shares are not easily transferable. You should not plan on being able to readily transfer and/or resell your security. Currently there is no market or liquidity for these shares and the company does not have any plans to list these shares on an exchange or other secondary market. At some point the company may choose to do so, but until then you should plan to hold your investment for a significant period of time before a “liquidation event” occurs. A “liquidation event” is when the company either lists their shares on an exchange, is acquired, or goes bankrupt.
The Company may not pay dividends for the foreseeable future. Unless otherwise specified in the offering documents and subject to state law, you are not entitled to receive any dividends on your interest in the Company. Accordingly, any potential investor who anticipates the need for current dividends or income from an investment should not purchase any of the securities offered on the Site.
Valuation and capitalization. Unlike listed companies that are valued publicly through market-driven stock prices, the valuation of private companies, especially startups, is difficult to assess and you may risk overpaying for your investment. In addition, there may be additional classes of equity with rights that are superior to the class of equity being sold.
You may only receive limited disclosure. While the company must disclose certain information, since the company is at an early-stage they may only be able to provide limited information about its business plan and operations because it does not have fully developed operations or a long history. The company may also only obligated to file information periodically regarding its business, including financial statements. A publicly listed company, in contrast, is required to file annual and quarterly reports and promptly disclose certain events through continuing disclosure that you can use to evaluate the status of your investment.
Investment in personnel. An early-stage investment is also an investment in the entrepreneur or management of the company. Being able to execute on the business plan is often an important factor in whether the business is viable and successful. You should be aware that a portion of your investment may fund the compensation of the company's employees, including its management. You should carefully review any disclosure regarding the company's use of proceeds.
Possibility of fraud. In light of the relative ease with which early-stage companies can raise funds, it may be the case that certain opportunities turn out to be money-losing fraudulent schemes. As with other investments, there is no guarantee that investments will be immune from fraud.
Lack of professional guidance. Many successful companies partially attribute their early success to the guidance of professional early-stage investors (e.g., angel investors and venture capital firms). These investors often negotiate for seats on the company's board of directors and play an important role through their resources, contacts and experience in assisting early-stage companies in executing on their business plans. An early-stage company may not have the benefit of such professional investors.
Representatives of SI Securities, LLC are affiliated with SI Advisors, LLC (“SI Advisors”). SI Advisors is an exempt investment advisor that acts as the General Partner of SI Selections Fund I, L.P. (“SI Selections Fund”). SI Selections Fund is an early stage venture capital fund owned by third-party investors. From time to time, SI Selections Fund may invest in offerings made available on the SeedInvest platform, including this offering. Investments made by SI Selections Fund may be counted towards the total funds raised necessary to reach the minimum funding target as disclosed in the applicable offering materials.
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 Zenspace. Once Zenspace accepts your investment, and certain regulatory procedures are completed, your money will be transferred from the escrow account to Zenspace in exchange for your securities. At that point, you will be a proud owner in Zenspace.
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, Zenspace 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 Zenspace does not plan to list these securities on a national exchange or another secondary market. At some point Zenspace 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 Zenspace 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 Zenspace'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 Zenspace's Form C. The Form C includes important details about Zenspace's fundraise that you should review before investing.
For offerings made under Regulation CF, you may cancel your investment at any time up to 48 hours before a closing occurs or an earlier date set by the company. You will be sent a reminder notification approximately five days before the closing or set date giving you an opportunity to cancel your investment if you had not already done so. Once a closing occurs, and if you have not canceled your investment, you will receive an email notifying you that your securities have been issued. If you have already funded your investment, your funds will be promptly refunded to you upon cancellation. To cancel your investment, you may go to your portfolio page
If you invest under any other offering type, you may cancel your investment at any time, for any reason until a closing occurs. You will receive an email when the closing occurs and your securities have been issued. If you have already funded your investment and your funds are in escrow, your funds will be promptly refunded to you upon cancellation. To cancel your investment, please go to your portfolio page.