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Educational Materials for Investors

Welcome to our Funding Portal. We've put together this package to ensure you're informed about the investment process on our platform. If there's anything you don't grasp or you have queries, don't hesitate to reach out at info@KingVest.co.

This guide covers:

  • Our role and operations.
  • The steps to buy securities on our portal.
  • Restrictions on your investments.
  • Your rights to revoke or change investment decisions.
  • Risks linked with investing on our platform.
  • The securities available and their associated risks.
  • Limitations on selling securities you've acquired.
  • Essential disclosures from issuers and our relationship with them.
  • We'll update this guide periodically.

What to Consider Before Investing

Investments on our site differ significantly from public stock market ventures. The businesses here might be in their infancy, with minimal history or profits. Assess whether these investments align with your personal and financial situation. Some vital questions are:

  • Can you handle a complete loss of your investment?
  • Are you emotionally prepared for potential losses?
  • Do you comprehend the business and its products or services?
  • Have you grasped the documents presented for signing?

If your answer is "Yes" to these, you're on the right track.

Key Definitions

  • Site: Our web presence at www.KingVest.co.
  • Issuer: Companies seeking investor funds on our site.
  • Security: Instruments like stocks or bonds sold by issuers here.
  • Title III: A part of the JOBS Act of 2012, enabling "Regulation Crowdfunding".
  • Funding Portal: Websites, like ours, permitted to sell securities under Title III.
  • SEC: The U.S. Securities and Exchange Commission, www.sec.gov.
  • FINRA: The Financial Industry Regulatory Authority, www.finra.org.

Our Role

We operate as a "Funding Portal," licensed with the SEC and FINRA. Think of us as a bridge between companies and investors. Your investments go directly to third-party businesses, not us. As facilitators, we don't guarantee outcomes or vouch for the precision of issuer data. Our primary function is to ensure all dealings adhere to legal standards.

What We Offer

  • Selection of issuers.
  • Background and compliance checks on issuers.
  • Guidance to issuers and aid in document preparation.
  • Screening investors for compliance.
  • Communication avenues for discussions and information exchange.
  • Investment tools and educational resources.

What We Don't Do

  • Provide investment advice.
  • Ensure specific investment results.
  • Discuss the pros of particular ventures.

Our Relationship with Issuers

Issuers compensate us for our platform's exposure. The form of payment varies—fees, commissions, or even securities. The details of our compensation will always be disclosed to you. We might maintain relations with issuers after offerings but never possess a financial stake beyond securities received as payment.

Communication Channels

Our platform has communication avenues—essentially chat rooms—for discussions between investors and issuers. These forums are public, but only registered investors can post. Issuer representatives must identify their association. Use these spaces to ask questions and gain clarity.

How We Screen Issuers

Per SEC regulations, we ensure:

  • Each Issuer on our Platform is eligible to offer its Securities and complies with Title III. While we may do our own checks, we often trust the Issuer's statements.
  • Issuers maintain accurate records of Security holders. We might perform checks but generally trust the Issuer's word.

We'll deny Issuer access if:

  • We believe an Issuer, its directors, officers, or a major stakeholder (20%+ of voting securities) might be disqualified under rules in "Disqualification of Issuers".
  • We suspect potential fraud, investor protection concerns, or find risk assessment challenging.

Note: We adhere to all regulations but aren't mandated to vouch for Issuers as good investments. You're responsible for your investment decisions.

Disqualification of Issuers

Title III disqualifies Issuers if they, or associated entities, faced certain disqualifying events in the past decade. These entities include the Issuer's predecessors, directors, major stakeholders, promoters, those paid for investor solicitation, and key personnel of solicitors. Events causing disqualification relate to misconduct in securities, like felonies or broker license revocation. We'll run checks before listing an Issuer.

Securities We Offer

Issuers can offer varied securities:

  • Debt Securities: Like promissory notes, you loan money to the Issuer in exchange for repayment with interest. You don't own part of the company but are a creditor.
  • Revenue-Sharing Notes: Issuers pay a set percentage of their revenue, like 5% for four years, with a cap and due date for the original investment.
  • Equity-alternative Revenue (EaRN) Note: It's a longer-term revenue-sharing note with potential benefits for the investor.
  • Equity Securities: By purchasing, you own part of the company. Your investment's value can rise or fall based on company performance.
  • Preferred Equity Securities: Prioritized over regular equity, but still after creditors.
  • Convertible Securities: These can change types, like a debt turning into common stock

Each opportunity on our Site will specify the Security type.

Limits on Your Investments

Title III sets yearly limits on your investments across all companies and all Funding Portals. This only concerns your Title III (Regulation Crowdfunding) investments.

If either your annual income or net worth is below $124,000:

  • Invest up to $2,500;
  • Or up to 5% of either your annual income or net worth.

If both your annual income and net worth are $124,000 or more, you can invest up to 10% of whichever is greater. Accredited Investors don't have investment limits. The SEC adjusts these limits for inflation periodically.

Combine incomes and assets with your spouse if desired, but both of you will be seen as one investor.

Investing Steps

Registration: Register on our Site. Set up log-in details and share some personal details. Agree to our Terms of Use and Privacy Policy. We can decline your registration if necessary.

Online Investment Process: All investment steps are online. No offline documents, no calls (except emergencies), no meetings.

Solicitation of Interest: You might see potential offers online. Showing interest doesn't commit you to invest.

Investing: Browse investment options anytime. Register to invest. To commit, click "INVEST". We'll gather details, handle payment, and present documents for signing. This makes an "investment commitment", but you can still cancel

Notice of Investment Commitment: After committing, you'll receive details like your commitment amount, the securities' price, the Issuer's name, and the cancellation deadline.

Target Offering Amount & Deadline: Issuers set a target amount and deadline. If they don't reach the target by the deadline, they cancel the offer and refund investors. If they achieve their target early and after a 21-day open period, they can close the offer early. In such cases, we notify investors of:

  • The new deadline, which is at least five days from the notice.
  • Their right to cancel investments up to 48 hours before the new deadline.
  • Whether the issuer is still accepting investments in the 48 hours preceding the new deadline.

Issuers accepting investments beyond their target should state the max they'll accept and their approach to "over-subscriptions".

our Right to Cancel Your Investment You can cancel your investment commitment up to 48 hours before the offering deadline for any reason. Details on how to do so are on the Site.

If there's a significant change in the offering after your investment commitment, it will be automatically canceled unless you reconfirm within five business days after receiving notice. Refer to the section "If Information Changes Before Closing" for more insights.

Paying for Your Investment To pay for securities, initiate a direct transfer from your bank (ACH transfer). This transfer will be free.

Your funds will be held by a trusted third-party financial institution until the offering concludes. We cannot hold your funds directly. If the Issuer reaches the target amount, your funds will be forwarded to the Company. We'll inform you by email once the investment process wraps up.

Confirmation of Transaction Prior to finalizing your investment, we'll send a notice detailing:

  • Transaction date
  • Type of Security being purchased
  • Price, number of Securities being purchased and details of the entire transaction
  • Details on debt securities, if applicable
  • Details on callable securities, if applicable
  • Information on any compensation we expect to receive

Restrictions on Resale Post purchase, selling or transferring the Security isn't permitted for 12 months, with certain exceptions:

  • To the Issuer
  • To an accredited investor
  • Part of an SEC-registered offering
  • To family members or due to death or divorce.

Post the 12-month restriction, selling may still be challenging due to a lack of market, meaning you could hold the investment indefinitely.

"Family member" and "accredited investor" have specific definitions, as provided above.

Information the Issuer Will Disclose Before Investing The Issuer must present extensive details on a Form C, accessible on the Site. This comprises information such as:

  • Basic details about the Issuer
  • Information about the Issuer's leadership
  • The Issuer's business details
  • Previous offerings
  • Financial conditions
  • Handling of over-subscriptions
  • Detailed financial information

Financial details depend on:

  • Amount being raised in the current offering
  • If it's the Issuer's first Title III offering
  • Amounts raised in other Title III offerings over the past year.

The type of financial documents (from tax returns to audited financial statements) required varies based on the total raised. These statements must follow U.S. generally accepted accounting principles. Reviews and audits have specific standards as detailed above.

If Changes Occur Before Closing: If you make an investment commitment and significant changes happen between the date of your commitment and the finalizing of the investment:

  • The Issuer will inform you of the changes.
  • Your investment commitment will be automatically canceled unless you reconfirm within five business days of receiving the notice.

Post-Investment: After investing, the Issuer usually needs to file yearly reports with the SEC and post them on their website within 120 days after their fiscal year ends. This report will contain:

  • The same type of details found on the Form C you viewed when you invested.
  • Refreshed financial statements certified by the Issuer's main executive officer.
  • Updated financial condition disclosures of the Issuer.

The Issuer can halt annual report submissions when:

  • The Issuer has filed one report and has under 300 shareholders.
  • The Issuer has filed three reports and has assets not exceeding $10 million.
  • All securities from the Title III offering are bought by the Issuer or another party.
  • The Issuer registers its securities under the Securities Exchange Act of 1934.
  • The Issuer dissolves as per state law.

You'll get updated information about the Issuer yearly at most. If the Issuer ceases giving annual reports, you'll lack up-to-date financial data on the Issuer.

Promoters: An Issuer may employ a public relations firm or another entity to promote its offering on the Platform. Similarly, an Issuer's employee or founder could do this. Anyone promoting needs to identify themselves on the Platform and declare their promotional activities. If a third party is promoting, they must also declare payment for their services.

Investment Risks: Securities on our Platform often have substantial risks, which could result in a complete loss of your investment. Here's a categorization of the risks:

  • Risks related to small, local businesses.
  • Risks common to most companies on our Site.
  • Risks related to certain financial instruments.
  • Risks specific to individual investment opportunities provided by the Issuer.

Risks from Small, Local Businesses:

  • Inadequate professional management.
  • Limited capital access.
  • Narrow product or service offerings.
  • Absence of stringent accounting measures.
  • Limited technological resources.
  • Periodic cash flow shortages.
  • Potential business plan alterations.
  • Vulnerability to competition.

General Risks on the Platform:

  • Dependence on the management.
  • Restrictions in selling your investment.
  • Issuers possibly requiring more capital.
  • Vulnerability to economic fluctuations.
  • Absence of securities law registration.
  • Partial offering information.
  • Limited continuous information availability.
  • Potential security breaches.
  • Possibility of uninsured losses.
  • Misconduct of company stakeholders.
  • Conflicting interests between companies and their management.
  • Restrained liability of company management.
  • Legal changes.
  • Conflicting interests with us.
  • Conflicting interests between companies and their management.
  • No professional advice.
  • Lawyers represent our interests, not yours.
  • New investors might have better rights.
  • Companies aren't bound by national stock exchange governance requirements.

Risks Associated with Promissory Notes:

  • Limited Upside: You can only receive your principal plus interest. Even if the company becomes very successful, your return is capped.
  • Downside: If the company loses value, you risk losing some or all of your money.
  • Subordination: Other lenders, like banks, might have a higher claim on the company's assets than you do in bankruptcy situations.
  • Security: Not all promissory notes on our Platform are secured by assets.
  • Lack of Guaranty: Not every promissory note is guaranteed by the business owner or others.
  • Absence of Third-Party Credit Ratings: Most companies on our Platform won't be rated by major credit rating agencies.
  • Interest Rate and Risk: The interest rate may not always reflect the level of risk you're assuming.

Risks Associated with Revenue-Sharing Notes and EaRN Notes:

  • Limited Upside: Your potential returns might be capped, such as at double your investment.
  • Downside: If the company's revenue falls short, you risk losses.
  • Subordination: Similar to promissory notes, other lenders might have higher claims.
  • Payment Unpredictability: Payments depend on issuer revenue, which can be volatile.
  • Security and Guaranty: Like promissory notes, not all are secured or guaranteed.
  • Absence of Third-Party Credit Ratings: These companies are usually unrated.
  • Return and Risk: The returns might not adequately reflect the risks.

Risks Associated with Equity Securities:

  • No Dividends:Companies might not distribute profits as dividends.
  • Liquidity Issues: Securities might be hard to sell and lack a secondary market.
  • Holding Period: You might have to hold onto the securities indefinitely.
  • Usage of Funds: Companies might not use the raised funds effectively, affecting your returns.
  • Subordination: Equity holders usually rank below other creditors in bankruptcy scenarios.
  • Special Restrictions: These securities might lack standard rights found in common stock.
  • Other Agreements: The securities could be governed by other agreements that might affect your rights.

Remember, while these summaries capture the primary risks, you should always review the specific terms and details before making any investment decisions.