The following risks have been identified for investors:
This investment is illiquid given the stage of the venture. A liquidity event is unlikely to take place before the proposed exit as outlined by the Company. Investors should not expect to access their principal before an exit, which may not take place for five (5) to ten (10) years.
Business and financial risk:
The planned business operations and revenues for the next phase of business at Nectar is dependent on customers adopting the product as well as for the Company to find the right commercial package formula related to the price, the features and support required to scale sales in large volume per customer.
After completing with success its Beta phase with 5 customers and 100 hives, Nectar his launching its first commercial sale campaign with the goal to reach 10,000 connected hive. Although most technological risk is behind, the Company needs to industrialize its manufacturing process and perform cost reduction programs. Additional features related to the platform and sensor as well as for the data pipeline collection needs to be developed, implemented and released in the next versions.
Market – Adoption risk:
Beekeepers are conservative in nature and could prove to be resistant to adopt easily new technologies that forces them to change the way they operate. This could have a negative effect on speed of customers adoption rate. More research and performance data could be necessary to scale faster its customer base in the short-term. The Company will have to conduct further validation to confirm if its commercialization strategy needs to be adapted for each geographical market. This could result into a higher investment cost to support sales and marketing efforts.
Nectar is an early-stage company with limited underlying assets to secure or de-risk this investment opportunity. All of the capital invested in the company via this offering is at risk for loss. The company has a limited history of revenues generation and track record to meet their debt financing obligations by making the requisite interest payments. This type of investment has substantial risk. Investors should make an investment only if you are prepared not to receive any return on your investment and to lose your investment in its entirety.
Nectar intellectual property protection strategy is currently being developed with a legal and patent firm. The innovation comes from the assembling of all the platform technology pieces. No patent has been granted as of today and there is a probability that the Company IP protection strategy may not create any value.
SAFE investment products carry certain risks. The investor is not receiving equity, only a future opportunity to do so and that the opportunity to receive equity in the future is contingent upon Nectar achieving certain milestones.