A large recruitment platform (Indeed.com, Zip Recruiter) or staffing/recruiting company may enter this space and squeeze our margins.
The Company may never receive a future equity financing or elect to convert the Securities upon such future financing. In addition, the Company may never undergo a liquidity event such as a sale of the Company or an IPO. If neither the conversion of the Securities nor a liquidity event occurs, the Purchasers could be left holding the Securities in perpetuity. The Securities have numerous transfer restrictions and will likely be highly illiquid, with no secondary market on which to sell them. The Securities are not equity interests, have no ownership rights, have no rights to the Company’s assets or profits and have no voting rights or ability to direct the Company or its actions.
The involvement of the Company’s Chief Executive Officer, who has previously been charged and pled guilty to securities fraud and conspiracy charges, could heighten the risk that the activities of the Company would be subject to regulatory scrutiny and any such investigation could materially adversely affect the Company.
Richard Bronson, who is a “key person” of the company and is the Chief Executive Officer of the Company, was charged with securities fraud and conspiracy charges in January 2002 and pled guilty in October 2003. As a result of his conviction, the SEC imposed a lifetime ban his ability to engage in registered broker-dealer activities. The involvement of Richard Bronson in the business of the Company might become known to securities regulators and his role in the Company could heighten the risk that the activities of the Company would be subject to regulatory scrutiny and any such investigation could materially adversely affect the Company.
The business is yet to be profitable, and relies upon the availability of investment capital to maintain operations. If for any reason outside investors chose not to invest, then there'd be an existential danger to the business.
The regulatory environment surrounding the hiring of the formerly incarcerated is changing quickly from state to state and on the municipal level. Unforeseen regulations could negatively impact our ability to do business.
Negative press attention--such as one of our applicants acting violently on the job--could undermine our ability to convince employers that our applicants were desirable hires.
Since we target large, national employers as clients, we are dependent on their ability to honor their obligations to pay us. If a large client were unwilling or unable to pay us, this could have a negative impact on our business.
Our future success depends on the efforts of key personnel and consultants, especially our founder, Richard Bronson. The loss of services of Mr Bronson or any key personnel may have an adverse effect on us. There can be no assurance that we will be successful in attracting and retaining other personnel we require to successfully grow our business.
We rely on our ability to attract adequate numbers of both job seekers and to provide job listings. If either of these are unsuccessful, then this could be detrimental to our success.