|1||Created a totally new market for a personalized aerial camera — a pocket-sized flying HD camera.|
|2||$8M+ and 50k units in shipment and orders so far. $100B TAM|
|3||Strong Intellectual property portfolio - since 2016 - covering Trademark, Utility, Design,|
|4||Shopify-powered AirSelfie website converting at 1.62% with a ROAS of 4.91x!|
|5||Raised $2.3M on Crowdfunding Platforms including Indiegogo and Kickstarter, others from 18,112 backers.|
|6||CEO with 20+ years in startups. Experienced Senior Team from Kodak, olloclip, PopSockets, Lavazza.|
|7||Featured in WIRED, The Huffington Post, BuzzFeed, Forbes, Mashable, etc.|
|8||Company target to go public in 24 - 36 months depending on different Capital Market opportunities.|
Who said selfies were confined to sticks? With this ground-breaking camera, you’ll be able to snap aerial photos directly from your phone. The sky’s the limit.
We have developed a new market category that never existed before — personal aerial digital cameras. No one has dominated the personal aerial cameras market yet.
No more missing friends in group photos and videos, misframed or mistimed self-timers, or awkward selfie angles. AIR PIX gives you the perfect full-frame shot quickly and easily.
Easily take stunning aerial HD photos and video selfies (from unique angles and heights impossible with a handheld camera), edit them right in the app, and then share them instantly on your favorite social media platforms.
See AIR PIX in action. View our gallery here.
The AirSelfie rollout of aerial cameras in 2020 and 2021 includes a mix of strategic features and key price points.
AirSelfie aerial cameras have features and performance you would expect to see on devices that cost much, much more.
We believe life is led in the moment. A billion-million unique moments all strung together by time. We want you to live every one of them to its fullest and then share them with your family, friends and followers. Easily. Instantly.
AirSelfie has financial statements ending March 31 2020. Our cash in hand is $68,379.57, as of March 2020. Over the three months prior, revenues averaged $21,799.58/month, cost of goods sold has averaged $13,464.49/month, and operational expenses have averaged $154,961.09/month.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes and other financial information included elsewhere in this offering. Some of the information contained in this discussion and analysis, including information regarding the strategy and plans for our business, includes forward-looking statements that involve risks and uncertainties. You should review the "Risk Factors" section for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
AirSelfie is a technology company that operates in the photography sector and realizes aerial cameras that allow and enhance the photography experiences of its users.
AIRPIX by AirSelfie a pocket-sized aerial camera that elevates your selfie game to the new heights.
We are on a mission to change personal photography forever.
AirSelfie Inc. was incorporated in the State of Delaware in May 2019. AirSelfie Limited is a sister company of AirSelfie, Inc. Both companies are controlled by AirSelfie Holdings Limited. The funds from this offering are going towards the operations of AirSelfie Inc.
Since then, we have:
- AirSelfie created the market for Aerial Cameras — pocket-sized flying cameras that take HD Photos and Video - $17B Total Addressable Market (Goldman Sachs).
- Strong patent portfolio covering Brand, Design and Proprietary Software with advanced Computer Vision functions for Auto Fly and Capture functions.
AirSelfie Holdings Limited owns Patents prior to May, 2019. AirSelfie Inc. has a 10 year exclusive license to commercialize this IP. From May 1, 2019 and forward, all IP and Trademarks are owned by AirSelfie Inc.
- Global distribution/retail commitments - 37 distributors covering over 100 Retailers across Americas, EMEA, Asia and Oceania. Best Buy, Amazon, Urban Outfitters will launch AIR PIX in the spring.
- AirSelfie orders over $8M to date (between all entities) with over 50K units ordered in more than 110 countries around the world.
- Return on ad spend of 4.91x on direct-to-consumer AirSelfie Shopify website on a pre-order.
- CEO with 20+ years in successful startups with experienced Senior Team from Kodak, Olliclip, PopSockets, Lavazza. Agile management style.
- R&D team has developed a product roadmap for consumer (4 products), tactical (2 products) and IOT/Smarthome.
- Company targets (but can't guarantee) to go public in 24 - 36 months depending on different Capital Market opportunities.
Historical Results of Operations
Our company was organized in May 2019 and has limited operations upon which prospective investors may base an evaluation of its performance.
Related Party Transaction
Refer to Question 26 of this Form C for disclosure of all related party transactions.
Liquidity & Capital Resources
To date, the company has been funded with $132,243 in debt.
After the conclusion of this Offering, should we hit our minimum funding target, our projected runway is 12 months before we need to raise further capital.
We plan to use the proceeds as set forth in this Form C under "Use of Funds". We don’t have any other sources of capital in the immediate future.
We will likely require additional financing in excess of the proceeds from the Offering in order to perform operations over the lifetime of the Company. We plan to raise capital in 12 months. Except as otherwise described in this Form C, we do not have additional sources of capital other than the proceeds from the offering. Because of the complexities and uncertainties in establishing a new business strategy, it is not possible to adequately project whether the proceeds of this offering will be sufficient to enable us to implement our strategy. This complexity and uncertainty will be increased if less than the maximum amount of securities offered in this offering is sold. The Company intends to raise additional capital in the future from investors. Although capital may be available for early-stage companies, there is no guarantee that the Company will receive any investments from investors.
Runway & Short/Mid Term Expenses
AirSelfie Inc. cash in hand is $68,379.57, as of March 2020. Over the last three months, revenues have averaged $21,799.58/month, cost of goods sold has averaged $13,464.49/month, and operational expenses have averaged $154,961.09/month, for an average burn rate of $146,626 per month. Our intent is to be profitable in 12 months.
In April 2020 we adjusted our burn rate significantly to about break even. We plan to continue operate at a break even point until we ramp up production again.
Management has conservatively treated its crowdfunding orders and left the orders unfilled for the year ending April 30th, 2021. The orders (approximately 18k units) are classified as deferred revenue in the consolidated balance sheet as of March 31st, 2020 and represent approximately $2 million.
Management intends to use excess available cash from operations to fulfill such orders which would improve forecasted performance for the year ended April 30th, 2021.
In the 3 - 6 months following the raise, we expect (but cannot guarantee) that revenues will increase and expenses will remain flat. We have additional funding in the form of a potential working capital line with traditional banking, extending terms with manufacturing partners, and short term loans to support growth. We hope to end the year with $1.9M in revenue and approximately $1.2M in expenses.
We have a limited operating history, which may make it difficult for investors to evaluate our prospects for success.
The Company was incorporated in May 2019 as a subsidiary of AirSelfie Holdings Limited, a UK corporation (“ASHL”), to become the exclusive worldwide licensee of the AirSelfie brand and intellectual property. Although ASHL has been operating since 2016, we have a limited operating history selling our personal aerial cameras. This lack of operating history, and the fact that the available financial statement information relating to us is unaudited and follows UK generally accepted accounting principles rather than U.S. GAAP, may make it difficult for investors to evaluate our prospects for success. There is no assurance that we will be successful and the likelihood of success must be considered in light of our relatively early stage of operations.
We may be unable to obtain additional financing to fund the operations and growth of our company.
Although we believe that the net proceeds of this placement, if subscribed for in full, will be sufficient to allow us to execute on our business plan for at least 12 months following the final closing on such funding, we may not sell all of the Shares. Further, if we incur any setbacks or issues with our growth plan, we may need to raise additional equity or debt capital to support the running and growth of our business. In any event, we anticipate that we will require multiple additional funding rounds subsequent to the 12-month period following the final closing on this private placement before we are able to self-fund our capital needs through our operations, if ever. Additional such financing may not be available on acceptable terms, if at all. Our inability to obtain additional financing on acceptable terms when needed by us could have a material adverse effect on the existence, or the continued development or growth, of our business. None of our officers, directors or stockholders is required to provide any financing to us in connection with or after this private placement.
We cannot assure you that our personal aerial camera products will be accepted by consumers.
Although since 2016, we have received orders for over 41,000 of our personal aerial camera products directly to consumers worldwide, we cannot assure that consumers will broadly accept our products and purchase them.
First, we are subject to the whims of changing consumer tastes. The public can be fickle about adopting new innovations and may view our personal aerial cameras as out of style or as pricey toys rather than as value-adding lifestyle additions. Social media influencers, who are important to the growth of our business, may not view our products as useful or worthy of recommendation or may pan our products if they think they are expensive or otherwise don’t like them. Although through our current Indiegogo crowdfunding campaign, we expect to release an entry-level personal aerial camera at half the retail price of our currently available model, our plan is to complete development and launch several new personal aerial cameras later in 2020 that are more feature rich and expensive than our current model. Our new models may end up being less attractive to consumers than our current model.
Wands used to extend the reach of the human arm when using a smartphone for self-photography were very popular but a few years ago. However, complaints about consumers’ impolite use of those devices in public led to a marked reduction in sales and use of these so-called “selfie sticks.” It is possible that the use of our personal aerial cameras in a crowded space, where airborne devices might block the view of others, hit people or property or otherwise cause or be part of a pedestrian or vehicular accident leading to injuries or cause noise deemed unacceptable by those in proximity, could spark lawsuits or an unintended backlash in the press, on social media or otherwise against the use of our products. Further, many individuals have returned to use of only their smartphones for taking self-photographs and will not want to carry a separate photo device while away from home, particularly if it became viewed as rude to use an aerial camera. Users could also find that their smartphones lose control of our flying devices or are otherwise difficult to control, leading to accidents or frustration by users who thereafter abandon use of our products and discourage purchase of them by others.
Intentionally or otherwise, an aerial camera could allow for viewing of activities without the permission of those photographed. Concerns regarding privacy may lead to consumer or regulatory complaints, which could impact our business.
Our personal aerial cameras currently operate for no more than 6.5 minutes on a single battery charge. This limited use time may negatively affect adoption of our products by prospective users.
In light of the foregoing, our business, and thus the value of your investment, could be materially and adversely impacted by our inability to convince consumers to purchase and adopt our products for long-term use.
We expect competition to increase in the future, which could have an adverse effect on our revenue and market share.
The global market for personal aerial cameras in general is highly competitive. We compete in different target markets to various degrees on the basis of a number of competitive factors, including our current and planned products’ performance, features, functionality, battery life (affecting flight time) and recharge time, size, customer support, reliability and price, as well as on the basis of our reputation. We expect competition to increase and intensify as more and larger drone companies enter our markets and as existing competitors improve or expand their product offerings. Increased competition could result in price pressure, reduced profitability and loss of market share, any of which could harm our business, revenue and operating results.
Our competitors include companies offering a wide range of industrial and consumer unmanned aerial vehicles (UAVs) with cameras, such as SZ DJI Technology Co., Ltd., Parrot SA, Zerotech (Beijing) Intelligence Technology Co., Ltd., Ryze Tech, Holy Stone Toy, CheerWing, Autel Robotics and ZeroZero Robotics.
Our ability to compete successfully depends on elements both within and outside of our control, including industry and general economic trends. Many of our competitors are substantially larger, have greater financial, technical, marketing, distribution, customer support and other resources, are more established than we are and have significantly better brand recognition and broader product offerings than us, which may enable them to develop and enable new technology into products better or faster than us and to better withstand adverse economic or market conditions in the future. Our ability to compete will depend on a number of factors, including:
our ability to anticipate market and technology trends and successfully develop solutions that meet market needs;
our success in identifying and penetrating new markets, applications and customers;
our ability to understand the price points and performance metrics of competing products in the marketplace;
our products’ performance and cost-effectiveness relative to that of competing products;
our ability to protect our intellectual property;
our ability to expand international operations in a timely and cost-efficient manner; and our ability to deliver products in volume on a timely basis at competitive prices.
Our competitors may also establish cooperative relationships among themselves or with third parties or acquire companies that provide similar products to ours. As a result, new competitors or alliances may emerge that could acquire significant market share. Any of these factors, alone or in combination with others, could harm our business and result in a loss of market share and an increase in pricing pressure.
We do not have long-term supply contracts with our third-party manufacturing vendors, and they may not allocate sufficient capacity to us at reasonable prices to meet future demands for our products.
The unmanned drone manufacturing industry is subject to intense competitive pricing pressure from customers and competitors. Accordingly, any increase in the cost of our products, whether by adverse purchase price variances or adverse manufacturing cost variances, will reduce our gross margins and operating profit. We currently do not have long-term supply contracts with our primary third-party vendor, and we negotiate pricing with our main vendor on a purchase order-by-purchase order basis. Therefore, they are not obligated to perform services or supply product to us for any specific period, in any specific quantities, or at any specific price, except as may be provided in a particular purchase order. Availability of drone manufacturing capacity has in the recent past been limited due to strong demand. The ability of our vendors to provide us with a product, which is typically sole-sourced at each manufacturing facility, is limited by their available capacity, existing obligations and technological capabilities. Drone manufacturing capacity may not be available when we need it or at reasonable prices. None of our third-party manufacturing vendors has provided contractual assurances to us that adequate capacity will be available to us to meet our anticipated future demand for our products. Our vendors may allocate capacity to the production of other companies’ products while reducing deliveries to us on short notice. In particular, other companies that are larger and better financed than we are or that have long-term agreements with our manufacturing vendors may cause our vendors to reallocate capacity to them, decreasing the capacity available to us. Converting or transferring manufacturing from a primary location or supplier to a backup provider could be expensive and time-consuming and might require development of new tools and dies for production. The unavailability of any of our vendors could significantly impact our ability to produce our products or delay production, which would negatively impact our business.
We are subject to warranty and product liability claims and to product recalls.
We are subject to potential warranty claims that may require us to make significant expenditures to defend these claims or pay damage awards. In the future, we may also be subject to product liability and other claims resulting from failure of our products or if products we design, have manufactured or sell, cause personal injury or property damage, even where the cause is unrelated to product defects. These risks will likely increase as our products are more widely adopted, particularly by consumers not familiar with flying devices. In the event of a warranty claim, we may also incur costs if we compensate the affected customer. We maintain product liability insurance, but this insurance is limited in amount and subject to significant deductibles. There is no guarantee that our insurance will be available or adequate to protect against all claims. We also may incur costs and expenses relating to a recall of one of our products. The process of identifying recalled consumer devices that have been widely distributed may be lengthy and require significant resources, and we may incur significant replacement costs, contract damage claims from our customers and reputational harm. Costs or payments made in connection with warranty and product liability claims and product recalls could harm our financial condition and results of operations, as well as harm our reputation and cause the market value of our ordinary shares to decline.
Global economic and political conditions, including possible trade tariffs and restrictions, may have an impact on our business and financial condition in ways that we currently cannot predict.
Our products are manufactured to our specifications in China. Recently public policy changes and the imposition of trade tariffs and restrictions between the United States and China have, in our view, created and will continue to create an uncertain business environment. We currently import our products into the United States under a toy classification, which limits our tariff impact. However, as we begin to import more sophisticated devices as planned, our products may be reclassified into a higher tariff category. In particular, if additional tariffs or restrictions are imposed on our products or the products of our customers, there could be a negative impact on our operations and financial performance. Similarly, changes in export classification requirements could impact our ability to supply our products to certain countries. Even in the absence of new restrictions, tariffs or changes in export classifications, it is possible that foreign customers could take actions to reduce dependence on our products that could be subject to new export classifications, which could have a material adverse effect on our business and financial condition.
Our products are subject to unclear governmental regulation, compliance with which may adversely affect our business and increase our costs and the uncertainty of applicability to us which may deter purchase and use of our products.
As flying drone devices, our products are subject to regulation in the United States by the Federal Aviation Administration (the “FAA”) and are subject to the laws and regulations of other countries worldwide where we market and sell our products. The application of these laws and regulations to our products is not clear, which may adversely impact adoption of our products by consumers. For example, in the United States, we operate under our belief that our products and customers are currently exempt from FAA regulation because of the light weight and small size of our devices. However, in fall 2018, the FAA Modernization and Reform Act (the “FAARA”) repealed a then-existing exemption from FAA regulation of certain lightweight, recreational drones, similar to our type of products. Compliance with FAARA provisions, if they are ultimately determined to apply to our products, may deter purchase or use of our products by consumers. Section 349 of the FAARA creates a new framework for the operation of model aircraft, a category into which our aerial cameras may fit. To avoid the need for specific certification or operating authority from the FAA, model aircraft must now (1) be flown strictly for recreational purposes; (2) be operated in accordance with a community-based organization’s set of safety guidelines developed in coordination with the FAA; (3) be flown within the visual line of sight of the operator or a visual observer co-located and in direct communication with the operator; (4) be operated in a manner that does not interfere with manned aircraft; (5) not be flown in particular classes of airspace or within the lateral boundaries of the surface area of certain airspace designated for an airport without prior authorization; (6) be flown no higher than 400 feet above ground level; (7) be flown by an operator who has passed an aeronautical knowledge and safety test which is to be developed no later than 180 days after the FAARA’s passage; and (8) be registered and marked. In October 2018, the FAA released a statement acknowledging the inability to fully implement the FAARA provisions immediately and asking operators to follow then-current policies and guidance with respect to recreational use of drones until the FAA provides updated direction and guidance. In May 2019, the FAA issued a notice entitled “Exception for Limited Recreational Operations of Unmanned Aircraft” which is intended in part to implement the FAARA. In our view, the new guidance does not clarify the applicability of the FAARA to our products. This only may add to consumer confusion and adversely affect our business and the value of your investment in us.
Our future results may also be affected by other various legal and regulatory proceedings and legal compliance risks worldwide, including those involving product liability, antitrust, intellectual property, environmental, foreign governmental regulations, the U.S. Foreign Corrupt Practices Act and other anti-bribery, anti-corruption or other matters. The outcome of these legal proceedings may differ from our expectations because the outcomes of litigation, including regulatory matters, are often difficult to reliably predict. Various factors or developments can lead us to change current estimates of liabilities and related insurance receivables where applicable or make such estimates for matters previously not susceptible of reasonable estimates, such as a significant judicial ruling or judgment, a significant settlement, significant regulatory developments or changes in applicable law. A future adverse ruling, settlement or unfavorable development could result in future charges that could have a material adverse effect on our business.
Our products could have undetected defects, errors or bugs in hardware or software which could reduce the market adoption of our products, damage our reputation with current or prospective customers and adversely affect our operating costs.
We have in the past and may in the future experience defects, errors and bugs in the hardware or software for our personal aerial camera products. If any of our products have reliability, quality or compatibility problems, we may not be able to successfully correct these problems in a timely manner or at all. In addition, if any of our proprietary features contain defects, errors or bugs when first introduced or as new versions of our products are released, we may be unable to timely correct these problems. Consequently, our reputation may be damaged and customers may be reluctant to buy our products, which could harm our ability to retain existing customers and attract new customers, and could adversely affect our financial results. In addition, these defects, errors or bugs could interrupt or delay sales to our customers. If any of these problems are not found until after we have commenced commercial production of a new product, we may incur significant additional development costs and product recall, repair or replacement costs. These problems may also result in claims against us by our customers or others.
If we fail to develop and introduce new or enhanced products on a timely basis, our ability to attract and retain customers could be impaired and our competitive position could be harmed.
We operate in a dynamic environment characterized by rapidly changing technologies and technological obsolescence. To compete successfully, we must design, develop, arrange for manufacture, market and sell enhanced, easy-to-use, inexpensive personal aerial camera products that provide increasingly higher levels of performance and functionality and that meet the cost expectations of our customers. Our existing or future products could be rendered obsolete by the introduction of new products by our competitors; convergence of other markets with or into the personal aerial camera market; or the market adoption of products based on new or alternative technologies. In addition, the markets for our products are characterized by frequent introduction of next-generation and new products, short product life cycles, increasing demand for added functionality and significant price competition. If we or our distribution customers are unable to manage product transitions in a timely and cost-effective manner, our business and results of operations would suffer.
Our failure to anticipate or timely develop new or enhanced products in response to technological shifts could result in decreased revenue and our competitors achieving wins that we sought. In particular, we may experience difficulties with product design, development of new software, manufacturing, marketing or qualification that could delay or prevent our development, introduction or marketing of new or enhanced products. In addition, we expect that we will need to establish relationships with third-party distributors in order to effectively market our products to end-customers. Failure to establish these relationships could harm our ability to achieve increasing product sales. Delays in product development could impair our relationships with our customers and negatively impact sales of our products under development. Moreover, it is possible that our distributors may develop their own product or adopt a competitor’s solution for products that they currently buyfrom us. If we fail to introduce new or enhanced products that meet the needs of our customers or penetrate new markets in a timely fashion, we will lose market share and our operating results will be adversely affected.
Fluctuations in our operating results could negatively affect the value of our company.
Our revenue and operating results have fluctuated significantly from period to period in the past and are likely to do so in the future. In particular, our business has tended to be seasonal with higher revenue in our third quarter as our distribution customers typically increase their inventories to meet holiday shopping season or year-end demand for our products. We also may experience seasonally lower demand in our first quarter in the Asia-based portion of our markets as a result of industry seasonality and the impact of factory closures associated with the Chinese New Year holiday. As a result, you should not rely on period-to-period comparisons of our operating results as an indication of our future performance. In future periods, our revenue and results of operations may be below expectations. Factors that may affect our operating results include:
fluctuations in demand, sales cycles, product mix, and prices for our products;
the forecasting, scheduling, rescheduling or cancellation of orders by our distribution customers;
shifts in consumer or manufacturer preferences and any resultant change in demand for personal, aerial camera devices;
changes in the competitive dynamics of our markets, including new entrants or pricing pressures;
delays in our manufacturer’s ability to manufacture and ship our products caused by internal and external factors beyond our control;
our ability to successfully define, design and release new products in a timely manner that meet our customers’ needs;
changes in manufacturing costs, including product quality and reliability;
timely availability of adequate manufacturing capacity from our manufacturing subcontractors;
the timing of product announcements by our competitors or by us;
incurrence of research and development and related new products expenditures;
write-downs of inventory for excess quantities and technological obsolescence;
future accounting pronouncements and changes in accounting policies;
volatility in our effective tax rate;
general socioeconomic and political conditions in the countries where we operate or where our products are sold or used; and
costs associated with litigation, especially related to intellectual property.
Moreover, the consumer electronics industry in general has historically been cyclical in nature, reflecting overall economic conditions as well as budgeting and buying patterns of consumers. We expect these cyclical conditions to continue. As a result, our quarterly operating results are difficult to predict, even in the near term. Our expense levels are relatively fixed in the short term and are based, in part, on our expectations of future revenue. If revenue levels are below our expectations, we may experience material impacts on our business, including declines in margins and profitability, or incur losses. Reduced revenues may result in a substantial decline in cash flows from operating activities, which would harm our business.
If we are unable to manage any future growth, we may not be able to execute our business plan and our operating results could suffer.
Our future operating results depend to a large extent on our ability to successfully manage any expansion and growth, including the challenges of managing a company with an executive management team split between the United States and Italy and manufacturing occurring in Asia. With proceeds from this placement we plan to increase our investment in research and development and other functions to grow our business and address new markets, such as the military markets. To manage our growth successfully, we believe we must effectively, among other things:
recruit, hire, train and manage additional qualified engineers for our research and development activities;
add additional sales and business development personnel;
add additional finance and accounting personnel;
maintain and improve our administrative, financial and operational systems, procedures and controls; and
enhance our information technology support for enterprise resource planning and design engineering, and properly training new hires as to their use.
We are likely to incur the costs associated with these increased investments earlier than some of the anticipated benefits, and the return on these investments, if any, may be lower, may develop more slowly than we expect or may not materialize. In addition, development of products to address emerging markets, such as the military markets, could negatively impact our ability to develop new products for our current consumer markets, which may harm our financial condition, particularly in the near term.
If we are unable to manage growth effectively, we may not be able to take advantage of market opportunities or develop new products, and we may fail to satisfy customer product or support requirements, maintain product quality, execute our business plan or respond to competitive pressures.
The average selling prices of drone camera products has historically decreased over time and will likely do so in the future, which could reduce our gross margins and make it easier for new competitors to enter our markets.
Average selling prices of drone camera devices in the consumer markets we principally serve have historically decreased over time, and we expect such declines to continue to occur for our products over time. Our gross margins and financial results will suffer if we are unable to offset reductions in our average selling prices by reducing our costs, developing new or enhanced products on a timely basis with higher selling prices or gross margins, or increasing our sales volumes. Additionally, because we do not operate our own manufacturing, assembly or testing facilities, we may not be able to reduce our costs as rapidly as companies that operate their own facilities, and our costs may even increase, which could also reduce our gross margins.
Camera manufacturers incorporate components supplied by multiple third parties, and a supply shortage or delay in delivery of these components could delay delivery of our products.
Our Chinese manufacturer purchases camera components used in the manufacture of our personal aerial cameras from various sources of supply, often involving several specialized components, including lenses, sensors and memory chips. Any supply shortage or delay in delivery by third-party component suppliers, or a third-party supplier’s cessation or shut down of its business, may prevent or delay our manufacturer’s production of our products. In addition, replacement or substitute components may not be available on commercially reasonable terms, or at all. As a result of delays in delivery or supply shortages of third-party components, orders for our products could be delayed or canceled and our business may be harmed. Errors or defects within a personal aerial camera system or in the manner in which the various components interact could prevent or delay our manufacturer’s production of our products, which could harm our business.
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.
Mike Kasner is a part-time officer. As such, it is likely that the company will not make the same progress as it would if that were not the case.
Our future success depends on the efforts of a small management team. The loss of services of the members of the management team may have an adverse effect on the company. There can be no assurance that we will be successful in attracting and retaining other personnel we require to successfully grow our business.
COVID-19 may have impacts on our business. In-person events where customers may use our products could be postponed or canceled. Manufacturing could be delayed due to forces outside of our control.
The ongoing COVID-19 pandemic and responses thereto have adversely affected and we expect will continue to adversely affect our supply chain, workforce, approval process, and business operations.
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