As we grow our customer base and scale to thousands and ultimately millions of users, our website’s infrastructure as it relates to storage space, bandwidth, processing ability, speed and other factors may begin to deteriorate or fail completely. This may result in deteriorating user experience, system failures or system outages for continued periods of time. If we are unable to resolve any technical glitch, our business and financial conditions could suffer. In addition to needing to scale our technology platform, we will also need to scale our business operations and team to support a growing business in order to be successful.
Mobile app stores are highly competitive. New competitors may emerge with a stronger product, more funding, or unique access to potential consumers. Increased competition may adversely affect our business, prospects, financial condition or results of operations. We cannot assure investors that we will be able to compete effectively against current and future competitors.
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.
Breaches of the Company's platform and systems may materially affect client adoption and subject the Company to significant negative reputational, legal or operational consequences. Calroo user privacy has never been compromised to date due to a focus on encryption and security, but 100% security cannot be guaranteed. Cyber-crimes are becoming increasingly common and aggressive which brings parallel increase in risk.
The company owes a significant amount of money to two related parties, The Perrodin Family Trust and the founder and CEO Elena Krasnoperova. While the founder and CEO debt may be forgiven, if everything is repaid the total amount including interest is $549,757.81, and is set to be due on 12/31/18. The company is not prohibited from being lent more money, and if it increases its debt amount, its financial position could be harmed.
The Company has limited operating history and is still pre-revenue. Accordingly, the Company’s operations are subject to all the risks inherent in the establishment of a new business enterprise, including potential operating losses. The Company has made key assumptions around its ability to acquire, retain and engage consumers, ultimately reaching meaningful scale (millions of monthly active users), customer willingness to pay for the premium version of the app (i.e., Calroo Pro), and ability to develop a set of organic (i.e., free or earned) customer acquisition channels. If all or any of these assumptions proves untrue the company may have difficulty generating or sustaining revenue in the future.
Our future success depends on the efforts of a small management team, namely the two co-founders Elena Krasnoperova and Marcelo Ribeiro, who are supported by a Head of Marketing and a technical team. The loss of their services 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.