Table of Contents
- General Disclosure
- The Purpose of the Management Company
- Performance Disclosure
- Management’s Compensation
- Offering Disclosure
- Reviews and Comments Disclosure
- “Testing the Waters”
“Testing-the-Waters” Note:
We are currently “testing-the-waters”. As such, you may want to read Section 7 below before continuing.
1. General Disclosure
Archimedes’ Offspring (“AOS”) is an unincorporated business organization (commonly referred to as a “Massachusetts Business Trust” or “MBT”) formed pursuant to that certain Trust Agreement dated as of the 31st day of March, 2019 (the “Trust Agreement”), by and between FLC LLC, a Colorado limited liability company doing business as “FLeCusa International,” as Grantor, Windom Peaks Capital, LLC, a Colorado limited liability company, as Trustee, and the Invention Investment Families identified on this website, each of which has been designated a beneficiary / beneficial owner under the terms of the Trust Agreement. AOS operates a website at www.ArchimedesOffspring.com (the “Site”). The information contained on the Site neither constitutes an offer for, nor a solicitation of interest in, any securities offering.
In the future, one or more entities comprising one of the parts of the AOS unincorporated “umbrella” structure (the “AOS Umbrella”) may decide to make offerings for the sale of its own securities (such entities are hereinafter referred to individually as an “Invention Investment Family” or a “Family” and collectively as “Invention Invention Families” or “Families”). AOS’s intent is to serve as an “umbrella” sponsor for each and every securities offering by any Invention Investment Family (each such securities offering is hereinafter individually referred to as an “Offering” and collectively as the “Offerings”).
In connection therewith, if an indication of interest in any Offering is provided by an investor, such indication of interest may be withdrawn or revoked, without obligation or commitment of any kind, prior to being accepted by the offering Invention Investment Family’s pertinent Invention Investment Fund (an “IIF” and, collectively, “IIFs”) following the “acceptance” (under Title III of the Federal JOBS Act under Regulation Crowdfunding) or “qualification” (under Title IV of the JOBS Act under Regulation A, as amended), as the case may be, of the applicable offering document by the Securities and Exchange Commission (the “SEC”), and any offer, solicitation or sale of any securities will be made only by means of an appropriate offering circular, private placement memorandum, prospectus or other offering document (the “Offering Document”).
At the present time, no money or other consideration is hereby being solicited, and none will be solicited in the future, on behalf of any Invention Investment Family’s IIF, and if money or other consideration is tendered, will not be accepted without such potential investor having been provided the Offering Document. Joining the Site neither constitutes an indication of interest in any such future Offering nor involves any obligation or commitment of any kind.
In the future, a pre-selected management company recommended by AOS will constitute one of the entities that will be under the AOS Umbrella (the “Management Company”). The Management Company will, in the future, enter into management contracts with each of the Invention Investment Families’ IIFs for the purpose of managing each such IIF on behalf of the Boards of Directors of each such IIF and such IIF’s shareholders.
Neither AOS, nor the future Management Company, will be registered with the SEC as an investment adviser under the Investment Advisers Act of 1940, as amended, and neither provides, nor will either in the future provide, investment advice.
2. The Purpose of the Management Company
AOS, through the Management Company and its affiliates, will create divisions known as Invention Investment Families. Each of these Invention Investment Families will, in turn, become sponsors of individual invention investment funds, the IIFs, whose purpose, upon formation, will be purchasing selected and targeted high-quality inventions and their related intellectual property (the “Targeted Inventions”). The funds for this purpose will be raised from members of the general public through use of Regulation Crowdfunding (Title III of the Federal JOBS Act (Jumpstart Our Business Startups) or Regulation A, as amended (Title IV of the Federal JOBS Act)). The Management Company will provide services to the Invention Investment Families and their related IIFs in their pursuit of Targeted Inventions. These Invention Investment Families and their related IIFs will, in the future become, such Management Company’s only clients. (Note: AOS, through one of these Invention Investment Families, is currently testing the waters for a possible future offering. See Section 7 for more details). As such, the SEC has not provided any exemptions, nor, under applicable law, is it necessary for the SEC to provide such an exemption to either AOS or the future Management Company or to any of its affiliates for this purpose.
As stated above, the mission of AOS is to identify high quality inventions and, where the same exists, related intellectual property (together, collectively referred to as the “IP”). In the case of the IP, once it has been identified as a “high quality invention” by the AOS vetting process, the next step is for the Management Company to recommend to the relevant IIF’s Board of Directors, a potential purchase of a partial ownership interests in such IP by the IIF’s shareholders through the vehicle of such IIF. Additionally, and consistent with the foregoing, it is the goal of AOS that the development and management of the Targeted Inventions by experts within or under the AOS Umbrella structure will increase the probability of success. The intent of this is that the process will result in a concomitant improvement in financial returns both for the inventor and for any third party co-owners of such IP who have invested alongside the inventor, including any invested IIF. In this regard, the Management Company will provide such acquisition, development and management services to the various Invention Investment Families and their related IIFs on behalf of those IIF’s Board of Directors and their shareholders.
All product names, logos, and brands are the property of their respective owners. Use of such names, logos, and brands is for identification purposes only, and does not imply endorsement or affiliation.
Services available on the Site do not constitute “crowdfunding” as described in Title III of the Jumpstart Our Business Startups Act (“JOBS Act”), nor the “offering of securities” under Title IV of the JOBS Act.
As communications with respect to any offer of securities are highly regulated, please review and follow the AOS Commenting Guidelines before leaving any comments or reviews with respect to any Offering by any Family on any social media website or network.
3. Performance Disclosure
There can be no assurance that an investment mix or any projected or actual performance shown on any website on which securities are being offered by one or more of the Invention Families will lead to the expected results shown or perform in any predictable manner. It should not be assumed that investors will experience returns in the future, if any, comparable to those shown at such time on such website or websites nor that any or all investors with respect to such website offers have experienced such returns.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS, AND ANY EXPECTED RETURNS OR HYPOTHETICAL PROJECTIONS MAY NOT REFLECT ACTUAL FUTURE PERFORMANCE. FURTHERMORE, PAST RETURNS MAY REFLECT THE PERFORMANCE OF ASSETS FOR A FINITE TIME, OR DURING A PERIOD OF EXTREME MARKET ACTIVITY. ALL INVESTMENTS INVOLVE RISK AND MAY RESULT IN PARTIAL OR TOTAL LOSS.
Whenever performance information is presented, it will be presented in such a manner as to be net of all management fees and expenses, unless otherwise indicated. Commissions are not considered since investors on any such sites will not be charged any commissions by AOS or any future Management Company. Neither AOS nor the still-to-be-designed Management Company charge, nor will either in the future charge, any trading commissions or any other transaction-based fees for the services it renders to the Invention Investment Families and their related IIFs.
If, in the future, after the successful closing of an Offering by one or more of the Invention Investment Families’ funds, such fund declares that dividends are to be paid to such fund’s shareholders and such shareholders determine to reinvest such dividends in that fund, the performance information will include the reinvestment of those dividends (plus any interest accruing therefrom), unless otherwise noted.
In the future, should there be a comparison drawn between the cost charged by the Management Company to an IIF for the services it renders to such IIF and the cost charged by any third parties to its clients, such comparisons will be based upon the fees typically charged by non-traded venture capital funds. Depending on the varying terms of different or successive Offerings by an IIF, the actual results that one investor may receive in one Offering could be different from that received by an investor in a different or successive Offering. In addition, there can be no guarantee of enhanced returns due to investing in one Offering versus investing in a different Offering by a different fund within the same Family or other Families.
The Invention Investment Funds may pay (but are not required to pay) quarterly distributions that may consist of ordinary dividends, capital gains, and/or non-dividend distributions. However, the tax characteristics of these distributions (i.e., dividend income, non-dividend distributions, and capital gains) cannot be determined until after the end of the year. Since the future Management Company cannot know the taxability of each IIF’s distributions during the year, unadjusted effective yields will be calculated and presented. After the end of each year, each entity required to report changes in tax basis will publicly post a Form 8937 disclosing the non-dividend distribution portion of such distributions.
Actual investors in any Offering may experience different results from any hypothetical results shown. There is a potential for loss, as well as gain, that is not reflected in any hypothetical information that might be portrayed in any Offering Document. The hypothetical performance results that may be shown would not necessarily represent the results of actual investment activity. Investors should carefully review the additional information presented on any website maintained for a specific Family, or for several Families collectively (the “Family Website”).
The return, composite and performance information that may be shown on a Family Website will use or will include information compiled from third-party sources, including independent market quotations and index information. While AOS believes the third-party information comes from reliable sources, AOS can not guarantee the accuracy of such Family Website’s information and may receive incorrect information from third-party providers. Unless otherwise indicated, the information on any such Family Website will have either been prepared by AOS by the future Management Company or by a third-party whom the Management Company has retained on behalf of the relevant IIF’s Boards of Directors and such IIF’s shareholders. In each case, unless otherwise indicated, such information will not have been reviewed, compiled or audited by any independent third-party or public accountant.
ANY COMPARISONS THAT MAY BE MADE IN THE FUTURE TO PERFORMANCE ACHIEVED BY SECURITIES INDICES WILL BE PROVIDED FOR ILLUSTRATIVE PURPOSES ONLY. AN INDEX IS A BROADLY DIVERSIFIED, UNMANAGED GROUP OF SECURITIES, WHICH MAY INCLUDE ONLY LARGE CAPITALIZATION COMPANIES OR COMPANIES OF A CERTAIN SIZE. BROADLY BASED INDICES MAY BE SHOWN ONLY AS AN INDICATION OF THE GENERAL PERFORMANCE OF THE FINANCIAL MARKETS DURING THE PERIODS INDICATED VERSUS THE PERFORMANCE ATTAINED BY ONE OR MORE OF THE INVENTION INVESTMENT FAMILIES’ IIFS. BECAUSE OF THE DIFFERENCES BETWEEN THE RESULTS OBTAINED BY INVESTMENTS IN SECURITIES VERSUS THE RESULTS OBTAINED BY INVESTMENTS IN THE INVENTION INVESTMENT FUNDS, INVESTORS ARE CAUTIONED THAT NO INDEX IS DIRECTLY COMPARABLE TO THE PERFORMANCE SHOWN ON SUCH FAMILY WEBSITE SINCE EACH INDEX HAS ITS OWN UNIQUE RESULTS AND VOLATILITY, AND SUCH INDICES, IF SHOWN, SHOULD NOT BE RELIED UPON AS AN ACCURATE COMPARISON.
4. The Management Company
The still-to-be-designated Management Company, under the various contracts between it and the Invention Investment Families’ IIFs will be entitled to receive both ongoing maintenance fees, paid monthly, and a “carried interest” in each of the IIFs in the form of a unique class of shares referred to as “Series B Preferred Stock”.
The cost of the ongoing monthly maintenance fees to be paid to the Management Company will be shared equally by the Families’ IIFs, on a pro rata basis, with each IIF paying a fraction of such costs equal to an amount determined by dividing the aggregate amount of such monthly maintenance fees by the number of IIFs that have raised and successfully closed at least one Offering.
The Management Company’s “carried interest” will be represented by its ownership of a class of securities issued by each IIF known as “Series B Preferred Stock”, which securities will (i) possess an anti-dilution preference, and (ii) be subject to a liquidation preference in favor of the “Series A Preferred Stock” (which Series A Preferred Stock will be issued exclusively to members of the general public who constitute the first class of investors in each initial Offering made by any of the Families’ IIFs, and which will entitle such investors to receive repatriation of their entire investment in that IIF prior to any distribution to the Management Company as a consequence of its ownership of the Series B Preferred Stock); and (iii) otherwise participate with the Series A Preferred Stock, along with any additional class or series of shares issued subsequent to the issuance of the Series A Preferred Stock, on a pari passu basis in respect of any financial returns or distributions arising from ownership of such stock.
5. Offering Disclosure
Some of the statements that might be contained on a Family Website could be viewed as “forward-looking statements”. The reader is advised not to rely upon forward-looking statements as predictions of future events. Such statements will involve known and unknown risks, uncertainties, and other factors that may cause such Family’s actual results, levels of activity, performance, or achievements to be materially and adversely different from any future results, levels of activity, performance, or achievements expressed or implied by these forward-looking statements. An investment in any Offering available on any Family Website will involve substantial risks, including risk of partial or total loss of investment, and each investor should carefully consider the Risk Factors contained in each Offering Document made available by the Family involved in that particular Offering. Except as required by law, neither AOS nor the future Management Company, or any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. None of AOS, the future Management Company, and any third party affiliated or associated with AOS or the future Management Company, undertakes any obligation to update publicly any forward-looking statements for any reason or to conform these statements to actual results or to changes in any projected expectations. Diversification, while helpful to the mitigation of loss, does not alone guarantee profit or protect against loss.
The information presented on one or more Family Websites regarding such Families’ Offerings, including information regarding financial status, business strategy, investment objectives, historical performance, projections, redemption plans, etc., shall merely constitute a summary of such information and is prospectively deemed to be qualified in its entirety by the disclosure contained in each such Family’s Offering Document. There can be no guarantee that any Family will achieve its business objectives or that it will become profitable.
Offers to sell, or the solicitations of offers to buy, any security can only be made through official offering documents that contain important information about risks, fees and expenses. Investors should conduct their own due diligence, not rely on the financial assumptions or estimates displayed on a Family’s Website, and are encouraged to consult with a financial advisor, attorney, accountant, and any other professional that can help you to understand and assess the risks associated with any investment opportunity.
Where the Offerings available on a Family’s Website are conducted as “continuous offerings” pursuant to Rule 251(d)(3) of the Securities Act of 1933, as amended, it means that while an Offering is continuous, sales of securities may happen sporadically over the term of such Offering as the future Management Company is able to process subscriptions. Further, the acceptance of subscriptions, whether via such Family Website or otherwise, may be briefly paused at times to allow the Management Company to effectively and accurately process and settle subscriptions that have been received.
Neither the SEC nor any state securities commission or regulatory authority has approved, passed upon or endorsed, nor, in the future, will the SEC or any state securities commission or regulatory authority approve, pass upon or endorse the merits of any investment on any Family Website.
6. Reviews and Comments Disclosure
Where permitted under law, all ratings and reviews provided to the various independent social media sites by the future Management Company on behalf of a Family are provided solely in accordance with the SEC’s Guidance on the Testimonial Rule and Social Media (March 2014). The average rating review is determined by the various independent social media sites, and not by AOS nor the Management Company, or any of its affiliates or associates. Where permitted under law, ratings and reviews are added continuously to the independent social media sites and average ratings will be updated by the independent social media websites and not by AOS nor the future Management Company or any of their affiliates.
The ratings and experience of investors may not be representative of the experiences of all investors and is not indicative of any future success. The accuracy of information included in the ratings and reviews cannot be guaranteed by AOS or any of its affiliates or associates.
As communications in our industry are highly regulated, please review and follow the AOS Commenting Guidelines before leaving any comments or reviews on any independent social media website.
7. Testing the Waters
No money or other consideration is being solicited on behalf of any Offering at this time and if sent in to the future Management Company on behalf of a Family’s IIF offering, will not be accepted. No offer to buy securities in a Regulation Crowdfunding or Regulation A, as amended, Offering by a IIF can be accepted and no part of the purchase price can be received until after an appropriate filing is “accepted” or “qualified”, as the case may be, by the SEC. Any such offer to buy securities may be withdrawn or revoked, without obligation or commitment of any kind, at any time before notice of its acceptance given after the “acceptance” or “qualification” date. Any indications of interest in an Offering involves no obligation or commitment of any kind.
Once a management company has been designated on behalf of AOS and the Invention Families, such management company will commence testing the waters for one of such Families’ IIFs. This process will allow an IIF to determine whether there may be interest in an eventual Offering of its securities. Neither AOS nor the future Management Company will be under any obligation to make an offering under Regulation Crowdfunding or Regulation A, as amended. A Family may choose to make an Offering to some, but not all, of the people who indicate an interest in investing, and that Offering may thereafter not be made to the excluded persons. For example, the Family may determine to proceed with an offering under Rule 506(c) of Regulation D, in which case the Family will only offer the securities of the relevant IIF to accredited investors as defined by Rule 501(a) of Regulation D. If a Family pursues an Offering under either Regulation Crowdfunding or Regulation A, as amended, it will only be able to make sales after it has filed an appropriate Offering Document with the SEC and only after the SEC has “accepted” or “qualified”, as the case may be, such Offering Document. The information in the Offering Document will be more complete than the “testing-the-waters” materials and could differ in important ways. You should read the Offering Document filed with the SEC before making your decision.