Climatize Earth Securities LLC is Registered with the Securities and Exchange Commission (SEC) and is a Financial Industry Regulatory Authority (FINRA) Member under Section 4(a)(6) of the United States Securities Act, SEC File No: 7-360. You can only invest in a crowdfunding offering through an online platform, such as a website or a mobile application, of a broker-dealer or a funding portal [such as] Climatize Earth Securities, LLC (“Climatize” and the “Platform”). Funding portals must be registered with the SEC, and must be a member of FINRA. Be aware that companies may not offer crowdfunding investments to you without being a registered broker-dealer or registered funding portal (such as Climatize).
Keep in mind that you will have to open an account with our funding portal in order to make an investment in an organization, and that all written communications relating to your crowdfunding investment(s) will be electronic.
Investors may cancel an investment commitment until forty-eight (48) hours prior to the deadline identified in an Issuer’s offering materials posted on the Platform. The Platform will notify investors by email when the target offering amount has been met. If an Issuer reaches its target offering amount prior to the deadline identified in its offering materials, it may close the offering early so long as it provides investors notice of the new offering deadline at least five (5) business days prior to the new offering deadline. The Platform may continue to accept investment commitments during this 5-day period. If an investor does not cancel an investment commitment 48 hours prior to the offering deadline, the funds will be released to the Issuer by the escrow agent upon closing of the offering. The investor will receive securities in exchange for his, her, their or its investment. If an investment commitment is canceled, the Platform will direct the return of any funds that have been committed by investors in the offering. If a material change is made to the offering materials, the Platform will require investors to reconfirm their investment within five days (5). If an investor does not reconfirm his, her or its investment commitment after a material change is made to the offering, the investor’s investment commitment will be canceled and the committed funds will be returned to the investor. The Issuer and Climatize may cancel the offering. In the event the offering is canceled by the Issuer or the Platform, the investor’s investment commitment will be canceled and the committed funds will be returned to the investor.
The Climatize Earth crowdfunding platform is hosted on a mobile application available for iPhone users through the iOS Store. The Platform is operated by Climatize Earth Securities, LLC, which a subsidiary of Climatize Earth Inc. Climatize Earth Securities LLC is an SEC registered funding portal (CRD #321981), and a member of FINRA. Climatize Earth Securities, LLC serves as the securities arm of Climatize, and acts as an intermediary through which Issuers offer and sell their securities to potential investors pursuant to Section 4(a)(6) of the Securities Act of 1933 (as amended from time to time). Climatize Earth Inc. is not regulated as either a broker-dealer or a funding portal, and is not a member of FINRA.
Issuers that register with (and are approved by) the Platform to sell securities are able to create and post offering materials on the Platform for potential investors to review. Information about specific offerings, including SEC-required documents, promotional material like videos, and communications about an offering, are publicly viewable on the Platform.
Potential investors that are interested in using the Platform to participate in investment opportunities and / or to communicate on the Platform with others about the investment opportunities must register with the Platform by opening an account. This entails providing certain personal and non-personal information to the Platform, its affiliates and / or service providers to the Platform prior to making an investment, including documentation related to the investor’s income and net worth. This information is used to verify that an investor is qualified to invest in opportunities posted on our Platform. For further information on investment limitations when using this Platform, please see “Investment Limitation under Regulation Crowdfunding” further below.
After opening an account, an investor will be able to search for various investment opportunities on the Platform, review all campaign and investment materials posted on the Platform, and communicate about a specific offering with the issuer and its agents (as well as with other investors) on the Platform.
Once an investor decides to purchase securities from a particular Issuer, the investor authorizes a transfer of funds to an escrow account; investor funds are held in the escrow account until the offering campaign is completed. The Platform does not (and cannot) hold funds, and investors should not send funds directly to Climatize or its affiliates. The escrow account for each transaction is maintained by a separate qualified escrow agent with a registered broker-dealer. Climatize uses North Capital Private Securities Corporation (“North Capital”) as the escrow agent for all transactions hosted on the Platform. After completion of the campaign the escrow agent will release the aggregate funds contributed from all investors, and the Issuer will issue securities to all investors.
Pursuant to Reg CF, each Issuer that posts offerings of securities on the Platform is required to annually file with the SEC a Form C-AR and financial statements. This must be done no later than 120 days after the end of the Issuer’s fiscal year covered by such filing. Each Issuer must also post its Form C-AR and financial statements to its own website.
The Form C-AR contains updated disclosures substantially similar to those provided in the Issuer’s initial offering statement / Form C, including information on the Issuer’s size, location, principals and employees, business, plan of operations and the risks of investment in the Issuer’s securities; however, offering-specific disclosures are not required to be disclosed in the Form C-AR.
Investors should be aware that in certain circumstances, an Issuer may no longer be required to continue its annual reporting obligations under Reg CF, including in the event (i) that the Issuer has fewer than 300 stockholders of record after filing at least one Form C-AR in the last year, (ii) its total assets are equal to or less than $10 million after filing a Form C-AR for at least 3 years prior, (iii) the Issuer undergoes liquidation or dissolution or (iv) all of the Issuer’s issued securities are repurchased by the Issuer or another party. In the event that an Issuer ceases to publish annual reports, investors may no longer obtain and review current financial information about the Issuer.
Prior to registering with the Climatize Platform or making an investment commitment, a potential investor must consider the risks of investing in crowdfunded securities offerings and determine whether such an investment is appropriate. The Platform and its employees are prohibited from offering advice about any offering posted on the Platform and from recommending any investment. This means the decision to invest or contribute must be based solely on the potential investor’s own individualized consideration and analysis of the risks involved in a particular investment opportunity posted on the Platform, which is made at the investor’s own risk.
Potential investors acknowledge and agree that they are solely responsible for determining their own suitability for an investment or strategy on the Platform and must accept the risks associated with such decisions, which include the risk of losing the entire amount of their principal. Investors must also be aware that an issuer may retain the ability to raise additional capital outside of the Reg CF transaction hosted on the Climatize Platform, including with respect to additional debt capital. If an issuer decides to raise additional indebtedness (or other forms of capital), this could impact the ability of the issuer to repay the principal due to the investor, or could impact the order in which the investor is repaid relative to the new capital in a bankruptcy or liquidation scenario. Certain inherent risks with debt instruments include but are not limited to:
Interest rate risk: When the market interest rate rises above the rate of a debt instrument, the demand for it falls and, hence, the market price of the debt product falls.
Inflation risk: The potential for investment losses that can be triggered by a move upward in the prevailing rates for new debt instruments.
Credit risk: Possible default by the issuer/debtor in repayment and/or the interest payment.
Liquidity risk: Your money is not accessible to you. Investors should consider whether they can convert their short-term debt obligations into cash before investing in long-term illiquid assets.
Reinvestment risk: If you were to reinvest the money, you might not receive the same outcome.
Please note that the content here is for informational purposes only; should NOT be taken as legal, business, tax, or investment advice or be used to evaluate any investment or security; and is not directed at any investors or potential investors.
The Platform has no special relationship with, or fiduciary duty to, potential investors and investors’ use of the Platform does not create such a relationship. Potential investors agree and acknowledge that they are responsible for conducting their own legal, accounting and other due diligence reviews of the investment opportunities posted on the Platform.
EACH INVESTOR IS STRONGLY ADVISED TO CONSULT LEGAL, TAX, INVESTMENT, ACCOUNTING AND/OR OTHER PROFESSIONALS BEFORE INVESTING, AND TO CAREFULLY REVIEW ALL THE SPECIFIC RISK DISCLOSURES PROVIDED AS PART OF ANY OFFERING MATERIALS, AND TO ASK EACH ISSUER OFFERING
SECURITIES ANY QUESTIONS OR FOR ADDITIONAL INFORMATION PRIOR TO MAKING AN INVESTMENT
THERE IS NO INDEPENDENT GOVERNMENTAL OR REGULATORY REVIEW OF THE OFFERING OR OFFERING MATERIALS
No governmental agency has reviewed the investment opportunities posted on this Platform and no state or federal agency has passed upon either the adequacy of the disclosure(s) contained therein, or the fairness of the terms of any such investment opportunity.
The exemptions relied upon for the investment opportunities posted on the Platform are significantly dependent upon the accuracy of the representations of the issuers offering securities through the Platform and the potential investors registered with the Platform.
The following highlighted risks are non-exhaustive and are intended to highlight certain risks associated with investing in securities that are not registered with the SEC.
Restriction on Resale of Securities Offered
The securities offered on the Platform are only suitable for potential investors who are familiar with, and are willing to accept, the high risks associated with private investments. Securities sold through this Platform are restricted and not publicly traded and, therefore, are illiquid unless registered with the SEC.
Securities issued in a transaction pursuant to Section 4(a)(6) of the Securities Act may not be transferred by any purchaser of such securities for a one-year period after such securities were issued, unless such securities are transferred: (i) to the issuer of the securities, (ii) to an “Accredited
Investor” (as such term is defined in Rule 501 of Regulation D promulgated under the Securities Act) or such purchaser has reasonable belief that such transferee is an “Accredited Investor,” (iii) as part of an offering registered with the SEC, or (iv) to a member of the family of the purchaser or the equivalent, to a trust controlled by the purchaser, to a trust created for the benefit of a member of the family of the purchaser or the equivalent, or in connection with the death or divorce of the purchaser or other similar circumstance.
Investors in Small Companies May, and Frequently Do, Lose All of Their Investment
Investing in private securities offerings requires a high-risk tolerance, a low need for liquidity, and a long-term commitment. Investments in small, especially start-up and early stage, companies is speculative and involves a high degree of risk. While promised or targeted returns on the amount invested should reflect the perceived level of risk in the investment, such returns may never be realized and / or may not be adequate to compensate an investor for the risks taken. Loss of an Investor’s entire investment is very possible and can easily occur. Even the timing of any payment of a return on an investment is highly speculative.
Among many factors to consider is that the issuer’s management may be inexperienced. Due to Inexperience, management may not be able to execute on its business plan. An investor may not be able to evaluate the issuer’s operating history, and in some cases the issuer may not have any operating history.
The Issuer may have serious risks specific to its industry or business model. Demand for a product or service may be seasonal, or may be impacted by the overall economy. Small businesses, in particular, often depend heavily upon a single customer, supplier, or upon one or a small number of employee(s). The issuer may have difficulty competing against larger companies who can negotiate for better prices from suppliers, produce goods and /or services on a large-scale more economically, or take advantage of bigger marketing budgets.
The Company may not have audited financial statements, or may not be required to provide investors with audited financial statements
Under Reg CF audited financial statements are not required to be provided by issuers who are raising less than $535,000 in capital, or for issuers who are raising less than $1,070,000 in capital that have not previously sold securities in reliance on section 4(a)(6) of the Securities Act (15 U.S.C. 77d(a)(6)). In some cases the issuer may not have its financial statements audited, or even reviewed by outside accountants / auditors. Your decision to make an investment in the issuer will be based upon the information the issuer provides in its offering materials, which may not completely or even accurately represent the financial condition of the company.
The Issuer may lack adequate financial controls and /or procedures
The issuer in all likelihood will not have an internal control infrastructure. It will not have the controls one would expect to find in a publicly-held company subject to the Sarbanes Oxley Act of 2002 (“Sarbanes Oxley”). Because the Issuer will not be subject to Sarbanes Oxley, its financial and disclosure controls and procedures will reflect its status as an early-stage, non-public company. There can be no assurance of no significant deficiencies or material weaknesses in the quality of the issuer’s financial and disclosure controls and procedures.
Lack of information to monitor and / or value an issuer
As explained above, an investor may not be able to obtain the information it wants regarding a particular issuer on a timely basis, or at all. It is possible that the investor may not be aware of material adverse changes that have occurred for the issuer. An investor may not be able to get accurate information about an issuer’s current value at any given time.
The issuer’s management team may have broad discretion over how the issuer uses the net proceeds of an offering
Unless the Company has agreed to a specific use of the proceeds from the offering, the issuer’s management will usually have considerable discretion over how to use the capital raised. You may not have any assurance the issuer will use the proceeds appropriately. You should pay close attention to what the issuer says about how offering proceeds are to be used.
Lack of control
Because the issuer’s founders, directors, and executive officers may be among its largest stockholders, they may be able to exert significant control over the issuer’s business and affairs, and may even have actual or potential interests that diverge from those of other investors. This may worsen as time goes on if the holdings of the issuer’s directors and / or executive officers increase upon vesting or other maturation of exercise rights under options and / or warrants they may hold, or in the future be granted. In addition to holding or controlling board seats and offices, these persons may well have significant influence over, and control of, corporate actions requiring shareholder approval(s), separate from how the issuer’s other stockholders, including the investors, may vote in a given offering.
Completion of Offering and Relationship between Issuer and the Platform
Investors that participate in an offering on the Platform should be aware that once an offering has been completed, and an investor has received securities from the issuer, there may or may not be an ongoing relationship between the issuer and the Platform. Any questions or concerns related to such issuer’s securities and continued disclosure(s) provided in such issuer’s annual reports on Form C AR must be forwarded directly to such issuer once an offering on the Platform is completed. The Platform assumes no liability or responsibility, directly or indirectly, for any damage or loss caused, or alleged to be caused, by or related to the use of, or reliance on, any disclosures made or services provided by the issuer once the issuer’s offering on the Platform is completed.