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   The risks associated with participating in an offer through an Offering Coordinator

 

Investment in securities of private companies in general, and of private companies in early stages in particular, is characterized by a high level of risk, inter alia, in light of the following:

 

  • The possibility of loss of full investment money due to the Offering Company ("Offering Company") beginning insolvency and/or liquidation proceedings.
  • The possibility of loss of full investment funds, in view of the fact that investors are minority shareholders, or due to the actions and/or transactions of the Offering Company or its controlling shareholders, including the sale of control of the Offering Company, or the sale of its material assets.
  • Lack of market activity and a public market for the securities of the Offering Company, since it is not listed on the Tel Aviv Stock Exchange Ltd. or any other stock exchange. 
  • The holding rate of any investor in the Offering Company may be diluted as a result of future allocations of its securities, including, but not limited to, future offerings of the Offering Company, as they may be, all subject to the rights attached to the offered securities.
  • Risks associated with investing online according to the offering model (crowdfunding), including the inability of the public to negotiate investment conditions, and lack of financial incentive to monitor the investment given its scope.
  • The price of a proposed security reflects the value of the Offering Company as assessed by the management of the Offering Company, and is not based on the valuation or opinion of a financial entity or any other qualified entity. 
  • The offer is not subject to the Securities Law, 1968 and the Companies Law 5759-1999, the laws typically applicable to a company that is offering its securities to the public. The Israel Securities Authority ("ISA") has not approved or reviewed the offers, and the Offering Company will not be subject, after an offer is made, to disclosure instructions and corporate governance directives designed to protect investors or to monitoring by the ISA.

The risks described above are in addition to the unique risks of each Offering Company listed in the offers. Given the risks associated with investing in securities in general, and companies in their early stages in particular, Smart Funding recommends that users diversify investments and invest amounts whose loss they have the financial ability to absorb.