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A crowdfunding investment involves risk. You should not invest any funds in their offerings unless you can afford to lose your entire investment. In making an investment decision, investors must rely on their own examination of the issuer and the terms of the offering, including the merits and risks involved.
Relevant Background on crowdfunding regulations
https://www.finra.org/investors/alerts/crowdfunding-and-jobs-act
FINRA is issuing an update to this Alert to advise investors about the inflation-adjusted increase in investment limits for securities-based crowdfunding. The Jumpstart Our Business Startups Act (JOBS Act) established crowdfunding provisions that allow early-stage businesses to offer and sell securities and provided that crowdfunding dollar limits be adjusted for inflation every five years. The SEC issued inflation-adjusted crowdfunding dollar amounts on May 5, 2017, which are reflected below.
"Crowdfunding" generally refers to the use of the Internet by small businesses to raise capital through limited investments from a large number of investors. Under SEC rules, the general public can invest in capital raising by start-up companies. This advisory is designed to help the public understand the crowdfunding rules and processes so they can make informed decisions about the risks and rewards of investing in these early-stage businesses.
Title III of the JOBS Act established crowdfunding provisions that allow early-stage businesses to offer and sell securities. The SEC subsequently adopted Regulation Crowdfunding to implement the crowdfunding provisions of the JOBS Act. The role of the Financial Industry Regulatory Authority (FINRA) is to oversee the registration of crowdfunding portals and to ensure that they comply with the federal securities laws and FINRA rules. Broker-dealers and funding portals that are registered with the SEC and are FINRA members are permitted to offer and sell securities on behalf of issuers to the investing public using crowdfunding.
Investors are subject to investment limits that we describe below. Investors should be aware that crowdfunding investments carry significant risk: you can lose some or all of your investment.
Like stocks and bonds, anyone can invest in crowdfunding offerings. But because of the risks involved, you are limited in how much you can invest during any 12-month period in these kinds of securities. The inflation-adjusted investment limits depend on your net worth and annual income:
If either your annual income or your net worth is less than $107,000, then during any 12-month period, you can invest up to the greater of either $2,200 or five percent of the lesser of your annual income or net worth.
If both your annual income and your net worth are equal to or more than $107,000 then, during any 12-month period, you can invest up to 10 percent of your annual income or net worth, whichever is less, but not to exceed $107,000.
Say your annual income is $150,000 and your net worth is $80,000. JOBS Act crowdfunding rules allow you to invest the greater of $2,200 or five percent of $80,000 ($4,000) during a 12-month period. So in this case, you can invest $4,000 over a 12-month period.
To calculate your net worth, add up all your assets and subtract your liabilities. The resulting sum is your net worth. To learn more, read FINRA’s Know Your Net Worth, which includes a worksheet to help with your net worth computation. For purposes of JOBS Act crowdfunding, the value of your primary residence is not included in your net worth calculation.
When you calculate your annual income or net worth, you may include your spouse’s income or assets even if those assets are not held jointly. However, if you use a joint calculation, you and your spouse’s aggregate investment may not exceed the limit that would apply to an individual investor at that income and net worth level.
In addition to investment limits described above, other requirements and procedures have been put in place to protect and inform those who invest in crowdfunding offerings.
Among the most important, you can invest in an offering pursuant to Regulation Crowdfunding only through an online platform of a broker-dealer or a funding portal, a new type of intermediary that was created by the JOBS Act. Companies may not offer crowdfunding investments to you directly—they must use a broker-dealer or funding portal.
The broker-dealer or funding portal must be registered with the SEC and be a member of FINRA. To check registration status and additional information on broker-dealers, visit FINRA’s BrokerCheck. To check if a funding portal is registered, go to FINRA's Funding Portals Web page.
To begin the investment process, you will have to use a new or existing account with the broker-dealer or funding portal. While brokers can offer investment advice and recommendations, funding portals cannot. Also, a funding portal cannot solicit purchases, sales or offers to buy the securities being offered or displayed on the platform.
Be aware that you will be limited in your ability to resell your investment for the first year—and you may need to hold your investment for an indefinite period of time. While you are allowed to transfer shares to certain parties such as a family member or the firm that issued the securities, this may not be easy to do.
Since crowdfunding investments are likely to be early-stage ventures and may be highly risky, the JOBS Act and Regulation Crowdfunding include provisions designed to inform investors about these investments and their potential risks.
Companies that conduct offerings under Regulation Crowdfunding are required to disclose, among other things:
A description of the business of the company and its anticipated plan of business, including its name, legal status, physical address and website address.
A discussion of the material factors that make an investment in the company speculative or risky.
A discussion of the company’s financial condition.
The names and positions of the directors and officers; the name of each person who is a beneficial owner of 20 percent or more of the company’s outstanding voting equity securities; and additional information such as the business experience of the directors and officers over the past three years.The price of the securities or the method for determining the price.
Instruction to paragraph (a). The disclosure required by this paragraph is required, with each communication, for persons engaging in promotional activities on behalf of the issuer through the communication channels provided by the intermediary, regardless of whether or not the compensation they receive is specifically for the promotional activities. This includes persons hired specifically to promote the offering as well as to persons who are otherwise employed by the issuer or who undertake promotional activities on behalf of the issuer.
https://www.ecfr.gov/current/title-17/chapter-II/part-227/subpart-B/section-227.205
(b) Other than as set forth in paragraph (a) of this section, an issuer or person acting on behalf of the issuer shall not compensate or commit to compensate, directly or indirectly, any person to promote the issuer's offerings made in reliance on section 4(a)(6) of the Securities Act (15 U.S.C. 77d(a)(6)), unless such promotion is limited to notices permitted by, and in compliance with, § 227.204.
Virtualities, Inc (the “Company”) has recently begun the process on engaging a crowdfunding campaign on Start Engine. This confirms that the Company intends to grant the an option (the “Option”) to purchase shares of Common Stock of the Company (the “Common Stock”) pursuant to the Company’s 2021 Equity Incentive Plan (the “Plan”) promptly subject to valuation reports with respect to the Company’s Common Stock in compliance with Internal Revenue Code Section 409A and CF crowdfunding regulations.
The Option will (i) have an exercise price equal to the fair market value of the Common Stock on the date of grant, as determined by the Board, (ii) vest, subject to mutually agreeable terms to be decided by Company at the time of issuance, (iii) be subject to the terms and conditions of the Plan and applicable form of stock option agreement thereunder and (iv) provide you with 7 years to exercise any options. All sponsored content is indicated and the compensation for Soulfox was at $600 USD and 6000 stock options. All sponsored social media content is indicated and stated in the description. This disclosure is in compliance with Section 17(b) of the United States Securities Act of 1933.
Virtualities, Inc (the “Company”) has recently begun the process on engaging a crowdfunding campaign on Start Engine. This confirms that the Company intends to grant the an option (the “Option”) to purchase shares of Common Stock of the Company (the “Common Stock”) pursuant to the Company’s 2021 Equity Incentive Plan (the “Plan”) promptly subject to valuation reports with respect to the Company’s Common Stock in compliance with Internal Revenue Code Section 409A and CF crowdfunding regulations.
The Option will (i) have an exercise price equal to the fair market value of the Common Stock on the date of grant, as determined by the Board, (ii) vest, subject to mutually agreeable terms to be decided by Company at the time of issuance, (iii) be subject to the terms and conditions of the Plan and applicable form of stock option agreement thereunder and (iv) provide you with 7 years to exercise any options. All sponsored content is indicated and the compensation for Tigress was at $1000 USD and 2000 stock options. All sponsored social media content is indicated and stated in the description. This disclosure is in compliance with Section 17(b) of the United States Securities Act of 1933.
Virtualities, Inc (the “Company”) has recently begun the process on engaging a crowdfunding campaign on Start Engine. This confirms that the Company intends to grant the an option (the “Option”) to purchase shares of Common Stock of the Company (the “Common Stock”) pursuant to the Company’s 2021 Equity Incentive Plan (the “Plan”) promptly subject to valuation reports with respect to the Company’s Common Stock in compliance with Internal Revenue Code Section 409A and CF crowdfunding regulations.
The Option will (i) have an exercise price equal to the fair market value of the Common Stock on the date of grant, as determined by the Board, (ii) vest, subject to mutually agreeable terms to be decided by Company at the time of issuance, (iii) be subject to the terms and conditions of the Plan and applicable form of stock option agreement thereunder and (iv) provide you with 7 years to exercise any options. All sponsored content is indicated and the compensation for Boethiah was at $500 USD and 1000 stock options. All sponsored social media content is indicated and stated in the description. This disclosure is in compliance with Section 17(b) of the United States Securities Act of 1933.
Virtualities, Inc (the “Company”) has recently begun the process on engaging a crowdfunding campaign on Start Engine. This confirms that the Company intends to grant the an option (the “Option”) to purchase shares of Common Stock of the Company (the “Common Stock”) pursuant to the Company’s 2021 Equity Incentive Plan (the “Plan”) promptly subject to valuation reports with respect to the Company’s Common Stock in compliance with Internal Revenue Code Section 409A and CF crowdfunding regulations.
The Option will (i) have an exercise price equal to the fair market value of the Common Stock on the date of grant, as determined by the Board, (ii) vest, subject to mutually agreeable terms to be decided by Company at the time of issuance, (iii) be subject to the terms and conditions of the Plan and applicable form of stock option agreement thereunder and (iv) provide you with 7 years to exercise any options. All sponsored content is indicated and the compensation for FitProVR was at $500 USD and 1000 stock options. All sponsored social media content is indicated and stated in the description. This disclosure is in compliance with Section 17(b) of the United States Securities Act of 1933.
Virtualities, Inc (the “Company”) has recently begun the process on engaging a crowdfunding campaign on Start Engine. This confirms that the Company intends to grant the an option (the “Option”) to purchase shares of Common Stock of the Company (the “Common Stock”) pursuant to the Company’s 2021 Equity Incentive Plan (the “Plan”) promptly subject to valuation reports with respect to the Company’s Common Stock in compliance with Internal Revenue Code Section 409A and CF crowdfunding regulations.
The Option will (i) have an exercise price equal to the fair market value of the Common Stock on the date of grant, as determined by the Board, (ii) vest, subject to mutually agreeable terms to be decided by Company at the time of issuance, (iii) be subject to the terms and conditions of the Plan and applicable form of stock option agreement thereunder and (iv) provide you with 7 years to exercise any options. All sponsored content is indicated and the compensation for Tech.Man.Ju was at $1000 USD and 2500 stock options. All sponsored social media content is indicated and stated in the description. This disclosure is in compliance with Section 17(b) of the United States Securities Act of 1933.
Virtualities, Inc (the “Company”) has recently begun the process on engaging a crowdfunding campaign on Start Engine. This confirms that the Company intends to grant the an option (the “Option”) to purchase shares of Common Stock of the Company (the “Common Stock”) pursuant to the Company’s 2021 Equity Incentive Plan (the “Plan”) promptly subject to valuation reports with respect to the Company’s Common Stock in compliance with Internal Revenue Code Section 409A and CF crowdfunding regulations.
The Option will (i) have an exercise price equal to the fair market value of the Common Stock on the date of grant, as determined by the Board, (ii) vest, subject to mutually agreeable terms to be decided by Company at the time of issuance, (iii) be subject to the terms and conditions of the Plan and applicable form of stock option agreement thereunder and (iv) provide you with 7 years to exercise any options. All sponsored content is indicated and the compensation for LSToast was at $2000 USD and 6000 stock options. All sponsored social media content is indicated and stated in the description. This disclosure is in compliance with Section 17(b) of the United States Securities Act of 1933.
Virtualities, Inc (the “Company”) has recently begun the process on engaging a crowdfunding campaign on Start Engine. This confirms that the Company intends to grant the an option (the “Option”) to purchase shares of Common Stock of the Company (the “Common Stock”) pursuant to the Company’s 2021 Equity Incentive Plan (the “Plan”) promptly subject to valuation reports with respect to the Company’s Common Stock in compliance with Internal Revenue Code Section 409A and CF crowdfunding regulations.
The Option will (i) have an exercise price equal to the fair market value of the Common Stock on the date of grant, as determined by the Board, (ii) vest, subject to mutually agreeable terms to be decided by Company at the time of issuance, (iii) be subject to the terms and conditions of the Plan and applicable form of stock option agreement thereunder and (iv) provide you with 7 years to exercise any options. All sponsored content is indicated and the compensation for XORoseGold was at $750 USD and 1000 stock options. All sponsored social media content is indicated and stated in the description. This disclosure is in compliance with Section 17(b) of the United States Securities Act of 1933.
Virtualities, Inc (the “Company”) has recently begun the process on engaging a crowdfunding campaign on Start Engine. This confirms that the Company intends to grant the an option (the “Option”) to purchase shares of Common Stock of the Company (the “Common Stock”) pursuant to the Company’s 2021 Equity Incentive Plan (the “Plan”) promptly subject to valuation reports with respect to the Company’s Common Stock in compliance with Internal Revenue Code Section 409A and CF crowdfunding regulations.
The Option will (i) have an exercise price equal to the fair market value of the Common Stock on the date of grant, as determined by the Board, (ii) vest, subject to mutually agreeable terms to be decided by Company at the time of issuance, (iii) be subject to the terms and conditions of the Plan and applicable form of stock option agreement thereunder and (iv) provide you with 7 years to exercise any options. All sponsored content is indicated and the compensation for BMFVR was 5000 stock options. All sponsored social media content is indicated and stated in the description. This disclosure is in compliance with Section 17(b) of the United States Securities Act of 1933.
All sponsored content is indicated and the compensation for ShearsyVR was $1500 USD. All sponsored social media content is indicated and stated in the description. This disclosure is in compliance with Section 17(b) of the United States Securities Act of 1933.
Virtualities, Inc (the “Company”) has recently begun the process on engaging a crowdfunding campaign on Start Engine. This confirms that the Company intends to grant the an option (the “Option”) to purchase shares of Common Stock of the Company (the “Common Stock”) pursuant to the Company’s 2021 Equity Incentive Plan (the “Plan”) promptly subject to valuation reports with respect to the Company’s Common Stock in compliance with Internal Revenue Code Section 409A and CF crowdfunding regulations.
The Option will (i) have an exercise price equal to the fair market value of the Common Stock on the date of grant, as determined by the Board, (ii) vest, subject to mutually agreeable terms to be decided by Company at the time of issuance, (iii) be subject to the terms and conditions of the Plan and applicable form of stock option agreement thereunder and (iv) provide you with 7 years to exercise any options. All sponsored content is indicated and the compensation for TnyBeats was at $500 USD and 2000 stock options. All sponsored social media content is indicated and stated in the description. This disclosure is in compliance with Section 17(b) of the United States Securities Act of 1933.
Virtualities, Inc (the “Company”) has recently begun the process on engaging a crowdfunding campaign on Start Engine. This confirms that the Company intends to grant the an option (the “Option”) to purchase shares of Common Stock of the Company (the “Common Stock”) pursuant to the Company’s 2021 Equity Incentive Plan (the “Plan”) promptly subject to valuation reports with respect to the Company’s Common Stock in compliance with Internal Revenue Code Section 409A and CF crowdfunding regulations.
The Option will (i) have an exercise price equal to the fair market value of the Common Stock on the date of grant, as determined by the Board, (ii) vest, subject to mutually agreeable terms to be decided by Company at the time of issuance, (iii) be subject to the terms and conditions of the Plan and applicable form of stock option agreement thereunder and (iv) provide you with 7 years to exercise any options. All sponsored content is indicated and the compensation for Otterworldly was at $1000 USD and 3500 stock options. All sponsored social media content is indicated and stated in the description. This disclosure is in compliance with Section 17(b) of the United States Securities Act of 1933.