Semiconductor performance today is limited by power delivery, not by the processing capacity within the microprocessor. Artificial Intelligence (AI) is requiring ever greater processing speed, driving a need for smaller and faster power supplies.
Empower Semiconductor, Inc. (“Empower”), a leader in semiconductor power management innovation, has developed the world’s fastest and smallest voltage regulators for powering semiconductors across a broad range of applications (cell phones, data centers and computing.
Empower has created the smallest and fastest semiconductor voltage regulators. They are up to 1,000x times faster, 3x smaller, and 30% more energy-efficient than competitors.
The Company received 5 customer “Design-ins” in 2023, with forecasted annual revenue potential of up to $20 million+. Empower now has a $366 million/year sales pipeline and visibility on over $1 billion/year when including its next generation products (details available under NDA).
Current Empower investors include venture investment entities of Samsung and Taiwan Semiconductor Manufacturing Company Limited (TSMC), the world’s largest semiconductor Manufacturer. Public semiconductor power management companies currently trade at +17x revenues (based on the market cap and P/E ratio of Monolithic Power Systems, Inc.)
Empower Semiconductor, Inc. (“Empower” or the “Company”) is issuing up to $3,000,000 in Convertible Promissory Notes (the “Securities”) to finance (i) ongoing development costs associated with the Crescendo platform (ii) research and development costs. Empower Feeder HoldCo, LLC (the “Issuer”) is issuing up to $3,000,000 of Series A Preferred Units for the purchase of the Securities and payment of certain issuance and management expenses.
Broader microchip applications, internet usage and related digital data transmittal are now increasing exponentially, particularly as AI applications proliferate.
Prevailing semiconductor power management technologies cannot meet this demand.
Semiconductors are facing significantly greater electrical power management challenges within their limited physical footprints resulting in transmission losses and decreased overall efficiency.
Heretofore, increased power demands have been met by using larger power delivery components - now often many times the size of the actual “footprint” of the processor.
Empower has created the next-generation semiconductor power management solution utilizing its proprietary Integrated Voltage Regulators (“IVRs”) and silicon capacitors (“ECAP”) resulting in significantly greater speed and efficiency within a dramatically smaller form factor.
Empower IVR technology, in conjunction with its ECAP silicon capacitors, enhance telecommunications and other consumer electronics applications such as mobile, 5G, AI, and data centers.
Empower's innovative design and patented technology successfully address the power challenges encountered in the Cloud, AI, and EV sectors.
IVR product lines are already funded, developed and ready for production, with ongoing research and development on mobile and high-current IVR solutions.
Founded in 2014, by specialists in semiconductor power management, to revolutionize power management within electronic devices.
Six years ground-breaking research resulting in nearly 100 patents, five developed products and two products in development as of Q1 2024
Empower IVR products are up to 1,000x faster, 10x smaller and 30% more efficient compared to current solutions.
Solved the power problem present in the Cloud, AI, and EV space, presenting a large business opportunity.
Robust sales pipeline, and infrastructure in place to ramp up production.
Security description – Up to $3,000,000 of Series A Preferred membership units (the “Series A Preferred”) of Empower Feeder HoldCo, LLC, (“Holdco”) a special purpose vehicle organized for the sole purpose of acquiring newly issued convertible promissory notes of Empower (“Convertible Notes”) and passing investment returns to Holdco investors.
Maturity - 4/30/2025, estimated
Convertibility (see Security Terms below):
Automatic conversion – Upon $5,000,000 or greater equity financing at 20% discount, capped at $250,000,000.
Voluntary conversion – Upon a holder majority vote, on the same discount terms as above.
Maturity conversion – Conversion into outstanding Series C-2 Preferred Stock of Empower, at the original issue price.
Interest (pay in kind) – 6.0% cumulative, but not compound, annual preferred return
Sale of the business – Pro rata distribution of net sale proceeds from the sale of Empower to another company. If the sale is consummated while the Convertible Notes are outstanding, the applicable sales price will result in a 2X return of principal plus all accrued interest.
Initial Public Offering (IPO)- Assuming Convertible Note conversion, and following an IPO and any related “lock-up” required by the underwriter, a pro rata distribution of publicly registered common equity of Empower.
Limited commercial application: Semiconductor development is a very deliberate process with a high degree of collaboration and oversight by customers. Though Empower has now received 5 “design-ins” with major customers, product launches are now at the very early stage and performance is yet to be proved at commercial scale.
Additional capital requirement: Empower may need more capital than its currently projects to execute its business plans. If unable to do so, the company will limit its ability to continue operations and may need to sell its proprietary technology under less-than-optimal terms.
Competition: Some of Empower’s competitors may operate their own fabrication facilities, have longer operating histories, larger customer bases, more comprehensive IP portfolios and patent protections, new and designs and more design wins, and greater financial, sales, marketing, and distribution resources than Empower does.
Defective Products: Even after being proven in at commercial scale, the Company’s hardware and software product offerings are complex and may contain defects or security vulnerabilities, or experience failures or unsatisfactory performance due to any number of issues in design, fabrication, packaging, materials and/or use within a system.
Additional risk factors: See Risk factors section below
Empower was founded in 2014 to fundamentally improve efficiency in power delivery for data-intensive applications.
Based in San Jose, CA and led by a team of highly experienced industry experts and executives, the Company has created the world's fastest and smallest voltage regulators.
Empower’s product suite is designed to replace Power Management-Integrated Circuits (“PMIC”) with its smaller, faster, and more efficient Integrated Voltage Regulators (“IVR”).
Empower’s IVR technology has applications across the information technology industry and provides power management solutions for rapidly growing industries including AI processing, autonomous vehicles, and high-performance computing.
Targeted customers may include companies such as Amazon, Microsoft, Tesla, AMD, Nvidia, and Intel among many others.
Empower products are dramatically ahead of competitors on fundamental benchmarks.
In May 2024, samples of the Crescendo platform will become available for evaluation. Even before this date, over ten potential customers had begun system designs, studies, and simulations to be ready for sample release. The platform targets programs with a peak annual revenue in excess of $1.2 billion and is scheduled for fully qualified production in the latter half of 2025.
Thorough competitor studies have confirmed Crescendo's performance superiority, solidifying its position as the preferred solution. This is particularly significant when considering the stature of competitors like Monolithic Power Systems, a company generating revenues exceeding $1.8 billion dollars and with a market capitalization of ~$31 billion.
A customer considering the implementation of the Crescendo platform for extensive projects is a major EV company. Specifically, Crescendo stands out as a significant improvement to current solutions they are considering.
Empowers product suite consists of their patented IVR and ECAP technology.
Empower’s patented IVR technology eliminates dozens of discrete components by using a single integrated circuit with greater efficiency and 10x reduction in printed circuit board (“PCB”) area.
IVR is up to 1,000x faster, 10x smaller, and between 10% and 30% more efficient than other PMICs.
E-CAP is a vastly superior performing capacitor, far exceeding the semiconductor industry’s previously leading multi-layer ceramic capacitors.
Product families have industry-leading specification across the entire $10 billion IVR market.
Because IVR uses an integrated system, it should realize a 50% higher ASP compared to standard PMICs, and approximately 60% margin
Empower’s solution offers up to 10x reduction in size, coupled with high efficiency and speed, effectively eliminating the "last inches" of power loss. This results in up to 30% energy savings and more than 20% faster throughput. This achievement drives a forecast $11.5 billion opportunity for Empower by 2025.
Global semiconductor sales reached $526.8 billion in 2023(1) The global semiconductor market is estimated to increase to $588 billion in 2024(2).
Within the Semiconductor Market Sector, Empower has identified opportunities in data centers, communications (5G), Electronic Vehicles, Mobile Phones, Virtual Reality, and the Internet of Things.
Empower’s serviceable market is estimated to be $10 billion by 2025.
(1) Semiconductor Industry Association. Available from link
(2) Deloitte. Available from link.
Empower Feeder HoldCo, LLC (the “SPV”) is offering up to $3,000,000 of Series A Preferred membership units (the “Series A Preferred”) for the acquisition of convertible promissory notes (the “Convertible Notes”) of Empower Semiconductor, Inc. (the “Company”).
The Term Sheet below summarizes the terms and conditions of the Series A Preferred to be issued by the SPV, with the terms and conditions of the Convertible Notes summarized in the “Term Sheet – Convertible Notes” section following.
Series A Preferred membership units (the “Series A Preferred”) of Empower Feeder HoldCo, LLC (the “SPV”), a special purpose vehicle organized in North Carolina by Carolina Financial Group, LLC (the “Manager”) for the sole purpose of acquiring the convertible promissory notes (the “Convertible Notes”) of Empower Semiconductor, Inc. (“Empower”), a Delaware corporation.
Up to $3,000,000. $25,000 minimum individual participation
The SPV will accept funds from purchasers of the Series A Preferred (the “Investors”) on a continuous basis.
No less than 90% of the funds received by the SPV through the sale of the Series A Preferred will be utilized for the purchase of Convertible Notes of Empower.
Up to 10% of the funds received by the SPV in the Offering (the “Management Reserve”) may be retained by the Manager for the payment (i) out-of-pocket expenses incurred in the management of the SPV, and (ii) a monthly management fee of $2,500. The Management Reserve available to the Manager shall not exceed $100,000 at any point in time.
When Investor’s funds are used to purchase a Convertible Note of the Company, the SPV shall maintain a ledger linking each Convertible Note it purchases from the Company with the Investor’s whose funds were utilized for such purchase (each an “Assigned Convertible Note”)
Investors will be the sole members of the SPV, with the aggregate capital contributions by such Investors representing the fully diluted, post-money valuation of the SPV, not to exceed $3,000,000.
The Series A Preferred will carry a cumulative, but not compounding, annual preferred return of 6% (the “Accruing Preferred Return”), payable upon liquidation or upon the discretion of the Manager.
The Accruing Preferred Return for each Investor shall cease to accumulate upon the conversion of such Investor’s Assigned Convertible Note and the SPV’s Operating Agreement shall be amended to mirror the terms of the security such Investor’s Assigned Convertible Note is converted into, if any.
Any and all distributions by the SPV, whether during its operations or following a liquidation, dissolution, winding up of its business shall be made in the following order, with each category being paid in full until distributions can be made to the following category:
First, to the holders of the Series A Preferred, on a pro rata and pari passu basis, up to the amount of their accrued but unpaid Accruing Preferred Return;
Second, to the holders of the Series A Preferred, on a pro rata and pari passu basis, until their unreturned capital contributions are reduced to zero;
Thereafter, and only if immediately prior to any such distribution each Investor has earned an internal rate of return (“IRR”, as further described under “Internal Rate of Return, or IRR”) of at least 15.00%, 85% to the holders of Series A Preferred, on a pari passu basis, and 15% to the Manager (the “Manager Carry”), with such distributions to the holders of the Series A Preferred and the Manager being made on a pari passu basis. If, immediately prior to any such distribution any Investor has not earned a 15.00% IRR, 100% of funds available for such distribution to the holders of the Series A Preferred, on a pari passu basis.
The Series A Preferred shall not have voting rights in the management of the SPV.
So long as Series A Preferred issued in the transaction are outstanding, the SPV will not, without the written consent of the Requisite Holders, either directly or by amendment, merger, consolidation, recapitalization, reclassification, or otherwise:
(i) liquidate, dissolve or wind up the affairs of the SPV or effect any Deemed Liquidation Event; (ii) amend, alter, or repeal any provision of the SPV’s Operating Agreement in a manner adverse to the Series A Preferred; (iii) create or authorize the creation of or issue any other security convertible into or exercisable for any equity security unless the same ranks junior to the Series A Preferred with respect to its rights, preferences and privileges, or increase the authorized number of units of Series A Preferred.
In addition to certain rights pertaining to the Company (see Company Information Rights below) Investors will be entitled to an unaudited balance sheet of the SPV, along with an accounting of the balance of such Investor’s Assigned Convertible Note, each on a quarterly basis.
Upon the execution of a Non-Disclosure Agreement and a Side Letter, Investors shall be entitled to the receipt of the following financial statements, to be made available by the SPV Manager upon receipt from the Company:
Within 120 days of fiscal year end, an unaudited balance sheet and unaudited statements of income and cash flows for such fiscal year, along with a statement of stockholders’ equity as of the end of such year;
Within 45 days of the end of each of the first three quarters of the Company’s fiscal year, unaudited statements of income and cash flows for such fiscal quarter, along with an unaudited balance sheet and a statement of stockholders’ equity as of the end of such quarter;
Within 45 days of the end of each of the first three quarters of the Company’s fiscal year, a statement showing the number of shares of each class and series of capital stock and securities convertible into or exercisable for shares of capital stock outstanding at the end of the period;
Within 30 days of the end of each month, an unaudited income statement and statement of cash flows for such month, along with an unaudited balance sheet and statements of stockholders’ equity as of the end of such month.
“Internal Rate of Return”, or “IRR” will be utilized as a trigger to determine whether the Manager will be entitled to the Management Carry in any given distribution. Each Investor’s IRR immediately prior to such distribution will be calculated as follows:
The IRR figure described herein is used solely as a trigger provision for the Management Carry and shall not be implied to represent a promised or expected rate of return for any Investor in the Offering.
The SPV was created for the purpose of enabling an investment in the Convertible Notes by individual accredited investors. As such, the Manager retains full discretion to treat any and all matters in the management of the SPV as if any individual investor in the SPV had been a direct investor in the Convertible Notes of the Company. Please see Pass-Through Vehicle Risk under the Risk Factors section of this document.
Carolina Financial Group, LLC will act as the sole manager of the SPV. For such services, the Manager will be entitled to (i) “Monthly Management Fee” of $2,500, and (ii) the Management Carry.
The Manager may hold up to 10% of the funds received in the Offering for the payment of the Monthly Management Fee and any out-of-pocket expenses incurred in the management of the SPV.
Carolina Financial Securities, LLC (“CFS”), an affiliate of the Manager, shall be entitled to a “Placement Fee”) equal to 4% of the aggregate funds received by the SPV in the Offering, with such Placement Fee being payable by the Company upon receipt of funds for the purchase of Convertible Notes by the SPV. CFS may share up to 50% of the Placement Fee with Carofin, LLC, an affiliated broker-dealer for its assistance in the placement of the Series A Preferred.
Convertible Promissory Notes (the “Convertible Notes”) of Empower Semiconductor, Inc., a Delaware corporation (the “Company”).
Up to $10,000,000 in the aggregate, with up to $3,000,000 being offered to the SPV.
Working capital and general corporate purposes.
Simple interest equal to 6% per annum.
12 months following the first closing and acceptance of subscriptions by the Company (the “Initial Closing”).
Twenty percent (20%)
$250,000,000.
Upon the nest sale of the Company’s capital stock or other equity securities in one private placement or a series of related private placement transactions in which the aggregate proceeds to the Company (exclusive of the Convertible Notes and other convertible promissory notes of the Company) exceed $5,000,000 (a “Qualified Financing”), the outstanding principal amount and all accrued but unpaid interest under the Convertible Notes shall be converted into shares of the Company’s capital stock sold in the Qualified Financing at a price per share equal to the Conversion Price, as further defined herein.
If the Company consummates an issuance and sale of shares of its equity securities to investors in a bona fide equity financing that is not a Qualified Financing (a “Non-Qualified Financing”), then the outstanding principal and any accrued but unpaid interest under the Convertible Notes shall, at the option of the holders of a majority of the outstanding principal amount of all Convertible Notes then outstanding (the “Holder Majority”), convert into shares of such equity securities on the same terms and subject to the same conditions as are applicable in such Non-qualified Financing and at a price per share equal to the Conversion Price.
In the event the Company does not consummate a Qualified Financing on or before the Maturity Date, then the outstanding principal and any accrued but unpaid interest under the Convertible Notes shall, at the option of the Holder Majority, convert into shares of the Company’s Series C-2 Preferred Stock, or any shares issued in exchange therefor (the “Series C-2 Preferred”) at a per share price equal to the original issue price of the Series C-2 Preferred. The Company’s charter and the Investor Rights Agreement governing the terms of the Series C-2 Preferred are available in the diligence files for the Offering.
The term “Conversion Price” shall mean the lower of (i) eighty percent (80%) of the lowest per share cash selling price of shares of equity securities sold in a Qualified Financing or Non-Qualified Financing, as applicable, and (ii)the price per share obtained by dividing (A) $250,000,000 by (B) the number of shares of outstanding Common Stock of the Company as of immediately prior to the initial closing of the Qualified Financing or Non-Qualified Financing, as applicable (assuming conversion of all securities convertible into Common Stock, exercise of all outstanding options and warrants to purchase Common Stock, and including the shares reserved or authorized for issuance under the Company’s stock option plan (including any expansion or increase in the plan in connection with the Qualified or Non-Qualified Financing, as applicable) but excluding, for this purpose, both (x) the conversion of the Convertible Notes and (y) the conversion of all other outstanding convertible debt and SAFEs including, without limitation, all outstanding convertible promissory notes, SAFEs and similar instruments as of immediately prior to the initial closing of the Qualified Financing or Non-Qualified Financing, as applicable).
In the event of a sale of the Company prior to full payment or conversion of the Convertible Notes, then the holders thereof shall receive, in preference to any payment to any holder of the Company’s capital stock (or securities convertible into such capital stock) a cash payment from the Company from the proceeds of the sale of the Company equal to the sum of (i) two times (2x) the principal amount and (ii) one time (1x) the accrued interest.
The Company may not prepay the Convertible Notes without the consent of the Holder Majority.
Any provision of the Convertible Notes or the Note Purchase Agreement governing the acquisition of the Convertible Notes may be amended or waived by the Holder Majority.
No Convertible Notes may be assigned, conveyed, or transferred without the prior written consent of the Holder Majority, except for transfers to certain persons described in the Convertible Note.
A) Associated Risks
Management is unable to achieve sales targets, or experiences cost overages.
Scaling of early-stage companies is challenging, and there are often unforeseen costs and difficulties. Substantial cost overages or operational obstacles could result in bankruptcy and a full loss of invested capital.
AN INVESTMENT IN THE NOTES IS SPECULATIVE AND IS SUITABLE ONLY FOR PERSONS OF SUBSTANTIAL FINANCIAL MEANS WHO CAN AFFORD TO LOSE THEIR ENTIRE INVESTMENT AND HAVE NO NEED FOR LIQUIDITY IN THIS INVESTMENT. AN INVESTMENT IN THE SECURITIES OFFERED HEREIN SHOULD NOT BE A MAJOR PART OF YOUR INVESTMENT PORTFOLIO. YOU SHOULD REVIEW THE RISKS OF THIS INVESTMENT WITH YOUR LEGAL OR FINANCIAL ADVISORS.
THIS OFFERING INVOLVES SUBSTANTIAL RISKS. THESE RISKS INCLUDE, BY WAY OF ILLUSTRATION AND NOT LIMITATION, THE FOLLOWING: RISKS ASSOCIATED WITH THE FACT THAT THE MEMBERS WILL NOT HAVE THE RIGHT TO VOTE ON OR APPROVE MOST DECISIONS REGARDING THE BUSINESS AND, AS SUCH, WILL NOT BE IN CONTROL OF THEIR INVESTMENTS IN NOTES OF THE COMPANY AND THE BUSINESS; AND THE OPERATION OF THE COMPANY INVOLVES TRANSACTIONS BETWEEN THE COMPANY, THE MANAGER, AND THE OWNER WHICH MAY INVOLVE CONFLICTS OF INTEREST.
THE NOTES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT, AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM, AND WITH THE PRIOR CONSENT OF THE MANAGER, WHICH CONSENT MAY BE WITHHELD IN THE MANAGER’S SOLE DISCRETION. PROSPECTIVE INVESTORS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
SOME OF THE INFORMATION IN THIS PRESENTATION MAY CONTAIN “FORWARD-LOOKING” STATEMENTS. YOU CAN IDENTIFY SUCH STATEMENTS BY THE USE OF FORWARD-LOOKING WORDS SUCH AS “MAY,” “ANTICIPATE,” “ESTIMATE,” “COULD,” “SHOULD,” “WOULD,” “EXPECT,” “BELIEVE,” “WILL,” “PLAN,” “INTEND,” “PROJECT,” “PREDICT,” “POTENTIAL” OR OTHER SIMILAR WORDS. THESE TYPES OF STATEMENTS DISCUSS FUTURE EXPECTATIONS OR CONTAIN PROJECTIONS OR ESTIMATES WHICH MAY OR MAY NOT HAPPEN AS PROJECTED HEREIN. WHEN CONSIDERING SUCH FORWARD-LOOKING STATEMENTS, YOU SHOULD KEEP IN MIND THE RISK FACTORS LISTED BELOW, WHICH COULD CAUSE THE COMPANY’S ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTAINED IN ANY FORWARD-LOOKING STATEMENT.
YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS IN CONJUNCTION WITH THE OTHER INFORMATION ABOUT THE NOTES BEFORE PARTICIPATING IN THIS OFFERING. THE RISKS DISCUSSED IN THIS PRESENTATION CAN ADVERSELY AFFECT THE COMPANY’S OPERATION, OPERATING RESULTS, FINANCIAL CONDITION AND PROSPECTS FOR SUCCESS. THIS COULD CAUSE THE VALUE OF THE SECURITIES OFFERED HEREIN TO DECLINE AND COULD CAUSE YOU TO LOSE PART OR ALL OF YOU INVESTMENT. THE RISKS AND UNCERTAINTIES DESCRIBED BELOW ARE NOT THE ONLY ONES THE COMPANY FACES BUT DO REPRESENT THOSE RISKS AND UNCERTAINTIES KNOWN TO THE COMPANY AND THAT THE COMPANY BELIEVES ARE MATERIAL TO THE COMPANY’S FUTURE OPERATING PERFORMANCE.
The Securities being offered should be considered a speculative investment. The ability of the Company to achieve its objectives may be determined by factors beyond its control that cannot be predicted at this time. Consequently, there can be no assurance that the Company’s efforts to continue its business operations will prove to be sufficient to enable the Company to generate the funds required to make distributions. Anyone investing in the Securities should do so only if they are financially able to sustain the loss of their entire investment and should recognize that such a possibility exists.
As this security is a private transaction, there is currently no public market for the securities being offered herein. These Securities are not a publicly registered securities and will have no secondary sale liquidity.
The Company has a limited history of operations upon which an evaluation of the Company’s business and prospects can be based. No assurances can be given that the Company will ever be profitable or generate revenues sufficient to make distributions. This makes evaluating the Company’s business operations and validating its financial projections difficult. In assessing the Company’s prospects, a potential investor must consider the risks and difficulties frequently encountered by early-stage companies. These risks include the Company’s ability to: raise sufficient capital to fund operations, and other general corporate purposes; manage changing and expanding operations; establish and increase awareness of the Company’s brand and strengthen loyalty among prospective customers; implement and successfully execute the Company’s business and marketing strategies; respond effectively to competitive pressures and developments; continue to enhance the Company’s products and services; and attract, retain and motivate qualified personnel. The Company’s failure in any of these areas could adversely affect the Company’s financial condition and results of operation.
Semiconductor development is a very deliberate process with a high degree of collaboration and oversight by customers. Though Empower has now received 5 “design-ins” with major customers, product launches are now at the very early stage and performance is yet to be proved at commercial scale.
Even after being proven in at commercial scale, the Company’s hardware and software product offerings are complex and may contain defects or security vulnerabilities, or experience failures or unsatisfactory performance due to any number of issues in design, fabrication, packaging, materials and/or use within a system.
There is a possibility of changes in general economic conditions in the countries where the Company’s products are sold or used, in particular China.
The success of The Company is dependent on the nature and success of the semiconductor industry. The highly cyclical nature of the semiconductor industry, increased competition due to industry consolidation, or a decline in the semiconductor market and related markets could adversely affect the performance of The Company.
The Company’s dependence on the Asian markets for its customer base and reliance on manufacturing operations in China may expose them to political, cultural, regulatory, economic, foreign currency and operational risks.
Changes in international trade policy, such as tariffs on imports of foreign goods and regulations restricting the export of goods and services between the U.S. and China may impact The Company adversely.
Changes in general demand for electronic products as a result of worldwide macroeconomic conditions, and the seasonality and variability in the end markets that The Company serves may influence operations.
The Company’s success is influenced by competitors’ ability to timely develop and introduce new products, and the acceptance of their own products in the marketplace. Competition from companies with greater financial and technological resources and customers developing products internally could also influence The Company’s success.
Availability of adequate manufacturing capacity from suppliers can impact The Company’s ability to increase product sales and revenue. The Company also depends on third-party suppliers for wafer purchases. Potential increases in pricing can result from capacity shortages.
The Company expects to continue to grow its overall operations and this may strain the Company’s resources. Any inability to manage growth effectively would have a material adverse effect on the Company’s business.
Due to the size of the organization, the Company has a significant reliance on certain key employees. If the Company is unable to retain key employees it could jeopardize the Company’s ability to implement its business plan, its relationships with its customers, and its financial stability.
The impact of system upgrades, cyber attacks or other system security, data protection and privacy breaches on business operations could materially impact the success of The Company.
The ability of the Company to successfully defend themselves in legal proceedings and protect their intellectual property, and the significant increase in legal expenses as a result of such proceedings could impact the Company.
Empower may need more capital than its currently projects to execute its business plans. If unable to do so, the company will limit its ability to continue operations and may need to sell its proprietary technology under less-than-optimal terms.
The Company reserves the right to accept or reject any proposed investment in its sole discretion. Subject to this discretion, it intends to accept investments on a “first-come, first-served” basis, with the consequence that Investors will be allocated a portion of the total Offering, based upon the amounts they have committed, in the order in which such commitments have been accepted. The Borrower is not required to accept all commitments tendered to it. There is no assurance, therefore, that your commitment will necessarily be accepted in whole or in part by it should it raise more or less funds than are needed to make its investments.
The financial projections contained in this Offering Summary and any supplements represent the Company’s estimated results of operations. The financial projections have been prepared upon the basis of assumptions and estimates which may differ from actual events and/or circumstances.
The Company has not requested and will not request any tax ruling from the IRS regarding the tax consequences of the Company’s activities. Accordingly, there is no certainty as to the tax consequences of participating in the Security. The Company has not sought or obtained a legal opinion with respect to the tax treatment of the offering proceeds or issuance of the Security. Accordingly, Investors are urged to consult your own tax advisor with respect to the federal and state tax consequences arising from participation in this Offering.
There is a possibility that the IRS will audit the Company’s income tax returns. If the Company’s income tax returns are audited, your return might also be audited.
No assurance can be given that the current Congress or any future Congress will not enact federal income tax legislation that could adversely affect the tax consequences of participating in the Offering.
Potential investors should not rely exclusively on one aspect of the security structure when making an investment decision on whether or not to participate in this Offering.
The effect of epidemics and pandemics, such as the COVID-19 pandemic, could have material and adverse effects on the business of the company.
In addition to the above risks, businesses are often subject to risks not foreseen or fully appreciated by management. Prospective investors reviewing this Offering Summary should keep in mind other possible risks that could be important to the success of their investment in the Notes
A Carofin representative will be in touch soon.
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Our firms do not hold any investor cash or securities, and securities offered by us often have no easily assessable market value, so our firms will not monitor the market value of your investment on an ongoing basis. An affiliate of CFS and Carofin, CFG Financial Services, does, however, act as administrative agent for many offerings we bring to market. In this role, CFG Financial Services will monitor an issuer’s compliance with its obligations, make distributions of periodic payments, and, when necessary, intervene in the event that things are not going to plan. When this happens, CFG Financial Services is often compensated by part of the proceeds recovered in settlement or bankruptcy proceedings, which may reduce the return on your investment.
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Given that our placement fees are payable by the issuer, the full amount of your investment will be used to purchase debt or equity securities, even though a certain amount of the proceeds may be immediately redirected by the issuer to CFS and Carofin as placement fees.
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Proprietary Products: Our firms will often present investments that are only available though them, which may result in a higher placement fee.
Management Fees: Our firms will often present investments in which Carolina Financial Group, LLC an affiliate of CFS and Carofin, acts a manager of the company. CFG will often be compensated for such services.
Warrant Position: Our firms will often receive a warrant (an option to purchase an equity security in the future, for a defined price) for certain securities. Given that our firms, or other equity holders in the company, may have an investment time horizon that differs from yours, this may create a conflict of interest.
Equity Trust Company Relationship: Carofin and Equity Trust Company (“ETC”) have entered into an agreement by which Carofin exclusively promotes ETC’s services as IRA custodian, in exchange for the sharing of certain Carofin content by ETC. You can learn more about the services ETC offers, along with the fees associated with such services, at trustetc.com.
Conversation Starters:Our firms have different compensation structures.
CFS financial professionals, which are often the individuals working with the company to structure an appropriate security, receive a percentage of the placement fee received by CFS in the investments they structure. Therefore, these professionals have an interest in presenting you with the investments they have structured.
Carofin financial professionals, on the other hand, are the individuals responsible for understanding and presenting these investments to you. While Carofin professionals are compensated through discretionary bonuses, they may have an interest in presenting you with investments which may result in a higher placement fee to the firm overall.
Yes. You have access to a free and simple tool to research our firms and financial professionals at Investor.gov/CRS.
Conversation Starters:You may learn more about our brokerage services and request a copy of this relationship summary at Carofin.com. You may also contact us directly at 828.393.0088 or compliance@carofin.com to request up-to-date information and a copy of this relationship summary. We also encourage you to visit our Knowledge Base for additional educational information on private investments.
Conversation Starters:Form CRS – October 12th, 2020, Ver. 2.0
PRIVATE PLACEMENTS ARE HIGH RISK AND ILLIQUID INVESTMENTS. AS WITH OTHER INVESTMENTS, YOU CAN LOSE SOME OR ALL OF YOUR INVESTMENT.
Securities offered through Carofin, LLC. Carofin, LLC and Carolina Financial Securities, LLC are affiliated Broker-Dealers, Members of FINRA/SIPC, and subsidiaries of Carolina Financial Group, LLC. For more information on the services we offer and details associated with such services, please see our Customer Relationship Summary.
This site is published for residents of the United States only. Representatives may only conduct business with residents of the states and jurisdictions in which they are properly registered. Therefore, a response to a request for information may be delayed until appropriate registration is obtained or exemption from registration is determined. Not all services referenced on this site are available in every state and through every advisor listed. For additional information, please contact Craig Gilmore at 828.393.0088 x 520 and/or cgilmore@carofin.com
The information contained herein is for informational purposes only and is not intended for further distribution. The information does not constitute a complete description of any investment or investment performance. This webpage is in no way a solicitation nor is it an offer to sell securities nor is it advice or recommendation regarding any investment. The information is not directed to any person who is not believed to qualify under the definition of an Accredited Investor under the rules of Regulation D of the 1933 Securities and Exchange Act. No security listed on this webpage or otherwise offered through Carofin, LLC may be purchased without prior receipt of a complete Private Placement Memorandum or other official offers of sale.
Carolina Financial Securities and Carofin only offer one type of alternative investment, those sold as private placements. Nothing on this website should be interpreted to state or imply that past results are an indication of future performance nor should it be interpreted that FINRA, the SEC or any other securities regulator approves of any of these securities. Additionally, there are no warranties expressed or implied as to accuracy, completeness, or results obtained from any information provided on this website. Investing in private securities transactions bears risk, in part due to the following factors: there is no secondary market for the securities; there is credit risk; where there is collateral as security for the investment, its value may be impaired if it is sold.
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