2019 Report atlasGO

Filed on April 24, 2020

We are an early stage company and have only generated marginal profits. Atlas Unlimited Inc. was formed in 2016. Accordingly, the company has a limited history upon which an evaluation of its performance and future prospects can be made. Our current and proposed operations are subject to all the business risks associated with new enterprises. These include likely fluctuations in operating results as the company reacts to developments in its market, managing its growth and the entry of competitors into the market.

We rely on the work of our personnel and will continue to do so increasingly into the future. Competition for highly skilled personnel, especially engineering and data analytics personnel, is extremely intense, and we could face difficulty identifying and hiring qualified individuals in many areas of our business. We may not be able to hire and retain such personnel at compensation levels consistent with our compensation and salary structure. Many of the companies with which we compete for experienced employees have greater resources than we have and may be able to offer more attractive terms of employment. In particular, candidates making employment decisions, specifically in high-technology industries, often consider the value of any equity they may receive in connection with their employment. Any significant volatility in the value, or the perceived market value, of our stock after any offering may adversely affect our ability to attract or retain highly skilled technical, financial, marketing, or other personnel.

We depend heavily on our relationships and our reputation to attract corporate partners as well as charities that benefit from our business, many of whom we reach either through our limited networks or by word of mouth. If for any reason our reputation suffers, we may face difficulties attracting such partners, which could in turn affect our ability to generate revenue and continue to operate our business. If our reputation suffers, we will also face difficulty in attracting additional investors.

As our business scales volume of work increases, we will require increasing amounts of capital to build our operations. We have to carefully manage capital to generate significant revenue and be profitable. This need for capital will require us to find additional investors. Our inability to attract sufficient capital at all or on favorable terms will impact our ability to grow and remain in business.

Any valuation at this stage is difficult to assess. The valuation cap for the offering was established by the company. Unlike listed companies that are valued publicly through market-driven stock prices, the valuation of private companies, especially startups, is difficult to assess and you may risk overpaying for your investment.

We operate in a fairly regulated industry. We may be subject to regulation and failure to comply with such regulation could have an adverse effect on our business. In addition, some of the restrictions and rules applicable to potential subsidiaries in other countries could adversely affect and limit some of our business plans in the future.

Because the company’s business fundamentally involves a platform in which end-users of the platform track their physical performance, and because the company organizes physical events, such as group running events, there is a risk of personal injury or property damage that could arise while individuals use the platform or during an event organized by the company. While we strive to limit such risks through the use of insurance, contractual waivers, and other precautionary steps, it is possible that the company could have significant liability that arises as a result of any such personal injury or property damage that occurs while individuals use the platform or during an event organized by the company.

In the event we are required or decide to register as a commercial fundraiser, commercial coventurer, or other similar type of registration that may be required for a business that assists charities with raising funds for their work, our current business model could be affected. Under our current structure, we believe we are not required under federal, state, local, and international laws to register as a commercial fundraiser, commercial coventurer, or other similar type of registration that may be required for a business that assists charities with raising funds for their work; however, the regulations for commercial fundraisers, commercial coventurers, and other similar type of registrations come from a patchwork of federal, state, local, and international laws and we may not be aware of legal requirements that may apply to our business. Further, we may decide for business reasons or we may be required to register as a commercial fundraiser, commercial coventurer, or other similar type of registration that may be required for a business that assists charities with raising funds for their work, which would increase our costs, especially our costs associated with compliance with such requirements and our business model and revenue may be significantly adversely impacted by such requirements. If we are required but decide not to register as a commercial fundraiser, commercial coventurer, or other similar type of registration that may be required for a business that assists charities with raising funds for their work, we may not be able to continue to operate under our current business model, which could have a significant adverse impact on our revenue and our ability to continue business operations.

We receive, collect, process, transmit, store and use a large volume of personally identifiable information and other sensitive data users. There are federal, state, and foreign laws regarding privacy, and the storing, sharing, use, disclosure, and protection of personally identifiable information and sensitive data. Specifically, personally identifiable information is increasingly subject to legislation and regulations to protect the privacy of personal information that is collected, processed, and transmitted. Any violations of these laws and regulations may require us to change our business practices or operational structure, address legal claims, and sustain monetary penalties, or other harms to our business.

The regulatory framework for privacy issues in the United States and internationally is constantly evolving and is likely to remain uncertain for the foreseeable future. The interpretation and application of such laws is often uncertain, and such laws may be interpreted and applied in a manner inconsistent with other binding laws or with our current policies and practices. If either we or our third-party service providers are unable to address any privacy concerns, even if unfounded, or to comply with applicable laws and regulations, it could result in additional costs and liability, damage to our reputation, and harm to our business.

Further, changes in laws or regulations or the regulatory application or judicial interpretation of the laws and regulations applicable to us could adversely affect our ability to operate in the manner in which we currently conduct business or make it more difficult or costly for us to operate our business. A material failure to comply with any such laws or regulations could result in regulatory actions, lawsuits, and damage to our reputation, which could have a material adverse effect on our business and financial condition and our ability to operate our business.

We are dependent on general economic conditions. Our business model is dependent on companies investing in employee engagement, cause marketing campaigns and corporate social responsibility programs. Our business model is thus dependent on national and international economic conditions. Adverse national and international economic conditions may reduce the future availability of corporate and private donations as well as investments of corporations in cause marketing and employee engagement campaigns, which would negatively impact our revenues and possibly our ability to continue operations. It is not possible to accurately predict the potential adverse impacts on the company, if any, of current and future economic conditions on its financial condition, operating results and cash flow

We currently use third-party service providers to handle many components of our operations. These service providers may themselves rely on third-party data center hosting facilities or other service providers. The continuous availability of our service depends on the operations of these service providers, on data facilities, on a variety of network service providers, on third-party vendors, and on data center operations staff. In addition, we depend on the ability of our third-party providers to protect the facilities against damage or interruption from natural disasters, power or telecommunications failures, criminal acts, and similar events. If there are any lapses of service or damage to the facilities, we could experience lengthy interruptions in our service as well as delays and additional expenses in arranging new service providers and services. Even with current disaster recovery arrangements, our business could be harmed.

Design and mechanical errors or failure to follow operations protocols and procedures could cause our systems to fail, resulting in interruptions in our platform. Any such interruptions or delays, whether as a result of third-party error, our own error, natural disasters, or security breaches, whether accidental or willful, could harm our relationships with customers and cause our revenue to decrease and/or our expenses to increase. These factors in turn could further reduce our revenue and subject us to liability, which could materially adversely affect our business.

The company may never receive further investment, and even if it is able to raise further investment, such investment may not qualify as an “Equity Financing” as defined in the Simple Agreement for Future Equity (“SAFE”). In the event that the company does not ever enter into a future Equity Financing, the SAFE investors do not have any right to covert their SAFE into equity securities of the company unless there is a “Liquidity Event” (as defined in the SAFE). And in such case, the company may not offer the option for SAFE investors to convert the SAFE into equity securities of the company.

In addition, the company may never undergo a Liquidity Event such as a sale of the company or an IPO. If neither the conversion of the SAFE nor a liquidity event occurs, the Purchasers could be left holding the SAFE in perpetuity. Upon a “Dissolution Event” (as defined in the SAFE), such as the dissolution of the company prior to conversion of the SAFE, it is possible that the company will not have sufficient funds, or any funds, available to return the investment to SAFE investors. Further, the company has the right to return the capital received by the SAFE investor if the company believes it would be required to register a class of its securities under the Securities Exchange Act of 1934 and if the fair market value of the SAFE is determined to be less than the amount invested via the SAFE.

The SAFE has numerous transfer restrictions and will be highly illiquid, with no secondary market on which to sell them. The SAFE does not grant equity interests, has no ownership rights, has no rights to the company’s assets or profits and has no voting rights or ability to direct the company or its actions.

Unlike a traditional SAFE, the SAFE offered through WeFunder in the present offering includes significant delegation of rights of the investor to a “Designated Lead Investor” (as defined in the SAFE) selected by the company, and to the company’s CEO. Specifically, and as more comprehensively explained in the SAFE, the SAFE investor irrevocably delegates the right for the Designated Lead Investor to do each of the following on behalf of the SAFE investor: (i) give and receive notices and communications on behalf of the investor, (ii) execute any instrument or document that the Designated Lead Investor determines is necessary or appropriate in the exercise of its authority under the SAFE, and (iii) take all actions necessary or appropriate in the judgment of the Designated Lead Investor for the accomplishment of the foregoing. In addition, and as more comprehensively explained in the SAFE, the SAFE investor irrevocably delegates the right for the CEO to do each of the following on behalf of the SAFE investor: (i) vote all shares of the “Capital Stock” (as defined in the SAFE) issued pursuant to the terms of the SAFE as the holders of a majority of the shares of “Standard Preferred Stock” (as defined in the SAFE) vote, (ii) give and receive notices and communications, (iii) execute any instrument or document that the CEO determines is necessary or appropriate in the exercise of the CEO’s authority under the SAFE, and (iv) take all actions necessary or appropriate in the judgment of the CEO for the accomplishment of the foregoing. Further, the SAFE includes language that significantly absolves the CEO of responsibility for such acts taken on behalf of the SAFE investor. As such, and for the sake of clarity, the SAFE effectively delegates the SAFE investor’s voting rights and rights to take further actions and negotiate on its own behalf.

As fully described in the SAFE, the terms of the SAFE may be amended without the SAFE investor’s consent

Atlas Unlimited Inc.’s founders currently own all of the company's stock. The founders also currently are the company’s sole members of its Board of Directors, and therefore have significant control over the management of the company and the direction of its policy and affairs. This concentrated control in the company will limit SAFE investors’ ability to influence company matters.

We will only be able to pay dividends on any shares once our directors determine that we are financially able to do so, which the Board of Directors may never decide to do. Atlas Unlimited Inc. has incurred a net loss and has had limited revenues generated since inception. There is no assurance that we will be profitable in the next three years or thereafter, or that we will generate sufficient revenues to pay dividends to the holders of shares of the company’s stock.

Our future success depends on the efforts of a small management team. The loss of services of the members of the management team may have an adverse effect on the company. There can be no assurance that we will be successful in attracting and retaining other personnel we require to successfully grow our business.

The company’s business involves using third parties’ trademarks and trade names, such as the names and logos of the company’s corporate sponsors and charities who benefit from the company. While we obtain contractual approval for such use, there is a risk that a third party could determine that our use of their names or logos is beyond the scope of such approval or that such approval was not properly granted. As such, the company could be at risk of a claim for trademark infringement or a violation of publicity rights.