The key risks summarized are intended to be an exhaustive list of risks that may apply to you as a purchaser or holder of POXO. You should read these key risks and consider whether you are willing to assume such risks before you agree to subscribe for POXO.
POXO are not investment securities nor financial products. They do not entitle holders to receive a return of their purchase price, nor to any returns or financial benefits.
System risk of purchase interface: There can be possible delays, failure, or inability to submit an offer to purchase POXO early contribution in time, for various reasons, including but not limited to the Applicant’s own act or omission, technical and/ or operational glitches, system or network overloads arising from or in connection with the Ethereum network, any other platform or otherwise.
No assurance of return or benefits: There can be no assurance that the Applicant as a purchaser or holder of POXO Early Contribution Round Tokens or POXO Tokens will be able to receive a return of its capital or any returns or benefits.
Market risk: The value of cryptocurrencies can go down as well as up. Any young market carries significant risks. Past performance is not a reliable indicator of future performance and investors may not recover the full amount invested.
Regulatory risk: Regulation of digital tokens (including the POXO Early Contribution Round Token and POXO Tokens). Cryptocurrency exchanges are relatively undeveloped and likely to evolve quickly and can therefore be subject to significant uncertainty.
New or changing laws and regulations or interpretations of existing laws and regulations may adversely impact the liquidity and market price of POXO. In particular, changes pertaining to the Proposal for a Regulation of the European Parliament and of the Council on Markets in Crypto-asset (“MiCAR”). Such burdens may increase the costs of compliance and/or cause additional operational delays in conducting business operations, which as a result might lower the overall profitability of the company. Revenues may be negatively impacted also by unfavourable tax treatment and reporting requirements applicable to investors in and/or traders of digital assets, especially in connection to fiat currencies-to-virtual assets and vice versa transactions.
No regulatory protection: The Company is not licensed or approved by the Luxembourg Financial Authorities.
The company has no intention to apply for financial services license or regulatory approval under the laws and regulations of Luxembourg. In addition, the POXO Tokens do not constitute, and are not characterized as, any of the Regulated Products. Therefore, the Applicant will not be able to invoke or avail itself of any regulatory protection or remedies applicable in respect of such Regulated Products under the laws and regulations of Luxembourg, in relation to its purchase, holding or trading of POXO Tokens.
Start-up company: The company has been operating in its current sphere of economic activity for less than three years and is therefore considered a start-up company in accordance with Art. 136 of ESMA update on CESR Recommendations. The company is thus a pre-profit (though not pre-revenue) company, with a working prototype, but currently limited user base, low ability to raise additional funding at a reasonable cost, if needed, and overall high probability of failure to execute its business plan. While the forecasts therein are company’s best approximation of expected developments, there is a high degree of probability that stated targets regarding user numbers, trading activity and total revenues will be significantly missed. Anticipations disclosed in the business plan may not occur and may lead to a significant loss in value of POXO.
Legal risk: POXO is not a financial instrument within the meaning of Directive 2014/65/EU (“MiFID II”). Protections offered by applicable laws in relation to the purchase and offering of the aforementioned financial instruments and/or investments do not apply to the sale and purchase of POXOand this Whitepaper does not constitute a prospectus or offering document, and are not an offer to sell, nor the solicitation of an offer to buy any investment or financial instrument in any jurisdiction. POXO is not intended to be a representation of currency or money (whether fiat or virtual or any form of electronic money), security, commodity, bond, debt instrument, unit in a collective investment scheme or any other kind of financial instrument or investment.
None of SPARKSO or any affiliate has or assumes responsibility for the lawfulness of the acquisition of the POXO by a prospective purchaser of POXO (whether for its own account or for the account of any third party), whether under the laws of the jurisdiction of its incorporation or the jurisdiction in which it operates (if different), or for compliance by that prospective purchaser (or any such third party) with any law, regulation or regulatory policy applicable to it.
Licensing and Regulatory risk: The communication services and products which the SPARKSO Platform (including any Connected Application) deals with is a heavily regulated area, with different regulators in different jurisdictions applying varying approaches to licensing and regulatory requirements. Such requirements may include, without limitation, compliance with approval requirements / standards, capitalization requirements, quality of services requirements / standards, or other commercial / operational / technological requirements or standards. For instance, the POXO Tokens and any value as may be deemed or associated with the same may further constitute instruments, services, or other matter (including prepayment for prepaid services) which may in turn attract additional licensing or regulations. There is therefore no certainty that the SPARKSO Platform (or any Connected Application) can be delivered or accessible in any particular jurisdiction or that the access, use or participation in the same, in respect of any particular use case, would be compliant with local law or regulation. SPARKSO Tokens and any value as may be deemed or associated with the same may further constitute instruments, services, or other matter (including prepayment for prepaid services) which may in turn attract additional licensing or regulations.
Tax risk: The tax characterization of POXO Early Contribution Round Tokens and POXO Tokens is uncertain, and the Applicant should consult its own tax advisors regarding the tax consequences of its acquisition, holding, trading or disposal of POXO Early Contribution Round Tokens or POXO Tokens. An investment in POXO Early Contribution Round Tokens or POXO Tokens may result in adverse tax consequences to the Applicant. The Applicant should consult with and must rely upon the advice of its own tax advisors with respect to the tax consequences, whether of Luxembourg or elsewhere, of an investment in POXO Early Contribution Round Tokens or POXO Tokens and is wholly responsible for understanding and meeting all their tax obligations whether of Singapore or elsewhere in relation to their acquisition, holding, trading or disposal of POXO Early Contribution Round Tokens or POXO Tokens.
Company risk: The company is incorporated in Luxembourg and has not started its operations. The Company is subject to all the business risks and uncertainties associated with any new business.
Voting and liquidation rights: POXO Early Contribution Round Tokens and POXO Tokens do not carry any voting, management or control rights or other management or control rights in the Company. Accordingly, the shareholders of the Company will control decisions of the Company, including any significant corporate transactions or election to liquidate or dissolve the Company. In addition, upon a liquidation, bankruptcy or other dissolution of the Company, the Applicant as a purchaser or holder of POXO Early Contribution Round Tokens or POXO Tokens will highly likely not be entitled to liquidation rights or other claims.
Technology and Coding risk: Blockchain and smart contract technology carry significant operational and technological risks. It is possible that the Smart Contract, the Smart Contract System or elements of the SPARKSO Platform and/or any Connected Application could contain weaknesses, vulnerabilities or bugs which could cause, inter alia, the complete loss of the Applicant’s utility and/or the value of the POXO Early Contribution Round Tokens, POXO Tokens, the SPARKSO Platform and/or any Connected Application by impacting on their operation and functionality.
SPARKSO Platform risk: While the SPARKSO Entities are procuring the development of the SPARKSO Platform, there is no assurance that the SPARKSO Platform (or any Connected Application) will be designed or completed in the manner described in the SPARKSO Whitepaper and if the SPARKSO Platform (or any Connected Application) is completed, there is no assurance as to the continued operation and functioning of the SPARKSO Platform (or any Connected Application). The SPARKSO Platform and any Connected Application is subject to change and no representation is given that any function or aspect of the SPARKSO Platform (or any Connected Application) will continue to be provided or made available at any time.
Trading/Valuation risk: As a utility token, the inherent value of POXO Tokens and correspondingly, the POXO Early Contribution Round Tokens is derived from the successful operation of the SPARKSO Platform and/or the Connected Applications. POXO Early Contribution and the POXO Tokens is not backed by any FIAT currency or any cryptocurrency, and the exchange value from time-to-time given to POXO Early Contribution Round Tokens or POXO Tokens on third-party exchanges may not reflect the intrinsic value of POXO Token. The risk of loss when purchasing or disposing of POXO Early Contribution Round Tokens and POXO Tokens could be substantial, and losses may compound quickly (including up to total loss). As a token built on top of the Ethereum network, the value of POXO can be affected by the value of the ETH against fiat currencies.
Illiquidity risk: No POXO Tokens will be issued after the TGE, although the reserve POXO Tokens are held by the Company and may be released over time to the market. Should the Applicant wish to exit the SPARKSO Platform temporarily, permanently, or partially and/or the Connected Applications ecosystem, it may be unable to liquidate its position by exchanging POXO Tokens in terms of price and volume expected by the applicant. The Applicant as a holder of POXO Tokens has no right to redeem or sell its POXO Tokens. Although the Company intends to list the SPARKSO Tokens on several cryptocurrency exchanges, there can be no assurance that such exchanges will accept the listing of POXO Tokens or maintain the listing if it is accepted. There can be no assurance that a secondary market will develop or, if a secondary market does develop, that it will provide the Applicant with liquidity of investment or that it will continue for the life of the POXO Tokens.
Network risk: POXO Early Contribution Round Tokens, compliant tokens and POXO tokens are built on the Ethereum network (ERC20), a decentralised network containing, among other things, both cryptocurrency and smart contract protocols. None of the SPARKSO Entities has control over the Ethereum network, including confirmations of transactions and execution of smart contracts on the network. If the Ethereum network experiences temporary or permanent issues, including network slowdowns or transaction delays, this may affect a holder of POXO Early Contribution Round Tokens or POXO Tokens and hinder the free use of POXO Early Contribution Round Tokens or POXO Tokens (as the case may be) within the SPARKSO Platform or any Connected Application’s ecosystem and could impair the usability of the SPARKSO Platform or Connected Application generally.
Cyber security risk: The nature of SPARKSO Early Contribution Round Tokens, the POXO Tokens and the Ethereum network may lead to an increased risk of fraud or cyberattack and may mean that technological difficulties experienced by users of the SPARKSO Platform and/or the Connected Applications ecosystem could prevent access to or use of the Applicant’s POXO Early Contribution Round Tokens or POXO Tokens. For example, it is possible that an unauthorized third party could exploit a coding vulnerability in the SPARKSO Platform or any Connected Application code and damage, interrupt or otherwise attack it. Depending on the use case in the SPARKSO Platform a participation in the SPARKSO Platform or any Connected Application may also constitute engagement in, access to or use of communication systems or facilities which may in turn be subject to third party rights or be without certainty of lawful consent having been procured from the appropriate third parties. The access, use and participation in the SPARKSO Platform or any Connected Application as delivered and deployed for any particular use case may therefore constitute or trigger cybersecurity incidents, and may therefore require additional lawful consents before becoming legally feasible.
Private Key risk: Extreme caution must be taken whenever selecting, storing, or transmitting private keys for POXO Early Contribution Round Tokens or POXO Tokens. The Applicant is responsible for the storage of its POXO Early Contribution Round Tokens or POXO Tokens. If another person obtains access to the Applicant’s private keys, they can steal its POXO Early Contribution Round Tokens, POXO Tokens or other cryptocurrency it uses to purchase POXO Early Contribution Round Tokens or POXO Tokens. Furthermore, if the Applicant loses access to its private keys, neither the POXO Entities nor any other entity will be able to recover the Applicant’s lost POXO Early Contribution Round Tokens, POXO Tokens or cryptocurrency. If the Applicant holds POXO Early Contribution Round Tokens or POXO Tokens on a cryptocurrency exchange, the private keys to those POXO Early Contribution Round Tokens or POXO Tokens is held by that exchange. Should that exchange be hacked or otherwise compromised, the Applicant’s POXO Early Contribution Round Tokens or POXO Tokens may be stolen or otherwise become inaccessible.
Wallet risk: Should the Applicant attempt to send POXO Early Contribution Round Tokens or as the case may be, POXO Tokens to a wallet type that does not support POXO Early Contribution Round Tokens or as the case may be, POXO Tokens, its POXO Early Contribution Round Tokens or as the case may be, POXO Tokens may be lost forever. Wallets could become insolvent or otherwise become insecure. There may be practical, or timing problems associated with enforcing the rights to assets in the case of an insolvency or security disruption of any such party.