Risk factors
RISKS RELATING TO PARTICIPATION IN THE TOKEN SALE
Investments in startups such as the Issuer involves a high degree of risk
Financial and operating risks confronting startups are significant and Issuer is not immune to these. Startups often experience unexpected problems in the areas of product development, marketing, financing, and general management, among others, which frequently cannot be solved.
Issuer may be forced to cease operations
It is possible that, due to any number of reasons, including, but not limited to, an unfavorable fluctuation in the value of cryptographic and fiat currencies, the failure of commercial relationships, or intellectual property ownership challenges, Issuer may no longer be viable to operate and may dissolve or take actions that result in a dissolution of Issuer.
The tax treatment of the Sales, the purchase rights contained therein and the Token distribution is uncertain and there may be adverse tax consequences for Buyers upon certain future events
The tax characterization of the Sales and the Tokens is uncertain, and each Buyer must seek his/her/its own tax advice in connection with an investment in the Tokens. An investment pursuant to the Sales and the purchase of Tokens pursuant thereto may result in adverse tax consequences to Buyer, including withholding taxes, income taxes and tax reporting requirements. Each Buyer should consult with and must rely upon the advice of his/her/its own professional tax advisors with respect tax treatment of an investment in the Tokens pursuant to the Sales.
There is no prior market for Tokens and the Token Distribution may not result in an active or liquid market for the Tokens
Prior to some of the Token Distributions, there may be no public market for the Tokens. In the event that the Tokens are traded on a cryptocurrency exchange, there is no assurance that an active or liquid trading market for the Tokens will develop or if developed, be sustained after the Tokens have been made available for trading on such cryptocurrency exchange. There is also no assurance that the market price of the Tokens will not decline below the Purchase Consideration. The Purchase Consideration may not be indicative of the market price of the Tokens after they have been made available for trading on a cryptocurrency exchange.
A Token is not a currency issued by any central bank or national, supra-national or quasi- national organization, nor is it backed by any hard assets or other credit. Issuer is not responsible for nor do it pursue the circulation and trading of Tokens on the market. Trading of Tokens merely depends on the consensus on its value between the relevant market participants, and no one is obliged to purchase any Token from any holder of the Token, including the purchasers, nor does anyone guarantee the liquidity or market price of Tokens to any extent at any time. Accordingly, Issuer cannot ensure that there will be any demand or market for Tokens, or that the Purchase Consideration is indicative of the market price of Tokens after they have been made available for trading on a cryptocurrency exchange.
Future sales of the Tokens could materially and adversely affect the market price of Tokens
Any future sale of the Tokens (which were not available for sale in the Token Distribution) would increase the supply of Tokens in the market and this may result in a downward price pressure on the Token. The sale or distribution of a significant number of Tokens outside of the Token Distribution, or the perception that such further sales or issuance may occur, could adversely affect the trading price of the Tokens.
Negative publicity may materially and adversely affect the price of the Tokens
Negative publicity involving (a) Issuer; (b) Chemix ecosystem; (c) the Tokens in various auctions/sales; or (d) any of the key personnel of Issuer, may materially and adversely affect the market perception or market price of the Tokens, whether or not such publicity is justified.
There is no assurance of any success of Chemix Ecosystem
The value of, and demand for, the Tokens hinges heavily on the performance of Chemix Ecosystem. There is no assurance that Chemix Ecosystem will gain traction after its launch and achieve any commercial success.
Chemix Ecosystem has not been fully developed, finalized and integrated and is subject to further changes, updates and adjustments prior to its launch. Such changes may result in unexpected and unforeseen effects on its projected appeal to users, and hence impact its success.
While the development team has made every effort to provide a realistic estimate, there is also no assurance that the cryptocurrencies raised in the Token Distribution will be sufficient for the development and integration of Chemix Ecosystem. For the foregoing or any other reason, the development and integration of Chemix Ecosystem may not be completed. As such, distributed Tokens may hold little worth or value, and this would impact its trading price.
The trading price of the Tokens may fluctuate following the Token Distribution Event
The prices of cryptographic tokens in general tend to be relatively volatile, and can fluctuate significantly over short periods of time. The demand for, and corresponding the market price of, the Tokens may fluctuate significantly and rapidly in response to, among others, the following factors, some of which are beyond the control of Issuer:
new technical innovations;
analysts’ speculations, recommendations, perceptions or estimates of the Token’s market price or Issuer’s financial and business performance;
changes in market valuations and token prices of entities with operations similar to that of Issuer that may be made available for sale and purchase on the same cryptocurrency exchanges as the Tokens;
announcements by Issuer of significant events, for example partnerships, sponsorships, new product developments;
fluctuations in market prices and trading volume of cryptocurrencies on cryptocurrency exchanges;
additions or departures of key personnel of Issuer or Chemix Ecosystem;
success or failure of the management of Issuer or Chemix Ecosystem in implementing business and growth strategies; and
changes in conditions affecting the blockchain or financial technology industry, the general economic conditions or market sentiments, or other events or factors.
The funds raised in the Token Distribution are exposed to risks of theft
Whilst Chemix Ecosystem team will make every effort to ensure that the funds received from the Token Sale are securely held at the receiving smart contract address(es) at which it received the Purchase Consideration (“Receiving Address(es)”) through the implementation of security measures, there is no assurance that there will be no theft of the cryptocurrencies as a result of hacks, mining attacks (including but not limited to double-spend attacks, majority mining power attacks and “selfish-mining” attacks), sophisticated cyber-attacks, distributed denials of service or errors, vulnerabilities or defects on the smart contract(s), the Ethereum, Binance Smart Chain, or any other blockchain, or otherwise. Such events may include, for example, flaws in programming or source code leading to exploitation or abuse thereof. In such event, even if the Token Distribution is completed, Issuer may not be able to receive the cryptocurrencies raised and may not be able to utilize such funds for the needs of capital recycling, and the launch of Chemix Ecosystem, or Issuer’s project, might be temporarily or permanently curtailed. As such, the issued Tokens may hold little worth or value, and this would impact its trading price. The Tokens are uninsured, unless you specifically obtain private insurance to insure them. In the event of any loss or loss of value, you may have no recourse.
RISKS RELATING TO THE RECEIVING ADDRESS(ES) AND WALLETS
The Receiving Address(es) may be compromised and the cryptocurrencies may not be able to be disbursed
The Receiving Address(es) are designed to be secure. However, in the event that the Receiving Address(es) are, for any reason compromised (including but not limited to scenarios of the loss of keys to such Receiving Address(es)), the funds held at the Receiving Address(es) may not be able to be retrieved and disbursed, and may be permanently unrecoverable. In such event, even if the Token Distribution is successful, Purchaser will not be able to receive the Tokens distributed, and the implementation of Chemix Ecosystem might be temporarily or permanently curtailed. If Purchaser would like to chance his/her/its Token receiving address, Chemix Ecosystem team may not receive the requirement in time, or received the change requirement but not be able to change receiving address for Purchaser. As such, distributed Tokens may hold little worth or value, and this would impact its trading price, Purchaser may not receive Tokens with intended address, may face permanent loss on his/her/its funds.
The loss or compromise of information relating to your Wallet may affect your access and possession of the Tokens
For purposes of receipt of your Tokens, you are to establish and maintain access to a cryptocurrency wallet (“Wallet”). Your access to the Tokens in the Wallet depends on, among other things, the safeguards to the information to such Wallet, including but not limited to the user account information, address, private key and password. In the event that any of the foregoing is lost or compromised, your access to the Wallet may be curtailed and thereby adversely affecting your access and possession to the Tokens, including such Tokens being unrecoverable and permanently lost.
The Wallet or Wallet service provider may not be technically compatible with the Tokens
The Wallet or Wallet service provider may not be technically compatible with the Tokens which may result in the delivery of Tokens being unsuccessful or affect your access to such Tokens.
RISKS RELATING TO THE CHEMIX ECOSYSTEM TEAM
Chemix Ecosystem is intended to be developed, operated and maintained by The Chemix Ecosystem team. Any events or circumstances which adversely affect The Chemix Ecosystem team may have a corresponding adverse effect on The Chemix Ecosystem team if such events or circumstances affect The Chemix Ecosystem team’s ability to maintain Chemix Ecosystem. This would correspondingly have an impact on the delivery and trading price of the Tokens.
The Chemix Ecosystem team may be materially and adversely affected if it fails to effectively manage its operations as its business develops and evolves, which would have a direct impact on its ability to maintain Chemix Ecosystem and consequently the trading price of the Tokens
The financial technology and cryptocurrency industries and the markets in which The Chemix Ecosystem team competes have grown rapidly and continue to grow rapidly, and continue to evolve in response to new technological advances, changing business models and other factors. As a result of this constantly changing environment, The Chemix Ecosystem team may face operational difficulties in adjusting to the changes, and the sustainability of The Chemix Ecosystem team will depend on its ability to manage its operations, adapt to technological advances and market trends and ensure that it hires qualified and competent employees, and provide proper training for its personnel. As its business evolves, The Chemix Ecosystem team must also expand and adapt its operational infrastructure. The Chemix Ecosystem team’s business relies on its blockchain-based software systems, cryptocurrency wallets or other related token storage mechanisms, blockchain technology and smart contract technology, and to manage technical support infrastructure for Chemix Ecosystem effectively, The Chemix Ecosystem team will need to continue to upgrade and improve its data systems and other operational systems, procedures and controls. These upgrades and improvements will require a dedication of resources, are likely to be complex and increasingly rely on hosted computer services from third parties that The Chemix Ecosystem team does not control. If The Chemix Ecosystem team is unable to adapt its systems and organization in a timely, efficient and cost-effective manner to accommodate changing circumstances, its business, financial condition and results of operations may be adversely affected. If the third parties whom The Chemix Ecosystem team relies on are subject to a security breach or otherwise suffer disruptions that impact the services The Chemix Ecosystem team utilizes, the integrity and availability of its internal information could be compromised, which may consequently cause the loss of confidential or proprietary information, and economic loss. The loss of financial, labor or other resources, and any other adverse effect on The Chemix Ecosystem team’s business, financial condition and operations, would have a direct adverse effect on The Chemix Ecosystem team’s ability to maintain Chemix Ecosystem. As Chemix Ecosystem is the main product to which the Tokens relate, this may adversely impact the trading price of the Tokens.
The Chemix Ecosystem team may experience system failures, unplanned interruptions in its network or services, hardware or software defects, security breaches or other causes that could adversely affect its infrastructure network, and/or Chemix Ecosystem
The Chemix Ecosystem team is unable to anticipate when there would be occurrences of hacks, cyber- attacks, mining attacks (including but not limited to double-spend attacks, majority mining power attacks and “selfish-mining” attacks), distributed denials of service or errors, vulnerabilities or defects in Chemix Ecosystem, the Tokens, the Receiving Address(es), the Wallet or any technology (including but not limited to smart contract technology) on which The Chemix Ecosystem team, Chemix Ecosystem, the Tokens, the Receiving Address(es) and the Wallet relies or on the Ethereum blockchain or any other blockchain. Such events may include, for example, flaws in programming or source code leading to exploitation or abuse thereof. The Chemix Ecosystem team may not be able to detect such hacks, mining attacks (including but not limited to double-spend attacks, majority mining power attacks and “selfish-mining” attacks), cyber-attacks, distributed denials of service errors vulnerabilities or defects in a timely manner, and may not have sufficient resources to efficiently cope with multiple service incidents happening simultaneously or in rapid succession.
The Chemix Ecosystem team’s network or services, which would include Chemix Ecosystem, could be disrupted by numerous events, including natural disasters, equipment breakdown, network connectivity downtime, power losses, or even intentional disruptions of its services, such as disruptions caused by software viruses or attacks by unauthorized users, some of which are beyond The Chemix Ecosystem team’s control. Although The Chemix Ecosystem team will be taking steps against malicious attacks on its appliances or its infrastructure, which are critical for the maintenance of Chemix Ecosystem and its other services, there can be no assurance that cyber-attacks, such as distributed denials of service, will not be attempted in the future, and that any of The Chemix Ecosystem team’s intended enhanced security measures will be effective. The Chemix Ecosystem team may also be prone to attacks on its infrastructure intended to steal information about its technology, financial data or user information or take other actions that would be damaging to The Chemix Ecosystem team and users of Chemix Ecosystem. Any significant breach of The Chemix Ecosystem team’s intended security measures or other disruptions resulting in a compromise of the usability, stability and security of The Chemix Ecosystem team’s network or services (including Chemix Ecosystem) may adversely affect the trading price of the Tokens.
The Chemix Ecosystem team is dependent in part on the location and data center facilities of third parties
The The Chemix Ecosystem team’s infrastructure network will be in part established through servers that which it owns and houses at the location facilities of third parties, and servers that it rents at data center facilities of third parties. If The Chemix Ecosystem team is unable to renew its data facility lease on commercially reasonable terms or at all, The Chemix Ecosystem team may be required to transfer its servers to a new data center facility, and may incur significant costs and possible service interruption in connection with the relocation. These facilities are also vulnerable to damage or interruption from, among others, natural disasters, arson, terrorist attacks, power losses, and telecommunication failures. Additionally, the third party providers of such facilities may suffer a breach of security as a result of third party action, employee error, malfeasance or otherwise, and a third party may obtain unauthorized access to the data in such servers. As techniques used to obtain unauthorized access to, or to sabotage systems change frequently and generally are not recognized until launched against a target, The Chemix Ecosystem team and the providers of such facilities may be unable to anticipate these techniques or to implement adequate preventive measures. Any such security breaches or damages occurred which impact upon The Chemix Ecosystem team’s infrastructure network and/or Chemix Ecosystem may adversely impact the price of the Tokens.
General global market and economic conditions may have an adverse impact on The Chemix Ecosystem team’s operating performance, results of operations and cash flows
The Chemix Ecosystem team could be affected by general global economic and market conditions. Challenging economic conditions worldwide have from time to time, contributed, and may continue to contribute, to slowdowns in the information technology industry at large. Weakness in the economy could have a negative effect on The Chemix Ecosystem team’s business, operations and financial condition, including decreases in revenue and operating cash flows. Additionally, in a down-cycle economic environment, The Chemix Ecosystem team may experience the negative effects of increased competitive pricing pressure and a slowdown in commerce and usage of Chemix Ecosystem. Suppliers on which The Chemix Ecosystem team relies for servers, bandwidth, location and other services could also be negatively impacted by economic conditions that, in turn, could have a negative impact on The Chemix Ecosystem team’s operations or expenses. There can be no assurance, therefore, that current economic conditions or worsening economic conditions or a prolonged or recurring recession will not have a significant adverse impact on the The Chemix Ecosystem team’s business, financial condition and results of operations and hence Chemix Ecosystem, which would correspondingly impact the trading price of the Tokens.
The Chemix Ecosystem team and/or the Tokens may be affected by newly implemented regulations
Cryptocurrency trading is generally unregulated worldwide, but numerous regulatory authorities across jurisdictions have been outspoken about considering the implementation of regulatory regimes which govern cryptocurrency or cryptocurrency markets. The Chemix Ecosystem team and/or the Tokens may be affected by newly implemented regulations relating to cryptocurrencies or cryptocurrency markets, including having to take measures to comply with such regulations, or having to deal with queries, notices, requests or enforcement actions by regulatory authorities, which may come at a substantial cost and may also require substantial modifications to the Tokens and/or Chemix Ecosystem. This may impact the appeal of the Tokens and/or Chemix Ecosystem for users and result in decreased usage of the Tokens and/or Chemix Ecosystem. Further, should the costs (financial or otherwise) of complying with such newly implemented regulations exceed a certain threshold, maintaining the Tokens and/or Chemix Ecosystem may no longer be commercially viable and The Chemix Ecosystem team may opt to discontinue the Tokens and/or Chemix Ecosystem. Further, it is difficult to predict how or whether governments or regulatory authorities may implement any changes to laws and regulations affecting distributed ledger technology and its applications, including the Tokens and Chemix Ecosystem. The Chemix Ecosystem team may also have to cease operations in a jurisdiction that makes it illegal to operate in such jurisdiction, or make it commercially unviable or undesirable to obtain the necessary regulatory approval(s) to operate in such jurisdiction. In scenarios such as the foregoing, the trading price of Tokens will be adversely affected or Tokens may cease to be traded.
The regulatory regime governing the blockchain technologies, cryptocurrencies, tokens and token offerings such as Chemix Ecosystem and the Tokens is uncertain, and regulations or policies may materially adversely affect the development of Chemix Ecosystem and the utility of the Tokens
Regulation of tokens (including the Tokens) and token offerings such as this, cryptocurrencies, blockchain technologies, and cryptocurrency exchanges currently is undeveloped and likely to rapidly evolve, varies significantly among international, federal, state and local jurisdictions and is subject to significant uncertainty. Various legislative and executive bodies in the United States of America and in other countries may in the future, adopt laws, regulations, guidance, or other actions, which may severely impact the development and growth of Chemix Ecosystem and the adoption and utility of the Tokens. Failure by The Chemix Ecosystem team or users of Chemix Ecosystem to comply with any laws, rules and regulations, some of which may not exist yet or are subject to interpretation and may be subject to change, could result in a variety of adverse consequences, including civil penalties and fines. As blockchain networks and blockchain assets have grown in popularity and in market size, federal and state agencies have begun to take interest in, and in some cases regulate, their use and operation. In the case of virtual currencies, state regulators like the New York Department of Financial Services have created new regulatory frameworks. Others, as in Texas, have published guidance on how their existing regulatory regimes apply to virtual currencies. Some states, like New Hampshire, North Carolina, and Washington, have amended their state’s statutes to include virtual currencies into existing licensing regimes. Treatment of virtual currencies continues to evolve under federal law as well. The Department of the Treasury, the Securities Exchange Commission, and the Commodity Futures Trading Commission, for example, have published guidance on the treatment of virtual currencies. The IRS released guidance treating virtual currency as property that is not currency for US federal income tax purposes, although there is no indication yet whether other courts or federal or state regulators will follow this classification. Both federal and state agencies have instituted enforcement actions against those violating their interpretation of existing laws. The regulation of non-currency use of blockchain assets is also uncertain. The U.S. Commodities Futures Trading Commission has publicly taken the position that certain blockchain assets are commodities, and the Securities Exchange Commission of the United States of America has issued a public report stating federal securities laws require treating some blockchain assets as securities. To the extent that a domestic government or quasi-governmental agency exerts regulatory authority over a blockchain network or asset, Chemix Ecosystem and the Tokens may be materially and adversely affected. Blockchain networks also face an uncertain regulatory landscape in many foreign jurisdictions such as the European Union, China and Russia. Various foreign jurisdictions may, in the near future, adopt laws, regulations or directives that affect Chemix Ecosystem. Such laws, regulations or directives may conflict with those of the United States of America or may directly and negatively impact our business. The effect of any future regulatory change is impossible to predict, but such change could be substantial and materially adverse to the development and growth of Chemix Ecosystem and the adoption and utility of the Tokens.
New or changing laws and regulations or interpretations of existing laws and regulations, in the United States of America and other jurisdictions, may materially and adversely impact the value of the currency in which the Tokens may be exchanged, the value of the distributions that may be made by The Chemix Ecosystem team, the liquidity of the Tokens, the ability to access marketplaces or exchanges on which to trade the Tokens, and the structure, rights and transferability of Tokens.
Purchasers will have no control on The Chemix Ecosystem team
Purchasers are not and will not be entitled, to vote or receive dividends or be deemed the holder of capital stock of The Chemix Ecosystem team for any purpose, nor will anything be construed to confer on the Purchasers any of the rights of a stockholder of The Chemix Ecosystem team or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action or to receive notice of meetings, or to receive subscription rights or otherwise.
Purchasers may lack information for monitoring their investment
Purchasers may not be able to obtain all information it would want regarding The Chemix Ecosystem team on a timely basis or at all. It is possible that Purchasers may not be aware on a timely basis of material adverse changes that have occurred. While The Chemix Ecosystem team has made efforts to use open-source development for Tokens, this information may be highly technical by nature. As a result of these difficulties, as well as other uncertainties, Purchasers may not have accurate or accessible information about Chemix Ecosystem.
There may be unanticipated risks arising from the Tokens
Cryptographic tokens such as the Tokens are a relatively new and dynamic technology. In addition to the risks included in this section, there are other risks associated with the purchase, holding and use of the Tokens, including those that The Chemix Ecosystem team cannot anticipate. Such risks may further materialize as unanticipated variations or combinations of the risks discussed in this section.
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