UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 24, 2022
StartEngine Crowdfunding, Inc.
(Exact Name of Registrant As Specified In Its Charter)
000-56415
(Commission File Number)
| Delaware | 46-5371570 | |
| (State or other jurisdiction
of incorporation or organization) |
(I.R.S.
Employer Identification No.) |
4100 West Alameda Avenue, 3rd Floor
Burbank, CA 91505
(Address of Principal Executive Offices)
Registrant’s telephone number, including area code: (800) 317-2200
Not applicable
(Former name, former address and former fiscal year, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered under Section 12(b) of the Act:
None.
Securities registered under Section 12(g) of the Act:
Common Stock, $0.00001 par value
(Title of Class)
Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company x
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. x
Item 1.01 Entry into a Material Definitive Agreement.
On October 24, 2022, StartEngine Crowdfunding, Inc. (“StartEngine”) entered into a definitive agreement to acquire substantially all of the assets of the SeedInvest business as conducted by Circle Internet Financial Limited through its subsidiary Pluto Holdings, LLC, a Delaware limited liability company (“Pluto Holdings”) and through SI Securities, LLC, a New York limited liability company (“SI Securities”), and SeedInvest Technology, LLC, a New York limited liability company, each a wholly-owned subsidiary of Pluto Holdings (“SeedInvest Technology,” collectively, with the assets acquired from Pluto Holdings and SI Securities, “SeedInvest”). The completion of the acquisition of SeedInvest is subject to customary closing conditions and to regulatory approval by FINRA. The total consideration for the purchase is 960,000 shares of StartEngine’s common stock, which based on StartEngine’s current Regulation A offering price of $25 per share would be valued at $24 million.
The assets of the SeedInvest business include SeedInvest Technology, LLC and substantially all the assets related to owning and operating the crowdfunding platform at www.seedinvest.com.
The sellers will retain among other items: their broker-dealer regulatory approvals and licenses; equity interests, convertible notes, SAFEs and all other investment contracts received, and in certain cases to be received, in SeedInvest portfolio companies; and receivables related to current and certain contemplated offerings.
The parties anticipate this sale will close by the end of the first quarter of 2023. For more details, see StartEngine’s press release attached as Exhibit 99.1 to this Form 8-K.
Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking statements. All statements contained in this Quarterly Report on Form 8-K other than statements of historical fact, including statements regarding our future results of operations and financial position, our business strategy and plans, and our objectives for future operations, are forward-looking statements. The words "believe," "may," "will," "estimate," "continue," "anticipate," "intend," "expect," and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this Current Report on Form 8-K may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.
We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit No. | Description |
| 99.1 | Press release of StartEngine Crowdfunding, Inc. dated October 27, 2022 |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| STARTENGINE CROWDFUNDING, INC. | ||
| (Registrant) | ||
| Date: October 27, 2022 | By: | /s/ Howard Marks |
| Howard Marks | ||
| Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer and Director |
Exhibit 99.1
Title: StartEngine to Acquire SeedInvest
FOR IMMEDIATE RELEASE
LOS ANGELES, CA – October 27, 2022 – A consolidation is underway in the equity crowdfunding industry: StartEngine has agreed to acquire fellow equity crowdfunding platform, SeedInvest, from Pluto Holdings, LLC, an affiliate of Circle Internet Financial. StartEngine is one of the largest equity crowdfunding platforms in the U.S. and its acquisition of the SeedInvest platform will only further its position as a leader in the industry. It will also allow StartEngine to provide even more startup founders access to raise capital online from retail investors.
The acquisition is subject to review by FINRA, the regulatory authority for broker-dealers. If approved, StartEngine leadership sees the move as a validation of the company’s long-term strategy and a win for founders raising via equity crowdfunding:
“SeedInvest has been a pioneer in equity crowdfunding since the passage of the JOBS Act in 2012,” said StartEngine CEO Howard Marks. “This is a great opportunity to acquire a fellow industry leader, which will allow us to help even more entrepreneurs achieve their dreams.”
Meanwhile, StartEngine’s Strategic Advisor and Spokesperson Kevin O’Leary (aka Mr. Wonderful) said: “By purchasing SeedInvest, StartEngine will be able to reach even more founders in what may well be a defining moment for their businesses.”
In its 10-year run, SeedInvest has supported over 300 startups, helping them to raise more than $465 million from close to 700,000 users. The high-quality customer and investor portfolio makes SeedInvest an attractive fit for StartEngine, which also ranks among the industry leaders with over $650 million* raised to date from a community of more than 1 million users.
Compared to other investing strategies, equity crowdfunding is still in its early days. By acquiring SeedInvest, StartEngine promises to continue in its role as a trailblazer for the future of the industry.
About StartEngine
One of the largest equity crowdfunding platforms in the U.S., led by Activision Co-Founder Howard Marks and advised by Kevin O'Leary, StartEngine launched in 2015 with the mission to help entrepreneurs achieve their dreams, while enabling everyday people access to private investment opportunities. To date, over $650 million* has been raised for startups and alternative assets on the StartEngine platform from more than 1 million users. In October 2020, StartEngine also became one of the first equity crowdfunding platforms to launch an investor marketplace where anyone can trade the securities of private companies that have raised capital via Regulation Crowdfunding and Regulation A.**
StartEngine Crowdfunding Inc. is not a broker-dealer, funding portal or investment adviser. StartEngine Capital, LLC is a funding portal registered with the US Securities and Exchange Commission (SEC) and a member of the Financial Industry Regulatory Authority (FINRA). StartEngine Primary LLC is a broker-dealer registered with the SEC and FINRA/SIPC. StartEngine Secondary is an alternative trading system regulated by the SEC and operated by StartEngine Primary. To raise funds, invest or trade on the StartEngine platform, visit www.startengine.com.
*Total raised includes StartEngine’s own raises and is inclusive of investments that have been closed on, investments that are received but not yet closed on, and investments that have been submitted but not yet received.
**It is important to know that while companies may trade on StartEngine’s alternative trading system, StartEngine Secondary, companies which intend to trade on the marketplace are subject to certain requirements which they may or may not be able to satisfy in a timely manner. Even if a company qualifies to trade, there is no guarantee an active trading market for the securities will ever develop, or if developed, be maintained. Further, any company which does trade may also request to be removed from the marketplace. You should assume that you may not be able to liquidate your investment for some time, if at all, or be able to pledge these shares as collateral.
Press Contact: partnerships@startengine.com