Risk Disclosures
Important information about the risks associated with investing in Abilities Finance
HIGH RISK INVESTMENT
AN INVESTMENT IN THE COMPANY IS SPECULATIVE AND INVOLVES A HIGH DEGREE OF RISK. You should invest only if you are prepared to lose your entire investment.
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Risks Related to Cryptocurrencies
Extreme Volatility
The prices of cryptocurrencies have historically been subject to dramatic fluctuations and are highly unpredictable. Bitcoin, Ethereum, and other digital assets have experienced price swings of 20% or more in a single day.
The value of your investment may decline significantly and rapidly. Past performance is not indicative of future results, and there is no guarantee that any cryptocurrency will maintain its value or appreciate over time.
Example:
Bitcoin has experienced multiple 80%+ drawdowns in its history. An investment of $10,000 could potentially decline to $2,000 or less during a market downturn.
Regulatory Uncertainty
The legal and regulatory treatment of digital assets is evolving and varies by jurisdiction. Governments around the world are still determining how to regulate cryptocurrencies, and future regulations may adversely affect:
- •The value of the Company's assets
- •Our ability to operate or trade certain cryptocurrencies
- •The tax treatment of cryptocurrency gains and losses
- •The ability to custody or transfer digital assets
Regulatory actions, including bans or restrictions on cryptocurrency trading, could result in a total loss of your investment.
Cybersecurity Threats
Digital assets are stored in digital "wallets" and are subject to theft by hackers. While the Company uses institutional-grade custody solutions with multiple layers of security, no system is perfectly secure.
Cryptocurrency exchanges and custodians have been hacked in the past, resulting in the loss of billions of dollars worth of digital assets. If our custody provider is compromised, investors could lose some or all of their investment.
Liquidity Risk
Some digital assets may have limited liquidity, making it difficult to sell them at a desired price or at all. During periods of market stress, liquidity can evaporate rapidly, and bid-ask spreads can widen significantly.
The Company may be unable to exit positions in a timely manner, potentially resulting in significant losses.
Risks Related to Our Business
Algorithmic Trading Risk
The Company's proprietary trading algorithms may not prove to be successful. While our strategies have been backtested and refined, past performance is not indicative of future results.
Algorithmic trading systems can fail due to:
Model Risk
The algorithms may be based on flawed assumptions or incomplete data
Execution Risk
Technical failures or latency issues may prevent timely execution of trades
Market Regime Changes
Strategies that worked in the past may fail in new market conditions
Overfitting
Algorithms optimized for historical data may not perform well in live trading
As an Exponential Organization, we rely heavily on our algorithmic systems. A significant failure in our AI or trading infrastructure could have a material adverse effect on performance.
Dependence on Key Personnel
The success of the Company is highly dependent on its management team and the developers who maintain our trading algorithms. The loss of key personnel could have a material adverse effect on the Company's operations and performance.
While our ExO model includes "Staff on Demand" to access external expertise, the core algorithmic trading strategies are proprietary and depend on specific individuals.
Limited Operating History
The Company is a newly formed entity with a limited operating history. There is no assurance that the Company will be able to successfully implement its business strategy or achieve its investment objectives.
Risks Related to The Offering
Illiquidity of Interests
The Interests are not publicly traded and are subject to significant transfer restrictions. You may not be able to sell your Interests for an indefinite period, and there is no guarantee that you will ever be able to sell them.
Interests are subject to a one-year lock-up period from the date of purchase. After the lock-up period, redemptions are permitted on a quarterly basis, subject to gate provisions and other limitations.
No Guarantee of Return
There is no guarantee that you will receive any return on your investment. You may lose your entire investment. The Company's performance fee structure means that management is incentivized to take risks, which could result in losses.
Exponential Organization Risks
Reliance on Third Parties
Our "Staff on Demand" and "Leveraged Assets" approach means we rely on external partners for critical functions, including custody, legal, accounting, and infrastructure. The failure of a key partner could disrupt our operations.
AI and Zuri Risks
Our AI assistant, Zuri, is a complex system. Any malfunction, security breach, or misuse of Zuri could impact investor relations, data privacy, and the Company's reputation. Zuri's responses should not be relied upon as legal or investment advice.
ACKNOWLEDGMENT REQUIRED
By signing the Subscription Agreement, you acknowledge that you have read and understood these risk factors and are able to bear the economic risk of a total loss of your investment.