Further detailed information is contained in the Information Memorandum (IM)Download IM
Veriphi has developed a ground breaking laser based analyser that minimises the risk of death and injury due to intravenous medication error in hospitals. The company is seeking to raise up to NZ$2m to commercialise its solution. Medical error is the third leading cause of death in the United States and medication error is one of the most common forms of patient harm in hospitals globally. Intravenous errors are twice as likely to harm patients than from drugs administered via other routes. As drug regimens for an aging population become more complex, new intelligent solutions are required to minimise the risk of patient harm whilst fitting seamlessly with existing clinical practice. The Veriphi system works by using lasers to automatically verify the drug identity and concentration. Veriphi will verify IV drug doses as they are compounded or administered and be paid every time that happens, providing greater safety by fitting seamlessly into within existing clinical practise.
Medication errors are among the most common medical errors, harming millions of people globally every year. In New Zealand hospitals, medication error causes an estimated 400 permanent disabilities and 3,500 temporary disabilities, costing an estimated NZ $158 million per annum. In US Hospitals, medication error injures approximately 400,000 people and causes an estimated 7,000 deaths at a cost of US$3.5B-$5.6B per annum. Intravenous medication errors account for over half of this total and are twice as likely to cause harm than from drugs administered via other routes. Examples include a 33 year old mother in Sydney in 2010, left paralysed from the waist down when injected epidurally with a cleaning agent. In 2012, a Wairarapa patient was unintentionally administered two doses of adrenaline causing heart arrhythmia requiring defibrillation.
Veriphi has developed a highly innovative laser based analyser to verify intravenous drugs to prevent medication error in hospitals. The Veriphi medication safety solution will be arguably the simplest and safest way to prevent such tragedies occurring. The system works by placing Veriphi’s consumable containing the drug in the beam path of the analyser. The consumable has optical windows that allow the laser beam to pass through the drug onto a detector. The optical information received by the detector is compared against a library of known signatures for specific drugs. The Veriphi system then alerts the clinician if the drug presented is not the one that is intended to be administered.
To be able to simply and quickly verify the correct identity and concentration of IV drugs in non destructive testing is widely acknowledged in New Zealand and abroad as the holy grail of IV medication safety. As such, a solution that does this would be a “game changer”. This is particularly the case since recent overhaul of pharmaco-vigilance legislation in the EU and USA. The objective of the changes was to tighten up on drug traceability and verification as part of Good Manufacturing Practice. The US changes were sparked by a major tragedy due to non compliant preparation of sterile drugs in a single compounding pharmacy that caused the death of over 60 people across the United States in 2012 and 2013.
We raised capital in 2016 to achieve six performance milestones that would pave the way for us to commercialise our drug-verification technology. We have made good progress in a number of these areas, however other areas have taken longer than expected or not eventuated as we expected. This has resulted in the first commercial sales of the analyser being delayed from 2017 to 2018.
Despite the delays, our original timeline for international sales that was outlined in 2016 remains largely unaffected. The reason we believe we can maintain those international sales targets is because of an initial exclusive focus on hospital compounding pharmacies. This is the result of in-depth discussions with the US FDA on the best path for Veriphi to enter the US market. Focusing on hospital pharmacies means we have removed the heavy compliance requirements associated with approval for a medical device included in previous timelines.
Speeding up the development process
Avoiding hospital delays
Veriphi was impacted by a 6 month wait for approval of hospital trials. It will therefore mitigate its risk against delays in hospital decision making in the following ways:
Reducing exploratory testing of new drugs
Speeding up US market entry
Maximising recurring revenue from fewer analysers
Veriphi will bring on stream 5 new prototypes for hospital and compliance testing in January 2018. Depending on the outcome of compliance approvals, we anticipate first sales to NZ customers in August 2018. Compliance approvals will be initially for NZ and Australasia with US approvals following shortly thereafter. A visit to the United States in March 2018 is designed to expedite hospital trials and first commercial revenues.
• August 2018. Compliance for NZ and Australia as laboratory equipment.
• August 2018. First commercial revenues in New Zealand.
• March 2018. Visit to Texas Medical Center Houston.
• December 2018. First sales in Australia.
• March 2019. First US sales.
Mistakenly Injected: In 2010, a 33 year old mother was giving birth at St. George Hospital, Australia when the anaesthetist mistakenly injected her spine with chlorhexidine (a cleaning fluid) instead of a pain-killing agent. The injection caused massive nerve damage which required two brain surgeries and left her permanently paralysed from the waist down.
Container Confusion: In 2012, a Wairarapa patient was unintentionally administered two doses of adrenaline instead of a pain killer and a sedative. This caused heart arrhythmia requiring defibrillation to restore the heart’s normal rhythm. A confusion over containers led to a selection error which was then repeated.
Contaminated Dose: The New England Compounding Centre meningitis outbreak was caused by a contaminated batch of the steroid Methylprednisolone. This drug is routinely used as a pain reliever and works by being injected directly into the spinal column and joints. The contaminated doses were administered to about 14,000 patients across 23 states of the US and caused 64 deaths and 751 non-fatal injuries. The incident resulted in numerous lawsuits against the NECC. A US$200 million settlement plan was approved for victims and their families
Veriphi‘s analyser passes a laser beam at specific wavelengths through each IV dose to recognise the unique spectral signature of each drug and concentration.
The innovation of the technology is evident in five granted US patents. The solution employs a proprietary cartridge with unique optical features that allow the laser to pass through the drug inside. The cartridge attaches to an IV bag, line or syringe as part of the delivery system.
We plan to appeal to hospitals through three key value propositions:
• Reducing cost and risk: Hospitals and medical professionals are constantly burdened by the consequences and cost of intravenous drug errors. Medical complications cause hospital resources to be drained. In particular, medical professionals in the US expose themselves to the risk of costly lawsuits for medical malpractice, not to mention the personal distress of being responsible for causing patients unnecessary pain and suffering. We appeal to hospitals as a cost-saving and risk reduction tool.
• Becoming “market best practice”: Once our solution has garnered significant traction, we expect the Veriphi system to be adapted as market best practice, either as an ‘add-on’ or as a compulsory standard operating procedure across the entire industry. Veriphi could become a necessary part of the duty of care owed to patients being administered intravenous drugs.
• Safety as a Service: We will lower the barrier to hospital purchase decisions and speed up their adoption by providing Veriphi’s solution as a service. This will maximise recurring revenue as opposed to equipment sales.
Veriphi will expand from pharmacies to medication rooms, operating theatres and wards, as the analyser becomes faster at processing results, more miniaturised and less expensive to manufacture.
Veriphi’s plan is to expand from the hospital pharmacy to become ubiquitous throughout the hospital environment as the cost and size of the technology reduce. Pharmacy compounding of sterile drugs is a US$5.6B global business whereas infusion devices and consumables is a US$6-8B global business. The optical features of Veriphi’s proprietary consumable design will ultimately be incorporated into IV bags, IV lines and syringes. Veriphi will continue to expand its library of drugs and concentrations and explore its capability to detect drug contamination and denaturation.
Three major trends are identifiable within the industry, which provide opportunities for Veriphi:
Over the past two years, we have successfully:
The proposition has been significantly de-risked through:
The next phase is commercialisation, with hospital pharmacy trials ongoing at time of writing:
The CDEX Valimed analyser is one of two comparable solutions currently in the market that we are aware of. CDEX is a small (YE Oct 31, 2014, Revenue US$177,000) lossmaking (Net Loss – US$578,000) Arizona company making a range of industrial analytical solutions including CDEX Valimed. Their analyser is a bench top device designed for drug sampling in the laboratory. It uses enhanced photoemission spectroscopy (another optical technique) to verify drugs in proprietary containers. The solution requires the drug to be decanted from its original container for analysis. Although in the market for over 10 years, revenue from the Valimed solution remains modest and uptake from potential partners has been slow.
Dynalabs DVX analyser is also a benchtop analyser for onsite verification. Like the Valimed system, the DVX requires decanting into the analyser to measure the drug and its concentration. The solution uses UV-Vis spectroscopy to measure drugs in as little as 4 seconds for high concentration drugs. Some key differences between the DVX and Verphi solutions are that UV Vis spectroscopy is typically limited to a subset of drugs that fluoresce. The DVX to date has a limited drug library. The drug must be decanted to be measured limiting drug samples for batch testing as opposed to universal screening. The company had revenues of $8.1m in 2013.
Our market validation, from third party comments and internet research, has identified that some potential issues with the CDEX-Valimed and Dynalabs DVX are:
By comparison the Veriphi system is intended to be an in-line solution that is part of the compounding or delivery process as opposed to a laboratory tool. We believe the technology we are using is well suited to miniaturisation and cost reduction required for scaling up; and that the format is well suited to a broad range of drugs.
The Veriphi system can work as a standalone solution or as a ”plug in“ complement to existing IT systems such as Computerised Physician Order Entry (CPOE) and drug bar code medication administration (BCMA). Studies have shown that CPOE, (electronic record keeping) and BCMA (drug tracking using barcodes) technology can reduce medication errors by 55% to 86%. However errors can still occur in these systems through:
Veriphi has three distinct phases to its growth plan:
Phase 1: Validation in Hospital Trials
Completion of technical development to enable commercialisation.
As Veriphi conducts testing for pharmacy use with hospitals and another commercial company, it is preparing 5 devices for compliance testing in preparation for commercial sales.
Phase 2: Commercialisation
First generation sales to hospital pharmacies.
Veriphi estimates first sales to New Zealand hospital pharmacies will commence by mid 2018 spreading to Australia and the United States in 2019 and 2020. Veriphi will scale globally, rapidly, in pharmacies, without the need for medical device compliance, using a service based revenue model.
Phase 3: Scale Up
With a distribution network established in hospitals and other compounding pharmacies, Veriphi will then expand out into other clinical areas in the hospital environment once compliance as a medical device has been achieved, assisted by local reference data. In this way the company can rapidly scale its revenue through the same distribution network. Parallel development of a miniaturised form factor will enable Veriphi technology to become ubiquitous in the hospital environment. Expanding deeply within a limited global footprint will help enable direct distribution and a safety as a service revenue model; charging a set-up and a monthly service fee as the main sources of revenue. The safety as service model speeds up purchase decisions, maximises recurring revenue and streamlines technology upgrades, enhancing customer perceived value.
Our IP strategy is to be proactive, ensuring that any IP that is further developed is protected, broad in its approach, and is commercially aligned with Veriphi’s products and/or future developments. This requires internal and external reflection across and within the Veriphi team with constant communication between all to determine any new developments and to ensure relevance of the patent portfolio.
As such, the Veriphi patent portfolio has 3 primary patent families arms directed to i) the Analyser itself, ii) the software for the Analyser and iii) the Receptacle to be used within the Analyser. The original Veriphi patents have been retained in key markets. Currently the Veriphi patent families are as follows:
Original patent that utilises broadband light. Granted in US and JP. Expires September 2023.
2. “Syringe and reader”
Directed to optical window in a syringe and method for identifying drug and drug volume in a syringe. Granted in NZ, AU, CA, South Africa and US. Expires November 2026.
3. “Spectroscopic Analyser”
Directed to the Analyser itself including its use with a single package laser. Granted patents in AU, JP, NZ and 2 granted in the US. Further pending applications in AU, CA, CN, EPO, KR, NZ and US. Expires October 2032. In the US we have both a granted patent to the Analyser itself and the Analyser with a single package laser. These 2 US patents are particularly powerful as it further blocks the use of an integrated laser with our Analyser which is an important price point for the manufacturing of the Analyser.
4. “Spectroscopic Analysis”
Directed to the software used to determine the drug identification and concentration. Granted patent in the US. Further pending applications in AU, CA, CN, EPO, HK, KR, NZ, South Africa and US. Expires December 2033.
5. “Sample Receptacle for Spectrometry”
Directed to the consumable product into which the drug is provided. PCT application filed. If granted, this patent will expire April 2037. Expect to file this nationally in a broad range of countries.
Veriphi’s focus will be on New Zealand, Australian and US markets. The various agencies and approvals are described below. Veriphi will initially apply for approvals as laboratory testing equipment, for use in pharmacies, avoiding the lengthier medical device route. Veriphi is currently in ongoing discussion with the USFDA regarding the fastest compliance route to market. They have endorsed this approach as part of our ongoing discussions.
The cost and time required for Medsafe (New Zealand) and TGA (Australian) certification is not onerous. Similarly as a device initially used in hospital pharmacies we anticipate a less onerous compliance path than at the patient’s bedside in the United States.
A requirement for US pre-market approval as a medical device could take several years at an approximate cost of over US$200k. Therefore avoiding this compliance pathway speeds up market entry.
We may also pursue European standards CE Mark as a path to Australian medical device approvals because:
1. The documentation workload for EU and Australia are very similar.
2. There is a mutual recognition agreement between Australia and EU which essentially allows devices that have undergone conformity assessment by an EU Notified Body to be placed on the Australian market without further assessment.
Veriphi plans to commence its New Zealand and Australian regulatory approval process for hospital pharmacy use (IEC61010, IEC60825-1 and IEC61326-1) by March - August. Approvals for pharmacy use are expected to take two to three months from the commencement of testing for all three markets. Medical device approval times are estimated below:
We believe the most likely exit opportunity for Veriphi shareholders will come through a trade sale:
Some recent acquisitions in the industry include:
Other Trade Buyers
There are a range of other potential exit options for Veriphi shareholders. Aside from commercial partners, our preference for follow on funding is from large private investors. These investors may wish to acquire shares from current shareholders.
Veriphi does not intend to pay dividends for the foreseeable future. The dividend policy will be reviewed annually by the directors; however we believe that in the medium-term the opportunity will be greatest if Veriphi re-invests any profits for further growth.
Revenues are estimated. See below for supporting business metrics, staff resource forecast, and geographic market forecast.
The model is based on high volume testing in a compounding pharmacy where up to 4,000 tests are performed each month per analyser. The hospital is charged a set up fee that includes; installation, IT integration and training. A service fee per month is charged which includes; the analyser rental, consumables, maintenance and ongoing training. The economic value to pharmacies is supported by the high cost of oncology drugs and the high cost of errors.
Financial Year – End Date
The company year runs from 1st April to 31st March.
We are seeking to raise up to $2m through this offer. From the capital raised in the last investment round, the commercial analyser and consumable have been developed, substantially de-risking the current funding round in the intervening period. The current funding round is designed to now create commercial scalability for the company.
The first two years are focused on building a small base of hospital pharmacy customers. Veriphi plans to sign up other hospital pharmacies for trials once hospital trials have been completed, and convert these hospitals to customers at the end of the trial period. Oncology drug compounding will be our initial focus and we have already approached Napier, Palmerston North and Wellington Hospitals as they have IV oncology drug compounding facilities. Direct approaches to hospitals will be our initial focus using PR and social media to create awareness in preparation for rapid expansion. New customers will come from:
• Direct approaches to hospitals.
• Promotion at industry events.
• PR through mainstream and industry channels/associations.
• Digital Marketing to clinicians.
Rapid uptake through safety as a service.
Rather than selling our analysers the solution will be sold as a service for an upfront installation cost and monthly service fee. Avoiding the capital expenditure approval process will help fast track hospital adoption.
Faster market penetration by avoiding medical device compliance hurdles.
For local and offshore expansion we plan to focus first on pharmacy compounding to avoid the compliance delays that would occur were it to be classified as medical device. Classified as laboratory equipment instead, the compliance approval process is expected to be much shorter.
In-market expansion as the technology moves throughout the hospital.
In-market data from pharmacy testing will accelerate medical device compliance, allowing Veriphi to expand into multiple clinical areas throughout the hospital, dramatically expanding revenue opportunities from the same distribution base. Revenue per customer will grow as verification expands from batch testing of high risk drugs in pharmacies through to testing all drugs of a certain type at multiple locations throughout the hospital.
1. Batch sampling IV oncology drugs in the hospital pharmacy.
2. Verifying all IV oncology drugs in the hospital pharmacy.
3. Verifying other IV drugs at multiple locations in the hospital e.g. medication rooms and anaesthesia.
The first two areas for expansion outside of pharmacies will be medication rooms and operating theatres. Many hospitals do not have compounding pharmacies (only seven out of 200 hospitals in New Zealand do). In this instance drugs are compounded at third party suppliers or in medication rooms attached to wards and treatment areas. Determining the rate of this expansion will be:
1. The performance of the technology.
2. Number of drugs that can be accurately verified.
3. The cost per test.
4. The size and cost of the analyser.
The cost of the analyser to the end user falls as more are produced as per initial quotes from suppliers. Lasers comprise over 95% of the current material costs. This cost will fall rapidly with volume and even further with integration of the optical circuit on to a silicon chip. These costs must remain confidential. However the development cost and time quoted by our partners has fallen considerably. The cost of the intravenous consumables to the end user falls as more are produced and further development enables the use of lower cost materials. As yet our plans to develop a very low cost consumable remain preliminary. However, we remain optimistic that the cost targets can be achieved, through volume and innovative use of materials. The margin on both analysis machines and the intravenous consumables rise as more are produced with the upside shared between Veriphi and its customers. This reflects our belief that as the technology improves and we are able to scale, the cost to the user will fall, but our margin will increase.
Expense and Capital Expenditure Assumptions
• Product development costs of $403k in FY18, $500k in FY19, $600k in FY20, and $700k in FY21.
• Salary and wages are forecast to rise from $30K in FY17 to $2.8m in FY21.
• Test equipment capital expenditure of $75k in FY17, $42k in FY18, $100k in FY19, $150k in FY20 and $200k in FY21.
Veriphi is forecasting positive operating results from FY20, requiring funding for the next three years:
Technology fails to deliver a commercial solution
Rapid progress over the past 12 months has reduced the risk of the technology not delivering a commercial solution. The technology has a range of potentially less demanding clinical verification applications should particular drugs prove problematic. e.g. limited drug sets in high risk areas, or negative verification i.e. drugs fluids that should never be given.
Technology development falls behind schedule
We believe we are on track to have a commercially viable solution by mid 2018.
Cost structure unaffordable for hospitals
Market validation work indicates we have a wide scope depending on different clinical applications. However the company has a plan in place for dramatic cost reduction of the hardware with experienced technical partners. Consumable costs will decrease with volume.
Low interest from clinicians
Veriphi has experienced broad interest from clinical leaders both in New Zealand and abroad, a number of whom are members of our advisory team. As well as trials in selected New Zealand hospitals, we are in the process of planning trials with research partners in Australia and the United States.
Low interest from global commercial partners
Veriphi has long established interest from a number of large global healthcare companies who have affirmed the solution’s value proposition as well as our complementary fit with existing systems.
IP hurdles for freedom to operate
Veriphi periodically conducts freedom to operate searches and is aware of two patents that it may have to accommodate to fully execute its longer term plan, depending on the commercial direction taken. Ongoing freedom to operate work is required and the funds invested will be used in part to do this.
Compliance hurdles delay execution of plan
Veriphi will build commercial, technical and clinical momentum, by pursuing applications with lesser compliance burdens, before addressing the US “Medical Device” regulatory hurdles. This will be achieved by 1. Pursuing non-US opportunities first 2. Commencing first with pharmacy verification, which is not a medical device under FDA regulations 3. Trialing in the US and Australia early.
Capital burden of establishing manufacturing
Initial production will be performed by Veriphi but volume production will be undertaken by established contract manufacturers in Asia.
Copying or blocking by potential competitors
Other companies may be developing similar competitive solutions. We are not aware of any commercial solutions using directly comparable technology relevant to this specific application. We have a growing patent portfolio to provide protection along broad contacts in the industry.
Key members of staff may leave, causing disruption
Veriphi diffuses key management responsibilities and keeps extensive documentation of business processes, such that the loss of any of its key people could be managed with minimal disruption.
Customer concentration risk
Seven New Zealand District Health Boards (Auckland, Waikato, Hawkes Bay, Mid Central, Capital Coast, Canterbury and Dunedin), have their own hospital pharmacies. We also plan to conduct trials in Australia and the United States at the earliest opportunity in order to broaden our reach and minimise customer concentration risk.
Dilution of existing shareholders in the event of new capital needing to be raised
Veriphi has strongly considered its capital needs and believes the capital raised during this offer will be sufficient to cover its immediate needs. Existing Veriphi shareholders will be given the right to participate in any future fund-raising rounds to maintain their pro-rata position.
Valuation of the company before funds are invested
Amount required for the offer to be deemed successful
The maximum amount the company is looking to raise
Percentage of the company offered at the minimum target
Percentage of the company offered at the maximum target
The cost of each share
The minimum investment amount for this offer
See the Subscription Agreement for details
The company may have rights to shorten or extend this period
The company may have rights to shorten or extend this end date
Veriphi’s NZ$13m (pre-money) valuation is in recognition of the significant progress made since the last funding round in 2016. The analyser electronics, software and mechanical hardware have all been redesigned and off tool parts are in production for the analyser and consumable. Testing continues to deliver positive results and testing time has been reduced from 100 to 10 seconds. Recent milestones are as follows:
• July 2014: Successful verification of 30/31 anaesthetic drugs in randomised blind trials using a single container after repeatability issues addressed.
• April 2015: Successful use of the mathematical model for verification of 10 drugs in multiple containers.
• July 2015: Indicative results on fast verification times.
• September 2015: Transfer of algorithm into software code.
• October 2015: Positive results in randomised blind trials on 15 common anaesthetic drugs using a second prototype and a single container.
• February 2016: 100% success across 40 blind trials of 10 drugs in 4 containers with data measured across three temperatures. This is a significant step forward in the pathway to successful commercialisation.
• February 2017: 100% success across 100 blind trials of 10 drugs in 3 containers with data measured across three temperatures. The testing time was reduced from 100 to 10 seconds, with total new analyser hardware, software and new consumable prototype.
• June 2017: Veriphi signs a research agreement.
• Nov 2017: Veriphi completes the first round of hospital trials.
International medical device comparable companies are observed to trade on 2 – 3x forward revenue at earlier stage, and 5 – 7x forward revenue for more mature companies. Veriphi has been valued at 2x revenue for FY20.
Roger Lampen, Veriphi’s largest financial investor has committed to invest a minimum $150k at the $3.87 share price.
In August 2017, foundation shareholder Cornelis (Kees) Klein offered all his shares for sale at $1.35 per share to Veriphi shareholders. Kees has had no involvement with Veriphi for 7 years. He offered his shares at this substantially discounted price in order to urgently release funds for other needs. The transaction was oversubscribed which created an opportunity for three other small shareholders to also sell their shareholding. Forty-six shareholders increased their shareholding.
Remuneration of senior management and directors
• CEO Greg Shanahan is paid $120,000 per annum.
• Directors fees in future will be paid in cash.
• Director’s fees are not paid to the Chairman.
• Roger Lampen was a director of health IT company HSA Global when it went into liquidation in August 2015.
• Key staff member remuneration will be reviewed regularly by the Board to ensure the company continues to attract and retain high quality individuals.
Related Party Transactions
Future Funding Options
Should further capital be required it is likely to be raised from one or more of the sources below:
• Private Investors. A significant investment by one or more small private investors.
• Commercial Partners. Investment from market or technology partners.
• Follow-On Crowdfunding Offer. New Zealand legislation currently allows fund-raising of up to $2 million in any 12 month period.
• Trade Sale. It may be the case that a buyer who can bring substantially more resources to Veriphi makes an offer for the company. In this case, an exit for current shareholders could be achieved and Veriphi would continue as a subsidiary with funding from the new owners.
On the basis that Veriphi is performing well against KPIs, Veriphi will also consider some debt funding to potentially reduce the need for new capital and any potential dilution effect that may have.
The type of shares on offer are:
We are offering Investment Class Shares, as non-voting shares, to prevent the company from becoming a “Code Company” for the purposes of the Takeovers Code. A company becomes a Code Company when it has 50 or more voting share parcels, and shareholders of Code Companies can be restricted in how and when they are able to transfer their shares. Due to Veriphi’s size, our advisors and the board do not believe it is in the best interests of Veriphi, its shareholders or investors for it to become a Code Company and face the increased compliance costs associated with this.
Investment Class Shares give the holders:
The Investment Class Shares do not give the holder the right to vote at meetings of shareholders. In very limited circumstances (to ensure the shareholders’ core rights are protected) each Investment Class Share gives the holder the right to one vote. This only occurs where there is a proposal or resolution:
All Investment Class Shares automatically convert to Ordinary Shares upon certain events such as an initial public offering (sharemarket listing) or a liquidity event. In such an event, each Investment Class Share will convert one for one into an Ordinary Share, which shall rank equal with all existing Ordinary Shares. This conversion is designed to give holders of Investment Class Shares the same economic benefits as holders of Ordinary Shares upon an exit event. The constitution and shareholder agreement set out other terms that will apply to any shareholding in Veriphi. You should read these documents before subscribing for shares.
• Board meetings are held monthly and a written report is provided in advance to the directors.
• Regular updates are sent to shareholders.
Share Registry Management
We currently use Avenir to manage our share registry. After the capital raise we will be transitioning to use the Snowball Effect share registry.
Veriphi will issue a quarterly report to shareholders which will provide operational KPIs, key achievements in the quarter and key goals for the quarter ahead. Key financials will be described and reported once a year.
This information memorandum has been prepared by Veriphi Limited. The information contained in this information memorandum is confidential. This information memorandum has been compiled from information believed to be reliable as at the date of this document. The purpose of this document is solely for information purposes to assist recipients in making their own evaluation of whether they wish to invest in Veriphi Limited.
The distribution of this offer outside of New Zealand may be restricted by law. This is not intended to, and does not, constitute an offer of securities in any place which, or to any person to whom, the making of such offer would not be lawful under the laws of any jurisdiction outside New Zealand. This includes, but is not in any way limited to, Australia and the United States. It is the responsibility of any Snowball Investor to ensure compliance with all laws of any country outside New Zealand relevant to their subscription, and any such Snowball Investor should consult their professional advisers as to whether any governmental or other consents are required, or other formalities need to be observed to enable them to apply for securities pursuant to each offer. The failure to comply with any applicable restrictions may constitute a violation of securities law in those jurisdictions. The securities in each offer have not been and will not be registered under the US Securities Act or the securities laws of any state of the United States.
It's crucial for you to understand the characteristics and risks of this investment opportunity. New Zealand law normally requires people who offer financial products to provide in-depth information to investors before they invest. The usual rules do not apply to offers by companies through Snowball Effect. As a result, you may not be given all the information you need to make an informed decision. Investing is risky. Some of the key risks include loss of capital, illiquidity, lack of returns, dilution, loss of key people and customers, and lack of control. You should only invest money that you can afford to lose.