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Risk Factors

Aera Force Risk Factors

Participating in the Fund involves a high degree of risk for the participant. Before making any decision to enter into a Fund, you should consider carefully the risks described below, together with all of the other information contained in this Green Paper.

The following risks entail circumstances under which, our business, financial condition, results of operations and prospects could suffer. The list of risk factors below is not exhaustive and Aera Force does not express any view as to the likelihood of any of the contingencies detailed below occurring. You may wish to seek professional advice in relation to the possible risks that may arise as a result of your participating in a Fund.

Risks associated with the development and deployment of Aera Force Tickets

Aera Force Tickets may not be successfully developed or may not function as intended and Fund capital may not be deployed as intended or at all.

Aera Force is at a very early stage of development. Aera Force Management, LLC (the “Manager”) may have to make changes to the specifications of Fund, Treasury, or Aera Force Tickets for any number of legitimate reasons or Aera Force may be unable to structure the Fund or the Treasury in a way that realizes those specifications or forms of a functioning network. To the extent that Aera Force is successfully capitalized and the Fund is deployed, Aera Force, the Treasury and/or Aera Force Tickets, may not meet participant expectations at the time of entering into the Fund and may be different from those set out in this Green Paper. Furthermore, despite Aera Force’s efforts to develop and deploy the Fund and subsequently to develop and maintain the Aera Force Tickets, it is still possible that the Fund structure or DAO governance process will experience malfunctions or otherwise fail to be adequately developed or maintained, which may negatively impact Aera Force Tickets.

The capitalization of the Fund and Treasury will require significant capital funding, expertise and Aera Force’s time and effort. The Fund may fail to attract sufficient interest from key stakeholders or require significantly more funding or time in development than Aera Force currently envisions, which may result in suspension or cancellation of launching of the Fund. If Aera Force is not successful in its efforts to demonstrate to users the utility and value of Aera Force Tickets, there may not be sufficient demand for Aera Force Tickets for Aera Force to proceed with the deployment of the Fund. As a result, or if the deployment of the Fund capital does not occur, participants may lose all of the funds provided in connection with the Fund. The Fund may not be deployed as intended at all.

Due to the decentralized nature of the Fund, there is no guarantee that the Fund (to the extent that it is fully capitalized) will be deployed as intended or at all. As Aera Force Tickets are Non-Fungible Tokens (NFTs) unique to the Fund, they may not come into existence, whether as part of the Fund or otherwise, if there is no full capitalization of the Fund.

Aera Force’s success depends on retention of its personnel, and the loss of one or more key team members, whether at the Manager level or in the Aera Force management ecosystem, may harm Aera Force and the capitalization and deployment of the Fund and/or circulation of Aera Force Tickets.

Aera Force’s success depends substantially upon the continued services of certain key partners. Changes in Aera Force’s team may be disruptive to its success in launching the Fund and/or Aera Force Tickets.

Aera Force may not be successful in engaging the services of its preferred software developer(s). Aera Force may not have or may not be able to obtain the technical skills and expertise needed to progress the Fund to deploy capital into investments. There is a general scarcity of management, technical, scientific, research and marketing personnel with appropriate training to develop and maintain the Fund.

Risks associated with joining a Fund

Aera Force Tickets may not be transferred.

The terms of the Fund prohibit transfer of Aera Force Tickets. As a result, participants will be required to hold their Aera Force Tickets until the earlier of liquidation of corresponding investments and allocation of capital returns, or the termination or liquidation of the Fund pursuant to its terms. Consequently, participants must be prepared to bear the risk of participating in the Fund until the termination or wind-down of the Fund pursuant to the terms set forth therein.

The tax treatment of the Fund, the rights contained therein and the Aera Force Ticket allocation is uncertain and there may be adverse tax consequences for participants upon certain future events.

The tax characterization of the Fund and the Aera Force Tickets is uncertain, and each participant must seek its own tax advice in connection with participating in the Fund. A purchase pursuant to the Fund and the rights to Aera Force Tickets pursuant thereto may result in adverse tax consequences to participants, including withholding taxes, income taxes and tax reporting requirements. Each participant should consult with and must rely upon the advice of its own professional tax advisors with respect to the United States and non-U.S. tax treatment of minting an Aera Force Ticket.

Taxes in Other Jurisdictions

Prospective participants should also consider the potential state and local tax consequences of an investment in the Fund.  In addition to being taxed in its own state or locality of residence, a ticket holder may be subject to tax return filing obligations and income, franchise and other taxes in jurisdictions in which the Fund operates.  

Participants in the Fund may lose up to the entire value of funds contributed

In the event that the Fund is not successfully capitalized or is not deployed, participants in the Fund may not receive any returns on their Aera Force Tickets. In these circumstances, participants in the Fund will lose the full value of funds provided in connection with the Fund.

Aera Force is not currently regulated

Aera Force is not currently regulated by any regulatory, supervisory or governmental authority and participants in the private sales and general sales will not, therefore, be afforded the benefit of any regulatory protections, including in relation to the protection of any funds contributed through private sales or through any general sale or minting of Aera Force Tickets.

Risks associated with the minting Aera Force Tickets

The initial mint of Aera Force Tickets, or any part of it, may not be completed as planned. There is no guarantee that the ticket mint will be completed or go ahead as currently envisioned. Aera Force may need to suspend or change the structure of the sale, including imposing restrictions on certain aspects of the sale, in a short space of time and may not be able to provide advance notice of such changes. In addition, Aera Force expresses no view as to the expected level of interest in participation in any general sale of Aera Force Tickets.

Risks associated with Aera Force Tickets

The applicable law relevant to Aera Force and / or Aera Force Tickets may change

The law applicable to Aera Force and / or the Aera Force Tickets, including the initial minting of Aera Force Tickets, may change in a manner that means Aera Force is no longer permitted to complete the minting of Aera Force Tickets or allocate the Aera Force Tickets as intended.

Aera Force Tickets may have no economic value and any value may be subject to extreme volatility.

Aera Force expresses no view as to the economic value of Aera Force Tickets and it is possible that Aera Force Tickets will have no economic value at all. Any economic value that Aera Force Tickets do have, whether such value arises solely in the context of the use of Aera Force Tickets in Aera Force or whether investment equity accrues to such ticket(s), may be subject to extreme volatility resulting in a total loss of all economic value, which shall be borne solely by holders of Aera Force Tickets.

‘Bad actors’ may lose some or all of their Aera Force Tickets.

It is contemplated that holders of Aera Force Tickets who are deemed to be ‘bad actors’ under the governance framework of the Fund may lose some or all of their Aera Force Tickets.

Nature of the legal relationship between holders of Aera Force Tickets is uncertain.

The legal nature of the relationship (if any) between the holders of Aera Force Tickets and the liabilities and obligations of holders of Aera Force Tickets is uncertain.

Regulatory treatment of Aera Force Tickets is uncertain.

As the minting of NFTs is a nascent practice, the treatment of Aera Force Tickets by regulatory and governmental authorities is uncertain and may vary across jurisdictions. The legal and regulatory treatment of Aera Force Tickets may be prone to change in the future, which may have a materially adverse impact on the legal status of Aera Force Tickets, the economic value (if any) of Aera Force Tickets and the liquidity of Aera Force Tickets, as well as the development, function or governance of the Fund and / or Aera Force itself.

There may not be a secondary market for Aera Force Tickets.

As it is intended that Aera Force Tickets created will be non-transferable, and as Aera Force does not intend to provide, develop or support any infrastructure to allow for the trading of Aera Force Tickets, the nature and extent of any secondary market for Aera Force Tickets cannot be predicted. As a consequence, any person intending to participate in the first general sale should consider lack of liquidity in Aera Force Tickets as a risk.

Risks associated with blockchains and distributed ledger technologies

Viruses and other malicious code.

Aera Force may not be able to ensure that material made available to participants by Aera Force or any third party in relation to the Fund will be free from viruses or any other code that has contaminating properties or is otherwise destructive in its effect.

Mining attacks.

The blockchain on which the funds sent to Aera Force pursuant to the Fund and the cryptographic wallet in which funds are stored may be subject to successful attacks.

Advances in code cracking and other technical advances.

Advances in code cracking, or technical advances such as the development of quantum computers, could present risks to the Fund or the Ethereum blockchain, which could result in the theft or loss of Aera Force Tickets.

Loss of Aera Force Ticket wallet private keys.

The loss or destruction of a private key used by a participant to access the Ethereum public key through which they will access their Aera Force Tickets or the private key used to access their Aera Force Tickets wallet may be irrecoverable. Widespread loss or destruction by participants of private keys used to access their respective Aera Force Ticket wallet may adversely affect the functioning of the Fund and the economic value (if any) of Aera Force Tickets.

Digital Asset Risks

Digital Asset Investments

The Fund may invest in cryptocurrencies, decentralized application tokens, protocol tokens and other cryptofinance coins, tokens and digital assets and instruments that are based on blockchain, distributed ledger or similar technologies (collectively, “Digital Assets”).  Digital Assets are loosely regulated and there is no central marketplace for currency exchange.  Supply is determined by a computer code or other action, not by a central actor, and prices have been extremely volatile. Digital Asset exchanges and other service providers to the Digital Assets sector are not well developed.  Multiple Digital Asset exchanges and parties providing storage solutions for Digital Assets have ceased operation due to fraud, security breaches and governmental decree.  The Fund’s investments in Digital Assets may be held by such an exchange or other third party and could be subject to loss if such exchange or other third party were to shut down or suffer a security breach or other negative event.  Additionally, various jurisdictions may, in the near future, adopt laws, regulations or directives that affect Digital Assets and parties that come into contact with Digital Assets.  Such laws, regulations or directives may negatively impact the Fund in a variety of ways, including increasing the compliance burden of the Fund and its related parties or diminishing the value of the Fund’s investments in Digital Assets.

Emerging Technology and Malicious Actors

The ownership or transmission of Digital Assets is recorded or verified by a distributed ledger or other similar technology. The marketplace for such Digital Assets is still in its early stages of development, which may increase the risk of loss with respect to investments in Digital Assets in a number of ways.  Digital Assets and their functions are generally governed by software run on a network of computers associated with such Digital Assets.  Various issues related to such software and such computer networks could result in the diminution in value of Digital Assets, including, without limitation, undiscovered flaws in software, advancement in computing technology, fraud and third party attacks on computer networks.

Tax Risk of Digital Asset Investments

There is substantial uncertainty regarding the tax treatment of Digital Assets. As such, the General Partner may take certain tax positions that may ultimately be treated differently in the course of an audit by the Internal Revenue Service, or the regulations promulgated by the IRS may change over time. As a result, Limited Partners may be subject to adverse tax consequences associated with their investment in the Fund.

Risks associated with the Issuer

Aera Force may be dissolved and its assets transferred.

THE INVESTMENT OFFERED HEREBY IS HIGHLY SPECULATIVE, AND PROSPECTIVE PURCHASERS SHOULD BE AWARE THAT AN INVESTMENT IN THE NON-FUNGIBLE TOKENS INVOLVES A HIGH DEGREE OF RISK. ACCORDINGLY, PROSPECTIVE PURCHASERS SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS IN ADDITION TO THE OTHER INFORMATION IN THIS GREEN PAPER.

Lack of Liquidity.

The Aera Force Tickets are being offered without registration under the Securities Act, in reliance upon an exemption contained in Section 4(2) of the Securities Act and/or Regulation D under the Securities Act. Certain restrictions on transferability will preclude disposition and transfer of Securities other than pursuant to an effective registration statement or in accordance with an exemption from registration contained in the Securities Act. In addition, the transfer of the Aera Force Tickets is restricted. In light of the restrictions imposed on a transfer of the Aera Force Tickets, an investment in the Aera Force Tickets should be viewed as illiquid and subject to risk.

The determination of the amount of the offering has been arbitrarily determined by the Manager.

The amount of the Aera Force Tickets of the Fund offered hereby has been arbitrarily determined by the Manager and is not based on the Fund’s book value, assets, earnings or any other recognizable standard of value. As such, no prospective investor should infer that the Manager has chosen to offer the amount of Aera Force Tickets described herein because of the Fund’s assets or book value. If profitable results are not achieved from the Fund’s operations, of which there can be no assurance, the Fund may not have sufficient resources to make distributions to the ticket holders.

There is no public market for the Aera Force Tickets described herein, and no market is expected to develop for the Aera Force Tickets in the future. The Aera Force Tickets are not being registered under the Securities Act or the securities laws of any other

appropriate jurisdiction in reliance on exemptions from such registration requirements, including state, federal, or international jurisdictions. The Aera Force Tickets may not be resold or otherwise transferred unless the Aera Force Tickets are later registered under the Securities Act or the securities laws of any other appropriate jurisdiction, or unless an exemption from such registration requirements is available.

Accordingly, an investor may be unable to liquidate an investment in the Aera Force Tickets and should be prepared to bear the economic risk of an investment in the Aera Force Tickets for an indefinite period. In addition, an investor should be able to withstand the total loss of his/her or its investment.

The Aera Force Tickets are being offered by the Fund on a “best efforts” basis and no minimum amount of proceeds is required to be raised before the Fund may use the proceeds of this NFT mint.

No assurance can be given that all or any specific portion of Aera Force Tickets offered hereby will be sold. The description of “Investment Strategy” set forth herein shows the proposed use of the net proceeds assuming the sale of all of the Aera Force Tickets offered hereby. To the extent that less than all of the Aera Force Tickets offered hereby are sold, the Fund will need

to adjust its investment strategy to compensate for the reduction in receipt of funds.

No Minimum Capitalization Applicable To The Offering.

The Fund does not have a minimum capitalization, and it may immediately use the proceeds from the issuance of the Aera Force Tickets once the accredited investor and “know your customer” requirements are satisfied and Aera Force Tickets are minted. The Fund may only raise a minimum of capital, which could leave it with insufficient capital to implement its business plan effectively. There can be no assurance that alternative capital or financing would be available.

Risk Offering Exemptions Not Available.

In making this Offering, the Fund is relying upon the availability of Regulation D to exempt its offerings from registration under the Securities Act. If the private placement exemptions relied upon is not available to the Fund and/or its Manager for any reason, the Fund and its Manager may be required to offer to the investors the right to rescind their purchase of the Aera Force Tickets, which could have a material adverse effect on the Fund, its business, and its financial condition. There is also no assurance that the Fund and/or its Manager would have adequate funds to repay ticket holders if rescission were required. Any related litigation with the Securities and Exchange Commission or other state, federal or local agencies or parties would also have a material adverse impact on the Fund.

Investment Advisers Act of 1940

The Manager is not registered with the Securities and Exchange Commission (”SEC”) as an Investment Adviser under the United States Investment Advisers Act of 1940 (“Advisers Act”) or any state administrator as an investment adviser and, consequently, investors will not be afforded the protections of the Advisers Act or similar state acts. The Manager believes it is not required to register as an Investment Adviser in reliance upon multiple exemptions contained in the Advisers Act. Specifically, the Manager has elected to rely on the following facts and corresponding regulations:Section 203A of the  Advisers Act generally prohibits an investment adviser from registering with the SEC unless that adviser has more than $25 million of assets under management or is an adviser to a registered investment company. The initial Fund will not exceed $25 million in assets under management. 
Investment decision-making will reside, subject to voting and governance provisions of the Fund, with the ticket holders; specifically, the Green Team, comprised of investors and community members as set forth below in “DAO Governance Structure”. As such, the Manager will not be a primary source of, or authority over, investment decisions; nor does the Manager hold itself out to provide investment advice to Fund participants, nor conduct any advisory services. 
From inception and as the Fund grows, it will expressly follow an investment strategy that allows it to be a “venture capital fund,” exempt from registration with the SEC under Section 203(l) of the Advisers Act. Therefore, although such designation may limit the ability of the Fund to make certain types of qualifying investments, in the event deemed to control and/or advise on the Fund’s investment strategy, the Manager and its affiliates (including the Fund) would be permitted to rely on the exception hereunder as an investment adviser that solely advises venture capital funds. 
Finally, Section 203(b)(3) of the Advisers Act which permits persons or entities advising fewer than fifteen clients and neither holding themselves out generally to the public as an investment adviser nor acting as an investment adviser to any investment company registered under Title I of the Act.
In order to qualify under Section 203(b)(3) of the Advisers Act, the Manager is relying on Advisers Act Rule 203(b)(3)-1 which provides that any “legal organization” (such as the Fund) may be considered a single client. Compliance with these exemptions requires that the Manager provide investment decisions to the Fund (based on the Fund’s overall investment objectives, as applicable for decisions not made by the Green Team) and not to any ticket holder individually. 

Due to the various burdens of compliance with the Advisers Act, the performance of the Fund’s investments could be materially adversely affected, and risks involved in financing developing companies could substantially increase, if the Manager or any of its affiliates were required to register under the Advisers Act or with any state administrator.  The Manager cannot assure investors that, under certain conditions, changing circumstances or changes in law, the Manager or any of its affiliates may not be required to register under the Advisers Act or under similar state acts. Ongoing compliance with this exemption requires great care on the part of the Manager to ensure the Fund’s continuing eligibility for the exemption. If the Manager were to fail to qualify as an exempt investment adviser or register accordingly after any such exemption lapses, the Fund and its Manager could be subject to enforcement action by state or federal securities regulators. Such enforcement action could result in the termination of the Fund’s operations and liquidation of the Fund, as well as significant fines and penalties.

The Aera Force Tickets offered hereby are not insured by any governmental or private agency, and they are not guaranteed by any public or private entity other than the Fund. Likewise, the Fund is not regulated or subject to examination in the same manner as commercial banks and thrift institutions. The Fund is not a commercial bank or savings/thrift institution. The Fund is dependent upon proceeds from investment deals to make distributions to its ticket holders and to conduct its ongoing operations. The Fund’s revenues from operations, including the acquisition, servicing and management of its deal portfolio and the Fund’s working capital represent the sources of funds for distributions to its ticket holders.

DAO Governance Structure

The Fund is governed by collective vote in the form of a decentralised autonomous organization (”DAO”). The Manager does not hold exclusive control over investment decisions and therefore, Green Team decisions are attributable to collective or majority vote, rather than an experienced team of investment professionals. The governance as intended shall reflect community engagement and collaborative diligence, dealflow support, and investment signoff, rather than external or third-party fund management.

See “DAO Voting and Investment Process” for more information on DAO participation structure and decisionmaking for deals.

The Fund Has A Limited Operating History.

The Fund was formed on February 8, 2022, and accordingly has a limited history of operation. There can be no assurance that the Fund will be able to successfully implement its business plan. For these and other unforeseeable factors, there can be no assurance that the Fund will achieve or sustain profitable operations.

Restrictions On Transfers and Withdrawals – Suspension of Withdrawals.

The right of any ticket holder to withdraw monies from the Fund is subject to the provision by the Manager for Fund liabilities in accordance with U.S. generally accepted accounting principles and reserves for contingencies. In addition, the Manager may, in its sole discretion during the existence of any state of affairs that, in the opinion of the Manager, make the determination that the price, value or disposition of the Fund’s investments is impractical or prejudicial to the non-withdrawing ticket holders.

There Is No Assurance The Fund Will Turn A Profit.

There is no assurance as to whether the Fund will be profitable, or earn revenues, or whether the Fund will be able to return any investment funds, to make cash distributions or to meet its operating expenses.

There Is No Assurance The Fund Will Generate Immediate Revenues.

The Fund anticipates that it will incur substantial expenses relating to the acquisition and servicing of its portfolios of deals. The Fund currently expects the initial expenses it incurs to result in operating losses for the Fund for the foreseeable future. Furthermore, no assurance can be made that a Subscriber for the Securities offered hereby will not lose his or her or its entire investment.

The Fund Will Be Subject To Substantial Fees and Expenses Regardless Of Profitability Of The Fund.

The Fund will pay various fees and expenses related to its ongoing operations regardless of whether or not the Fund’s investment activities are profitable. These fees and expenses include, but are not limited to, the Management Fee paid to its Manager as referenced in this Green Paper. These fees and expenses will require that the Fund’s investment activities generate sufficient revenues in excess of these expenses.

The Fund May Not Achieve Its Goals And Objectives.

All investments in the Fund risk the loss of capital. While the Fund’s Manager believes that its experience and relationships will moderate this risk to some degree, no representation is made that the Fund’s investment strategy will be successful.

The Fund May Become Subject To Litigation.

There are many risks incident to certain deals that may give rise to litigation. The Fund may also be named as a defendant in a lawsuit or regulatory action. The Fund may also incur uninsured losses for liabilities which arise in the ordinary course of business, or which are unforeseen, including, but not limited to, employment liability and business loss claims. There is no assurance that the Fund’s ticket holders will not lose their entire investment in the Fund as a result of unforeseen litigation.

There May Be Changes In Laws Applicable To The Fund.

The Fund must comply with various legal requirements, including requirements imposed by the state and federal securities laws, pension laws and state licensing requirements. Should any of those laws change, the legal requirements to which the Fund may be subject could differ materially from current requirements.

The Fund May Face Adverse Tax Consequences.

While the Fund is advised in tax matters by its accountants and attorneys, the Internal Revenue Service (“IRS”) may not accept the tax positions taken by the Fund. For example, the Fund may agree with a company receiving funding to classify the deal structure as an equity based revenue based financing transaction while the IRS and the U.S. tax court determine the financing transaction should be classified as debt.

The Fund Could Be Audited By The Internal Revenue Service.

The IRS could audit the Fund’s information and adjustments to the Fund’s tax returns could occur as a result. Any such adjustment could result in the Fund and/or ticket holders paying additional tax, interest and penalties, as well as incremental accounting and legal expenses.

Companies Receiving Funds Could Be Audited By The Internal Revenue Service.

The IRS could audit Companies receiving funds and reclassify qualified dividend and stock redemption payments as loan principal and interest payments. This could result in adjustments to the Fund’s tax returns and tax impact to the ticket holders as a result. Any such adjustment could result in the Fund and or ticket holders paying additional tax, interest and penalties, as well as incremental accounting and legal expenses.

Non-U.S. Investment Risks.

The Fund’s current investment program involves sourcing and participating in both domestic and foreign deals, private placement, and varying hybrid funding deals. Investing in offshore entities involves certain risks not associated with investing in securities of U.S. companies or the U.S. government. These risks include, but are not limited to, political and economic considerations, such as higher risk of nationalization, confiscatory taxation, difficulties involved in repatriating funds, social, political and economic instability, the low volume of trading and resulting lower liquidity present in offshore securities markets, difficulty in settling securities trades, fluctuations in exchange rates between currencies, lower levels of regulation of offshore securities markets and investment entities, and comparatively lower accounting standards.

The Biggest Risk of All.

Not investing in Aera Force is your biggest risk of all. Thank you for making it all the way down here! Now come on in, the water’s fine.

Risk Factors

Aera Force Risk Factors

Participating in the Fund involves a high degree of risk for the participant. Before making any decision to enter into a Fund, you should consider carefully the risks described below, together with all of the other information contained in this Green Paper.

The following risks entail circumstances under which, our business, financial condition, results of operations and prospects could suffer. The list of risk factors below is not exhaustive and Aera Force does not express any view as to the likelihood of any of the contingencies detailed below occurring. You may wish to seek professional advice in relation to the possible risks that may arise as a result of your participating in a Fund.

Risks associated with the development and deployment of Aera Force Tickets

Aera Force Tickets may not be successfully developed or may not function as intended and Fund capital may not be deployed as intended or at all.

Aera Force is at a very early stage of development. Aera Force Management, LLC (the “Manager”) may have to make changes to the specifications of Fund, Treasury, or Aera Force Tickets for any number of legitimate reasons or Aera Force may be unable to structure the Fund or the Treasury in a way that realizes those specifications or forms of a functioning network. To the extent that Aera Force is successfully capitalized and the Fund is deployed, Aera Force, the Treasury and/or Aera Force Tickets, may not meet participant expectations at the time of entering into the Fund and may be different from those set out in this Green Paper. Furthermore, despite Aera Force’s efforts to develop and deploy the Fund and subsequently to develop and maintain the Aera Force Tickets, it is still possible that the Fund structure or DAO governance process will experience malfunctions or otherwise fail to be adequately developed or maintained, which may negatively impact Aera Force Tickets.

The capitalization of the Fund and Treasury will require significant capital funding, expertise and Aera Force’s time and effort. The Fund may fail to attract sufficient interest from key stakeholders or require significantly more funding or time in development than Aera Force currently envisions, which may result in suspension or cancellation of launching of the Fund. If Aera Force is not successful in its efforts to demonstrate to users the utility and value of Aera Force Tickets, there may not be sufficient demand for Aera Force Tickets for Aera Force to proceed with the deployment of the Fund. As a result, or if the deployment of the Fund capital does not occur, participants may lose all of the funds provided in connection with the Fund. The Fund may not be deployed as intended at all.

Due to the decentralized nature of the Fund, there is no guarantee that the Fund (to the extent that it is fully capitalized) will be deployed as intended or at all. As Aera Force Tickets are Non-Fungible Tokens (NFTs) unique to the Fund, they may not come into existence, whether as part of the Fund or otherwise, if there is no full capitalization of the Fund.

Aera Force’s success depends on retention of its personnel, and the loss of one or more key team members, whether at the Manager level or in the Aera Force management ecosystem, may harm Aera Force and the capitalization and deployment of the Fund and/or circulation of Aera Force Tickets.

Aera Force’s success depends substantially upon the continued services of certain key partners. Changes in Aera Force’s team may be disruptive to its success in launching the Fund and/or Aera Force Tickets.

Aera Force may not be successful in engaging the services of its preferred software developer(s). Aera Force may not have or may not be able to obtain the technical skills and expertise needed to progress the Fund to deploy capital into investments. There is a general scarcity of management, technical, scientific, research and marketing personnel with appropriate training to develop and maintain the Fund.

Risks associated with joining a Fund

Aera Force Tickets may not be transferred.

The terms of the Fund prohibit transfer of Aera Force Tickets. As a result, participants will be required to hold their Aera Force Tickets until the earlier of liquidation of corresponding investments and allocation of capital returns, or the termination or liquidation of the Fund pursuant to its terms. Consequently, participants must be prepared to bear the risk of participating in the Fund until the termination or wind-down of the Fund pursuant to the terms set forth therein.

The tax treatment of the Fund, the rights contained therein and the Aera Force Ticket allocation is uncertain and there may be adverse tax consequences for participants upon certain future events.

The tax characterization of the Fund and the Aera Force Tickets is uncertain, and each participant must seek its own tax advice in connection with participating in the Fund. A purchase pursuant to the Fund and the rights to Aera Force Tickets pursuant thereto may result in adverse tax consequences to participants, including withholding taxes, income taxes and tax reporting requirements. Each participant should consult with and must rely upon the advice of its own professional tax advisors with respect to the United States and non-U.S. tax treatment of minting an Aera Force Ticket.

Taxes in Other Jurisdictions

Prospective participants should also consider the potential state and local tax consequences of an investment in the Fund.  In addition to being taxed in its own state or locality of residence, a ticket holder may be subject to tax return filing obligations and income, franchise and other taxes in jurisdictions in which the Fund operates.  

Participants in the Fund may lose up to the entire value of funds contributed

In the event that the Fund is not successfully capitalized or is not deployed, participants in the Fund may not receive any returns on their Aera Force Tickets. In these circumstances, participants in the Fund will lose the full value of funds provided in connection with the Fund.

Aera Force is not currently regulated

Aera Force is not currently regulated by any regulatory, supervisory or governmental authority and participants in the private sales and general sales will not, therefore, be afforded the benefit of any regulatory protections, including in relation to the protection of any funds contributed through private sales or through any general sale or minting of Aera Force Tickets.

Risks associated with the minting Aera Force Tickets

The initial mint of Aera Force Tickets, or any part of it, may not be completed as planned. There is no guarantee that the ticket mint will be completed or go ahead as currently envisioned. Aera Force may need to suspend or change the structure of the sale, including imposing restrictions on certain aspects of the sale, in a short space of time and may not be able to provide advance notice of such changes. In addition, Aera Force expresses no view as to the expected level of interest in participation in any general sale of Aera Force Tickets.

Risks associated with Aera Force Tickets

The applicable law relevant to Aera Force and / or Aera Force Tickets may change

The law applicable to Aera Force and / or the Aera Force Tickets, including the initial minting of Aera Force Tickets, may change in a manner that means Aera Force is no longer permitted to complete the minting of Aera Force Tickets or allocate the Aera Force Tickets as intended.

Aera Force Tickets may have no economic value and any value may be subject to extreme volatility.

Aera Force expresses no view as to the economic value of Aera Force Tickets and it is possible that Aera Force Tickets will have no economic value at all. Any economic value that Aera Force Tickets do have, whether such value arises solely in the context of the use of Aera Force Tickets in Aera Force or whether investment equity accrues to such ticket(s), may be subject to extreme volatility resulting in a total loss of all economic value, which shall be borne solely by holders of Aera Force Tickets.

‘Bad actors’ may lose some or all of their Aera Force Tickets.

It is contemplated that holders of Aera Force Tickets who are deemed to be ‘bad actors’ under the governance framework of the Fund may lose some or all of their Aera Force Tickets.

Nature of the legal relationship between holders of Aera Force Tickets is uncertain.

The legal nature of the relationship (if any) between the holders of Aera Force Tickets and the liabilities and obligations of holders of Aera Force Tickets is uncertain.

Regulatory treatment of Aera Force Tickets is uncertain.

As the minting of NFTs is a nascent practice, the treatment of Aera Force Tickets by regulatory and governmental authorities is uncertain and may vary across jurisdictions. The legal and regulatory treatment of Aera Force Tickets may be prone to change in the future, which may have a materially adverse impact on the legal status of Aera Force Tickets, the economic value (if any) of Aera Force Tickets and the liquidity of Aera Force Tickets, as well as the development, function or governance of the Fund and / or Aera Force itself.

There may not be a secondary market for Aera Force Tickets.

As it is intended that Aera Force Tickets created will be non-transferable, and as Aera Force does not intend to provide, develop or support any infrastructure to allow for the trading of Aera Force Tickets, the nature and extent of any secondary market for Aera Force Tickets cannot be predicted. As a consequence, any person intending to participate in the first general sale should consider lack of liquidity in Aera Force Tickets as a risk.

Risks associated with blockchains and distributed ledger technologies

Viruses and other malicious code.

Aera Force may not be able to ensure that material made available to participants by Aera Force or any third party in relation to the Fund will be free from viruses or any other code that has contaminating properties or is otherwise destructive in its effect.

Mining attacks.

The blockchain on which the funds sent to Aera Force pursuant to the Fund and the cryptographic wallet in which funds are stored may be subject to successful attacks.

Advances in code cracking and other technical advances.

Advances in code cracking, or technical advances such as the development of quantum computers, could present risks to the Fund or the Ethereum blockchain, which could result in the theft or loss of Aera Force Tickets.

Loss of Aera Force Ticket wallet private keys.

The loss or destruction of a private key used by a participant to access the Ethereum public key through which they will access their Aera Force Tickets or the private key used to access their Aera Force Tickets wallet may be irrecoverable. Widespread loss or destruction by participants of private keys used to access their respective Aera Force Ticket wallet may adversely affect the functioning of the Fund and the economic value (if any) of Aera Force Tickets.

Digital Asset Risks

Digital Asset Investments

The Fund may invest in cryptocurrencies, decentralized application tokens, protocol tokens and other cryptofinance coins, tokens and digital assets and instruments that are based on blockchain, distributed ledger or similar technologies (collectively, “Digital Assets”).  Digital Assets are loosely regulated and there is no central marketplace for currency exchange.  Supply is determined by a computer code or other action, not by a central actor, and prices have been extremely volatile. Digital Asset exchanges and other service providers to the Digital Assets sector are not well developed.  Multiple Digital Asset exchanges and parties providing storage solutions for Digital Assets have ceased operation due to fraud, security breaches and governmental decree.  The Fund’s investments in Digital Assets may be held by such an exchange or other third party and could be subject to loss if such exchange or other third party were to shut down or suffer a security breach or other negative event.  Additionally, various jurisdictions may, in the near future, adopt laws, regulations or directives that affect Digital Assets and parties that come into contact with Digital Assets.  Such laws, regulations or directives may negatively impact the Fund in a variety of ways, including increasing the compliance burden of the Fund and its related parties or diminishing the value of the Fund’s investments in Digital Assets.

Emerging Technology and Malicious Actors

The ownership or transmission of Digital Assets is recorded or verified by a distributed ledger or other similar technology. The marketplace for such Digital Assets is still in its early stages of development, which may increase the risk of loss with respect to investments in Digital Assets in a number of ways.  Digital Assets and their functions are generally governed by software run on a network of computers associated with such Digital Assets.  Various issues related to such software and such computer networks could result in the diminution in value of Digital Assets, including, without limitation, undiscovered flaws in software, advancement in computing technology, fraud and third party attacks on computer networks.

Tax Risk of Digital Asset Investments

There is substantial uncertainty regarding the tax treatment of Digital Assets. As such, the General Partner may take certain tax positions that may ultimately be treated differently in the course of an audit by the Internal Revenue Service, or the regulations promulgated by the IRS may change over time. As a result, Limited Partners may be subject to adverse tax consequences associated with their investment in the Fund.

Risks associated with the Issuer

Aera Force may be dissolved and its assets transferred.

THE INVESTMENT OFFERED HEREBY IS HIGHLY SPECULATIVE, AND PROSPECTIVE PURCHASERS SHOULD BE AWARE THAT AN INVESTMENT IN THE NON-FUNGIBLE TOKENS INVOLVES A HIGH DEGREE OF RISK. ACCORDINGLY, PROSPECTIVE PURCHASERS SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS IN ADDITION TO THE OTHER INFORMATION IN THIS GREEN PAPER.

Lack of Liquidity.

The Aera Force Tickets are being offered without registration under the Securities Act, in reliance upon an exemption contained in Section 4(2) of the Securities Act and/or Regulation D under the Securities Act. Certain restrictions on transferability will preclude disposition and transfer of Securities other than pursuant to an effective registration statement or in accordance with an exemption from registration contained in the Securities Act. In addition, the transfer of the Aera Force Tickets is restricted. In light of the restrictions imposed on a transfer of the Aera Force Tickets, an investment in the Aera Force Tickets should be viewed as illiquid and subject to risk.

The determination of the amount of the offering has been arbitrarily determined by the Manager.

The amount of the Aera Force Tickets of the Fund offered hereby has been arbitrarily determined by the Manager and is not based on the Fund’s book value, assets, earnings or any other recognizable standard of value. As such, no prospective investor should infer that the Manager has chosen to offer the amount of Aera Force Tickets described herein because of the Fund’s assets or book value. If profitable results are not achieved from the Fund’s operations, of which there can be no assurance, the Fund may not have sufficient resources to make distributions to the ticket holders.

There is no public market for the Aera Force Tickets described herein, and no market is expected to develop for the Aera Force Tickets in the future. The Aera Force Tickets are not being registered under the Securities Act or the securities laws of any other

appropriate jurisdiction in reliance on exemptions from such registration requirements, including state, federal, or international jurisdictions. The Aera Force Tickets may not be resold or otherwise transferred unless the Aera Force Tickets are later registered under the Securities Act or the securities laws of any other appropriate jurisdiction, or unless an exemption from such registration requirements is available.

Accordingly, an investor may be unable to liquidate an investment in the Aera Force Tickets and should be prepared to bear the economic risk of an investment in the Aera Force Tickets for an indefinite period. In addition, an investor should be able to withstand the total loss of his/her or its investment.

The Aera Force Tickets are being offered by the Fund on a “best efforts” basis and no minimum amount of proceeds is required to be raised before the Fund may use the proceeds of this NFT mint.

No assurance can be given that all or any specific portion of Aera Force Tickets offered hereby will be sold. The description of “Investment Strategy” set forth herein shows the proposed use of the net proceeds assuming the sale of all of the Aera Force Tickets offered hereby. To the extent that less than all of the Aera Force Tickets offered hereby are sold, the Fund will need

to adjust its investment strategy to compensate for the reduction in receipt of funds.

No Minimum Capitalization Applicable To The Offering.

The Fund does not have a minimum capitalization, and it may immediately use the proceeds from the issuance of the Aera Force Tickets once the accredited investor and “know your customer” requirements are satisfied and Aera Force Tickets are minted. The Fund may only raise a minimum of capital, which could leave it with insufficient capital to implement its business plan effectively. There can be no assurance that alternative capital or financing would be available.

Risk Offering Exemptions Not Available.

In making this Offering, the Fund is relying upon the availability of Regulation D to exempt its offerings from registration under the Securities Act. If the private placement exemptions relied upon is not available to the Fund and/or its Manager for any reason, the Fund and its Manager may be required to offer to the investors the right to rescind their purchase of the Aera Force Tickets, which could have a material adverse effect on the Fund, its business, and its financial condition. There is also no assurance that the Fund and/or its Manager would have adequate funds to repay ticket holders if rescission were required. Any related litigation with the Securities and Exchange Commission or other state, federal or local agencies or parties would also have a material adverse impact on the Fund.

Investment Advisers Act of 1940

The Manager is not registered with the Securities and Exchange Commission (”SEC”) as an Investment Adviser under the United States Investment Advisers Act of 1940 (“Advisers Act”) or any state administrator as an investment adviser and, consequently, investors will not be afforded the protections of the Advisers Act or similar state acts. The Manager believes it is not required to register as an Investment Adviser in reliance upon multiple exemptions contained in the Advisers Act. Specifically, the Manager has elected to rely on the following facts and corresponding regulations:Section 203A of the  Advisers Act generally prohibits an investment adviser from registering with the SEC unless that adviser has more than $25 million of assets under management or is an adviser to a registered investment company. The initial Fund will not exceed $25 million in assets under management. 
Investment decision-making will reside, subject to voting and governance provisions of the Fund, with the ticket holders; specifically, the Green Team, comprised of investors and community members as set forth below in “DAO Governance Structure”. As such, the Manager will not be a primary source of, or authority over, investment decisions; nor does the Manager hold itself out to provide investment advice to Fund participants, nor conduct any advisory services. 
From inception and as the Fund grows, it will expressly follow an investment strategy that allows it to be a “venture capital fund,” exempt from registration with the SEC under Section 203(l) of the Advisers Act. Therefore, although such designation may limit the ability of the Fund to make certain types of qualifying investments, in the event deemed to control and/or advise on the Fund’s investment strategy, the Manager and its affiliates (including the Fund) would be permitted to rely on the exception hereunder as an investment adviser that solely advises venture capital funds. 
Finally, Section 203(b)(3) of the Advisers Act which permits persons or entities advising fewer than fifteen clients and neither holding themselves out generally to the public as an investment adviser nor acting as an investment adviser to any investment company registered under Title I of the Act.
In order to qualify under Section 203(b)(3) of the Advisers Act, the Manager is relying on Advisers Act Rule 203(b)(3)-1 which provides that any “legal organization” (such as the Fund) may be considered a single client. Compliance with these exemptions requires that the Manager provide investment decisions to the Fund (based on the Fund’s overall investment objectives, as applicable for decisions not made by the Green Team) and not to any ticket holder individually. 

Due to the various burdens of compliance with the Advisers Act, the performance of the Fund’s investments could be materially adversely affected, and risks involved in financing developing companies could substantially increase, if the Manager or any of its affiliates were required to register under the Advisers Act or with any state administrator.  The Manager cannot assure investors that, under certain conditions, changing circumstances or changes in law, the Manager or any of its affiliates may not be required to register under the Advisers Act or under similar state acts. Ongoing compliance with this exemption requires great care on the part of the Manager to ensure the Fund’s continuing eligibility for the exemption. If the Manager were to fail to qualify as an exempt investment adviser or register accordingly after any such exemption lapses, the Fund and its Manager could be subject to enforcement action by state or federal securities regulators. Such enforcement action could result in the termination of the Fund’s operations and liquidation of the Fund, as well as significant fines and penalties.

The Aera Force Tickets offered hereby are not insured by any governmental or private agency, and they are not guaranteed by any public or private entity other than the Fund. Likewise, the Fund is not regulated or subject to examination in the same manner as commercial banks and thrift institutions. The Fund is not a commercial bank or savings/thrift institution. The Fund is dependent upon proceeds from investment deals to make distributions to its ticket holders and to conduct its ongoing operations. The Fund’s revenues from operations, including the acquisition, servicing and management of its deal portfolio and the Fund’s working capital represent the sources of funds for distributions to its ticket holders.

DAO Governance Structure

The Fund is governed by collective vote in the form of a decentralised autonomous organization (”DAO”). The Manager does not hold exclusive control over investment decisions and therefore, Green Team decisions are attributable to collective or majority vote, rather than an experienced team of investment professionals. The governance as intended shall reflect community engagement and collaborative diligence, dealflow support, and investment signoff, rather than external or third-party fund management.

See “DAO Voting and Investment Process” for more information on DAO participation structure and decisionmaking for deals.

The Fund Has A Limited Operating History.

The Fund was formed on February 8, 2022, and accordingly has a limited history of operation. There can be no assurance that the Fund will be able to successfully implement its business plan. For these and other unforeseeable factors, there can be no assurance that the Fund will achieve or sustain profitable operations.

Restrictions On Transfers and Withdrawals – Suspension of Withdrawals.

The right of any ticket holder to withdraw monies from the Fund is subject to the provision by the Manager for Fund liabilities in accordance with U.S. generally accepted accounting principles and reserves for contingencies. In addition, the Manager may, in its sole discretion during the existence of any state of affairs that, in the opinion of the Manager, make the determination that the price, value or disposition of the Fund’s investments is impractical or prejudicial to the non-withdrawing ticket holders.

There Is No Assurance The Fund Will Turn A Profit.

There is no assurance as to whether the Fund will be profitable, or earn revenues, or whether the Fund will be able to return any investment funds, to make cash distributions or to meet its operating expenses.

There Is No Assurance The Fund Will Generate Immediate Revenues.

The Fund anticipates that it will incur substantial expenses relating to the acquisition and servicing of its portfolios of deals. The Fund currently expects the initial expenses it incurs to result in operating losses for the Fund for the foreseeable future. Furthermore, no assurance can be made that a Subscriber for the Securities offered hereby will not lose his or her or its entire investment.

The Fund Will Be Subject To Substantial Fees and Expenses Regardless Of Profitability Of The Fund.

The Fund will pay various fees and expenses related to its ongoing operations regardless of whether or not the Fund’s investment activities are profitable. These fees and expenses include, but are not limited to, the Management Fee paid to its Manager as referenced in this Green Paper. These fees and expenses will require that the Fund’s investment activities generate sufficient revenues in excess of these expenses.

The Fund May Not Achieve Its Goals And Objectives.

All investments in the Fund risk the loss of capital. While the Fund’s Manager believes that its experience and relationships will moderate this risk to some degree, no representation is made that the Fund’s investment strategy will be successful.

The Fund May Become Subject To Litigation.

There are many risks incident to certain deals that may give rise to litigation. The Fund may also be named as a defendant in a lawsuit or regulatory action. The Fund may also incur uninsured losses for liabilities which arise in the ordinary course of business, or which are unforeseen, including, but not limited to, employment liability and business loss claims. There is no assurance that the Fund’s ticket holders will not lose their entire investment in the Fund as a result of unforeseen litigation.

There May Be Changes In Laws Applicable To The Fund.

The Fund must comply with various legal requirements, including requirements imposed by the state and federal securities laws, pension laws and state licensing requirements. Should any of those laws change, the legal requirements to which the Fund may be subject could differ materially from current requirements.

The Fund May Face Adverse Tax Consequences.

While the Fund is advised in tax matters by its accountants and attorneys, the Internal Revenue Service (“IRS”) may not accept the tax positions taken by the Fund. For example, the Fund may agree with a company receiving funding to classify the deal structure as an equity based revenue based financing transaction while the IRS and the U.S. tax court determine the financing transaction should be classified as debt.

The Fund Could Be Audited By The Internal Revenue Service.

The IRS could audit the Fund’s information and adjustments to the Fund’s tax returns could occur as a result. Any such adjustment could result in the Fund and/or ticket holders paying additional tax, interest and penalties, as well as incremental accounting and legal expenses.

Companies Receiving Funds Could Be Audited By The Internal Revenue Service.

The IRS could audit Companies receiving funds and reclassify qualified dividend and stock redemption payments as loan principal and interest payments. This could result in adjustments to the Fund’s tax returns and tax impact to the ticket holders as a result. Any such adjustment could result in the Fund and or ticket holders paying additional tax, interest and penalties, as well as incremental accounting and legal expenses.

Non-U.S. Investment Risks.

The Fund’s current investment program involves sourcing and participating in both domestic and foreign deals, private placement, and varying hybrid funding deals. Investing in offshore entities involves certain risks not associated with investing in securities of U.S. companies or the U.S. government. These risks include, but are not limited to, political and economic considerations, such as higher risk of nationalization, confiscatory taxation, difficulties involved in repatriating funds, social, political and economic instability, the low volume of trading and resulting lower liquidity present in offshore securities markets, difficulty in settling securities trades, fluctuations in exchange rates between currencies, lower levels of regulation of offshore securities markets and investment entities, and comparatively lower accounting standards.

The Biggest Risk of All.

Not investing in Aera Force is your biggest risk of all. Thank you for making it all the way down here! Now come on in, the water’s fine.