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Advice Systems, Inc.

Advice Systems, Inc.

A new frontier in financial planning advice

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Deal Type

Convertible Note

Funding Goal

$500,000

Current Reservations

$50,000

Minimum Reservation

$5,000

Deal Stage

Seed

Interest (% per year)

5.00%

Term Length (Months)

24 months

Valuation Cap

$10,000,000

Conversion Discount (%)

20%

Warrant Coverage (%)

N/A

Open Date

11/14/2019

Maximum Reservation

$500,000

Closing Date

02/28/2020

Deal Exemption Type

3

Elevator Pitch

First-to-market AI software automating holistic expert advice on virtually any personal financial topic typically taking a few minutes. Founder & CEO's prior FinTech acquired by Broadridge (BR).

Company Overview

Advice Systems, Inc. (ASI) was launched in August 2018 and is an early-stage personal financial technology company and the creator of Intelligent Decision Tools™ (IDT). CEO and Founder Ronald E. Newton, CFP® was the former CEO and Founder of Forefield, Inc. which is the financial industry’s foremost provider of real-time sales, education, and presentation solutions for financial institutions and advisors. Forefield was acquired in 2010 for $19.5 million by Broadridge Financial Solutions, Inc. (BR) and today Broadridge Advisor Solutions has 125,000 advisors as licensed users. ASI expects to enter into a strategic partnership with Broadridge which would include joint marketing to Broadridge’s existing licensed users.

ASI’s vision is to revolutionize personal financial advice by creating a new unique category of FinTech softwareAutomated Personal Financial Advice. Our vision includes making expert holistic personal financial advice available, not only to the 300,000 financial advisors, but also to the 106 million USA households who lack sufficient investible assets to qualify to work with a financial advisor.

Simulating the process of how human financial advisors work with clients, IDT answers both routine and complex personal financial planning questions through a concise Q&A process that typically requires only a few minutes or less to complete. The result is specific recommendations based on the user’s profile making the user an “instant” expert on virtually any personal financial issue, enabling confident financial decisions and providing a rich user experience.

It’s important to identify what IDT is not:

  • It’s neither… traditional financial planning software, (e.g. How much do I need to save to retire?)
  • Nor is it… portfolio management/robo advisor software (e.g. How do I invest the money in my IRA?).

Rather, by incorporating both quantitative and qualitative analysis based on each user’s unique profile, IDT answers specific user questions, making the user an “instant expert” on virtually any personal financial planning issue. We do this through advanced client profiling, and knowledge engineering within a rules-based expert system allowing users to seamlessly answer their personal financial planning questions:

  • Is it better for me to leave an orphan 401(k) with my former employer or to roll it over?
  • When I retire, should I take the monthly pension benefit or rollover the lump sum to my IRA?
  • I am a business owner… what’s the best way for me to save for my retirement?
  • Is a 15-year mortgage better for me or is a 30-year mortgage the better option?
  • What should I do with my stock options and how will I be taxed?
  • Should I lease or purchase my next car?

It’s also important to emphasize that IDT does not replace the critical role that financial advisors provide clients any more than TurboTax eliminated CPAs.

The feedback we’ve received during IDT demonstrations has been overwhelmingly enthusiastic:

“[The software] is shaping up to be an incredibly valuable addition to what exists in the marketplace, and I wholly agree with your vision. In particular the Intelligent Decision Tools seemed very interesting to what I think our advisors would really appreciate.[It] has tons of value [and doesn’t even] need to be integrated with a CRM thanks to the limited data entry requirements.” - Senior Executive from a leading national Broker-Dealer firm - August 2019

Intelligent Decision Tools is very interesting and no one else is doing this. This is good for compliance, and all broker dealers would benefit from this software. This is a no-brainer!” - Nation’s leading FinTech expert - December 2019

ASI’s total addressable market is $1.4 billion based on the combined value of four target markets:

  • Large Financial Enterprises (B2B): $210 million
  • Independent Financial Advisors (B2B): $345 million
  • Workplace Financial Wellness Programs (B2B): $402 million
  • Consumer Financial Websites (B2B2C): $408 million

ASI has been bootstrapped by founder Ron Newton since it launched in August 2018, investing $1.8 million thus far, and is now seeking $500,000 in seed financing. ASI believes this is an outstanding investment opportunity and your investment would serve to democratize and revolutionize providing personal financial advice… Expert advice made simple!

Traction

  • Initiated pilot test with a nationally recognized wealth management firm

    January, 2020
  • Leading FinTech expert feedback; “No one else doing this”… “All broker dealers would benefit from this software”… “This is a no-brainer!”

    December, 2019
  • IDT commercially available

    December, 2019
  • Overwhelmingly positive feedback from product demos to industry executives

    August, 2019
  • Founder launches ASI, committing $1.8 million to develop the software

    August, 2018

Pitch Deck

Key Customers & Partners

 Broadridge Financial Solutions, Inc. KJE Computer Solutions, Inc.

Previous Funding

  • $1,850,000 Equity
  • Raise Source: Self
  • June 2019

Risks & Disclosures

RISK FACTORS

THE CONVERTIBLE PROMISSORY NOTES (THE “NOTES”) BEING OFFERED BY THE COMPANY INVOLVE A HIGH DEGREE OF RISK. NO ONE SHOULD INVEST WHO IS NOT PREPARED TO LOSE HIS OR HER ENTIRE INVESTMENT. THERE IS NO PUBLIC MARKET FOR THE NOTES AND IT IS NOT EXPECTED THAT THERE WILL BE A MARKET FOR THE RESALE OF THE NOTES IN THE FORESEEABLE FUTURE. PROSPECTIVE INVESTORS, PRIOR TO MAKING AN INVESTMENT, SHOULD CAREFULLY EXAMINE THE FOLLOWING RISK FACTORS INHERENT IN MAKING SUCH AN INVESTMENT AND AFFECTING THE COMPANY’S BUSINESS.

Early Stage Risks; Uncertainty of Future Profitability.The Company has a limited operating history. Accordingly, the Company is subject to all of the risks inherent in the establishment of a new business enterprise. The time required by the Company to reach profitability is highly uncertain and there can be no assurance that the Company will be able to achieve profitability at all or on a sustained basis. The successful implementation and development of the Company’s business plan and the Company’s operations in the future depends upon numerous factors, including, among others, the Company’s ability to attract the necessary capital, to build the management team capable of carrying out the proposed implementation and development of the Company’s business, to win market acceptance, to capture market share for the Company’s products and to generate the sales revenues and levels of profitability that management believes is necessary for success. There can be no assurance that the objectives established by the Company’s management with respect to the proposed implementation and development of the Company’s business and operations in the future will in fact be met, that the Company will establish or maintain market acceptance or market share or become profitable, or that the levels of revenues, profitability and cash flows established by management will in fact be attained. As implementation of any business plan continues over time, there are inevitably changes in direction and strategy that will be adopted by management based upon actual experience in operating a business. Thus, there can be no assurance that the actual manner in which the business of the Company is conducted and the results of the Company’s operations will not vary significantly from management’s current intentions.

Uncertainty of Development and Successful Commercialization. In order for investor to realize returns from its investment, the Company must ultimately become profitable, undertake an initial public offering or be acquired. This process will depend on the performance of the Company as well as many other factors over which the Company will have no control, such as general conditions in the financial markets, fluctuations in demand in the securities markets for initial public offerings and investor interest in companies in the Company’s industry. There can be no assurance that such acceptance will be achieved or, if achieved, can be maintained. There also can be no assurance that the Company will be able to compete effectively in its target markets in order to achieve value that would result in a return on investment. In short, the Company may develop much more slowly than planned or it may fail.

Need for Additional Financing. It is likely the Company will need to seek and secure significant additional financing in the near future. No party is obligated to provide financing to the Company and there can be no assurance that any such additional funding will be available to the Company or, if available, that it will be on reasonable terms. Any such additional funding may result in significant dilution to existing shareholders, and may be on terms unfavorable to the Company. The Company’s future capital requirements will depend on many factors, including its ability to generate cash flow from operations, its ability to develop, manufacture and market its planned products successfully, the feasibility of its technology, competition, and market developments.

Prospective Financial Information. A prospective investor should note that any financial projections provided by the Company have neither been examined nor compiled by independent accountants. Such projections are based upon numerous assumptions made by the Company’s management, some of the more significant ones being the size of the potential market for the Company’s planned products/services and market acceptance of the Company’s planned products/services. Notwithstanding the Company’s belief that the assumptions underlying such projections are reasonable based on the facts known to it at the time such assumptions were made, some of the assumptions may not materialize and unanticipated events and circumstances may occur. For these reasons, actual results achieved during these periods will almost surely vary from the projections, and the variations may be materially adverse to the Company. No representation or warranty is being made by the Company as to future events or any of these projections.

Competition. The Company may be subject to significant competition from a variety of sources, including both existing competitors and new companies to the market. Many of these competitors and potential competitors may have substantially greater technical, financial, and marketing resources than those available to the Company. The Company’s ability to compete successfully will depend in large part upon its ability to attract customers and develop and maintain relationships with such customers. There can be no assurance that the Company will be able to compete successfully.

Need for Further Staffing and Dependence Upon Key Personnel. The Company currently has a very small number of employees and consultants running the operations. For the foreseeable future, the Company expects to rely on this small group of personnel, the loss of any of whom would have a material adverse effect on the Company. There can be no assurance that the Company will be able to retain the services of these personnel, or of any future employees or advisors. Moreover, in order to implement its business plan and to remain competitive, the Company will need to attract and retain additional personnel. Thus, the success of the Company will in significant part depend upon the efforts of personnel not yet identified and upon its ability to attract and retain highly skilled technical, managerial and sales and marketing personnel. The Company faces significant competition for such personnel from other companies. There can be no assurance that the Company will be able to attract and retain necessary personnel. The failure to hire and retain such personnel could materially and adversely affect the Company’s prospects.

Intellectual Property Protection. The Company’s success depends in part on its ability to protect its proprietary technology and operate without infringing on the proprietary rights of others in the United States and other countries. There can be no assurance that any of the Company’s proprietary rights have been or will be adequately safeguarded, or that they will not be challenged by third parties, resulting in a material adverse impact on the Company’s business, prospects, financial condition and results of operations. In addition, the Company’s ability to conduct its business may be harmed if others claim the Company violates their intellectual property rights.

Illiquid Investment. The Notes being offered are not and will not be registered under the Securities Act of 1933, as amended, or applicable state or foreign securities laws and may not be resold unless they are subsequently registered or an exemption from registration is available. Moreover, there is no public or other market for the Notes or the equity securities of the Company into which the Notes may be converted nor can there be any assurance that such a market is likely to develop. The Purchaser may thus be required to retain its investment in the Company for an indefinite period of time.

Control by Existing Stockholders. The Company’s founders and management team own a substantial majority of the Company’s capital stock.Accordingly, the Purchaser should assume that, in the event of a conversion of the Notes into equity securities of the Company, he, she or it will be a minority stockholder with limited ability to control the Company.

Management of Growth. The Company’s future success will depend in part on its ability to manage growth, if any. To compete effectively and manage future growth, if any, the Company will be required to continue to implement and improve its operational, financial and management systems, procedures and controls on a timely basis, and to expand, train, manage and motivate its workforce. There can be no assurance that the Company’s personnel, systems, procedures and controls will be adequate to support the Company’s future operations or that it will be able to implement those that will be adequate. The failure to implement new and improved operational, financial and management systems or to expand, train, motivate and manage employees could have a material adverse effect on the Company’s business, operating results and financial condition. There can be no assurance that the Company will continue to grow or, if it does, that the Company will manage the growth successfully.

No Dividends. For the foreseeable future, the Company anticipates that any earnings will be used to finance the growth of the Company and will not be paid out as dividends. Any future dividends will be subject to the discretion of the Company’s Board of Directors and will depend upon, among other things, future earnings, the operating and financial condition of the Company, its capital requirements and general business conditions.

Documents

Confidential

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