A Glitch for the Globe and A Report to Celebrate

July 2024 was a wild ride. There were newsworthy moments left and right. Here’s to a less eventful August and enjoying the start of a new school year.

This is what I’m covering in this month’s Alternative Universe Newsletter:

1. Code Pushes & Their Outcomes

2. SOC It To Me

3. Webinar Invite

4. BOI (This is Not an Avril Lavigne Reference)

Code Pushes & Their Outcomes

Amid the cluttered newsworthy moments of last month, a global cybersecurity company pushed an automated update that adversely impacted millions of people around the world.

As the always untimely Blue Screen of Death appeared on desktops around the world (but not the sphere in Las Vegas), some travelers found themselves stranded for days. And while the toll on those individuals was high, the outcome for Crowdstrike will likely take some time to sort out.

There’s a lot to be said about the need to carefully update your critical systems. Obviously, no one wants to have an outage or cause one for someone else, but the stress of that moment, when something goes wrong with technology, even if it’s just not including the attachment on your email, is something we all know.

In the world of alts, many fund managers and financial advisors run into workflow hiccups that need solutions - from digital onboarding to sharing data easily, most firms wonder - what path should we take to solve this issue?

You’ll only ever have three options: Build, Buy or Partner.

UC Berkeley economist Oliver Williamson developed a strategic model to guide us as we decide whether to build, buy, or partner for a product or solution. His model takes into account two primary factors: the specificity of the product and its frequency of use. It helps companies to:

• Adapt their operations to utilize existing software solutions.

• Develop a custom solution for unique system requirements.

• Explore joint ventures or other contractual arrangements for moderate customization needs.

The path to solving your company’s alternative investing needs may take any of those three paths. If you’re wondering which one is right for you, the Mammoth Team is here to help. We offer a consultation that brings in legal, compliance, marketing and technical insights and recommendations based on your exact needs. If you want to learn more, let’s talk.

SOC It to Me

Our SOC II Report is Here

Information security and compliance have always been central to Mammoth Technology's innovation drive. We began preparing for our SOC II from the beginning of our very first code build and partnered with Vanta as we developed solutions that protect your data and ensure compliance with both local and international regulations.

Our clients’ data security is our top priority. We have implemented robust security measures to safeguard your data, ensuring that only authorized users have access and that all data transmitted through our software is handled securely. Maintaining the security of our platform and the information it holds is fundamental to our business and the trust our customers place in us.

With the increasing transmission of sensitive data online, cybersecurity has become a critical concern for businesses. Mammoth is proud to be SOC 2 Type II certified, verified by a leading third-party auditor. This certification is one of the highest security standards for SaaS platforms, providing assurance that Mammoth has a strong security program and that your data is always protected.

We’re proud to now be officially SOC 2 Type II certified! Thank you to our auditor, Johanson Group, for guiding us through this process.

You’re Invited

You’re invited to learn more about a new investment opportunity on the Mammoth Platform. Sign up to join this webinar from Harvard Medtech.

Key Features of the Offering

• Automatic Conversion: The seed round investment will automatically convert into Series A stock upon closing of the Series A round. Investors will receive Series A stock with the same protections, preferences, and terms as institutional investors.

• SAFE Note with 8% Interest Rate: The investment will be made via a SAFE note carrying an 8% interest rate that is paid-in-kind (PIK). Both the principal and accrued interest will convert into Series A stock.

• Conversion Terms: The conversion will occur at either a 25% discount to the Series A pricing or at a $30 million enterprise valuation, whichever is lower. This ensures that seed round investors will benefit from at least a 25% discount to the Series A pricing, potentially more when considering accrued interest.

• Investor Priority: Until conversion, note holders will have priority over equity holders from an asset protection perspective. This provides an additional layer of security for early investors.

If you are interested in learning more about this opportunity on behalf of your accredited investor clients, please register by clicking here.

BOI (This is Not an Avril Lavigne Reference)

Whether you have a limited liability company (LLC) or corporation (S corp or C corp), for your 9-5, a small one on the side you created years ago for your side hustle, or you’re working with people who have their own companies, there’s a new reporting requirement that you may or may not have heard about.

The new beneficial ownership information (BOI) report must be filed with a branch of the U.S. Department of Treasury called the Financial Crimes Enforcement Network (FinCEN). The BOI reporting is a new requirement effective as of January 1, 2024. A failure to comply can result in a company and the individuals responsible for the non-compliance being subject to hefty civil and criminal fines and even possible jail time.

If this is new news to you, or you’ve heard about it but don’t know the details, you’re in the right spot. Here’s an FAQ about BOI.

Does my small business have to file this report?
If you have ownership in a corporation (S corp or C corp) or a limited liability company (LLC), a BOI report will have to be filed unless your corporation or LLC qualifies for an exemption. Corporations and LLCs are the only business entity types specifically referred to in the Rule. However, entities other than corporations and LLCs may also have to file. The key is whether you had to file a document with the secretary of state or a similar office to create your company. 

There are 23 exemptions allowed by the Corporate Transparency Act. If your corporation or LLC has more than 20 full-time employees, more than $5 million in gross receipts, and an operating presence at a physical office in the USA, it can qualify for an exemption granted to what is called a “large operating company”. Other exemptions are for entities already regulated by the federal or state government and many already have to disclose their beneficial ownership information to the government. These include, among other things, publicly traded companies, financial institutions, insurance companies, public accounting firms, and tax exempt organizations. Most small corporations and LLCs will probably not qualify for an exemption.

Can you make it any more obvious? When, where, and how do I file this BOI report?

• If you formed the LLC or corporation prior to January 1, 2024, the BOI report will have to be filed no later than January 1, 2025.

• LLCs or corporations formed on or after January 1, 2024 and before January 1, 2025 have to file within 90 days of receiving actual or public notice of their formation. 

• LLCs or corporations formed on or after January 1, 2025 have to file within 30 days of receiving actual or public notice of their formation.
  
  Your company’s BOI report will be filed electronically with FinCEN from their website. There is no fee for filing the report. Note that this is a federal filing only, so there’s no need to do anything with your state.
  
  What information will I have to report to FinCEN?
  The BOI report for your company will provide FinCEN with certain facts about the company – namely, its legal name and any d/b/a names it conducts business under, its address, jurisdiction of formation, and taxpayer identification number.
  
  What will probably be more important to you as an owner of a reporting company is that you will also have to provide FinCEN with personally identifiable information (that is, information from which an individual can be identified) for each beneficial owner.  A beneficial owner is any individual who, directly or indirectly, exercises substantial control over a reporting company or who owns or controls at least 25 percent of a reporting company.
  
  For each beneficial owner of your company, you’ll have to provide the individual’s legal name, birthdate, home address, an identifying number from a driver’s license, state ID, or passport, and an image of the document that the number is from. (Reporting companies formed on or after January 1, 2024 will also provide information about their company applicants.)
  
  Next Steps 
  1. Determine if your corporation or LLC is required to file a beneficial ownership report
  2. If you have questions on filing requirements or instructions contact your legal advisor
  3. Decide how you will file the BOI:

• File Directly through FINCIN @ https://boiefiling.fincen.gov/fileboir

• Contact your local attorney.

• Use Legal Zoom or some other online service
  More information is available by clicking here.

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As always, thanks for reading. See ya later, (boi)!

Steve, for the Mammoth Team