Superdapp Holdings Limited

Updated: September 3, 2024

EXCLUDED JURISDICTIONS

THE TOKENS ARE NOT BEING OFFERED OR SOLD AND MAY NOT BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, FROM WITHIN OR TO INDIVIDUALS IN THE PEOPLE’S REPUBLIC OF CHINA (FOR SUCH PURPOSES, NOT INCLUDING THE HONG KONG AND MACAU SPECIAL ADMINISTRATIVE REGIONS OR TAIWAN), UNITED STATES OF AMERICA, CANADA, DEMOCRATIC PEOPLE’S REPUBLIC OF NORTH KOREA, AUSTRALIA, CUBA, ISLAMIC REPUBLIC OF IRAN, THE STATE OF LIBYA, REPUBLIC OF SOUTH SUDAN, THE REPUBLIC OF SUDAN, THE SYRIAN ARAB REPUBLIC, AND/OR THE RUSSIAN FEDERATION (THE “EXCLUDED JURISDICTIONS”).

THESE TERMS AND CONDITIONS (the "Terms & Conditions") govern the exchange for the payment by the purchaser (the "Purchaser") to acquire the digital asset known as $SUPR (“Tokens”) from Superdapp Holdings Limited, a corporation incorporated and existing under the laws of the Seychelles (the "Company"), subject to the terms set forth below.

1. Events.

1. Offering. The Company intends to offer and sell a number of Tokens that the board of directors sees fit (the "Offering").

2. Network Launch.

Upon the Network Launch, the Company, or an affiliate of the Company, upon notice to the Purchaser, will, provide that delivery of the Tokens complies with all applicable securities laws ("Applicable Securities Laws") at the time, issue to the Purchaser in accordance with the applicable vesting schedule (the “Purchased Token Delivery Schedule”).

2. Definitions.

1. "Dissolution Event" means any of the following dissolution events, which occur pursuant to the laws of the Republic of the Seychelles:

2. a voluntary termination of operations of the Company;

3. a general assignment for the benefit of the Company’s creditors; or

4. any other liquidation, dissolution or winding up of the Company, whether voluntary or involuntary.

5. "Governmental Authority" means any federal, national, supranational, state, provincial or local government, any court, tribunal, arbitrator, authority, central bank, agency, commission, stock exchange, official, any minister or the crown or foreign equivalent or any regulatory or non-governmental self-regulatory agency or other instrumentality of any government that, in each case, has jurisdiction over the matter in question.

6. "laws" means all laws, statutes, ordinances, rules, regulations, judgments, injunctions, orders, decrees, and other pronouncements of a Governmental Authority having the effect of law.

7. "Network" means the protocol created on the Syscoin Blockchain, as a layer 2 blockchain.

8. "Network Launch" means a bona fide transaction or series of transactions, pursuant to which the Company, or an affiliate of the Company, upon notice to the Purchasers, distributes Tokens in a publicized product launch of the Network, which would occur once the Company determines, at their sole discretion, Tokens are utility tokens that have a specific consumptive use and are exchangeable in the Network in return for services such as features offered by the Network.

9. “Public Token Issuance” means the primary issuance of the Tokens by the Company through an initial coin offering, initial exchange offering, initial DEX offering, or some other offering of the Tokens to the public, which do not include the Company, the founders of the Company or any advisors.

2. Purchaser Representations.

1. The Purchaser has full legal capacity, power and authority to execute and deliver these Terms & Conditions and to perform its obligations hereunder. These Terms & Conditions constitute a valid and binding obligation of the Purchaser, enforceable in accordance with its terms, except as limited by bankruptcy, insolvency or other laws of general application relating to or affecting the enforcement of creditors’ rights generally and general principles of equity.

2. The Purchaser has been advised that these Terms & Conditions may be considered a "security" in one or more jurisdictions and the Tokens and may be considered to be a "security" for the purposes of other Applicable Securities Laws and that the offers and sales of these Terms & Conditions have not been registered or qualified under the securities laws of any jurisdiction and, therefore, may be subject to resale and other transfer restrictions under the Applicable Securities Laws. The Purchaser acknowledges that the Company’s obligation to deliver Purchased Tokens, if any, pursuant to these Terms & Conditions is conditional upon such delivery complying with all Applicable Securities Laws. The Purchaser is purchasing these Terms & Conditions for its own account for the opportunity to support and participate in the Network, not as a nominee or agent, and not with a view to, or for resale in connection with, the distribution thereof, and the Purchaser has no present intention of selling, granting any participation in, or otherwise distributing the same.

3. The Purchaser purchases the Tokens with the predominant expectation that he, she or it, as the case may be, will be provided with an opportunity to support and participate in the Network upon the successful development and Network Launch.

4. The Purchaser is not a resident of an Excluded Jurisdiction. The Purchaser acknowledges and agrees to the investor qualifications, investor disclosure acknowledgements and other requirements, respectively.

5. The Purchaser complies with all applicable laws of the jurisdiction in which the Purchaser resides including any relevant exchange control permission (an "International Jurisdiction") and does not give rise to any obligation of the Company to prepare and file a prospectus or similar document or to register the Tokens or to be registered with or to file any report, disclosure or notice with any Governmental Authority. The Purchaser is purchasing the Tokens pursuant to exemptions from the prospectus and registration requirements under the Applicable Securities Laws of the International Jurisdiction or, if such is not applicable, the Purchaser is permitted to purchase the Tokens under the Applicable Securities Laws of the International Jurisdiction without the need to rely on an exemption.

6. The Purchaser has sufficient knowledge and experience in business and financial matters to be able to evaluate the risks and merits of its purchase of the Tokens and is able to incur a complete loss of such investment without impairing the Purchaser’s financial condition and is able to bear the economic risk of such investment for an indefinite period of time. The Purchaser is aware of the Company’s business affairs and financial condition and has acquired sufficient information about the Company to reach an informed and knowledgeable decision to acquire the Tokens. The Purchaser understands that Tokens involve risks, all of which the Purchaser fully and completely assumes, including, but not limited to, those described herein. The Purchaser agrees that it will complete any questionnaires or surveys that the Company requires regarding the Purchaser’s understanding of cryptocurrency, the Tokens, the Network or blockchain technology. The Purchaser understands and expressly accepts that Tokens will be created and delivered to the Purchaser at the sole risk of the Purchaser on an “AS IS” and “UNDER DEVELOPMENT” basis, and any issuances of Tokens to the Purchaser or others may be subject to limitations or restrictions under applicable law. The Purchaser understands and expressly accepts that the Purchaser has not relied on any representations or warranties made by the Company outside of these Terms & Conditions, including, but not limited to, conversations of any kind, whether through oral or electronic communication, or any white paper. THE PURCHASER HAS REVIEWED THE RISK DISCLOSURE BELOW AND UNDERSTANDS AND ACCEPTS ALL RISKS. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, THE PURCHASER ASSUMES ALL RISK AND LIABILITY FOR THE RESULTS OBTAINED BY THE USE OF ANY TOKENS AND REGARDLESS OF ANY ORAL OR WRITTEN STATEMENTS MADE BY THE COMPANY, BY WAY OF TECHNICAL ADVICE OR OTHERWISE, RELATED TO THE USE OF TOKENS.

7. The Purchaser acknowledges that neither the Company nor any of its directors or other representatives has provided it with any financial, legal, or tax related advice. The Purchaser has consulted to the extent deemed appropriate by it with its own advisors as to the financial, tax, legal and related matters concerning a purchase of the Tokens and solely on that basis the Purchaser believes that its purchase of the Tokens is suitable and appropriate. The Purchaser understands that Purchaser bears sole responsibility for any taxes as a result of the matters and transactions the subject of these Terms & Conditions, and any future acquisition, ownership, use, sale or other disposition of Tokens held by the Purchaser.

8. The Purchaser is an accredited investor, qualified investor, professional investor, or otherwise has the sufficient financial strength and net worth whereby, if the applicable regulator defines the Tokens as securities, the offer to purchase the Tokens to the Purchaser, would not violate and applicable securities laws.

3. Miscellaneous.

1. Any provision of the Terms & Conditions may be amended, waived or modified only upon the written consent of the Company and the holders of a majority, in the aggregate, of the Tokens outstanding at the time of such amendment, waiver or modification.

2. Any notice required or permitted by these Terms & Conditions will be deemed sufficient when posted on www.superdapp.ai.

3. The Purchaser is not entitled, as a holder any Token, to vote or receive dividends or be deemed the holder of shares of the Company for any purpose, nor will anything contained herein be construed to confer on the Purchaser, as such, any of the rights of a shareholder of the Company or any right to vote for the election of directors or upon any matter submitted to shareholders at any meeting thereof, or to give or withhold consent to any corporate action or to receive notice of meetings, or to receive subscription rights or otherwise.

4. Except as required by law, neither these Terms & Conditions nor the rights contained herein may be assigned by the Purchaser without the prior written consent of the Company; however, the Company may assign these Terms & Conditions in whole, or any of the rights or obligations herein, without the consent of the Purchaser, to any other entity who directly or indirectly, controls, is controlled by or is under common control with the Company or in connection with a migration of the Company to change the Company’s domicile or otherwise.

5. In the event any one or more of the provisions of these Terms & Conditions is for any reason held to be invalid, illegal or unenforceable, in whole or in part or in any respect, or in the event that any one or more of the provisions of these Terms & Conditions operate or would prospectively operate to invalidate these Terms & Conditions, then and in any such event, such provision(s) only will be deemed null and void and will not affect any other provision of these Terms & Conditions and the remaining provisions of these Terms & Conditions will remain operative and in full force and effect and will not be affected, prejudiced, or disturbed thereby.

6. Nothing in these Terms & Conditions and no action taken by the parties pursuant to the purchase of the Tokens shall constitute, or be deemed to constitute, a partnership, association, joint venture or other co-operative entity between any of the parties. Nothing in these Terms & Conditions and no action taken by the parties pursuant to the purchase of the Tokens shall constitute, or be deemed to constitute, either party as the agent of the other party for any purpose. No party has, pursuant to the Terms & Conditions, any authority or power to bind or to contract in the name of the other party.

7. All rights and obligations hereunder will be governed by the laws of England & Wales, without regard to the conflicts of law provisions of such jurisdiction.

8. All rights and obligations of the Company hereunder may be assigned without notice given to the Purchaser.

9. EACH PARTY HERETO HEREBY EXPRESSLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ALL RIGHTS TO TRIAL BY JURY OR TO PARTICIPATE IN A CLASS ACTION WITH RESPECT TO ANY CLAIM, SUIT, ARBITRATION, LITIGATION, ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS SAFT, THE OFFERING MEMORANDUM, OR THE TRANSACTIONS CONTEMPLATED HEREBY. THE PARTIES AGREE THAT ANY OF THEM MAY FILE A COPY OF THIS PROVISION WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND BARGAINED FOR AGREEMENT BETWEEN THE PARTIES IRREVOCABLY TO WAIVE TRIAL BY JURY, AND THAT SUCH PROCEEDING WHATSOEVER BETWEEN THEM SHALL INSTEAD BE DETERMINED PURSUANT TO ARBITRATION IN ACCORDANCE WITH SECTION 6(l).

10. Negotiation to Resolve Disputes.  The parties covenant and agree to negotiate in good faith upon request in writing to settle any dispute, controversy or claim arising out of or relating to this Agreement, or the breach, termination or invalidity of this Agreement (collectively, a "Dispute").

11. Mediation. All Disputes which the parties are unable to resolve themselves shall be referred to non-binding mediation.  The parties agree to participate in any such mediation in good faith and, if a settlement of a Dispute has not been finalized by the parties within a thirty (30) day period after which a party has first requested in writing to the other party to the Dispute that the matter be resolved by mediation, any party to the Dispute may thereafter initiate proceedings to settle the Dispute by means of arbitration in accordance with Section 1.4 and such arbitration shall be the sole means available to the parties to settle the Dispute.

12. Arbitration. If the parties do not reach a solution pursuant to Section 6(n) within a period of thirty (30) day period after which a party has first requested in writing to the other party to the Dispute that the matter be resolved by mediation, then upon written notice by any Party to the others, the Dispute shall be exclusively and finally settled by arbitration in accordance with the rules and provisions of the London Court of International Arbitration Rules, which Rules are deemed to be incorporated by reference into this clause and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof.

13. Claims shall be heard by a panel of three arbitrators. Within 15 days after the commencement of arbitration, each party shall select one person to act as arbitrator and the two selected shall select a third arbitrator within ten days of their appointment. If the arbitrators selected by the parties are unable or fail to agree upon the third arbitrator, the third arbitrator shall be selected by the London Court of International Arbitration. The arbitrator(s) shall be an expert in technology contracts. 

14. The place of arbitration shall be London, UK. 

15. The arbitration shall be governed by the laws of England & Wales.

16. In making determinations regarding the scope of exchange of electronic information, the arbitrator(s) and the parties agree to be guided by The Sedona Principles, Third Edition: Best Practices, Recommendations & Principles for Addressing Electronic Document Production. Hearings will take place pursuant to the standard procedures of the Commercial Arbitration Rules that contemplate in person hearings. 

17. Time is of the essence for any arbitration under this agreement and arbitration hearings shall take place within 15 days of filing and awards rendered within 30 days. Arbitrator(s) shall agree to these limits prior to accepting appointment. 

18. The standard provisions of the Commercial Rules shall apply. Arbitrators will have the authority to allocate the costs of the arbitration process among the parties, but will only have the authority to allocate attorneys' fees if a particular law permits them to do so. The award of the arbitrators shall be accompanied by a reasoned opinion. The parties agree that failure or refusal of a party to pay its required share of the deposits for arbitrator compensation or administrative charges shall constitute a waiver by that party to present evidence or cross-examine witness. In such event, the other party shall be required to present evidence and legal argument as the arbitrator(s) may require for the making of an award. Such waiver shall not allow for a default judgment against the non-paying party in the absence of evidence presented as provided for above.

19. In any arbitration under this Section 6(o), each party shall be limited to calling a total of two witnesses both for purposes of deposition and the arbitration hearing.  Subject to the foregoing limitation on the number of witnesses, the arbitrator shall set a limited time period and establish procedures designed to reduce the cost and time for discovery while allowing the parties an opportunity, adequate in the sole judgment of the arbitrator to discover relevant information from the opposing parties about the subject matter of the dispute and in keeping with the timing requirements of Section 1.4(b).  The arbitrator shall rule upon motions to compel or limit discovery and shall have the authority to impose sanctions for discovery abuses, including legal fees and costs, to the same extent as a competent court of law or equity, should the arbitrator determine that discovery was sought without substantial justification or that discovery was refused or objected to without substantial justification;

20. The parties agree that the arbitration shall be kept confidential and that the existence of the proceeding and any element of it (including any pleadings, briefs or other documents submitted or exchanged, any testimony or other oral submissions and any awards) shall not be disclosed beyond the arbitrator, the parties, their counsel and any person necessary to the conduct of the proceeding, except as may lawfully be required in judicial proceedings relating to the arbitration or otherwise.

21. Injunctive Relief: Each party acknowledges and agrees that any breach by it or its Employees of this Agreement would cause irreparable harm to the non-breaching party, the amount of which would be extremely difficult to estimate and ascertain, and which could not be adequately compensated for by damages, and in the event of a material breach or a threatened breach of any of the said provisions, each party hereby acknowledges that the non-breaching party shall be entitled to seek an injunction or other equitable relief against the breaching party in the competent courts of any jurisdiction, without the necessity of posting any bond or security, restraining such breaching party from any material breach or further material breach of such restrictions, but this section shall not be construed so as to be in derogation of any other remedy which such non-breaching party may have at law or in equity in the event of such a breach or threatened breach.  

22. Non-Frustration: Neither party to this Agreement shall commit any act or take any action which frustrates or hampers the rights of the other party under this Agreement. Each party shall act in good faith and engage in fair dealing when taking any action under or related to this Agreement.  

RISK DISCLOSURE

THE PURCHASE OF THE TOKENS MAY INVOLVE A HIGH DEGREE OF RISK. SUCH A PURCHASE SHOULD BE CONSIDERED ONLY BY PURCHASERS WHO HAVE SUFFICIENT KNOWLEDGE AND EXPERIENCE TO EVALUATE THE MERITS AND RISKS OF THE PURCHASE OF DIGITAL ASSETS AND WHO HAVE CAREFULLY READ THESE TERMS & CONDITIONS. THE TOKENS SHOULD BE PURCHASED ONLY BY A PERSON WHOSE FINANCIAL POSITION WOULD PERMIT SUCH PERSON TO BEAR THE ECONOMIC RISKS OF SUCH AN INVESTMENT, INCLUDING A COMPLETE LOSS OF THE INVESTMENT.

A purchase of the Tokens involves a significant degree of risk, including, but not limited to, those risks described below, and, therefore, should be undertaken only by individuals capable of evaluating the risks of the Tokens and bearing such risks. In addition, there are significant actual and potential conflicts of interests that may arise in connection with the Tokens that investors should be aware of, as set forth below under "Conflicts of Interest." The existence of any risk or an actual conflict may have an adverse impact on the performance of the Tokens and, thus, the any return the holders are expecting. Prospective purchasers should carefully consider the following factors in connection with a purchase and should consult their own legal, tax and financial advisors as to all of these risks and relating to the purchase of any cryptocurrencies generally. The Tokens are suitable only for sophisticated investors who fully understand, and are willing to assume, and have the financial resources to withstand, the risks involved in cryptocurrencies and to bear the potential loss of their entire investment in the cryptocurrencies. There can be no assurance that the Tokens will be able to receive any return on their capital. Furthermore, no assurance can be given that risk control mechanisms will be adequate to safeguard against losses. Holders of the Tokens may be required to bear the financial risk of a total loss of the Tokens for an indefinite period of time. Additional risks and uncertainties not currently known to the Company or that the Company currently deems to be immaterial also may materially adversely affect the Company’s business, financial condition or operating results.

Risks Associated with Syscoin and the Syscoin Network

Digital assets such as syscoin were only introduced within the past decade or so, and the value of the Tokens is subject to a number of factors relating to the capabilities and development of blockchain technologies and to the fundamental investment characteristics of digital assets that are uncertain and difficult to evaluate.

Digital assets such as syscoin were only introduced within the past decade or so, and the medium-to-long term value of the Tokens may influenced by a wide variety of factors that are uncertain and difficult to evaluate, such as the infancy of their development, their dependence on technologies such as cryptographic protocols, their dependence on the role played by miners and developers and the potential for malicious activity. For example, the following are some of the risks could materially adversely affect the value of the Tokens:

• The trading prices of many digital assets, including bitcoin, have experienced extreme volatility in recent periods and may continue to do so. For instance, there were steep increases in the value of certain digital assets, including bitcoin, over the course of 2017, and multiple market observers asserted that digital assets were experiencing a "bubble." These increases were followed by steep drawdowns throughout 2018 in digital asset trading prices, including for bitcoin. Following the drawdowns, bitcoin prices increased during 2019, then decreased significantly again in early 2020 before increasing later in the year. This cycle was then repeated in 2021 and 2022. Currently, many describe Syscoin to be in a “bear market”. There can be no assurance that any expected increases will continue in the future, or that they will not be offset by declines. The bitcoin markets may still be experiencing a bubble or may experience a bubble again in the future. Extreme volatility in the future, including further declines in the trading prices of bitcoin, could have a material adverse effect on the value of the Tokens and the Tokens could lose all or substantially all of their value.

• Digital asset networks and the software used to operate them are in the early stages of development. Digital assets have experienced, and the Company expects will experience in the future, sharp fluctuations in value. Given the infancy of the development of digital asset networks, parties may be unwilling to transact in digital assets, which would dampen the growth, if any, of digital asset networks, including the Syscoin network.

• Digital asset networks are dependent upon the internet. A disruption of the internet or a digital asset network, such as the Syscoin network, would affect the ability to transfer digital assets, including bitcoin, and, consequently, adversely affect their value.

• The acceptance of software patches or upgrades by a significant, but not overwhelming, percentage of the users and miners in a digital asset network, such as the Syscoin network, could result in a "fork" in such network’s blockchain, resulting in the creation of multiple separate networks, which could compete with one another for users, miners, and developers. This could adversely affect the Syscoin network and Token prices.

• Governance of many digital asset networks, including the Syscoin network, is by voluntary consensus and open competition. As a result, there may be a lack of consensus or clarity on the governance of the Syscoin network, which may stymie the Syscoin network's utility and ability to grow and solve challenges. In particular, it may be difficult to find solutions or martial sufficient effort to overcome current or future problems on the Syscoin network.

• The foregoing notwithstanding, the Syscoin network’s software protocol is informally managed by a group of core developers that propose amendments to the Syscoin network’s source code. The core developers evolve over time, largely based on self-determined participation. To the extent that a significant majority of users and miners adopt amendments to the Syscoin network, the Syscoin network will be subject to new protocols that may adversely affect the value of the Tokens.

• The open-source structure of many digital asset network protocols, such as the protocol for the Syscoin network, means that developers and other contributors are generally not directly compensated for their contributions in maintaining and developing such protocols. As a result, the developers and other contributors of a particular digital asset may lack a financial incentive to maintain or develop the network or may lack the resources to adequately address emerging issues. Alternatively, some developers may be funded by companies whose interests are at odds with other participants in a particular digital asset network. A failure to properly monitor and upgrade the software protocol of the Syscoin network could damage the network, and adversely affect the value of bitcoin.

• The loss or destruction of a private key required to access a digital asset such as the Tokens may be irreversible. If a private key is lost, destroyed or otherwise compromised, including by any applicable custodian, you will be unable to access the bitcoin corresponding to that private key, resulting in loss.

• Miners, developers and users may switch to or adopt certain digital asset networks at the expense of their engagement with other digital asset networks, which may negatively impact those networks, including the Syscoin network.

• Over the past several years, digital asset mining operations have become more costly as they have evolved from individual users mining with computer processors, graphics processing units and first-generation application specific integrated circuit machines to "professionalized" mining operations using specialized hardware or sophisticated machines. If the profit margins of digital asset mining operations are not sufficiently high, digital asset miners are more likely to immediately sell tokens earned by mining, resulting in an increase in liquid supply of that digital asset, which would generally tend to reduce that digital asset’s market price.

• To the extent that any miners cease to record transactions that do not include the payment of a transaction fee in solved blocks or do not record a transaction because the transaction fee is too low, such transactions will not be recorded on bitcoin's digital public recordkeeping system or ledger (the "Syscoin Blockchain") until a block is solved by a miner who does not require the payment of transaction fees or is willing to accept a lower fee. Any widespread delays in the recording of transactions could result in a loss of confidence in the Syscoin network.

• In the past, flaws in the source code for digital asset networks have been exposed and exploited, including flaws that disabled some functionality for users, exposed users' personal information and/or resulted in the theft of users' digital assets. The cryptography underlying Syscoin could prove to be flawed or ineffective, or developments in mathematics and/or technology, such as advances in quantum computing, could result in such cryptography becoming ineffective, enabling a malicious actor to take the bitcoin, which would adversely affect the value of the Tokens. Even if another digital asset other than bitcoin were affected by similar circumstances, any reduction in confidence in the robustness of the source code or cryptography underlying digital assets generally could negatively affect the demand for all digital assets, including bitcoin, and therefore adversely affect the value of the Tokens.

• Banks and other established financial institutions may refuse to process funds for bitcoin transactions; process wire transfers to or from bitcoin exchanges, bitcoin-related companies or service providers; or maintain accounts for persons or entities transacting in bitcoin. This could dampen liquidity in the market and damage the public perception of digital assets generally or any one digital asset in particular, such as bitcoin, and their or its utility as a payment system, which could decrease the price of digital assets generally or individually.

Moreover, because digital assets, have been in existence for a short period of time and are continuing to develop, there may be additional risks in the future that are impossible to predict or evaluate as of the date of these Terms & Conditions.

The value of the Tokens may relate directly to the value of bitcoin, syscoin, or other digital assets, the value of which may be highly volatile and subject to fluctuations due to a number of factors.

The value of the Tokens may relate directly to the value of the bitcoin, syscoin, or other digital assets, and fluctuations in the price of these digital assets could adversely affect the value of the Tokens. The market price of digital assets may be highly volatile, and may be influenced by a wide variety of factors, some of which could include:

• An increase in the global digital asset supply;

• The adoption of bitcoin and other digital assets as a medium of exchange, store-of-value or other consumptive asset and the maintenance and development of the open-source software protocol of the Bitcoin and Syscoin network, and speculative expectations related thereto;

• Forks in the Syscoin network;

• Expectations with respect to interest rates, the rates of inflation of fiat currencies or digital assets and fiat currency conversion and exchange rates;

• Monetary policies of governments, trade restrictions, currency devaluations and revaluations and regulatory measures or enforcement actions, if any, that restrict the use of digital assets as a form of payment or the purchase of digital assets on the digital asset markets;

• Increased competition from other forms of digital assets or payment services, including digital currencies constituting legal tender that may be issued in the future by central banks, or digital assets meant to serve as a medium of exchange by major private companies or other institutions.

• Global or regional political, economic or financial conditions, events and situations, such as the novel coronavirus outbreak;

• Consumer and investor preferences and perceptions of bitcoin specifically and digital assets generally;

• Decreased confidence in bitcoin exchanges generally due the failure of certain bitcoin exchanges or their being subject to hacks, service outages, or manipulative trading activity, as well as to the lack of regulation and transparency associated with some of them;

• Fiat currency withdrawal and deposit policies on crypto exchanges;

• The liquidity of crypto and Token markets;

• Levels of speculative interest and trading activity in digital asset markets;

• Investment and trading activities of large holders of the Tokens;

• A "short squeeze" resulting from speculation on the price of the Tokens;

• An active derivatives market for digital assets generally; and

• Fees associated with processing a bitcoin or syscoin transaction and the speed at which bitcoin or syscoin transactions are settled.

A decline in the popularity or acceptance of the Syscoin network would harm the value of the Tokens.

The value of the Tokens depends on the development and acceptance of the Syscoin network. The slowing or stopping of the development or acceptance of the Syscoin network may adversely affect the Tokens.

The Syscoin network, including the cryptographic and algorithmic protocols associated with the operation of the Syscoin Blockchain, has only been in existence since 2014, and bitcoin (2009), both markets have a limited performance record, making them part of a new and rapidly evolving industry that is subject to a variety of factors that are difficult to evaluate. For example, the following are some of the risks could materially adversely affect the value of the Tokens:

• As the Syscoin network continues to develop and grow, certain technical issues might be uncovered and the trouble shooting and resolution of such issues requires the attention and efforts of Syscoin’s global development community.

• The Syscoin network has underwent a hard fork that resulted in the minting of 100 million new syscoin tokens. This minting was contentious, and as a result some users of syscoin may harbor ill will toward the Syscoin network. These users may attempt to negatively impact the use or adoption of the Syscoin network.

• In August 2017, the Bitcoin network was upgraded with a technical feature known as "Segregated Witness" with the promise of increasing the number of transactions per second that can be handled on-chain and enabling so-called second layer solutions, such as the Lightning Network or payment channels, that have the potential to increase transaction throughput by processing certain transactions outside the main Syscoin Blockchain. These upgrades may fail to achieve the expected benefits or widespread adoption, leading to a decline in public support for, and the price of, bitcoin.

• As of the date of this Memorandum, the largest 100 bitcoin wallets held a substantial amount of the outstanding supply of bitcoin and it is possible that some of these wallets are controlled by the same person or entity. Moreover, it is possible that other persons or entities control multiple wallets that collectively hold a significant number of bitcoin, even if each wallet individually only holds a small amount. As a result of this concentration of ownership, large sales by such holders could have an adverse effect on the market price of bitcoin.

Token transactions are irrevocable and stolen or incorrectly transferred Tokens may be irretrievable.

Token transactions are not reversible. Once a transaction has been verified and recorded in a block that is added to the Syscoin Blockchain, an incorrect transfer of the Tokens, or a theft of them generally will not be reversible and the Token holder may not be capable of seeking compensation for any such transfer or theft.

The custody of the Tokens are through a “self- custodial” wallet, which could malfunction, be susceptible to cyber-attacks, or result in a total or catastrophic loss of all Tokens.

Self-custody wallets, which allow users to hold and manage their own private keys and digital assets, provide a high level of security and autonomy compared to custodial wallets managed by third parties. However, with this increased control comes a set of unique risks and responsibilities. Here are the primary risks associated with self-custody wallets:

1. Loss of Private Keys or Seed Phrases

- Description: The most significant risk of self-custody is the loss of access to the wallet's private keys or seed phrase. If lost, forgotten, or destroyed, there is no way to recover the assets stored in the wallet.

- Mitigation: Store private keys and seed phrases securely in multiple locations (e.g., secure offline backups, hardware wallets, or encrypted storage).

2. User Error

- Description: Mistakes such as sending assets to the wrong address, accidentally deleting wallets, or incorrectly managing backups can result in the permanent loss of funds.

- Mitigation: Double-check addresses and transactions, use wallet software with user-friendly interfaces, and thoroughly understand wallet operations before transacting.

3. Theft and Phishing Attacks

- Description: Cybercriminals often use phishing attacks, social engineering, malware, or other tactics to steal private keys or seed phrases from users. If someone gains access to these credentials, they can easily transfer all assets out of the wallet.

- Mitigation: Use strong, unique passwords, enable two-factor authentication where possible, and be cautious about sharing information. Avoid clicking on suspicious links and downloading untrusted software.

4. Malware and Hacking

- Description: Devices storing private keys or seed phrases are vulnerable to malware, spyware, or other forms of hacking. If compromised, the attacker could access and empty the wallet.

- Mitigation: Regularly update software, use antivirus programs, and consider using hardware wallets that keep private keys offline, making them less vulnerable to hacking.

5. Loss or Damage to Physical Storage

- Description: If you use a hardware wallet or store private keys on a physical medium (e.g., paper, metal backups), these could be lost, stolen, or damaged (e.g., fire, water damage).

- Mitigation: Use multiple backups stored in different secure locations, possibly with additional protective measures against environmental damage.

6. No Recourse for Reversing Transactions

- Description: Transactions on the blockchain are generally irreversible. If you mistakenly send funds to the wrong address or fall victim to fraud, there is no way to reverse the transaction or recover the assets.

- Mitigation: Verify transactions multiple times and use reputable services or applications that may have safeguards for common errors.

7. Lack of Technical Knowledge

- Description: Managing a self-custody wallet requires a certain level of technical understanding. Lack of knowledge can lead to errors, misuse, or vulnerability to scams.

- Mitigation: Educate yourself through reputable sources, and start with smaller transactions until comfortable with managing assets securely.

8. Software Bugs and Vulnerabilities

- Description: Wallet software, like any other software, may have bugs or security vulnerabilities that could be exploited by attackers.

- Mitigation: Regularly update wallet software, choose well-maintained and widely used wallets, and stay informed about any potential vulnerabilities in the software you use.

9. Social Attacks

- Description: Attackers may attempt to gain physical access to your device or use coercion to extract private keys or seed phrases.

- Mitigation: Use hardware wallets with passphrase protection and maintain privacy regarding the extent of your crypto holdings.

10. Inheritance and Succession Issues

- Description: If the wallet owner becomes incapacitated or dies, without a proper plan, inheritors may not be able to access the funds.

- Mitigation: Create a legal and secure inheritance plan that includes instructions on accessing private keys or seed phrases.

Conclusion

Self-custody wallets offer unmatched control and security over digital assets, but they also place the onus of security entirely on the user. A proactive approach to managing these risks—through education, planning, secure storage, and constant vigilance—is essential to safely navigate the complexities of self-custody.

Security threats to the Company or any exchange that the Tokens are trading on, could result in the halting of operations and a loss of assets or damage to the reputation of the Token or the Company, each of which could result in a reduction in the value of the Tokens.

Security breaches, computer malware and computer hacking attacks have been a prevalent concern in relation to digital assets. The Company believes that the Tokens will be an appealing target to hackers or malware distributors seeking to destroy, damage or steal the Tokens and will only become more appealing as the Tokens appreciate. To the extent the Company or an exchange is unable to identify and mitigate or stop new security threats or otherwise adapt to technological changes in the digital asset industry, the Tokens may be subject to theft, loss, destruction or other attack.

The Company has not evaluated the security procedures in place for safeguarding assets on any exchanges. Nevertheless, the security procedures cannot guarantee the prevention of any loss due to a security breach, software defect or act of God that may be borne by the Tokens or the exchanges.

The security procedures and operational infrastructure may be breached due to the actions of outside parties, error or malfeasance of an employee of the Company, the exchanges, or otherwise, and, as a result, an unauthorized party may obtain access to the private keys (and therefore the Tokens) or other data of the a Token holder. Additionally, outside parties may attempt to fraudulently induce employees of the Company, or the exchanges or other service providers to disclose sensitive information in order to gain access to the Company’s infrastructure. As the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently, or may be designed to remain dormant until a predetermined event and often are not recognized until launched against a target, the Company and exchanges may be unable to anticipate these techniques or implement adequate preventative measures.

An actual or perceived breach of the exchanges could harm the Company’s operations, result in damage the Company’s reputation and negatively affect the market perception, all of which could in turn reduce the value of the Tokens. The Company may also cease operations, the occurrence of which could similarly result in a reduction in the value of the Tokens.

A disruption of the Internet may affect operations, which may adversely affect the digital asset industry and the value of the Tokens.

The Syscoin network relies on the Internet. A significant disruption of Internet connectivity (i.e., one that affects large numbers of users or geographic regions) could disrupt the Syscoin network's functionality and operations until the disruption in the Internet is resolved. A disruption in the Internet could adversely affect the value of the Tokens or the ability of the Company to operate.

Potential amendments to the Syscoin network's protocols and software could, if accepted and authorized by the Syscoin network community, adversely affect the value of the Tokens.

The Syscoin network uses a cryptographic protocol to govern the interactions within the Syscoin network. The Syscoin Foundation and the core developers has evolved to manage the source code for the protocol. Membership in the community of core developers evolve over time, largely based on self-determined participation in the resource section dedicated to syscoin on Github.com. The core developers can propose amendments to the Syscoin network's source code that could alter the protocols and software of the Syscoin network and the properties of syscoin. These alterations would occur through software upgrades and could potentially include changes to the irreversibility of transactions and limitations on the merge-mining. The Syscoin network could be subject to new protocols and software that may adversely affect the Tokens, to the extent that a significant majority of the users and miners on the Syscoin network install such software upgrades.

The open-source structure of the Syscoin network protocol means that the core developers and other contributors are generally not directly compensated for their contributions in maintaining and developing the Syscoin network protocol. A failure to properly monitor and upgrade the Syscoin network protocol could damage the Syscoin network the Tokens.

The Syscoin network operates based on an open-source protocol maintained by the core developers and other contributors, largely on the GitHub resource section dedicated to syscoin development. As the Syscoin network protocol is not sold or made available subject to licensing or subscription fees and its use does not generate revenues for its development team, the core developers are generally not compensated for maintaining and updating the Syscoin network protocol. Consequently, there is a lack of financial incentive for developers to maintain or develop the Syscoin network and the core developers may lack the resources to adequately address emerging issues with the Syscoin network protocol. Although the Syscoin network is currently supported by the core developers, there can be no guarantee that such support will continue or be sufficient in the future. Alternatively, some developers may be funded by entities whose interests are at odds with other participants in the Syscoin network. To the extent that material issues arise with the Syscoin network protocol and the core developers and open-source contributors are unable to address the issues adequately or in a timely manner, the Syscoin network and the Tokens may be adversely affected.

A temporary or permanent "fork" of the Syscoin Blockchain could adversely affect the Tokens.

Syscoin software is open source. Any user can download the software, modify it and then propose that bitcoin users and miners adopt the modification. When a modification is introduced and a substantial majority of users and miners consent to the modification, the change is implemented and the Syscoin network remains uninterrupted. However, if less than a substantial majority of users and miners consent to the proposed modification, and the modification is nonetheless implemented by some users and miners and the modification is not compatible with the software prior to its modification, the consequence would be what is known as a "fork" (i.e., "split") of the Syscoin network (and the blockchain), with one version running the pre-modified software and the other running the modified software. The effect of such a fork would be the existence of two (or more) versions of the Syscoin network running in parallel, but with each version's bitcoin lacking interchangeability. Such a fork in the Syscoin Blockchain typically would be addressed by community-led efforts to merge the forked Syscoin Blockchains, and several prior forks have been so merged. Since the Syscoin network's inception, modifications to the Syscoin network have been accepted by the vast majority of users and miners, ensuring that the Syscoin network remains a coherent economic system and the focal point of the majority of developer activity. There is no assurance, however, that this will continue to be the case, and if it is not, then the price of bitcoin could be negatively affected. The original blockchain and the forked blockchain could potentially compete with each other for users, developers, and miners, leading to a loss of these for the original blockchain. A fork of any kind could adversely affect the Tokens.

Additionally, a fork could be introduced by an unintentional, unanticipated software flaw in the multiple versions of otherwise compatible software users run.

Forks have occurred already to the Syscoin network.

The Syscoin Blockchain could be vulnerable to a "51% attack", which could adversely affect an the Tokens or the ability of the Company to operate.

If the majority of the processing power dedicated to mining on the Syscoin network is controlled by a bad actor (often referred to as a "51% attack"), it may be able to alter the Syscoin Blockchain on which the Syscoin network and bitcoin transactions rely. This could occur if the bad actor were to construct fraudulent blocks or prevent certain transactions from completing in a timely manner, or at all. It could be possible for the malicious actor to control, exclude or modify the ordering of transactions, though it could not generate new bitcoin or transactions. Further, a bad actor could "double-spend" its own syscoin (i.e., spend the same syscoin in more than one transaction) and prevent the confirmation of other users' transactions for so long as it maintained control. If the Syscoin community did not reject the fraudulent blocks as malicious or to the extent that such bad actor did not yield its control of processing power, reversing any changes made to the Syscoin Blockchain may be impossible. The possible crossing of this threshold indicates a greater risk that a single mining pool could exert authority over the validation of bitcoin transactions. If the feasibility of a bad actor gaining control of the processing power on the Syscoin network increases, there may be a negative effect on the Tokens.

If miners expend less processing power on the Syscoin network, it could increase the likelihood of a malicious actor obtaining control.

Miners ceasing operations would reduce the collective processing power on the Syscoin network, which would adversely affect the confirmation process for transactions (i.e., temporarily decreasing the speed at which blocks are added to the Syscoin Blockchain until the next scheduled adjustment in difficulty for block solutions). If a reduction in processing power occurs, the Syscoin network may be more vulnerable to a malicious actor obtaining control in excess of fifty percent (50%) of the processing power on the Syscoin network. As a result, it may be possible for a bad actor to manipulate the Syscoin Blockchain and hinder transactions. Any reduction in confidence in the confirmation process or processing power of the Syscoin network may adversely affect the Tokens.

Blockchain technologies are based on the theoretical conjectures as to the impossibility of solving certain cryptographical puzzles quickly. These premises may be incorrect or may become incorrect due to technological advances.

Blockchain technologies are premised on theoretical conjectures as to the impossibility, in practice, of solving certain mathematical problems quickly. Those conjectures remain unproven, however, and mathematical or technological advances could conceivably prove them to be incorrect. Blockchain technology companies may also be negatively affected by cryptography or other technological advances, such as the development of quantum computers with significantly more power than computers presently available, that undermine or vitiate the cryptographic consensus mechanism underpinning the Syscoin Blockchain and other distributed ledger protocols. If either of these events were to happen, markets that rely on blockchain technologies, such as the Syscoin network, could quickly collapse, and the Tokens may be adversely affected.

The price of bitcoin on the bitcoin market has exhibited periods of extreme volatility, which could have a negative impact on the performance of the Tokens.

The price of bitcoin as determined by the bitcoin market has experienced periods of extreme volatility and may be influenced by a wide variety of factors. Speculators and investors who seek to profit from trading and holding bitcoin generate a significant portion of bitcoin demand. Such speculation regarding the potential future appreciation in the value of bitcoin may cause the price of bitcoin to increase. Conversely, a decrease in demand for or speculative interest regarding bitcoin may cause the price to decline. The volatility of the price of bitcoin, particularly arising from speculative activity, may have a negative impact on the performance of the Tokens.

Cryptocurrency exchanges on which the Tokens may trade are relatively new and, in some cases, unregulated, and, therefore, may be more exposed to fraud and security breaches than established, regulated exchanges for other financial assets or instruments, which could have a negative impact on the performance of the Tokens.

Over the past several years, a number of exchanges have been closed or faced issues due to fraud, failure, security breaches or governmental regulations. The nature of the assets held at exchanges makes them appealing targets for hackers and a number of cryptocurrency exchanges have been victims of cybercrimes. In many of these instances, the customers of such bitcoin exchanges were not compensated or made whole for the partial or complete losses of their account balances in such exchanges. No bitcoin exchange is immune from these risks. The closure or temporary shutdown of exchanges due to fraud, business failure, hackers or malware, or government-mandated regulation may reduce confidence in the Syscoin network and can slow down the mass adoption of cryptocurrencies. Further, should such exchange failures occur at a major exchange where the Tokens are traded, there is a significant possibility that those Tokens on that exchange may be frozen or lost without any or minimal recourse; this could result in the value of the Tokens reducing to nil.

Digital asset networks face significant scaling challenges and efforts to increase the volume of transactions may not be successful.

Many digital asset networks face significant scaling challenges due to the fact that public blockchains generally face a tradeoff between security and scalability. One means through which public blockchains achieve security is decentralization, meaning that no intermediary is responsible for securing and maintaining these systems. For example, a greater degree of decentralization generally means a given digital asset network is less susceptible to manipulation or capture. Achieving decentralization may mean that every single node on a given digital asset network is responsible for securing the system by processing every transaction and maintaining a copy of the entire state of the network. However, this may involve tradeoffs from an efficiency perspective, and impose constraints on throughput.

In an effort to increase the volume of transactions that can be processed on a given digital asset network, many digital assets are being upgraded with various features to increase the speed and throughput of digital asset transactions. In 2023, the Syscoin network was upgraded with a technical feature with the promise of increasing the number of transactions per second that can be handled on-chain and enabling so-called second layer solutions, that have the potential to increase transaction throughput by processing certain transactions outside the main Syscoin Blockchain. However, this upgrade may fail to achieve the expected benefits or widespread adoption.

If increases in throughput on the Syscoin network lag behind growth in usage of syscoin, average fees and settlement times may increase considerably.

Many developers are actively researching and testing scalability solutions for public blockchains that do not necessarily result in lower levels of security or decentralization. However, there is no guarantee that any of the mechanisms in place or being explored for increasing the scale of settlement of the Syscoin network transactions will be effective, or how long these mechanisms will take to become effective, which could adversely impact the value of the Tokens.

New competing digital assets may pose a challenge to the Token’s market position, resulting in a reduction in demand for the Tokens, which could have a negative impact on the price of the Tokens.

Competition from central bank digital currencies could adversely affect the value of bitcoins and other digital assets.

Central banks have introduced digital forms of legal tender ("CBDCs"). China's CBDC project, known as Digital Currency Electronic Payment ("DC/EP"), has reportedly been tested in a live pilot program conducted in multiple cities in China. A recent study published by the Bank for International Settlements estimated that at least 36 central banks have published retail or wholesale CBDC work ranging from research to pilot projects. Whether or not they incorporate blockchain or similar technology, CBDCs, as legal tender in the issuing jurisdiction, could have an advantage in competing with, or replace, bitcoin and other cryptocurrencies as a medium of exchange or store of value. As a result, the value of bitcoin could decrease, which could adversely affect the Tokens.

Miners could act in collusion to raise transaction fees, which may adversely affect the usage of the Syscoin network.

Syscoin miners collect fees for each transaction they confirm. Miners validate unconfirmed transactions by adding the previously unconfirmed transactions to new blocks in the blockchain. Miners are not forced to confirm any specific transaction, but they are economically incentivized to confirm valid transactions as a means of collecting fees. To the extent that any miners cease to record transactions in solved blocks, such transactions will not be recorded on the Syscoin Blockchain until a block is solved by a miner who does not require the payment of transaction fees. Miners have historically accepted relatively low transaction confirmation fees, because miners have a very low marginal cost of validating unconfirmed transactions. If miners collude in an anticompetitive manner to reject low transaction fees, then bitcoin users could be forced to pay higher fees, thus reducing the attractiveness of the bitcoin network, or to wait longer times for their transactions to be validated by a miner who does not require the payment of a transaction fee. Syscoin mining occurs globally and it may be difficult for authorities to apply antitrust regulations across multiple jurisdictions. Any collusion among miners may adversely impact the Tokens or the ability of the Company to operate.

As technology advances, miners may be unable to acquire the digital asset mining hardware necessary to develop and launch their operations. A decline in the bitcoin mining population could adversely affect the Syscoin network and the Tokens.

Due to the increasing demand for digital asset mining hardware, miners may be unable to acquire the proper mining equipment or suitable amount of equipment necessary to continue their operations or develop and launch their operations. In addition, because successful mining of a digital asset that uses "proof of work" validation requires maintaining or exceeding a certain level of computing power relative to other validators, miners will need to upgrade their mining hardware periodically to keep up with their competition. The development of supercomputers with disproportionate computing power may threaten the integrity of the bitcoin market by concentrating mining power, which would make it unprofitable for other miners to mine. The expense of purchasing or upgrading new equipment may be substantial and diminish returns to miners dramatically. A decline in miners may result in a decrease in the value of bitcoin and the value of the Tokens.

If profit margins of bitcoin or syscoin mining operations are not high, miners may elect to immediately sell bitcoin or syscoin earned by mining, resulting in a reduction in the price of bitcoin or syscoin that could adversely affect the Tokens.

Bitoin network mining operations have rapidly evolved over the past several years from individual users mining with computer processors, graphics processing units and first-generation ASIC (application- specific integrated circuit) machines. New processing power is predominantly added to the network currently by "professionalized" mining operations. Such operations may use proprietary hardware or sophisticated ASIC machines acquired from ASIC manufacturers. Significant capital is necessary for mining operations to acquire this hardware, lease operating space (often in data centers or warehousing facilities), afford electricity costs and employ technicians to operate the mining farms. As a result, professionalized mining operations are of a greater scale than prior network validators and have more defined, regular expenses and liabilities. In addition, mining operations may choose to immediately sell bitcoin earned from their operations into the global bitcoin market. In past years, individual miners are believed to have been more likely to hold newly mined bitcoin for more extended periods. The immediate selling of newly mined bitcoin would increase the supply of bitcoin on the bitcoin market, creating downward pressure on the price of bitcoin.

A professional mining operation operating at a low profit margin may be more likely to sell a higher percentage of its newly mined bitcoin rapidly, and it may partially or completely cease operations if its profit margin is negative. In a low profit margin environment, a higher percentage of the new bitcoin mined each day will be sold into the bitcoin market more rapidly, thereby reducing bitcoin prices. The network effect of reduced profit margins resulting in greater sales of newly mined bitcoin could result in a reduction in the price of bitcoin and syscoin that could adversely affect the Tokens.

Congestion or delay in the Syscoin network may delay purchases or sales of the Tokens.

The size of each block on the Syscoin Blockchain is currently limited, and is significantly below the level that centralized systems can provide. Increased transaction volume could result in delays in the recording of transactions due to congestion in the Syscoin network. Moreover, unforeseen system failures, disruptions in operations, or poor connectivity may also result in delays in the recording of transactions on the Syscoin network. Any delay in the Syscoin network could affect the Token holder’s ability to buy or sell the Token at an advantageous price, or may create the opportunity for a bad actor to double spend, resulting in decreased confidence in the Syscoin network. Over the longer term, delays in confirming transactions could reduce the attractiveness to merchants and other commercial parties as a means of payment. As a result, the Syscoin network and the value of the Tokens would be adversely affected.

Risk Associated with Purchasing the Tokens

The Tokens are subject to market risk.

Market risk refers to the risk that the market price of the Tokens will rise or fall, sometimes rapidly or unpredictably. Purchasing the Tokens is subject to market risk, including the possible loss of the entire value of the Tokens.

Possible illiquid markets may exacerbate losses of the Tokens.

Cryptocurrency is a relatively new asset with a limited trading history. The Tokens have virtually no trading history. Therefore, the markets for the Tokens may be less liquid and more volatile than other markets for more established products. It may be difficult to execute a trade at a specific price when there is a relatively small volume of buy and sell orders in the market. A market disruption can also make it more difficult to liquidate a position or find a suitable counterparty at a reasonable cost.

Market illiquidity may cause losses for the Tokens. The large size of the positions that the Tokens may acquire will increase the risk of illiquidity by both making the positions more difficult to liquidate and increasing the losses incurred while trying to do so should the Token holders need to liquidate their Tokens.

Misconduct of employees and of third-party service providers could cause significant losses to the Tokens.

Misconduct by employees or by third-party service providers could cause significant losses to the Company. Losses could also result from actions by third-party service providers, including the misappropriation of assets. In addition, employees and third-party service providers may improperly use or disclose confidential information, which could result in litigation or serious financial harm, including limiting the Company’s business prospects or future marketing activities.

Prospective purchasers have not been separately represented by counsel.

Prospective purchasers should note that the Tokens, the Company and their affiliates are all represented by legal counsel. Prospective purchasers in the Tokens have not been separately represented by counsel and are encouraged to seek the advice of independent legal counsel in evaluating the merits and risks of the offering.

Purchasing the Tokens may be adversely affected by competition from other investment vehicles focused on bitcoin or other cryptocurrencies.

The Tokens will compete with direct investments in bitcoin, other cryptocurrencies and other potential financial vehicles, possibly including securities backed by or linked to cryptocurrency and other investment vehicles that focus on other digital assets. Market and financial conditions, and other conditions beyond the Company 's control, may make it more attractive to invest in other vehicles, which could adversely affect the performance of the Tokens.

The Company lacks any operating history.

The Company has no operating history. Any past investment performance of the entities and individuals with which personnel of the Company have been associated should not be construed as an indication of the future value of the Tokens.

The Company has the ability to mint additional Tokens.

The Company has the power to mint additional Tokens which may result in significant dilution and potential devaluation of the Tokens.

Reliance on the Company and its principals.

The Company has exclusive responsibility for the Company’s decisions, which may directly impact the value of the Tokens. The success of the Company is dependent upon the ability of the Company and its key personnel who will manage the Company’s assets to develop and implement successfully the Company’s objectives. Holders of the Tokens will not have an opportunity to participate in the management of the Company.

Holders of the Tokens Do Not Participate in Management of the Company.

Holders of the Tokens will have no right or power to take part in the management or control of the business of the Company. Holders of the Tokens must rely solely on the judgment of the Company and its affiliates and should not purchase the Tokens unless they are willing to entrust all aspects of the Company operations to the Company and its affiliates.

Regulatory Risk

Future and current regulations by a United States or foreign government or quasi-governmental agency could have an adverse effect on the Tokens.

The regulation of bitcoin and related products and services continues to evolve, may take many different forms and will, therefore, impact bitcoin and its usage in a variety of manners. The inconsistent and sometimes conflicting regulatory landscape may make it more difficult for bitcoin businesses to provide services, which may impede the growth of the bitcoin economy and have an adverse effect on consumer adoption of bitcoin. There is a possibility of future regulatory change altering, perhaps to a material extent, the nature of the Tokens or the ability of the Company to continue to operate. Additionally, changes to current regulatory determinations of bitcoin's status as not being a security, changes to regulations surrounding futures contracts for bitcoin or related products, or actions by a United States or foreign government or quasi-governmental agency exerting regulatory authority over bitcoin, the Syscoin network, bitcoin trading, or related activities impacting other parts of the digital asset market, may adversely impact bitcoin and therefore may have an adverse effect on the value of your investment in the Tokens.

Tax Risk

The tax treatment of digital assets and transactions involving digital assets for income tax purposes may change.

Because digital currencies are a relatively new innovation, the tax treatment of digital assets, is not settled. Relevant tax authority’s treatment of digital assets may have negative consequences, including the imposition of a greater tax burden on Token holders or the imposition of a greater cost on the acquisition and disposition of the Tokens generally. Any such treatment may have a negative effect on the price of the Tokens and could result in adverse tax consequences for holders of the Tokens.

Tax Laws Could Change

There may be future changes in tax laws resulting from legislative, administrative or judicial decisions, any of which may have adverse tax consequences to the Tokens. Any such change may or may not be retroactive to a time preceding its occurrence. The rules dealing with taxation are constantly under review by persons involved in the legislative, administrative and judicial processes, resulting in revisions of regulations and revised interpretations of established concepts as well as statutory changes. Revisions in the tax laws could adversely affect the Company's tax consequences or the tax consequences of the Tokens.