AN OFFERING STATEMENT PURSUANT TO REGULATION A RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. INFORMATION CONTAINED IN THIS PRELIMINARY OFFERING CIRCULAR IS SUBJECT TO COMPLETION OR AMENDMENT. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED BEFORE THE OFFERING STATEMENT FILED WITH THE COMMISSION IS QUALIFIED. THIS PRELIMINARY OFFERING CIRCULAR SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR MAY THERE BE ANY SALES OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL BEFORE REGISTRATION OR QUALIFICATION UNDER THE LAWS OF SUCH STATE. THE COMPANY MAY ELECT TO SATISFY ITS OBLIGATION TO DELIVER A FINAL OFFERING CIRCULAR BY SENDING YOU A NOTICE WITHIN TWO BUSINESS DAYS AFTER THE COMPLETION OF THE COMPANY’S SALE TO YOU THAT CONTAINS THE URL WHERE THE FINAL OFFERING CIRCULAR OR THE OFFERING STATEMENT IN WHICH SUCH FINAL OFFERING CIRCULAR WAS FILED MAY BE OBTAINED.

PRELIMINARY OFFERING CIRCULAR DATED AUGUST 7, 2020

GATSBY DIGITAL, INC.

28 Liberty St, New York, NY 10005

(203) 842-9729
 

www.trygatsby.com

UP TO 5,434,782 SHARES OF SERIES A PREFERRED STOCK

UP TO 5,434,782 SHARES OF COMMON STOCK INTO WHICH THE SERIES A PREFERRED STOCK MAY CONVERT

PRICE: $0.92 PER SHARE

MINIMUM INVESTMENT: $999.12

SEE “SECURITIES BEING OFFERED” AT PAGE 29

Holders of our Series A Preferred Stock have limited voting rights compared to holders of our Common Stock pursuant to the investors rights agreement that investors must enter into in order to invest in this offering. For instance, holders of our Series A Preferred Stock must vote to elect two (2) directors designated by the Company’s founders, and (1) director designated by a significant shareholder of the Company, whereas the holders of our Common Stock have no requirement to vote for such designees. In addition, investors in this offering will be granting the Chief Executive Officer of the Company a proxy to vote all of such investor’s shares of stock in the event such an investor fails to vote. See “Securities Being Offered” at page 29 for more information on the rights of our Series A Preferred Stock.

The Series A Preferred Stock is subject to restrictions on transferability pursuant to the provisions in the Company’s Amended and Restated Bylaws. See “Securities Being Offered” on page 29 for more information on these restrictions.

The Series A Preferred Stock is convertible into Common Stock either at the discretion of the investor or automatically upon the occurrence of certain events, like the closing of the sale the Common Stock in an initial public offering or the vote of the majority of the holders of the Series A Preferred Stock to effect such conversion. The total number of shares of Common Stock into which the Series A Preferred Stock may be converted will be determined by dividing the original issue price per share of the Series A Preferred Stock by the conversion price per share of the Series A Preferred Stock. See “Securities Being Offered” at page 29 for additional details.

* The Company has engaged SI Securities, LLC to serve as its sole and exclusive placement agent to assist in the placement of its securities. The Company will pay SI Securities, LLC in accordance with the terms of the Issuer Agreement between the Company and SI Securities, LLC, a copy of which is filed as an exhibit to the Offering Statement of which this Offering Circular is a part. If the placement agent identifies all the investors and the maximum amount of shares is sold, the maximum amount the Company would pay SI Securities, LLC is $425,000. This does not include transaction fees paid directly to SI Securities, LLC by investors. See “Plan of Distribution and Selling Securityholders” for details of compensation and transaction fees to be paid to the placement agent on page 15.

The Company expects that the amount of expenses of the offering that it will pay will be approximately $65,000, not including commissions or state filing fees.

The Company is selling shares of Series A Preferred Stock.

The Company has engaged The Bryn Mawr Trust Company of Delaware as an escrow agent (the “Escrow Agent”) to hold funds tendered by investors, and assuming we sell a minimum of $1,000,000 in shares, may hold a series of closings at which we receive the funds from the Escrow Agent and issue the shares to investors.  This offering (the “Offering”) will terminate at the earlier of the date at which the maximum offering amount has been sold, and the date at which the Offering is earlier terminated by the Company, in its sole discretion. At least every 12 months after this Offering has been qualified by the United States Securities and Exchange Commission (the “Commission”), the Company will file a post-qualification amendment to include the Company’s recent financial statements. The Offering is being conducted on a best-efforts basis. The Company may undertake one or more closings on a rolling basis. After each closing, funds tendered by investors will be available to the Company.

INVESTING IN THE SERIES A PREFERRED STOCK OF GATSBY DIGITAL, INC. IS SPECULATIVE AND INVOLVES SUBSTANTIAL RISKS. YOU SHOULD PURCHASE THESE SECURITIES ONLY IF YOU CAN AFFORD A COMPLETE LOSS OF YOUR INVESTMENT. SEE “RISK FACTORS” BEGINNING ON PAGE 7 TO READ ABOUT THE MORE SIGNIFICANT RISKS YOU SHOULD CONSIDER BEFORE BUYING THE SERIES A PREFERRED STOCK OF THE COMPANY.

THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION DOES NOT PASS UPON THE MERITS OR GIVE ITS APPROVAL OF ANY SECURITIES OFFERED OR THE TERMS OF THE OFFERING, NOR DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF ANY OFFERING CIRCULAR OR OTHER SOLICITATION MATERIALS. THESE SECURITIES ARE OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION WITH THE COMMISSION; HOWEVER THE COMMISSION HAS NOT MADE AN INDEPENDENT DETERMINATION THAT THE SECURITIES OFFERED ARE EXEMPT FROM REGISTRATION

GENERALLY NO SALE MAY BE MADE TO YOU IN THIS OFFERING IF THE AGGREGATE PURCHASE PRICE YOU PAY IS MORE THAN 10% OF THE GREATER OF YOUR ANNUAL INCOME OR NET WORTH. DIFFERENT RULES APPLY TO ACCREDITED INVESTORS AND NON-NATURAL PERSONS. BEFORE MAKING ANY REPRESENTATION THAT YOUR INVESTMENT DOES NOT EXCEED APPLICABLE THRESHOLDS, WE ENCOURAGE YOU TO REVIEW RULE 251(d)(2)(i)(C) OF REGULATION A. FOR GENERAL INFORMATION ON INVESTING, WE ENCOURAGE YOU TO REFER TO www.investor.gov.

Sales of these securities will commence on approximately                              , 2020.

The Company is following the “Offering Circular” format of disclosure under Regulation A.

In the event that we become a reporting company under the Securities Exchange Act of 1934, we intend to take advantage of the provisions that relate to “Emerging Growth Companies” under the JOBS Act of 2012. See “Implications of Being an Emerging Growth Company.”

In this Offering Circular, the term “Gatsby Digital”, “Gatsby” “we”, “us”, “our” or “the Company” refers to Gatsby Digital, Inc. and its subsidiary on a consolidated basis.

THIS OFFERING CIRCULAR MAY CONTAIN FORWARD-LOOKING STATEMENTS AND INFORMATION RELATING TO, AMONG OTHER THINGS, THE COMPANY, ITS BUSINESS PLAN AND STRATEGY, AND ITS INDUSTRY. THESE FORWARD-LOOKING STATEMENTS ARE BASED ON THE BELIEFS OF, ASSUMPTIONS MADE BY, AND INFORMATION CURRENTLY AVAILABLE TO THE COMPANY’S MANAGEMENT. WHEN USED IN THE OFFERING MATERIALS, THE WORDS “ESTIMATE,” “PROJECT,” “BELIEVE,” “ANTICIPATE,” “INTEND,” “EXPECT” AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS, WHICH CONSTITUTE FORWARD LOOKING STATEMENTS. THESE STATEMENTS REFLECT MANAGEMENT’S CURRENT VIEWS WITH RESPECT TO FUTURE EVENTS AND ARE SUBJECT TO RISKS AND UNCERTAINTIES THAT COULD CAUSE THE COMPANY’S ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTAINED IN THE FORWARD-LOOKING STATEMENTS. INVESTORS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE ON WHICH THEY ARE MADE. THE COMPANY DOES NOT UNDERTAKE ANY OBLIGATION TO REVISE OR UPDATE THESE FORWARD-LOOKING STATEMENTS TO REFLECT EVENTS OR CIRCUMSTANCES AFTER SUCH DATE OR TO REFLECT THE OCCURRENCE OF UNANTICIPATED EVENTS.

SUMMARY

Overview

Gatsby Digital, Inc. is the owner and creator of “Gatsby” – a simple, free options trading platform focused on making options trading accessible to everyone. Gatsby makes options trading straightforward by removing the commissions and the jargon that has historically made options trading daunting for casual investors. Gatsby, available as a mobile app, allows users to trade options with their friends, earn “Gatsby Rewards” points on every trade, track breaking news and important alerts, and never pay any commissions or contract fees. In addition, the Company has recently launched Gatsby API, a new, free service offered to companies that want to trade options through Gatsby’s platform but not using the mobile app.

Gatsby Digital, Inc. wholly-owns Gatsby Securities LLC, a broker-dealer licensed by the Financial Industry Regulatory Authority, Inc. (“FINRA”).

Implications of Being an Emerging Growth Company

As an issuer with less than $1 billion in total annual gross revenues during our last fiscal year, we will qualify as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) and this status will be significant if and when we become subject to the ongoing reporting requirements of the Exchange Act upon filing a Form 8-A. An emerging growth company may take advantage of certain reduced reporting requirements and is relieved of certain other significant requirements that are otherwise generally applicable to public companies. In particular, as an emerging growth company we:

We intend to take advantage of all of these reduced reporting requirements and exemptions, including the longer phase-in periods for the adoption of new or revised financial accounting standards, and hereby elect to do so. Our election to use the phase-in periods may make it difficult to compare our financial statements to those of non-emerging growth companies and other emerging growth companies that have opted out of the phase-in periods under Section 107 of the JOBS Act.

Under the JOBS Act, we may take advantage of the above-described reduced reporting requirements and exemptions for up to five years after our initial sale of common equity pursuant to a registration statement declared effective under the Securities Act of 1933, as amended, or such earlier time that we no longer meet the definition of an emerging growth company. Note that this offering, while a public offering, is not a sale of common equity pursuant to a registration statement, since the offering is conducted pursuant to an exemption from the registration requirements. In this regard, the JOBS Act provides that we would cease to be an “emerging growth company” if we have more than $1 billion in annual revenues, have more than $700 million in market value of our Common Stock held by non-affiliates, or issue more than $1 billion in principal amount of non-convertible debt over a three-year period.

Certain of these reduced reporting requirements and exemptions are also available to us due to the fact that we may also qualify, once listed, as a “smaller reporting company” under the Commission’s rules. For instance, smaller reporting companies are not required to obtain an auditor attestation on their assessment of internal control over financial reporting; are not required to provide a compensation discussion and analysis; are not required to provide a pay-for-performance graph or CEO pay ratio disclosure; and may present only two years of audited financial statements and related MD&A disclosure.

Selected Risks Associated with Our Business

Our business expects to be subject to a number of risks and uncertainties, including those highlighted in the section titled “Risk Factors” immediately following this summary. These risks include, but are not limited to, the following:

RISK FACTORS

The SEC requires the Company to identify risks that are specific to its business and its financial condition. The Company is still subject to all the same risks that all companies in its business, and all companies in the economy, are exposed to. These include risks relating to economic downturns, political and economic events and technological developments (such as cyber-attacks and the ability to prevent such attacks). Additionally, early-stage companies are inherently more risky than more developed companies, and the risk of business failure and complete loss of your investment capital is present. You should consider general risks as well as specific risks when deciding whether to invest.

Risks Related to Our Company

We have a limited operating history upon which you can evaluate our performance, and have not yet generated revenues or profits. Accordingly, our prospects must be considered in light of the risks that any new company encounters. The Company was incorporated under the laws of the State of Delaware on February 8, 2018, and we have not yet generated revenue or profits. The likelihood of our creation of a viable business must be considered in light of the problems, expenses, difficulties, complications, and delays frequently encountered in connection with the growth of a business, operation in a competitive industry, and the continued development of our technology and platform. We anticipate that our operating expenses will increase in the near future, and there is no assurance that we will generate revenue or become profitable in the near future. You should consider our business, operations and prospects in light of the risks, expenses and challenges faced as an emerging growth company.

The auditor included a “going concern” note in its audit report. We may not have enough funds to sustain the business until it becomes profitable. Even if we raise funds through this offering, we may not accurately anticipate how quickly we may use the funds and whether these funds are sufficient to bring the business to profitability.

We anticipate initially sustaining operating losses. It is anticipated that we will initially sustain operating losses. Our ability to generate revenue and become profitable depends on the Company funding a clearing deposit with a clearing broker (intended to be Apex Clearing, a SEC-registered and FINRA member clearing broker-dealer), which will then allow the Company to collect revenues generated by trade flow on the Gatsby platform (which will be $0.50 per contract traded). There can be no assurance that this will occur. Unanticipated problems and expenses are often encountered in offering new products and services which may impact whether the Company is successful. Furthermore, we may encounter substantial delays and unexpected expenses related to development, technological changes, marketing, regulatory requirements and changes to such requirements or other unforeseen difficulties. There can be no assurance that we will ever become profitable. If the Company sustains losses over an extended period of time, it may be unable to continue in business.

Extensive regulation of our industry results in ongoing exposure to significant costs and penalties, enhanced oversight and restrictions and limitations on our ability to conduct and grow our business. The financial services industry, including our business, is subject to extensive regulation by governmental and self-regulatory organizations in the jurisdictions in which we operate. These regulators have broad powers to promulgate and interpret laws, rules and regulations that often serve to restrict or limit our business. The requirements imposed by these regulators are designed to safeguard the integrity of the financial markets and to protect public investors generally rather than the interests of our stockholders, and we could become subject to increased governmental and public scrutiny in the future in response to global conditions and events. The SEC, FINRA, and other authorities extensively regulate the U.S. financial services industry, including most of our operations in the United States.

Most aspects of our business, and in particular our wholly-owned subsidiary Gatsby Securities, LLC, a FINRA-licensed broker-dealer, are subject to laws, rules and regulations that cover all aspects of our business, including manner of operation, system integrity, anti-money laundering and financial crimes, handling of material non-public information, safeguarding data, capital requirements, reporting, record retention, market access, licensing of employees and the conduct of officers, employees and other associated persons. See “The Company’s Business — Regulation,” for a further description of the laws, rules and regulations that materially impact our business. There can be no assurance that we and/or our directors, officers and employees (including those of our subsidiary, as applicable) will be able to fully comply with these laws, rules and regulations. Any failure to comply with such legal and regulatory requirements could subject us to increased costs, fines, penalties or other sanctions, including suspensions of, or prohibitions on, certain of our activities, revocations of our subsidiary’s licenses or registrations, such as its membership in FINRA and registration as a broker-dealer, or suspension of personnel.

Gatsby Securities, LLC, our subsidiary, is subject to regulations under FINRA regarding changes in control of their ownership or organizational structure. These regulations generally provide that prior regulatory approval must be obtained in connection with any transaction resulting in a change in control or organizational structure of the subsidiary, such as changes in direct and indirect ownership or changes in the composition of the board of directors or similar body or the appointment of new officers, and, may include similar changes that occur at the Company or any of its stockholders that may be deemed to hold a controlling interest as defined by the applicable regulatory body. As a result of these regulations, our future efforts to sell shares or raise additional capital, or to make changes to our organizational structure, may be delayed or prohibited in circumstances in which such a transaction would give rise to a change in control or organizational structure as defined by the applicable regulatory body.

Our ability to operate our trading platform or offer our solutions in a particular jurisdiction is dependent on continued registration or authorization in that jurisdiction (or the maintenance of a valid exemption from such registration or authorization). In addition, regulatory approval may be required to expand certain of our operations and activities, and we may not be able to obtain the necessary regulatory approvals on a timely or cost-effective basis, or at all. Even if regulatory approvals are obtained, they may limit or impose restrictions on our operations and activities, and we may not be able to continue to comply with the terms of such approvals.

We incur significant costs, and will continue to devote significant financial and operational resources, to develop, implement and maintain policies, systems and processes to comply with our evolving legal and regulatory requirements. Future laws, rules and regulations, or adverse changes to, or more stringent enforcement of, existing laws, rules and regulations, could increase these costs and expose us to significant liabilities.

Our regulators generally require strict compliance with their laws, rules and regulations, and may investigate and enforce compliance and punish non-compliance. Many of our regulators, as well as other governmental authorities, are empowered to bring enforcement actions and to conduct administrative proceedings, examinations, inspections and investigations, which may result in increased compliance costs, penalties, fines, enhanced oversight, increased financial and capital requirements, additional restrictions or limitations, censure, suspension or other sanction, such as disgorgement, restitution or the revocation of regulatory approvals. The risks associated with such actions may be difficult to assess or quantify.

In the normal course of our business, we have been, and continue to be from time to time, a party to various regulatory proceedings related to compliance with applicable laws, rules and regulations, including audits, examinations and investigations of our operations and activities. Legal and regulatory actions, from subpoenas and other requests for information to potential criminal investigations, may divert management’s attention, cause us to incur significant expenses, including fees for legal representation and costs for remediation efforts, and result in fines, penalties or other sanctions. We may also be required to change or cease aspects of our operations or activities if a legal or regulatory authority determines that we have failed to comply with any laws, rules or regulations applicable to our business and/or otherwise determines to prohibit any of our operations or activities or revoke any of our approvals. In addition, regardless of the outcome, such actions may result in substantial costs and negative publicity, which may damage our reputation and impair our ability to attract and retain clients.

Firms in the financial services industry have experienced increased scrutiny in recent years, and penalties, fines and other sanctions sought by governmental and regulatory authorities, including the SEC, the CFTC, the Department of Justice, state securities administrators and state attorneys general in the United States. This trend toward a heightened regulatory oversight and enforcement environment is expected to continue for the foreseeable future, and may create uncertainty and may increase our exposure to scrutiny of our operations and activities, significant penalties and liability and negative publicity.

Our business could be materially adversely affected by new laws, rules or regulations or changes in existing laws, rules or regulations, including the interpretation and enforcement thereof. Our business is subject to extensive regulation. Governmental and regulatory authorities periodically review legislative and regulatory policies and initiatives, and may promulgate new or revised, or adopt changes in the interpretation and enforcement of existing, laws, rules and regulations at any time. Any such changes in laws, rules or regulations or in governmental policies could create additional regulatory exposure for our business, cause us to incur significant additional costs, require us to change or cease aspects of our business or restrict or limit our ability to grow our business, any of which could have a material adverse effect on our business, financial condition or results of operations. There have been in the past, and could be in the future, significant technological, operational and compliance costs associated with the obligations that derive from compliance with evolving laws, rules and regulations.

Changes in legislation and in the rules and regulations promulgated by U.S. domestic regulators, and how they are applied, often directly affect the method of operation and profitability of dealers and other financial services intermediaries, and could result in restrictions in the way conduct business. For example, various rules promulgated since the financial crisis, including under the Dodd-Frank Act, could adversely affect dealers’ ability to make markets in options, thereby negatively impacting the level of liquidity and pricing available on our trading platforms. Our business could also be affected by the monetary policies adopted by the Federal Reserve and foreign central banking authorities, which may affect the credit quality of our clients or increase the cost for our clients to trade options on our trading platform.

Furthermore,. Trading in options has been subject to extensive regulation in the past, and any future regulation could lead to a decline in trading in these markets, which could have a negative impact on our trading volumes and, as a result, our revenues.

We cannot predict how specific aspects of the regulatory developments described above may directly affect our business. Additional changes to the laws, rules and regulations that govern our business and operations, including changes to their interpretation, implementation or enforcement, may occur in the future, and we cannot know the extent to which any such changes will impact our business and operations. In addition, we cannot predict how current proposals that have not yet been finalized and/or that remain subject to ongoing debate will be implemented or in what form. We believe that uncertainty and potential delays around the final form of such new laws, rules and regulations may negatively impact our clients and trading volumes in the options market in which we transact. Additionally, unintended consequences of such new laws, rules and regulations may adversely affect our industry, our clients and us in ways yet to be determined. Any such legal and regulatory changes could affect us in substantial and unpredictable ways, and could have a material adverse effect on our business, financial condition and results of operations.

Our actual or perceived failure to comply with privacy, data protection and information security laws, rules, regulations and obligations could harm our business.

Certain types of information we collect, compile, store, use, transfer and/or publish are subject to numerous federal, state, local and foreign laws and regulations regarding privacy, data protection and information security These laws, rules and regulations govern the storing, sharing, use, processing, transfer, disclosure and protection of personal information and other content. The scope of these laws, rules and regulations are changing, subject to differing interpretations. We are also subject to the terms of our privacy policies and obligations to third parties related to applicable privacy, data protection and information security.

The regulatory framework for privacy, data protection and information security is uncertain, and is likely to remain uncertain for the foreseeable future, and we expect that there will continue to be new laws, rules regulations and industry standards concerning privacy, data protection and information security proposed and enacted in the jurisdictions in which we operate

Our efforts to comply with privacy, data protection and information security laws, rules and regulations could entail substantial expenses, may divert resources from other initiatives and could impact our ability to provide certain solutions. Additionally, if our third-party providers violate any of these laws or regulations, such violations may also put our operations at risk. Any failure or perceived failure by us to comply with any of our obligations relating to privacy, data protection or information security may result in governmental investigations or enforcement actions, litigation, claims or negative publicity and could result in significant liability, increased costs or cause our clients to lose trust in us, which could have an adverse effect on our reputation and business.

Our compliance and risk management programs might not be effective and may result in outcomes that could adversely affect our reputation, business, financial condition and results of operations. Our ability to comply with all applicable laws, rules and regulations is largely dependent on our establishment and maintenance of compliance and risk management programs, including audit and reporting systems, that can quickly adapt and respond, as well as our ability to attract and retain qualified compliance, audit, legal, cybersecurity and other compliance and risk management personnel. While we have policies and procedures in place, as well as third-party compliance firms engaged, to identify, monitor and manage our risks and regulatory obligations, we cannot assure you that ours our compliance firms’ policies and procedures will always be effective or that we will always be successful in monitoring or evaluating the risks to which we are or may be exposed. Our risk-management programs may prove to be ineffective because of their design, their implementation and maintenance or the lack of adequate, accurate or timely information. If our risk-management programs and efforts are ineffective, we could suffer losses that could have a material adverse effect on our financial condition and results of operations.

As part of our compliance and risk management programs, we must rely upon ours and our third-party compliance firms’ analysis of laws, rules, regulations and information regarding our industry, market, personnel, clients and other matters that are publicly available or otherwise accessible to us. That information may not in all cases be accurate, complete, up-to-date or properly analyzed. Furthermore, we rely on a combination of technical and human controls and supervision that are subject to error and potential failure, the challenges of which are exacerbated by the 24-hour-a-day, global nature of our business, which is subject to various legal and regulatory requirements of multiple jurisdictions that are constantly evolving and subject to change.

In case of non-compliance or alleged non-compliance with applicable laws, rules or regulations by us or third parties on which we may rely, we could be subject to regulatory investigations and proceedings that may be very expensive to defend against and may result in substantial fines and penalties or civil lawsuits, including by clients, for damages which can be significant. Any of these outcomes would adversely affect our reputation, financial condition and results of operations. Further, the implementation of new legislation or regulations, or changes in or unfavorable interpretations of existing legislation or regulations by courts or regulators, could require us to incur significant compliance costs and impede our ability to operate, expand and enhance our platforms and solutions as necessary to remain competitive and grow our business, which could materially adversely affect our business, financial condition and results of operations.

We are exposed to litigation risk. From time to time, we may be involved in various litigation matters and claims, including lawsuits regarding employment matters, breach of contract matters and other business and commercial matters. See “The Company’s Business — Litigation.” Many aspects of our business involve substantial risks of liability. These risks include, among others, disputes over terms of a trade and claims that a system failure or delay caused monetary loss to a client or that an unauthorized trade occurred. Currently, we do not carry insurance that may limit our risk of damages in some matters. As such, we may be at greater risk to experience uncovered losses, and we could incur significant legal expenses defending claims, even those without merit. Due to the uncertain nature of the litigation process, it is not possible to predict with certainty the outcome of any particular litigation matter or claim, and we could in the future incur judgments or enter into settlements that could have a material adverse effect on our business, financial condition and results of operations. The ultimate outcome of litigation matters and claims against us may require us to change or cease certain operations and may result in higher operating costs. An adverse resolution of any litigation matter or claim could cause damage to our reputation and could have a material adverse effect on our business, financial condition and results of operations.

Our reliance on our computer systems and software could expose us to great financial harm if any of our computer systems or software were subject to any material disruption or corruption. We rely significantly on our computer systems and software to receive and properly process internal and external data and utilize such data to generate orders and other messages. A disruption or corruption of the proper functioning of our computer systems or software could cause us to make erroneous trades, which could result in material losses. We cannot guarantee that our efforts to maintain competitive computer systems and software will be successful. Our computer systems and software may fail or be subject to bugs or other errors, resulting in service interruptions or other unintended consequences. If any of these risks materialize, they could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Our failure to protect our systems and network against cybersecurity breaches, or otherwise protect confidential and proprietary information, could damage our reputation and negatively impact our business. Our cybersecurity measures may not detect or prevent all attempts to compromise our systems, including denial-of-service attacks, viruses, malicious software, break-ins, phishing attacks, social engineering, security breaches or other attacks and similar disruptions that may jeopardize the security of information stored in and transmitted by our systems or that we otherwise maintain. Breaches of our cybersecurity measures could result in any of the following: unauthorized access to our systems; unauthorized access to and misappropriation of information or data, including confidential or proprietary information about ourselves, third parties with whom we do business or our proprietary systems; viruses, worms, spyware or other malware being placed in our systems; deletion or modification of client information; or a denial-of-service or other interruptions to our business operations. Because techniques used to obtain unauthorized access to or sabotage systems change frequently and may not be known until launched against us or our third-party service providers, we may be unable to anticipate these attacks or to implement adequate preventative measures. While we have not suffered any material breach of our cybersecurity, any actual or perceived breach of our cybersecurity could damage our reputation, expose us to a risk of loss or litigation and possible liability, require us to expend significant capital and other resources to alleviate problems caused by such breaches and otherwise have a material adverse effect on our business, financial condition, results of operations and cash flows.

Capacity constraints, systems failures, malfunctions and delays could harm our business. Our business activities are heavily dependent on the integrity and performance of the computer and communications systems supporting them. Our systems and operations are vulnerable to damage or interruption from human error, software bugs and errors, electronic and physical security breaches, natural disasters, power loss, utility or internet outages, computer viruses, intentional acts of vandalism, terrorism and other similar events. Extraordinary trading volumes or other events could cause our computer systems to operate in ways that we did not intend, at an unacceptably low speed or even fail. While we have invested significant amounts of capital to upgrade the capacity, reliability and scalability of our systems, there can be no assurance that our systems will always operate properly or be sufficient to handle such extraordinary trading volumes. Any disruption for any reason in the proper functioning or any corruption of our software or erroneous or corrupted data may cause us to make erroneous trades or suspend our services and could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Although our systems and infrastructure are generally designed to accommodate additional growth without redesign or replacement; we may need to make significant investments in additional hardware and software to accommodate growth. Failure to make necessary expansions and upgrades to our systems and infrastructure could not only limit our growth and business prospects but could also cause substantial losses and have a material adverse effect on our business, financial condition, results of operations and cash flows.

Since the timing and impact of disasters and disruptions are unpredictable, we may not be able to respond to actual events as they occur. Business disruptions can vary in their scope and significance and can affect one or more of our facilities. Further, the severity of the disruption can also vary from minimal to severe. Although we have employed significant effort to develop, implement and maintain reasonable disaster recovery and business continuity plans, we cannot guarantee that our systems will fully recover after a significant business disruption in a timely fashion or at all. If we are prevented from using any of our current trading operations, or if our business continuity operations do not work effectively, we may not have complete business continuity, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Failure or poor performance of third-party software, infrastructure or systems on which we rely could adversely affect our business. We depend on third parties to provide and maintain certain infrastructure that is critical to our business. For example, we rely on third parties to provide software, data center services and dedicated fiber optic, microwave, wireline and wireless communication infrastructure. This infrastructure may malfunction or fail due to events outside of our control, which could disrupt our operations and have a material adverse effect on our business, financial condition and results of operations. Any failure to maintain and renew our relationships with these third parties on commercially favorable terms, or to enter into similar relationships in the future, could have a material adverse effect on our business, financial condition, results of operations and cash flows.

We also rely on certain third-party software, third-party computer systems and third-party service providers, including clearing systems, exchange systems, alternate trading systems, order routing systems, internet service providers, communications facilities and other facilities. Any interruption in these third-party services or software, deterioration in their performance, or other improper operation could interfere with our trading activities, cause losses due to erroneous or delayed responses, or otherwise be disruptive to our business. If our arrangements with any third party are terminated, we may not be able to find an alternative source of software or systems support on a timely basis or on commercially reasonable terms. This could also have a material adverse effect on our business, financial condition, results of operations and cash flows.

Risks Relating to the Company

Our products may not gain market acceptance among our target customer demographic. Gatsby is focused on bringing new traders to the market, specifically targeting traders of cryptocurrency. A critical element in our commercialization strategy is to persuade this demographic to use our platform and engage in options trading. This demographic may be unwilling to change from the platforms they are currently using, or the types of trading they are engaging in currently. A number of factors may limit the market acceptance of our platform, including the following:

Our inability to successfully commercialize our platform will have a material adverse effect on the value of your investment.

We operate in a highly competitive industry that is dominated by several very large, well-capitalized market leaders and is constantly evolving. New entrants to the market, existing competitor actions, or other changes in market dynamics could adversely impact us. 

The level of competition in the brokerage industry is high, with multiple exceptionally large, well-capitalized competitors holding a majority share of the market, such as Charles Schwab and TD Ameritrade. Specifically, in the commission-free mobile platform brokerage market, platforms such as Robinhood and Webull are significant players, holding a majority of the market. Many of the companies in the brokerage industry have longer operating histories, larger customer bases, significantly greater financial, technological, sales, marketing, and other resources than we do. Further, such companies will be able to respond more quickly than we can to new or changing opportunities, technologies, standards, or client requirements, more quickly develop new products or devote greater resources to the promotion and sale of their products and services than we can. Likewise, their greater capabilities in these areas may enable them to better withstand periodic downturns in the industry and compete more effectively on the basis of price and production. In addition, new companies may enter the markets in which we compete, further increasing competition in the video brokerage industry. If we are unable to effectively compete against current companies and/or new entrants in this space, or business will suffer.

Our company does not currently hold any patents on its products or technology. As of the date of this Offering, the Company has not been issued any patents. There is no guarantee that the Company will ever be issued patents on its products or technology. If we are unable to secure patents for our products and technology, other companies with greater resources may copy our technology and/or products, or improve upon them, putting us at a disadvantage to our competitors.

Our failure to attract and retain highly qualified personnel in the future could harm our business. As the Company grows, it will be required to hire and attract additional qualified professionals such as software engineers, operations personnel , project managers, regulatory professionals, sales and marketing professionals, accounting, legal, and finance experts. The Company may not be able to locate or attract qualified individuals for such positions, which will affect the Company’s ability to grow and expand its business.

We rely on third party service providers. Our third party partners provide a variety of essential business functions, as well as regulatory compliance. In particular, transactions through the Gatsby platform are currently supported by ViewTrade Securities, Inc., a SEC registered broker-dealer and member of FINRA, pursuant to a brokerage services agreement. It is possible that ViewTrade Securities, Inc. or some of these other third parties will fail to perform their services or will perform them in an unacceptable manner. If we encounter problems with one or more of these parties and they fail to perform to expectations, it could have a material adverse impact on the Company, such as regulatory enforcement and punishment by FINRA, the SEC, or other regulatory bodies.

Our future success is dependent on the continued service of our small management team. Gatsby is managed by three (3) directors and three (3) executive officers. Our success is dependent on their ability to manage all aspects of our business effectively. Because we are relying on our small management team, we lack certain business development resources that may hurt our ability to grow our business. Any loss of key members of our executive team could have a negative impact on our ability to manage and grow our business effectively. We do not maintain a key person life insurance policy on any of the members of our senior management team. As a result, we would have no way to cover the financial loss if we were to lose the services of our directors or officers.

We expect to raise additional capital through equity and/or debt offerings to support our working capital requirements and operating losses. In order to fund future growth and development, the Company will likely need to raise additional funds in the future by offering shares of its Common or Preferred Stock and/or other classes of equity, or debt that convert into shares of common or Preferred Stock, any of which offerings would dilute the ownership percentage of investors in this offering. See “Dilution.” Furthermore, if the Company raises capital through debt, the holders of our debt would have priority over holders of common and Preferred Stock and the Company may be required to accept terms that restrict its ability to incur more debt. We cannot assure you that the necessary funds will be available on a timely basis, on favorable terms, or at all, or that such funds if raised, would be sufficient. The level and timing of future expenditure will depend on a number of factors, many of which are outside our control. If we are not able to obtain additional capital on acceptable terms, or at all, we may be forced to curtail or abandon our growth plans, which could adversely impact the Company, its business, development, financial condition, operating results or prospects.

Any valuation at this stage is difficult to assess. The valuation for this Offering was established by the Company. Unlike listed companies that are valued publicly through market-driven stock prices, the valuation of private companies, especially early-stage companies, is difficult to assess and you may risk overpaying for your investment.

We are and may continue to be significantly impacted by the worldwide economic downturn due to the COVID-19 pandemic. In December 2019, a novel strain of coronavirus, or COVID-19, was reported to have surfaced in Wuhan, China. COVID-19 has spread to many countries, including the United States, and was declared to be a pandemic by the World Health Organization. Efforts to contain the spread of COVID-19 have intensified and the U.S., Europe and Asia have implemented severe travel restrictions and social distancing. The impacts of the outbreak are unknown and rapidly evolving. A widespread health crisis has adversely affected and could continue to affect the global economy, resulting in an economic downturn that could negatively impact the value of the Company’s shares and investor demand for shares generally.

The continued spread of COVID-19 has also led to severe disruption and volatility in the global capital markets, which could increase our cost of capital and adversely affect our ability to access the capital markets in the future. It is possible that the continued spread of COVID-19 could cause a further economic slowdown or recession or cause other unpredictable events, each of which could adversely affect our business, results of operations or financial condition.
 

The extent to which COVID-19 affects our financial results will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the COVID-19 outbreak and the actions to contain the outbreak or treat its impact, among others. Moreover, the COVID-19 outbreak has had and may continue to have indeterminable adverse effects on general commercial activity and the world economy, and our business and results of operations could be adversely affected to the extent that COVID-19 or any other pandemic harms the global economy generally.

On April 24, 2020, we entered into a Small Business Administration (“SBA”) loan under the Paycheck Protection Program (“PPP”) in the amount of $106,210 with Radius Bank, a member of the Federal Deposit Insurance Corporation. The loan will mature 2 years from the date it was issued (April 24, 2020) and will accrue interest at a rate of 1% per year. The Paycheck Protection Program Flexibility Act of 2020 authorized the Company to apply for forgiveness of the funds utilized over the course of 24 weeks so long as the full-time equivalent staffing level remains the same (or increases) and that at least 60% of the funds are utilized to pay payroll costs. The Company subsequently applied for loan forgiveness, and has received a preliminary opinion from Radius Bank that the Company is eligible for loan forgiveness in the amount of $86,573.28 on July 8, 2020. However, the Company has not yet been granted forgiveness of this amount, and the forgiveness will not granted until a final determination is made that the Company utilized the funds in accordance with defined loan forgiveness guidance issued by the government. As such, it is possible that the Company may have to repay the entire balance of this loan.

If we cannot raise sufficient funds, we will not succeed. We are offering shares of our Series A Preferred Stock in the amount of up to $5,000,000 in this Offering on a best-efforts basis and may not raise the complete amount. Even if the maximum amount is raised, we are likely to need additional funds in the future in order to grow, and if we cannot raise those funds for whatever reason, including reasons relating to the Company itself or to the broader economy, the Company may not survive. If we raise a substantially lesser amount than the Maximum Raise, we will have to find other sources of funding for some of the plans outlined in “Use of Proceeds To Issuer”.

Risks Related to the Securities in this Offering

In certain circumstances investors will not have dissenters’ rights. The subscription agreement that investors will execute in connection with the offering contains a “drag-along” provision whereby investors agree to vote any shares they own in the same manner as the majority holders of our other classes of stock. Specifically, and without limitation, if the majority holders of our other classes of stock determine to sell the Company, depending on the nature of the transaction, investors will be forced to sell their stock in that transaction regardless of whether they believe the transaction is the best or highest value for their shares, and regardless of whether they believe the transaction is in their best interests.

We have previously granted anti-dilution rights in the form of preemptive rights to certain holders of our Series Seed Preferred Stock. The effect of those rights is that at any time we intend to issue additional shares of our stock that would dilute those holders, they would first have the right to acquire additional shares to maintain their pro rata ownership. As a result, upon future issuances of stock by the Company, investors in this offering may experience more substantial dilution than other stockholders. See Exhibit 3.1 and “Securities Being Offered” for further information about the preemptive rights granted to certain holders of our Series Seed Preferred Stock.

This investment is illiquid. There is no currently established market for reselling these securities. If you decide that you want to resell these securities in the future, you may not be able to find a buyer. Although the Company intends to apply in the future for quotation of its Common Stock on an over-the-counter market, or similar, exchange, there are a number of requirements that the Company may or may not be able to satisfy in a timely manner. Even if we obtain that quotation, we do not know the extent to which investor interest will lead to the development and maintenance of a liquid trading market. You should assume that you may not be able to liquidate your investment for some time, or be able to pledge these shares as collateral.

You will need to keep records of your investment for tax purposes. As with all investments in securities, if you sell our Series A Preferred Stock at a profit or loss, you will probably need to pay tax on the long- or short-term capital gains that you realize, or apply the loss to other taxable income. If you do not have a regular brokerage account, or your regular broker will not hold our Series A Preferred Stock for you (and many brokers refuse to hold securities issued under Regulation A) there will be nobody keeping records for you for tax purposes and you will have to keep your own records, and calculate the gain or loss on any sales of the Series A Preferred Stock. 

The value of your investment may be diluted if the Company issues additional options. A pool of unallocated options is typically reserved for future employees, which affects the fully-diluted pre-money valuation for this offering. The price per share of the Series A Preferred Stock has been calculated assuming a 5% post-money unallocated option pool, which may not account for all additional options the Company will issue after the offering and may not provide adequate protection against the dilution investors may face due to such additional issuances. Any option issuances by the Company over the 5% pool will lower the value of your shares.

Investors in this offering will receive stock that is subject to transfer restrictions. The Company’s Amended and Restated Bylaws contains provisions that (i) prohibits the sale or transfer of any shares of the Company’s capital stock by a stockholder without first obtaining the Company’s approval; and (ii) grants the Company a right of first refusal, whereby the Company has the option to purchase any shares proposed to be transferred or sold by a stockholder, in effect replacing the intended purchaser or transferee, so long as the Company matches the consideration the stockholder would have received for such sale or transfer. These provisions will limit your ability to access any liquidity following the purchase of these shares, as well as limit your freedom in choosing when and to whom you wish to sell your shares. As noted above, investors should intend to hold their securities for a significant period of time.

Investors in this offering may not be entitled to a jury trial with respect to claims arising under the subscription agreement, the investors’ rights agreement, which could result in less favorable outcomes to the plaintiff(s) in any action under these agreements. Investors in this offering will be bound by the subscription agreement and investors’ rights agreement both of which include a provision under which investors waive the right to a jury trial of any claim they may have against the Company arising out of or relating to these agreements. By signing these agreements, the investor warrants that the investor has reviewed this waiver with his or her legal counsel, and knowingly and voluntarily waives the investor’s jury trial rights following consultation with the investor’s legal counsel.

If we opposed a jury trial demand based on the waiver, a court would determine whether the waiver was enforceable based on the facts and circumstances of that case in accordance with the applicable state and federal law. To our knowledge, the enforceability of a contractual pre-dispute jury trial waiver in connection with claims arising under the federal securities laws has not been finally adjudicated by a federal court. However, we believe that a contractual pre-dispute jury trial waiver provision is generally enforceable, including under the laws of the State of New York and to the jurisdiction of the United States District Court of the Southern District of New York, which governs the subscription agreement and investors’ rights agreement, and in the Court of Chancery in the State of Delaware. In determining whether to enforce a contractual pre-dispute jury trial waiver provision, courts will generally consider whether the visibility of the jury trial waiver provision within the agreement is sufficiently prominent such that a party knowingly, intelligently and voluntarily waived the right to a jury trial. We believe that this is the case with respect to the subscription agreement and investors’ rights agreement. You should consult legal counsel regarding the jury waiver provision before entering into the subscription agreement and investors’ rights agreement. 

If you bring a claim against the Company in connection with matters arising under either the investors’ rights agreement or the subscription agreement, including claims under federal securities laws, you may not be entitled to a jury trial with respect to those claims, which may have the effect of limiting and discouraging lawsuits against the Company. If a lawsuit is brought against the Company under the either of these agreements, it may be heard only by a judge or justice of the applicable trial court, which would be conducted according to different civil procedures and may result in different outcomes than a trial by jury would have had, including results that could be less favorable to the plaintiff(s) in such an action. 

Nevertheless, if this jury trial waiver provision is not permitted by applicable law, an action could proceed under the terms of the subscription agreement or investors’ rights agreement with a jury trial. No condition, stipulation or provision of the subscription agreement or investors’ rights agreement serves as a waiver by any holder of common shares or by us of compliance with any substantive provision of the federal securities laws and the rules and regulations promulgated under those laws.

In addition, when the shares are transferred, the transferee is required to agree to all the same conditions, obligations and restrictions applicable to the shares or to the transferor with regard to ownership of the shares, that were in effect immediately prior to the transfer of the Shares, including but not limited to the investors’ rights agreement or subscription agreement.

Investors in this offering will enter into an Investors’ Rights Agreement that will limit their voting rights compared to those of holders of our Common Stock. Investors in this offering will be required to enter into an investors’ rights agreement. Pursuant to this agreement, holders of Series A Preferred Stock agree to vote for two (2) directors designated by the founders of the Company, Ryan Belanger-Saleh and/or Jeff Myers, and one (1) director designated by SWS Holding Company, LLC, a shareholder of the Company, so long as it holds at least 7.5% of the outstanding shares of the Company’s Series Seed Preferred Stock. In addition, investors will grant the Chief Executive Officer of the Company a proxy to vote all of such investor’s shares of stock on behalf of such investor if such investor fails to vote (or attempts to vote, but does so improperly). Investors in this offering therefore will have no choice as to the election of three members of the Board of Directors of the Company. Therefore, investors in this offering will very likely not be able to exert the same amount of control over the management of the Company as the holders of the Common Stock. See “Securities Being Offered” for more information on the voting rights of our Series A Preferred Stock.

The Investors’ Rights Agreement and Subscription Agreement also includes a forum selection provision, which could result in less favorable outcomes to the plaintiff(s) in any action against our company. Our Investors’ Rights Agreement and subscription agreement include a forum selection provision that requires any claims against the Company by stockholders not arising under the federal securities laws to be brought in the jurisdiction of the state courts of New York and to the jurisdiction of the United States District Court of the Southern District of New York. This forum selection provision may limit investors’ ability to bring claims in judicial forums that they find favorable to such disputes and may discourage lawsuits with respect to such claims. 

DILUTION

Dilution means a reduction in value, control or earnings of the shares the investor owns.

Immediate dilution  

An early-stage company typically sells its shares (or grants options over its shares) to its founders and early employees at a very low cash cost, because they are, in effect, putting their “sweat equity” into the Company. When the Company seeks cash investments from outside investors, like you, the new investors typically pay a much larger sum for their shares than the founders or earlier investors, which means that the cash value of your stake is diluted because all the shares are worth the same amount, and you paid more than earlier investors for your shares.

The following table illustrates the dilution that new investors will experience upon investment in the Company relative to existing holders of our securities. Because this calculation is based on the net tangible assets of the Company, we are calculating based our net tangible book value of $(1,331,286) as of December 31, 2019, as included in our audited financial statements. Note, no securities issuances from 2020 are reflected in the table to maintain consistency with the audited net tangible book value as of December 31, 2019.

The offering costs assumed in the following table includes up to $425,000 in commissions to SI Securities, LLC, as well as $65,000 in fixed legal, Edgarization, and accounting fees incurred for this offering.

This table presents three scenarios for the convenience of the reader: a $1,000,000 raise from this offering (the minimum offering), a 2,500,000 raise from this offering, and a fully subscribed $5,000,000 raise from this offering (the maximum offering).

Future dilution

Another important way of looking at dilution is the dilution that happens due to future actions by the Company. The investor’s stake in a company could be diluted due to the company issuing additional shares. In other words, when the Company issues more shares, the percentage of the Company that you own will go down, even though the value of the Company may go up. You will own a smaller piece of a larger company. This increase in number of shares outstanding could result from a stock offering (such as an initial public offering, another crowdfunding round, a venture capital round, angel investment), employees exercising stock options, or by conversion of certain instruments (e.g. convertible bonds, preferred shares or warrants) into stock.

If the Company decides to issue more shares, an investor could experience value dilution, with each share being worth less than before, and control dilution, with the total percentage an investor owns being less than before. There may also be earnings dilution, with a reduction in the amount earned per share (though this typically occurs only if the Company offers dividends, and most early stage companies are unlikely to offer dividends, preferring to invest any earnings into the Company).

The type of dilution that hurts early-stage investors most occurs when a company sells more shares in a “down round”, meaning at a lower valuation than in earlier offerings. An example of how this might occur is as follows (numbers are for illustrative purposes only):

This type of dilution might also happen upon conversion of convertible notes into shares. Typically, the terms of convertible notes issued by early-stage companies provide that in the event of another round of financing, the holders of the convertible notes get to convert their notes into equity at a “discount” to the price paid by the new investors, i.e., they get more shares than the new investors would for the same price. Additionally, convertible notes may have a “price cap” on the conversion price, which effectively acts as a share price ceiling. Either way, the holders of the convertible notes get more shares for their money than new investors. In the event that the financing is a “down round” the holders of the convertible notes will dilute existing equity holders, and even more than the new investors do, because they get more shares for their money. Investors should pay careful attention to the amount of convertible notes that the Company has issued (and may issue in the future), and the terms of those notes.

If you are making an investment expecting to own a certain percentage of the Company or expecting each share to hold a certain amount of value, it is important to realize how the value of those shares can decrease by actions taken by the Company. Dilution can make drastic changes to the value of each share, ownership percentage, voting control, and earnings per share.

PLAN OF DISTRIBUTION AND SELLING SECURITYHOLDERS

Plan of Distribution

The Company is offering a minimum of 1,086,956 (representing $1,000,000 in proceeds) and up to 5,434,782 (representing $5,000,000 in proceeds) of per share. The minimum investment is 1,086 shares, or $999.12. SeedInvest Auto Invest participants have a lower investment minimum of $199.64.

The Company has engaged SI Securities, LLC as its sole and exclusive placement agent to assist in the placement of its securities. SI Securities, LLC is under no obligation to purchase any securities or arrange for the sale of any specific number or dollar amount of securities.

(1)       SI Securities, LLC will receive commissions of 8.5% of the offering proceeds.

Other Terms

Except as set forth above, the Company is not under any contractual obligation to engage SI Securities, LLC to provide any services to the Company after this offering, and has no present intent to do so. However, SI Securities, LLC may, among other things, introduce the Company to potential target businesses or assist the Company in raising additional capital, as needs may arise in the future. If SI Securities, LLC provides services to the Company after this offering, the Company may pay SI Securities, LLC fair and reasonable fees that would be determined at that time in an arm’s length negotiation.

SI Securities, LLC intends to use an online platform provided by SeedInvest Technology, LLC, an affiliate of SI Securities, LLC, at the domain name www.seedinvest.com (the “Online Platform”) to provide technology tools to allow for the sales of securities in this offering. SI Securities, LLC will charge you a non-refundable transaction fee equal to 2% of the amount you invest (up to $300) at the time you subscribe for our shares. This fee will be refunded in the event the Company does not reach its minimum fundraising goal. In addition, SI Securities, LLC may engage selling agents in connection with the offering to assist with the placement of securities.

Selling Security holders

No securities are being sold for the account of security holders; all net proceeds of this offering will go to the Company.

Transfer Agent and Registrar 

eShares, Inc. dba Carta, Inc. will serve as transfer agent to maintain stockholder information on a book-entry basis. We will not issue shares in physical or paper form. Instead, our shares will be recorded and maintained on our stockholder register.

Investors’ Tender of Funds and Return of Funds

After the Commission has qualified the Offering Statement, the Company will accept tenders of funds to purchase the Series A Preferred Stock. The Company may close on investments on a “rolling” basis (so not all investors will receive their shares on the same date), provided that the minimum offering amount has been met. Tendered funds will remain in escrow until both the minimum offering amount has been reached and a closing has occurred. However, in the event we have not sold the minimum amount of shares by _____, 2020 or sooner terminated by the Company, any money tendered by potential investors will be promptly returned by the Escrow Agent. Upon closing, funds tendered by investors will be made available to the Company for its use.

In order to invest you will be required to subscribe to the offering via the Company’s website and agree to the terms of the offering and the subscription agreement.

In the event that it takes some time for the Company to raise funds in this offering, the Company may rely on cash on hand, or may seek to raise funds by conducting a new offering of equity or debt securities.

In order to invest you will be required to subscribe to the offering via the Online Platform and agree to the terms of the offering, Series A Preferred Stock Purchase Agreement, and any other relevant exhibit attached thereto.

Provisions of Note in Our Subscription Agreement and Investors’ Rights Agreement

Our subscription agreement and investors’ rights agreement include forum selection provisions that require any claims against the Company based on the subscription agreement and/or investors’ rights agreement not arising under the federal securities laws to be brought in a court of competent jurisdiction in the State of New York and to the jurisdiction of the United States District Court of the Southern District of New York. These forum selection provisions may limit investors’ ability to bring claims in judicial forums that they find favorable to such disputes and may discourage lawsuits with respect to such claims. The company has adopted these provisions to limit the time and expense incurred by its management to challenge any such claims. As a company with a small management team, this provision allows its officers to not lose a significant amount of time travelling to any particular forum so they may continue to focus on operations of the Company.

Jury Trial Waiver 

Our subscription agreement and investors’ rights agreement provides that investors waive the right to a jury trial of any claim they may have against us arising out of or relating to the investors’ rights agreement and subscription agreement. By signing the subscription agreement and investors’ rights agreement, the investor warrants that the investor has reviewed these waivers with the investor’s legal counsel, and knowingly and voluntarily waives his or her jury trial rights following consultation with the investor’s legal counsel. If we opposed a jury trial demand based on the waiver, a court would determine whether the waiver was enforceable given the facts and circumstances of that case in accordance with applicable case law.

USE OF PROCEEDS TO ISSUER

Assuming a maximum raise of $5,000,000, the net proceeds of this offering would be approximately $4,510,000 after subtracting estimated offering costs of $425,000 to SI Securities, LLC in commissions, $8,000 in audit fees, $7,000 in Edgarization fees and $50,000 in legal fees.

Assuming a raise of $3,000,000, representing 60% of the maximum offering amount, the net proceeds of this offering would be approximately $2,680,000 after subtracting estimated offering costs of $255,000 to SI Securities, LLC in commissions, $8,000 in audit fees, $7,000 in Edgarization fees and $50,000 in legal fees.

Assuming a raise of the minimum of $1,000,000, representing 20% of the maximum offering amount, the net proceeds of this offering would be approximately $850,000 after subtracting estimated offering costs of $85,000 to SI Securities, LLC in commissions, $8,000 in audit fees, $7,000 in Edgarization fees and $50,000 in legal fees. In such an event, Gatsby would adjust its use of proceeds by not funding the clearing deposit with Apex Clearing, and would instead put the proceeds towards its operational costs and continue to grow without unlocking the revenue potential that the clearing deposit would provide.

Please see the table below for a summary our intended use of the net proceeds from this offering

Because the offering is a “best efforts”, we may close the offering without sufficient funds for all the intended purposes set out above, or even to cover the costs of this offering.

The Company reserves the right to change the above use of proceeds if management believes it is in the best interests of the Company

THE COMPANY’S BUSINESS

Overview

Gatsby Digital, Inc. is the owner and creator of “Gatsby” – a simple, free options trading platform focused on making options trading accessible to everyone. Gatsby makes options trading straightforward by removing the commissions and the jargon that has historically made options trading a dauting task for newcomers. Gatsby, available as a mobile app, allows users to trade options with their friends, earn “Gatsby Rewards” points on every trade, track breaking news and important alerts, and never pay any commissions or contract fees. In addition, the Company has recently launched Gatsby API, a new, free service offered to traders that want to trade options through Gatsby’s technology using their own proprietary trading interface as an alternative to the mobile app interface. Gatsby Digital, Inc. was incorporated under the laws of the State of Delaware on February 8, 2018. Gatsby Securities, LLC, the Company’s wholly-owned subsidiary, was formed on January 22, 2019, and is a FINRA-licensed broker-dealer.

Gatsby was in the 2018 Barclays Accelerator powered by Techstars in Spring of 2018. At that time, we had built a waitlist of more 15,000 traders. Today, the Company has over 6,500 sign ups. Through Gatsby, it is our goal to bring options trading to a new generation of investors.

Principal Products and Services

The Company’s primary product is Gatsby – an options trading platform. Gatsby allows users to make trades for or against companies and Exchange Traded Funds (ETFs), and with no commissions or contract fees. Gatsby was launched in December 2019.

The Company has recently launched Gatsby API, a new, free service offered to companies that want to trade options through Gatsby’s technology but not using the mobile app. The Gatsby API is still in early-access stage, and is not fully-developed.

We are currently pre-revenue. While the Gatsby platform does currently generate revenue by charging users certain transactional fees, such fees are pass-through fees that the Company does not itself collect. We intend to start generating revenue by routing our customer’s orders to market makers who will pay us rebates of $0.50 per contract. In order to do this, we need to fund a clearing deposit with a clearing broker. We have identified Apex Clearing as the clearing broker we wish to utilize for this purpose going forward, and we intend to fund a clearing deposit with Apex Clearing with the funds raised in this offering, assuming we raise at least $1,000,000 in gross proceeds.

Organizational Structure

The Gatsby platform is owned by Gatsby Digital, Inc., the creator of the Gatsby platform. Gatsby Digital, Inc. operates primarily as a technology holding company. Operation of the Gatbsy Platform is supported by ViewTrade Securities, Inc., a SEC registered broker-dealer and FINRA member (“ViewTrade”). The Company currently operates as an Office of Supervisory Jurisdiction (OSJ) of ViewTrade pursuant to a Franchise Branch Office and Management Agreement. Pursuant to this agreement, ViewTrade acts as broker-dealer for the purchase and sale of securities on the Gatsby Platform, in exchange for a monthly fee of the greater of either $15,000 or the total amount of “ticket charges” – variable, flat-rate transaction fees charged by ViewTrade – accrued by the Company, as well as certain other fees. The Company initially entered into this agreement with ViewTrade because it did not have a broker-dealer license with FINRA through which to operate the Gatsby platform. As of the date of this Offering Circular, the Company’s has formed a wholly-owned subsidiary, Gatsby Securities, LLC, which has been licensed as a broker-dealer by FINRA, and is pursuing licenses in every state. As such, the Company intends to terminate the agreement with ViewTrade, and instead rely on Gatsby Securities, LLC to act as broker-dealer for transactions on the Gatsby platform, which it plans to do by January 1, 2021.

Market

Since the year 2000, while stock-market trading volume has more than doubled, stock-options volume has grown 6x since then, with approximately 4.4 billion options contracts in 2019, according to data supplied by Options Clearing Corp. Gatsby is focused on bringing new traders to the options trading market, specifically targeting crypto traders, of which there are over 22 million in the United States, according to data published by DataLight in 2019.

Competition

We face competition from large, well-known companies in the brokerage industry as a whole, such as Charles Schwab (owner of TD Ameritrade) and Morgan Stanley (owner of eTrade). We view our biggest competitors as Robinhood and Webull, as these are large, well-known companies offering commission-free mobile trading platforms, targeting the same young, new generation of investors that we are currently targeting.

Our Advantage

We believe Gatsby’s principal advantages over its competition are threefold: Gatsby is simple, social, and free.

Simple. Gatsby provides options trading tailored for a new generation of investors. By providing a sleek, simple interface and avoiding use of industry jargon, we believe Gatsby makes option trading accessible to everyone, and not just professionals.

Social: Gatsby functions as a social platform, allowing users to trade with their friends. Gatsby trades are visible on a social feed in the app (similar to Venmo) and users can like / copy each other’s trades. Gatsby also provides a community forum, allowing users to react to breaking news and corporate reports in real time on the platform. (For example, users can comment on trades they make to explain their reasoning for making the trade, which other users on the platform can see and interact with.)

Free. Gatsby does not charge any commissions or contract fees, and the app is free to download on the App Store (Apple) or Google Play (Android). Traders are only required to deposit a minimum of $10 in order to create an account. (Note: $0 commissions are charged on self-directed individual cash brokerage accounts that trade U.S. listed securities. SEC & FINRA fees may apply to certain transactions.) Gatsby like most brokers, makes money by directing customer order flow and receiving rebates from market makers (e.g. Citadel, Wolverine, Susquehanna). The Company cannot currently collect the rebates being generated on the platform, but will be able to once it funds a clearing deposit with a clearing broker, such as Apex Clearing.

Distribution

The Gatsby mobile app is available on iOS and Android, and is available for download on both the App Store and Google Play. The Gatsby API is available online at www.trygatsby.com. The Gatsby API is not yet fully-developed, and is available only by request.

Research and Development

Research and development to date has been primarily focused on development of the Gatsby platform, including technology development, product testing, risk mitigation, suitability, customer identification and education tools for customers. Future R&D initiatives will center are additional development in these areas.

Employees

The Company currently has 5 full-time employees (consisting of three officers of the Company and two registered representatives) that work either remotely or at the Company’s headquarters at 28 Liberty St, New York, NY 10005. In addition, the Company utilizes third-party contractors for certain technology development work. The Company has not entered into formal employment agreements with any of its executive officers or directors.

Regulation

As stated above, operation of the Gatbsy platform is currently handled by ViewTrade Securities, Inc., a SEC registered broker-dealer and FINRA member. As of the date of this Offering Circular, the Company’s wholly-owned subsidiary, Gatsby Securities, LLC, is a FINRA-licensed broker-dealer. In the future, the Company intends for Gatsby Securities, LLC to operate the Gatsby platform.

In the United States, the SEC is the federal agency primarily responsible for the administration of the federal securities laws, including adopting and enforcing rules and regulations applicable to broker-dealers. Broker-dealers are subject to regulation by state securities administrators in those states in which they conduct business or have registered to do business. Broker-Dealers are also subject to the various anti-fraud provisions of the Securities Act, the Exchange Act, the Commodity Exchange Act, certain state securities laws and the rules and regulations promulgated thereunder.

Much of the regulation of broker-dealers’ operations in the United States has been delegated to self-regulatory organizations. These self-regulatory organizations adopt rules (which are generally subject to approval by the SEC) that govern the operations of broker-dealers and conduct periodic inspections and examinations of their operations. In the case of our Gatsby Securities, LLC, our broker-dealer subsidiary, the principal self-regulatory organization is FINRA. Accordingly, Gatsby Securities, LLC is subject to both scheduled and unscheduled examinations by the SEC and FINRA, and is subject to regulatory capital rules of the SEC and FINRA. These rules, which specify minimum capital requirements for our regulated subsidiaries, are designed to measure the general financial integrity and liquidity of a broker-dealer and require that at least a minimum part of its assets be kept in relatively liquid form. Failure to maintain required minimum capital may subject a regulated subsidiary to a requirement to cease conducting business, suspension, revocation of registration or expulsion by applicable regulatory authorities, and ultimately could require the relevant entity’s liquidation.

Following the 2008 financial crisis, legislators and regulators in the United States adopted new laws and regulations, including the Dodd-Frank Act. Title VII of the Dodd-Frank Act (“Title VII”) amended the Commodity Exchange Act and the Exchange Act to establish a regulatory framework for swaps, subject to regulation by the CFTC, and security-based swaps, subject to regulation by the SEC. The CFTC has completed the majority of its regulations in this area, most of which are in effect. The SEC has also finalized many of its security-based swap regulations, although a significant number are not yet in effect. Among other things, Title VII rules require certain standardized swaps to be cleared through a central clearinghouse and/or traded on a designated contract market or SEF, subject to various exceptions. Title VII also requires the registration and regulation of certain market participants, including SEFs. As these rules require SEFs to maintain robust front-end and back-office IT capabilities and to make large and ongoing technology investments, and because SEFs may be supported by a variety of voice and auction-based execution methodologies, we expect our hybrid and fully electronic trading capability to perform strongly in such an environment. The SEC has proposed but not yet finalized its rules relating to the registration and regulation of security-based swap execution facilities (“SBSEFs”). If and when the SEC finalizes these rules, we expect that certain of our subsidiaries may be required to register as SBSEFs.

The current administration under President Trump and the Republican Party have sought, and already passed legislation, to roll-back key pieces of the Dodd-Frank Act in an effort to loosen certain regulatory restrictions on financial institutions. Although the current administration has indicated a goal of further reforming aspects of its existing financial services regulations, it is unknown at this time to what extent new legislation will be passed into law or whether pending or new regulatory proposals will be adopted or modified, or what effect such passage, adoption or modification will have, whether positive or negative, on our industry, our clients or us. In particular, there can be no assurance that rules impacting our clients will be amended or repealed, and we continue to expect the industry to be more heavily regulated than it was prior to the 2008 financial crisis.

Intellectual Property

Gatsby Digital does not currently hold any issued patents. The Company owns a trademark, information for which is summarized in the table below.

Litigation

From time to time, the Company may be involved in a variety of legal matters that arise in the normal course of business. The Company is not currently involved in any litigation, and its management is not aware of any pending or threatened legal actions relating to its intellectual property, conduct of its business activities, or otherwise. See “Risk Factors” for a summary of risks our company may face in relation to litigation against our company.

THE COMPANY’S PROPERTY

 The Company leases a shared office space at 28 Liberty St., New York, NY 10005 which serves as its headquarters.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of our financial condition and results of operations for the fiscal years ended December 31, 2018 and December 31, 2019 should be read in conjunction with our financial statements and the related notes included in this Offering Circular. The following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements.

Overview

Gatsby Digital, Inc., was formed on February 8, 2018 in the State of Delaware. Gatsby Digital, Inc. is the owner and creator of “Gatsby” – a simple, free options trading platform focused on making options trading accessible to everyone. Gatsby makes options trading straightforward by removing the commissions and the jargon that has historically made options trading a dauting task for newcomers. Gatsby, available as a mobile app, allows users to trade options with their friends, earn “Gatsby Rewards” points on every trade, track breaking news and important alerts, and never pay any commissions or contract fees. In addition, the Company has recently launched Gatsby API, a new, free service offered to traders that want to trade options through Gatsby’s technology using their own proprietary trading interface as an alternative to the mobile app interface. Gatsby Securities, LLC, the Company’s wholly-owned subsidiary, was formed on January 22, 2019, and is a FINRA-licensed broker-dealer, licensed May 27, 2020.

Results of Operations

Year ended December 31, 2019 Compared to Year ended December 31, 2018

Gatsby Digital, Inc. is in an early stage of development.  The Company did not generate revenues for the years ended December 31, 2019 and 2018.

Our operating expenses currently consist of general and administrative expenses, sales and marketing expenses, and research and development expenses. It should be noted that the first recorded transactions on the Gatsby mobile platform did not occur until November 2019.

General and Administrative Expenses: General administrative expenses were $689,469 for the year ended December 31, 2019 compared to $54,734 for the year ended December 31, 2018 – an increase of $634,735. Since our inception in February 2018, general and administrative expenses primarily consisted of compensation to software development contractors to build and develop the Gatsby platform, salaries, business development, data vendors, rent, and payments to necessary software vendors operate the Gatsby app. The increase in general and administrative expenses from 2018 to 2019 is primarily the result of scaling up our business operations as we geared up towards our general launch of the Gatsby app, which occurred in December 2019.

Sales and Marketing Expenses: Sales and marketing expenses were $35,713 for the year ended December 31, 2019 compared to $2,486 for the year ended December 31, 2018 – an increase of $33,227. Sales and marketing expenses have consisted primarily of online advertisements on Facebook, Google, Instagram, and Reddit. The increase in sales and marketing expenses in 2019 is the result of the launch of the Gatsby App, in which we increased our marketing efforts in order to increase our user base.

Research and Development Expenses: Research and development expenses were $292,431 for the year ended December 31, 2019 compared to $85,843 for the year ended December 31, 2018 – an increase of $206,588. Research and development expenses to date have consisted primarily compensation to software development contractors to build and develop the Gatsby platform, which was launched in December 2019. Development efforts increased up to the launch of the platform, which in turn increased development expenses. In August 2019, the Company also brought on its first full-time developer. As such, these factors resulted in an increase in research and development expenses from 2018 to 2019.

As a result of the foregoing, the Company generated a net loss of $1,085,924 for the period ended December 31, 2019 compared to a net loss of $148,888 for the year ended December 31, 2018, an $937,036 increase in net loss.

Since the end of the period covered by our financial statements, our legal and professional, research and development, payments to contractors, and marketing and advertising expenses are expected to increase in connection with this Offering. Our expenses related to wages and payroll taxes have temporarily decreased due to employees voluntarily deferring wages and temporary reductions in headcount. We expect wages and payroll tax expenses to increase following this Offering.

Liquidity and Capital Resources

At December 31, 2019, the Company’s cash on hand was $1,050,838. The Company is not generating revenues and requires the continued infusion of new capital to continue business operations. The Company has recorded losses since inception. As of December 31, 2019, the Company had working capital of $980,760 and a stockholders’ deficit of ($1,211,286). The Company has historically been capitalized by issuances of convertible notes and Simple Agreements for Future Equity (SAFEs). The Company plans to continue to try to raise additional capital through crowdfunding offerings, equity issuances, or any other method available to the Company. Absent additional capital, the Company may be forced to significantly reduce expenses and could become insolvent.

Issuances of Equity, Convertible Notes, and SAFEs

Equity

During the year ended December 31, 2018, the Company sold 638,298 shares of common stock for gross proceeds of $20,000.

Starting in March 2020, the Company commenced a Regulation D offering for the sale of its Series Seed Preferred Stock. The Company has raised approximately $670,000 through the sale of 1,673,928 shares of Series Seed Preferred Stock as of the date of this Offering Circular. In connection with the offering, the Company also issued 173,919 shares of Series Seed Preferred Stock via the Online Platform affiliated with SI Securities, LLC, which acted as a funding intermediary for a portion of this offering. In connection with the offering, the Company issued SI Securities, LLC 8,695 shares of Series Seed Preferred Stock as compensation for placement agent services.

Convertible Notes

During 2019 and 2018, the Company entered into a series of convertible note agreements with third parties and related parties totaling $1,964,630 and $375,000, respectively. A principal amount of $376,790 was issued via the Online Platform affiliated with SI Securities, LLC, which acted as a funding intermediary for a portion of this offering. In connection with the offering, the Company issued SI Securities, LLC a convertible note with a principal amount of $18,839.50 as compensation for placement agent services. In March 2020, all convertible notes issued by the Company converted (totaling approximately $2,430,000 in principal and interest) converted into Series Seed Preferred Stock, resulting in the issuance of 9,638,093 shares of Series Seed Preferred Stock of the Company. As a result of the conversion, the note held by SI Securities, LLC converted into 70,377 shares of Series Seed Preferred Stock.

SAFEs

On March 1, 2018, the Company assumed $20,000 in SAFE agreements from a related party entity, the proceeds of which were used to commence the Company’s operations. In March 2020, these $20,000 in SAFE agreements converted into Series Seed Preferred Stock of the Company, resulting in the issuance of 43,478 shares.

Indebtedness

PPP Loan

On April 24, 2020, we entered into a Small Business Administration (“SBA”) loan under the Paycheck Protection Program (“PPP”) in the amount of $106,210 with Radius Bank, a member of the Federal Deposit Insurance Corporation. The loan will mature 2 years from the date it was issued (April 24, 2020) and will accrue interest at a rate of 1% per year. The Paycheck Protection Program Flexibility Act of 2020 authorized the Company to apply for forgiveness of the funds utilized over the course of 24 weeks so long as the full-time equivalent staffing level remains the same (or increases) and that at least 60% of the funds are utilized to pay payroll costs. The Company subsequently applied for loan forgiveness, and has received a preliminary opinion from Radius Bank that the Company is eligible for loan forgiveness in the amount of $86,573.28 on July 8, 2020. However, the Company has not yet been granted forgiveness of this amount, and the forgiveness will not granted until a final determination is made that the Company utilized the funds in accordance with defined loan forgiveness guidance issued by the government. No payments on this loan are due for 6 months from the issuance date. Thereafter, the loan balance must be repaid within 18 months, in monthly installments. .As of the date of this Offering Circular, the entire balance of the $106,210 note is remaining.

Plan of Operations and Milestones

The Company has not yet generated any revenues. We have established the following milestones in our plan of operations for the next 12 months:

Since the net proceeds from the minimum offering amount ($850,000) will not allow us to fund a clearing deposit with a clearing broker ($1,000,000), if we only raise the minimum offering amount, we will not be able to achieve profitability without seeking additional funding, as we cannot generate revenues until we have funded a clearing deposit. In our opinion, it will be necessary to raise additional funds in the next six months to implement the plan of operations set out above, if we only raise the minimum. If we raise $3,000,000 or more, we intend to fund the clearing deposit immediately, and believe we could achieve the plan of operations set out above without raising additional capital in the next six months.

Trend Information

The options industry and particularly retail options have been increasing in volume consistently for the last decade. This growth is anticipated to continue for the foreseeable future as markets become increasingly volatile. We believe there is a huge trend towards young investors joining commission free options trading apps (such as Robinhood). In the first quarter of 2020, Robinhood users traded 9 times as many shares as E-Trade customers and 40 times as many shares as Charles Schwab customers, per dollar in the average customer account. They also bought and sold 88 times as many risky options contracts as Schwab customers, relative to the average account size, according to research conducted by Alphacution. The Company is hoping to capitalize on this growing trend, and attract these young investors to its platform.

The Company is currently pre-revenue, but plans on funding a clearing deposit with a clearing broker by January 2021, which will allow it to begin generating revenues, as described above.

Relaxed Ongoing Reporting Requirements

If we become a public reporting company in the future, we will be required to publicly report on an ongoing basis as an “emerging growth company” (as defined in the Jumpstart Our Business Startups Act of 2012, which we refer to as the JOBS Act) under the reporting rules set forth under the Exchange Act. For so long as we remain an “emerging growth company”, we may take advantage of certain exemptions from various reporting requirements that are applicable to other Exchange Act reporting companies that are not “emerging growth companies”, including but not limited to:

If we become a public reporting company in the future, we expect to take advantage of these reporting exemptions until we are no longer an emerging growth company. We would remain an “emerging growth company” for up to five years, although if the market value of our Common Stock that is held by non-affiliates exceeds $700 million as of any June 30 before that time, we would cease to be an “emerging growth company” as of the following December 31.

If we do not become a public reporting company under the Exchange Act for any reason, we will be required to publicly report on an ongoing basis under the reporting rules set forth in Regulation A for Tier 2 issuers. The ongoing reporting requirements under Regulation A are more relaxed than for “emerging growth companies” under the Exchange Act. The differences include, but are not limited to, being required to file only annual and semiannual reports, rather than annual and quarterly reports. Annual reports are due within 120 calendar days after the end of the issuer’s fiscal year, and semiannual reports are due within 90 calendar days after the end of the first six months of the issuer’s fiscal year.

In either case, we will be subject to ongoing public reporting requirements that are less rigorous than Exchange Act rules for companies that are not “emerging growth companies”, and our stockholders could receive less information than they might expect to receive from more mature public companies.

Ryan Belanger-Saleh, Co-Founder, Co-Chief Executive Officer, Director

Ryan Belanger-Saleh is a co-founder and a co-Chief Executive Officer of Gatsby Digital, Inc. Ryan co-founded the Company in February 2018, and has a history of entrepreneurship and executive management in the fintech industry. From June 2014 to March 2016, Ryan acted as Chief Technology Officer for Blue Technologies LLC, a software platform designed to support direct investment within the brokerage and wealth management community. As CTO, Ryan handled all technology development for the company, which provided the first electronic syndication platform in the equity crowdfunding space. In March 2016, Ryan left Blue Technologies to start Dealtable, Inc. with Jeff Myers, a deal management platform that allows users to securely collaborate, market, and close deals faster, where he acted as co-CEO until his departure in February 2018, leaving to co-found the Company with Jeff Myers.

Ryan earned a Bachelor’s of Arts in Economics from Northeastern University.

Jeff Myers, Co-Founder and Co-Chief Executive Officer

Jeff Myers is a co-founder and Co-Chief Executive officer of Gatsby Digital, Inc. Jeff co-founded the Company in February 2018. As Co-Chief Executive Officer, he shares responsibility with Ryan Belanger-Saleh for managing the day-to-day operations of the Company, and plays a key role in managing technology development, marketing and branding strategies, and fundraising / investor relations for Gatsby Digital Inc. Prior to co-founding the Company, beginning in 2014, Jeff served as an Emerging Platforms Lead at NBCUniversal, where he lead a Led a ss team of developers and designers to build and deploy innovative new products for various business units at. NBCUniversal. Jeff left NBCUniversal in October 2015, and subsequently founded DealTable, Inc. with Ryan Belanger-Saleh , where he acted as co-CEO until his departure in February 2018, where he handled development and launch of data room software and oversaw sales strategy and implementation for customers. Jeff left DealTable to co-found the Company in February 2018.

Jeff earned his B.A. in English from Trinity College-Hartford.

Davis Gaynes, Chief Operating Officer

Davis Gaynes serves as the Company’s Chief Operating Officer, a position he has held since its inception in February 2018. As its COO, Davis manages the daily operations of our broker-dealer (currently, ViewTrade, but in the future, this will be Gatsby Securities) and develops and manages relationships with various vendors. Davis is an experienced Chief Operating Officer, and has served in such capacity in a number of noteworthy companies in his career. From February 2013 to December 2015, Davis served as President of Chaikin Analytics, a stock trading idea platform named one of “Two Top Websites for Quantitative Analysis” by Barron’s. There, he was responsible for all day to day aspects of running the company, from sales and marketing to product development and operations. Next, Davis served as Chief Operating Officer of Weiss Analytics from April 2016 to October 2017, a home price analytics company that produces house specific home price indexes, among other things.

Steven Streit, Director

Steven Streit joined our Company as a director in March 2020. In addition to serving as a director of our Company, Steven is a Founder and General Partner of SWS Venture Capital, the Founder and Chief Executive Officer of Green Dot Corporation and the Founder and Chairman of Green Dot Bank. Steve began Green Dot in 1999 and invented the prepaid debit card industry, bringing the first reloadable prepaid debit card to retail stores nearly 20 years ago. Since those early days, Green Dot has grown from a start-up that began at a table in Steve’s bedroom into a financial technology leader with multiple products, services, and millions of customers—including its revolutionary Banking as a Service cloud-based platform. Additionally, Steve serves on the board of the Federal Reserve Bank of San Francisco’s Los Angeles branch, has been named a two-time EY entrepreneur of the Year and is ranked among Bank Innovation’s 10 Most Innovative CEO’s in Banking. Through his family charity, Patti’s Way, a 501(c)(3) charitable foundation, Steve advocates for, and provides grants to children and their single parent or guardian who apply at PattisWay.org.

For the fiscal year ended December 31, 2019, we paid Ryan Belanger-Saleh, our sole director at the time, $80,000. None of this compensation was for his services as a director of the Company.

Other than cash compensation, no other compensation was provided to the executive officers or directors in their capacities as officers and directors of the Company.

SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITYHOLDERS

The following table sets out, as of July 31, 2020, the voting securities of the Company that are owned by executive officers and directors, and other persons holding more than 10% of any class of the Company’s voting securities, or having the right to acquire those securities. The table assumes that all options and warrants have vested. The Company’s voting securities include all shares of the Company’s Common Stock and Series A Preferred Stock.

INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS

None.

SECURITIES BEING OFFERED

General

The Company is offering shares of Series A Preferred Stock in this offering. The Series A Preferred Stock may be converted into shares of the Common Stock of the Company at the discretion of each investor, or automatically upon the occurrence of certain events, like an initial public offering. The Company is qualifying up to 5,434,782 shares of Series A Preferred Stock, convertible into an additional 5,434,782 shares of Common Stock, under the Offering Statement of which this Offering Circular is a part.

The following description summarizes the most important terms of the Company’s capital stock. This summary does not purport to be complete and is qualified in its entirety by the provisions of Gatsby’s Amended and Restated Certificate of Incorporation and bylaws, copies of which have been filed as exhibits to the Offering Statement of which this Offering Circular is a part. For a complete description of Gatsby’s capital stock, you should refer to the Amended and Restated Certificate of Incorporation and bylaws of the Company and to the applicable provisions of Delaware law.

The authorized capital stock of the Company consists of 26,800,000 shares of Common Stock, par value $0.00001 per share, and [_] shares of Preferred Stock, par value $0.00001 of which [_] is designated as Series A Preferred Stock 12,800,000 is designated as Series Seed Preferred Stock.

As of July 31, 2020, the outstanding shares of the Company included:

Common Stock

Voting Rights

Each holder of the Company’s Common Stock is entitled to one vote for each share on all matters submitted to a vote of the stockholders, including the election of directors.

Dividend Rights

Holders of Common Stock are entitled to receive dividends, as may be declared from time to time by the Board of Directors out of legally available funds as detailed in the Company’s Amended and Restated Certificate of Incorporation. The Company has never declared or paid cash dividends on any of its capital stock and currently does not anticipate paying any cash dividends after this offering or in the foreseeable future.

Liquidation Rights

In the event of a voluntary or involuntary liquidation, dissolution, or winding up of the Company, the holders of the Common Stock are entitled to share ratably in the net assets legally available for distribution to stockholders after the payment of all debts and other liabilities of the Company. Holders of the Series A Preferred Stock and Series Seed Preferred Stock are entitled to a liquidation preference that is senior to holders of the Common Stock, and therefore would receive dividends and liquidation assets prior to the holders of the Common Stock.

Preferred Stock

Series A Preferred Stock

Voting Rights

Each holder of Series A Preferred Stock will be entitled to one vote for each share of Common Stock into which such share of Series A Preferred Stock could be converted. In addition, pursuant to the investors’ rights agreement to be executed by investors in this offering, and to which holders of the Series Seed Preferred Stock are a party, holders of Series A Preferred Stock agree to vote for two (2) directors designated by the founders of the Company, Ryan Belanger-Saleh and/or Jeff Myers, and one (1) director designated by SWS Holding Company, LLC, so long as it holds at least 7.5% of the outstanding shares of the Company’s Series Seed Preferred Stock.

Fractional votes shall not be permitted and any fractional voting rights available on an as-converted basis (after aggregating all shares into which shares of Series A Preferred Stock held by each holder could be converted) shall be rounded to the nearest whole number (with one-half being rounded upward).

Additionally, the holders of the Series A Preferred Stock are entitled to certain protective provisions that require the Company to obtain the written consent or affirmative vote of a majority of the outstanding shares of Series A Preferred Stock prior to effecting certain corporate actions, comprised of the following:

On any matter submitted to the Series A Preferred Stock, the holders of the Series A Preferred Series will vote together with the Seed Preferred Stock as a single class, including the election of directors.

In addition, pursuant to the investors’ rights agreement, investors will grant the Chief Executive Officer of the Company a proxy to vote all of such investor’s shares of stock on behalf of such investor if such investor fails to vote or attempts to vote (whether by proxy, in person or by written consent), in a manner which is inconsistent with the terms of the agreement, and does not cure such inconsistency within 10 days.

Dividend Rights

Holders of Series A Preferred Stock will be entitled to receive dividends as may be declared from time to time by the Board of Directors out of legally available funds of the Company. The Company may not pay dividends on shares of Common Stock unless the holders of Series A Preferred Stock and Series Seed Preferred Stock first, or simultaneously, receive dividends on each share of Series A Preferred Stock and Series Seed Preferred Stock held by such holder. The Company has never declared or paid cash dividends on any of its capital stock and currently does not anticipate paying any cash dividends after this offering or in the foreseeable future.

Conversion Rights

Shares of Series A Preferred Stock will be convertible, at the option of the holder, at any time, into fully paid and nonassessable shares of the Company’s Common Stock at the then-applicable conversion rate. The conversion rate is determined by dividing the Series A Original Issue Price by the Conversion Price. The “Series A Original Issue Price” shall mean [_] per share, subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series A Preferred Stock. The “Conversion Price” for the Series A Preferred Stock shall initially mean the Series A Original Issue Price, subject to adjustment. The conversion rate is subject to adjustment in the event of stock splits, reverse stock splits or the issuance of a dividend or other distribution payable in additional shares of Common Stock.

Additionally, each share of Series A Preferred Stock will automatically convert into Common Stock:

In either of these events, the shares will convert in the same manner as a voluntary conversion.

Right to Receive Liquidation Distributions

In the event of a liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, or certain other events (each a “Deemed Liquidation Event”) such as the sale or merger of the Company, all holders of Series A Preferred Stock and will be entitled to a liquidation preference that is senior to holders of the Common Stock. Holders of Series A Preferred Stock will receive a liquidation preference equal to the greater of (a) the Series A Original Issue Price (as defined above) for such share of Series A Preferred Stock, plus any dividends declared but unpaid thereon, or (b) such amount per share as would have been payable had all shares of Series A Preferred Stock been converted into Common Stock immediately prior to such liquidation, dissolution or winding up or Deemed Liquidation Event (the “Series A Liquidation Amount”).

If, upon such liquidation, dissolution, or winding up or Deemed Liquidation Event, the assets (or the consideration received in a transaction) that are distributable to the holders of Series A Preferred Stock are insufficient to permit the payment to such holders of the full amount of their respective liquidation preference, then all of such funds will be distributed ratably among the holders of the Series A Preferred Stock in proportion to the full amounts to which they would otherwise be entitled to receive.

After the payment of the full liquidation preference of the Series A Preferred Stock, the remaining assets of the Company legally available for distribution (or the consideration received in a transaction), if any, will be distributed ratably to the holders of the Common Stock in proportion to the number of shares of Common Stock held by each such holder.

Drag Along Right

Investors in this offering will execute an investors’ rights agreement that contains a “drag-along provision” related to the sale of the Company. Investors who purchase Series A Preferred Stock (or who hold Common Stock into which the Series A Preferred Stock may convert) agree that, if the board of directors and the majority of the holders of the Company’s Preferred Stock vote in favor of a sale of the Company, then such holders of Series A Preferred Stock will vote in favor of the transaction if such vote is solicited, refrain from exercising dissenters’ rights with respect to such sale of the Company and deliver any documentation or take other actions reasonably requested by the Company or the other holders in connection with the sale.

Information Rights

The Company also agrees in the investors’ rights agreement to grant certain information rights to investors in this offering, including: (1) annual unaudited financial statements for each fiscal year of the Company, including an unaudited balance sheet as of the end of such fiscal year, an unaudited income statement, and an unaudited statement of cash flows, all prepared in accordance with generally accepted accounting principles and practices; and (2) quarterly unaudited financial statements for each fiscal quarter of the Company (except the last quarter of the Company’s fiscal year), including an unaudited balance sheet as of the end of such fiscal quarter, an unaudited income statement, and an unaudited statement of cash flows, all prepared in accordance with generally accepted accounting principles and practices, subject to changes resulting from normal year-end audit adjustments. If the Company has audited records of any of the foregoing, it will provide those in lieu of the unaudited versions.

Restrictions on Transfer - Market Stand Off

Pursuant to the investors’ rights agreement, holders of the Series A Preferred Stock agree not to, sell or otherwise transfer or dispose of any capital stock of the Company owned by such holder for up to one hundred eighty (180) days following the effective date of any registration statement of the Company filed under the Securities Act relating to the registration by the Company for its own behalf of shares of its Common Stock or other equity securities on a registration statement on Form S-1 or S-3. Investors agree to execute any agreements as may be reasonably requested by the underwriters of the IPO to effect the market stand-off.

Series Seed Preferred Stock

The terms of the Series Seed Preferred Stock and Series A Preferred Stock are substantially the same. The following description of the Series Seed Preferred Stock is only intended to highlight terms of the Series Seed Preferred Stock that differ from the Series A Preferred Stock. Unless otherwise noted below, the terms of the Series Seed Preferred Stock are identical to the terms of the Series A Preferred Stock laid out above.

Voting Rights

Identical to Series A Preferred Stock. Series Seed Preferred stockholders are also party to the investors’ rights agreement.

Dividend Rights

Identical to Series A Preferred Stock.

Conversion Rights

Identical to Series A Preferred Stock, except that the “Original Issue Price” for the Series Seed Preferred Stock shall mean $0.46.

Right to Receive Liquidation Distributions

The Series Seed Preferred Stock has identical rights to the Series A Preferred Stock with respect of a liquidation, dissolution or winding up of the Company, and therefore is on parity with the Series A Preferred Stock with respect to distributions outlined above.

Drag Along Right

Identical to Series A Preferred Stock.

Information Rights

Identical to Series A Preferred Stock (pursuant to the investors’ rights agreement).

Right of First Refusal

The investors’ rights agreement executed by holders of the Series Seed Preferred Stock grants “Major Investors” in our Series Seed Preferred Stock (defined as an investor holding 581,395 or more shares of Series Seed Preferred Stock) the right of first refusal to purchase Major Investor’s Pro Rata Share (as defined below) of all (or any part) of any New Securities (as defined below) that the Company may issue in the future.

A Major Investor’s “Pro Rata Share” for purposes of this right of first refusal is the ratio of (a) the number of shares of the Company’s Common Stock issued or issuable upon conversion of the shares owned by such Major Investor, to (b) a number of shares of Common Stock of the Company equal to the sum of (1) the total number of shares of Common Stock of the Company then outstanding plus (2) the total number of shares of Common Stock of the Company into which all then outstanding shares of Preferred Stock of the Company are then convertible plus (3) the number of shares of Common Stock of the Company reserved for issuance under any stock purchase and stock option plans of the Company and outstanding warrants.

“New Securities” are any Common Stock or Preferred Stock of the Company, whether now authorized or not, and rights, options or warrants to purchase such Common Stock or Preferred Stock, and securities of any type whatsoever that are, or may become, convertible or exchangeable into such Common Stock or Preferred Stock, subject to certain exceptions. For example, “New Securities” would not include: (a) shares of Common Stock issued or issuable upon conversion of the outstanding shares of any and all series of Preferred Stock; (b) shares of Common Stock or Preferred Stock issuable upon exercise of any options, warrants or rights to purchase any securities of the Company outstanding as of the date of the investors’ rights agreement was signed, and any securities issuable upon the conversion thereof; (c) shares of Common Stock or Preferred Stock issued in connection with any stock split or stock dividend or similar recapitalization; (d) shares of Common Stock (or options, warrants or rights therefor) granted or issued hereafter to employees, officers, directors, contractors, or consultants of, or advisers to, the Company or any subsidiary of the Company pursuant to incentive agreements, stock purchase or stock option plans, stock bonuses or awards, warrants, contracts or other arrangements that are approved by the Board; (e) shares of the Company’s Series Seed Preferred Stock issued pursuant to the Series Seed Subscription Agreement; (f) any other New Securities (and/or options or warrants therefor) issued or issuable in connection with the Company’s business other than primarily for equity financing purposes and approved by the Board; and (g) shares of Common Stock issued or issuable by the Company to the public pursuant to a registration statement filed under the Securities Act.

The Company will send Major Investors, or their proxies, if applicable, a notice describing the type of New Securities and the price and the general terms upon which the it proposes to issue the New Securities. An investor will have fourteen (15) days from the date of notice, to agree to purchase a quantity of New Securities, up to their Pro Rata Share. If an investor fails to exercise in full the right of first refusal within the 15-day period, then the Company will have one hundred twenty (90) days after that to sell the New Securities with respect to which the investor’s right of first refusal was not exercised. If the Company has not issued and sold the New Securities within the 90-day period, then the Company will not issue or sell any New Securities without again first offering those New Securities to investors in accordance with the terms of the investors’ rights agreement.

The Company currently has one stockholder that would qualify as a “Major Investor”, and may exercise this right to purchase up to 10% of the shares of Series A Preferred Stock sold in this offering. As of the date of this Offering Circular, this investor has not declared his intention to exercise this right.

Restrictions on Transfer - Market Stand Off

Identical to Series A Preferred Stock.

Provisions of Note in Our Investors’ Rights Agreement

Investors in this offering will be required to enter into an investors’ rights agreement. Pursuant to this agreement, holders of our Preferred Stock agree to vote for two (2) directors designated by the founders of the Company, Ryan Belanger-Saleh and/or Jeff Myers, and one (1) director designated by SWS Holding Company, LLC, a shareholder of the Company, so long as it holds at least 7.5% of the outstanding shares of the Company’s Series Seed Preferred Stock. In addition, investors will grant the Chief Executive Officer of the Company a proxy to vote all of such investor’s shares of stock on behalf of such investor if such investor fails to vote (or attempts to vote, but does so improperly). Our investors’ rights agreement is included as Exhibit 3.1 to our offering statement of which this offering circular forms a part.

Provisions of Note in our Amended and Restated Bylaws – Restrictions on Transfer and Company’s Right of First Refusal

The Company’s Amended and Restated Bylaws contains restrictions on transfer of the capital stock of the Company, including the Series A Preferred Stock being offered by the Company.

No holder of any of the shares of stock of the Company may sell, transfer, assign, pledge, or otherwise dispose of any of the shares of stock of the Company without the prior written consent of the Company. The company may withhold consent for any legitimate corporate purpose, as determined by the Board of Directors. Examples of the basis for the Company to withhold its consent include a proposed sale or transfer to a potential competitor of the Company, or if such sale or transfer increases the risk of the Company having a class of security held of record by 2,000 or more persons, or 500 or more persons who are not accredited investors (as such term is defined by the SEC).

If a stockholder desires to transfer any shares, then the stockholder must first give written notice to the Company. The notice must name the proposed transferee and state the number of shares to be transferred, the proposed consideration, and all other terms and conditions of the proposed transfer. Any shares proposed to be transferred will first be subject to the Company’s right of first refusal, whereby for 30 days following receipt of such notice, the Company has the option to purchase up to all the shares specified in the notice at the price and upon the terms set forth in such notice. In the event the Company does not elect to acquire any or all of the shares specified in the transferring stockholder’s notice, the transferring stockholder may, subject to the Company’s approval, transfer the shares as originally intended within 60 days following the expiration of the 30 day notice period, or from the date the Company informs the stockholder that it does not intend to exercise its right of first refusal.

GATSBY DIGITAL, INC.

GATSBY DIGITAL, INC.

CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2019 AND 2018 AND FOR THE YEAR ENDED

DECEMBER 31, 2019 AND THE PERIOD FROM INCEPTION (FEBRUARY 8, 2018) TO DECEMBER 31, 2018

GATSBY DIGITAL, INC.

Index to Consolidated Financial Statements

INDEPENDENT AUDITORS’ REPORT 

To the Board of Directors and Management
of Gatsby Digital, Inc.

We have audited the accompanying consolidated financial statements of Gatsby Digital, Inc. and subsidiaries (“the Company”), which comprise the consolidated balance sheets as of December 31, 2019 and 2018, and the related consolidated statements of operations, changes in stockholders’ deficit, and cash flows for the year ended December 31, 2019 and period from February 8, 2018 (inception) to December 31, 2018, and the related notes to the financial statements.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Emphasis of Matter Regarding Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has incurred losses from inception and has stated that substantial doubt exists about the Company’s ability to continue as a going concern. Management’s evaluation of the events and conditions and management’s plans regarding these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Our conclusion is not modified with respect to this matter.

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for the year ended December 31, 2019 and period from February 8, 2018 (inception) to December 31, 2018 in accordance with accounting principles generally accepted in the United States of America.

/s/ Fruci & Associates II, PLLC

Spokane, Washington

July 21, 2020

The accompanying notes are an integral part of these consolidated financial statements.

The accompanying notes are an integral part of these consolidated financial statements.

The accompanying notes are an integral part of these consolidated financial statements.

The accompanying notes are an integral part of these Consolidated Financial Statements.

GATSBY DIGITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – NATURE OF OPERATIONS

Gatsby Digital, Inc., was formed on February 8, 2018 (“Inception”) in the State of Delaware.   The consolidated financial statements of Gatsby Digital, Inc., (which may be referred to as the “Company”, “we,” “us,” or “our” or “Gatsby”) are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The Company’s headquarters are located in New York, New York.

Gatsby has built a mobile application to facilitate zero-commission options trading for new and experienced options traders alike. Gatsby cuts through the jargon and makes options trading simple, social and free.

Management Plans

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. The Company has incurred losses from operations and has net cash used in operations since Inception. The Company will require additional capital until revenue from operations are sufficient to cover operational costs. These matters raise substantial doubt about the Company’s ability to continue as a going concern.

During the next 12 months, the Company intends to fund operations through the commencement of revenue generating activities and debt and/or equity financing, including a proposed Regulation A offering and a Regulation D offering described in Note 6. There are no assurances that management will be able to raise capital on terms acceptable to the Company. If it is unable to obtain sufficient amounts of additional capital, it may be required to reduce the scope of its planned operations, which could harm its business, financial condition, and operating results. The accompanying consolidated financial statements do not include any adjustments that might result from these uncertainties.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accounting and reporting policies of the Company conform to U.S. GAAP. The consolidated financial statements include the accounts of Gatsby Securities, LLC, a wholly-owned subsidy. All significant intercompany accounts and transactions are eliminated upon consolidation.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, and the reported amount of expenses during the reporting periods. Actual results could materially differ from these estimates. It is reasonably possible that changes in estimates will occur in the near term.

Fair Value of Financial Instruments

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants as of the measurement date. Applicable accounting guidance provides an established hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors that market participants would use in valuing the asset or liability. There are three levels of inputs that may be used to measure fair value:

 GATSBY DIGITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. 

Fair-value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of December 31, 2019 and 2018. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values.

Simple Agreements for Future Equity (“SAFEs”) are considered a level 3 liability as there are no observable direct or indirect inputs. Based on management’s estimates as of December 31, 2019 and 2018, the fair value of these instruments is considered to be the carrying value. Management’s estimates are based on the fact that market circumstances have not changed materially since the instruments were originated. Accordingly, there has been no change in valuation during the periods presented.

Risks and Uncertainties

The Company has a limited operating history and has not generated revenue from intended operations. The Company’s business and operations are sensitive to general business and economic conditions in the U.S. and worldwide along with local, state, and federal governmental policy decisions. A host of factors beyond the Company’s control could cause fluctuations in these conditions. Adverse conditions may include: changes in technology, competition from larger more well-funded competitors, regulations governing securities trading, and the ability to maintain compliance within a heavily regulated industry. These adverse conditions could affect the Company’s financial condition and the results of its operations.

On January 30, 2019 the World Health Organization declared the COVID-19 coronavirus outbreak a “Public Health Emergency of International Concern” and on March 10, 2020, declared it to be a pandemic. Actions taken around the world to help mitigate the spread of the coronavirus include restrictions on travel, and quarantines in certain areas, and forced closures for certain types of public places and businesses. The COVID-19 coronavirus and actions taken to mitigate it have had and are expected to continue to have an adverse impact on the economies and financial markets of many countries, including the geographical area in which the Company operates. While it is unknown how long these conditions will last and what the complete financial effect will be to the company, to date, there has been little disruption to the Company’s operations. The Company is actively monitoring the situation and how it affects the markets in which the Company operates.

Cash and Cash Equivalents

The Company considers all short-term, highly liquid, unrestricted investments with original maturities of three months or less, to be cash equivalents.

Internal Use Software

We incur software development costs to develop software programs to be used solely to meet our internal needs and cloud-based applications used to deliver our services. In accordance with Accounting Standards Codification (“ASC”) 350-40, Internal-Use Software, we capitalize development costs related to these software applications once the preliminary project stage is complete and it is probable that the project will be completed, the software will be used to perform the function intended, and the value will be recoverable. Reengineering costs, minor modifications and enhancements that do not significantly improve the overall functionality of the software are expensed as incurred. The Company has not capitalized any such costs to date.

GATSBY DIGITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Impairment of Long-Lived Assets

The Company reviews its long-lived assets in accordance with Accounting Standards Codification (“ASC”) 360-10-35, Impairment or Disposal of Long-Lived Assets. Under that directive, long-lived assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. Such group is tested for impairment whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. When such factors and circumstances exist, the projected undiscounted future cash flows associated with the related asset or group of assets over their estimated useful lives are compared against their respective carrying amount. Impairment, if any, is based on the excess of the carrying amount over the fair value, based on market value when available, or discounted expected cash flows, of those assets and is recorded in the period in which the determination is made.

Offering Costs

The Company accounts for offering costs in accordance with Accounting Standards Codification (“ASC”) 340, Other Assets and Deferred Costs. Prior to the completion of an offering, offering costs are capitalized as deferred. The deferred offering costs are netted against the proceeds of the offering in the consolidated statements of changes in stockholders’ deficit or the related debt, as applicable. No costs are capitalized as of December 31, 2019 or 2018.

Accounting for Convertible Notes and Securities with Beneficial Conversion Features

The Company reviews the terms of convertible debt and equity instruments it issues to determine whether there are derivative financial instruments, including an embedded conversion option that is required to be bifurcated and accounted for separately as a derivative financial instrument. In circumstances where a host instrument contains more than one embedded derivative instrument, including a conversion option, that is required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument. Also, in connection with the sale of convertible debt and equity instruments, the Company may issue freestanding warrants that may, depending on their terms, be accounted for as derivative liabilities rather than as equity.

The discount from the face value of the convertible debt, together with the stated interest on the instrument, is amortized over the life of the instrument through periodic charges to interest expense, using the effective interest method.

Simple Agreements for Future Equity (“SAFEs”)

The Company has issued several Simple Agreements for Future Equity (“SAFEs”). These funds have been classified as long-term liabilities. (See Note 3.)

The Company has accounted for its SAFEs as derivative liabilities under the FASB’s ASC section 815-40 and ASC section 815-10. If any changes in the fair value of the SAFEs occur, the Company will record such changes through earnings, under the guidance prescribed by ASC 825-10.

GATSBY DIGITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Revenue Recognition

The Company will recognize revenue in accordance with Financial Accounting Standard Board (“FASB”) Accounting Standards Codification (ASC”) Topic 606, Revenue from Contracts with Customers. The amount of revenue recognized will reflect the consideration to which the Company expects to be entitled to receive in exchange for these goods and services, using the five-step method required by ASC 606 by identifying the contract with a customer, identifying the performance obligations in the contract, determining the transaction price, allocating the transaction price to the performance obligations in the contract, and recognizing revenue when (or as) the Company satisfies a performance obligation. The Company adopted this standard at the beginning of fiscal year 2019, with no material impact to its financial position or results of operations, using the modified retrospective method. To date, the Company has not generated revenue from intended operations.

Research and Development

The Company incurs research and development costs during the process of researching and developing its technologies and future product offerings. Research and development costs consist primarily non-capitalizable costs associated with the Company’s application as well as costs incurred during the testing of the Company’s application. These costs are expensed as incurred until the resulting product has been completed, tested, and made ready for commercial use. Research and development costs expensed were $292,431 and $85,843 for the year ended December 31, 2019 and the period from Inception to December 31, 2018, respectively.

Stock-Based Compensation

The Company accounts for stock awards issued under ASC 718, Compensation – Stock Compensation. Under ASC 718, stock-based compensation cost is measured at the grant date, based on the estimated fair value of the award. Stock-based compensation is recognized as expense over the employee’s requisite vesting period and over the nonemployee’s period of providing goods or services. The fair value of each stock option or warrant award is estimated on the date of grant using the Black-Scholes option valuation model. Restricted shares are measured based on the fair market value of the underlying stock on the grant date.

Income Taxes

The Company applies ASC 740 Income Taxes (“ASC 740”).  Deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial statement reported amounts at each period end, based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The provision for income taxes represents the tax expense for the period, if any and the change during the period in deferred tax assets and liabilities.

ASC 740 also provides criteria for the recognition, measurement, presentation and disclosure of uncertain tax positions.  A tax benefit from an uncertain position is recognized only if it is “more likely than not” that the position is sustainable upon examination by the relevant taxing authority based on its technical merit.

The Company’s net deferred tax asset at December 31, 2019 and 2018 was approximately $306,000 and 33,000, respectively, which primarily consists of net operating loss carry forwards. As of December 31, 2019 and 2018, the Company provided a 100% valuation allowance against the net deferred tax assets, which management could not determine, would more likely than not be realized. During the years ended December 31, 2019 and 2018, the Company recorded an increase to the valuation allowance for approximately $273,000 and $33,000, respectively.

At December 31, 2019, the Company had federal and state net operating loss carry forwards of approximately $1,111,000. The federal and state net operating losses expire on various dates through 2039.

At December 31, 2019, the applicable federal and state rates used in calculating the deferred tax provision was 21% and 6.5%, respectively. The difference between the effective tax rate and the stated tax rate is primarily due to a full valuation allowance on the net deferred tax assets.

GATSBY DIGITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company is subject to tax in the United States (“U.S.”) and files tax returns in the U.S. Federal jurisdiction and New York state jurisdiction.  The Company is subject to U.S. Federal, state and local income tax examinations by tax authorities for all periods since Inception.  The Company currently is not under examination by any tax authority for the last three years. The Company has filed its tax returns through 2019.

Loss per Common Share

The Company presents basic loss per share (“EPS”) and diluted EPS on the face of the consolidated statements of operations. Basic loss per share is computed as net loss divided by the weighted average number of common shares outstanding for the period. For periods in which we incur a net loss, the effects of potentially dilutive securities would be antidilutive and would be excluded from diluted EPS calculations. For the years ended December 31, 2019 and 2018, there were 1,376,554 and 0 options or warrants excluded, respectively. The Company also has convertible debt and Simple Agreements for Future Equity outstanding, for which the ultimate number of shares for which these instruments will convert into is unknown.

Concentration of Credit Risk

The Company maintains its cash with a major financial institution located in the United States of America which it believes to be creditworthy.  Balances are insured by the Federal Deposit Insurance Corporation up to $250,000.  At times, the Company may maintain balances in excess of the federally insured limits.

New Accounting Standards

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842), specifying the accounting for leases, which supersedes the leases requirements in Topic 840, Leases. The objective of Topic 842 is to establish the principles that lessees and lessors shall apply to report useful information to users of consolidated financial statements about the amount, timing, and uncertainty of cash flows arising from a lease. Lessees are permitted to make an accounting policy election to not recognize the asset and liability for leases with a term of twelve months or less. Lessors’ accounting is largely unchanged from the previous accounting standard. In addition, Topic 842 expands the disclosure requirements of lease arrangements. Lessees and lessors will use a modified retrospective transition approach, which includes several practical expedients. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2021 for emerging growth companies, with early adoption permitted. The Company has reviewed the provisions of the new standard, but it is not expected to have a significant impact on the Company at the current time.

In June 2016, the FASB issued authoritative guidance regarding Financial Instruments - Credit Losses and has subsequently modified several areas of the standard in order to provide additional clarity and improvements. The new standard requires entities to use a current expected credit loss impairment model based on expected losses rather than incurred losses. Under this model, an entity would recognize an impairment allowance equal to its current estimate of all contractual cash flows that the entity does not expect to collect from financial assets measured at amortized cost within the scope of the standard. The entity’s estimate would consider relevant information about past events, current condition and reasonably and supportable forecasts, which all result in recognition of lifetime expected credit losses. The Company is evaluating the impact of adopting the new standard to its financial statement and does not expect a material impact.

GATSBY DIGITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In December 2019, the FASB issued guidance that simplifies the accounting for income taxes by removing certain exceptions in existing guidance and improves consistency in application by clarifying and amending existing guidance. This guidance is effective for annual periods beginning after December 15, 2020, and interim periods within those annual periods, where the transition method varies depending upon the specific amendment. Early adoption is permitted, including adoption in any interim period. An entity that elects to early adopt the amendments in an interim period should reflect any adjustments as of the beginning of the annual period that includes that interim period, and all amendments must be adopted in the same period. The Company has reviewed the provisions of the new standard, but it is not expected to have a significant impact on the Company.

The FASB issues ASUs to amend the authoritative literature in ASC. There have been several ASUs to date, including those above, that amend the original text of ASC. Management believes that those issued to date either (i) provide supplemental guidance, (ii) are technical corrections, (iii) are not applicable to us or (iv) are not expected to have a significant impact our consolidated financial statements.

NOTE 3 – DEBT AND OTHER LIABILITIES

Convertible Debts

During 2019 and 2018, to fund operations the Company entered into a series of contingently convertible note agreements with third parties and related parties totaling $1,964,630 and $375,000, respectively.

The 2018 convertible notes (“2018 Notes”) bear interest between 5% and 6%, contains both optional and automatic conversion features, do not allow for prepayment and mature between March and December of 2020. An automatic conversion can be triggered upon a qualified financing, defined as a transaction or series of transactions in which the Company sells Preferred Stock for aggregate proceeds of at least $250,000. In such instance the notes and interest thereon are convertible at the lesser of: 1) 80% (20% discount) of the price paid per share of the preferred stock in the qualified offering and 2) the price equal to the quotient of $3,000,000 divided by the total number of outstanding shares of the Company immediately prior to the qualified financing on a fully diluted basis. If a qualified financing does not occur prior to the maturity date, then at the option of the holder, the note shall be converted into shares of common stock equal to the quotient of $2,000,000 divided by the aggregate number of outstanding shares of the company’s common stock on a fully diluted basis on the election date. Of the 2018 Notes, $25,000 is held by a related party.

The 2019 convertible notes (“2019 Notes”) bear interest of 4%, contain both optional and automatic conversion features, do not allow for prepayment and mature between April and August of 2021. An automatic conversion can be triggered upon a qualified financing, defined as a transaction or series of transactions in which the Company sells Preferred Stock for aggregate proceeds of at least $750,000. In such instance the notes and interest thereon are convertible at the lesser of: 1) 100% of the price paid per share of the preferred stock in the qualified offering and 2) the price equal to the quotient of $6,000,000 divided by the total number of outstanding shares of the Company immediately prior to the qualified financing on a fully diluted basis. The holders of the majority of notes in the series, have the option to convert at the same term as above, if the Company sells Preferred Stock in a financing that is not a qualified financing.

Of the 2019 Notes, $64,000 was for the exchange of advisory services, whereby no cash was received, and $57,099 was for commissions due an intermediary funding platform for assisting in raising the 2019 Notes. The 2019 Notes related to advisory services were for services to be rendered over twelve months following the note date. The value of these notes was recorded as a prepaid and are being amortized over the service period. Accordingly, $26,652 was expensed to general and administrative during 2019 and $37,348 remains in prepaid expenses and other current assets in the accompanying balance sheet as of December 31, 2019. The $57,099 issued to the intermediary funding platform is considered a cost of capital and is being accreted up over the life of the note. During 2019, $9,516 of the discount was amortized with $47,583 remaining to be amortized through 2021.

GATSBY DIGITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The 2018 Notes and 2019 Notes are presented as long-term liabilities as they were converted into Series Seed Preferred Stock subsequent to December 31, 2019 as disclosed in Note 6.

Stated interest expense related to these notes for the years ended December 31, 2019 and 2018 was $61,377 and $5,825, respectively. In 2019, additional interest expense of $9,516 was recognized related to the accretion of discounts.

Simple Agreements for Future Equity

On March 1, 2018, the Company assumed $20,000 in SAFE agreements from a related party entity, the proceeds of which were used to commence the Company’s operations. The SAFE’s originated from two related parties.

Under the SAFEs, the funds contributed by the investors will convert to shares of preferred stock in a qualified priced preferred stock financing round of over $250,000, at 100% of the preferred round price.

While the SAFEs remain outstanding, if there is a liquidity event, as defined by the agreements, before expiration or termination of the instrument, the investor will, at its option, either receive a cash payment equal to the purchase amount or automatically receive from the Company a number of shares of common stock equal to the purchase amount divided by the liquidity price if the cash option is not selected.

If the Company dissolves or ceases operations, the SAFE holders, as a class, will have a preferential right to receive cash, up to the amount of their original investments, to the extent such funds are available to be paid. Cash payments to SAFE investors in this situation would hold a preferential position to payments to the holders of Common Stock.

As of December 31, 2019 and 2018, there has not been any priced round of preferred stock financing that would trigger a conversion of the SAFE funds to preferred stock. The SAFEs are marked-to-market each reporting period as described in Note 2. As of December 31, 2019 and 2018, management has determined that the carrying value is considered the fair value as there are no indications that the value has changed.

In 2020, the SAFE’s converted to Series Seed Preferred Stock as described in Note 6.

NOTE 4 – COMMITMENTS AND CONTINGENCIES

Contractual Obligations

In 2019, the Company entered into an agreement with a third-party Broker/Dealer to act as the Broker/Dealer for the purchase and sale of various securities as specified by the agreement. The agreement has an indefinite life, but can be terminated with 90-day notice. The agreement calls for monthly payments for the greater of $15,000 or the aggregate transaction costs based on the terms specified in the agreement. The agreement also called for a $120,000 deposit which is refundable 30 days after the termination of the agreement, which is included in Other Assets within the accompanying consolidated balance sheet.

Lease

In July 2019, the Company entered into a one-year lease for office space for monthly rent of $2,470. Upon expiration in 2020, the Company renewed the one-year lease with the same terms. Rent expense for the year ended December 31, 2019 was $16,290. There was no rent expense during 2018.

GATSBY DIGITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Cancelled Purchase Agreement

In 2019, the Company entered into an agreement to purchase a third-party broker dealer entity. Under the terms of the agreement, the Company had 30 days to exercise its right to unwind the transactions. Such right was exercised within the specified time period. Prior to cancelling the purchase agreement, the Company had advanced the acquisition target approximately $31,500 for professional and legal services to assist in consummating the transaction. These advances were forgiven up the agreement’s cancelation. As the nature of these advances were related to professional fees procured for the purpose of effectuating this transaction, the amounts advanced were included in general and administrative in the accompanying statements of operations.

Litigation

The Company is not currently involved with, and does not know of any, pending or threatened litigation against the Company or any of its officers.

NOTE 5 – STOCKHOLDERS’ EQUITY

Capital Stock

Upon Inception, the Company authorized the issuance of 10,000,000 shares of common stock with $0.00001 par value.

In March 2020, the Company authorized an increase to 26,800,000 shares of common stock, $0.00001 par value and 12,800,000 shares of Preferred Stock, $0.00001 par value. All of the Preferred Stock authorized was designated Series Seed Preferred Stock. Preferred stock maintains liquidation preferences at the Series Seed original issue price, prior to common stock and are convertible at any time into common stock at the conversion price or automatically converted upon a firm-commitment underwritten public offering.

Upon Inception, the Company issued 10,000,000 Common shares to its founders for $0.00001 per share. Of these, 1,330,000 was returned to the Company in 2019 for no consideration; and was issued to a service provider as described below.

Shares Issued for Cash

During the year ended December 31, 2018, the Company sold 638,298 shares of common stock for gross proceeds of $20,000.

Shares Issued for Services

During the years ended December 31, 2019 and 2018, the Company issued 1,330,000 and 107,450 shares of common stock for services, recognizing stock-based compensation of $2,660, and $107, respectively. Compensation expense related to these issuances was based on managements estimated fair value of the Company’s common stock at the time of issuance.

Stock Options

In 2019, the Board of Directors adopted the Gatsby Digital, Inc. 2019 Equity Incentive Plan (the “2019 Plan”). The 2019 Plan provides for the grant of equity awards to eligible award recipients, including stock options, restricted stock, stock appreciation rights, and restricted stock units to purchase shares of common stock. Up to 1,123,050 shares of common stock were initially authorized under the 2019 Plan. In 2020, the number of authorized shares was increased to 2,623,050. The 2019 Plan is administered by the Board of Directors, and expires ten years after adoption, unless terminated earlier by the Board.

GATSBY DIGITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

During the year ended December 31, 2019 the board of directors approved the grant of 1,146,554 stock options to various contractors and employees. The 2019 granted options had an exercise prices $0.002, expire in ten years, and had vesting periods ranging from immediate vesting to four years.

The total grant date fair value of options granted in 2019 was $1,040.

A summary of our stock option activity for the year ended December 31, 2019, is as follows:

Stock-based compensation expense for stock options for the years ended December 31, 2019 and 2018 was $659 and $0, respectively.

As of December 31, 2019, the total estimated remaining stock-based compensation expense for unvested stock options is $381 which is expected to be recognized over a weighted average period of 3.5 years.

The Company estimates the fair value of stock options that contain service and/or performance conditions using the Black-Scholes option pricing model. The range of input assumptions used by the Company were as follows:

The Company recognizes stock option forfeitures as they occur. The risk-free interest rate assumption for options granted is based upon observed interest rates on the United States government securities appropriate for the expected term of the Company’s stock options.

The expected term of stock options is calculated using the simplified method which takes into consideration the contractual life and vesting terms of the options.

The Company determined the expected volatility assumption for options granted using the historical volatility of comparable public company’s common stock. The Company will continue to monitor peer companies and other relevant factors used to measure expected volatility for future stock option grants, until such time that the Company’s common stock has enough market history to use historical volatility.

GATSBY DIGITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The dividend yield assumption for options granted is based on the Company’s history and expectation of dividend payouts. The Company has never declared or paid any cash dividends on its common stock, and the Company does not anticipate paying any cash dividends in the foreseeable future.  

Warrants

In 2019, the Company granted 230,000 warrants to a service provider. The exercise price was $0.01 and is exercisable at the latter of six months following the termination of the agreement or five years. The Company valued the warrants using a Black-Scholes option pricing model using similar inputs to those described for stock options above. The value of the warrants was determined to be negligible.

NOTE 6 – SUBSEQUENT EVENTS

See Note 5 for changes to authorized common and preferred shares.

In March 2020, the 2018 Notes and 2019 Notes totaling approximately $2,340,000 and interest thereon, converted into Series Seed Preferred Stock, resulting in the issuance of 9,638,093 shares.

In March 2020, the SAFEs totaling $20,000 converted into Series Seed Preferred Stock, resulting in the issuance of 43,478 shares.

Starting in March 2020, the Company commenced a Regulation D offering for the sale of Series Seed Preferred Stock. The Company has raised approximately $670,000 through the sale of 1,673,928 shares of Series Seed Preferred Stock. In connection with the offering, the Company also issued 79,072 shares of Series Seed Preferred Stock to a funding intermediary.

The Company has evaluated subsequent events that occurred after December 31, 2019 through July 21, 2020, the issuance date of these consolidated financial statements, and noted no additional events for disclosure.

Exhibit 1.1

SI Securities, LLC 

61 Broadway, Suite 1705

New York, NY 10006

THIS AGREEMENT is entered into as of May 29th, 2020 (the “Effective Date”) by and among Gatsby Digital, Inc. (the “Company”) and SI Securities, LLC (“SI Securities”, and together with Company, the “Parties”) regarding its proposed offering of equity, convertible debt, or any other type of financing (the “Securities”) pursuant to Regulation A under Section 3(b) of the Act (the “Offering”) on the terms and subject to the conditions contained herein (the “Agreement”).

Company agrees to solicit non-binding indications of interest under Rule 255 for its proposed Offering using the online platform provided by SeedInvest Technology, LLC at the domain name www.seedinvest.com (the “Online Platform”) upon the approval of SI Securities (“Testing the Waters”), at which point SI Securities and/or SeedInvest Technology may send communications to registered users on the Online Platform. Company will not be charged any commissions or incur any expenses for Testing the Waters and will incur no fees unless Company decides to proceed with an offering under Regulation A.

If after Testing the Waters, Company proceeds with an Offering, then Company agrees to retain SI Securities as its exclusive placement agent in connection with said Offering in accordance with the terms set forth in Exhibit A attached herein. Company shall similarly be bound by the terms of Exhibit A if it chooses to forgo Testing the Waters and proceed directly with the Offering. The Company will not be required to retain SI Securities and will not be bound to any fees if it decides to proceed with a capital raise under Regulation D solely from institutional and accredited investors, instead of through Regulation A.

This Agreement may be terminated by either party upon written notice at any time (the “Termination Date”). The initial term of this Agreement shall be forty-five (45) days from the Effective Date of this Agreement (the “Initial Term”). The Initial Term shall automatically renew for successive fifteen (15) day periods and automatically terminate two hundred seventy (270) days from the Effective Date, unless notice of termination is delivered prior to then.

For a period of twelve (12) months following the Termination Date, Company agrees that it shall provide SI Securities at least 30 days prior written notice of any proposed future offering of Securities made pursuant to Regulation A (the “Future Offering”), and therein shall provide SI Securities the opportunity to serve as Company’s exclusive placement agent in connection with such Future Offering in accordance with the terms set forth in Exhibit A attached herein. The Company will not be required to retain SI Securities and will not be bound to any fees if, within twelve (12) months of the Termination Date, if it decides to proceed with a capital raise under Regulation D solely from institutional and accredited investors, instead of through Regulation A. However, if SI Securities chooses not to serve as Company’s placement agent for a Future Offering, in its sole discretion, this Agreement shall automatically terminate.

The Company represents and warrants to SI Securities that:

This Agreement shall be governed by and construed in accordance with the laws of the New York and the federal laws of the United States of America. SI Securities and Company hereby consent and submit to the jurisdiction and forum of the state and federal courts in New York in all questions and controversies arising out of this Agreement.

This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same Agreement. The Parties agree that a facsimile signature may substitute for and have the same legal effect as the original signature. This Agreement and its attached exhibits constitute the entire agreement between the Parties.

Company:			SI Securities, LLC
By:			By:
Name:	Ryan Belanger-Saleh		Name:	Ryan Feit

EXHIBIT A

SI Securities, LLC – Regulation A Issuer Agreement

THIS EXHIBIT is entered into as of the Effective Date by and among Company and SI Securities regarding its Offering of Securities on the terms and subject to the conditions contained herein (the “Exhibit”). Capitalized terms used herein and not otherwise defined in this Exhibit shall have the meaning set forth above. This Exhibit will only apply if the Company decides to proceed with an Offering under Regulation A and will not apply if it decides to proceed with a capital raise under Regulation D solely from institutional and accredited investors.

The Company hereby retains SI Securities as its exclusive placement agent in connection with the Offering. SI Securities agrees to use its reasonable best efforts to effect the Offering. SI Securities shall identify prospective investors (the “Prospects”) and Company shall make the Securities in the Offering available to respective Prospects. For the avoidance of doubt, Prospects include all existing investors of the Company who invested through the Online Platform and/or were identified by SI Securities. Company understands that SI Securities intends to use the Online Platform to facilitate the Offering upon satisfactory completion of SI Securities’ due diligence as determined in its sole discretion.

Company shall pay to SI Securities, in cash, an amount equal to 8.5% of the value of Securities purchased by Prospects in the Offering from the proceeds of the Offering (the “Compensation”) at each applicable closing (a “Closing”). Company acknowledges that SI Securities charges Prospects who make investments through the Online Platform a 2% non-refundable transaction processing fee, up to $300 (the “Transaction Fee”), and which Company is not responsible for. The Transaction Fee is broken out as follows: i) 50% is meant to cover the financial and administrative costs associated with the processing of payments via Wire, ACH, and Debit transfers; and ii) the remaining 50% is meant to cover the financial and administrative costs of the related and subsequent reconciliation of cash and securities in Prospects accounts.

SI Securities shall receive Compensation based on the Fair-Market Value of all gross proceeds, services, and/or goods received by the Company by Prospects in exchange for Securities issued in the Offering. The Fair-Market-Value shall be equal to the value of Securities received in exchange, less any cash consideration paid. Company shall pay Compensation to SI Securities in the event that, at any time prior to twelve (12) months after the Termination Date, Company sells or enters into an agreement to sell Securities to a Prospect.

The Company represents and warrants to SI Securities that:

Company agrees that, except in the case of gross negligence, fraud or willful misconduct by SI Securities and each of its respective affiliates and their respective directors, officers and employees, it will indemnify and hold harmless SI Securities and its respective affiliates and their respective directors, officers, employees for any loss, claim, damage, expense or liability incurred by the other (including reasonable attorneys’ fees and expenses in investigating, defending against or appearing as a third-party witness in connection with any action or proceeding) in any claim arising out of a material breach (or alleged breach) by it of any provision of this Exhibit, as a result of any potential violation of any law or regulation, or in any third-party claim arising out of any investment or potential investment in the Offering by a person other than a Prospect.

Company hereby agrees that if it breaches any portion of this Exhibit, (a) SI Securities and any applicable third-party beneficiary (each, a “Damaged Party”) would suffer irreparable harm; (b) it would be difficult to determine damages, and money damages alone would be an inadequate remedy for the injuries suffered by the applicable Damaged Party; and (c) if a Damaged Party seeks injunctive relief to enforce this Exhibit, Company will waive and will not (i) assert any defense that the Damaged Party has an adequate remedy at law with respect to the breach, (ii) require that the Damaged Party submit proof of the economic value of any losses, or (iii) require the Damaged to post a bond or any other security. Accordingly, in addition to any other remedies and damages available, Company acknowledges and agrees that each Damaged Party may immediately seek enforcement of this Exhibit by means of specific performance or injunction, without any requirement to post a bond or other security. Nothing contained in this Exhibit shall limit the Damaged Party’s right to any other remedies at law or in equity. In any litigation, arbitration, or other proceeding by which one party either seeks to enforce its rights under this Exhibit (whether in contract, tort, or both) or seeks a declaration of any rights or obligations under this Exhibit, the prevailing party shall be awarded its reasonable attorney fees, and costs and expenses incurred. All rights and remedies herein shall be in addition to all other rights and remedies available at law or in equity, including, without limitation, specific performance against the Company for the enforcement of this Exhibit, and temporary and permanent injunctive relief.

THE LIABILITY OF SI SECURITIES, WHETHER BASED ON AN ACTION OR CLAIM IN CONTRACT, EQUITY, NEGLIGENCE, TORT, OR OTHERWISE FOR ALL EVENTS, ACTS, OR OMISSIONS RELATED TO THIS EXHIBIT SHALL NOT EXCEED THE FEES PAID OR PAYABLE TO SI SECURITIES, UNDER THIS EXHIBIT, EXCEPT IN THE EVENT OF FRAUD, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT ON THE PART OF SI SECURITIES.

This Exhibit shall be governed by and construed in accordance with the laws of the New York and the federal laws of the United States of America. SI Securities and Company hereby consent and submits to the jurisdiction and forum of the state and federal courts in New York in all questions and controversies arising out of this Exhibit. Aside from otherwise previously mentioned above, in any arbitration, litigation, or other proceeding by which one party either seeks to enforce this Exhibit or seeks a declaration of any rights or obligations under this Exhibit, the non-prevailing party shall pay the prevailing party’s costs and expenses, including but not limited to, reasonable attorneys’ fees. The failure of either party at any time to require performance by the other party of any provision of this Exhibit shall in no way affect that party’s right to enforce such provisions, nor shall the waiver by either party of any breach of any provision of this Exhibit be taken or held to be a waiver of any further breach of the same provision. This Exhibit constitutes the entire Exhibit between the Parties.

Exhibit 2.2 

Amended and Restated

BYLAWS

OF

GATSBY DIGITAL, INC.

(A DELAWARE CORPORATION)

ARTICLE I

Offices

Section 1.       Registered Office. The registered office of the corporation in the State of Delaware is 874 Walker Road, Suite C, City of Dover, County of Kent, 19904 or in such other location as the Board of Directors of the corporation (the “Board of Directors”) may from time to time determine or the business of the corporation may require.

Section 2.       Other Offices. The corporation will also have and maintain an office or principal place of business at such place as may be fixed by the Board of Directors, and may also have offices at such other places, both within and without the State of Delaware, as the Board of Directors may from time to time determine or the business of the corporation may require.

ARTICLE II

Corporate Seal

Section 3.       Corporate Seal. The Board of Directors may adopt a corporate seal. Said seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.

ARTICLE III

Stockholders’ Meetings

Section 4.       Place of Meetings. Meetings of the stockholders of the corporation may be held at such place, either within or without the State of Delaware, as may be determined from time to time by the Board of Directors. The Board of Directors may, in its sole discretion, determine that the meeting will not be held at any place, but may instead be held solely by means of remote communication as provided under the Delaware General Corporation Law (the “DGCL”).

Section 5.       Annual Meeting.

(a)    The annual meeting of the stockholders of the corporation, for the purpose of election of directors and for such other business as may lawfully come before it, will be held on such date and at such time as may be designated from time to time by the Board of Directors. Nominations of persons for election to the Board of Directors of the corporation and the proposal of business to be considered by the stockholders may be made at an annual meeting of stockholders: (i) pursuant to the corporation’s notice of meeting of stockholders; (ii) by or at the direction of the Board of Directors; or (iii) by any stockholder of the corporation who was a stockholder of record at the time of giving of notice provided for in the following paragraph, who is entitled to vote at the meeting and who complied with the notice procedures set forth in this Section.

(b)     At an annual meeting of the stockholders, only such business will be conducted as has been properly brought before the meeting. For nominations or other business to be properly brought before an annual meeting by a stockholder pursuant to clause (iii) of paragraph (a) of this Section, (i) the stockholder must have given timely notice thereof in writing to the Secretary of the corporation, (ii) such other business must be a proper matter for stockholder action under the DGCL and applicable law, (iii) if the stockholder, or the beneficial owner on whose behalf any such proposal or nomination is made, has provided the corporation with a Solicitation Notice (as defined in this paragraph), such stockholder or beneficial owner must, in the case of a proposal, have delivered a proxy statement and form of proxy to holders of at least the percentage of the corporation’s voting shares required under applicable law to carry any such proposal, or, in the case of a nomination or nominations, have delivered a proxy statement and form of proxy to holders of a percentage of the corporation’s voting shares reasonably believed by such stockholder or beneficial owner to be sufficient to elect the nominee or nominees proposed to be nominated by such stockholder, and must, in either case, have included in such materials the Solicitation Notice, and (iv) if no Solicitation Notice relating thereto has been timely provided pursuant to this Section, the stockholder or beneficial owner proposing such business or nomination must not have solicited a number of proxies sufficient to have required the delivery of such a Solicitation Notice under this Section. To be timely, a stockholder’s notice will be delivered to the Secretary at the principal executive offices of the corporation not later than the close of business on the 90^th day nor earlier than the close of business on the 120^th day prior to the first anniversary of the preceding year’s annual meeting; provided, however, that in the event that the date of the annual meeting is advanced more than 30 days prior to or delayed by more than 30 days after the anniversary of the preceding year’s annual meeting, notice by the stockholder to be timely must be so delivered not earlier than the close of business on the 120^th day prior to such annual meeting and not later than the close of business on the later of the 90^th day prior to such annual meeting or the 10^th day following the day on which public announcement of the date of such meeting is first made. In no event will the public announcement of an adjournment of an annual meeting commence a new time period for the giving of a stockholder’s notice as described above. Such stockholder’s notice will set forth: (A) as to each person whom the stockholder proposed to nominate for election or reelection as a director all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the “1934 Act”), and Rule 14a-4(d) thereunder (including such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected); (B) as to any other business that the stockholder proposes to bring before the meeting, a brief description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting and any material interest in such business of such stockholder and the beneficial owner, if any, on whose behalf the proposal is made; and (C) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made (i) the name and address of such stockholder, as they appear on the corporation’s books, and of such beneficial owner, (ii) the class and number of shares of the corporation that are owned beneficially and of record by such stockholder and such beneficial owner, and (iii) whether either such stockholder or beneficial owner intends to deliver a proxy statement and form of proxy to holders of, in the case of the proposal, at least the percentage of the corporation’s voting shares required under applicable law to carry the proposal or, in the case of a nomination or nominations, a sufficient number of holders of the corporation’s voting shares to elect such nominee or nominees (an affirmative statement of such intent, a “Solicitation Notice”).

(c)     Notwithstanding anything in the second sentence of paragraph (b) of this Section to the contrary, in the event that the number of directors to be elected to the Board of Directors of the corporation is increased and there is no public announcement naming all of the nominees for director or specifying the size of the increased Board of Directors made by the corporation at least 100 days prior to the first anniversary of the preceding year’s annual meeting, a stockholder’s notice required by this Section will also be considered timely, but only with respect to nominees for any new positions created by such increase, if it is delivered to the Secretary at the principal executive offices of the corporation not later than the close of business on the 10^th day following the day on which such public announcement is first made by the corporation.

(d)     Only such persons who are nominated in accordance with the procedures set forth in this Section (or elected or appointed pursuant to Article IV of these Bylaws) will be eligible to serve as directors and only such business will be conducted at a meeting of stockholders as has been brought before the meeting in accordance with the procedures set forth in this Section. Except as otherwise provided by law, the Chairman of the meeting will have the power and duty to determine whether a nomination or any business proposed to be brought before the meeting was made, or proposed, as the case may be, in accordance with the procedures set forth in these Bylaws and, if any proposed nomination or business is not in compliance with these Bylaws, to declare that such defective proposal or nomination will not be presented for stockholder action at the meeting and will be disregarded.

(e)     Notwithstanding the foregoing provisions of this Section, in order to include information with respect to a stockholder proposal in the proxy statement and form of proxy for a stockholders’ meeting, stockholders must provide notice as required by the regulations promulgated under the 1934 Act. Nothing in these Bylaws is deemed to affect any rights of stockholders to request inclusion of proposals in the corporation proxy statement pursuant to Rule 14a-8 under the 1934 Act.

(f)      For purposes of this Section, “public announcement” means disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the corporation with the Securities and Exchange Commission (the “SEC”) pursuant to Section 13, 14 or 15(d) of the 1934 Act.

Section 6.       Special Meetings.

(a)     Special meetings of the stockholders of the corporation may be called, for any purpose or purposes, by (i) the Chairman of the Board of Directors, (ii) the Chief Executive Officer, (iii) the Board of Directors pursuant to a resolution adopted by directors representing a quorum of the directors then serving on the Board of Directors or (iv) by the holders of shares entitled to cast not less than 20% of the votes at the meeting, and will be held at such place, on such date, and at such time as the Board of Directors will fix.

(b)     If a special meeting is properly called by any person or persons other than the Board of Directors, the request will be in writing, specifying the general nature of the business proposed to be transacted, and will be delivered personally or sent by certified or registered mail, return receipt requested, or by telegraphic or other facsimile transmission to the Chairman of the Board of Directors, the Chief Executive Officer, or the Secretary of the corporation. No business may be transacted at such special meeting otherwise than specified in such notice. The Board of Directors will determine the time and place of such special meeting, which will be held not less than 35 nor more than 120 days after the date of the receipt of the request. Upon determination of the time and place of the meeting, the officer receiving the request will cause notice to be given to the stockholders entitled to vote, in accordance with the provisions of Section 7 of these Bylaws. Nothing contained in this paragraph (b) is to be construed as limiting, fixing, or affecting the time when a meeting of stockholders called by action of the Board of Directors may be held.

Section 7.       Notice of Meetings. Except as otherwise provided by law, notice, given in writing or by electronic transmission, of each meeting of stockholders will be given not less than 10 nor more than 60 days before the date of the meeting to each stockholder entitled to vote at such meeting, such notice to specify the place, if any, date and hour, in the case of special meetings, the purpose or purposes of the meeting, and the means of remote communications, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at any such meeting. If mailed, notice is given when deposited in the United States mail, postage prepaid, directed to the stockholder at such stockholder’s address as it appears on the records of the corporation. Notice of the time, place, if any, and purpose of any meeting of stockholders may be waived in writing, signed by the person entitled to notice thereof or by electronic transmission by such person, either before or after such meeting, and will be waived by any stockholder by his or her attendance thereat in person, by remote communication, if applicable, or by proxy, except when the stockholder attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Any stockholder so waiving notice of such meeting will be bound by the proceedings of any such meeting in all respects as if due notice thereof had been given.

Section 8.       Quorum. At all meetings of stockholders, except as otherwise provided by statute, the Certificate of Incorporation or these Bylaws, the presence, in person, by remote communication, if applicable, or by proxy duly authorized, of the holders of a majority of the outstanding shares of stock entitled to vote will constitute a quorum for the transaction of business. In the absence of a quorum, any meeting of stockholders may be adjourned, from time to time, either by the chairman of the meeting or by vote of the holders of a majority of the shares represented thereat, but no other business will be transacted at such meeting. The stockholders present at a duly called or convened meeting, at which a quorum is present, may continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum. Except as otherwise provided by statute, the Certificate of Incorporation or these Bylaws, in all matters other than the election of directors, the affirmative vote of a majority of shares present in person, by remote communication, if applicable, or represented by proxy duly authorized at the meeting and entitled to vote generally on the subject matter will be the act of the stockholders. Except as otherwise provided by statute, the Certificate of Incorporation or these Bylaws, directors will be elected by a plurality of the votes of the shares present in person, by remote communication, if applicable, or represented by proxy duly authorized at the meeting and entitled to vote generally on the election of directors. Where a separate vote by a class or classes or series is required, except as otherwise provided by statute, the Certificate of Incorporation or these Bylaws, a majority of the outstanding shares of such class or classes or series, present in person, by remote communication, if applicable, or represented by proxy duly authorized, will constitute a quorum entitled to take action with respect to that vote on that matter. Except as otherwise provided by statute, the Certificate of Incorporation or these Bylaws, the affirmative vote of the majority (plurality, in the case of the election of directors) of shares of such class or classes or series present in person, by remote communication, if applicable, or represented by proxy at the meeting will be the act of such class or classes or series.

Section 9.       Adjournment and Notice of Adjourned Meetings. Any meeting of stockholders, whether annual or special, may be adjourned from time to time either by the chairman of the meeting or by the vote of a majority of the shares present in person, by remote communication, if applicable, or represented by proxy. When a meeting is adjourned to another time or place, if any, notice need not be given of the adjourned meeting if the time and place, if any, thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting, the corporation may transact any business that might have been transacted at the original meeting pursuant to the Certificate of Incorporation, these Bylaws or applicable law. If the adjournment is for more than 30 days or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting will be given to each stockholder of record entitled to vote at the meeting.

Section 10.     Voting Rights. For the purpose of determining those stockholders entitled to vote at any meeting of the stockholders, except as otherwise provided by law, only persons in whose names shares stand on the stock records of the corporation on the record date, as provided in Section 12 of these Bylaws, will be entitled to vote at any meeting of stockholders. Every person entitled to vote or execute consents will have the right to do so either in person, by remote communication, if applicable, or by an agent or agents authorized by a proxy granted in accordance with Delaware law. An agent so appointed need not be a stockholder. No proxy will be voted after three years from its date of creation unless the proxy provides for a longer period.

Section 11.     Joint Owners of Stock. If shares or other securities having voting power stand of record in the names of two or more persons, whether fiduciaries, members of a partnership, joint tenants, tenants in common, tenants by the entirety, or otherwise, or if two or more persons have the same fiduciary relationship respecting the same shares, unless the Secretary is given written notice to the contrary and is furnished with a copy of the instrument or order appointing them or creating the relationship where it is so provided, their acts with respect to voting (including giving consent pursuant to Section 13) will have the following effect: (a) if only one votes, his or her act binds all; (b) if more than one votes and the vote is not evenly split, the act of the majority so voting binds all; (c) if more than one votes, but the vote is evenly split on any particular matter, each faction may vote the securities in question proportionally, or may apply to the Delaware Court of Chancery for relief as provided in the DGCL, Section 217(b). If the instrument filed with the Secretary shows that any such tenancy is held in unequal interests, a majority or even-split for the purpose of subsection (c) will be a majority or even-split in interest.

Section 12.     List of Stockholders. The Secretary will prepare and make, at least 10 days before every meeting of stockholders, a complete list of the stockholders entitled to vote at said meeting, arranged in alphabetical order, showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list will be open to the examination of any stockholder, for any purpose germane to the meeting, on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting, or during ordinary business hours, at the principal place of business of the corporation. In the event that the corporation determines to make the list available on an electronic network, the corporation may take reasonable steps to ensure that such information is available only to stockholders of the corporation. The list will be open to examination of any stockholder during the time of the meeting as provided by law.

Section 13.     Action Without Meeting.

(a)     Unless otherwise provided in the Certificate of Incorporation, any action required by statute to be taken at any annual or special meeting of the stockholders, or any action that may be taken at any annual or special meeting of the stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, or by electronic transmission setting forth the action so taken, will be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted.

(b)     Every written consent or electronic transmission will bear the date of signature of each stockholder who signs the consent, and no written consent or electronic transmission will be effective to take the corporate action referred to therein unless, within 60 days of the earliest dated consent delivered to the corporation in the manner herein required, written consents or electronic transmissions signed by a sufficient number of stockholders to take action are delivered to the corporation by delivery to its registered office in the State of Delaware, its principal place of business or an officer or agent of the corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to a corporation’s registered office will be by hand or by certified or registered mail, return receipt requested.

(c)     Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent will be given to those stockholders who have not consented in writing or by electronic transmission and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for such meeting had been the date that written consents signed by a sufficient number of stockholders to take action were delivered to the corporation as provided in Section 228(c) of the DGCL. If the action to which the stockholders consented is such as would have required the filing of a certificate under any section of the DGCL if such action had been voted on by stockholders at a meeting thereof, then the certificate filed under such section must state, in lieu of any statement required by such section concerning any vote of stockholders, that written consent has been given in accordance with Section 228 of the DGCL.

(d)    An electronic mail, facsimile or other electronic transmission consenting to an action to be taken and transmitted by a stockholder or proxyholder, will be deemed to be written, signed and dated for the purposes of this Section, provided that any such electronic mail, facsimile or other electronic transmission sets forth or is delivered with information from which the corporation can determine (i) that the electronic mail, facsimile or other electronic transmission was transmitted by the stockholder or proxyholder or by a person or persons authorized to act for the stockholder and (ii) the date on which such stockholder or proxyholder or authorized person or persons transmitted such electronic mail, facsimile or electronic transmission. The date on which such electronic mail, facsimile or electronic transmission is transmitted will be deemed to be the date on which such consent was signed. No consent given by electronic mail, facsimile or other electronic transmission will be deemed to have been delivered until such consent is reproduced in paper form and until such paper form is delivered to the corporation by delivery to its registered office in the state of Delaware, its principal place of business or an officer or agent of the corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to a corporation’s registered office will be made by hand or by certified or registered mail, return receipt requested. Notwithstanding the foregoing limitations on delivery, consents given by electronic mail, facsimile or other electronic transmission may be otherwise delivered to the principal place of business of the corporation or to an officer or agent of the corporation having custody of the book in which proceedings of meetings of stockholders are recorded if, to the extent and in the manner provided by resolution of the Board of Directors. Any copy, facsimile or other reliable reproduction of a consent in writing may be substituted or used in lieu of the original writing for any and all purposes for which the original writing could be used, provided that such copy, facsimile or other reproduction is a complete reproduction of the entire original writing.

Section 14.     Organization.

(a)    At every meeting of stockholders, the Chairman of the Board of Directors, or, if a Chairman has not been appointed or is absent, the Chief Executive Officer, or, if the Chief Executive Officer is absent, a chairman of the meeting chosen by a majority in interest of the stockholders entitled to vote, present in person or by proxy, will act as chairman. The Secretary, or, in his or her absence, an Assistant Secretary directed to do so by the Chief Executive Officer, will act as secretary of the meeting.

(b)    The Board of Directors is entitled to make such rules or regulations for the conduct of meetings of stockholders as it deems necessary, appropriate or convenient. Subject to such rules and regulations of the Board of Directors, if any, the chairman of the meeting has the right and authority to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such chairman, are necessary, appropriate or convenient for the proper conduct of the meeting, including, without limitation, establishing an agenda or order of business for the meeting, rules and procedures for maintaining order at the meeting and the safety of those present, limitations on participation in such meeting to stockholders of record of the corporation and their duly authorized and constituted proxies and such other persons as the chairman permits, restrictions on entry to the meeting after the time fixed for the commencement thereof, limitations on the time allotted to questions or comments by participants and regulation of the opening and closing of the polls for balloting on matters that are to be voted on by ballot. The date and time of the opening and closing of the polls for each matter upon which the stockholders will vote at the meeting will be announced at the meeting. Unless and to the extent determined by the Board of Directors or the chairman of the meeting, meetings of stockholders will not be required to be held in accordance with rules of parliamentary procedure.

ARTICLE IV

Directors

Section 15.     Number and Term of Office. The authorized number of directors of the corporation will be fixed by the Board of Directors from time to time. Directors need not be stockholders unless so required by the Certificate of Incorporation. If for any cause, the directors have not been elected at an annual meeting, they may be elected as soon thereafter as convenient.

Section 16.     Powers. The business and affairs of the corporation will be managed by or under the direction of the Board of Directors, except as otherwise provided by statute or by the Certificate of Incorporation.

Section 17.     Term of Directors. Subject to the rights of the holders of any series of Preferred Stock to elect additional directors under specified circumstances, directors will be elected at each annual meeting of stockholders to serve until the next annual meeting of stockholders and his or her successor is duly elected and qualified or until his or her death, resignation or removal. No decrease in the number of directors constituting the Board of Directors will shorten the term of any incumbent director.

Section 18.     Vacancies. Unless otherwise provided in the Certificate of Incorporation, and subject to the rights of the holders of any series of Preferred Stock, any vacancies on the Board of Directors resulting from death, resignation, disqualification, removal or other causes and any newly created directorships resulting from any increase in the number of directors will, unless the Board of Directors determines by resolution that any such vacancies or newly created directorships will be filled by stockholders, be filled only by the affirmative vote of a majority of the directors then in office, even though less than a quorum of the Board of Directors, or by a sole remaining director; provided, however, that whenever the holders of any class or classes of stock or series thereof are entitled to elect one or more directors by the provisions of the Certificate of Incorporation, vacancies and newly created directorships of such class or classes or series will, unless the Board of Directors determines by resolution that any such vacancies or newly created directorships will be filled by stockholders, be filled by a majority of the directors elected by such class or classes or series thereof then in office, or by a sole remaining director so elected. Any director elected in accordance with the preceding sentence will hold office for the remainder of the full term of the director for which the vacancy was created or occurred and until such director’s successor has been elected and qualified. A vacancy in the Board of Directors will be deemed to exist under this Bylaw in the case of the death, removal or resignation of any director.

Section 19.     Resignation. Any director may resign at any time by delivering his or her notice in writing or by electronic transmission to the Secretary, such resignation to specify whether it will be effective at a particular time, upon receipt by the Secretary or at the pleasure of the Board of Directors. If no such specification is made, it will be deemed effective at the pleasure of the Board of Directors. When one or more directors resigns from the Board of Directors, effective at a future date, a majority of the directors then in office, including those who have so resigned, will have power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations become effective, and each director so chosen will hold office for the unexpired portion of the term of the director whose place is vacated and until his or her successor has been duly elected and qualified.

Section 20.     Removal. Subject to any limitations imposed by applicable law, the Board of Directors or any director may be removed from office at any time (i) with cause by the affirmative vote of the holders of a majority of the voting power of all then-outstanding shares of capital stock of the corporation entitled to vote generally at an election of directors or (ii) without cause by the affirmative vote of the holders of a majority of the voting power of all then-outstanding shares of capital stock of the corporation, entitled to elect such director.

Section 21.     Meetings

(a)     Regular Meetings. Unless otherwise restricted by the Certificate of Incorporation, regular meetings of the Board of Directors may be held at any time or date and at any place within or without the State of Delaware that has been designated by the Board of Directors and publicized among all directors, either orally or in writing, including a voice-messaging system or other system designated to record and communicate messages, facsimile, or by electronic mail or other electronic means. No further notice will be required for a regular meeting of the Board of Directors.

(b)    Special Meetings. Unless otherwise restricted by the Certificate of Incorporation, special meetings of the Board of Directors may be held at any time and place within or without the State of Delaware whenever called by the Chairman of the Board of Directors, the Chief Executive Officer (if a director), the President (if a director) or any director.

(c)     Meetings by Electronic Communications Equipment. Any member of the Board of Directors, or of any committee thereof, may participate in a meeting by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting by such means constitutes presence in person at such meeting.

(d)     Notice of Special Meetings. Notice of the time and place of all special meetings of the Board of Directors will be orally or in writing, by telephone, including a voice messaging system or other system or technology designed to record and communicate messages, facsimile, telegraph or telex, or by electronic mail or other electronic means, during normal business hours, at least 24 hours before the date and time of the meeting. If notice is sent by US mail, it will be sent by first class mail, postage prepaid at least three days before the date of the meeting. Notice of any meeting may be waived in writing or by electronic transmission at any time before or after the meeting and will be waived by any director by attendance thereat, except when the director attends the meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.

(e)    Waiver of Notice. The transaction of all business at any meeting of the Board of Directors, or any committee thereof, however called or noticed, or wherever held, will be as valid as though had at a meeting duly held after regular call and notice, if a quorum be present and if, either before or after the meeting, each of the directors not present who did not receive notice signs a written waiver of notice or waives notice by electronic transmission. All such waivers will be filed with the corporate records or made a part of the minutes of the meeting.

Section 22.     Quorum and Voting.

(a)     Unless the Certificate of Incorporation requires a greater number, a quorum of the Board of Directors will consist of a majority of the total number of directors then serving; provided, however, that such number will never be less than 1/3 of the total number of directors authorized except that when one director is authorized, then one director will constitute a quorum. At any meeting, whether a quorum be present or otherwise, a majority of the directors present may adjourn from time to time until the time fixed for the next regular meeting of the Board of Directors, without notice other than by announcement at the meeting. If the Certificate of Incorporation provides that one or more directors will have more or less than one vote per director on any matter, every reference in this Section to a majority or other proportion of the directors will refer to a majority or other proportion of the votes of the directors.

(b)    At each meeting of the Board of Directors at which a quorum is present, all questions and business will be determined by the affirmative vote of a majority of the directors present, unless a different vote be required by law, the Certificate of Incorporation or these Bylaws.

Section 23.     Action Without Meeting. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all members of the Board of Directors or committee, as the case may be, consent in writing or by electronic transmission, and such writing or writings or transmission or transmissions are filed with the minutes of proceedings of the Board of Directors or committee. Such filing will be in paper form if the minutes are maintained in paper form and will be in electronic form if the minutes are maintained in electronic form.

Section 24.     Fees and Compensation. Directors will be entitled to such compensation for their services as may be approved by the Board of Directors, including, if so approved, by resolution of the Board of Directors, a fixed sum and expenses of attendance, if any, for attendance at each regular or special meeting of the Board of Directors and at any meeting of a committee of the Board of Directors. Nothing herein contained is to be construed to preclude any director from serving the corporation in any other capacity as an officer, agent, employee, or otherwise and receiving compensation therefor.

Section 25.     Committees.

(a)     Executive Committee. The Board of Directors may appoint an Executive Committee to consist of one or more members of the Board of Directors. The Executive Committee, to the extent permitted by law and provided in the resolution of the Board of Directors, will have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers that may require it; but no such committee will have the power or authority in reference to (i) approving or adopting, or recommending to the stockholders, any action or matter expressly required by the DGCL to be submitted to stockholders for approval, or (ii) adopting, amending or repealing any bylaw of the corporation.

(b)     Other Committees. The Board of Directors may, from time to time, appoint such other committees as may be permitted by law. Such other committees appointed by the Board of Directors will consist of one or more members of the Board of Directors and will have such powers and perform such duties as may be prescribed by the resolution or resolutions creating such committees, but in no event will any such committee have the powers denied to the Executive Committee in these Bylaws.

(c)     Term. The Board of Directors, subject to any requirements of any outstanding series of Preferred Stock and the provisions of paragraphs (a) or (b) of this Section may at any time increase or decrease the number of members of a committee or terminate the existence of a committee. The membership of a committee member will terminate on the date of his or her death or voluntary resignation from the committee or from the Board of Directors. The Board of Directors may at any time for any reason remove any individual committee member and the Board of Directors may fill any committee vacancy created by death, resignation, removal or increase in the number of members of the committee. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee, and, in addition, in the absence or disqualification of any member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member.

(d)     Meetings. Unless the Board of Directors otherwise provide, regular meetings of the Executive Committee or any other committee appointed pursuant to this Section will be held at such times and places as are determined by the Board of Directors, or by any such committee, and when notice thereof has been given to each member of such committee, no further notice of such regular meetings need be given thereafter. Special meetings of any such committee may be held at any place that has been determined from time to time by such committee, and may be called by any director who is a member of such committee, upon notice to the members of such committee of the time and place of such special meeting given in the manner provided for the giving of notice to members of the Board of Directors of the time and place of special meetings of the Board of Directors. Notice of any special meeting of any committee may be waived in writing at any time before or after the meeting and will be waived by any director by attendance thereat, except when the director attends such special meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Unless otherwise provided by the Board of Directors in the resolutions authorizing the creation of the committee, a majority of the authorized number of members of any such committee will constitute a quorum for the transaction of business, and the act of a majority of those present at any meeting at which a quorum is present will be the act of such committee.

Section 26.     Duties of Chairman of the Board of Directors. The Chairman of the Board of Directors, when present, will preside at all meetings of the stockholders and the Board of Directors. The Chairman of the Board of Directors will perform other duties commonly incident to the office and will also perform such other duties and have such other powers as the Board of Directors designates from time to time. If there is no Chief Executive Officer and no President, then the Chairman of the Board of Directors will also serve as the Chief Executive Officer of the corporation and will have the powers and duties prescribed in Section 29(b).

Section 27.     Organization. At every meeting of the directors, the Chairman of the Board of Directors, or, if a Chairman has not been appointed or is absent, the Chief Executive Officer (if a director), or if the Chief Executive Officer is not a director or is absent, the President (if a director), or if the President is not a director or is absent, the most senior Vice President (if a director) or, in the absence of any such person, a chairman of the meeting chosen by a majority of the directors present, will preside over the meeting. The Secretary, or in his or her absence, any Assistant Secretary directed to do so by the Chief Executive Officer or President, will act as secretary of the meeting.

ARTICLE V

Officers

Section 28.     Officers Designated. The officers of the corporation will include, if and when designated by the Board of Directors, the Chief Executive Officer, the President, one or more Vice Presidents, the Secretary, the Chief Financial Officer, the Treasurer and the Controller, all of whom will be elected or appointed from time to time by the Board of Directors. The Board of Directors may also appoint one or more Assistant Secretaries, Assistant Treasurers, Assistant Controllers and such other officers and agents with such powers and duties as it deems necessary. The Board of Directors may assign such additional titles to one or more of the officers as it deems appropriate. Any one person may hold any number of offices of the corporation at any one time unless specifically prohibited therefrom by law. The salaries and other compensation of the officers of the corporation will be fixed by or in the manner designated by the Board of Directors.

Section 29.     Tenure and Duties of Officers.

(a)     General. All officers will hold office at the pleasure of the Board of Directors and until their successors have been duly elected or appointed and qualified, unless sooner removed. Any officer elected or appointed by the Board of Directors may be removed at any time by the Board of Directors. If the office of any officer becomes vacant for any reason, the vacancy may be filled by the Board of Directors, or by the Chief Executive Officer or other officer if so authorized by the Board of Directors.

(b)     Duties of Chief Executive Officer. The Chief Executive Officer will preside at all meetings of the stockholders and (if a director) at all meetings of the Board of Directors, unless the Chairman of the Board of Directors has been appointed and is present. The Chief Executive Officer will be the chief executive officer of the corporation and will, subject to the control of the Board of Directors, have general supervision, direction and control of the business and officers of the corporation. The Chief Executive Officer will perform other duties commonly incident to the office and will also perform such other duties and have such other powers as the Board of Directors designates from time to time.

(c)     Duties of President. In the absence or disability of the Chief Executive Officer or if the office of Chief Executive Officer is vacant, the President will preside at all meetings of the stockholders and (if a director) at all meetings of the Board of Directors, unless the Chairman of the Board of Directors has been appointed and is present. If the office of Chief Executive Officer is vacant, the President will be the chief executive officer of the corporation (including for purposes of any reference to Chief Executive Officer in these Bylaws) and will, subject to the control of the Board of Directors, have general supervision, direction and control of the business and officers of the corporation. The President will perform other duties commonly incident to the office and will also perform such other duties and have such other powers as the Board of Directors designates from time to time.

(d)     Duties of Vice Presidents. The Vice Presidents may assume and perform the duties of the President in the absence or disability of the President or whenever the office of President is vacant. The Vice Presidents will perform other duties commonly incident to their office and will also perform such other duties and have such other powers as the Board of Directors or the President designates from time to time.

(e)     Duties of Secretary. The Secretary will attend all meetings of the stockholders and of the Board of Directors and will record all acts and proceedings thereof in the minute book of the corporation. The Secretary will give notice in conformity with these Bylaws of all meetings of the stockholders and of all meetings of the Board of Directors and any committee thereof requiring notice. The Secretary will perform all other duties provided for in these Bylaws and other duties commonly incident to the office and will also perform such other duties and have such other powers as the Board of Directors will designate from time to time. The Chief Executive Officer may direct any Assistant Secretary to assume and perform the duties of the Secretary in the absence or disability of the Secretary, and each Assistant Secretary will perform other duties commonly incident to the office and will also perform such other duties and have such other powers as the Board of Directors or the Chief Executive Officer designates from time to time.

(f)      Duties of Chief Financial Officer. The Chief Financial Officer will keep or cause to be kept the books of account of the corporation in a thorough and proper manner and will render statements of the financial affairs of the corporation in such form and as often as required by the Board of Directors or the Chief Executive Officer. The Chief Financial Officer, subject to the order of the Board of Directors, will have the custody of all funds and securities of the corporation. The Chief Financial Officer will perform other duties commonly incident to his or her office and will also perform such other duties and have such other powers as the Board of Directors or the Chief Executive Officer designate from time to time. The Chief Executive Officer may direct the Treasurer or any Assistant Treasurer, or the Controller or any Assistant Controller to assume and perform the duties of the Chief Financial Officer in the absence or disability of the Chief Financial Officer, and each Treasurer and Assistant Treasurer and each Controller and Assistant Controller will perform other duties commonly incident to the office and will also perform such other duties and have such other powers as the Board of Directors or the Chief Executive Officer designates from time to time.

Section 30.            Delegation of Authority. The Board of Directors may from time to time delegate the powers or duties of any officer to any other officer or agent, notwithstanding any provision hereof.

Section 31.            Resignations. Any officer may resign at any time by giving notice in writing or by electronic transmission notice to the Board of Directors or to the Chief Executive Officer or to the President or to the Secretary. Any such resignation will be effective when received by the person or persons to whom such notice is given, unless a later time is specified therein, in which event the resignation will become effective at such later time. Unless otherwise specified in such notice, the acceptance of any such resignation will not be necessary to make it effective. Any resignation will be without prejudice to the rights, if any, of the corporation under any contract with the resigning officer.

Section 32.           Removal. Any officer may be removed from office at any time, either with or without cause, by the affirmative vote of a majority of the directors in office at the time, or by the unanimous written or electronic consent of the directors in office at the time, or by any committee or superior officers upon whom such power of removal may have been conferred by the Board of Directors.

ARTICLE VI

Execution Of Corporate Instruments And Voting
Of Securities Owned By The Corporation

Section 33.           Execution of Corporate Instruments. The Board of Directors may, in its discretion, determine the method and designate the signatory officer or officers, or other person or persons, to execute on behalf of the corporation any corporate instrument or document, or to sign on behalf of the corporation the corporate name, or to enter into contracts on behalf of the corporation, except as otherwise provided by law or these Bylaws, and such execution or signature will be binding upon the corporation. All checks and drafts drawn on banks or other depositaries of funds to the credit of the corporation or on special accounts of the corporation will be signed by such person or persons as the Board of Directors authorizes so to do. Unless authorized or ratified by the Board of Directors or within the agency power of an officer, no officer, agent or employee will have any power or authority to bind the corporation by any contract or engagement or to pledge its credit or to render it liable for any purpose or for any amount.

Section 34.          Voting of Securities Owned by the Corporation. All stock and other securities of other corporations owned or held by the corporation for itself, or for other parties in any capacity, will be voted, and all proxies with respect thereto will be executed, by the person authorized so to do by resolution of the Board of Directors, or, in the absence of such authorization, by the Chairman of the Board of Directors, the Chief Executive Officer, the President, or any Vice President.

ARTICLE VII

Shares Of Stock

Section 35.           Form and Execution of Certificates. The shares of the corporation will be represented by certificates, or will be uncertificated. Certificates for the shares of stock, if any, of the corporation will be in such form as is consistent with the Certificate of Incorporation and applicable law. Every holder of shares of stock in the corporation represented by certificate will be entitled to have a certificate signed by or in the name of the corporation by any two authorized officers of the corporation, including but not limited to the Chief Executive Officer, the President, the Chief Financial Officer, any Vice President, the Treasurer or Assistant Treasurer or the Secretary or Assistant Secretary, certifying the number of shares owned by him or her in the corporation. Any or all of the signatures on the certificate may be facsimiles. In case any officer, transfer agent, or registrar who has signed or whose facsimile signature has been placed upon a certificate has ceased to be such officer, transfer agent, or registrar before such certificate is issued, it may be issued with the same effect as if he or she were such officer, transfer agent, or registrar at the date of issue.

Section 36.            Lost Certificates. A new certificate or certificates will be issued in place of any certificate or certificates theretofore issued by the corporation alleged to have been lost, stolen, or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen, or destroyed. The corporation may require, as a condition precedent to the issuance of a new certificate or certificates, the owner of such lost, stolen, or destroyed certificate or certificates, or the owner’s legal representative, to agree to indemnify the corporation in such manner as it requires or to give the corporation a surety bond in such form and amount as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificate alleged to have been lost, stolen, or destroyed.

Section 37.            Restrictions on Transfer.

(a)            No holder of any of the shares of stock of the corporation may sell, transfer, assign, pledge, or otherwise dispose of or encumber any of the shares of stock of the corporation or any right or interest therein, whether voluntarily or by operation of law, or by gift or otherwise (each, a “Transfer”) without the prior written consent of the corporation, upon duly authorized action of its Board of Directors.  The corporation may withhold consent for any legitimate corporate purpose, as determined by the Board of Directors. Examples of the basis for the corporation to withhold its consent include, without limitation, (i) if such Transfer to individuals, companies or any other form of entity identified by the corporation as a potential competitor or considered by the corporation to be unfriendly; or (ii) if such Transfer increases the risk of the corporation having a class of security held of record by 2,000 or more persons, or 500 or more persons who are not accredited investors (as such term is defined by the SEC), as described in Section 12(g) of the 1934 Act and any related regulations, or otherwise requiring the corporation to register any class of securities under the 1934 Act; or (iii) if such Transfer would result in the loss of any federal or state securities law exemption relied upon by the corporation in connection with the initial issuance of such shares or the issuance of any other securities; or (iv) if such Transfer is facilitated in any manner by any public posting, message board, trading portal, internet site, or similar method of communication, including without limitation any trading portal or internet site intended to facilitate secondary transfers of securities; or (v) if such Transfer is to be effected in a brokered transaction; or (vi) if such Transfer represents a Transfer of less than all of the shares then held by the stockholder and its affiliates or is to be made to more than a single transferee.

(b)            If a stockholder desires to Transfer any shares, then the stockholder will first give written notice to the corporation. The notice must name the proposed transferee and state the number of shares to be transferred, the proposed consideration, and all other terms and conditions of the proposed transfer. Any shares proposed to be transferred to which Transfer the corporation has consented pursuant to paragraph (a) of this Section will first be subject to the corporation’s right of first refusal located in Section 38 of these Bylaws.

(c)           At the option of the corporation, the stockholder will be obligated to pay to the corporation a reasonable transfer fee related to the costs and time of the corporation and its legal and other advisors related to any proposed Transfer.

(d)           Any Transfer, or purported Transfer, of shares not made in strict compliance with this Section will be null and void, will not be recorded on the books of the corporation and will not be recognized by the corporation.

(e)           The restriction on Transfer set forth in Section 37(a) will terminate upon the date securities of the corporation are first offered to the public pursuant to a registration statement filed with, and declared effective by, the SEC under the Securities Act of 1933, as amended (the “1933 Act”).

(f)            The certificates representing shares of stock of the corporation will bear on their face the following legend so long as the foregoing Transfer restrictions are in effect:

“THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A TRANSFER RESTRICTION, AS PROVIDED IN THE BYLAWS OF THE CORPORATION.”

Section 38.            Right of First Refusal. No stockholder will Transfer any of the shares of stock of the corporation, except by a Transfer that meets the requirements set forth in this Section 38, in addition to any other restrictions or requirements set forth under applicable law or these Bylaws:

(a)            If the stockholder desires to Transfer any of his or her shares of stock, then the stockholder must first give written notice thereof to the corporation. The notice must name the proposed transferee and state the number of shares to be transferred, the proposed consideration, and all other terms and conditions of the proposed transfer.

(b)           For 30 days following receipt of such notice, the corporation has the option to purchase up to all the shares specified in the notice at the price and upon the terms set forth in such notice; provided, however, that, with the consent of the stockholder, the corporation has the option to purchase a lesser portion of the shares specified in said notice at the price and upon the terms set forth therein. In the event of a gift, property settlement or other Transfer in which the proposed transferee is not paying the full price for the shares, and that is not otherwise exempted from the provisions of this Section, the price will be deemed to be the fair market value of the stock at such time as determined in good faith by the Board of Directors. In the event the corporation elects to purchase all of the shares or, with consent of the stockholder, a lesser portion of the shares, it will give written notice to the transferring stockholder of its election and settlement for said shares will be made as provided below in paragraph (d) of this Section.

(c)           The corporation may assign its rights hereunder.

(d)           In the event the corporation and/or its assignee(s) elect to acquire any of the shares of the transferring stockholder as specified in said transferring stockholder’s notice, the Secretary of the corporation will so notify the transferring stockholder and settlement thereof will be made in cash within 30 days after the Secretary of the corporation receives said transferring stockholder’s notice; provided that if the terms of payment set forth in said transferring stockholder’s notice were other than cash against delivery, the corporation and/or its assignee(s) will pay for said shares on the same terms and conditions set forth in said transferring stockholder’s notice.

(e)           In the event the corporation and/or its assignees(s) do not elect to acquire all of the shares specified in the transferring stockholder’s notice, said transferring stockholder may, subject to the corporation’s approval and all other restrictions on Transfer located in Section 37 of these Bylaws, within the 60-day period following the expiration or waiver of the option rights granted to the corporation and/or its assignees(s) herein, Transfer the shares specified in said transferring stockholder’s notice that were not acquired by the corporation and/or its assignees(s) as specified in said transferring stockholder’s notice. All shares so sold by said transferring stockholder will continue to be subject to the provisions of this Bylaw in the same manner as before said Transfer.

(f)            Anything to the contrary contained herein notwithstanding, the following transactions are exempt from the right of first refusal in paragraph (a) of this Section:

(1)            A stockholder’s Transfer of any or all shares held either during such stockholder’s lifetime or on death by will or intestacy to such stockholder’s immediate family or to any custodian or trustee for the account of such stockholder or such stockholder’s immediate family or to any limited partnership or limited liability company of which the stockholder, members of such stockholder’s immediate family or any trust for the account of such stockholder or such stockholder’s immediate family will be the general or limited partner(s) of such partnership or the controlling member(s) of such limited liability company. “Immediate family” as used herein means spouse, lineal descendant, father, mother, brother, or sister of the stockholder making such Transfer;

(2)            A stockholder’s bona fide pledge or mortgage of any shares with a commercial lending institution, provided that any subsequent Transfer of said shares by said institution will be conducted in the manner set forth in this Bylaw;

(3)            A stockholder’s Transfer of any or all of such stockholder’s shares to the corporation or to any other stockholder of the corporation;

(4)            A stockholder’s Transfer of any or all of such stockholder’s shares to a person who, at the time of such Transfer, is an officer or director of the corporation;

(5)            A corporate stockholder’s Transfer of any or all of its shares pursuant to and in accordance with the terms of any merger, consolidation, reclassification of shares or capital reorganization of the corporate stockholder, or pursuant to a sale of all or substantially all of the stock or assets of a corporate stockholder;

(6)            A corporate stockholder’s Transfer of any or all of its shares to any or all of its stockholders; or

(7)            A Transfer by a stockholder that is a limited or general partnership to any or all of its partners or former partners in accordance with partnership interests.

In any such case, the transferee, assignee, or other recipient will receive and hold such stock subject to the provisions of this Section and any other restrictions set forth in these Bylaws, and there will be no further Transfer of such stock except in accord with this Section and the other provisions of these Bylaws.

(g)           The provisions of this Bylaw may be waived with respect to any Transfer either by the corporation, upon duly authorized action of its Board of Directors, or by the stockholders, upon the express written consent of the owners of a majority of the voting power of the corporation (excluding the votes represented by those shares to be transferred by the transferring stockholder). This Bylaw may be amended or repealed either by a duly authorized action of the Board of Directors or by the stockholders, upon the express written consent of the owners of a majority of the voting power of the corporation.

(h)           Any Transfer, or purported Transfer, of securities of the corporation will be null and void unless the terms, conditions, and provisions of this Bylaw are strictly observed and followed.

(i)            The foregoing right of first refusal will terminate upon the date securities of the corporation are first offered to the public pursuant to a registration statement filed with, and declared effective by, the SEC under the Securities Act of 1933, as amended.

(j)            The certificates representing shares of stock of the corporation that are subject to the right of first refusal in paragraph (a) of this Section will bear on their face the following legend so long as the foregoing right of first refusal remains in effect:

“THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A RIGHT OF FIRST REFUSAL OPTION IN FAVOR OF THE CORPORATION AND/OR ITS ASSIGNEE(S), AS PROVIDED IN THE BYLAWS OF THE CORPORATION.”

(k)            To the extent this Section conflicts with any written agreements between the corporation and the stockholder attempting to Transfer shares, such agreement will control.

Section 39.            Fixing Record Dates.

(a)            In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, the Board of Directors may fix, in advance, a record date, which record date will not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date will, subject to applicable law, not be more than 60 nor less than 10 days before the date of such meeting. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders will be at the close of business on the day immediately preceding the day on which notice is given, or if notice is waived, at the close of business on the day immediately preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders will apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

(b)            In order that the corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board of Directors may fix a record date, which record date will not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which date will not be more than 10 days after the date upon which the resolution fixing the record date is adopted by the Board of Directors. Any stockholder of record seeking to have the stockholders authorize or take corporate action by written consent will, by written notice to the Secretary, request the Board of Directors to fix a record date. The Board of Directors will promptly, but in all events within 10 days after the date on which such a request is received, adopt a resolution fixing the record date. If no record date has been fixed by the Board of Directors within 10 days of the date on which such a request is received, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is required by applicable law, will be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the corporation by delivery to its registered office in the State of Delaware, its principal place of business or an officer or agent of the corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the corporation’s registered office will be by hand or by certified or registered mail, return receipt requested. If no record date has been fixed by the Board of Directors and prior action by the Board of Directors is required by law, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting will be at the close of business on the day on which the Board of Directors adopts the resolution taking such prior action.

(c)            In order that the corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which record date will not precede the date upon which the resolution fixing the record date is adopted, and which record date will be not more than 60 days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose will be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.

Section 40.           Registered Stockholders. The corporation is entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and is not bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person whether or not it has express or other notice thereof, except as otherwise provided by the laws of Delaware.

ARTICLE VIII

Other Securities Of The Corporation

Section 41.            Execution of Other Securities. All bonds, debentures and other corporate securities of the corporation, other than stock certificates (covered in Section 35 of these Bylaws), may be signed by the Chairman of the Board of Directors, the Chief Executive Officer, the President or any Vice President, or such other person as may be authorized by the Board of Directors, and the corporate seal impressed thereon or a facsimile of such seal imprinted thereon and attested by the signature of the Secretary or an Assistant Secretary, or the Chief Financial Officer or Treasurer or an Assistant Treasurer; provided, however, that where any such bond, debenture or other corporate security is authenticated by the manual signature, or where permissible facsimile signature, of a trustee under an indenture pursuant to which such bond, debenture or other corporate security is issued, the signatures of the persons signing and attesting the corporate seal on such bond, debenture or other corporate security may be the imprinted facsimile of the signatures of such persons. Interest coupons appertaining to any such bond, debenture or other corporate security, authenticated by a trustee as aforesaid, will be signed by the Treasurer or an Assistant Treasurer of the corporation or such other person as may be authorized by the Board of Directors, or bear imprinted thereon the facsimile signature of such person. In case any officer who has signed or attested any bond, debenture or other corporate security, or whose facsimile signature appears thereon or on any such interest coupon, has ceased to be such officer before the bond, debenture or other corporate security so signed or attested has been delivered, such bond, debenture or other corporate security nevertheless may be adopted by the corporation and issued and delivered as though the person who signed the same or whose facsimile signature has been used thereon had not ceased to be such officer of the corporation.

ARTICLE IX

Dividends

Section 42.           Declaration of Dividends. Dividends upon the capital stock of the corporation, subject to the provisions of the Certificate of Incorporation and applicable law, if any, may be declared by the Board of Directors pursuant to law at any regular or special meeting. Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the Certificate of Incorporation and applicable law.

Section 43.           Dividend Reserve. Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the Board of Directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or for such other purpose as the Board of Directors thinks conducive to the interests of the corporation, and the Board of Directors may modify or abolish any such reserve in the manner in which it was created.

ARTICLE X

Fiscal Year

Section 44.            Fiscal Year. The fiscal year of the corporation will be fixed by resolution of the Board of Directors.

ARTICLE XI

indemnification

Section 45.            Indemnification of Directors, Executive Officers, Other Officers, Employees and Other Agents.

(a)            Directors and Executive Officers. The corporation will indemnify its directors and executive officers (for the purposes of this Article, “executive officers” has the meaning defined in Rule 3b-7 promulgated under the 1934 Act) to the fullest extent not prohibited by the DGCL or any other applicable law; provided, however, that the corporation may modify the extent of such indemnification by individual contracts with its directors and executive officers; and, provided, further, that the corporation will not be required to indemnify any director or executive officer in connection with any proceeding (or part thereof) initiated by such person unless (i) such indemnification is expressly required to be made by law, (ii) the proceeding was authorized by the Board of Directors of the corporation, (iii) such indemnification is provided by the corporation, in its sole discretion, pursuant to the powers vested in the corporation under the DGCL or any other applicable law or (iv) such indemnification is required to be made under paragraph (d) of this Section.

(b)            Other Officers, Employees and Other Agents. The corporation will have power to indemnify its other officers, employees and other agents as set forth in the DGCL or any other applicable law. The Board of Directors will have the power to delegate the determination of whether indemnification will be given to any such person except executive officers to such officers or other persons as the Board of Directors determines.

(c)            Expenses. The corporation will advance to any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person is or was a director or executive officer of the corporation, or is or was serving at the request of the corporation as a director or executive officer of another corporation, partnership, joint venture, trust or other enterprise, prior to the final disposition of the proceeding, promptly following request therefor, all expenses incurred by any director or executive officer in connection with such proceeding, provided, however, that, if the DGCL requires, an advancement of expenses incurred by a director or officer in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such indemnitee, including, without limitation, service to an employee benefit plan) will be made only upon delivery to the corporation of an undertaking, by or on behalf of such indemnitee, to repay all amounts so advanced if it is ultimately determined by final judicial decision from which there is no further right to appeal that such indemnitee is not entitled to be indemnified for such expenses under this Section or otherwise.

Notwithstanding the foregoing, unless otherwise determined pursuant to paragraph (e) of this Section, no advance will be made by the corporation to an executive officer of the corporation (except by reason of the fact that such executive officer is or was a director of the corporation, in which event this paragraph will not apply) in any action, suit or proceeding, whether civil, criminal, administrative or investigative, if a determination is reasonably and promptly made (i) by a majority vote of a quorum consisting of directors who were not parties to the proceeding, even if not a quorum, or (ii) by a committee of such directors designated by a majority of such directors, even though less than a quorum, or (iii) if there are no such directors, or such directors so direct, by independent legal counsel in a written opinion, that the facts known to the decision-making party at the time such determination is made demonstrate clearly and convincingly that such person acted in bad faith or in a manner that such person did not believe to be in or not opposed to the best interests of the corporation.

(d)            Enforcement. Without the necessity of entering into an express contract, all rights to indemnification and advances to directors and executive officers under this Section will be deemed to be contractual rights and be effective to the same extent and as if provided for in a contract between the corporation and the director or executive officer. Any right to indemnification or advances granted by this Section to a director or executive officer will be enforceable by or on behalf of the person holding such right in any court of competent jurisdiction if (i) the claim for indemnification or advances is denied, in whole or in part, or (ii) no disposition of such claim is made within 90 days of request therefor. The claimant in such enforcement action, if successful in whole or in part, will be entitled to be paid also the expense of prosecuting the claim. In connection with any claim for indemnification, the corporation will be entitled to raise as a defense to any such action that the claimant has not met the standards of conduct that make it permissible under the DGCL or any other applicable law for the corporation to indemnify the claimant for the amount claimed. In connection with any claim by an executive officer of the corporation (except in any action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such executive officer is or was a director of the corporation) for advances, the corporation will be entitled to raise as a defense as to any such action clear and convincing evidence that such person acted in bad faith or in a manner that such person did not believe to be in or not opposed to the best interests of the corporation, or with respect to any criminal action or proceeding that such person acted without reasonable cause to believe that his or her conduct was lawful. Neither the failure of the corporation (including its Board of Directors, independent legal counsel or its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he has met the applicable standard of conduct set forth in the DGCL or any other applicable law, nor an actual determination by the corporation (including its Board of Directors, independent legal counsel or its stockholders) that the claimant has not met such applicable standard of conduct, will be a defense to the action or create a presumption that claimant has not met the applicable standard of conduct.

(e)            Non-Exclusivity of Rights. The rights conferred on any person by this Section are not exclusive of any other right that such person may have or hereafter acquire under any applicable statute, provision of the Certificate of Incorporation, Bylaws, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding office. The corporation is specifically authorized to enter into individual contracts with any or all of its directors, officers, employees or agents respecting indemnification and advances, to the fullest extent not prohibited by the DGCL or any other applicable law.

(f)            Survival of Rights. The rights conferred on any person by this Section will continue as to a person who has ceased to be a director or executive officer and will inure to the benefit of the heirs, executors and administrators of such a person.

(g)            Insurance. To the fullest extent permitted by the DGCL, or any other applicable law, the corporation, upon approval by the Board of Directors, may purchase insurance on behalf of any person required or permitted to be indemnified pursuant to this Section.

(h)            Amendments. Any repeal or modification of this Section is only prospective and does not affect the rights under this Bylaw in effect at the time of the alleged occurrence of any action or omission to act that is the cause of any proceeding against any agent of the corporation.

(i)            Saving Clause. If this Section or any portion hereof is invalidated on any ground by any court of competent jurisdiction, then the corporation will nevertheless indemnify each director and executive officer to the full extent not prohibited by any applicable portion of this Bylaw that has not been invalidated, or by any other applicable law. If this Section is invalid due to the application of the indemnification provisions of another jurisdiction, then the corporation will indemnify each director and executive officer to the full extent under applicable law.

(j)            Certain Definitions. For the purposes of this Section, the following definitions apply:

(1)            The term “proceeding” is to be broadly construed and includes, without limitation, the investigation, preparation, prosecution, defense, settlement, arbitration and appeal of, and the giving of testimony in, any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative.

(2)            The term “expenses” is to be broadly construed and includes, without limitation, court costs, attorneys’ fees, witness fees, fines, amounts paid in settlement or judgment and any other costs and expenses of any nature or kind incurred in connection with any proceeding.

(3)            The term the “corporation” includes, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger that, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, stands in the same position under the provisions of this Section with respect to the resulting or surviving corporation as he would have with respect to such constituent corporation if its separate existence had continued.

(4)            References to a “director,” “executive officer,” “officer,” “employee,” or “agent” of the corporation include, without limitation, situations where such person is serving at the request of the corporation as, respectively, a director, executive officer, officer, employee, trustee or agent of another corporation, partnership, joint venture, trust or other enterprise.

(5)            References to “other enterprises” include employee benefit plans; references to “fines” include any excise taxes assessed on a person with respect to an employee benefit plan; and references to “serving at the request of the corporation” include any service as a director, officer, employee or agent of the corporation that imposes duties on, or involves services by, such director, officer, employee, or agent with respect to an employee benefit plan, its participants, or beneficiaries; and a person who acted in good faith and in a manner he reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan is deemed to have acted in a manner “not opposed to the best interests of the corporation” as referred to in this Section.

ARTICLE XII

Notices

Section 46.            Notices.

(a)            Notice to Stockholders. Written notice to stockholders of stockholder meetings will be given as provided in Section 7 of these Bylaws. Without limiting the manner by which notice may otherwise be given effectively to stockholders under any agreement or contract with such stockholder, and except as otherwise required by law, written notice to stockholders for purposes other than stockholder meetings may be sent by United States mail or nationally recognized overnight courier, or by facsimile, telegraph or telex or by electronic mail or other electronic means.

(b)            Notice to Directors. Any notice required to be given to any director may be given by the method stated in paragraph (a) of this Section, or as provided for in Section 21 of these Bylaws. If such notice is not delivered personally, it will be sent to such address as such director has filed in writing with the Secretary, or, in the absence of such filing, to the last known post office address of such director.

(c)            Affidavit of Mailing. An affidavit of mailing, executed by a duly authorized and competent employee of the corporation or its transfer agent appointed with respect to the class of stock affected or other agent, specifying the name and address or the names and addresses of the stockholder or stockholders, or director or directors, to whom any such notice or notices was or were given, and the time and method of giving the same, will in the absence of fraud, be prima facie evidence of the facts therein contained.

(d)            Methods of Notice. It is not necessary that the same method of giving notice be employed in respect of all recipients of notice, but one permissible method may be employed in respect of any one or more, and any other permissible method or methods may be employed in respect of any other or others.

(e)            Notice to Person with Whom Communication Is Unlawful. Whenever notice is required to be given, under any provision of law or of the Certificate of Incorporation or Bylaws of the corporation, to any person with whom communication is unlawful, the giving of such notice to such person is not required and there is no duty to apply to any governmental authority or agency for a license or permit to give such notice to such person. Any action or meeting that is taken or held without notice to any such person with whom communication is unlawful has the same force and effect as if such notice had been duly given. In the event that the action taken by the corporation is such as to require the filing of a certificate under any provision of the DGCL, the certificate will state, if such is the fact and if notice is required, that notice was given to all persons entitled to receive notice except such persons with whom communication is unlawful.

(f)            Notice to Stockholders Sharing an Address. Except as otherwise prohibited under DGCL, any notice given under the provisions of DGCL, the Certificate of Incorporation or the Bylaws will be effective if given by a single written notice to stockholders who share an address if consented to by the stockholders at that address to whom such notice is given. Such consent is deemed to have been given if such stockholder fails to object in writing to the corporation within 60 days of having been given notice by the corporation of its intention to send the single notice. Any consent is revocable by the stockholder by written notice to the corporation.

ARTICLE XIII

Amendments

Section 47.           Amendments. The Board of Directors is expressly empowered to adopt, amend or repeal Bylaws of the corporation. The stockholders also have power to adopt, amend or repeal the Bylaws of the corporation; provided, however, that, in addition to any vote of the holders of any class or series of stock of the corporation required by law or by the Certificate of Incorporation, such action by stockholders requires the affirmative vote of the holders of a majority of the voting power of all of the then-outstanding shares of the capital stock of the corporation entitled to vote generally in the election of directors, voting together as a single class.

ARTICLE XIV

Loans To Officers

Section 48.           Loans to Officers. Except as otherwise prohibited under applicable law, the corporation may lend money to, or guarantee any obligation of, or otherwise assist any officer or other employee of the corporation or of its subsidiaries, including any officer or employee who is a Director of the corporation or its subsidiaries, whenever, in the judgment of the Board of Directors, such loan, guarantee or assistance may reasonably be expected to benefit the corporation. The loan, guarantee or other assistance may be with or without interest and may be unsecured, or secured in such manner as the Board of Directors approves, including, without limitation, a pledge of shares of stock of the corporation. Nothing in these Bylaws is deemed to deny, limit or restrict the powers of guaranty or warranty of the corporation at common law or under any statute.

ARTICLE XV

Miscellaneous

Section 49.           Forum. Unless the corporation consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware is the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the corporation; (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the corporation to the corporation or the corporation’s stockholders; (iii) any action asserting a claim against the corporation or any director or officer or other employee of the corporation arising pursuant to any provision of the DGCL, the certificate of incorporation or the Bylaws of the corporation; or (iv) any action asserting a claim against the corporation or any director or officer or other employee of the corporation governed by the internal affairs doctrine.

GATSBY DIGITAL, INC.

CERTIFICATE OF SECRETARY

I hereby certify that:

I am the duly elected and acting Secretary of Gatsby Digital, Inc., a Delaware corporation (the “Company”); and

Attached hereto is a complete and accurate copy of the Bylaws of the Company as duly adopted by the Board of Directors of the Company by Unanimous Written Consent dated ________________, 20___ and said Bylaws are presently in effect.

This Certificate of Secretary may be executed via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act or other applicable law) or other transmission method and will be deemed to have been duly and validly delivered and be valid and effective for all purposes. Signed on ________________, 20___.

Exhibit 6

FRANCHISE BRANCH OFFICE

AND

MANAGEMENT AGREEMENT

THIS AGREEMENT, (the “Agreement”), effective as of August 22, 2019 by and among ViewTrade Securities, Inc., (the “Company” or “VT”), with Office at 7280 W. Palmetto Park Road #310, Boca Raton, Florida and Gatsby Digital, Inc. (the “Contractor”) located at 28 Liberty St. New York, NY 10005 and Peter Quinn (the “Manager”).

WHEREAS, the purpose of this Agreement is to set out the basis on which Contractor is to operate ONE office defined in Section 1;

WHEREAS, the Contractor wishes to operate under a corporate identity known as Gatsby Digital, Inc. (a Delaware Corporation).

WHEREAS, the Contractor wishes to establish an Office of Supervisory Jurisdiction in the Office,

WHEREAS, the Company is registered as a securities Broker/Dealer with the Securities Exchange Commission; the Company is a member of the Financial Industry Regulatory Authority (“FINRA”), and other necessary governmental agencies; and

WHEREAS, the Company conducts, inter alia, a retail securities business;

WHEREAS, the Contractor will employ registered representatives and at least one general securities principals and registered options principals; and other principals as required from time to time;

WHEREAS, the Contractor is desirous of opening one retail securities branch office for the Company set out herein and hereinafter identified and defined as the Office;

WHEREAS, the Contractor and its principals and representatives are currently in good standing pursuant to the rules and regulations of applicable state, federal authorities and regulatory associations; and

NOW, THEREFORE, in consideration of the mutual promises and premises contained herein, the parties hereto agree as follows:

OPERATIVE PROVISIONS

1.              APPOINTMENT. The Company hereby appoints Contractor to operate one office (the “Office”) established at: 44 S Broadway, White Plains, NY 10601. VT agrees to act as Broker/Dealer for the purchase and sale of various securities and other investment vehicles which VT is authorized to purchase and sell under the law and by governmental agencies, and Manager may place various buy and sell orders through VT in accordance with the terms of this Agreement. Nothing in this Agreement shall be interpreted as relieving either party from its obligations to comply with all applicable securities laws of the United States, or any other applicable regulatory bodies, the laws of the particular agency having jurisdiction over the affairs of the office location which either or both parties are registered or licensed or the rules, regulations, interpretations and directives issued by the associations and exchanges with which the parties are, or may be, registered. To the extent this Agreement or any portion thereof shall be considered as a contravention of any such law or rule, only the applicable portion thereof shall be deemed null and void and of no effect.

2.             TERM. This Agreement is for an indefinite term but may be canceled by VT or the Contractor upon 90 days written notice to the other party. VT will comply with all applicable laws and regulations by notifying any and all appropriate regulatory bodies or agencies upon termination of this Agreement and specifically disclose the reasons for any termination of this Agreement if for cause or violation of securities laws, rules or regulations.

3.             CONTRACTOR DUTIES. The undersigned Contractor’s duties include, but are not limited to, appointing an appropriately licensed principal to perform the supervision of the Office, the management and administration of the Office, making a good faith effort, to ensure the entry of securities orders with VT with all activities conducted in accordance with the Federal Securities Acts, the rules, regulations, interpretations and directives of the FINRA and any stock, commodity, option exchange, state, governmental or foreign agency with whom VT or the Contractor is licensed or registered. The appropriately licensed principal, appointed by the Contractor, shall perform all of the duties typically performed by a Branch Office Manager (“BOM”) in respect to the Office, and Contractor shall appoint and supervise additional branch office managers, as discussed in (d) below, to perform all of the duties typically performed by a retail securities firm principal, including, by way of example, but not by way of limitation, the following:

(a)       the hiring, supervision and dismissal of all personnel, including registered representatives in the Office;

(b)       office compliance with applicable rules, regulations and statutes, as well as compliance with Company policies and procedures;

(c)       assisting the Operations Manager of the Company in maintaining all required books and records for the Office in accordance with the Company’s policies;

(d)       maintaining one general securities principal for the first ten representatives and adding one additional general securities principal for each additional ten representatives within thirty days of the requirement, at the Office;

(e)       maintaining compliance with the VT compliance training, branch office, and continuing education manuals;

(f)        compliance with VT and regulatory requirements as may be required from time to time;

(g)       the Contractor will manage the Office as an equal opportunity employer and will not tolerate any form of harassment or prejudicial discrimination in the work place.

4.             OFFICE OF SUPERVISORY JURISDICTION. The Contractor understands that the Company has designated the Office as an Office of Supervisory Jurisdiction (“OSJ”). The Contractor agrees that the designated manager shall be directly responsible for the review of the securities activities of registered representatives and persons associated with the Company in that office and the Contractor agrees that he is responsible for any monetary liabilities for their actions. The designation and operation as an OSJ will commence immediately.

5.             LIMITATIONS ON CONTRACTOR’S AUTHORITY. The following limitations are hereby imposed on both the Contractor’s and Manager’s authority with respect to the Office:

(a)       neither the Contractor, Manager nor any of its employees are authorized to commit the Company’s funds or to bind the Company to act (except for the execution of securities trades in the ordinary course) without receiving prior written approval from James StClair.

(b)       the Contractor, Manager and all employees of the Office are forbidden to recommend or permit any person or persons under his supervision to recommend any prolonged volume accumulation of securities unless the branch manager provides a written statement as to suitability which is acceptable to the compliance department and then receives prior written approval from James StClair. Prolonged accumulation shall be interpreted as the accumulation of a particular security in one or more accounts representing either a majority of the assets in the account of the customer or representing a majority of the trading activity conducted with clients by a registered representative in one of the Office.

(c)       the Company must approve the proposed hiring of all registered personnel in writing, such approval not to be unreasonably withheld;

(d)       the Company must approve in writing all advertising or marketing material prior to its distribution: Internet, virtual, cyber, and all other electronic media are subject to this approval requirement;

(e)       neither the branch managers nor registered representatives will be permitted to conduct any options business until the office has a registered options principal;

(f)       no purchase or sale transaction may be accepted in a new account unless sufficient funds, equity or securities to consummate the transaction are in the account for which the order is taken;

(g)       the Contractor and Manager shall not hold or commingle funds from investors or securities purchased with the Contractor’s own funds, whether in a personal, business, trust or special account, and all such funds shall be immediately forwarded to the Company or its clearing agent;

(h)       The Contractor and Manager will not enter into any investment banking or advisory arrangements without the prior review and written approval of James StClair;

6.             FINANCIAL RESPONSIBILITIES OF THE OFFICE. The Contractor agrees to bear complete financial responsibility for the operation of the Office, such responsibility to include, but not limited to, the following:

(a)       all expenses of operating the office including rent, telephones, utilities, equipment, advertising, marketing, postage, secretary, quotation equipment, supplies, insurance, branch office fees, all costs of personnel and any other expenses normally associated with operating a retail securities branch office;

(b)       all costs of compliance, litigation or regulatory investigations directly relating to the Office including attorneys’ fees, fines or judgments;

(c)       all costs of record keeping, accounting and payroll computation required by regulatory authorities and by the Company;

(d)       all costs associated with the accepting, transmitting, executing and clearing of orders;

(e)       all debit balances in customer accounts and the costs associated with collecting those debit balances;

(f)        all other costs incurred in connection with the Company’s clearing agreement which are attributable to the Contractor’s office;

(g)       the Company will charge the Contractor and the Contractor will pay a service fee for the processing of trades or ticket charges. This may be changed from time to time by written agreement but the initial arrangement is set out in Annex “A” attached.

7.             COMPENSATION TO THE MANAGER. The Contractor’s registered representatives shall receive from the Company a payout according to Schedule A of this Agreement, which is attached hereto and incorporated herein by reference. The Company shall furnish the Contractor with an itemized statement showing the commission owed the Contractor’s registered representatives for the period covered by the statement, and an itemized accounting of all expenses deducted therefrom. The term “Monthly Gross Revenue” shall mean all commission and other revenue generated during a month through the efforts of the Contractor’s branch office personnel and received by the Company prior to the end of the production month. A “Production Month” is that period of time in which commission income is generated and remitted to the Company by its clearing agent.

The Company will not be responsible for withholding any taxes from the Contractor’s employees as long as the appropriate forms are on file.

The Contractor understands that The Office’s right to remuneration does not arise until such time that the Company receives confirmation of cleared funds on the commission or other revenue sources from the particular transaction effectuated by the Office. The Company’s ability to receive funds from the firm’s clearing firm will not affect the Contractor’s Registered Representative’s ability to be paid. All clearing costs and other costs of the Office paid by the Company shall be deducted from the amounts to be paid to the Contractor and shall be paid on the 15^th of the following month.

The Contractor’s sole remuneration under this Agreement shall be the above-mentioned commissions paid to the registered representatives and other revenues. The amount of the gross commission that the Company will receive will vary depending on the type of product or transaction involved, all of which shall be agreed upon by the Company with respect to each transaction.

The Office shall not be entitled to any advance or draw on such commission.

8.             CUSTOMER COMPLAINTS. The Manager shall promptly inform the Company, in writing, of any customer complaints whether they are written or oral. If such complaint is in writing, copies of the complaint shall be provided to the Company immediately. The Manager shall have the responsibility to resolve all customer complaints, and to provide all reasonable assistance to the Company in the resolution of any complaint, but may not commit the Company without specific written authorization. The Company, however, reserves the right, at its absolute discretion, to settle any complaint and charge the Contractor, or branch personnel with the costs of any such settlement. The duties of the Contractor and Manager with regard to complaint resolution as set out herein, survive the termination of this Agreement.

9.             REPRESENTATIONS OF CONTRACTOR. The Contractor represents and warrants to the Company as follows:

(a)       each of its registered persons:

(i) is duly licensed as a registered representative with the FINRA and is not currently under suspension or limitation on his ability to act as such;

(ii) is familiar with all the rules, regulations and statutes of all applicable state and federal agencies which regulate securities markets as well as the constitution, rules, by-laws, regulations and customs of all applicable securities markets, associations, exchanges, and any and all local laws having jurisdiction over the particular location of the Office (collectively referred to here after as the “Applicable Rules”) and will fully comply therewith;

(iii)       has read and understands the Company’s Written Supervisory and Procedures Manual as provided by the Company and will fully comply therewith;

(iv)       that he will devote an appropriate amount of his time, effort and attention to the management of the Office;

(b)       the Contractor agrees to indemnify the Company against any third party claim asserted against the Company arising from any past financial commitments, customer complaints, litigation and regulatory problems of any type which occurred prior to the establishment of the Office.

10.           REPRESENTATIONS OF COMPANY. The Company represents, warrants and covenants to the Contractor as follows:

(a)       that it is a member in good standing of FINRA and will continue to be so for so long as this Agreement remains in effect;

(b)       that it is duly registered as a Broker/Dealer with the Securities and Exchange Commission (“SEC”) and numerous states including Florida and will continue to be so registered for so long as this Agreement remains in effect;

(c)       it has not been, and is not currently, under investigation by any governmental agency or self-regulatory organization for violations of securities laws;

(d)       it has met, and will continue to meet for so long as this Agreement remains in effect, any other applicable federal or state requirements, or the applicable requirements of any regulatory or industry self-regulatory agency, necessary to be met in order to perform the services contemplated by this Agreement;

(e)       it is a corporation duly formed and in good standing in its jurisdiction of incorporation and has all authorizations necessary to enter into and perform this Agreement;

(f)       it will immediately notify the Contractor of the occurrence of any event that would disqualify the Company from providing it services hereunder; and

(g)        it will promptly provide the Contractor written notice of any deficiency, investigation or the institution of any proceeding by the Securities and Exchange Commission or any other regulatory or self-regulatory authority that is or is likely to be material to the relationship between the parties.

11.           INDEMNIFICATION. The Contractor and Manager hereby agrees to indemnify, defend and hold the Company harmless from any loss, damage, liability, claim, cost and expense including, but not limited to reasonable attorneys’ fees arising out of any third party claims against the Company directly resulting from their management or supervision of the Office referred to in this Agreement or other breach of this Agreement. Similarly, the Company agrees to indemnify, defend and hold the Contractor and Manager harmless from any loss, damage, liability, claim, cost and expense including, but not limited to, reasonable attorneys’ fees arising out of any third party claims against the Contractor and Manager directly resulting from Company’s breach of this Agreement or the rules or regulations of any federal, state or self-regulatory agency.

The Manager will not be liable for anything unless the liability is due to his fraud, gross negligence or willful misconduct.

12.           BENEFITS. The Contractor and Manager will not be entitled to participate in any employee benefit programs of the Company as may, from time to time, be in effect unless specifically agreed to in writing.

13.           DEFAULT. The occurrence of any of the following events shall be deemed to be, and shall be treated as, a default under this Agreement and just cause for its termination:

(a)       breach or failure, by either party, in the due observance or performance of any term, covenant or agreement contained in this Agreement which shall continue unremedied or uncorrected for a period of thirty (30) days after written notice thereof, specifying the breach, has been delivered to the defaulting party;

(b)       fraud on the part of either party or their subagents or employees, or the willful failure or gross negligence of either party to comply with the applicable securities laws of any applicable states or with the regulations of FINRA or the SEC;

(c)       the violation of either party, or their subagents or employees, of any rules or regulations of the SEC, the FINRA, or any other regulatory body or agency, foreign or domestic, having jurisdiction over either party, if such a violation could result in the suspension or termination of membership;

(d)       either party becomes insolvent, makes any assignment for the benefit of creditors, calls a meeting of creditors, offers a composition of extension to creditors, suspends payment, consents to or suffers the appointment of a receiver, a trustee or committee of creditors, or seeks a reorganization, arrangement or bankruptcy.

(e)       either party has filed or has had commenced against it an involuntary petition in bankruptcy seeking reorganization, arrangement or adjustment of its debts or for any other relief under any bankruptcy or insolvency law, or has entered against it any judgment or decree for its dissolution which remains undismissed or undischarged or unbonded for a period of thirty (30) days.

If either party shall be entitled to cancel or terminate this Agreement pursuant to this paragraph, the defaulting party shall be obligated to pay all damages which the non-defaulting party may sustain by reason of the default, including without limitation, all legal fees and other expenses incurred in the course of the termination of this Agreement.

14.           TERMINATION. This Agreement shall be terminated upon the occurrence of the earliest of the following events:

(a)       whenever the Company and the Contractor shall mutually agree to termination in writing;

(b)       if the Contractor or Manager engages in personal misconduct, including dishonesty, fraud, or the failure to perform his duties under this Agreement due to any reason, or is convicted of a crime involving moral turpitude, or materially breaches this Agreement;

(c)       in the event of a default, as provided in paragraph 13 of this Agreement, the parties agree that the non-defaulting party may terminate this Agreement without prejudicing its rights and remedies here under.

(d)       If the Company’s Compliance Department reasonably determines the risk of keeping the Office open is too high due to an excessive number of customer complaints and/or arbitrations and/or violations of either industry or Company rules and regulations.

(e)       Upon termination pursuant to Section 2 of this Agreement.

Any termination of this Agreement shall be effective at the end of the cure period specified in Paragraphs 13(a) and 13(e); or immediately upon notice being delivered by the non-defaulting party that a default has occurred under paragraphs 13(b), 13(c), 13(d) or 14(b) or 14(d); all, as the case may be. Promptly upon termination of this Agreement for any reason, the Company shall reasonably cooperate with the Contractor to facilitate the transfer of all customer accounts opened by the Office to a broker-dealer of the Contractor’s choosing with the Contractor bearing such costs as are reasonable for such transfer not to exceed one dollar ($1) per transferred customer account plus any third party expenses associated with the transfer of customer accounts.

15.           SECURITY DEPOSIT. The Company reserves the right to require a deposit, in an amount, as determined by VT, with an initial amount equal to $120,000, payable as defined in Annex “A”. The existence of this deposit will not serve in any way to limit the financial responsibility of the Contractor or its employees under this Agreement. No part of the deposit may be available for refund until, at a minimum thirty (30) days after termination of this Agreement, and all issues have been resolved. No part of the deposit will be available in the case of a shortfall of monies in any given month. The Company has the right in its sole discretion to increase or decrease the required deposit; in the event of an increase, the amount of the increase is due within thirty (30) days upon demand and failure to remit, or to promptly reach an agreement on remittance, may, at the Company’s discretion constitute a breach of this Agreement.

16.           ASSIGNMENT. No rights under this Agreement shall be assigned, nor any duties assumed by another party, except that the Company can assign this contract to any affiliated entity that is properly licensed as a broker-dealer and provided the Company agrees to be a guarantor of the affiliated entity’s assumption of obligation under this Agreement. This Agreement shall be binding upon and inure to the benefit of the successors of the Company (by way of merger, consolidation, acquisition of all, or substantially all, of the assets of the Company), and the heirs’ personal representative and successors of the shareholders.

17.           ENTIRE AGREEMENT. This instrument contains the entire Agreement of the parties with respect to the subject matter hereof. It may not be varied orally, but only by an agreement in writing signed by the respective parties.

18.           NOTICES. All notices and other communications here under shall be in writing and shall be deemed given when delivered personally or when mailed by registered or certified mail, return receipt requested, to the parties at their respective addresses given above (or at other such address for a party as shall be specified by notice).

19.           APPLICABLE LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of Florida.

20.           SEVERANCE. In the event that any provision of this Agreement conflicts with federal, state, or local laws, regulations or ordinances, such provision shall be deemed null and void and the Agreement shall be read as if such provision is null and void and were no longer a part thereto.

21.           WAIVER. No waiver of any breach of this Agreement or provision herein contained shall be deemed a waiver of any preceding or succeeding breach thereof or of any other agreement or provision herein contained. No extension of time for performance of any obligations or acts shall be deemed an extension of time for performance of any other obligations or acts.

22.           NATURE OF CONTRACTOR OR MANAGER. Contractor and Manager are engaged with the Company in a unique relationship, working in concert with the wishes and practices of the Company. For the purpose of his/her compensation, the Contractor and Manager are considered an independent contractor under this Agreement. Accordingly:

(a)       Contractor and Manager shall receive no fringe benefits under this Agreement, whatsoever, including, but not limited to, insurance benefits, disability income, vacation pay, travel, entertainment or personal expense reimbursement.

(b)       Contractor and Manager shall not be allowed to incur any expenses for the Company under this Agreement. All expenses, leases or contractual commitments shall be placed in a name other than the Company. Any expenses incurred in the Contractor’s name shall be the sole responsibility of the Contractor.

(c)       Contractor and Manager shall not be required to work any specific hours or days unless specific time is necessary to properly service clients of the branch.

(d)       Contractor and Manager are neither assigned nor limited to any geographic or demographic territory for client solicitations other than those imposed by his licenses or registrations.

(e)       Contractor and Manager may service or refuse to service any customer at his discretion upon proper notice to the customer and the Company.

(f)       Contractor and Manager shall maintain the books and records of the branch in the format provided by the Company to insure uniformity for purposes of review and supervision.

(g)       Contractor and Manager shall render all reports required by the Company on a timely manner and any other reports as required by federal and state law or the rules and regulations of applicable regulatory agencies, foreign or domestic, after review by the Company’s compliance department.

(h)       As a result of the Contractor’s and Manager’s activities, should the Contractor be required under local law to register as one engaged in the sale of securities and/or to pay a registration fee for such activities, under no circumstances shall the Company pay such registration fees.

(i)       If any employees of the branch are not currently registered with the FINRA and applicable states, Contractor and Manager will insure that they shall not solicit or sell any securities, nor accept unsolicited orders, on behalf of the Company until notified by the Company in writing that the required FINRA registration and state licensing requirements have become effective.

23.           FREEDOM FROM COMPANY CONTROLS. The Company enters into this Agreement for the sole purpose of retaining the Contractor and Manager to operate and manage the Office for the purpose of engaging in the offer and sale of securities approved for sale by the Company pursuant to the Written Supervisory Procedures Manual. The Company has no right to control or direct the Manager in the sale of securities, except that the Company shall have the responsibility and right to perform such supervisory overview required by the SEC, the FINRA, other securities regulatory agencies and exchanges, and the state and political subdivisions.

The Company shall also be permitted to issue such instructions as may be necessary to explain, clarify and insure compliance with the directives acknowledged by the aforementioned agencies. All orders, or applications for, securities purchases are subject to its acceptance or rejection by the Company in its sole discretion. It is agreed by the Contractor and Manager that due to the extreme emphasis by regulatory agencies on markups, suitability, sales practices, pink sheet stocks, designated securities, advertising and misrepresentation, the Company’s management may, in its sole discretion, review, approve or prohibit orders in specific securities, states, mark-up-downs, etc., in order to insure compliance with regulatory rules and to mitigate risk to the Company.

24.           COMPANY COMPLIANCE MANUAL/WRITTEN SUPERVISORY PROCEDURES. The Company’s Written Supervisory Procedures Manual and the procedures contained therein (the “Manual”), as revised and supplemented from time to time; contains the rules and regulations required by the various regulatory agencies including, but not limited to, the FINRA, the SEC, MSRB and the various states agencies.

Failure to materially comply with the terms of the Manual, any requirement for additional training or licensing, and any subsequent revisions and supplements, to the Manual constitutes a material breach of this Agreement.

The Contractor and Manager, by the execution of this Agreement, hereby certifies that they have read said Manual, consents to abide by its terms, and habe received a copy of the Manual.

25.           PAYMENT OF COMMISSIONS UPON TERMINATION. The Company shall have the right to offset commissions or other revenues against any charges to the Contractor occasioned by improper activity or dishonored installment payments, trades or deliveries by customers, etc. The Company shall also have the right to offset all expenses which remain in the termination of the branch including, but not limited to, investigation and reasonable attorneys’ fees.

26.           NON-EMPLOYEE STATUS. The Contractor and Manager shall not be considered under the provisions of this Agreement or otherwise as having “employee” status for any purpose. The Contractor is thus not entitled to participate in any profit sharing or pension retirement plan, vacation, holiday pay, sick pay, insurance coverage, or any other benefits intended for the Company’s employees.

27.           NON-EXCLUSIVITY. Contractor and Manager are required to place all securities transactions exclusively through the Company. The Contractor and Manager may engage in any other trade or business while a Contractor, provided such activity does not conflict with any rule or regulation of the FINRA, the SEC, or laws of the various states and is disclosed in advance in writing to the compliance department.

28.           MATERIAL AMENDMENT REQUIREMENT. If any term of this Agreement contravenes the express, or in the opinion of Company’s counsel, the intended provisions of any applicable regulatory authority or court decision, then said term shall be governed by said regulatory provision or decision and the subject term of this Agreement shall be deemed automatically amended or deleted as the case may be, and the remainder of the provisions shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

29.           PARTIAL INVALIDITY. If any term, conditions, or provision of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the provisions shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

30.           INTERPRETATIONS AND DEFINITIONS. Unless otherwise provided in this Agreement, the following definitions and rules shall apply:

(a)       the neuter gender includes the feminine and masculine;

(b)       the singular number includes the plural;

(c)       the word “person” includes corporation, partnership, firm or association wherever the context so requires;

(d)       “shall”, “will”, and “agree” are mandatory and “may” is permissive;

(e)       any references to the “Agreement term”, or “term of the Agreement” shall include any extension of such term.

31.           MISCELLANEOUS PROVISIONS.

(a)       Notices. Contractor and Manager shall immediately advise Company of any action or fact whatsoever which comes to Contractor’s knowledge which may possibly constitute a violation of any securities laws or regulations with respect to the Company or the Contractor or with respect to any party who is, has been, or may be doing business with the Company. Contractor and Manager shall promptly notify Company of any past, present or future investigations or inquiries by governmental agencies and will send to the Company copies of all correspondence sent to or received from such governmental agencies as and when sent or received.

(b)       Captions. Captions for this Agreement are for convenience and reference only, and the words contained therein shall in no way be held to explain, modify, amplify or aid in the interpretation, construction or meaning of the provisions of this Agreement.

32.           SECURITY LAW VIOLATIONS. Each party shall immediately advise the other of any action or fact whatsoever which comes to such party’s knowledge, which may possibly constitute a material violation of any securities laws or regulations with respect to the Company or the Contractor and Manager. Each party shall promptly notify the other of any past, present or future investigations or inquiries by governmental agencies and will send to the other party copies of all correspondence sent to or received from such governmental agencies as and when sent or received.

[SIGNATURE PAGE FOLLOWS.]

IN WITNESS WHEREOF, the Company, the Contractor and the Manager have caused this Agreement to be executed in their corporate names by their respective corporate officers and have executed this Agreement on this 22^nd day of August, 2019.

VIEWTRADE SECURITIES, INC.

ANNEX A

The following represents Schedule A of the Franchise Agreement dated August _____, 2019 between ViewTrade, Inc. (“ViewTrade”) and Gatsby Digital, Inc. (“Contractor”).

Given the unique structure of the relationship contemplated by the Franchise Agreement, ViewTrade will simply incorporate the pricing offered to Contractor by Apex Clearing on February 1, 2019 (attached as Supplement #1) with the following adjustments:

Monthly Minimum:

Contractor shall pay ViewTrade a monthly fee equal to the greater of the Ticket charges assessed monthly or $15,000. This fee is due and payable by the 18^th of each month.

Ticket charges:

Equities: Ticket charges to the Contractor will equal $0.10 on every retail equity order entered and executed on behalf of the franchise.

Options: Ticket charges to the Contractor will be tiered and reset monthly as follows:

Miscellaneous:

The Company will also pass on to the franchise, at the same rate that is charged by the firm’s clearing firm, pursuant to Supplement #1, the charges, at cost, for all non equity transactions, including but not limited to, bonds, mutual funds, security transfers, wires, etc.

Interest:

The interest revenue sources shall apply as outlined in Supplement #1 and the Contractor shall be paid 50% of all monthly rebates received by ViewTrade in excess of $5,000 on the aggregate sum of the margin, credit and FDIC rebates paid by Apex.

Security Deposit:

The firm is to receive a deposit of $120,000 which shall be in the form of a cash security deposit. The deposit may be satisfied by the execution of the Convertible Promissory Note between the Contractor and ViewTrade Holding Corp. The deposit will be reflected on the books and records of the Company as a franchise deposit and will be released pursuant to the provisions of Sect. 15 of the Agreement.

Exhibit 8.1 

ESCROW AGREEMENT

FOR SECURITIES OFFERING

THIS ESCROW AGREEMENT, dated as of July 29, 2020 (“Escrow Agreement”), is by and between SI Securities, LLC (“SI Securities”), Gatsby Digital, Inc., a Delaware corporation (“Issuer”), and The Bryn Mawr Trust Company of Delaware (“BMTC DE”), a Delaware entity, as Escrow Agent hereunder (“Escrow Agent”). Capitalized terms used herein, but not otherwise defined, shall have the meaning set forth in that certain Issuer Agreement by and between Issuer and SI Securities executed prior hereto (the “Issuer Agreement”).

BACKGROUND

A.           Issuer has engaged SI Securities to offer for the sale of Securities on a “best efforts” basis pursuant to the Issuer Agreement.

B.           Subscribers to the Securities (the “Subscribers” and individually, a “Subscriber”) will be required to submit full payment for their respective investments at the time they enter into subscription agreements.

C.           All payments in connection with subscriptions for Securities shall be sent directly to the Escrow Agent, and Escrow Agent has agreed to accept, hold, and disburse such funds deposited with it thereon in accordance with the terms of this Escrow Agreement.

D.           In order to establish the escrow of funds and to effect the provisions of the Offering Document, the parties hereto have entered into this Escrow Agreement.

STATEMENT OF AGREEMENT

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, for themselves, their successors and assigns, hereby agree as follows:

1.            Definitions. In addition to the terms defined above, the following terms shall have the following meanings when used herein:

“Business Days” shall mean days when banks are open for business in the State of Delaware.

“Investment” shall mean the dollar amount of Securities proposed to be purchased by the Subscriber in full. Subscribers may subscribe by tendering funds via debit card, wire, or ACH only to the account specified in Exhibit A attached herein or another account specified by SI Securities at the time of subscription for prompt forwarding to the account listed in Exhibit A, checks will not be accepted. Wire and/or ACH instructions are subject to change, and may differ if funds are being sent from an international account. In the event these instructions change they will be updated and provided by Escrow Agent to SI Securities.

“Escrow Funds” shall mean the funds deposited with the Escrow Agent pursuant to this Escrow Agreement.

“Expiration Date” means the date that is one year from the qualification of the Offering by the Commission.

“Minimum Offering” shall have the definition as set forth in Exhibit A attached hereto.

“Minimum Offering Notice” shall mean a written notification, signed by SI Securities, pursuant to which the SI Securities shall represent that, to its actual knowledge, all Closing Conditions have been met.

“Closing Conditions” shall include, but are not limited to, SI Securities determining in its sole discretion that at the time of a closing, the Minimum Offering has been met, the investment remains suitable for investors, investors have successfully passed ID, KYC, AML, OFAC, and suitability screening, and that Issuer has completed all actions required by it as communicated by SI Securities at the time of a closing.

“Offering” shall have the meaning set forth in the Issuer Agreement.

“Securities” shall have the meaning set forth in the Issuer Agreement.

“Subscription Accounting” shall mean an accounting of all subscriptions for Securities received for the Offering as of the date of such accounting, indicating for each subscription the Subscriber’s name, social security number and address, the number and total purchase price of subscribed Securities, the date of receipt of the Investment, and notations of any nonpayment of the Investment submitted with such subscription, any withdrawal of such subscription by the Subscriber, any rejection of such subscription by Issuer, or other termination, for whatever reason, of such subscription.

2.            Appointment of and Acceptance by Escrow Agent. The other parties hereto hereby appoint Escrow Agent to serve as escrow agent hereunder, and Escrow Agent hereby accepts such appointment in accordance with the terms of this Escrow Agreement. Escrow Agent hereby agrees to hold all Investments related to the Offering in escrow pursuant to the terms of this Agreement.

3.            Deposits into Escrow. a. All Investments shall be delivered directly to the Escrow Agent for deposit into the Escrow Account described on Exhibit A hereto. Investments shall be transmitted promptly to the Escrow Agent in compliance with Rule 15c2-4.

Each such deposit shall be accompanied by the following documents:

ALL FUNDS SO DEPOSITED SHALL REMAIN THE PROPERTY OF THE SUBSCRIBERS ACCORDING TO THEIR RESPECTIVE INTERESTS AND SHALL NOT BE SUBJECT TO ANY LIEN OR CHARGE BY ESCROW AGENT OR BY JUDGMENT OR CREDITORS’ CLAIMS AGAINST ISSUER UNTIL RELEASED OR ELIGIBLE TO BE RELEASED TO ISSUER IN ACCORDANCE WITH SECTION 4(a) HEREOF.

b.           The parties hereto understand and agree that all Investments received by Escrow Agent hereunder are subject to collection requirements of presentment and final payment, and that the funds represented thereby cannot be drawn upon or disbursed until such time as final payment has been made and is no longer subject to dishonor. Upon receipt, Escrow Agent shall process each Investment for collection, and the proceeds thereof shall be held as part of the Escrow Funds until disbursed in accordance with Section 4 hereof. If, upon presentment for payment, any Investment is dishonored, Escrow Agent’s sole obligation shall be to notify the parties hereto of such dishonor and to promptly return such Investment to the applicable investor.

Upon receipt of any Investment that represents payment of an amount less than or greater than the Subscriber’s initial proposed Investment, Escrow Agent’s sole obligation shall be to notify the parties hereto of such fact and to promptly return such Investment to the applicable investor.

4.            Disbursements of Escrow Funds.

a.            Completion of Offering. Subject to the provisions of Section 10 hereof, Escrow Agent shall pay to Issuer the liquidated value of the Escrow Funds, by Automated Clearing House (“ACH”), no later than one (1) business day following receipt of the following documents:

The Escrow Agent shall disburse the Escrow Funds by ACH from the Escrow Account in accordance with written instructions signed by SI Securities as to the disbursement of such funds (the “Instruction Letter”) in accordance with this Section 4(a). Notwithstanding the foregoing, Escrow Agent shall not be obligated to disburse the Escrow Funds to Issuer if Escrow Agent has reason to believe that (a) Investments in full payment for that number of Securities equal to or greater than the Minimum Offering have not been received, deposited with and collected by the Escrow Agent, or (b) any of the certifications and opinions set forth in the Minimum Offering Notice are incorrect or incomplete.

After the initial disbursement of Escrow Funds to Issuer pursuant to this Section 4(a), Escrow Agent shall pay to Issuer any additional funds received with respect to the Securities, by ACH, no later than one (1) business day after receipt.

It is understood that any ACH transaction must comply with U. S law. However, BMTC DE is not responsible for errors in the completion, accuracy, or timeliness of any transfer properly initiated by BMTC DE in accordance with joint written instructions occasioned by the acts or omissions of any third party financial institution or a party to the transaction, or the insufficiency or lack of availability of your funds on deposit in an external account.

b.           Rejection of Any Subscription or Termination of the Offering. Promptly after receipt by Escrow Agent of written notice (i) from Issuer that the Issuer intends to reject a Subscriber’s subscription, (ii) from Issuer or SI Securities that there will be no closing of the sale of Securities to Subscribers, (iii) from any federal or state regulatory authority that any application by Issuer to conduct a banking business has been denied, or (iv) from the Securities and Exchange Commission or any other federal or state regulatory authority that a stop or similar order has been issued with respect to the Offering Document and has remained in effect for at least twenty (20) days, Escrow Agent shall pay to the applicable Subscriber(s), by ACH , the amount of the Investment paid by each Subscriber.

c.           Expiration of Offering Period. Notwithstanding anything to the contrary contained herein, if Escrow Agent shall not have received a Minimum Offering Notice on or before the Expiration Date, or the offering has been sooner terminated by Issuer, Escrow Agent shall, without any further instruction or direction from SI Securities or Issuer, promptly return to each Subscriber, by debit, ACH, or Wire transfer, the Investment made by such Subscriber.

5.            Suspension of Performance or Disbursement Into Court. If, at any time, (i) there shall exist any dispute between SI Securities, Issuer, Escrow Agent, any Subscriber or any other person with respect to the holding or disposition of all or any portion of the Escrow Funds or any other obligations of Escrow Agent hereunder, or (ii) if at any time Escrow Agent is unable to determine, to Escrow Agent’s reasonable satisfaction, the proper disposition of all or any portion of the Escrow Funds or Escrow Agent’s proper actions with respect to its obligations hereunder, or (iii) if SI Securities and Issuer have not within 30 days of the furnishing by Escrow Agent of a notice of resignation pursuant to Section 7 hereof appointed a successor Escrow Agent to act hereunder, then Escrow Agent may, in its reasonable discretion, take either or both of the following actions: