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An offering statement pursuant to Regulation A relating to these securities has been filed with the Securities and Exchange Commission (the “SEC” or the “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 any such state. We may elect to satisfy our obligation to deliver a Final offering circular by sending you a notice within two business days after the completion of our 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.

KeyStone Solutions, Inc.

3,000,000 Units

Consisting of:

3,000,000 Shares of Series A Cumulative Convertible Redeemable Preferred Stock, par value $0.0001 per share

and

Warrants to Purchase 750,000 Shares of Common Stock, par value $0.0001 per share

(2,892,857 Shares of Common Stock, par value $0.0001 per share, issuable upon Conversion of Series A Cumulative Convertible Redeemable Preferred Stock and Exercise of Warrants)

Minimum purchase: 500 Units ($5,000)

We are offering units (“Units”), consisting of (a) a minimum of 300,000 shares of Series A Cumulative Convertible Redeemable Preferred Stock, par value $0.0001 (the “Series A Preferred Stock”), and a maximum of 3,000,000 shares of Series A Preferred Stock and (b) warrants to purchase up to 750,000 shares of our common stock, on a “best efforts” basis. Each Unit consists of one share of Series A Preferred Stock and a warrant to purchase 0.25 shares of our common stock at any time on or before seven years from the date of qualification of the Units as exempt from registration by the SEC (the “Qualification Date”) at an exercise price of $2.00 per share of common stock. While the Series A Preferred Stock and the warrants will be sold together as a Unit, the Series A Preferred Stock and warrants will be issued separately. The Units will be sold by the Company in minimum amounts of $5,000 (500 Units).

If $3,000,000 in subscriptions for the Units (the “Minimum Offering”) is not deposited with FOLIOfn Investments, Inc., as set forth in more detail in the “Plan of Distribution,” on or before the earlier of six (6) months after commencement of the offering or twelve (12) months after the Qualification Date (the “Minimum Offering Period”), all subscriptions will be refunded to subscribers without deduction or interest. Subscribers have no right to a return of their funds during the Minimum Offering Period. See “Plan of Distribution” and “Securities Being Offered” for a description of the Units being sold and our capital stock.

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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” as defined in Rule 501(a) of Regulation D (17 CFR §230.501(a) 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.

There is currently no trading market for our Units, common stock or preferred stock. We do not intend to apply to have our Units or shares of preferred stock or common stock approved for trading on any trading market upon the completion of this offering.

These are speculative securities. Investing in the Units involves significant risks. You should purchase these securities only if you can afford a complete loss of your investment. See “Risk Factors” beginning on page [4].

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The United States Securities and Exchange Commission does not pass upon the merits of or give its approval to 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.

We are providing the disclosure in the format prescribed by Part II of Form 1-A.

14420 Albemarle Point Place, Suite 200, Chantilly, VA, 20151

(703) 953-3838; www.aockeysolutions.com

The date of this preliminary offering circular is May 12, 2016

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RISK FACTORS

An investment in Units involves a high degree of risk and many uncertainties. You should carefully consider the specific factors listed below, together with the cautionary statement that follows this section and the other information included in this offering circular, before purchasing Units in this offering. If one or more of the possibilities described as risks below actually occur, our operating results and financial condition would likely suffer and the trading price, if any, of our preferred stock and/or common stock could fall, causing you to lose some or all of your investment. The following is a description of what we consider the key challenges and material risks to our business and an investment in our securities.

Risks Related to our Business and Industry

We are a holding company; have no direct operations and depend in large part on funding from our subsidiaries.

KeyStone Solutions, Inc. was formed in March 2016 as a holding company. It has no current business operations of its own. Until we have either formed or acquired other companies, our only significant assets are our cash and equity interest in our principal operating subsidiary, AOC Key Solutions. As a result, we rely on funding from AOC Key Solutions to meet our obligations. If AOC Key Solutions needs to retain its funds to meet its financial obligations or experiences other restrictions on its ability to fund us, that may limit our access to funds and restrict our ability to meet our dividend, redemption and liquidation obligations in respect of our Series A Preferred Stock and to pursue our acquisition strategy or other strategic objectives.

We face aggressive competition that can impact our ability to obtain contracts and therefore affect our future revenues and growth prospects.

Our business is highly competitive, and we compete with larger companies that have greater name recognition and financial resources, as well as many independent sole-proprietors who sell themselves as business development experts.

The markets in which we operate are characterized by rapidly changing technology, and the needs of our clients change and evolve regularly. Accordingly, our success depends on our ability to develop services and solutions that address these changing needs of our government contractor clients, and to provide people and technology needed to deliver these services and solutions. To remain competitive, we must consistently provide superior service, technology and performance on a cost-effective basis to our clients. Our competitors may be able to provide our clients with different or greater capabilities or technologies or better contract terms than we can provide, including technical qualifications, past contract experience, geographic presence, price and the availability of qualified professional personnel. Additionally, we anticipate that larger or new competitors or alliances among competitors may emerge which may adversely affect our ability to compete for new contracts.

The U.S. government may adopt new contract rules and regulations or revise its procurement practices in a manner adverse to us at any time.

Our industry has experienced, and we expect it will continue to experience, significant changes to business practices as a result of an increased focus on affordability, efficiencies and recovery of costs, among other items. U.S. government agencies may face restrictions or pressure regarding the type and amount of services that they may obtain from private contractors. Legislation, regulations and initiatives dealing with procurement reform, mitigation of potential conflicts of interest, deterrence of fraud, and environmental responsibility or sustainability, as well as any resulting shifts in the buying practices of U.S. government agencies, such as increased usage of fixed-price contracts, multiple award contracts and small business set-aside contracts, could have adverse effects on government contractors and the business development services we provide. Any of these changes could impair our ability to obtain new support contracts or renew our existing contracts when those contracts are recompeted. Any new contracting requirements or procurement methods could be costly or administratively difficult for us to implement and could adversely affect our future revenues, profitability and prospects, or alternatively may reduce the need for government contractors to acquire our services.

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Technology improvements and disruptions could diminish the need for our traditional services.

Based on recent technological developments, the market for consultants has diminished and may continue to diminish. Some companies are beginning to use the World Wide Web to advertise for different services, including experts for sale, anonymous authors to complete certain proposal sections for an “introductory fee,” and even buying entire proposals on-line, sometimes from overseas vendors. The market trend seems to be that these competitors are offering similar types of services at extremely low prices. This trend towards utilization of unknown and unproven companies advertising traditional consulting services may diminish the demand for our services, which may adversely affect our revenues, results of operations and financial condition.

The spending cuts imposed by the Budget Control Act of 2011 (“BCA”) could impact our operating results and profit.

The U.S. government continues to focus on developing and implementing spending, tax, and other initiatives to stimulate the economy, create jobs, and reduce the deficit. One of these initiatives, the BCA, imposed constraints around U.S. government spending. In an attempt to balance decisions regarding defense, homeland security, and other federal spending priorities, the BCA imposed spending caps that contain approximately $487 billion in reductions to the Department of Defense base budgets over a seven year period (to 2021). Additionally, the BCA triggered an automatic sequestration process, effective March 1, 2013, that would have reduced planned defense spending by an additional $500 billion over a nine-year period that began in the U.S. government’s 2013 fiscal year.

On November 2, 2015, the President signed into law the Bipartisan Budget Act of 2015 (“BBA 2015”). BBA 2015 raises the limit on the U.S. government’s debt until March 2017 and raises the sequester caps imposed by the BCA by $80 billion, split equally between defense and non-defense spending over the next two years ($50 billion in the U.S. government’s 2016 fiscal year and $30 billion in the U.S. government’s 2017 fiscal year). On December 18, 2015, the President signed into law the Consolidated Appropriations Act of 2016, funding the government through September 30, 2016 and on February 9, 2016, the President submitted a budget proposal for the U.S. government’s 2017 fiscal year, consistent with BBA 2015 funding levels. BBA 2015 includes discretionary funding for Department of Defense of approximately $580 billion in the U.S. government’s 2016 fiscal year and $583 billion in the U.S. government’s 2017 fiscal year. This funding includes a base budget for the Department of Defense of approximately $521 billion in the U.S. government’s 2016 fiscal year and $524 billion in the U.S. government’s 2017 fiscal year. BBA 2015 also provides approximately $59 billion for Department of Defense Overseas Contingency Operations (OCO) spending in each of the U.S. government’s 2016 and 2017 fiscal years.

The Bipartisan Budget Act of 2013 (“BBA 2013”) passed by Congress in December 2013 alleviated some budget cuts that would have otherwise been instituted through sequestration in the U.S. government’s 2014 and 2015 fiscal years. While BBA 2013 and BBA 2015 (collectively, the “Bipartisan Budget Acts”), taken together, increased discretionary spending limits through the U.S. government’s 2017 fiscal year, the Bipartisan Budget Acts retained sequestration cuts for the U.S. government’s 2018 through 2021 fiscal years, including the across-the-board spending reduction methodology provided for in the BCA. As a result, there remains uncertainty regarding how, or if, sequestration cuts will be applied in the U.S. government’s 2018 fiscal year and beyond. Department of Defense and other agencies may have significantly less flexibility in how to apply budget cuts in future years. While the defense budget sustained the largest single reductions under the BCA, other civil agencies and programs have also been impacted by significant spending reductions. In light of the BCA and deficit reduction pressures, and the upcoming change in administrations, it is likely that discretionary spending by the U.S. government will remain constrained for a number of years. Additionally, if an annual appropriations bill is not enacted for the U.S. government’s 2017 fiscal year or beyond, the U.S. government may operate under a continuing resolution, abating RFP processes, restricting new contract or program starts and government slowdowns, or even shutdowns, could arise. We anticipate there will continue to be significant debate within the U.S. government over defense spending throughout the budget appropriations process for the U.S. government’s 2017 fiscal year and beyond. The outcome of these debates could have long-term consequences for our industry and Company.

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Since we generate most of our revenues from clients that bid on contracts with U.S. government agencies, our operating results could be adversely affected by spending caps or changes in the budgetary priorities of the U.S. government, as well as by delays in RFP processes, program starts or the award of contracts or task orders under contracts.

Continued or increased market consolidations by large and small contractors.

Last year witnessed a variety of transactions impacting our client base: CACI acquired L-3’s National Security Solutions business unit for $550 million; Harris Corporation acquired Exelis, Inc. for $4.7 billion; Science Applications International Corporation (“SAIC”) acquired Scitor Corporation from Leonard Green Partners for $790 million; The Carlyle Group acquired Novetta Solutions from Arlington Capital; and Computer Sciences Corporation (“CSC”) split its public sector business from its commercial and international business (the public sector business then merged with SRA International to form CSRA, Inc. the largest professional services firm to the U.S. government). This consolidation of our client base could lead to less demand for our services.

Due to the competitive process to obtain contracts and an increase in bid protests, we may be unable to achieve or sustain revenue growth and profitability.

We expect that a majority of the business that we seek in the foreseeable future will be under service agreements awarded to our clients through a competitive bidding process, including Indefinite Delivery/Indefinite Quantity (“ID/IQ”) contracts. The U.S. government has increasingly relied on contracts that are subject to a competitive bidding process, which has resulted in greater competition and increased pricing pressure. As a result, there is a tendency for it to place undue emphasis on low price over technical merit when selecting contractors. This in turn can result in the U.S. government contracts market attracting extremely low-priced competitors who see certain consulting products and services as mere “commodities” and price accordingly. Government contractors may decide that they can prepare their bid responses with internal resources and not engage outside organizations to assist this process.

The competitive bidding process involves substantial costs and a number of risks, including significant cost and managerial time to prepare bids and proposals for contracts that may not be awarded to our clients, and therefore puts our reputation at risk and may affect our future contracts with these clients, or that may be awarded but for which our customers do not receive meaningful task orders which might make them less likely to bid for additional task orders. For support contracts awarded to us, we also face the risk of inaccurately estimating the resources and costs that will be required to fulfill these engagements, which also could impact our reputation and the likelihood of getting additional engagements for capture and proposal support.

Our business is directly tied to the success of our government contracting clients, which are increasingly reliant on ID/IQ contracts. ID/IQ contracts are not firm orders for services, and we may generate limited or no revenue from these contracts which could adversely affect our operating performance.

ID/IQ contracts are typically awarded to multiple contractors, and the award of an ID/IQ contract does not represent a firm order for services. Generally, under an ID/IQ contract, the government is not obligated to order a minimum of services or supplies from its contractor, irrespective of the total estimated contract value. In effect, an ID/IQ award acts as a “hunting license,” permitting a contractor to bid on task orders issued under the ID/IQ contract, but not guaranteeing the award of individual task orders. Following an award under a multi-award ID/IQ program, the customer develops requirements for task orders that are competitively bid against all of the contract awardees. However, many contracts also permit the U.S. government to direct work to a specific contractor. Our clients may not win new task orders under these contracts for various reasons, including price, past performance and responsiveness, among others. We support our government contractor clients both when they compete to get the umbrella ID/IQ contract and subsequently when we help the winners of those contracts compete for individual tasks. The proposals for both of these stages can be relatively brief and require quick turn-arounds, thus potentially reducing some opportunities to be awarded significant turn-key engagements. While it is possible that the increased importance of winning the umbrella ID/IQ contract will prompt clients to hire outside firms to prepare their proposals, it is also likely that government contractors will decide to prepare ID/IQ proposals without the assistance from outside experts.

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Increased reliance on task order responses as the preferred method of proposal submission may significantly and adversely affect our future revenues, cash flow and financial results.

The U.S. government sometimes makes use of abbreviated (miniature) submissions to a solicitation by requiring a task order response rather than a full proposal, especially for ID/IQ contracts. Task Order Responses (TORs) as a rule tend to be relatively brief and have a short response period (often 10 days). These reduced page counts and shorter response times reduce the need for our traditional services, and if TORs become more of a standard for the U.S. government, this could adversely impact our operations, cash flow and financial results.

Our business could be negatively impacted by cyber and other security threats or disruptions.

We face various cyber and other security threats, including attempts to gain unauthorized access to sensitive information and networks; insider threats; threats to the safety of our directors, officers and employees; threats to the security of our facilities and infrastructure; and threats from terrorist acts or other acts of aggression. Our clients and partners (including subcontractors and joint ventures) face similar threats. Although we utilize various procedures and controls to monitor and mitigate the risk of these threats, there can be no assurance that these procedures and controls will be sufficient. These threats could lead to losses of sensitive information or capabilities, harm to personnel, infrastructure or products, and/or damage to our reputation as well as our partners’ ability to perform.

Cyber threats are evolving and include, but are not limited to, malicious software, destructive malware, attempts to gain unauthorized access to data, disruption or denial of service attacks, and other electronic security breaches that could lead to disruptions in mission critical systems, unauthorized release of confidential, personal or otherwise protected information (ours or that of our employees, customers or partners), and corruption of data, networks or systems. In addition, we could be impacted by cyber threats or other disruptions or vulnerabilities found in products we use or in our partners’ or customers’ systems that are used in connection with our business. These threats, if not prevented or effectively mitigated, could damage our reputation, require remedial actions and lead to loss of business, regulatory actions, potential liability and financial losses.

We provide services to various customers (commercial and occasionally government) who also face cyber threats. Our services may themselves be subject to cyber threats and/or they may not be able to detect or deter threats, or effectively to mitigate resulting losses. These losses could adversely affect our customers and our Company.

The impact of these factors is difficult to predict, but one or more of them could result in the loss of information or capabilities, harm to individuals or property, damage to our reputation, loss of business, regulatory actions and potential liability, any one of which could have a material adverse effect on our financial position, results of operations and/or cash flows.

Although we have identified general criteria and guidelines that we believe are important in evaluating prospective target businesses for merger or acquisition, we may enter into a potential business combination with a target that does not meet such criteria and guidelines, and as a result, the target business with which we enter into a potential business combination may not have attributes entirely consistent with our general criteria and guidelines.

Although we have identified general criteria and guidelines for evaluating prospective target businesses for merger or acquisition, it is possible that a target business with which we enter into a potential business combination will not have all of these positive attributes. If we complete a potential business combination with a target that does not meet some or all of these guidelines, such combination may not be as successful as a combination with a business that does meet all of our general criteria and guidelines.

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Resources could be wasted in researching acquisitions that are not completed, which could materially adversely affect subsequent attempts to locate and acquire or merge with another business.

We anticipate that the investigation of each specific target business and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require substantial management time and attention and substantial costs for accountants, attorneys and others. If we decide not to complete a potential business combination, the costs incurred up to that point for the proposed transaction likely would not be recoverable. Furthermore, if we reach an agreement relating to a specific target business, we may fail to complete a potential business combination for any number of reasons including those beyond our control. Any such event will result in a loss to us of the related costs incurred which could materially adversely affect subsequent attempts to locate and acquire or merge with another business.

We may seek investment opportunities in industries outside of our management’s area of expertise.

We intend to focus on target businesses in industries that complement our management team’s backgrounds including consulting for the procurement of government contracts. However, we may also pursue acquisition opportunities in other markets. Although our management will endeavor to evaluate the risks inherent in any particular business combination candidate, we cannot assure you that we will adequately ascertain or assess all of the significant risk factors. We also cannot assure you that an investment in our Units will not ultimately prove to be less favorable to investors in this offering than a direct investment, if an opportunity were available, in a business combination candidate.

Our strategy of growth through acquisitions could harm our business.

It is our intent to continue to grow through strategic acquisitions. Successful integration of newly acquired target companies may place a significant burden on our management and internal resources. The diversion of management’s attention and any difficulties encountered in the transition and integration processes could harm our business, financial condition and operating results. In addition, we may be unable to execute our acquisition strategy, resulting in under-utilized resources and a failure to achieve anticipated growth. Our operating results and financial condition will be adversely affected if we are unable to achieve, or achieve on a timely basis, cost savings or revenue opportunities from any future acquisitions, or incur unforeseen costs and expenses or experience unexpected operating difficulties from the integration of acquired businesses.

Our ability to successfully effect a potential business combination and to be successful thereafter will be totally dependent upon the efforts of our key personnel, some of whom may join us following a potential business combination. The loss of key personnel could negatively impact the operations and profitability of our post-combination business.

Our ability to successfully effect business combinations is dependent upon the efforts of our key personnel. The role of our key personnel in the target business, however, cannot presently be ascertained. Although some of our key personnel may remain with the target business in senior management or advisory positions following our business combination, it is likely that some or all of the management of the target business will remain in place. While we intend to closely scrutinize any individuals we engage after our business combination, we cannot assure you that our assessment of these individuals will prove to be correct. These individuals may be unfamiliar with the requirements of operating a company regulated by the SEC, which could cause us to have to expend time and resources helping them become familiar with such requirements and take time away from oversight of our operations.

We may have a limited ability to assess the management of a prospective target business and, as a result, may effect a potential business combination with a target business whose management may not have the skills, qualifications or abilities to manage a growing company.

When evaluating the desirability of effecting a potential business combination with a prospective target business, our ability to assess the target business’s management may be limited due to a lack of time, resources or information. Our assessment of the capabilities of the target’s management, therefore, may prove to be incorrect and such management may lack the skills, qualifications or abilities we suspected. Should the target’s management not possess the skills, qualifications or abilities necessary to manage a growing company, the operations and profitability of the post-combination business may be negatively impacted. Accordingly, any stockholders who choose to remain stockholders following the business combination could suffer a reduction in the value of their shares. The officers and directors of an acquisition candidate may resign upon completion of a potential business combination. The departure of a potential business combination target’s key personnel could negatively impact the operations and profitability of our post-combination business. The role of an acquisition candidate’s key personnel upon the completion of a potential business combination cannot be ascertained at this time.

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We may issue additional common or preferred shares to complete business combinations or under an employee award plan after completion of business combinations, any one of which would dilute the interest of our stockholders and likely present other risks.

Our Certificate of Incorporation authorizes the issuance of up to 32,500,000 shares – 25,000,000 shares of common stock, par value $0.0001 per share, and 7,500,000 shares of preferred stock, par value $0.0001 per share. Immediately after this offering (assuming the Maximum Offering Amount is raised), there will be 15,769,841 authorized but unissued shares of common stock available for issuance, which amount takes into account shares reserved for issuance (a) upon conversion of outstanding Series A Preferred Stock, (b) upon the exercise of outstanding Unit and Underwriter Warrants and (c) under the Company’s equity award plan. Immediately after this offering, there will be (x) if the Company receives subscriptions for the minimum number of shares available in the offering, 300,000 and (y) if the Company receives subscriptions for the maximum number of shares available in the offering 3,000,000 shares of preferred stock issued and outstanding. We may issue a substantial number of additional shares of common or preferred stock to complete a proposed business combination. The issuance of additional shares of common or preferred stock:

We may issue additional notes or other debt securities, or otherwise incur substantial additional debt, to complete a business combination, which may adversely affect our leverage and financial condition and thus negatively impact the value of our stockholders’ investment in us.

The anticipated cash needs of our business could change significantly as we pursue and complete business acquisitions, if our business plans change, if economic conditions change from those currently prevailing or from those now anticipated, or if other unexpected circumstances arise that may have a material effect on the cash flow or profitability of our business. If we require additional capital resources to grow our business, either internally or through acquisition, we may seek to secure debt financing. We may not be able to obtain financing arrangements in amounts or on terms acceptable to us in the future.

Although we have no commitments as of the date of this offering circular to issue any additional notes or other debt securities, or to otherwise incur additional outstanding debt, we may choose to incur substantial debt to complete a business combination. The incurrence of debt could have a variety of negative effects, including:

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We may attempt to simultaneously complete business combinations with multiple prospective targets, which may hinder our ability to complete a business combination and give rise to increased costs and risks that could negatively impact our operations and profitability.

If we attempt to simultaneously acquire several businesses that are owned by different sellers, we may need for each of such sellers to agree that our purchase of its business is contingent on the simultaneous closings of the other business combinations. With multiple business combinations, we could also face additional risks, including additional burdens and costs with respect to possible multiple negotiations and due diligence investigations (if there are multiple sellers) and the additional risks associated with the subsequent assimilation of the operations and services or products of the acquired companies in a single operating business. If we are unable to adequately address these risks, it could negatively impact the Company’s profitability and results of operations.

Risks Related to the Investment in our Securities

The ownership of our common stock is concentrated among existing executive officers and directors.

Upon the sale of all of the shares offered in this offering, our executive officers and directors will continue to own beneficially, in the aggregate, a vast majority of the outstanding shares of our common stock. As a result, they will be able to exercise a significant level of control over all matters requiring shareholder approval, including the election of directors, amendments to our Certificate of Incorporation, and approval of significant corporate transactions. This control could have the effect of delaying or preventing a change of control of the Company or changes in management and will make the approval of certain transactions difficult or impossible without the support of these stockholders.

Holders of our Series A Preferred Stock will have limited voting rights.

Except with respect to certain material changes in the terms of the Series A Preferred Stock and certain other matters and except as may be required by Delaware law, holders of Series A Preferred Stock will have no voting rights unless and until such Series A Preferred Stock is converted into our common stock. You will have no right to vote for any members of our Board of Directors unless and until such Series A Preferred Stock you hold is converted into our common stock.

Terms of subsequent financings may adversely impact your investment.

We may have to engage in common equity, preferred stock or debt financing in the future, as a result of which our stockholders could suffer significant dilution. Your rights and the value of your investment in Units could be reduced. Interest on debt securities could increase costs and negatively impact operating results. Preferred stock could be issued in series from time to time with such designation, rights, preferences, and limitations as are needed to raise capital. The terms of preferred stock could be more advantageous to those investors than to the holders of common stock. In addition, if we need to raise more equity capital from the sale of common stock, institutional or other investors may negotiate terms at least as, and possibly more, favorable than the terms of your investment. Shares of common stock which we sell could be sold into any market which develops, which could adversely affect the market price.

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If our Series A Preferred Stock is converted into common stock, these converting stockholders will have significant voting power, and they will have the ability to exert substantial influence over matters requiring stockholder approval.

The Series A Preferred stockholders may convert their shares of Series A Preferred Stock at any time after the third anniversary of the Qualification Date into shares of our common stock. If all of our Series A Preferred Stock is converted into common stock (assuming the Maximum Offering Amount is raised), the shares issued upon this conversion will total approximately 25.5% of our outstanding common stock. Therefore, although these stockholders may not acquire majority control upon conversion of their Series A Preferred Stock, if these distinct stockholders were to act together, they will have the ability to exert substantial influence over all matters requiring approval of our stockholders, including the election and removal of directors, the approval of mergers or other business combinations, and other significant corporate actions. This ability to influence the Company’s affairs might be disadvantageous to our other stockholders.

Provisions in our Certificate of Incorporation and Bylaws and Delaware law could delay or discourage a takeover and could adversely affect the price of our common stock.

Our Board of Directors has the authority to issue 7,500,000 shares of preferred stock, and to determine the price, rights, preferences, privileges and restrictions, including voting rights, of those shares without any further vote or action by holders of our common stock. If additional preferred stock is issued, the voting and other rights of the holders of our common stock may be subject to, and may be adversely affected by, the rights of the holders of our preferred stock. The issuance of preferred stock may have the effect of delaying or preventing a change of control of the Company that could have been at a premium price to our stockholders.

Certain provisions of our Certificate of Incorporation and Bylaws could discourage potential takeover attempts and make stockholders’ attempts to change management difficult. Our Board of Directors has the authority to impose various procedural and other requirements that could make it more difficult for our stockholders to effect certain corporate actions.

In addition, certain provisions of Delaware law could have the effect of delaying or preventing a change of control of the Company. Section 203 of the Delaware General Corporation Law, for example, prohibits a Delaware corporation from engaging in any business combination with any interested stockholder for a period of three years from the date the person became an interested stockholder unless certain conditions are met.

The cumulative feature of the Series A Preferred Stock will create obligations for the Company.

If any dividends payable with respect to the Series A Preferred Stock are not paid when due, the dividends will accrue, even in cases when the Company is financially unable to pay such dividends. As dividends in arrears accrue they can become a significant obligation to the Company which will accumulate and compound at the rate of seven percent (7%) per annum. Any accumulation of dividends can become a financial burden that the Company is obligated to pay in full. Such accumulations if not paid down on a regular basis can become an obligation that may delay or prevent the Company from using its cash to meet its obligations for operations, acquisitions by the Company and dividends on the Company’s common stock.

We do not expect to pay cash dividends on common stock in the foreseeable future.

We have not declared or paid cash or other dividends on our common stock and do not expect to pay cash dividends for the foreseeable future. Our ability to pay dividends on our common stock is also restricted by the terms of our Series A Preferred Stock which require us to pay full cumulative dividends on the Series A Preferred Stock before making any dividend payment on our common stock. Generally, the Series A Preferred Stock is entitled to quarterly dividends of $0.175 (7% per annum) per share. We currently intend to retain all future earnings for use in the operation of our business and to fund future growth. Any future cash dividends will depend upon our results of operations, financial conditions, cash requirements, the availability of a surplus and other factors.

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There currently is no public trading market for our securities and an active market may not develop or, if developed, be sustained. If a public trading market does not develop, you may not be able to sell any of your securities.

There is currently no public trading market for our common stock, our preferred stock or our warrants, and an active market may not develop or be sustained. If an active public trading market for our securities does not develop or is not sustained, it may be difficult or impossible for you to resell your securities at any price. Even if a public market does develop, the market price could decline below the amount you paid for your securities.

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USE OF PROCEEDS

We estimate the net proceeds from the sale of Units by us in this offering, excluding the proceeds, if any, from the exercise of the warrants, after deducting the placement agent fees and estimated offering expenses payable by us, will be approximately $2,288,000 for the minimum offering or $26,806,600 for the maximum offering. We cannot predict when or if the warrants will be exercised, and it is possible that the warrants may expire and never be exercised. We intend to use the net proceeds from the sale of the Units offered by us in this offering to fund the Company’s organic growth and strategic acquisition of, and investments in, government contract service providers and for general corporate purposes.

Accordingly, although the use of proceeds are reasonable estimates, they are subject to change as the Company’s opportunities for acquisitions and operational expenses change from time-to-time we expect to use the net proceeds as follows:

Since this is a best efforts offering, if we are only able to sell $3,000,000, the minimum offering amount required to be raised in order to continue with the offering, we expect to use the net proceeds from the sale to fund the Company’s strategic acquisition of, and investments in, government contract service providers and government contractors, and for general corporate purposes. To the extent that we sell more than 300,000 Units, the additional net proceeds will be used primarily to fund the Company’s strategic acquisition of, and investments in, government contract service providers with the remainder being used for general corporate purposes. These general corporate purposes may include capital expenditures and additions to working capital.

The foregoing information is an estimate based on our current business plan. We may find it necessary or advisable to re-allocate portions of the net proceeds reserved for one category to another, and we will have broad discretion in doing so. Pending these uses, we intend to invest the net proceeds of this offering in short-term, interest-bearing securities.

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BUSINESS

General

The Company was formed in March 2016 as a holding company for the purpose of creating or acquiring professional services companies that provide support to the government contracting (GovCon) industry. We formed the Company through a corporate reorganization of AOC Key Solutions, which, as a result, became a wholly owned subsidiary of the Company. We believe this structure will allow the Company to make acquisitions and raise capital in a more efficient manner.

The operations of the Company are currently conducted by and through its wholly owned subsidiary, AOC Key Solutions. AOC Key Solutions is an established business development and consulting firm that assists government contractors in winning government contracts. It also helps commercially focused firms gain entry into the government contracting market for the first time. Since commencing operations in 1983, AOC Key Solutions has assisted clients in winning over approximately $150 billion of government contract awards.

AOC Key Solutions was a division of American Operations Corporation before being spun off in 2008 and has been profitable since becoming an independent company in 2008.

The Company identifies winnable government contracts for clients and provides teaming support to help its clients identify qualified teaming opportunities from the Company’s large database of government contractors. Next, AOC Key Solutions helps its clients develop the strategy and plan to win contracts, implement and execute their strategy and plan, and prepare a compliant, compelling and winning proposal document. For more than 30 years AOC Key Solutions has provided market intelligence, proposal, capture, advisory and teaming support and other important services to Fortune 50 companies and small businesses alike. Since the 2008 spin-off, AOC Key Solutions’ cumulative client awards have exceeded $72 billion. For the year ended December 31, 2015, AOC Key Solutions generated over $9.6 million of revenue and net income of approximately $422,000. For the first quarter of 2016, AOC Key Solutions’ revenues were $3,432,766 as compared to $2,126,174 for the same period in 2015.

We seek to improve how the federal government and government contractors operate. For the former, KeyStone works to increase the efficiency and effectiveness of government on behalf of the taxpayer. For the latter, KeyStone assists companies who are in, or seek to enter, the lucrative government contracting market. KeyStone helps contractors seeking to achieve two types of results: positive societal contributions; and success measured by our clients’ profits and return on investment.

Members of KeyStone’s management team have extensive experience in the government contracting sector and collective breadth of experience managing organic growth as well as growth through acquisitions and integration. In connection with the formation of the Company as a platform for expansion in the GovCon sector, Robert A. Berman joined the Company as Chief Executive Officer and became an investor in the Company. See “Interest of Management and Others in Certain Transactions.” Prior to investing in the Company, Mr. Berman executed a successful growth acquisition strategy by building a $6 million in annual revenue, 50-employee hospitality company into the hospitality sector’s premiere service provider. In just three years, the hospitality company grew by more than 3,000 employees and $280 million in revenues with offices around the globe by acquiring well-run synergistic companies. In addition to successfully operating and growing businesses through acquisitions, Mr. Berman has extensive capital market experience in both the public and private sectors. Mr. James McCarthy is the Company’s Chairman and his career spans over 30 years of marketing strategy creation, proposal development, and oral presentation coaching to contractors seeking to expand their market shares or to enter the government contracts market sector. Dr. Richard Nathan, our Chief Operating Officer, President and Member of the Board, brings over 45 years of corporate management, program management, and business and proposal development experience. He has led large management and operation contracts valued at more than a billion dollars and managed service and technical contracts for DOE, DoD, DHS, NASA, EPA, and state government. We believe that the combined expertise of Mr. Berman, Mr. McCarthy and Dr. Nathan will help to identify and evaluate key strategic acquisitions as we pursue our growth strategy.

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KeyStone’s strategy includes diversifying its services offering within the market it knows well gaining a critical mass of sustainable revenues. We intend to use the net proceeds of this offering to fund organic growth and to add both vertical and horizontal capabilities by acquiring GovCon service providers through a disciplined acquisition strategy. We intend to foster communication and knowledge transfer by constructing a “bridge” across which efficiencies and best practices will be shared between the private sector and government, benefiting government, industry and the taxpayer.

Our Mission Statement

Through acquisitions and integration, KeyStone intends to provide a “one-stop,” full suite of services and products to the Government Contracting Market, making us a cohesive force in an extremely fragmented industry. KeyStone will diversify its services within the market it knows well in an effort to gain a critical mass of sustainable revenues.

Background

On March 15, 2016, the Company entered into a merger agreement (the “Merger Agreement”) with KCS Merger Sub, Inc. (“Merger Sub”), a wholly owned subsidiary of the Company, and AOC Key Solutions. Pursuant to the Merger Agreement, on March 15, 2016, Merger Sub was merged with and into AOC Key Solutions, with AOC Key Solutions becoming a wholly owned subsidiary of the Company.

Our Process

AOC Key Solutions works with clients across nearly all federal agencies and market sectors, and specializes in information technology, defense and homeland security, healthcare, energy and environment, infrastructure support services, design/build, and new and emerging markets. Our full service business development process is shown below.

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Distinctive Characteristics

The United States Government purchases between $450 billion and $500 billion in products and services each year from the private sector, making it the single largest customer on the planet. As policy evolves, KeyStone evolves with government keeping itself and its clients ahead of the curve.

The following characteristics have contributed to our success and, we believe will have a material and positive impact on the growth anticipated from KeyStone’s strategy:

Win Record. Each year we list, in our Billion Dollar Club, the major contract awards that we have helped our clients to win. Our 2015 members are shown below. From 2011 through 2015 we averaged $9 billion annually in government contract award wins for our clients.

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Ability to Provide Value to the Influx of Small Businesses. Recent data suggest that the Small Business Administration helps to start approximately 14,200 small businesses per year. We believe that a number of these new entities intend to enter the GovCon sector and may be potential KeyStone clients. We have a toolbox of services and products tailored to help new businesses gain entry into this lucrative market.

Access to Government and Industry Decision-Makers. We support our clients in seeking work from a majority of federal agencies. We know well the executive and working-level staff at all of our government contractor clients, and they are aware of the value of our services. As a result, we have key market intelligence that allows us to recommend teaming arrangements that have strategic value and are designed to increase the likelihood of our client winning a contract.

Government Contracting Weekly. This is a TV show we produced and are transitioning to the Internet to broaden its exposure. This show was previously broadcast for several years on CBS in Washington, DC and continues to open doors to us. Government Contracting Weekly also provides an open and transparent forum to discuss the many issues relevant to both the government and contractors.

Expertise and Depth of Resources. We employ over 25 in-house proposal development specialists backed by approximately 300 contract technical and management subject matter experts. Many of our employees maintain federal security clearances up to and including Top Secret.

Client Base of World Class Companies. Our client base has grown to over 450 companies, ranging from Fortune 50 firms to small and minority-owned businesses and start-ups. Over the Company’s 33-year history, we have supported a majority of the top-100 federal contractors, based on revenue.

Client Base Continues to Expand. Even with the size of our client base, the total number of contractors registered in the government’s System for Acquisition Management (SAM) exceeds 413,000, the majority of whom we do not currently serve.

Successful Long-Term Performance is Due to Our Sound and Proven Business Model. We have been in business for over 33 years with continuity of management from the beginning. Our proprietary processes and tools have afforded us the opportunity to train the next generation of talent.

Dedication to Principle-Centered Winning (PCW). We create value for our clients by focusing on winning— but winning the right way, not just any way. PCW is a code of conduct, a set of ethical principles and rules; based on service, sacrifice where necessary, and always seeking to act in the interests of our clients. We also seek to act in the best interests of the Federal Government. In part, this is because we are selective about who we take on as clients – only those companies which we believe will be able to successfully perform to government requirements. Thus, we play the important role of providing the right capabilities and the right price to the government entity with which our client is contracting.

State-of-the-Art Proposal Facility. For those clients who prefer an off-site proposal venue, we have a modern, secure and well-equipped proposal facility capable of simultaneously hosting multiple client engagements.

Our Network of Strategic Relationships. To increase our access to senior executives in government and industry, we have created a wide network of strategic relationships with organizations that include the George Washington University, Virginia Science and Technology Campus, Technology Accelerator, George Mason University Procurement and Technical Assistance Center, Arbinger Institute, Coalition for Government Procurement and the Veterans Institute for Procurement. It is through these relationships that we are able to:

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Our Services

We believe clients value our services for four primary reasons. First, we offer a full suite of services for GovCon industry best practices allowing our clients to outsource their non-core competencies and focus on performing their contracts more efficiently. Second, many companies cannot maintain a large support infrastructure in-house and find it more cost effective to outsource. Third, our proprietary tools help clients maintain a healthy pipeline. And fourth, our win record supports their top-line revenue growth.

Clients engage us for a variety of important reasons when they:

The services we provide include:

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Our Clients

KeyStone works with many highly-regarded government contractors, including start-ups, small and medium sized businesses, and large defense contractors and integrators. We have supported brand name firms such as Lockheed Martin, Northrop Grumman, Boeing, Raytheon, General Dynamics, Honeywell, BAE, Siemens, CSC, SAIC/Leidos, HP, CACI, AT&T, Booz Allen Hamilton, IBM, Oshkosh, Sodexo and others. Over the Company’s 33-year history, we have supported a majority of the top-100 federal contractors (by revenue). We provide our clients with quality value-added service through efficiencies of scale, productivity enhancements and expertise.

Our potential GovCon clients are the various levels of government and those companies that support them. They consist of two groups:

The Private Sector Group consists of those contractors and service companies that serve and support the various levels of Government. Contractors include firms that offer an array of important products and services. These are provided in the areas of national security, defense, homeland security, intelligence, information technology, energy, environment, healthcare, transportation, education, operations and maintenance, infrastructure, logistics, and others. Examples of service companies include law firms, accounting firms, banks and financial institutions, insurance companies, staffing and recruiting firms, media companies, market research, public relations houses, and all manner of consulting firms dedicated to supporting the taxpayer at every level of government.

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The Public Sector Group is comprised of the government entities or agencies of the United States including those at the federal, state and municipal levels.

Business Development

In the GovCon market, business development is tailored and scaled to meet the opportunity and the players associated with that opportunity. Business development is primarily carried out by our team of full-time business developers. To promote our business, our officers and employees take leadership positions in key GovCon industry organizations including industry trade groups and associations, chambers of commerce, veterans organizations, and civic and community organizations. Our leadership routinely engages in writing blogs, newsletters, white papers and thought pieces and developing podcasts and webinars for the GovCon industry on various GovCon subjects. We further this educational and brand recognition process by offering seminars and training, participating on roundtables and presenting at industry conferences. We also use several technology platforms to monitor industry developments and identify targets of contract opportunity for our clients. Because of our breadth of industry contacts and relationships we frequently facilitate and help create teams of multiple companies to pursue targets of opportunity. On each occasion, we become accessible to potential new clients by brokering the relationships.

The GovCon Market Defined

The GovCon market is defined as:

“The economic system through which different companies compete with each other to sell their services

or products to the Government.”

A government contractor is an organization — either for profit or non-profit — that produces goods or services under a contract for the government. The GovCon market functions at the intersection of government and private industry.

Size of GovCon Market—Leading Market Metrics

The GovCon market is massive. The US Federal Government is estimated to procure between $450 billion and $500 billion annually for products and services from the private sector — making it the world’s largest customer. KeyStone is positioned to become a leading provider of outsourced services to government contractors.

Government Contracting Sector Outlook

We believe the outlook for the GovCon sector for GFY 2016 (the federal government fiscal year starts on October 1 and ends on September 30) is promising. Congress has repealed sequestration and late last year a potential government shutdown was averted with pledges to avoid future disruptions. $88 billion of defense cuts from sequestration were restored. An omnibus-spending bill, ending the need for stopgap funding, was passed by Congress and signed into law. The government relaxed certain restrictions affecting spending ceilings and budget deficits, and a new House Speaker was elected, giving rise to hopes of stemming the partisan tide on the Hill. The shortage in the government’s acquisition workforce received attention accompanied by the recognition that training for government contracting personnel is a national priority.

Industry has also bounced back. The number of undercapitalized, unprofitable, and unstable companies was reduced—leaving a smaller, yet more robust contractor base. The volume and frequency of RFPs is increasing, outdated and ill-conceived programs have been eliminated in favor of higher priority programs and Low Price Technically Acceptable (LPTA) is more and more falling into disfavor.

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We believe the following indicators suggest a restoration of normalcy in the market:

We believe that GovCon’s future appears bright. The following chart provides a recap of federal government spending, demonstrating the size and scope of the GovCon market.

Source: USAspending.gov

Our Growth Strategy

KeyStone intends to bring together in one platform many of the products, services, and expertise used by both the public and private sector groups in the GovCon market. Our intent is to set up a structure of “cross pollination” and “cross selling” among all companies throughout the platform. This gives us a strong marketing tool which we believe will help us achieve our vision. The net proceeds from this offering will enable KeyStone to pursue this strategy.

KeyStone intends to acquire companies that provide a wide range of complementary services as described below. KeyStone’s acquisition strategy is to buy well-run profitable businesses, like AOC Key Solutions, focusing on top-line revenues to achieve critical mass while concurrently leveraging our platform to create economies of scale and best practices. Our strategy targets companies that provide both vertical and horizontal integrated services.

A vertical is a company that provides products and services within the GovCon market that are compatible and synergistic, and supplement those currently provided by KeyStone. Through strategic acquisitions of verticals, our plan is to be the preeminent source for many of the services and products required to provide end-to-end support to government contractors.

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GovCon verticals under consideration include companies engaged in staffing and recruiting, back office support services, information technology support, operations and contract performance, opportunity identification tracking and pipeline management services, teaming solutions, training and business development, price-to-win strategies, hardware and product offerings, traditional and social media services, M&A-related products and services, market research, specialized insurance, government executive recruiting, event planning and concierge services and logistics. We may consider investing in more than one company in any vertical category if it is a strategic fit.

A horizontal is a company that provides products and services that competes in whole or in part with AOC Key Solutions which operates in a highly-fragmented market. No single firm is dominant in the market and none has a large market share. As part of our growth strategy, we will seek to acquire firms that are qualified, meet our standards, and offer a supportable business case.

In the past the Company has been presented with numerous opportunities where a potential client has asked the Company to go at risk in some fashion in pursuit of a particular contract opportunity. In addition to our acquisition strategy, we may use a portion of the net proceeds from this offering to make strategic investments in targeted GovCon entities.

The likely recipients of any direct investments are high potential/high performing companies, primarily, but not exclusively, small businesses. Candidates could also include firms whose owners are executing a growth or exit strategy and are positioning themselves for an eventual liquidity event.

These types of investments may be deployed in certain sectors of the GovCon market including but not limited to: information technology; health care; national defense; homeland security; energy and the environment; maintenance and operation of government facilities and infrastructure; architecture, engineering, and construction; transportation; law enforcement; and new and emerging market sectors.

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We believe our existing facilities are adequate to meet our current needs and we can renew our existing leases or obtain alternate space on terms that would not have a material impact on our financial results.

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SUMMARY HISTORICAL AND PRO FORMA FINANCIAL INFORMATION

Summary Historical Financial Data

The following summary historical and pro forma financial data should be read in conjunction with: (a) “Management’s Discussion and Analysis of Financial Condition and Results of Operations”; (b) the AOC Key Solutions audited financial statements and accompanying notes for the years ended December 31, 2015 and 2014; (c) the AOC Key Solutions unaudited financial statements for the periods ended March 31, 2016 and 2015; and (d) the KeyStone Solutions unaudited consolidated financial statements and accompanying notes for the period ended March 31, 2016. The summary financial data in this section are not intended to replace the respective financial statements and related notes included in the “Financial Statements” section of this offering circular.

The selected statements of income data for the years ended December 31, 2015 and 2014 and the selected balance sheets data as of December 31, 2015 and 2014, are derived from the AOC Key Solutions audited financial statements for the years ended December 31, 2015 and 2014, appearing in the “Financial Statements” section of this offering circular. The selected statements of income data for the three months ended March 31, 2016 and 2015, and the selected balance sheets data as of March 31, 2016 and 2015, are derived from the AOC Key Solutions unaudited financial statements for the periods ended March 31, 2016 and 2015, appearing in the “Financial Statements” section of this offering circular.

The selected statements of income consolidated data for the period of March 15 – March 31, 2016 and the selected balance sheets data as of March 31, 2016 is derived from the KeyStone Solutions unaudited consolidated financial statements for the 17-day period ended March 31, 2016 appearing in the “Financial Statements” section of this offering circular.

The unaudited financial statements have been prepared on a basis consistent with our audited financial statements included in this offering circular. Our historical results are not necessarily indicative of the results that may be expected in the future and the results for any interim period are not necessarily indicative of the results that may be expected for the full fiscal year.

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Pro Forma Financial Data

The following unaudited pro forma combined financial statements are based on the KeyStone Solutions unaudited consolidated financial statements and accompanying notes for the period ended March 31, 2016, which cover the period of March 15 – March 31, 2016, and the AOC Key Solutions unaudited financial statements for the periods ended March 31, 2016 and 2015, as adjusted to give effect to the Reorganization. The unaudited pro forma combined statements of income for the three months ended March 31, 2016 give effect to the acquisition of AOC Key Solutions as if it had occurred on January 1, 2016. The unaudited pro forma combined balance sheets as of March 31, 2016 gives effect to the Reorganization as if it had occurred on March 31, 2016.

The assumptions and estimates underlying the unaudited adjustments to the pro forma condensed combined financial statements are described in the accompanying notes in this section, which should be read together with the KeyStone Solutions unaudited consolidated financial statements and accompanying notes for the period ended March 31, 2016.

The pro forma combined financial statements do not necessarily reflect what the combined Company’s financial condition or results of operations would have been had the Reorganization occurred on the dates indicated. They also may not be useful in predicting the future financial condition and results of operations of the combined Company. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors.

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See accompanying Notes to the Unaudited Pro Forma Condensed Combined Financial Information.

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See accompanying Notes to the Unaudited Pro Forma Condensed Combined Financial Information .

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See accompanying Notes to the Unaudited Pro Forma Condensed Combined Financial Information.

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Notes to the Unaudited Pro Forma Condensed Combined Financial Information

Note 1 – Basis of presentation

KeyStone Solutions interim unaudited consolidated financial statements have been adjusted in the pro forma condensed combined financial statements to give effect to pro forma events that are (1) directly attributable to the Reorganization, (2) factually supportable and (3) with respect to the pro forma condensed combined statement of operations, expected to have a continuing impact on the combined results following the business combination.

The pro forma combined financial statements do not necessarily reflect what the combined Company’s financial condition or results of operations would have been had the Reorganization occurred on the dates indicated. They also may not be useful in predicting the future financial condition and results of operations of the combined Company. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors. The combined pro forma financial information does not reflect the realization of any expected cost savings or other synergies from the Reorganization and other possible cost savings initiatives following the completion of the Reorganization.

Note 2 – Pro forma adjustments

The pro forma adjustments are based on our preliminary estimates and assumptions that are subject to change. The following adjustments have been reflected in the unaudited pro forma condensed combined financial information:

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MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATION

General

KeyStone Solutions was formed on March 15, 2016 as a holding company for the purpose of creating or acquiring professional services companies that provide support to the government contracting (GovCon) industry. While KeyStone Solutions has no direct current business operations, our significant assets are our cash and equity interest in our principal operating subsidiary, AOC Key Solutions.

AOC Key Solutions is an established provider of outsourced services to the GovCon market. AOC Key Solutions helps government contractors target and win government contracts. For more than 30 years AOC Key Solutions has provided market intelligence, proposal, capture, advisory and teaming support and other important services to Fortune 50 companies and small businesses alike. We intend to use the net proceeds of this offering to fund organic growth and add both vertical and horizontal capabilities by acquiring GovCon service providers through a market-focused and disciplined strategy. Our efforts to identify prospective target businesses will not be limited to any geographic region or any particular sector of the GovCon support industry.

We are based in Chantilly, Virginia and have a satellite office in New Orleans, Louisiana. As of March 31, 2016 we had 28 employees and access to approximately 300 consultants.

We generate revenues from fees and reimbursable expenses for professional services usually billed on an hourly rate, time-and-materials (T&M) basis. Clients are typically invoiced on a monthly basis, with revenue recognized as the services are provided. In a few cases, we may enter into a fixed-fee engagement for our services. Fixed-fee engagements can be invoiced once for the entire job, or there could be several “progress” invoices for accomplishing various phases or reaching contractual milestones. T&M contracts represent over 95% of our client engagements. Revenues related to materials (mainly out-of-pocket expenses such as airfare, lodging and meals) required during an engagement generally are billed on a pass-through basis and do not include overhead, general and administrative and profit mark-ups and can be charged and reimbursed separately or as part of the overall fee arrangement. Time-and-materials engagements do not provide us with a high degree of predictability of future period performance.

Our financial results are impacted principally by the:

The number of quarterly business days is affected by the number of vacation days taken by our staff and consultants, as well as the number of holidays in each quarter. We typically have fewer business work days available in the fourth quarter of the year, which can impact revenues during that period. Our staff utilization rate can also be affected by seasonal variations in the demand for our services from our clients. Our revenues have historically been weighted slightly toward the second and third calendar quarters, with the fourth quarter generally experiencing the least amount of revenue. Our earnings may trend with revenue seasonality and results for any quarter are not necessarily indicative of the results that may be achieved for a full fiscal year.

Unexpected changes in the demand for our services can result in significant variations in utilization and revenues, and present a challenge to optimal hiring, staffing and use of consultants. The volume of work performed can vary from period to period.

We anticipate an increasing demand for our services in 2016 as the volume of government spending increases and as our clients elect to outsource their bid and proposal activities. We believe the outlook for the GovCon sector for GFY 2016 (the federal government fiscal year starts on October 1 and ends on September 30) is promising. The volume and frequency of RFPs is increasing, outdated and ill-conceived programs have been eliminated in favor of higher priority programs and Low Price Technically Acceptable (LPTA) contracts are increasingly falling into disfavor. We have seen a growth in AOC Key Solutions’ comparable unaudited year-over-year revenue for the period ended March 31, 2016. In addition, AOC Key Solutions’ backlog of work is approximately 21% greater as of March 31, 2016 when compared to March 31, 2015.

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Operating Results

Since KeyStone Solutions was not formed until March 2016, we are presenting three reviews of operating results:

Comparison of the Three Months Ended March 31, 2016 and 2015 (Unaudited) – AOC Key Solutions Only

Since the Company was formed on March 15, 2016, a comparison of the unaudited financial results for the three months ended March 31, 2016 and 2015 is provided below for AOC Key Solutions in order to provide a comparative review of the Company’s only wholly owned operating subsidiary.

The interim period comparison for the first quarters of 2016 and 2015 was not adjusted for a difference in period-end closing dates. Prior to 2016, AOC Key Solutions used a first quarter end date that coincided with its billing and payroll quarter end date of March 27, 2015. In 2016, AOC Key Solutions changed its quarterly ended dates to coincide with the calendar end of each quarter. The number of days of comparison between the first quarters of 2016 and 2015 differs by two business days. We have determined that the absence of accruing for the two business days does not have a material effect on the financial statement presentation because the majority of AOC Key Solutions’ expenses are directly associated with AOC Key Solutions’ revenue.

The unaudited results for the periods shown below should be reviewed in conjunction with the financial statements included elsewhere in this offering circular.

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Revenue

AOC Key Solutions’ revenue for the first quarter of 2016 increased by $1,306,592, or 61.5%, to $3,432,766 compared to $2,126,174 in the comparable period in 2015. This increase was primarily due to an increase in demand by clients for our services as a result of the federal government procurement process putting more contracts out for bid.

Operating Costs and Expenses

AOC Key Solutions’ most significant operating costs and expenses are described below:

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Total operating costs and expenses for the first quarter of 2016 increased by $776,423, or 34.9%, to $3,002,339 compared to $2,225,916 in the comparable period in 2015. This increase was mostly attributable to an increase in our cost of revenue which increased by $673,444, or 55.9%, compared to the prior year period primarily due to an increased use of consultants to support the additional demand for our services. Billable expenses increased by $55,129, or 144%, for the first quarter of 2016 as compared to the comparable period in 2015 due to additional client engagements requiring increased travel and other direct costs. Selling, general and administrative expenses increased by $49,770, or 5.2%, compared to the prior year period primarily due to increases in payroll related expenses and employee bonuses, offset by decreases in net rent and administrative expenses. Depreciation and amortization expense for the first quarter of 2016 decreased by $1,920, or 6.8%, for the comparable period in 2015.

Income Taxes

As presented below in the Critical Accounting Policies and Estimates discussion regarding income taxes, AOC Key Solutions elected to be taxed under the provisions of Subchapter S of the Internal Revenue Code. Under those provisions, AOC Key Solutions did not pay federal corporate income tax, and in most instances state income tax, on its taxable income. AOC Key Solutions revoked its S Corporation election upon the March 16, 2016 merger with the Company and is now subject to corporate income taxes.

The benefit from income taxes for the first quarter of 2016 is a $25,925 deferred tax provision.

The deferred tax assets on AOC Key Solutions’ balance sheets are due to temporary differences related primarily to depreciation of property and equipment and accrued deferred employee compensation. There was no valuation allowance for deferred tax assets at March 31, 2016, as management believes that the deferred tax assets will be realized through future operations.

The difference between the effective tax rate and federal statutory tax rate is due primarily to certain expenses which are not deductible for income tax purposes.

Net Income

Net income in the first quarter of 2016 increased by $556,094, or 557.5%, to $456,352 compared to a net loss of $99,742 for the comparable period in 2015. As a result, AOC Key Solutions’ net income margin increased from a loss of 4.7% in 2015 to a gain of 13.3% for the comparable period in 2016.

Stockholders’ Distributions

The Stockholders’ distributions for the first quarter of 2016 were $125,615 compared to $0 for the comparable period in 2015.

Cash Flow

We expect to finance our operations over the next twelve months primarily through existing cash flow and from the net proceeds of this offering, supplemented as necessary by funds available through our $1,000,000 revolving line of credit.

The unaudited net cash flows from operating, investing and financing activities for the periods below were as follows:

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Cash Used for Operating Activities

For the period ended March 31, 2016, net cash used for operating activities of $314,566 consisted of AOC Key Solutions’ net income of $456,352 adjusted by $26,263 of non-cash depreciation and amortization, and offset by $797,181 in cash used by changes in working capital including intercompany receivables from KeyStone Solution, accrued wages and leave, deferred taxes and other activities.

For the period ended March 31, 2015, net cash used for operating activities of $217,159 consisted of AOC Key Solutions’ net loss of $99,742 adjusted by $28,183 of non-cash depreciation and amortization, and offset by $117,417 in cash used by changes in working capital accrued wages and leave, and other activities.

Cash Used for Investing Activities

For the period ended March 31, 2016, net cash used for investing activities of $10,995 was entirely for the purchase of computer hardware and equipment.

For the period ended March 31, 2015, net cash used for investing activities of $41,749 was entirely for the purchase of computer hardware and equipment.

Cash Used for Financing Activities

For the period ended March 31, 2016, net cash used for financing activities of $125,615 was used for stockholders’ distributions.

For the period ended March 31, 2015, no cash was used for financing activities.

Comparison of Years Ended December 31, 2015 and 2014 – AOC Key Solutions Only

AOC Key Solutions is KeyStone’s historical operating entity that has been in business for over 30 years. A comparison for the years ended December 31, 2015 and 2014 is provided below. The audited results for the periods shown below should be reviewed in conjunction with the financial statements and notes included elsewhere in this Offering Circular.

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Revenue

Total revenue for 2015 decreased by $1,857,662, or 16.1%, compared to 2014 primarily due to a decrease in federal government spending and the resultant reduction in the number of contracts on which our clients bid.

Operating Costs and Expenses

Total operating costs and expenses for 2015 decreased by $2,164,642, or 19.0%, compared to 2014. As our expectations for revenue decreased during 2015, we reduced our use of consultants to maximize profitability. As a result, our cost of revenue during 2015 decreased by $1,115,133, or 17.4%, compared to 2014. Billable expenses decreased by $7,376, or 3.3%, in 2015 as compared to 2014 due to the net change of travel and other direct costs requirements of individual client engagements. Selling, general and administrate expenses decreased by $1,032,755, or 21.9%, in 2015 as compared to 2014 primarily due to a reduction in overhead expenses and also due to a reduction in fringe benefit expenses.

Depreciation and amortization expense in 2015 and 2014 were $70,268 and $79,646, respectively, representing a $9,378 or 11.8%, decrease. Depreciation expense is computed using the straight-line method over the estimated useful lives of assets.

We sublease part of our Chantilly, Virginia office space to a subtenant. To further reduce our overhead, we amended the sublease on April 7, 2015 to provide more space for the subtenant. As a result of these changes, rental income from this sublease arrangement increased from $101,522 in 2014 to $156,375 in 2015, thus helping to reduce our net rent.

Other Expenses

Total other expenses for 2015 decreased by $16, or 100%, compared to 2014 because we did not draw any funds from our credit facility.

Net Income

While we experienced a significant decrease in 2015 revenue, 2015 net income increased by $306,996, or 267.5%, due to operational changes and cost reductions. As a result, our net income margin increased from 1.0% in 2014 to 4.4% in 2015.

Stockholders’ Distributions

We reduced stockholders’ distributions from $319,909 in 2014 to $267,758 in 2015. This reduction coupled with the 2015 increase in net income resulted in the total shareholders’ equity balance increasing to $1,582,417 as of December 31, 2015, a $154,016 or a 10.8% increase over the balance as of December 31, 2014. Throughout its history and until March 15, 2016, AOC Key Solutions was an S corporation and the 2014 and 2015 financial statements reflect this status.

Cash Flow

We expect to finance our operations over the next twelve months primarily through existing cash flow and from the net proceeds of this offering, supplemented as temporarily necessary by funds available through our $1,000,000 revolving line of credit (See “Debt Issuances” below.) If we are unable to raise funds when required or on acceptable terms, we may have to significantly scale back, or discontinue, our intended acquisitions.

Net cash flow from operating, investing and financing activities for the periods below were as follows:

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Cash Provided By Operating Activities

For year ended December 31, 2015, net cash provided by operating activities of $260,659 consisted of our net income of $421,774 adjusted by $70,268 of non-cash depreciation and amortization, and offset by $231,383 in cash used by changes in working capital, accrued wages and leave, and other activities.

For year ended December 31, 2014, net cash provided by operating activities of $53,831 consisted of our net income of $114,778 adjusted by $79,646 of non-cash depreciation and amortization, and offset by $140,593 in cash used by changes in working capital, accrued wages and leave, and other activities.

Cash Used For Investing Activities

For year ended December 31, 2015, net cash used for investing activities of $57,343 was entirely for the purchase of computer hardware and equipment.

For year ended December 31, 2014, net cash used for investing activities of $32,070 was entirely for the purchase of computer hardware and equipment.

Cash Used For Financing Activities

For year ended December 31, 2015, net cash used for financing activities of $267,758 was used for stockholders’ distributions.

For year ended December 31, 2014, net cash used for financing activities of $319,909 was used for stockholders’ distributions.

Period Ended March 15 – 31, 2016 (Unaudited) – Consolidated KeyStone Solutions

On March 15, 2016, AOC Key Solutions, Inc. entered into a merger agreement (the “Merger Agreement”) with KeyStone Solutions and KCS Merger Sub, Inc. (“Merger Sub”), a wholly-owned subsidiary of KeyStone Solutions. Pursuant to the Merger Agreement, on March 15, 2016, Merger Sub was merged with and into AOC Key Solutions, and thus AOC Key Solutions became a wholly-owned subsidiary of KeyStone Solutions (the “Reorganization”). The operations of AOC Key Solutions have not changed, nor have any assets or operations transferred to either KeyStone Solutions or Merger Sub. The stockholders’ proportionate ownership of KeyStone Solutions remains the same as it was for AOC Key Solutions.

The unaudited consolidated results for the period shown below should be reviewed in conjunction with the KeyStone Solutions unaudited financial statements and notes for the period ended March 31, 2016 included elsewhere in this offering circular and only represent the consolidated operations from March 15, 2016 through March 31, 2016.

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Revenue

Consolidated revenue for the period of March 15-31 was $632,516 and is entirely attributable to the Company’s wholly-owned subsidiary, AOC Key Solutions. As discussed in the comparative review of AOC Key Solutions for the periods ending March 31, 2016 and 2015, AOC Key Solutions’ revenue increase period over period due to an increase in demand by clients for our services as a result of the federal government procurement process putting more contracts out for bid.

Operating Costs and Expenses

Total consolidated operating costs and expenses for the period of March 15-31, 2016 were $855,498. Operating cost attributable only to KeyStone at the holding company level during this period totaled $225,206 and were entirely for selling, general and administrative expenses primarily associated with professional and legal services in forming KeyStone and the merger which made AOC Key Solutions a subsidiary of KeyStone and preparing this offering circular.

We anticipate selling, general and administrative expenses increasing in future periods. These increases will include costs related to hiring of personnel and fees to outside consultants, lawyers and accountants as well as expenses related to maintaining compliance with applicable listing rules and SEC requirements, insurance, and investor relations activities. These expenses may further increase if we are required to comply with certain SEC reporting requirements from which we are currently exempt.

Other Expenses

Other expenses for the period of March 15-31, 2016 were for $1,815 of interest expense associated with the $500,000 Avon Road Partners, L.P. subordinated note.

Income Taxes

As presented below in the Critical Accounting Policies and Estimates discussion regarding Income Taxes, AOC Key Solutions elected to be taxed under the provision of Subchapter S of the Internal Revenue Code. Under those provisions, AOC Key Solutions did not pay federal corporate income tax, and in most instances state income tax, on its taxable income. AOC Key Solutions revoked its S Corporation election upon the March 15, 2016 merger with the Company and is now subject to corporate income taxes.

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Because of AOC Key Solutions’ S Corporation status in 2015, it did not have a provision for income taxes in 2015. The benefit from income taxes for the period of March 15-31, 2016 is a $25,925 deferred tax provision.

The deferred tax assets are due to temporary differences related primarily to depreciation of property and equipment and accrued deferred employee compensation. There was no valuation allowance for deferred tax assets at March 31, 2016, as management believes that the deferred tax assets will be realized through future operations.

The difference between the effective tax rate and federal statutory tax rate is due primarily to certain expenses which are not deductible for income tax purposes.

Net Income

Net loss in the period of March 15-31 was $198,872, or a loss of 31.4%.

Cash Flow

We expect to finance our operations over the next twelve months primarily through existing cash flow, the Avon Road Partners, L.P. subordinated note and from the net proceeds of this offering, supplemented as temporarily necessary by funds available through our $1,000,000 revolving line of credit.

The unaudited net cash flow from consolidated operating, investing and financing activities for the period below was as follows:

Cash Used For Operating Activities

For the period of March 15-31, 2016, net cash used for operating activities of $465,795 consisted of KeyStone’s net loss of $198,872 adjusted by $4,377 of non-cash depreciation and amortization, and offset by $271,300 in cash used by changes in working capital, accrued wages and leave, interest payable, deferred taxes and other activities.

Cash Used For Investing Activities

For the period of March 15-31, 2016, net cash used for investing activities of $10,995 was entirely for the purchase of computer hardware and equipment.

As of March 31, 2016, we did not have any material commitments for capital expenditures.

Cash Provided By Financing Activities

For the period of March 15-31, 2016, net cash provided by financing activities of $298,836 was the result of borrowing $500,000 through the Avon Partners, L.P. subordinated note offset by $201,164 used in connection with this offering.

Non-Cash Financing Activities

As more fully disclosed in Note 7 of the KeyStone Solutions, Inc. Notes to the Consolidated Financial Statements of March 31, 2016, the stockholders exchanged 100% of their outstanding shares of common stock in AOC Key Solutions for proportionate shares of KeyStone’s outstanding common stock.

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Lease Obligations

The Company leases office space in Chantilly, Virginia under the terms of a ten-year lease expiring October 31, 2019. The lease contains one five-year renewal option. The lease terms include an annual increase in base rent and expenses of 2.75%. The Company also leases office space in New Orleans, Louisiana under a three-year lease expiring May 31, 2018.

Rent expense was $124,349 for the period ended March 31, 2016.

Future obligations over the primary terms of the Company’s long-term lease expiring in 2019 are as follows:

The Company is the lessor in an agreement to sub-lease office space in Chantilly, Virginia under the terms of a seven-year lease, which expired October 31, 2014. The Company exercised the first and second renewal options on the lease. These options extend the lease until August 31, 2016. The lease terms include an annual increase in base rent and expenses of 2.90%. On April 7, 2015, the lease was amended to sub-lease more space to the subtenant and change the rental calculation. Rent income was $45,634 for the period ended March 31, 2016.

Liquidity and Capital Resources

We have funded our operations primarily through cash from operating activities of AOC Key Solutions. As of March 31, 2016 we had unrestricted cash and cash equivalents of $389,912 and working capital of $1,860,921.

As of December 31, 2015 we had unrestricted cash and cash equivalents of $567,865 and a working capital of $3,342,253, as compared to unrestricted cash and cash equivalents of $632,308 and working capital of $3,470,564 as of December 31, 2014.

Operating assets and liabilities consist primarily of receivables from billed and unbilled services, accounts payable, accrued expenses, and accrued payroll and related benefits. The volume of billings and timing of collections and payments affect these account balances.

Debt Issuances

AOC Key Solutions is a party to a business loan agreement (the “2015 Loan Agreement”) with Sandy Spring Bank (the “Lender”) dated as of September 25, 2015. The primary credit facility is an asset based revolving line of credit up to $1,000,000 which is due to mature on September 30, 2016. To secure our obligations under the 2015 Loan Agreement, AOC Key Solutions has granted to the Lender a security interest in its accounts receivable. The Lender is required to advance funds to AOC Key Solutions up to the lesser of (1) $1,000,000 or (2) eighty percent (80%) of the aggregate amount of all of AOC Key Solutions’ accounts receivable aged 90-days or less which contain selling terms and conditions acceptable to the Lender. AOC Key Solutions’ obligations under the 2015 Loan Agreement are guaranteed by James McCarthy, our Chairman of the Board, and his wife. AOC Key Solutions did not draw any funds from this credit facility in 2015. Pursuant to First Amendment to Business Loan Agreement (Asset Based), dated May 9, 2016, the Lender has waived the restrictions in the 2015 Loan Agreement on AOC Key Solutions’ ability to make dividends to the Company.

On March 24, 2016, KeyStone Solutions entered into a term sheet with respect to a proposed loan agreement (the “Proposed Loan Agreement”) with the Lender that is intended to replace the 2015 Loan Agreement. The proposed credit facility is comprised of: 1) an asset-based revolving line of credit up to $1,000,000 for short-term working capital needs and general corporate purposes which is due to mature on July 31, 2017, bears interest at the Wall Street Journal Prime Rate, floating, plus 0.50% and is secured by a first lien on all of KeyStone’s business assets; and 2) a term loan of $100,000 which is for permanent working capital, bears interest at the Wall Street

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Journal Prime Rate, floating, plus 0.75%, requires monthly payments of principal plus interest to fully amortize the loan over four (4) years and is secured by a first lien on all of KeyStone’s business assets, cross-collateralized and cross-defaulted with the revolving line of credit. The Proposed Loan Agreement would not require any personal guarantees. Our ability to access funds under the Proposed Loan Agreement is dependent upon negotiation of definitive documentation with the Lender.

The borrowing base for the revolving line of credit is up to the lesser of (1) $1,000,000 or (2) eighty percent (80%) of the aggregate amount of all of Keystone’s eligible accounts receivable as defined by the Lender. The borrowing base for the $100,000 term loan is fully reserved under the borrowing base for the revolving line of credit. The Proposed Loan Agreement has periodic reporting requirements, balance sheet and profitability covenants, as well as affirmative and negative operational and ownership covenants.

As of March 31, 2016, the Company had not made use of the line of credit, however, as of April 21, 2016, the Company had a $165,434 balance due on the line of credit.

On March 16, 2016, the Company entered into a Subordinated Note and Warrant Purchase Agreement (the “Note Purchase Agreement”) pursuant to which the Company agreed to issue up to $1,000,000 in subordinated debt and warrants to purchase up to 125,000 shares of the Company’s common stock (“Subordinated Note Warrants”). The exercise price for the Subordinated Note Warrants is equal to $2.00 per share of common stock. As of the date of this offering circular, subordinated notes with a face amount of $500,000 and Subordinated Note Warrants to purchase 62,500 shares of the Company’s common stock have been issued pursuant to the Note Purchase Agreement to Avon Road Partners, L.P. (“Avon Road”), an affiliate of Robert Berman, the Company’s acting CEO and a member of the Company’s Board of Directors.

The note is subordinated to the Company’s current financing facility with Lender and any successor financing facility. Simple interest accrues on the unpaid principal of the note at a rate equal to the lower of (a) 9% per annum, or (b) the highest rate permitted by applicable law. Interest is payable monthly and the note matures on March 16, 2019.

As of March 31, 2016, we did not have any material commitments for capital expenditures.

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Off-Balance Sheet Arrangements

As of the date of this offering circular, we did not have any off-balance sheet arrangements that have had or are reasonably likely to have a material effect on our financial condition, revenues or expenses, results of operations, liquidity, capital resources or capital expenditures.

Critical Accounting Policies and Estimates

The discussion and analysis of our financial condition and results of operations is based upon our financial statements which have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts in our financial statements.

We believe the application of accounting policies, and the estimates inherently required therein, are reasonable. These accounting policies and estimates are periodically reevaluated, and adjustments are made when facts and circumstances dictate a change. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form our basis for making judgments about the carrying values of assets and liabilities that may not be readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions, or if management made different judgments or utilized different estimates.

Our accounting policies are further described in our financial statements and the accompanying notes included in this offering circular. We have identified the following critical accounting policies:

Revenue Recognition

We recognize our revenues for the sale of services when persuasive evidence of an arrangement exists, services have been rendered or delivery has occurred, the fee is fixed or determinable, and the collectability of the related revenue is reasonably assured. We principally derive revenues from fees for services generated on a project by project basis. Prior to the commencement of a project, we reach agreement with the client on rates for services based upon the scope of the project, the proposed schedule, staffing requirements and the level of client involvement. Numerous assumptions are also set forth to guide on-going work. It is our policy to obtain written agreements from new clients prior to performing services. In these agreements, the clients acknowledge that they will pay based upon the amount of time spent on the project, and the completion of certain deliverables or milestones based on an agreed upon fee structure.

Revenues for time-and-materials contracts are recognized based on the number of hours worked by our employees or consultants at an agreed upon rate per hour set forth in our standard rate sheet or as written from time to time in our contracts or purchase orders. These costs are recognized in the period in which services are performed. Revenues for time-and-materials contracts are billed monthly or in accordance with the specific contractual terms of each project. All invoices rendered are fully supported by time sheets documenting labor costs. Where required by our client’s need to follow the Federal Travel Regulations, all other direct costs are supported by receipts or other documentation.

Revenues related to firm fixed price contracts are recognized as revenue as value is delivered to the customer. The pattern of revenue recognition for these contracts varies depending on the terms of the individual contracts, and may be recognized proportionally over the term of the contract or deferred until the end of the contract term and recognized when our obligations have been fulfilled with the customer. In instances where substantive acceptance provisions are specified in customer contracts, revenues are deferred until all acceptance criteria have been met. The pattern of revenue recognition for contracts where revenues are recognized proportionally over the term of the contact is based on the proportional performance method of accounting using the ratio of labor hours incurred to estimated total labor hours, which we consider to be the best available indicator of the pattern and timing in which contract obligations are fulfilled. This percentage is multiplied by the contracted dollar amount of the project to determine the amount of revenue to recognize in an accounting period. The contracted amount used in this calculation typically excludes the amount the client pays for reimbursable expenses. There are situations where the number of hours to complete projects may exceed our original estimate as a result of an increase in project scope or unforeseen events. On a regular basis, we review the hours incurred and estimated total labor hours to complete. The results of any revisions in these estimates are reflected in the period in which they become known. We believe we have demonstrated a history of successfully estimating the total labor hours to complete a project.

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Fees for services that have been performed, but for which we have not invoiced the customers are recorded as unbilled receivables in the accompanying balance sheets.

The agreements entered into in connection with a project, whether on a time-and-materials basis or firm fixed price basis, typically allow our clients to terminate early due to breach or for convenience with 30-days’ notice. In the event of termination, the client is contractually required to pay for all time, materials and expenses incurred by us through the effective date of the termination.

Accounts Receivables

Management reviews the collectability of accounts receivable on a monthly basis, assessing the credit-worthiness of customers whose accounts are past due. Management has elected to record bad debts using the direct write-off method. Generally accepted accounting principles require that the allowance method be used to reflect bad debts. However, the effect of the use of the direct write-off method is not materially different from the results that would have been obtained had the allowance method been followed.

Income Taxes

Through March 15, 2016, AOC Key Solutions had elected to be taxed under the provisions of Subchapter S of the Internal Revenue Code. Under those provisions, AOC Key Solutions does not pay federal corporate income taxes, and in most instances state income tax, on its taxable income. Instead, the stockholders of AOC Key Solutions are liable for individual income taxes on their respective shares of AOC Key Solutions’ net income. AOC Key Solutions effectively revoked its S Corporation election upon the March 15, 2016 merger with the Company. Both the Company and AOC Key Solutions are subject to corporate income taxes.

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

The Company’s evaluation as of March 31, 2016 revealed no tax positions that would have a material impact on the financial statements. The 2012 through 2015 tax years remain subject to examination by the IRS. Management does not believe that any reasonably possible changes will occur within the next twelve months that will have a material impact on the financial statements.

Change to AOC Key Solutions Quarter End Date

Prior to 2016, AOC Key Solutions used quarter end dates that coincided with its billing and payroll quarter end dates. AOC Key Solutions has used December 31 as its fiscal year end date. In 2016 AOC Key Solutions changed its quarterly ended dates to coincide with the calendar end date of each quarter.

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Executive Officers

Robert A. Berman, Chief Executive Officer and Member of the Board.

Robert Berman is the Chief Executive Officer of the Company. He also currently serves as the General Partner of Avon Road Partners, L.P., a limited partnership investing in real estate and the broadcast media industry. From 2006 through March 2015 Mr. Berman held the office of Chairman and Chief Executive Officer at Cinium Financial Services Corporation, a privately held specialty finance company, which included as one of its subsidiaries a New York State domiciled property and causality carrier licensed and admitted in 19 states.

While Mr. Berman led Cinium, it made the ranking of the Inc. 500 for both 2012 and 2013. Prior to Cinium Mr. Berman was Chairman and Chief Executive Officer of Empire Resorts, Inc., a NASDAQ-listed gaming company, from 2001-2005.

From 1995 until 2000, Mr. Berman was Chairman and Chief Executive Officer of Hospitality Worldwide Services (“HWS”), a publicly traded company that became the premiere service provider to the hospitality industry. Under Mr. Berman’s leadership HWS grew profitably from a small company with 50 employees and $6 million in revenues to excess of $280 million in revenues with offices on several continents and 3,000 employees. While at HWS Mr. Berman executed a successful acquisition strategy that resulted in multiple strategic operating divisions that created a one-stop shop for the hotel industry.

Mr. Berman was also instrumental in forging partnerships with institutional investors including ING and Apollo RE leading to the acquisition, re-positioning, and sale of more than $100 million of hotel properties such as the Historic Inn in Richmond, VA, the Warwick Hotel in Philadelphia, and the Radisson Hotel at Chicago O’Hare airport among others.

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Mr. Berman was director at Executone Information Systems, Inc. a publicly traded telecom company. In 1996 Executone’s board chose Mr. Berman to chair a special committee whose task it was to identify a new strategic direction for the company. The result of the special committees work was the transformation of the company increasing the company’s market capitalization by more than $500 million.

On March 16, 2016, the Company entered into an employment agreement with Mr. Berman (the “Berman Employment Agreement”).

James K. McCarthy, Chief Strategy Officer and Chairman of the Board.

Mr. McCarthy’s career spans over 30 years of marketing strategy creation, proposal development, and oral presentation coaching to contractors seeking to expand their market shares or to enter the government contracts market sector. As a founder and the Technical Director of AOC Key Solutions, he built an organization that, over the last five years, has played a part in winning an average of $9 billion per year in federal contract awards for its clients. Mr. McCarthy has worked at AOC Key Solutions for over 33 years.

An innovative builder of tools and processes aimed at continuous improvement, Mr. McCarthy created AOC Key Solutions’ approach known as Principle Centered Winning – a collection of proven best practices for market assessment, capture support, and proposal services that help win government contracts.

Mr. McCarthy often serves as a strategic advisor and “capture coach” to senior executives and rising corporate superstars. In these capacities, Mr. McCarthy mentors and guides both large and small business clients on market leadership, capture management, and strategy development to pursue and win government contracts. Mr. McCarthy frequently crafts powerful executive summaries, presentations, or other key documents in pursuit of government contracts. These contracts are valued from tens of millions of dollars to a billion dollars or more. He also frequently serves as a guest speaker on topics ranging from leadership to winning government contracts through every legitimate means available and is an advisor to the Arbinger Institute. Mr. McCarthy has served in an advisory role with the George Washington University, Virginia Science and Technology Campus, Technology Accelerator and has been a frequent speaker with the George Mason University Procurement and Technical Assistance Center. Mr. McCarthy has also served on the board of Coalition for Government Procurement and on the Veterans Institute for Procurement GovCon Council. In February 2016, Mr. McCarthy was named to Executive Mosaic’s Washington 100 as one of the top–100 most influential leaders in the government contracting arena.

Dr. Richard Nathan, Chief Operating Officer, President and Member of the Board.

Dr. Nathan brings over 45 years of corporate management, program management and business and proposal development experience. He has led large management and operation contracts valued at more than a billion dollars and managed service and technical contracts for DOE, DoD, DHS, NASA, EPA, and state governments. Dr. Nathan has directed and grown the environmental and energy business for a large corporation, and served as a corporate officer and held management and technical positions at Battelle Memorial Institute and Mason & Hanger. Dr. Nathan has worked at AOC Key Solutions for over 16 years, most recently as Chief Executive Officer.

Dr. Nathan excels in assisting companies to increase their market share through effective growth management, strategic planning, competitive analysis, and other approaches through all phases of the business development process. This includes building upon initial strategic decisions to develop tactical implementation plans for business sector growth.

Dr. Nathan’s management and business development skills span the full range of activities. He has served as capture manager, proposal manager, orals coach, and review team lead. His ability to develop and integrate effective win themes and discriminators unique to a given contract opportunity has resulted in multiple large contract wins for the Company’s customers to include contracts with DOE, NASA, DHS, and DoD as well as state and local governments.

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Greg McCarthy, Chief Executive Officer of AOC Key Solutions and Member of the Board

Greg McCarthy has over 25 years of sales management, marketing, capture and proposal experience. As President, Mr. McCarthy is responsible for overseeing the high degree of customer satisfaction that our clients expect. Mr. McCarthy has worked in virtually every role of the bid and proposal process, including proposal management, proposal writing, orals coach, and compliance manager.

Mr. McCarthy also leads the Key Solutions group specializing in Third Party Performance Assessments. In that capacity, he has interviewed more than 1,000 government personnel regarding contractor performance across dozens of government agencies, giving him “front line” experience in understanding Government needs and translating that understanding into winning proposals. As former COO of AOC Key Solutions, Mr. McCarthy was honored with Smart CEO Magazine’s Executive Management Award.

Riaz Latifullah, Chief Financial Officer

Prior to joining the Company, Riaz Latifullah served as the Chief Financial Officer of the American Grandparents Association / Grandparents.com. In this position he was responsible for directing and overseeing all of the company’s financial and accounting activities. He provided strategic advice to executive management on the financial implications of business activities and interacted with the board of directors.

Mr. Latifullah spent 13 years with AARP, a non-profit organization that advocates on behalf of people over age 50. With AARP he served as Vice President, Financial Management, Senior Director Strategic Markets and Director Brand Operations. As an in-house entrepreneur with AARP he created and launched five start-up operations bringing significant changes to the organization.

In other positions before AARP Mr. Latifullah served as General Manager for TV on the WEB, an internet video production company, a Government Relations Representative for the US Merchant Marine Academy Alumni Foundation and an Investment Banking Associate for Ryan, Lee and Company.

Glenn Goord, Director. 

Mr. Goord is a 32-year veteran of the New York State Department of Correctional Services and served as Commissioner from 1996 until 2006. As Commissioner, he oversaw the nation’s fourth largest state prison system, administering an operating budget of $2.3 billion in state and federal funds, plus $245 million in capital expenditures.

Mr. Goord’s outstanding contributions to furthering excellence in corrections earned him the Carl Robison Award, the highest honor bestowed by the Middle Atlantic States Correctional Association. In 1998 he earned the Charles Evans Hughes Award for public service from the Albany based Capital Area Chapter for the American Society for Public Administration (ASPA). In 2002, the ASPA awarded Mr. Goord its highest honor, the Governor Alfred E. Smith Award, for his direction of the Department’s immediate and expansive efforts to aid New York City following the September 11, 2001 terrorist attack. He also currently serves on the American Correctional Association Board of Governors.

Significant Employees

Gina Gallagher, President of AOC Key Solutions.

Gina Gallagher has more than 20 years of business strategy, business development and market experience in the federal government sector. She started her career at Electronic Data Systems (EDS), an HP Company, where she worked as an account manager for the organization’s Department of Defense contract and director of business development. She has held numerous additional leadership and senior executive management positions with large systems integrators and small companies such as DynCorp (CSC), Titan (L3), LEADS Corporation, and Satyam. Ms. Gallagher led the sales and marketing efforts for one of the most successful T4 primes at Systems Made Simple (SMS) and was instrumental in helping SMS win many of its large government contracts. This success helped develop Systems Made Simple into an industry leader in health information technology. In all of these positions,

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Ms. Gallagher has had the responsibilities of creating corporate strategic plans, building business development departments, identifying and selecting teaming ventures for competitive procurement initiatives, and winning new business. She also has extensive GWAC/IDIQ strategy experience.

Shelby Rudd, Senior Vice President and Chief Operating Officer of AOC Key Solutions

Shelby Rudd has more than 8 years of experience in operations and Federal Government business development, capture management, and proposal support. As Chief Operating Officer, she leads a team of full time and associate capture, proposal management, technical writing, and production support professionals. She manages AOC Key Solutions’ staff scheduling, resourcing, and recruiting efforts. She is responsible for ensuring clients receive high quality support and communications. In addition to her responsibilities as COO, she provides bid strategy, proposal management, review team, and technical writing support for AOC Key Solutions’ client proposals, focusing on large intelligence and defense procurements. Her ability to lead large, geographically dispersed teams and quickly learn complex technical and management information has resulted in large and strategic contract wins.

Previously, Ms. Rudd managed DHA Group, Inc.’s information technology and national security proposals to DoD and DOJ customers from opportunity identification to award. Prior to that, she provided proposal development support for AOC Key Solutions’ clients.

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Director Compensation

Directors who are officers or employees of the Company are not entitled to compensation for services as a director. The Company’s independent director, Glenn Goord, will receive annual compensation of $32,000, to be paid in equal quarterly installments. Mr. Goord will also receive options to purchase shares of common stock on terms to be determined. The Company intends to compensate other independent directors in a similar manner.

Employment Agreements

Berman Employment Agreement

The Berman Employment Agreement provides that upon the initial closing of this offering, Mr. Berman is our Chief Executive Officer for an initial term of five years with automatically renewing one-year terms thereafter. His base salary will be $395,000 per annum, and he will be eligible for a bonus as determined by the Company’s compensation committee. Mr. Berman will also be eligible to receive all such other benefits as are provided by the Company to other management employees that are consistent with the Company’s fringe benefits available to any other officer or executive of the Company.

In the event of a Change of Control, as defined in the Berman Employment Agreement, whether during the initial term or thereafter, the Company shall have the right to terminate the Berman Employment Agreement. In the event the Company exercises the option to terminate Mr. Berman, the Company will be required to pay Mr. Berman an amount equal to Mr. Berman’s base salary per annum multiplied by the number of years and portions thereof remaining under the Berman Employment Agreement. Mr. Berman may be terminated by the Company for “Cause”, as defined in the Berman Employment Agreement.

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Mr. Berman also agreed as consideration for entering into the Berman Employment Agreement, that for the period during his employment and for twelve months thereafter, he will not (i) compete with the Company in the “Geographic Area”, as defined in the Berman Employment Agreement, or (ii) solicit any of the Company’s existing employees, suppliers or customers.

James K. McCarthy Offer Letter

The James K. McCarthy Offer Letter provides that Mr. McCarthy is our Chief Strategy Officer. His employment will be at will, subject to providing 120-days’ notice of resignation or termination. The Company may pay Mr. McCarthy’s salary in lieu of notice for some or all of the 120-day notice period. His base salary will be $279,789 per annum, and he will be eligible for a bonus as determined by the Company’s compensation committee. Mr. McCarthy will also be eligible to receive all such other benefits as are provided by the Company to other management employees that are consistent with the Company’s fringe benefits available to any other officer or executive of the Company.

Mr. McCarthy also agreed that, for the period during his employment and for two years thereafter, he will not (i) compete with the Company in the “Restricted Territory”, as defined in Exhibit A to the McCarthy Offer Letter, or (ii) solicit any of the Company’s existing employees, suppliers or customers.

Nathan Employment Agreement

The Nathan Employment Agreement provides Mr. Nathan is our President/Chief Operating Officer for an initial term extending until April 15, 2017, with the option to extend the term in writing. His base salary will be $225,200 per annum, and he will be eligible for a bonus as determined by the Company’s compensation committee. Mr. Nathan will also be eligible to receive all such other benefits as are provided by the Company to other management employees that are consistent with the Company’s fringe benefits available to any other officer or executive of the Company.

The Company may terminate Mr. Nathan’s employment agreement for “Cause,” as defined in the Nathan Employment Agreement. In the event that the Company terminates Mr. Nathan’s employment other than for “Cause,” or Mr. Nathan terminates his employment for “Good Reason”, as defined in the Nathan Employment Agreement, the Company will be required to pay Mr. Nathan an amount equal to six months of Mr. Nathan’s base salary and the Company’s contribution to Mr. Nathan’s health insurance premiums.

Mr. Nathan also agreed that, for the period during his employment and for two years thereafter, he will not (i) compete with the Company in the “Restricted Territory”, as defined in Exhibit A to the Nathan Employment Agreement, or (ii) solicit any of the Company’s existing employees, suppliers or customers.

Latifullah Employment Agreement.

The Latifullah Employment Agreement will provide that upon the closing of this offering his employment agreement will become effective for an initial three year term. His base salary will be $285,000 per annum, and he will be eligible for a bonus as determined by the Company’s compensation committee. Mr. Latifullah will also be eligible to receive all such other benefits as are provided by the Company to other management employees that are consistent with the Company’s fringe benefits available to any other officer or executive of the Company. Mr. Latifullah will also be granted options to purchase 90,000 shares of common stock, which shall begin vesting on the first anniversary of his initial employment as Chief Financial Officer and continue vesting monthly over the following two years, at a strike price to be determined.

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Gregory McCarthy Employment Agreement.

The Gregory McCarthy Employment Agreement provides that Mr. McCarthy is the Chief Executive Officer of AOC Key Solutions for an initial term through April 21, 2017, with the option to extend the term in writing. His base salary will be $229,800 per annum, and he will be eligible for a bonus as determined by the Company’s compensation committee. Mr. McCarthy will also be eligible to receive all such other benefits as are provided by the Company to other management employees that are consistent with the Company’s fringe benefits available to any other officer or executive of the Company.

The Company may terminate Mr. McCarthy’s employment agreement for “Cause,” as defined in the Gregory McCarthy Employment Agreement. In the event that the Company terminates Mr. McCarthy’s employment other than for “Cause,” or Mr. McCarthy terminates his employment for “Good Reason”, as defined in the Gregory McCarthy Employment Agreement, the Company will be required to pay Mr. McCarthy an amount equal to six months of Mr. McCarthy’s base salary and the Company’s contribution to Mr. McCarthy’s health insurance premiums.

Mr. McCarthy also agreed that, for the period during his employment and for two years thereafter, he will not (i) compete with the Company in the “Restricted Territory”, as defined in Exhibit A to the Gregory McCarthy Employment Agreement, or (ii) solicit any of the Company’s existing employees, suppliers or customers.

Berrigan Employment Agreement.

The Berrigan Employment Agreement provides that Mr. Berrigan is the Executive Vice President and Principal Accounting Officer of AOC Key Solutions for an initial term through April 21, 2017, with the option to extend the term in writing. His base salary will be $195,800 per annum, and he will be eligible for a bonus as determined by the Company’s compensation committee. Mr. Berrigan will also be eligible to receive all such other benefits as are provided by the Company to other management employees that are consistent with the Company’s fringe benefits available to any other officer or executive of the Company.

The Company may terminate Mr. Berrigan’s employment agreement for “Cause”, as defined in the Berrigan Employment Agreement. In the event that the Company terminates Mr. Berrigan’s employment other than for “Cause,” or Mr. Berrigan terminates his employment for “Good Reason”, as defined in the Berrigan Employment Agreement, the Company will be required to pay Mr. Berrigan an amount equal to six months of Mr. Berrigan’s base salary and the Company’s contribution to Mr. Berrigan’s health insurance premiums.

Mr. Berrigan also agreed that, for the period during his employment and for two years thereafter, he will not (i) compete with the Company in the “Restricted Territory”, as defined in Exhibit A to the Berrigan Employment Agreement, or (ii) solicit any of the Company’s existing employees, suppliers or customers.

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KEYSTONE SOLUTIONS, INC. 2016 EQUITY AWARD PLAN

In May 2016, the Board and the stockholders unanimously approved and adopted the KeyStone Solutions, Inc. 2016 Equity Award Plan (the “Plan”). The purpose of the Plan is to promote the interests of the Company (including its parent, subsidiaries and affiliates, if any) and its stockholders by using equity interests in the Company to attract, retain and motivate its management, nonemployee directors and other eligible persons and to encourage and reward their contributions to the Company’s performance and profitability. The Board believes that the ability to provide equity-based incentives will be vital to the Company’s ability to continue to attract and retain individuals in the competitive labor markets in which we compete.

The total shares of common stock issuable under the Plan will be 923,016 shares.

Highlights of the Plan

The Plan permits the Company to take a flexible approach to its equity awards by permitting the grant of restricted stock, restricted stock units, restricted stock purchase rights, stock options, stock appreciation rights, performance awards and other stock awards. We have also designed the Plan to include a number of provisions that we believe promote best practices by reinforcing the alignment of equity compensation arrangements for nonemployee directors, officers, employees, consultants and stockholders’ interests. These provisions include, but are not limited to, the following:

No Discounted Awards. Awards that have an exercise price cannot be granted with an exercise price less than the fair market value on the grant date.

No Repricing Without Stockholder Approval. We cannot, without stockholder approval, reduce the exercise price of an award (except for adjustments in connection with a Company recapitalization), and at any time when the exercise price of an award is above the market value of our common stock, we cannot, without stockholder approval, cancel and re-grant or exchange such award for cash, other awards or a new award at a lower (or no) exercise price.

No Evergreen Provision. There is no evergreen feature under which the shares of common stock authorized for issuance under the Plan can be automatically replenished.

No Automatic Grants. The Plan does not provide for “reload” or other automatic grants to recipients.

No Transferability. Awards generally may not be transferred, except by will or the laws of descent and distribution or pursuant to a qualified domestic relations order, unless approved by the Administrator.

No Tax Gross-Ups. The Plan does not provide for any tax gross-ups.

No liberal change-in-control definition. The change-in-control definition contained in the Plan is not a “liberal” definition that would be activated on mere stockholder approval of a transaction.

“Double-trigger” change in control vesting. If awards granted under the Plan are assumed by a successor in connection with a change in control of the Company, such awards will not automatically vest and pay out solely as a result of the change in control, unless otherwise expressly set forth in an award agreement.

No dividends on unearned performance awards. The Plan prohibits the current payment of dividends or dividend equivalent rights on unearned performance-based awards.

Limitation on amendments. No amendments to the Plan may be made without stockholder approval if any such amendment would materially increase the number of shares reserved or the per-participant award limitations under the Plan, diminish the prohibitions on repricing stock options or stock appreciation rights, or otherwise constitute a material change requiring stockholder approval under applicable laws, policies or regulations or the applicable listing or other requirements of the principal exchange on which the Company’s shares are traded.

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Administered by the Administrator. The Plan will be administered by the Company’s Board, or a Committee, which shall be appointed in accordance with Section 3 of the Plan, or a combination thereof (the “Administrator”).

Clawbacks. Awards based on the satisfaction of financial metrics that are subsequently reversed, due to a financial statement restatement or reclassification, are subject to forfeiture.

Plan Principal Features

The principal features of the Plan are summarized below. This summary is not complete, however, and is qualified by the terms of the Plan, a copy of which is filed as Exhibit 6.2 to this offering statement on Form 1-A.

Shares Available Under the Plan

The maximum aggregate number of shares of common stock available for issuance under the Plan is 923,016. Shares subject to an award may be authorized but unissued, or reacquired shares of common stock or treasury shares. If an award under the Plan expires or becomes unexercisable without having been exercised in full, or an award is settled for cash, the unissued shares that were subject to the award will become available for future grant under the Plan, as will any shares that are withheld by the Company when an option is exercised or tax withholdings are satisfied by the tendering of shares. However, shares that have actually been issued under the Plan will not be returned to the Plan and will not be available for future distribution under the Plan.

Plan Administration

The Plan is administered by the Administrator. The Administrator has the exclusive authority, subject to the terms and conditions set forth in the Plan, to determine all matters relating to awards under the Plan, including the selection of individuals to be granted an award, the type of award, the number of shares of common stock subject to an award, and all terms, conditions, restrictions and limitations, if any, including, without limitation, vesting, acceleration of vesting, exercisability, termination, substitution, cancellation, forfeiture, or repurchase of an award and the terms of any instrument that evidences the award.

Term

The Plan shall continue in effect for a term of ten (10) years, unless sooner terminated pursuant to its provisions.

Eligibility

Awards under the Plan may be granted to employees (including officers), consultants and directors of the Company, its parent, subsidiaries and affiliates. In addition, an award under the Plan may be granted to a person who is offered employment by the Company or its parent, a subsidiary or affiliate, provided that such award shall be immediately forfeited if such person does not accept such offer of employment within an established time period. If otherwise eligible, an employee, consultant or director who has been granted an award under the Plan may be granted other awards. Although all employees of the Company, its parent, subsidiaries and affiliates are eligible to receive awards under the Plan, it is not possible to estimate the number of additional individuals who may become eligible to receive awards under the Plan from time to time.

Awards

The Plan is broad-based and flexible, providing for awards to be made in the form of (a) restricted stock and restricted stock units, (b) restricted stock purchase rights, (c) incentive stock options, which are intended to qualify under Section 422 of the Internal Revenue Code (the “Tax Code”), (d) non-qualified stock options, which are not intended to qualify under Section 422 of the Tax Code, (e) stock appreciation rights, (f) performance awards, (g) performance shares, (h) performance units or (i) other stock-based awards that relate to or serve a similar function to the awards described above. Awards may be made on a standalone, combination or tandem basis. Additional information about some of the awards is set forth below.

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Restricted Common Stock Awards, Restricted Stock Purchase Rights and Restricted Stock Units

Awards of Restricted Common Stock, Restricted Stock Purchase Rights and Restricted Stock Units. Awards of restricted common stock and grants of restricted stock purchase rights are shares of common stock awarded or granted to the recipient, all or a portion of which are subject to a restriction period set by the Administrator during which restriction period the recipient or purchaser shall not be permitted to sell, transfer or pledge the restricted common stock. Restricted stock units are notional accounts that are valued solely by reference to shares of common stock, subject to a restriction period set by the Administrator and payable in common stock, cash or a combination thereof. The restriction period for both restricted stock and restricted stock units may be based on period of service, which shall not be less than one (1) year, performance of the recipient or the Company, its parent, subsidiary, division or department for which the recipient is employed or such other factors as the Administrator may determine.

Rights as a Stockholder. Subject to any restrictions set forth in the award agreement, a recipient or purchaser of restricted common stock will possess all of the rights of a holder of common stock of the Company, including the right to vote and receive dividends. Cash dividends on the shares of common stock that are the subject of an award agreement shall be paid in cash to the recipient or purchaser and may be subject to forfeiture as set forth in the award agreement. The recipient of restricted stock units shall not have any of the rights of a stockholder of the Company; the Administrator shall be entitled to specify with respect to any restricted stock unit award that upon the payment of a dividend by the Company, the Company will hold in escrow an amount in cash equal to the dividend that would have been paid on the restricted stock units had they been converted into the same number of shares of common stock and held by the recipient on that date. Upon adjustment and vesting of the restricted stock unit, any cash payment due with respect to such dividends shall be made to the recipient.

Termination of Employment, Consultancy or Director Relationship. Generally, upon termination of employment, consultancy or a director relationship for any reason during the restricted period, the recipient or purchaser will forfeit the right to the shares of restricted common stock to the extent that the applicable restrictions have not lapsed at the time of such termination.

Common Stock Options

Types. Common stock options may be granted under the Plan to directors and consultants in the form of nonqualified stock options and to employees in the form of incentive stock options or nonqualified stock options.

Exercise Price. The per share exercise price for shares underlying common stock options will be determined by the Administrator, provided that the exercise price must be at least equal to 100% of the fair market value per share of common stock on the date of grant. In the case of an incentive stock option granted to an employee who, at the time of grant, owns more than 10% of the total combined voting power of all classes of stock of the Company, the per share exercise price must be at least equal to 110% of the fair market value per share of common stock on the date of grant.

Term of Option; Vesting. The term during which a common stock option may be exercised will be determined by the Administrator, provided that no common stock option will be exercisable more than ten (10) years from the date of grant. In the case of an incentive stock option granted to an employee who, at the time of grant, owns more than 10% of the total combined voting power of all classes of stock of the Company or its parent, subsidiaries or affiliates, the term of such common stock option may not be more than five (5) years. The Administrator has full authority, subject to the terms of the Plan, to determine the vesting period or limitation or waiting period with respect to any common stock option granted to a participant or the shares purchased upon exercise of such option; provided, however, that such vesting restriction or limitation or waiting period shall not be less than one (1) year. In addition, the Administrator may, for any reason, accelerate the exercisability of any common stock option.

Other Awards

Stock Appreciation Rights. The Administrator may grant to an employee, consultant or a director a right to receive the excess of the fair market value of shares of the Company’s common stock on the date the stock appreciation right is exercised over the fair market value of such shares on the date the stock appreciation right was granted. Such spread may, in the sole discretion of the Administrator, be paid in cash or common stock or a combination of both.

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Performance Awards. The Administrator may grant performance awards to employees based on the performance of a recipient over a specified period. Such performance awards may be awarded contingent upon future performance of the Company or its parent, affiliates or subsidiaries during that period. A performance award may be in the form of common stock (or cash in an amount equal to the fair market value thereof) or the right to receive an amount equal to the appreciation, if any, in the fair market value of common stock over a specified period. Performance awards may be paid, in the Administrator’s discretion, in cash or stock or some combination thereof. Each performance award will have a maximum value established by the Administrator at the time the award is made. Unless otherwise provided in an award agreement or by the Administrator, performance awards terminate if the recipient does not remain an employee of the Company, or its parent, affiliates or subsidiaries, at all times during the applicable performance period.

Other Stock-Based Awards. The Administrator may, in its discretion, grant other stock-based awards that are related to or serve a similar function to the awards described above.

Material Terms of Performance Goals for Qualified Performance-Based Compensation

Under section 162(m) of the Tax Code, in order for the Company to deduct compensation in excess of $1,000,000 that is paid in any year to any “covered employee,” such compensation must be treated as “qualified performance-based,” within the meaning of section 162(m) of the Tax Code. A “covered employee” is defined under section 162(m) of the Tax Code as a company’s principal executive officer or any of such company’s three other most highly compensated executive officers named in the proxy statement (other than the principal executive officer or principal financial officer). Section 7 of the Plan sets forth the procedures the Administrator should follow to avoid the deductibility limitations of section 162(m) of the Tax Code when making long-term incentive performance awards under the Plan to current covered employees and employees whom the Administrator anticipates may become covered employees between the time of grant and payment of the award. However, there can be no guarantee that amounts payable under the Plan will be treated as “qualified performance-based” compensation and the Company reserves the flexibility to pay nondeductible compensation when necessary to achieve our compensation objectives.

Among other things, in order for an award under Section 7 of the Plan to be treated as “qualified performance-based” compensation that is not subject to the $1,000,000 cap, stockholder approval of the material terms of the performance goals is required at least every five (5) years. The material terms include the employees eligible to receive the compensation, a description of the performance criteria and the maximum amount of compensation that may be paid to any one employee. A description of the material terms for qualified performance-based compensation in the Plan follows.

Employees Eligible to Receive Compensation. A performance-based award under the Plan may be granted to employees (including officers) of the Company, its parent, subsidiaries and affiliates. In addition, a performance-based award may be granted to a person who is offered employment by the Company or its parent, a subsidiary or affiliate, provided that such award shall be immediately forfeited if such person does not accept such offer of employment within an established time period.

Performance Criteria. When making an award under the Plan, the Administrator may designate the award as “qualified performance-based compensation,” which means that performance criteria must be satisfied in order for an employee to be paid the award. Qualified performance-based compensation may be made in the form of restricted common stock, restricted stock units, common stock options, performance shares, performance units or other stock equivalents. Section 7 of the Plan includes the performance criteria the Administrator has adopted, subject to stockholder approval, for a “qualified performance-based compensation” award, which shall consist of objective tests based on one or more of the following:

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Performance criteria may be measured solely on a Company, parent, subsidiary or business unit basis, on specific capital projects or groups of projects or a combination thereof. Further, performance criteria may reflect absolute entity performance or a relative comparison of entity performance to the performance of one or more peer groups of entities or other external measure of the selected performance criteria. The measure for any such award may include or exclude items to retain the intents and purposes of specific objectives, such as losses from discontinued operations, extraordinary gains or losses, the cumulative effect of accounting changes, acquisitions or divestitures, foreign exchange impacts, acceleration of payments, costs of capital invested, discount factors, and any unusual or nonrecurring gain or loss. In order to qualify as performance-based under section 162(m) of the Tax Code, the performance criteria will be established before 25% of the performance period has elapsed and will not be subject to change (although future awards may be based on different performance criteria). The performance periods may extend over one to five calendar years, and may overlap one another.

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Other Provisions

Termination, Amendment and Employee Retirement Income Security Act of 1974 (“ERISA”) Status. The Plan provides that the Board may generally amend, alter, suspend or terminate the Plan and the Administrator may prospectively or retroactively amend any or all of the terms of awards granted under the Plan, so long as any such amendment does not impair the rights of any recipient without the recipient’s consent. Stockholder approval is required for any material Plan amendment or any amendment necessary to comply with the Tax Code or any other applicable laws or stock exchange requirements. The Plan is not subject to the provisions of ERISA.

Anti-dilution Provisions. Subject to any required action by the stockholders of the Company, the number of shares of common stock covered by each outstanding award (and the purchase or exercise price thereof), and the number of shares of common stock that have been authorized for issuance under the Plan, but as to which no awards have yet been granted (or which have been returned to the Plan upon cancellation or expiration of an award or the withholding of shares by the Company) will be proportionately adjusted to prevent dilution or enlargement of rights in the event of any stock split, stock dividend, combination or reclassification of the common stock or other relevant capitalization change.

Prohibition on Loans to Participants. The Company may not lend money to any participant under the Plan for the purpose of paying the exercise or base price associated with any award or for the purpose of paying any taxes associated with the exercise or vesting of an award.

Withholding Obligations. The Company may take such steps as are considered necessary or appropriate for the withholding of any federal, state, local or foreign taxes of any kind that the Company is required by any law or regulation of any governmental authority to withhold in connection with any award under the Plan, including, without limiting the generality of the foregoing, the withholding of all or any portion of any payment or the withholding of the issue of common stock to be issued under the Plan, until such time as the recipient has paid the Company for any amount the Company is required to withhold with respect to taxes. Unless otherwise determined by the Administrator, withholding obligations may be settled with vested common stock, including vested common stock that is part of the award that gives rise to the withholding requirement. The Administrator may establish such procedures as it deems appropriate, including the making of irrevocable elections, for the settlement of withholding obligations with vested common stock.

Potential Dilutive Impact of Plan

We are committed to effectively managing our employee equity compensation programs while minimizing stockholder dilution. For this reason, in administering our equity compensation program, we consider both our “burn rate” and our “overhang” in evaluating the impact of the program on our stockholders. We define “burn rate” as the number of equity awards granted during the year, divided by the weighted average number of shares of common stock outstanding during the period. The burn rate measures the potential dilutive effect of our equity grants. We define “overhang” as the number of full value awards granted (but not yet vested or issued) and stock options granted (but not yet exercised) divided by the number of shares of common stock outstanding at the end of the period.

Certain Federal Income Tax Consequences

The following is a brief summary of the principal federal income tax consequences of the receipt of restricted common stock and restricted stock units, the grant and exercise of common stock options awarded under the Plan and the subsequent disposition of shares acquired upon such exercise and the receipt of certain other awards under the Plan. This summary is based upon the provisions of the Tax Code as in effect on the date of this offering circular, current regulations adopted and proposed thereunder and existing judicial decisions, as well as administrative rulings and pronouncements of the Internal Revenue Service (all of which are subject to change, possibly with retroactive effect). This summary is not intended to be exhaustive and does not describe all federal, state or local tax laws. Furthermore, the general rules discussed below may vary, depending upon the personal circumstances of the individual holder. Accordingly, participants should consult a tax advisor to determine the income tax consequences of any particular transaction.

Taxation of Restricted Common Stock. In general, except in the case of an election under section 83(b) of the Tax Code, a participant will not incur any tax upon the grant of shares of stock which are subject to a substantial risk of forfeiture. However, when the restrictions lapse or the shares become freely transferable, the participant will recognize ordinary income equal to the fair market value of the applicable shares at such time, less the amount, if any, paid for such shares, unless the participant has made a section 83(b) election with respect to such shares or has elected to defer receipt of such shares, as discussed below.

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If a participant makes a section 83(b) election within 30 days of a grant of restricted common stock, the participant will recognize ordinary income at the time of grant in an amount equal to the difference between the fair market value of the restricted shares on the grant date and the amount, if any, paid for such restricted shares. If the participant makes such an election, he or she will not recognize any further income with respect to such shares solely as a result of a later lapse of the restrictions.

If a participant holds the restricted common stock as a capital asset after the earlier of either (1) the vesting of such restricted common stock or (2) the making of a timely section 83(b) election with respect to such restricted common stock, any subsequent gain or loss will be taxable as long-term or short-term capital gain or loss, depending upon the holding period. For this purpose, the basis in the restricted common stock generally will be equal to the sum of the amount (if any) paid for the restricted common stock and the amount included in ordinary income as a result of the vesting event or section 83(b) election, as applicable; provided, however, that, if a participant forfeits restricted common stock with respect to which a section 83(b) election was made prior to vesting, the participant’s capital loss is limited to the amount (if any) paid for such restricted common stock.

In general, at the time a participant recognizes ordinary income with respect to the restricted common stock, the Company will be entitled to a deduction in an amount equal to the ordinary income recognized by the participant, which deduction may be limited by section 162(m) of the Tax Code.

Taxation of Restricted Stock Units; Stock Appreciation Rights; Performance Shares and Performance Units. In general, a participant will not incur any tax upon the grant of restricted stock units, stock appreciation rights, performance shares or performance units. However, when the restrictions lapse, the participant will recognize ordinary income in an amount equal to the sum of the cash and the fair market value of any property received.

Taxation of Non-Qualified Stock Options. In general, a participant will not recognize any income upon the grant of a non-qualified stock option. Upon the exercise of a non-qualified stock option, however, a participant generally will recognize ordinary income in an amount equal to the excess of the fair market value of the non-qualified option stock on the date of exercise over the exercise price (i.e., the “spread”) and the Company will be entitled to a deduction in an equal amount, which may be limited by section 162(m) of the Tax Code.

Upon subsequent sales of shares obtained through the exercise of non-qualified stock options, the participant may realize short-term or long-term capital gain or loss, depending upon the holding period of the shares, if such shares constitute capital assets in the participant’s hands. The gain or loss will be measured by the difference between the sales price and the tax basis of the shares sold. The tax basis for this purpose generally will be fair market value of the shares on the date of exercise.

Taxation of Incentive Stock Options. A participant who is granted an incentive stock option does not recognize taxable income at the time the option is granted or upon its exercise, although the exercise is an adjustment item for alternative minimum tax purposes and may subject the participant to alternative minimum tax. If the shares acquired upon exercise are sold after the expiration of two years from the grant of the option and one year after exercise of the option, any gain or loss is treated as long-term capital gain or loss. If these holding periods are not satisfied, the participant recognizes ordinary income at the time of disposition equal to the difference between the exercise price and the lower of (1) the fair market value of the shares at the date of the option exercise or (2) the sale price of the shares. Any gain or loss recognized on such a premature disposition of the shares in excess of the amount treated as ordinary income is treated as long-term or short-term capital gain or loss, depending on the holding period. Unless limited by section 162(m) of the Tax Code, the Company is generally entitled to a deduction in the same amount as the ordinary income recognized by the participant.

Taxation of Other Stock Based Awards. Other awards may be granted under the Plan. Since the amount, character and timing of income recognized in connection with such awards will vary depending upon the specific terms and conditions of such awards, no information regarding the tax consequences of the receipt of such awards may be provided at this time.

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Tax Withholding. The obligations of the Company under the Plan are conditioned upon proper arrangements being in place with participants in the Plan for the payment of withholding tax obligations. Unless otherwise determined by the Administrator, withholding tax obligations may be settled with shares of common stock, including shares that are part of the award that gives rise to the withholding obligation.

In light of the factors described above, the Administrator believes that the ability to grant equity compensation is vital to the Company’s ability to continue to attract, motivate, reward, and retain individuals.

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SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITY HOLDERS

Set forth below is information regarding the beneficial ownership of our common stock, our only outstanding class of capital stock, as of May 11, 2016 by (i) each person whom we know beneficially owned more than 5% of the outstanding shares of our common stock, and (ii) all of the current directors and executive officers individually and as a group. We believe that, except as otherwise noted below, each named beneficial owner has sole voting and investment power with respect to the shares listed. Unless otherwise indicated herein, beneficial ownership is determined in accordance with the rules of the SEC, and includes voting or investment power with respect to shares beneficially owned.

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INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS

Formation of KeyStone Solutions

On March 15, 2016, the Company entered into a merger agreement (the “Merger Agreement”) with KCS Merger Sub, Inc. (“Merger Sub”), a wholly-owned subsidiary of the Company, and AOC Key Solutions, Inc. (“Key Solutions”). Pursuant to the Merger Agreement, on March 15, 2016, Merger Sub was merged with and into Key Solutions, and thus Key Solutions became a wholly-owned subsidiary of the Company.

Subordinated Notes

On March 16, 2016, the Company entered into a Subordinated Note and Warrant Purchase Agreement (the “Note Purchase Agreement”) with Avon Road pursuant to which the Company agreed to issue up to $1,000,000 in subordinated debt and warrants to purchase up to 125,000 shares of the Company’s common stock (“Subordinated Note Warrants”). The exercise price for the Subordinated Note Warrants is equal to $2.00 per share of common stock. As of the date of this offering circular, subordinated notes with a face amount of $500,000 and Subordinated Note Warrants to purchase 62,500 shares of the Company’s common stock have been issued pursuant to the Note Purchase Agreement to Avon Road.

Stockholders Agreement

On March 16, 2016, Robert Berman, Avon Road, James McCarthy, Richard Nathan, Gregory McCarthy and Kevin Berrigan entered into a stockholders’ agreement (the “Stockholders’ Agreement”). The parties to the Stockholders’ Agreement, who currently control 100% of the Company’s common stock, have agreed to vote their shares of common stock in favor of the following directors:

See “Securities Being Offered – Stockholders’ Agreement”.

Option Grants

On March 16, 2016, James McCarthy, Richard Nathan and Avon Road, an affiliate of Mr. Berman, entered into an option agreement (the “Option Agreement”). Pursuant to the Option Agreement, Messrs. McCarthy and Nathan (each a “Grantor) granted Avon Road the right to purchase up to 50% of the shares of the Company’s common stock held by such Grantor as of the date of the Option Agreement. If Avon Road exercised all such options and the subordinated note warrant, Avon Road would then own 38.9% of the issued and outstanding common stock of the Company.

Berman Employment Agreement

The Berman Employment Agreement provides that upon the initial closing of the offering, Mr. Berman will become our Chief Executive Officer for an initial term of five years with automatically renewing one-year terms thereafter. His base salary will be $395,000 per annum, and he will be eligible for a bonus as determined by the Company’s compensation committee. Mr. Berman will also be eligible to receive all such other benefits as are provided by the Company to other management employees that are consistent with the Company’s fringe benefits available to any other officer or executive of the Company.

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In the event of a “Change of Control”, as defined in the Berman Employment Agreement, whether during the initial term or thereafter, the Company shall have the right to terminate Mr. Berman’s employment. In the event the Company exercises that option to terminate Mr. Berman’s employment, the Company shall pay to Mr. Berman, an amount equal to Mr. Berman’s base salary per annum multiplied by the number of years and portions thereof remaining in his current term under the Berman Employment Agreement. Mr. Berman may be terminated by the Company for “Cause”, as defined in the Berman Employment Agreement.

Mr. Berman also agreed as consideration for entering into the Berman Employment Agreement, that for the period during his employment and for twelve months thereafter, he will not (i) compete with the Company in the Geographic Area, as defined in the Berman Employment Agreement, or (ii) solicit any of the Company’s existing employees, suppliers or customers.

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SECURITIES BEING OFFERED

In this offering, we are offering Units, consisting of up to 3,000,000 shares of Series A Preferred Stock and warrants to purchase up to 750,000 shares of common stock. Each Unit consists of one share of Series A Preferred Stock and a 7-year warrant that is immediately exercisable to purchase 0.25 shares of common stock, at an exercise price of $2.00 per share of common stock. The shares of Series A Preferred Stock and warrants will be issued separately but can only be purchased together as a Unit in this offering. The separate purchase and sale of warrants, solely as warrants detached from a Unit, are restricted for a period of 180 days from the date the Unit, for which the warrant is associated, is purchased. This offering circular also relates to the offering of shares of our common stock upon the conversion of the Series A Preferred Stock and the exercise, if any, of the warrants.

Common Stock

Holders of common stock are entitled to one vote for each share held of record on all matters submitted to a vote of stockholders. Subject to preferences that may be applicable to any outstanding preferred stock, including the Series A Preferred Stock, the holders of common stock are entitled to receive ratably the dividends, if any, that may be declared from time to time by the Board of Directors out of funds legally available for such dividends. We have never declared a dividend on our common stock and do not anticipate doing so in the foreseeable future. In the event of a liquidation, dissolution or winding up of the Company, subject to the prior rights of the preferred stock, including the Series A Preferred Stock, the holders of common stock are entitled to share ratably in any remaining assets, if any such assets exist, after payment of liabilities. The common stock has no preemptive or other subscription rights and is not subject to any future calls or assessments. There are no conversion rights or redemption or sinking fund provisions applicable to shares of common stock. All of the outstanding shares of common stock are validly issued, fully paid and non-assessable.

Stockholders’ Agreement

The following is a summary of the material terms and provisions of the KeyStone Solutions, Inc. Stockholders’ Agreement, dated March 16, 2016, among the Company and the stockholders party thereto.

Board Representation. The board of directors of the Company shall not exceed five members and shall include (a) two directors nominated by Mr. Berman and Avon Road Partners, L.P. (the “Investor Holders”), which nominees shall be reasonably acceptable to the Founding Holders (as defined below), and (b) three directors designated by James McCarthy, Richard Nathan, Greg McCarthy and Kevin Berrigan (the “Founding Holders”), which nominees shall be reasonably acceptable to the Investor Holders.

Registration Rights. If the Company enters into any registration rights agreement or similar agreement granting “demand”, “piggyback” and/or S-3 registration rights with respect to, or proposes to register any of, equity securities, the Founding Holders and Investor Holders shall be made a party to such agreement (or enter into such an agreement in the event of a proposed registration) with equal rights to participate in the “demand”, “piggyback” and/or S-3 registration rights.

Right of First Offer. The Company shall have a right of first offer for a period of 30 days to purchase any shares proposed to be sold by any Founding Holder or Investor Holder to a third party. If the Company does not intend to purchase any of the offered shares (or intends to purchase less than the total number of offered shares), then each of the other Founding Holders and Investor Holders shall have the right to purchase their pro rata portion of the remaining shares.

Co-Sale Rights. If any Founding Holder or Investor Holder receives an offer to transfer any equity securities to a third party, the other Founding Holders or Investor Holders have the right to participate pro rata in such sale.

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Sale of the Company. At any time that the holders of a majority of the equity securities held by the Founding Holders and the Investor Holders propose a sale of the Company, such holders can compel all other Founding Holders and Investor Holders of the Company to approve such sale.

Series A Preferred Stock

The following summary of certain material terms and provisions of our Series A Preferred Stock offered in this offering is subject to changes based on the final terms of the offering. The following summary is subject to, and qualified in its entirety by, the form of Certificate of Designations of Series A Cumulative Convertible Redeemable Preferred Stock (the “Certificate of Designations”), which is attached hereto as Annex A. You should review a copy of the Certificate of Designations for a complete description of the terms and conditions applicable to the Series A Preferred Stock.

Voting Rights. The holders of Series A Preferred Stock shall not have any voting rights except as expressly set forth below or as otherwise from time to time required by law.

So long as any shares of Series A Preferred Stock are outstanding, in addition to any other vote or consent of stockholders required by law or by our Certificate of Incorporation, the vote or consent of the holders of a majority of the outstanding shares of Series A Preferred Stock at the time outstanding and entitled to vote thereon shall be necessary for effecting or validating, either directly or indirectly by amendment, merger, consolidation or otherwise:

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Dividends. The Series A Preferred Stock is entitled to quarterly dividends of $0.175 (7.0% per annum) per share.

Conversion Rights. At any time after the third anniversary of the Qualification Date, each holder of the Series A Preferred Stock will have the right to convert each share of Series A Preferred Stock into our common stock at an initial conversion price of (a)(i) $14.00, equivalent to a conversion rate of 0.714 shares of common stock for each share of Series A Preferred Stock from             , 2019 to             , 2020 or (ii) $15.00, equivalent to a conversion rate of 0.667 shares of common stock for each share of Series A Preferred Stock from and after            , 2020 plus (b) the amount of any accrued but unpaid dividends thereof, if any, whether or not declared, to and including the date immediately prior to such date of conversion. The Series A Preferred Stock will automatically be converted at the then effective conversion price (i) except as provided below, immediately prior to the closing of the Company’s sale of its common stock in a firm commitment underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Securities Act”), (A) which results in aggregate cash proceeds to the Company of not less than $30,000,000 (net of underwriting discounts and commissions), (B) is made at an offering price per share of at least the then applicable conversion price (as adjusted) and (C) following such offering, the common stock is listed for trading on a national securities exchange, and (ii) on the date specified by written consent or agreement of the holders of at least 66^2/3% of the then outstanding shares of Series A Preferred Stock.

Redemption by Company. At any time following the third anniversary of the Qualification Date, the Company may redeem all or any portion of the then outstanding Series A Preferred Stock for a redemption price equal to either (a) (i) $14.00 per share from             ,2019 to             , 2020 or (ii) $15.00 per share from and after            , 2020 plus (b) the amount of any accrued but unpaid dividends thereof, if any, whether or not declared, to and including the date immediately prior to such date of redemption.

Redemption by Holder. At any time after the sixtieth month after the Qualification Date, each holder of the Series A Preferred Stock will have the right to require the Company to redeem all, but not less than all, of such holder’s Series A Preferred Stock for a redemption price of $15 per share plus the amount of any accrued but unpaid dividends thereof, if any, whether or not declared, to and including the date immediately prior to such date of redemption.

Liquidation Rights. In the event of a “Liquidation Event” (as defined below), the holders of Series A Preferred Stock are entitled to be paid out of the assets of the Company available for distribution to stockholders an amount equal to $10 per share plus the amount of any accrued but unpaid dividends thereof, if any, whether or not declared, to and including such date of liquidation. “Liquidation Event” shall mean a liquidation, dissolution or winding up of the Company in a single transaction or series of transactions. The sale, conveyance, exchange or transfer (for cash, shares of stock, securities or other consideration) of all or substantially all of the property and assets of the Company shall not be deemed a Liquidation Event, nor shall the merger, consolidation or any other business combination transaction of the Company into or with any other corporation or person or the merger, consolidation or any other business combination transaction of any other corporation or person into or with the Company be deemed to be a Liquidation Event.

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Unit Warrants

The following summary of certain material terms and provisions of our Unit warrants offered in this offering is subject to changes based on the final terms of the offering. The following summary is subject to, and qualified in its entirety by, the form of warrant, which is attached hereto as Annex B . You should review a copy of the form of warrant for a complete description of the terms and conditions applicable to the warrants.

Exercisability. The warrants are exercisable on or before seven years from the Qualification Date. The warrants will be exercisable, at the option of each holder, in whole or in part, by delivering to us a duly executed exercise notice accompanied by payment in full for the number of shares of our common stock purchased upon such exercise (except in the case of a cashless exercise as discussed below).

Cashless Exercise. If at any time there is not a current, valid and effective registration statement covering the warrant shares that are the subject of the exercise notice, the holder may, in its sole discretion, exercise the warrant in whole or in part and, in lieu of making the cash payment otherwise contemplated to be made to us upon such exercise in payment of the aggregate exercise price, elect instead to receive upon such exercise the net number of shares of common stock determined according to the formula set forth in the warrant. In no event shall we be required to make any cash payments or net cash settlement to the registered holder in lieu of issuance of common stock underlying the warrants.

Exercise Price. The initial exercise price per share of common stock purchasable upon exercise of the warrants is $2.00 per share. The exercise price is subject to appropriate adjustment in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting our common stock and also upon any distributions of assets, including cash, stock or other property to our stockholders.

Certain Adjustments. The exercise price and the number of shares of common stock purchasable upon the exercise of the warrants are subject to adjustment upon the occurrence of specific events, including stock dividends, stock splits, combinations and reclassifications of our common stock.

Redemption. Provided that there is an effective registration statement registering the shares of common stock issuable upon exercise of the warrant, on or before the expiration date of the warrant, upon 20 days prior written notice to the holders of warrants following the date on which the last sale price of the common stock equals or exceeds $            per share for 20 consecutive trading days (“Call Notice”), as may be adjusted for stock splits, stock dividends and similar corporate events, and the daily average minimum volume of the common stock during those 20 days is at least             shares, the Company has the right to call any or all of the warrants at a call price of $            per share of common stock underlying the warrant. Warrant holders will have the period from the date of the Call Notice until 5 p.m., Eastern time, on the 20^th day following the Call Notice to exercise the warrant. Any warrants which have been called but remain unexercised by the 20^th day will automatically terminate and no longer entitle the holder to exercise such warrant or to receive any consideration therefor, other than the call price. For any warrants which are not exercised by the 20^th day, the Company will pay the call price to the holder of any warrants which have been called and not exercised.

Transferability. Subject to applicable laws, the warrants may be transferred at the option of the holders upon surrender of the warrants to us together with the appropriate instruments of transfer, provided however that the separate purchase and sale of warrants, solely as warrants detached from a Unit, are restricted for a period of 180 days from the date the Unit, for which the warrant is associated, is purchased.

Exchange Listing. There is no established public trading market for the warrants detached from the Series A Preferred Stock. We do not plan on making an application to list the warrants on any national securities exchange or other nationally recognized trading system.

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Fundamental Transaction. If, at any time while the warrants are outstanding, there is a “Fundamental Transaction” (as defined below), then upon any subsequent exercise of the warrants, the holders thereof will have the right to receive the same amount and kind of securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Transaction if it had been, immediately prior to such Fundamental Transaction, the holder of the number of warrant shares then issuable upon exercise of the warrant, and any additional consideration payable as part of the Fundamental Transaction. “Fundamental Transaction” shall mean (i) a merger or consolidation of the Company into or with another corporation in which the stockholders of the Company immediately prior to the consummation of such transaction shall own less than 50% of the voting securities or less than 50% of the voting power of the surviving corporation (or the parent corporation of the surviving corporation where the surviving corporation is directly or indirectly wholly-owned by the parent corporation) immediately following the consummation of such transaction, (ii) any sale or other transfer, in one transaction or a series of related transactions, of fifty percent (50%) or more of the outstanding voting stock of the Company, or (iii) the consummation of the sale, transfer or lease (including by merger or consolidation of one or more subsidiaries or otherwise, but not including a transfer or lease by pledge or mortgage to a bona fide lender) of all or substantially all of (A) the assets of the Company or (B) the assets of the Company and/or one or more subsidiaries constituting all or substantially all of the assets of the Company (determined on a consolidated basis with the Company and all of its subsidiaries)

Rights as a Stockholder. Except as otherwise provided in the warrants or by virtue of such holder’s ownership of shares of our common stock, the holder of a warrant does not have the rights or privileges of a holder of our common stock, including any voting rights, until the holder exercises the warrant.

Certain Anti-takeover Effects

The following is a summary of certain provisions of Delaware law, our Certificate of Incorporation and our bylaws. This summary does not purport to be complete and is qualified in its entirety by reference to the corporate law of Delaware and our Certificate of Incorporation and bylaws.

Effect of Delaware Anti-Takeover Statute

We are subject to Section 203 of the Delaware General Corporation Law, an anti-takeover law. In general, Section 203 prohibits a Delaware corporation from engaging in any business combination (as defined below) with any interested stockholder (as defined below) for a period of three years following the date that the stockholder became an interested stockholder, unless:

Section 203 defines “business combination” to include the following:

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