(Amendment No. 1)
After this Registration Statement becomes effective.
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or, an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer", "smaller reporting company", and "emerging growth company", in Rule 12b-2 of the Exchange Act.
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT HAS FILED A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
As used in this prospectus, references to the "Company," "we," "our", "us" or "Wigi" refer to Wigi Blockchain Technologies, Inc. unless the context otherwise indicates.
The following summary highlights selected information contained in this prospectus. Before making an investment decision, you should read the entire prospectus carefully, including the "Risk Factors" section, the financial statements, and the notes to the financial statements.
Our Company
Wigi Blockchain Technologies, Inc., an Oklahoma corporation incorporated on August 10, 2017, is a payments technology company that is developing a payments platform knowns as "WigiPay" that will utilize blockchain technologies.. From inception until the date of this filing our operating activities have primarily consisted of (i) the incorporation of our company, (ii) the development of our business plan, (iii) the acquisition of the source code for the Wigi software platform, (iv) the initial equity funding, (v) the development of WigiPay through conceptually setting out the use of WigiPay points and how the overall platform will function. The Company intends to develop a blockchain payments platform using fiat currency as opposed to the many other cryptocurrencies. In order to do that, the Company intends to implement WigiPay points which will allow payments to be made using blockchain technology. Each WigiPay point will represent the 1 fiat currency in the local currency. For example, in the United States, 1 WigiPay point will represent 1 U.S. dollar. In order to implement blockchain technology into the payments industry while using fiat currency, the Company intends to use WigiPay points . WigiPay is intended to give retail and e-commerce the ability to lower the cost of payments, eliminate fraud and deliver an automated and integrated rewards system. WigiPay is intended to be a consumer-focused payment platform that when fully developed will provide consumers with multiple payment options. As the platform evolves, it will allow for cash, credit cards, debit cards, gift cards, cryptocurrencies, as well as loyalty/rewards transactions. WigiPay will be developed to allow for the transfer of cash from a user's account into his or her WigiPay account. From there, users can buy goods and/or services online. In addition, we intend to provide retail and e-commerce businesses the ability to accept payments utilizing WigiPay points via our WigiPay payments system, which will charge a fee on every transaction made through our application. This is intended to provide a larger customer base to businesses while also lowering the payment processor transaction costs. Wigi believes that consumers, merchants and merchant network platform providers, can simultaneously benefit with its WigiPay payment system, which will use blockchain technology. Wigi believes it can disrupt legacy payments industry systems, which are costly for merchants (and ultimately for consumers), especially when fraud and chargebacks are included. Our products will include the WigiPay mobile app for consumers and WigiPOS merchant dashboard. When used in tandem, consumers will be able to pay for products and services at lower costs while merchants will benefit from an automated rewards system that result in greater consumer retention and satisfaction. Wigi intends to modernize legacy payments by utilizing blockchain technology with fiat currency. We are a development stage company that has not realized any revenues to date. We are in the early stages of developing our business. We intend to be in the business of providing retail and e-commerce companies the ability to accept WigiPay points using a blockchain based payment platform. The goal is to create blockchain based payment platform that focuses primarily on fiat as opposed to the many other digital currencies.
Our plan of operations over the 12-month period following the successful completion of our offering of 3,000,000 shares of our common stock is to complete development and marketing of our ecommerce blockchain products.
The Company's principal office is located at 8F Iwasaki Building. 1-7-2 Asakusabashi, Taito-ku, Tokyo-to, Japan 111-0053. Our telephone number is 81 90-9954-2711.
We are an "emerging growth company" within the meaning of the federal securities laws. For as long as we are an emerging growth company, we will not be required to comply with the requirements that are applicable to other public companies that are not "emerging growth companies" including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, the reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and the exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We intend to take advantage of these reporting exemptions until we are no longer an emerging growth company.
This is a direct participation offering since we are offering the stock directly to the public without the participation of an underwriter. Our officers and directors will be solely responsible for selling shares under this offering and no commission will be paid on any sales.
There has been no market for our securities and a public market may never develop, or, if any market does develop, it may not be sustained. Our common stock is not traded on any exchange or on the over-the-counter market. After the effective date of the registration statement relating to this prospectus, we intend to seek to have a market maker file an application with the Financial Industry Regulatory Authority ("FINRA") for our common stock to be eligible for trading on the Over-the-Counter Bulletin Board. We do not yet have a market maker who has agreed to file such application. There can be no assurance that our common stock will ever be quoted on a stock exchange or a quotation service or that any market for our stock will develop.
You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with information different from that contained in this prospectus. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of our common shares.
The Offering
Securities Being Offered:
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3,000,000 shares of common stock, par value $0.001 per share.
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Offering price
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$1.00 per share
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Duration of the Offering:
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The 3,000,000 shares of common stock are being offered for a period of 18 months.
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Net proceeds to us
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$3,000,000 assuming the maximum number of shares sold. For further information on the Use of Proceeds, see page 26.
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Shares Outstanding Prior to Offering
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9,046,890 shares of common stock.
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Shares Outstanding After Offering
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12,046,890 shares of common stock.
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Subscriptions
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All subscriptions once accepted by us are irrevocable.
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Registration Costs
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All registration costs shall be borne by the Company
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Risk Factors
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See "Risk Factors" and the other information in this prospectus for a discussion of the factors you should consider before deciding to invest in shares of our common stock.
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Going Concern
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Our financial statements from inception on August 10, 2017 through our fiscal period ended September 30, 2017 report no revenues and a net loss of $47,855 Our independent auditor has issued an audit opinion for our Company which includes a statement expressing substantial doubt as to our ability to continue as a going concern.
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RISK FACTORS
An investment in our common stock involves a number of very significant risks. You should carefully consider the following known material risks and uncertainties in addition to other information in this prospectus in evaluating our company and its business before purchasing shares of our company's common stock. You could lose all or part of your investment due to any of these risks. An investment in the Company is speculative. A purchase of any of the securities of the Company involves a high degree of risk and should be undertaken only by purchasers whose financial resources are sufficient to enable them to assume such risks and who have no need for immediate liquidity in their investment. An investment in the securities of the Company should not constitute a major portion of an individual's investment portfolio and should only be made by persons who can afford a total loss of their investment. Prospective purchasers should evaluate carefully the following risk factors associated with an investment in the Company's securities prior to purchasing any of the securities.
Limited Operating History
The Company has a limited operating history on which to base an evaluation of its business and prospects. The Company is subject to all the risks inherent in a small company seeking to develop, market and distribute new services, particularly companies in evolving markets such as the Internet, technology, and payment systems. The likelihood of the Company's success must be considered, in light of the problems, expenses, difficulties, complications and delays frequently encountered in connection with the development, introduction, marketing and distribution of new products and services in a competitive environment.
Such risks for the Company include, but are not limited to, dependence on the success and acceptance of the Company's services, the ability to attract and retain a suitable client base, and the management of growth. To address these risks, the Company must, among other things, generate increased demand, attract a sufficient clientele base, respond to competitive developments, increase the "Wigi" brand name visibility, successfully introduce new services, attract, retain and motivate qualified personnel and upgrade and enhance the Company's technologies to accommodate expanded service offerings. In view of the rapidly evolving nature of the Company's business and its limited operating history, the Company believes that period-to-period comparisons of its operating results are not necessarily meaningful and should not be relied upon as an indication of future performance.
The Company is therefore subject to many of the risks common to early-stage enterprises, including under-capitalization, cash shortages, limitations with respect to personnel, financial, and other resources and lack of revenues.
Need for Additional Capital
The Company has limited revenue-producing operations and will require the proceeds from this offering to execute its full business plan. The Company believes the proceeds from this offering, assuming a minimum of 750,000 shares ($750,000) are sold, will be sufficient to develop its initial plans as described in "Description of Business". However, the Company can give no assurance that all, or even a significant portion of these shares will be sold or that if 750,000 shares (i.e. $750,000) are sold in this offering, that the moneys raised will be sufficient to execute the entire business plan of the Company. Further, no assurance can be given if additional capital is needed as to how much additional capital will be required or that additional financing can be obtained, or if obtainable, that the terms will be satisfactory to the Company, or that such financing would not result in a substantial dilution of shareholder's interest. A failure to raise capital when needed would have a material adverse effect on the Company's business, financial condition and results of operations. In addition, debt and other debt financing may involve a pledge of assets and may be senior to interests of equity holders. Any debt financing secured in the future could involve restrictive covenants relating to capital raising activities and other financial and operational matters, which may make it more difficult for the Company to obtain additional capital or to pursue business opportunities, including potential acquisitions. If adequate funds are not obtained, the Company may be required to reduce, curtail, or discontinue operations.
Competition
The internet-based ecommerce payment business is highly competitive and the Company competes with several different types of companies that offer some form of payment processing and/or funds transfer content. Certain of these competitors may have greater industry experience or financial and other resources than the Company.
Some of the Company's competitors include the following companies:
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BitPay is a private global bitcoin payment service provider headquartered in Atlanta, Georgia;
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PayPal (NASDAQ: PYPL) is an international e-commerce business allowing payments and money transfers to be made through the Internet. PayPal is one of the largest financial transaction tools available online. PayPal is a leader in online commerce;
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POSaBIT is a private Seattle, Washington based company that gives consumers easy access to digital currency by allowing them to purchase it during the retail experience. These digital wallets can be used to make purchases on the spot or anywhere that accepts cryptocurrency such as Amazon.com, Overstock.com, Expedia.com, and more; and
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Shakepay is a Canadian private company that enables payments using bitcoin, ethereum and dash digital currencies via a standard Visa debit card where instantaneous transaction times are required and through Shakepay's agents for transaction of up to $2 million in cryptocurrency where longer transaction times are acceptable.
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To become and remain competitive, the Company will require research and development, marketing, sales and client support. The Company may not have sufficient resources to maintain research and development, marketing, sales and client support efforts on a competitive basis which could materially and adversely affect the business, financial condition and results of operations of the Company. The Company intends to differentiate itself from competitors by developing a payments platform that utilizes blockchain technology and allows consumers and merchants to accept fiat currency via Wigi points. The Company believes cryptocurrency is a rapidly growing currency or asset class; however, the Company believes that the dominant form of payment worldwide is and will continue to be fiat-based currency and the Company intends to develop a blockchain based payments platform that focuses on fiat currency.
The market for payment processing is rapidly evolving and intensely competitive, and the Company expects competition to intensify further in the future. There is no guarantee that any factors that differentiate the Company from its competitors will give the Company a market advantage or continue to be a differentiating factor for the Company in the foreseeable future. Competitive pressures created by any one of the above mentioned companies (and other direct or indirect competitors), or by the Company's competitors collectively, could have a material adverse effect on the Company's business, results of operations and financial condition.
CryptoCurrency Risks
The cryptocurrency market has limited regulation and in its infancy. Accordingly, there are certain risks related to cryptocurrencies, including the risk of regulation reforms which may prohibit payment processing transactions related to the business of the Company. Additionally, financial institutions may impose restrictions on persons that engage in business that is based on cryptocurrency transactions. Risks related to the acceptance and use of cryptocurrencies could have a significant impact on the volume of cryptocurrency transactions. Such acceptance or lack thereof, and reforms in regulation could adversely affect the Company assets, liabilities, business, financial condition, prospects and results of operations.
Risk of Capacity Constraints
The Company seeks to generate a high volume of traffic and transactions through its technologies. Accordingly, the satisfactory performance, reliability and availability of the Company's website, processing systems and network infrastructure are critical to the Company's reputation and its ability to attract and retain large numbers of users who transact sales on its platform while maintaining adequate customer service levels. The Company's revenues depend, in part, on the volume of user transactions that are successfully completed. To date, the Company has not generated any revenues. The Company acquired the source code of the Wigi software platform which it needs to develop further before the WigiPay platform can be operational.. Any system interruptions that result in the unavailability of the Company's service or reduced customer activity would ultimately reduce the volume of transactions completed. Interruptions of service may also diminish the attractiveness of the Company and its services. Any substantial increase in the volume of traffic on the Company's website or in the number of transactions being conducted by customers will require the Company to expand and upgrade its technology, transaction processing systems and network infrastructure. There can be no assurance that the Company will be able to accurately project the rate or timing of increases, if any, in the use of the Company's platform or timely expand and upgrade its systems and infrastructure to accommodate such increases in a timely manner. Any failure to expand or upgrade its systems could have a material adverse effect on the Company's business, results of operations and financial condition.
Furthermore, in the future, the Company may add new features and functionality to its services that would result in the need to develop or license additional technologies. The Company's inability to add new software and hardware to develop and further upgrade its existing technology, transaction processing systems or network infrastructure to accommodate increased traffic on its platforms or increased transaction volume through its processing systems or to provide new features or functionality may cause unanticipated system disruptions, slower response times, degradation in levels of customer service, impaired quality of the user's experience on the Company's service, and delays in reporting accurate financial information. There can be no assurance that the Company will be able in a timely manner to effectively upgrade and expand its systems or to integrate smoothly any newly developed or purchased technologies with its existing systems. Any inability to do so would have a material adverse effect on the Company's business, results of operations and financial condition.
Risks Associated with Brand Development
The Company believes that continuing to strengthen its brand is critical to achieving widespread acceptance of the Company, particularly in light of the competitive nature of the Company's market. Promoting and positioning its brand will depend largely on the success of the Company's marketing efforts and the ability of the Company to provide high quality services. In order to promote its brand, the Company will need to increase its marketing budget and otherwise increase its financial commitment to creating and maintaining brand loyalty among users. There can be no assurance that brand promotion activities will yield increased revenues or that any such revenues would offset the expenses incurred by the Company in building its brand. Further, there can be no assurance that any new users attracted to the Company will conduct transactions over the Company on a regular basis. If the Company fails to promote and maintain its brand or incurs substantial expenses in an attempt to promote and maintain its brand or if the Company's existing or future strategic relationships fail to promote the Company's brand or increase brand awareness, the Company's business, results of operations and financial condition would be materially adversely affected.
Risks Associated with New Services, Features and Functions
The Company plans to expand its operations by developing and promoting new or complementary services, products or transaction formats or expanding the breadth and depth of services. There can be no assurance that the Company will be able to expand its operations in a cost-effective or timely manner or that any such efforts will maintain or increase overall market acceptance. Furthermore, any new business or service launched by the Company that is not favourably received by consumers could damage the Company's reputation and diminish the value of its brand. Expansion of the Company's operations in this manner would also require significant additional expenses and development, operations and other resources and would strain the Company's management, financial and operational resources. The lack of market acceptance of such services or the Company's inability to generate satisfactory revenues from such expanded services to offset their cost could have a material adverse effect on the Company's business, results of operations and financial condition.
Risks Related to Consumer Trends
The Company expects to derive most of its revenues from fees from successfully completed transactions that utilize its payment processing platform. The Company's future revenues will depend upon continued demand for the types of goods that are listed by users of the Company's services. The value of listed items on the Company's platforms will fluctuate depending on the listing of inventory for sale by its customers, the frequency of transactions and the expiry dates for certain items. These trends will cause significant fluctuations in the Company's operating results from one quarter to the next. Any decline in demand for the goods offered through the Company's services as a result of changes in consumer trends could have a material adverse effect on the Company's business, results of operations and financial condition.
Online Commerce Security Risks
A significant barrier to online commerce and communications is the secure transmission of confidential information over public networks. There can be no assurance that advances in computer capabilities, new discoveries in the field of cryptography, or other events or developments will not result in a compromise or breach of the technology used by the Company to protect customer transaction data. If any such compromise of the Company's security were to occur, it could have a material adverse effect on the Company's reputation and, therefore, on its business, results of operations and financial condition. Furthermore, a party who is able to circumvent the Company's security measures could misappropriate proprietary information or cause interruptions in the Company's operations. The Company may be required to expend significant capital and other resources to protect against such security breaches or to alleviate problems caused by such breaches. Concerns over the security of transactions conducted on the Internet and other online services and the privacy of users may also inhibit the growth of the Internet and other online services generally, and the Web in particular, especially as a means of conducting commercial transactions. To the extent that activities of the Company involve the storage and transmission of proprietary information, security breaches could damage the Company's reputation and expose the Company to a risk of loss or litigation and possible liability. There can be no assurance that the Company's security measures will prevent security breaches or that failure to prevent such security breaches will not have a material adverse effect on the Company's business, results of operations and financial condition.
Improper Disclosure of Personal Data
The Company stores and processes large amounts of personally identifiable information (PII), consisting primarily of customer information and transactions. It is possible that the Company's security controls over personal data, training of employees and other practices it follows may not prevent the improper disclosure of personally identifiable information. Such disclosure could harm the Company's reputation and subject it to liability under laws that protect personal data, which could have a material adverse effect on its business and/or financial condition. Blockchain technology potentially provides a method to mitigate this risk, as PII is owned by the customer with select data being released only for the purposes to execute a transaction and never residing on company servers.
Growth Strategy Implementation; Ability to Manage Growth
The Company anticipates that significant expansion will be required to address potential growth in its customer base and market opportunities. The Company's expansion is expected to place a significant strain on the Company's management, operational and financial resources. To manage any material growth of its operations and personnel, the Company may be required to improve existing operational and financial systems, procedures and controls and to expand, train and manage its employee base. There can be no assurance that the Company's planned personnel, systems, procedures and controls will be adequate to support the Company's future operations, that management will be able to hire, train, retain, motivate and manage required personnel or that the Company's management will be able to successfully identify, manage and exploit existing and potential market opportunities. If the Company is unable to manage growth effectively, its business, prospects, financial condition and results of operations may be materially adversely affected.
Risks associated with Acquisitions
If appropriate opportunities present themselves, the Company intends to acquire businesses, technologies, services or products that the Company believes are strategic. The Company currently has no understandings, commitments or agreements with respect to any other material acquisition and no other material acquisition is currently being pursued. There can be no assurance that the Company will be able to identify, negotiate or finance future acquisitions successfully, or to integrate such acquisitions with its current business. The process of integrating an acquired business, technology, service or product into the Company may result in unforeseen operating difficulties and expenditures and may absorb significant management attention that would otherwise be available for ongoing development of the Company's business. Future acquisitions could result in potentially dilutive issuances of equity securities, the incurrence of debt, contingent liabilities and/or amortization expenses related to goodwill and other intangible assets, which could materially adversely affect the Company's business, results of operations and financial condition. Any such future acquisitions of other businesses, technologies, services or products might require the Company to obtain additional equity or debt financing, which might not be available on terms favourable to the Company, or at all, and such financing, if available, might be dilutive.
Dependence upon Management and Key Personnel
The Company is, and will be, heavily dependent on the skill, acumen and services of the management of the Company. The loss of the services of these key individuals, and certain others, for any substantial length of time would materially and adversely affect the Company's results of operation and financial position (See "Management"). Management and directors of the Company are not required to devote any specific number of hours to the Company. However, it is expected that Mr. Filiatrault will devote approximately 50% of his time to the business of the Company; Mr. Corin will devote approximately 15% of his time to the business of the Company; and Mr. Rosner will devote approximately 20% of his time to the business of the Company.
Difficulty to Forecast
The Company must rely largely on its own market research to forecast sales as detailed forecasts are not generally obtainable from other sources at this early stage of the industry. A failure in the demand for its products to materialize as a result of competition, technological change or other factors could have a material adverse effect on the business, results of operations and financial condition of the Company.
Regulatory Regime
From time-to-time, governments and regulatory bodies may review the legislation and regulations applied to the cryptocurrency financial services industry and the payment processing industry in which the Company operates. Such reviews could result in the enactment of new laws and/or the adoption of new regulations in the United States of America, Japan, Canada, Europe or elsewhere, which might adversely impact businesses in United States of America, Japan, Canada, Europe or other countries in general and consequently, may threaten the Company's growth prospects. More specifically, the Company is operating in the payment processing industry, which is strictly regulated. Regulation is extensive and designed to protect consumers and the public, while providing standard guidelines for business operations. In the offering of its products, the Company is subject to certain federal and provincial laws and regulations relating to its financial product offerings, including laws and regulations governing such things as Know-Your-Customer (KYC), Anti-Money Laundering (AML), Anti-Terrorist Financing (ATF) and safeguarding the privacy of customers' personal information. Failure to comply with, or changes to, existing or future laws and regulations could result in significant unforeseen costs and limitations, and could have an adverse impact on the Company's business, results of operations and/or financial condition.
Other Nonpublic Sales of Securities Likely
As part of the Company's plan to raise additional capital, the Company will likely make offers and sales of its common stock and/or preferred stock to qualified investors in transactions which are exempt from registration under the 1933 Act, as amended, in the future. Other offers and sales of common stock or preferred stock may be at prices per share that are higher or lower than the price per share in this offering or higher or lower than the conversion rate of the share of this offering. The Company reserves the right to set prices at its discretion, which prices need not relate to any ascertainable criterion of value. There can be no assurance the Company will not make other offers at lower prices per share, when, at the Company's discretion, such price is deemed by the Company to be reasonable under the circumstances. Additional future nonpublic sales of equity may result in dilution of shareholder interests in the Company.
Arbitrary Offering Price
The offering price of the common shares offered hereunder has been arbitrarily determined by the Company and bears no relationship to any objective criterion of value. The price does not bear any relationship to the assets, book value, historical earnings or net worth of the Company. In determining the offering price, the Company considered such factors as the prospects, if any, for similar companies, the previous experience of management, the Company's anticipated results of operations, the present financial resources of the Company and the likelihood of acceptance of this offering. Please review any financial or other information contained in this prospectus with qualified persons to determine its suitability as an investment before purchasing any shares in this offering.
Limited Market for Securities
The Company's securities are not currently quoted on any recognized stock exchange or trading platform. Therefore, there is currently no market for the Company's common stock is limited. There can be no assurance that a meaningful trading market will develop.
The Securities Enforcement and Penny Stock Reform Act of 1990 requires additional disclosure related to the market for penny stocks and for trades in any stock defined as a penny stock. The Commission has recently adopted regulations under such Act, which defines penny stock to be any non-NASDAQ equity security that has a market price of less than $5.00 per share (as defined). Unless exempt, for any transaction in a penny stock, the new rules require the delivery, prior to any transaction in a penny stock, of a disclosure schedule prepared by the Commission explaining important concepts involving the penny stock market, the nature of such market, terms used in such market, the broker/dealer's duties to the customer, a toll-free telephone number for inquiries about the broker/dealer's disciplinary history and the customer's rights and remedies in case of fraud or abuse in the sale. Disclosure also has to be made about commissions payable to both the broker/dealer and the registered representative and current quotations of securities. Finally, monthly statements must be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks. Non-NASDAQ stocks would not be covered by the definition of penny stock for (i) issuers who have $3,000,000 in tangible assets ($5,000,000 if the issuer has not been in continuous operation for three years); (ii) transactions in which the customer is an institutional accredited investor; and (iii) transactions that are not recommended by the broker/dealer.
Dividend Policy
To date, the Company has not declared or paid any cash dividends on its stock and do not anticipate paying cash dividends in the foreseeable future. The payment of cash dividends, if any, in the future will be at the sole discretion of the Board of Directors.
Control By Existing Management
Under the terms of the Company's Articles of Incorporation filed with the Secretary of State of Oklahoma with respect to the rights, preferences and limitations of the common shares, each common shareholder is entitled to vote on any matters presented to stockholders of the Company. The present officers and directors of the Company will own approximately 59.7% of the issued and outstanding common shares and will continue to own approximately 44.8% if all of the shares offered hereunder are sold. As a result, purchasers of the common shares will have only a limited voice in the Company's management, which is likely to be controlled by the present officers and directors of the Company. Although if all shares are sold management will not have actual 50% majority control, management is likely to vote as group and will still retain significant voting control of the Company. (See "Principal Shareholders" and "Description of Securities").
Proceeds Applied to General Corporate Purposes - Management Discretion
Although a portion of the net proceeds of this prospectus are for specific uses, the balance will be available for working capital and general corporate purposes. Therefore, the application of the net proceeds of this offering is substantially within the discretion of the management. Investors will be relying on the Company's management and business judgment based solely on limited information. No assurance can be given that the application of the net proceeds of this prospectus will result in the Company achieving its financial and strategic objectives.
Acceptance and/or widespread use of cryptocurrency is uncertain.
Currently, there is relatively small use of bitcoins and/or other cryptocurrencies in the retail and commercial marketplace in comparison to relatively large use by speculators, thus contributing to price volatility that could adversely affect the Company's operations, investment strategies, and profitability. Conversely, a significant portion of cryptocurrency demand is generated by speculators and investors seeking to profit from the short-term or long-term holding of cryptocurrencies. The relative lack of acceptance of cryptocurrencies in the retail and commercial marketplace limits the ability of end-users to use them to pay for goods and services. A lack of expansion by cryptocurrencies into retail and commercial markets, or a contraction of such use, may result in increased volatility or a reduction in their market prices, either of which could adversely impact the Company's operations, investment strategies, and profitability.
Security threats to us could damage to the reputation and our brand, each of which could adversely affect an investment in the Company.
Security breaches, computer malware and computer hacking attacks have been a prevalent concern in the bitcoin exchange market. Any security breach caused by hacking, which involves efforts to gain unauthorized access to information or systems, or to cause intentional malfunctions or loss or corruption of data, software, hardware or other computer equipment, and the inadvertent transmission of computer viruses, could harm our business operations or result in loss of our bitcoins. Any breach of our infrastructure could result in damage to our reputation which could adversely affect an investment in the Company. Furthermore, management of the Company believes that, as its assets grow, it may become a more appealing target for security threats such as hackers and malware.
The security system and operational infrastructure may be breached due to the actions of outside parties, error or malfeasance of an employee of ours, or otherwise, and, as a result, an unauthorized party may obtain access to our data. Additionally, outside parties may attempt to fraudulently induce employees of ours to disclose sensitive information in order to gain access to our infrastructure. As the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently, or may be designed to remain dormant until a predetermined event and often are not recognized until launched against a target, we may be unable to anticipate these techniques or implement adequate preventative measures. If an actual or perceived breach of our security system occurs, the market perception of the effectiveness of our security system could be harmed, which could adversely affect an investment in the Company.
In the event of a security breach, we may be forced to cease operations, or suffer a reduction in assets, the occurrence of each of which could adversely affect an investment in the Company.
A loss of confidence in our security system, or a breach of our security system, may adversely affect the Company and the value of an investment in the Company.
The Company will take measures to protect us from unauthorized access, damage or theft; however, it is possible that the security system may not prevent the improper access to, or damage or theft of our data and assets. A security breach could harm the Company's reputation.
Failure to deal effectively with fraud, fictitious transactions, bad transactions, and negative customer experiences would increase our loss rate and harm our business, and could severely diminish merchant and consumer confidence in and use of our services.
We will incur losses due to claims from consumers that merchants have not performed or that their goods or services do not match the merchant's description. We will also incur losses from claims that the consumer did not authorize the purchase, from consumer fraud, from erroneous transmissions and from customers who have closed bank accounts or have insufficient funds in them to satisfy payments. In addition, if losses incurred by us related to payment card transactions become excessive, they could potentially result in our losing the right to accept payment cards for payment. In the event that we were unable to accept payment cards, the number of transactions processed through our services would decrease substantially and our business could be harmed. We are similarly subject to the risk of fraudulent activity associated with merchants, consumers of our products and third parties handling our user information. We have taken measures to detect and reduce the risk of fraud, but these measures need to be continually improved and may not be effective against new and continually evolving forms of fraud or in connection with new product offerings. If these measures do not succeed, our business could be harmed.
It may be illegal now, or in the future, to acquire, own, hold, sell or use bitcoins or other digital currencies in one or more countries, and ownership of, holding or trading in our securities may also be considered illegal and subject to sanction.
Although currently bitcoins and other digital currencies are not regulated or are lightly regulated in most countries, including the United States, one or more countries such as China and Russia may take regulatory actions in the future that severely restricts the right to acquire, own, hold, sell or use digital currencies or to exchange digital currencies for fiat currency. Such an action may also result in the restriction of ownership, holding or trading in our securities. Such restrictions may adversely affect an investment in the Company.
The value of cryptocurrencies may be subject to momentum pricing risk.
Momentum pricing typically is associated with growth stocks and other assets whose valuation, as determined by the investing public, accounts for anticipated future appreciation in value. Cryptocurrency market prices are determined primarily using data from various exchanges, over-the-counter markets, and derivative platforms. Momentum pricing may have resulted, and may continue to result, in speculation regarding future appreciation in the value of cryptocurrencies, inflating and making their market prices more volatile. As a result, they may be more likely to fluctuate in value due to changing investor confidence in future appreciation (or depreciation) in their market prices, which could adversely affect the value of cryptocurrencies and discourage their use in day-to-day transactions and thereby affect the Company.
Cryptocurrency exchanges and other trading venues are relatively new and, in most cases, largely unregulated and may therefore be more exposed to fraud and failure.
To the extent that cryptocurrency exchanges or other trading venues are involved in fraud or experience security failures or other operational issues, this could result in a reduction in cryptocurrency prices. Cryptocurrency market prices depend, directly or indirectly, on the prices set on exchanges and other trading venues, which are new and, in most cases, largely unregulated as compared to established, regulated exchanges for securities, derivatives and other currencies. For example, during the past three years, a number of bitcoin exchanges have been closed due to fraud, business failure or security breaches.
In many of these instances, the customers of the closed bitcoin exchanges were not compensated or made whole for the partial or complete losses of their account balances in such bitcoin exchanges. While smaller exchanges are less likely to have the infrastructure and capitalization that provide larger exchanges with additional stability, larger exchanges may be more likely to be appealing targets for hackers and "malware" (i.e., software used or programmed by attackers to disrupt computer operation, gather sensitive information or gain access to private computer systems) and may be more likely to be targets of regulatory enforcement action. Any negative events or publicity involving digital currencies could discourage their use in day-to-day transactions and thereby affect the Company.
Banks may not provide banking services, or may cut off banking services, to businesses that provide cryptocurrency-related services or that accept cryptocurrencies as payment.
A number of companies that provide bitcoin and/or other cryptocurrency-related services have been unable to find banks that are willing to provide them with bank accounts and banking services. Similarly, a number of such companies have had their existing bank accounts closed by their banks. Banks may refuse to provide bank accounts and other banking services to bitcoin and/or other cryptocurrency-related companies or companies that accept cryptocurrencies for a number of reasons, such as perceived compliance risks or costs. The difficulty that many businesses that provide bitcoin and/or other cryptocurrency-related services have and may continue to have in finding banks willing to provide them with bank accounts and other banking services may be currently decreasing the usefulness of cryptocurrencies as a payment system and harming public perception of cryptocurrencies or could decrease its usefulness and harm its public perception in the future. Similarly, the usefulness of cryptocurrencies as a payment system and the public perception of cryptocurrencies could be damaged if banks were to close the accounts of many or of a few key businesses providing bitcoin and/or other cryptocurrency-related services. This could decrease the market prices of cryptocurrencies and adversely affect the value of our bitcoin inventory.
The Company's payment system might be used for illegal or improper purposes, which could expose it to additional liability and harm its business.
Despite measures the Company will implement to detect and prevent identify theft, its payment system remains susceptible to potentially illegal or improper uses. Despite measures the Company will take to detect and lessen the risk of this kind of conduct, the Company cannot assure that these measures will succeed. The Company's business could suffer if customers use the Resulting Issuer's system for illegal or improper purposes.
If these merchants are operating illegally, the Company could be subject to civil and criminal lawsuits, administrative action, and prosecution for, among other things, money laundering or for aiding and abetting violations of law. The Company would lose the revenues associated with these accounts and could be subject to material penalties and fines, both of which would seriously harm its business.
Customer complaints or negative publicity about the Company's customer service could affect use of its product adversely and, as a result, its business could suffer.
Customer complaints or negative publicity about the Company's customer service could diminish severely consumer confidence in and use of its product. Breaches of the Company's customers' privacy and its security measures could have the same effect. Measures the Company sometimes take to combat risks of fraud and breaches of privacy and security, such as freezing customer funds, can damage relations with the Company's customers. These measures heighten the need for prompt and accurate customer service to resolve irregularities and disputes. If the Company does not handle customer complaints effectively, its reputation may suffer and it may lose its customers' confidence.
The Company may experience breakdowns in its payment processing system that could damage customer relations and expose it to liability, which could affect adversely its ability to provide reliable service.
A system outage or data loss could have a material adverse effect on the Company's business, financial condition and results of operations. To operate the Company's business successfully, it must protect its payment processing and other systems from interruption by events beyond its control. Events that could cause system interruptions include:
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· |
telecommunications failure; and
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|
· |
computer denial of service attacks.
|
The Company's infrastructure could prove unable to handle a larger volume of customer transactions. Any failure to accommodate transaction growth could impair customer satisfaction, lead to a loss of customers, impair the Company's ability to add customers or increase its costs, all of which would harm its business.
Risks related to insurance
The Company intends to insure its operations. However, given the novelty of cryptocurrency businesses, such insurance may not be available, uneconomical or the nature or level may be insufficient to provide adequate insurance cover. The occurrence of an event that is not covered or fully covered by insurance could have a material adverse effect. While management of the Company believes its insurance coverage will address all material risks to which it is exposed and will be adequate and customary in its current state of operations, such insurance will be subject to coverage limits and exclusions and may not be available for the risks and hazards to which we are exposed. In addition, no assurance can be given that such insurance will be adequate to cover our liabilities or will be generally available in the future or, if available, that premiums will be commercially justifiable. If we were to incur substantial liability and such damages were not covered by insurance or were in excess of policy limits, or if we were to incur such liability at a time when we are not able to obtain liability insurance, our business, results of operations and financial condition could be materially adversely affected. Payment of the liabilities for which insurance is not carried may have a material adverse effect on the Company's financial position and operations.
Product Development and Technology Change
Our success could be seriously affected by a competitor's ability to develop and market technologies that compete with our technologies. To remain competitive, we must continue to enhance and improve the responsiveness, functionality and features of our technology. The Internet and the electronic commerce industry are characterized by rapid technological change, changes in user and customer requirements and preferences, frequent new product and service introductions embodying new technologies and the emergence of new industry standards and practices that could render our existing operations and proprietary technology and systems obsolete. There can be no assurance that we will successfully implement new technologies and transaction processing systems to meet industry standards and if unable to adapt in a timely matter, our business could be materially affected.
Dependence of Technical Infrastructure
Our ability to attract, retain, and serve customers is dependent upon the reliable performance of the blockchain software platform and the underlying technical infrastructure. We may fail to effectively scale and grow our technical infrastructure to accommodate these increased demands. In addition, our business will be reliant upon third party partners such as digital currency exchanges, financial service providers and cash-out providers. Any disruption or failure in the services from third party partners used to facilitate our business could harm our business. Any financial or other difficulties these partners face may adversely affect our business, and we exercise little control over these partners, which increases vulnerability to problems with the services they provide.
Use and Storage of Personal Information and Compliance with Privacy Laws
As part of our business we may receive, store and process personal information and other customer data including, addresses, telephone numbers, and images of government identification, and information relating to financial transactions. As a result, we must comply with the numerous federal, provincial and local laws relating to the collection, use, disclosure, storage and safeguarding of personal information. Any failure or perceived failure to comply with our privacy policies, privacy-related obligations to customers or other third parties, or privacy-related legal obligations, or any compromise of security that results in the unauthorized release or transfer of personally identifiable information or other customer data, may result in governmental enforcement actions, fines or litigation.
Profitability
There is no assurance that we will earn profits in the future, or that profitability will be sustained. There is no assurance that future revenues will be sufficient to generate the funds required to continue our business development and marketing activities. If we do not have sufficient capital to fund our operations, we may be required to reduce our sales and marketing efforts or forego certain business opportunities.
Protection of Intellectual Property Rights
The future success of our business is dependent upon the intellectual property rights surrounding the technology, including trade secrets, know-how and continuing technological innovation. Although we will seek to protect our proprietary rights, our actions may be inadequate to protect any proprietary rights or to prevent others from claiming violations of their proprietary rights. There can be no assurance that other companies are not investigating or developing other technologies that are similar to our technology. In addition, effective intellectual property protection may be unenforceable or limited in certain countries, and the global nature of the Internet makes it impossible to control the ultimate designation of our technology. Any of these claims, with or without merit, could subject us to costly litigation. If the protection of proprietary rights is inadequate to prevent unauthorized use or appropriation by third parties, the value of our brand and other intangible assets may be diminished. Any of these events could have an adverse effect on our business and financial results.
The Company's product features may infringe claims of third-party patents, which could affect its business and profitability adversely.
The Company cannot assure that its product features do not infringe on patents held by others or that they will not in the future.
If all or any portion of the Company's services were found to infringe a patent, it could be required to restructure its payment system, stop offering its payment product altogether, or pay substantial damages or license fees to third party patent owners. Even if the Company prevails in a lawsuit, litigation can be expensive and can consume substantial amounts of management time and attention.
If the Company cannot keep pace with rapid technological developments to provide new and innovative programs, products and services, the use of its products and its revenues could decline.
Rapid, significant technological changes continue to confront the industries in which the Company operates, including developments in smart cards, tokenization, ecommerce, mobile, and radio frequency and proximity payment devices, such as contactless payments. The Company cannot predict the effect of technological changes on its business. The Company expects that new services and technologies applicable to the industries in which it operates will continue to emerge. These new services and technologies may be superior to, or render obsolete, the technologies that the Company currently uses in its products and services. Incorporating new technologies into the Company products and services may require substantial expenditures and take considerable time, and ultimately may not be successful. In addition, the Company's ability to adopt new services and develop new technologies may be inhibited by industry-wide standards, payments networks, new laws and regulations, resistance to change from consumers or merchants, or third parties' intellectual property rights. The Company's success will depend on its ability to develop new technologies and adapt to technological changes, evolving industry standards as well as the regulatory environment.
Substantial and increasingly intense competition worldwide in the global payments industry may harm the Company's business
The global payments industry is highly competitive. The Company competes against businesses in varied industries, many of whom are larger than the Company is, have a dominant and secure position in other industries, and offer other goods and services to consumers and merchants which the Company does not offer. As online and offline commerce increasingly converge, the pace of change, innovation and disruption is increasing. The global payments industry is rapidly changing, highly innovative and increasingly subject to regulatory scrutiny, which may negatively affect the competitive landscape. The Company competes against all forms of payments, including:
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· |
paper-based transactions (principally cash and checks);
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|
· |
providers of traditional payment methods, particularly credit and debit cards, money orders, and Automated Clearing House transactions (these providers are primarily well-established banks);
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|
· |
providers of "digital wallets" which offer customers the ability to pay online and/or on mobile devices through a variety of payment methods, including with mobile applications, through contactless payments, and with a variety of payment methods;
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|
· |
providers of mobile payments solutions that use tokenized card data approaches and Near Field Communication ("NFC") functionality (including Host Based Card Emulation ("HCE") functionality to eliminate the need for a physical NFC chip in the device);
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|
· |
payment-card processors that offer their services to merchants;
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|
· |
providers of "person-to-person" payments that facilitate individuals sending money with an email address or mobile phone number;
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|
· |
providers of mobile payments; and
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|
· |
providers of card readers for mobile devices and of other new point of sale and multi-channel technologies.
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The Company also faces competition and potential competition from:
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· |
services that provide online merchants the ability to offer their customers the option of paying for purchases from their bank account or paying on credit;
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|
· |
issuers of stored value targeted at online payments;
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|
· |
other international online payment-services providers;
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|
· |
other providers of online account-based payments;
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|
· |
payment services targeting users of social networks and online gaming, often through billing to the consumer's mobile phone account;
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|
· |
mobile payment services between bank accounts;
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|
· |
payment services enabling banks to offer their online banking customers the ability to send and receive payments through their bank account;
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|
· |
online shopping services that provide special offers linked to a specific payment provider; and
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|
· |
services that help merchants accept and manage virtual currencies.
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Some of these payment providers have greater customer bases, volume, scale, and market share than the Company does, which may provide significant competitive advantages. Some of these competitors may also be subject to less burdensome licensing, anti-money laundering, counter-terrorist financing, and other regulatory requirements. They may devote greater resources to the development, promotion, and sale of products and services, and they may offer lower prices or more effectively introduce their own innovative programs and services that adversely impact the Resulting Issuer's growth. The Company also expect new entrants to offer competitive products and services. In addition, some merchants provide such services to themselves. Competing services tied to established banks and other financial institutions may offer greater liquidity and engender greater consumer confidence in the safety and efficacy of their services.
The Company competes primarily on the basis of the following:
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· |
ability to attract, retain and engage both merchants and consumers with relatively low marketing expense;
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|
· |
security of transactions and the ability for consumers to use the Company's services without sharing their financial information with the merchant;
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|
· |
simplicity of the Company's fee structure;
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|
· |
ability to develop services across multiple commerce channels, including mobile payments and payments at the retail point of sale;
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|
· |
website, mobile platform and application onboarding, ease-of-use and accessibility;
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|
· |
system reliability and data security;
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|
· |
ease and quality of integration into third-party mobile applications; and
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|
· |
quality of developer tools such as its application programming interfaces and software development kits.
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If the Company is not able to differentiate its business from those of its competitors, drive value for its customers, and/or effectively align its resources with its goals and objectives, the Company may not be able to compete effectively against its competitors. The Company's failure to compete effectively against any of the foregoing competitive threats could materially and adversely harm its business.
If we are unable to maintain and promote our brand, our business and operating results may be harmed.
Management of the Company believes that maintaining and promoting our brand is critical to expanding our customer base. Maintaining and promoting our brand will depend largely on our ability to continue to provide useful, reliable and innovative services, which we may not do successfully. We may introduce new features, products, services or terms of service that our customers do not like, which may negatively affect our brand and reputation. Maintaining and enhancing our brand may require us to make substantial investments, and these investments may not achieve the desired goals. If we fail to successfully promote and maintain our brand or if we incur excessive expenses in this effort, our business and operating results could be adversely affected.
Software
Our software is highly technical, and if it contains undetected errors, our business could be adversely affected. Our products incorporate software that is highly technical and complex. Our software may now or in the future contain, undetected errors, bugs, or vulnerabilities. Some errors in our software code may only be discovered after the code has been released. Any errors, bugs, or vulnerabilities discovered in our code after release could result in damage to our reputation, loss of users, loss of revenue, or liability for damages, any of which could adversely affect our business and financial results. There is no assurance that our development of software will result in commercially viable software for customers.
Regulatory Risks
Our activities will be subject to regulation by governmental authorities. Achievement of our business objectives are contingent, in part, upon compliance with regulatory requirements enacted by these governmental authorities and obtaining all regulatory approvals. We cannot predict the time required to secure all appropriate regulatory approvals for our products, or the extent of testing and documentation that may be required by governmental authorities. Any delays in obtaining, or failure to obtain regulatory approvals could have a material adverse effect our business, results of operations and financial condition.
Our business is subject to rapid regulatory changes. Failure to keep up with such changes may adversely affect our business. Failure to follow regulatory requirements will have a detrimental impact on our business. Changes in legislation cannot be predicted and could irreparably harm the business.
Conflicts of Interest
Certain of our directors and officers are also directors and officers of other companies, and conflicts of interest may arise between their duties as our officers and directors and as officers and directors of such other companies. In addition, as applicable, such directors and officers will refrain from voting on any matter in which they have a conflict of interest.
Mr. Filiatrault is also a director of DMG Blockchain Solutions Inc., a company engaged in cryptocurrency mining, blockchain platform development, and forensics. Currently, the Company and DMG Blockchain Solutions Inc. do not directly compete on similar projects or business ventures. However, if the two companies may potentially engage in similar businesses then Mr. Filiatrault will refrain from voting on any matters that may be approved by the board of directors, as applicable. The Company has no intention to engage in cryptocurrency mining or forensics.
Global Economic and Financial Deterioration Impeding Access to Capital or Increasing the Cost of Capital
Market events and conditions, including disruption in U.S. and international financial markets and other financial systems and the deterioration of U.S. and global economic and financial market conditions, could, among other things, impact currency trading and impede access to capital or increase the cost of capital, which would have an adverse effect on our ability to fund our working capital and other capital requirements. Current and future conditions in the domestic and global economies remain uncertain. As a result, it is difficult to estimate the level of growth or contraction for the economy as a whole. It is even more difficult to estimate growth or contraction in various parts, sectors and regions of the economy, including the market area in which we will participate.
Litigation
The Company and/or its directors and officers may be subject to a variety of civil or other legal proceedings, with or without merit. From time to time in the ordinary course of its business, we may become involved in various legal proceedings, including commercial, employment and other litigation and claims, as well as governmental and other regulatory investigations and proceedings. Such matters can be time-consuming, divert management's attention and resources and cause us to incur significant expenses. Furthermore, because litigation is inherently unpredictable, the results of any such actions may have a material adverse effect on our business, operating results or financial condition.
Going-Concern Risks
The financial statements have been prepared on a going concern basis under which an entity is considered to be able to realize its assets and satisfy its liabilities in the ordinary course of business. Our future operations are dependent upon the identification and successful completion of equity or debt financing and the achievement of profitable operations at an indeterminate time in the future. There can be no assurances that we will be successful in completing an equity or debt financing or in achieving profitability.
Financial Risk Exposures
The Company may have financial risk exposure to varying degrees relating to the currency of each of the countries where it operates and has financial risk exposure towards digital currencies. The level of the financial risk exposure related to a currency and exchange rate fluctuations will depend on the Company's ability to hedge such risk or use another protection mechanism.
USE OF PROCEEDS
Our public offering of 3,000,000 shares is being made on a self-underwritten basis: no minimum number of shares must be sold in order for the offering to proceed. The offering price per share is $1.00. The table below depicts how we plan to utilize the proceeds in the event that 25%, 50%, 75% and 100% of the shares in this offering are sold; however, the amounts actually expended for working capital as well as other purposes may vary significantly and will depend on a number of factors, including the amount of our future revenues and the other factors described under "Risk Factors." Accordingly, we will retain broad discretion in the allocation of proceeds of this Offering.
Number of shares sold
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|
25%
|
|
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50%
|
|
|
75%
|
|
|
100%
|
Gross proceeds from this Offering (1)(2)
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$
|
750,000
|
|
$
|
1,500,000
|
|
$
|
2,250,000
|
|
$
|
3,000,000
|
Offering Costs
|
$
|
55,000
|
|
$
|
55,000
|
|
$
|
55,000
|
|
$
|
55,000
|
Net proceeds from this Offering
|
$
|
695,000
|
|
$
|
1,445,000
|
|
$
|
2,195,000
|
|
$
|
2,945,000
|
Operations
|
$
|
150,000
|
|
$
|
300,000
|
|
$
|
450,000
|
|
$
|
600,000
|
Software/Platform Development
|
$
|
250,000
|
|
$
|
500,000
|
|
$
|
750,000
|
|
$
|
1,000,000
|
Marketing & Advertising
|
$
|
45,000
|
|
$
|
120,000
|
|
$
|
195,000
|
|
$
|
270,000
|
Regulatory Matters (legal, and compliance)
|
$
|
125,000
|
|
$
|
275,000
|
|
$
|
425,000
|
|
$
|
575,000
|
Intellectual Property
|
$
|
12,500
|
|
$
|
25,000
|
|
$
|
37,500
|
|
$
|
50,000
|
General & Administrative
|
$
|
62,500
|
|
$
|
125,000
|
|
$
|
187,500
|
|
$
|
250,000
|
General Working Capital
|
$
|
50,000
|
|
$
|
100,000
|
|
$
|
150,000
|
|
$
|
200,000
|
|
(1) |
Expenditures for the 12 months following the completion of this offering. The expenditures are categorized by significant area of activity. The Company will hire more employees and consultants and scale up its operations based on the amount of funds it has.
|
|
(2) |
Due to the uncertainties inherent in software development it is difficult to estimate with certainty the exact amounts of the net proceeds from this offering that may be used for the above purposes.
|
The above figures represent only estimated costs. There may be circumstances, however, where for sound business reasons a reallocation of funds may be necessary. Use of proceeds will be subject to the discretion of management.
Any funds we raise from our offering of 3,000,000 shares of common stock will be immediately available for our use and will not be returned to investors. We will not maintain an escrow, trust, or similar account for the receipt of proceeds from the sale of our shares. Accordingly, if we file for bankruptcy protection or a petition for involuntary bankruptcy is filed by creditors against us, your funds will become part of the bankruptcy estate and administered according to the bankruptcy laws. If a creditor sues us and obtains a judgment against us, the creditor could garnish the bank account and take possession of the subscriptions. If that happens, you will lose your investment and your funds will be used to pay creditors.
This prospectus also relates to shares of our common stock that may be offered and sold from time to time by the Selling Shareholders. We will receive no proceeds from the sale of shares by the Selling Shareholders of common stock registered in this offering.
We have previously received approximately $501,552 from the sale of shares to the Selling Shareholders. The application of the proceeds of these private sales is at the discretion of management.
The Company currently has its general business plan as disclosed herein and the initial source code that it acquired. In order to complete the development of the Wigi platform, the Company expects that it will need at least $550,000 for operations, software/platform development, and regulatory matters (legal and compliance).
Software functionality and integration with existing processes and systems is determined through a process of interviews and process analysis which will include working with an expert or a company in the retail/merchant industry. This involves in depth collaboration with partners involved in the design and roll-out of the system. Prototypes will be developed to be used to verify integration with existing processes and systems to guide the development of the system.
The Company will explore wallet software with the intent to understand the weaknesses for the end user of each and will conduct user interviews with cryptocurrency and fiat usersfor the purpose of understanding how they want to interact with the general payments industry. As the Company's software is further developed, input from potential users of the WigiPay points and merchants will be sought and taken into consideration.
The Company will introduce the WigiPay platform to a test group identified during discovery, followed by a public release on the app store. Security penetrating testing will likely be outsourced by the Company.
The Company's initial goal is to complete the pilot version of the application (v0.1) to be deployed for field use. This software application is not intended for a mass release, rather, only to be integrated by a few potential merchants and customers on a trial basis (the beta version).
The Wigi platform will require 3 major components (see figures on page 34 ):
|
a. |
Development of the WigiWallet/Application to hold and transfer the WigiPay points and manage balance, view history, and loyalty rewards.
|
|
b. |
Development of the Wigi account to be functional to facilitate the transfer of cash (fiat) to Wigi and to receive the WigiPay points to the WigiWallet/Application.
|
|
c. |
Development of the WigiPOS for merchants to be able to view customer payments, view dashboard of transaction history, and manage loyalty discounts.
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Total development budget to reach pilot use is approximately $550,000. The development of the Wigi platform is expected to take six (6) months and cost approximately $400,000 by using 4-5 programmers and developers and approximately $150,000 of legal and compliance costs.
Additional capital during the development pilot phase will allow Wigi to hire more programmers and developers to accelerate the development of the Wigi platform.
After the Wigi platform is complete then the Company can go into operations with merchants and customers using it on a daily basis. As the Company scales up and expands it will require more capital for operations and to add more employees and consultants.
Additional capital is needed if merchants and customers begin using the Wigi platform in order to manage support, maintenance, and security. Advertising and marketing will also be needed to acquire more customers and merchants. In addition, the software will continually need to be updated and additional features and functions added overtime as the business grows. The Company will need to hire more employees and consultants and scale up its operations based on the amount of funds it has.
The differing levels of spending as disclosed in the table under "Use of Proceeds" reflect the scaling up of operations. As the Company acquires customers and merchants it will need additional capital to cover the costs of a growing business. $550,000 is the expected minimum capital needed to complete the pilot phase and additional capital after that will assist the Company grow and hire additional employees and consultants to manage software development and upgrades, operational expenses, and ongoing marketing efforts.
This expected use of net proceeds from this offering and our existing cash represents our intentions based upon our current plans and business conditions, which could change in the future as our plans and business conditions evolve. The amounts and timing of our actual expenditures may vary significantly depending on numerous factors, including the progress of our development, the status of and results of input from consumers and merchants, regulatory matters and any collaborations that we may enter into with third parties for our product development, and any unforeseen cash needs.
The Company will use its existing cash to further the development of the WigiPay platform and intends to complete as much of the Offering as possible in order to provide the funds necessary to expand the business.
DETERMINATION OF THE OFFERING PRICE
The offering price of the 3,000,000 shares being offered has been determined arbitrarily by us. The price does not bear any relationship to our assets, book value, earnings, or other established criteria for valuing a privately held company. Accordingly, the offering price should not be considered an indication of the actual value of the securities.
DILUTION
Dilution represents the difference between the offering price and the net tangible book value per share immediately after completion of this offering. Net tangible book value is the amount that results from subtracting total liabilities and intangible assets from total assets. Dilution arises mainly as a result of our arbitrary determination of the offering price of the shares being offered. Dilution of the value of the shares you purchase is also a result of the lower book value of the shares held by our existing stockholders. The following tables compare the differences of your investment in our shares with the investment of our existing stockholders.
The price of the current offering is fixed at $1.00 per share. This price is significantly higher than the price paid by existing shareholders for common equity since the Company's inception.
As of December 31, 2017, the net tangible book value of our shares of common stock was $430,052 or approximately $0.05 per share based upon 9,046,890 shares outstanding.
If 100% of the Shares Are Sold:
Upon completion of this offering, in the event all of the shares are sold, the net tangible book value of the 12,046,890 shares to be outstanding will be $3,375,052 or approximately $0.28 per share. The net tangible book value per share prior to the offering is $0.05. The net tangible book value of the shares held by our existing stockholders will be increased by $0.23 per share without any additional investment on their part. Investors in the offering will incur an immediate dilution from $1.00 per share to $0.28 per share.
After completion of this offering, if 3,000,000 shares are sold, investors in the offering will own approximately 25% of the total number of shares then outstanding for which they will have made cash investment of $3,000,000, or $1.00 per share. Our existing stockholders will own approximately 75% of the total number of shares then outstanding, for which it has committed to contributions of cash totaling $501,552 or $0.055 per share.
If 75% of the Shares Are Sold
Upon completion of this offering, in the event 2,250,000 shares are sold, the net tangible book value of the 11,296,890 shares to be outstanding will be $2,625,052, or approximately $0.23 per share. The net tangible book value per share prior to the offering is $0.05. The net tangible book value of the shares held by our existing stockholders will be increased by $0.18 per share without any additional investment on their part. Investors in the offering will incur an immediate dilution from $1.00 per share to $0.23 per share.
If 50% of the Shares Are Sold
Upon completion of this offering, in the event 1,500,000 shares are sold, the net tangible book value of the 10,546,890 shares to be outstanding will be $1,875,052, or approximately $0.18 per share. The net tangible book value per share prior to the offering is $0.05. The net tangible book value of the shares held by our existing stockholders will be increased by $0.14 per share without any additional investment on their part. Investors in the offering will incur an immediate dilution from $1.00 per share to $0.18 per share.
If 25% of the Shares Are Sold
Upon completion of this offering, in the event 750,000 shares are sold, the net tangible book value of the 9,796,890 shares to be outstanding will be $1,125,052 or approximately $0.11 per share. The net tangible book value per share prior to the offering is $0.05. The net tangible book value of the shares held by our existing stockholders will be increased by $0.06 per share without any additional investment on their part. Investors in the offering will incur an immediate dilution from $1.00 per share to $0.11 per share.
Existing Shareholders if all Shares Sold |
|
|
|
|
Price per share
|
|
$
|
1.00
|
|
Net tangible book value per share before offering
|
|
$
|
0.05
|
|
Potential gain to existing shareholders
|
|
$
|
0.23
|
|
Net tangible book value per share after offering
|
|
$
|
0.28
|
|
Increase to present shareholders in net tangible book value per share after offering
|
|
$
|
0.23
|
|
Capital contributions
|
|
$
|
501,552
|
|
Number of shares outstanding before the offering
|
|
|
9,046,890
|
|
Number of shares after offering held by existing shareholders
|
|
|
9,046,890
|
|
Percentage of ownership after offering
|
|
|
75.1
|
|
Purchasers of Shares in this Offering if all Shares Sold
|
|
|
|
|
|
|
|
Price per share
|
|
$
|
1.00
|
|
Dilution per share
|
|
$
|
0.72
|
|
Capital contributions
|
|
$
|
3,000,000
|
|
Percentage of capital contributions
|
|
|
85.7
|
|
Number of shares after offering held by public investors
|
|
|
3,000,000
|
|
Percentage of ownership after offering
|
|
|
24.9
|
|
Purchasers of Shares in this Offering if 75% of Shares Sold
|
|
|
|
|
|
|
|
Price per share
|
|
$
|
1.00
|
|
Dilution per share
|
|
$
|
0.77
|
|
Capital contributions
|
|
$
|
2,250,000
|
|
Percentage of capital contributions
|
|
|
81.8
|
|
Number of shares after offering held by public investors
|
|
|
2,250,000
|
|
Percentage of ownership after offering
|
|
|
19.9
|
|
Purchasers of Shares in this Offering if 50% of Shares Sold
|
|
|
|
|
|
|
|
Price per share
|
|
$
|
1.00
|
|
Dilution per share
|
|
$
|
0.82
|
|
Capital contributions
|
|
$
|
1,500,000
|
|
Percentage of capital contributions
|
|
|
74.9
|
|
Number of shares after offering held by public investors
|
|
|
1,500,000
|
|
Percentage of ownership after offering
|
|
|
14.2
|
|
Purchasers of Shares in this Offering if 25% of Shares Sold
|
|
|
|
|
|
|
|
Price per share
|
|
$
|
1.00
|
|
Dilution per share
|
|
$
|
0.89
|
|
Capital contributions
|
|
$
|
750,000
|
|
Percentage of capital contributions
|
|
|
59.9
|
|
Number of shares after offering held by public investors
|
|
|
750,000
|
|
Percentage of ownership after offering
|
|
|
7.7
|
|
SELLING SHAREHOLDERS
The shares offered pursuant to this Prospectus are offered on the account of various shareholders (the "Selling Shareholders"). None of the Selling Shareholders hold or have held in the past three years any position, office, or other material relationship with the Issuer, except as provided below. The Selling Shareholders are not affiliated with or controlled by the Company. They purchased their shares in individual transactions in private placements from the Company and not with a view to sell or distribute those shares. They are consequently not "underwriters" within the meaning of the Securities Act of 1933, as amended.
The following table summarizes the shares held by the Selling Shareholders:
Name and position
|
|
Shares Beneficially Owned Prior to Offering
|
|
Shares
Offered
|
|
Shares Beneficially Owned After Offering
|
|
Percentage Beneficially Owned1,2
|
Private Investors:
|
|
|
|
|
|
|
|
|
Cataleya Capital Ltd.
|
|
334,000
|
|
334,000
|
|
0
|
|
*
|
Jazeb Jones
|
|
400,000
|
|
400,000
|
|
0
|
|
*
|
John Derby
|
|
266,000
|
|
266,000
|
|
0
|
|
*
|
Robert Tyler
|
|
405,818
|
|
405,818
|
|
0
|
|
*
|
Tania Woods
|
|
405,818
|
|
405,818
|
|
0
|
|
*
|
Nest Capital Management
|
|
223,200
|
|
223,200
|
|
0
|
|
*
|
CMGT, Inc.
|
|
405,818
|
|
405,818
|
|
0
|
|
*
|
Box Capital
|
|
405,818
|
|
405,818
|
|
0
|
|
*
|
Fort Investment Group Inc.
|
|
405,818
|
|
405,818
|
|
0
|
|
*
|
Steve Eliscu
|
|
400
|
|
400
|
|
0
|
|
*
|
Eugene Filiatrault
|
|
400
|
|
400
|
|
0
|
|
*
|
Tyler Aono
|
|
800
|
|
800
|
|
0
|
|
*
|
Norio Aono
|
|
800
|
|
800
|
|
0
|
|
*
|
Ryuya Furukawa
|
|
400
|
|
400
|
|
0
|
|
*
|
Kento Hashi
|
|
400
|
|
400
|
|
0
|
|
*
|
Kanako Kikuchi
|
|
400
|
|
400
|
|
0
|
|
*
|
Shun Nakayama
|
|
800
|
|
800
|
|
0
|
|
*
|
Kumi Nishioka
|
|
400
|
|
400
|
|
0
|
|
*
|
Kairi Tsuji
|
|
400
|
|
400
|
|
0
|
|
*
|
Masayuki Suzuki
|
|
400
|
|
400
|
|
0
|
|
*
|
Colin Wilson
|
|
40,000
|
|
40,000
|
|
0
|
|
*
|
Richard Ellison
|
|
20,000
|
|
20,000
|
|
0
|
|
*
|
Justin Meyer
|
|
3,000
|
|
3,000
|
|
0
|
|
*
|
Janeen Al Jadir
|
|
10,000
|
|
10,000
|
|
0
|
|
*
|
William Robertson
|
|
2,000
|
|
2,000
|
|
0
|
|
*
|
Robert Tyler
|
|
2,500
|
|
2,500
|
|
0
|
|
*
|
Randall Thomson
|
|
20,000
|
|
20,000
|
|
0
|
|
*
|
CMGT, Inc.
|
|
10,000
|
|
10,000
|
|
0
|
|
*
|
Tracy Dow
|
|
2,000
|
|
2,000
|
|
0
|
|
*
|
Robert Salna
|
|
50,000
|
|
50,000
|
|
0
|
|
*
|
Mohammad Shaygan
|
|
100,000
|
|
100,000
|
|
0
|
|
*
|
Alan Lindsay
|
|
10,000
|
|
10,000
|
|
0
|
|
*
|
Jiang Yu
|
|
100,000
|
|
100,000
|
|
0
|
|
*
|
Randall Lanham
|
|
1,000
|
|
1,000
|
|
0
|
|
*
|
Chetwood Ulyatt Capital, Inc.
|
|
1,000
|
|
1,000
|
|
0
|
|
*
|
John Welles
|
|
500
|
|
500
|
|
0
|
|
*
|
Kristen Lanham
|
|
500
|
|
500
|
|
0
|
|
*
|
Tania Woods
|
|
5,000
|
|
5,000
|
|
0
|
|
*
|
Stephen Lanham
|
|
500
|
|
500
|
|
0
|
|
*
|
Roger Janssen
|
|
500
|
|
500
|
|
0
|
|
*
|
Road Runner Media, Inc.
|
|
500
|
|
500
|
|
0
|
|
*
|
Joyce Lindsay
|
|
6,000
|
|
6,000
|
|
0
|
|
*
|
Noel Watkins
|
|
4,000
|
|
4,000
|
|
0
|
|
*
|
|
|
|
|
|
|
|
|
|
Total
|
|
3,646,890
|
|
3,646,890
|
|
0
|
|
0%
|
The table below summarizes all compensation awarded to, earned by, or paid to our officers and directors for all services rendered in all capacities to us for the fiscal periods indicated.