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Tesspay Inc. – IPO: ‘S-1/A’ on 2/9/24

On:  Friday, 2/9/24, at 4:57pm ET   ·   Accession #:  1493152-24-5723   ·   File #:  333-276716

Previous ‘S-1’:  ‘S-1’ on 1/26/24   ·   Next:  ‘S-1/A’ on 4/22/24   ·   Latest:  ‘S-1/A’ on 4/30/24   ·   4 References:   By:  Tesspay Inc. – Latest ‘S-1/A’ on 4/30/24 By:  Tesspay Inc. – ‘S-1/A’ on 4/26/24 By:  Tesspay Inc. – Next ‘S-1/A’ on 4/22/24 To:  Tesspay Inc. – Previous ‘S-1’ on 1/26/24 

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  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 2/09/24  Tesspay Inc.                      S-1/A                 25:18M                                    M2 Compliance LLC/FA

Document/Exhibit                   Description                      Pages   Size 

 1: S-1/A       Pre-Effective Amendment to Registration Statement   HTML   2.57M 
                (General Form)                                                   
 2: EX-1.1      Underwriting Agreement or Conflict Minerals Report  HTML    248K 
 3: EX-3.1      Articles of Incorporation/Organization or Bylaws    HTML     10K 
 4: EX-3.2      Articles of Incorporation/Organization or Bylaws    HTML     13K 
 5: EX-3.3      Articles of Incorporation/Organization or Bylaws    HTML      8K 
 6: EX-4.1      Instrument Defining the Rights of Security Holders  HTML     11K 
 7: EX-4.2      Instrument Defining the Rights of Security Holders  HTML    116K 
 8: EX-4.3      Instrument Defining the Rights of Security Holders  HTML     79K 
 9: EX-5.1      Opinion of Counsel re: Legality                     HTML     32K 
10: EX-10.1     Material Contract                                   HTML    105K 
19: EX-10.10    Material Contract                                   HTML     87K 
20: EX-10.11    Material Contract                                   HTML     22K 
21: EX-10.12    Material Contract                                   HTML     22K 
11: EX-10.2     Material Contract                                   HTML    128K 
12: EX-10.3     Material Contract                                   HTML    105K 
13: EX-10.4     Material Contract                                   HTML    171K 
14: EX-10.5     Material Contract                                   HTML    179K 
15: EX-10.6     Material Contract                                   HTML    279K 
16: EX-10.7     Material Contract                                   HTML    406K 
17: EX-10.8     Material Contract                                   HTML    305K 
18: EX-10.9     Material Contract                                   HTML    419K 
22: EX-21.1     Subsidiaries List                                   HTML     10K 
23: EX-23.1     Consent of Expert or Counsel                        HTML      9K 
24: EX-23.2     Consent of Expert or Counsel                        HTML      9K 
25: EX-FILING FEES  Calculation of Filing Fee Tables                HTML     45K 

As filed with U.S. Securities and Exchange Commission on February 9, 2024.

Registration Statement No. 333-276716

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

AMENDMENT NO. 1

to

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

TESSPAY INC.
(Exact name of registrant as specified in its charter)

9160 Forum Corporate Parkway, Suite 350

Fort Myers, FL 33905

(239) 544-4226

(Address, including zip code and telephone number, including area code of registrant’s principal executive offices)

Jeffrey Mason
Chief Executive Officer
TessPay Inc.

9160 Forum Corporate Parkway, Suite 350

Fort Myers, FL 33905

(239) 544-4226

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

Approximate date of commencement of proposed sale to the public:
As soon as practicable after the date this registration statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box: ☐

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 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 shall file a further amendment which 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 Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

Shares of

Common Stock

TessPay Inc.

This is a firm commitment initial public offering of shares of common stock of TessPay Inc. Prior to this offering, there has been no public market for our common stock. We anticipate that the initial public offering price will be between $4.00 and $6.00 per share.

We intend to apply to list our shares on the NYSE American under the symbol “TPI”. Upon completion of this offering, we believe that we will satisfy the listing requirements and expect that our common stock will be listed on the NYSE American. Such listing, however, is not guaranteed. If the application is not approved for listing on the NYSE American, we will not proceed with this offering.

We are an “emerging growth company” as that term is used in the Jumpstart Our Business Startups Act of 2012 and, as such, have elected to comply with certain reduced public company reporting requirements.

Immediately following the completion of this offering, our directors, executive officers, principal stockholders and their affiliates will beneficially hold, in the aggregate, approximately            % of our outstanding voting stock. These stockholders, acting together, would be able to significantly influence all matters requiring stockholder approval. See “Principal Stockholders” for additional information.

Investing in our common stock involves risks. See “Risk Factors” beginning on page 10.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

We have granted the underwriters a 45-day option to purchase up to an additional 15% of the total numbers of shares to be offered by the Company in the offering, or additional shares of common stock, solely to cover over-allotments, if any.

The underwriters expect to deliver the shares on or about                , 2024.

The date of this prospectus is               , 2024

TABLE OF CONTENTS

We have not, and the underwriters have not, authorized anyone to provide any information or to make any representations other than those contained in this prospectus or in any free writing prospectus prepared by or on behalf of us or to which we have referred you. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give to you. 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 any sale of our common stock.

You should rely only on the information contained in this prospectus. No dealer, salesperson or other person is authorized to give information that is not contained in this prospectus. This prospectus is not an offer to sell nor is it seeking an offer to buy these securities in any jurisdiction where the offer or sale is not permitted. The information 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 these securities.

All trademarks, trade names and service marks appearing in this prospectus are the property of their respective owners. Solely for convenience, the trademarks and trade names in this prospectus are referred to without the ® and ^TM symbols, but such references should not be construed as any indicator that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto.

PROSPECTUS SUMMARY

The following summary highlights selected information contained elsewhere in this prospectus and is qualified in its entirety by the more detailed information and financial statements included elsewhere in this prospectus. It does not contain all the information that may be important to you and your investment decision. You should carefully read this entire prospectus, including the matters set forth under “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and our financial statements and related notes included elsewhere in this prospectus. In this prospectus, unless context requires otherwise, references to “we,” “us”, “our”, “TessPay,” or “the Company” refer to TessPay Inc. and its subsidiaries. All references to “U.S. Dollars,” “USD” or “$” are to the legal currency of the United States, all references to “CAD$” and “C$” are to the legal currency of Canada, all references to “Euros” are the legal currency of the European Union and all references to “£” are the legal currency of the United Kingdom.

Overview

We have developed a financial technology platform for securing and streamlining financial transactions (the “Platform”) that utilizes blockchain technology to provide payment assurance and liquidity through a finance supply chain. Our Platform makes use of smart contracts, as programmatic representations of the terms of a legal contract between transacting parties, to affect automated financial settlements (account balance computations) to the supply chain participants. The Platform was developed in response to a need to transition from the current payment process down the supply chain (typically triggered by a manager or trusted party) to a more modern protocol that mandates simultaneous payment of all component and sub-component suppliers when the primary party makes a payment into the supply chain.

The blockchain elements of the system were in temporary abeyance during part of 2021 and 2022 with a secure database substituting for blockchain technology during a systems upgrade. The blockchain elements of the Platform returned to service during the first quarter of 2023. We elected to initially deploy the Platform and its services within the wholesale telecommunications industry, then into funding participating providers (each, an “ACP Provider”) under the Affordable Connectivity Program, or “ACP”, of the United States Government, operating under the Federal Communications Commission, or “FCC”, and subsequently into the major projects commercial construction industry. We believe the most significant issues for wholesale telecommunications carriers (“Telecom Carriers”) are a lack of payment assurances and lender funding. In order to connect calls between different countries, at least two to three Telecom Carriers are required in the international telecommunications supply chain using Voice Over Internet Protocol, or “VOIP”, technology. The Platform is intended to offer security to permit lender funding, increased payment confidence, fraud mitigation and transparency throughout each step of every supply chain finance transaction.

As a finance supply chain financial technology, or “fintech” platform, the Platform utilizes a set of technology-based solutions that aim at easing access to financing and improving business efficiency for buyers and sellers linked in smart contract transactions by automating invoice preparation and lender approval and automating settlement processes, from initiation to completion. In our experience, under traditional industry practice, major telecommunications carriers, as the buyers of telecommunication minutes (“Tier 1/2 Carriers”) delay payment for 60 days or more, while the smaller telecom carriers who are TessPay customers (“Platform Carriers”), as the suppliers, benefit from payment on much shorter terms. As a solution, under our paradigm, the Tier 1/2 Carriers’ high quality credit rating permits the Platform Carriers’ invoices to serve as collateral for financing by a third-party lender or factor. We pre-authorize and arrange such financing, providing short-term credit that optimizes working capital and provides liquidity for the Platform Carrier, who is able to spend time growing its business instead of searching for financing. Similarly, ACP Providers provide mobile broadband services and devices (“ACP Services”) to eligible subscribers under the ACP which is administered by the Universal Service Administrative Company, or “USAC”; however, ACP Provider reimbursement claims (“Claims”) for the ACP Services are typically settled up to 60 days after submission, necessitating the need for interim working capital financing. We believe that this delay in ACP Provider reimbursement funding is an impediment to business growth for ACP Providers, and that access to factoring on our Platform helps address this issue.

Our Market Opportunity

We believe we have a substantial market opportunity in the growing global market for innovative supply chain financial services. Supply chain finance has recently been defined as a much broader category of trade financing, encompassing all the financing opportunities across a supply chain. Supply chain finance offers high-quality, low-risk financing to the small enterprises that tend to have difficulty obtaining low-cost financing on the strength of their balance sheets and history of operations. These businesses often lack the credit ratings that lenders require and are seen as too costly to underwrite for the amount of financing required. We believe the business models that reliably track data produced by the transfer of money and goods in a supply chain, are best suited to deliver supply chain finance. We believe our Platform is capable of serving a broad set of industries to provide payment assurance and liquidity through a supply chain.

According to Allied Market Research, the global supply chain finance market generated $6 billion in 2021, and is projected to reach $13.4 billion by 2031, growing at a compound annual growth rate (“CAGR”) of 8.8% from 2022 to 2031. An increase in the need for safety and security of supplying activities and surge in adoption of supply chain finance by small and mid-size enterprises in various industries is driving supply chain finance market growth, and we believe the integration of blockchain in online supply chain finance practices may create lucrative opportunities, including for our Company.

We estimate our addressable market (phone to phone) in the wholesale telecommunications industry to be $45 billion with an annual growth rate of about 3.8%.

Our goal is to evaluate additional opportunities to further expand the Platform’s range into more industries requiring supply chain financing solutions if and when we are able to successfully develop our business and Platform in the initial industries we are seeking to serve, wholesale telecommunications industry and the ACP market, including, but not limited to, the commercial construction industry, mobile phone roaming, oil and gas, commercial aircraft fabrication, automobile production, electronic device assembly and retail supply chain. Notwithstanding the foregoing, as of September 30, 2023, we had cash and cash equivalents of $73,194 and a net loss of $1,597,895. Further, our independent registered public accounting firm included in its opinion for the year ended December 31, 2022 an explanatory paragraph referring to our losses from operations and expressing substantial doubt in our ability to continue as a going concern without additional capital becoming available. Accordingly, we will need to obtain financing in order to continue to fund our operations. Any failure or delay to secure such financing could force us to delay, limit or terminate our operations.

TessPay Platform

The Platform is made up of the following components:

TessPay Telecommunications Settlement System.

The Platform supports a lender funded fast payment business model where all parties to a cross-border voice call, other than the Tier 1/2 Carriers, quick pay on account for long distance minutes purchased from Platform Carriers. Transactions between the parties occur in our settlement system process (the “TessPay Settlement System”) using TessPay’s smart contract technology (“TessPay Smart Contracts” or the “Smart Contracts”), and settlement payments are made using fiat currency (initially, only in Euro and U.S. Dollar denominations) held within the TessPay Multi-Currency Wallets (“TessPay Wallets” or “Wallets”), which are attached to TessPay Smart Contracts. Funding is available upon execution of a TessPay Smart Contract by both parties to such transaction. Funding can be initiated either by the Platform Carrier allocating funds from its TessPay Wallet to the TessPay Smart Contract or by accessing pre-arranged funds from a lender or factor. At the end of each 24-hour period, after the Tier 1/2 Carrier has consumed minutes purchased in accordance with terms of the TessPay Smart Contract, all the participants in the chain will see a release of fiat currency into their TessPay Wallets pursuant to the terms of their TessPay Smart Contracts. Lenders advance to the Platform the value of discounted invoices initially purchased by the TessPay Finance Inc., our wholly-owned subsidiary (“TessPay Finance”), from the Platform Carrier and concomitantly resold to the lender on a daily basis. At the end of each payment cycle, the Tier 1/2 Carrier pays its outstanding balance in full, and all outstanding balances between the Platform Carrier and lenders are settled as well as all outstanding balances between Platform Carriers.

Services Fees

We generate revenue through our TessPay Settlement System by earning (i) processing fees for manufacturing invoices and settling accounts on the Platform (“Processing Fees”) and (ii) financing placement fees for acting as an agent in arranging lender purchase of daily telecom invoices and ACP Claims (“Financing Fees”, and together with Processing Fees, “Service Fees”). Our Service Fees are settled in fiat currency and are extracted from fiat balances in the Wallets when minute transactions settle and ACP Claim transactions settle in accordance with the provisions of TessPay Smart Contracts for telecom and factoring agreements for ACP.

Affordable Connectivity Program Lending

ACP is a $14.2 billion FCC benefit program that aims to increase access to affordable broadband connectivity for eligible low-income households in the United States. Serving over 20 million households since its inception in 2021, the ACP aims to increase access to affordable broadband connectivity by providing (i) monthly recurring discounts of up to $30 towards broadband service for eligible low-income households and up to $75 for households on qualifying tribal lands (“Monthly Recurring Charges”); and (ii) a one-time discount of up to $100 towards the purchase of a laptop, desktop computer, or tablet (“Devices”). ACP Providers who participate in ACP can use the Platform to factor ACP Claims quickly and to obtain funds for services rendered under ACP. Claims factoring is a financial transaction in which the ACP Provider sells accounts receivable from the United States government to a third-party at a discount to obtain cash quickly. The Platform offers financing for ACP Claims related to both Devices and Monthly Recurring Charges.

Using the Platform, ACP Providers can receive weekly advances to cover the cost of providing Devices and Monthly Recurring Charges to eligible households or individuals who enrolls in the ACP to receive discounted broadband services and/or devices (each, an “ACP Subscriber”). Without using the Platform, the United States government settles all ACP Claims at the end of the month following the month of service. We believe that the ACP Claims factoring option offered by the Platform is especially helpful for ACP Providers who may lack the financial resources to cover the upfront costs of Devices (which must be provisioned before the Monthly Recurring Charge can be billed). We also believe the Platform can provide faster access to the necessary funds, allowing ACP Providers to reinvest the funds towards attracting new ACP Subscribers to their business.

Expansion into Commercial Construction Projects

Utilization of our Platform is not limited to the telecommunications industry. We have developed a blockchain based settlement solution for major commercial construction projects. Significant infrastructure, commercial, and industrial projects involve multiple participants with numerous payment interactions that may create financial risk in the project’s supply chain, which we believe can be mitigated by the deployment of our Platform. We believe that the current commercial construction settlement process has poor tracking and little transparency throughout the supply chain, causing lenders and developers to have a lack of visibility of payments made by general contractors. If a general contractor does not make timely payments to contract subtrades or if the general contractor were to become insolvent, the project lenders would become exposed to significant risk, including being required to find a new general contractor, which may lead to project delays and an increase in costs.

The Platform deploys TessPay Smart Contracts (i.e., digital extensions of the project’s master development agreement) to connect funders, developers, and general contractors through to subcontractors and suppliers. Through the use of the Smart Contracts, the executable elements of each contract are tracked through the Platform and assembled in a structure that permits the system to ensure that only contracted amounts can be approved, and paid, without error or duplication. The project’s participants use our Wallet technology to record amounts due and payments made, and the linked TessPay Smart Contract permits automated payments to the project’s participants when programmed conditions are met. The Platform grants general contractors, subcontractors, and suppliers assurance of on-time payments whenever time programmed conditions are met and grants lenders and developers assurance that progress payments are to be made only when work is confirmed to have met programmed threshold conditions.

Create.iF Acquisition

On November 24, 2022, we entered into a Share Purchase Agreement (the “Share Purchase Agreement”) with TessPay Finance and Create.iF Group Limited for the acquisition of Create.iF Manage Limited, or “Create.iF”. Create.iF is a construction project management company based in the United Kingdom that offers services relating to fund monitoring, employer’s agent (“EA”)/quantity surveyor (“QS”), design/value engineering, commercial management, dispute resolutions and contract advice. We believe that the acquisition of Create.iF will provide us the ability to expand into the commercial construction industry by leveraging Create.iF’s customers and partnerships.

Pursuant to the Share Purchase Agreement, on November 24, 2022 (the “Closing Date”), we acquired all of the issued share capital of Create.iF in consideration for the issuance of an aggregate of 4,522,000 of our common shares for a total consideration of £1,900,000 ($2,261,000). Of such shares, 2,261,000 common shares were issued on the Closing Date, and the balance, or 2,261,000 common shares (the “Deferred Shares”), shall be issued in three equal installments on each subsequent anniversary of the Closing Date, subject to certain conditions. The Deferred Shares shall be issued based upon an amount of £316,667 per installment converted to the U.S. dollar equivalent at a rate equal to the closing mid-point range for exchanges between the two currencies quoted in the Financial Times (London edition) for the nearest business day for which that rate is to be so quoted on or prior to the date of the allotment of such shares. On December 22, 2023 and February 9, 2024, the parties entered into amendments to the Share Purchase Agreement. Pursuant to the Share Purchase Agreement, as amended, if our securities are not listed on the NYSE American at the time the relevant anniversary dates of the Closing Date, the value of each share shall be $4.00 per share.

In July 2023, TessPay and Create.iF initiated the first sub trade financing contract with a United Kingdom contractor to demonstrate the viability of such lending structures.

IPC Collaboration Agreement

On June 15, 2023, we entered into an ACP Provider Profit Sharing Agreement (the “IPC Collaboration Agreement”) with Integrated Path Communications LLC, or “IPC”, a wholesale telecommunications customer and ACP Provider. Pursuant to the IPC Collaboration Agreement, we are responsible for sourcing ACP Subscribers and IPC is responsible for providing operating infrastructure which includes, but is not limited to, the provision of devices and Internet services for the ACP Subscribers. Pursuant to the IPC Collaboration Agreement, we will finance the cost of devices and monthly recurring charges and will share in the Profits (as defined in the IPC Collaboration Agreement) generated from the provision of ACP Services. The IPC Collaboration Agreement may be terminated by either party upon twelve months’ written notice.

Recent Developments

Effective July 27, 2023, we entered into a factoring contract with TessPay Services AG, or “TPS AG”, a non-affiliated Swiss company, whereby TPS AG undertook to enter into factoring agreements with financial institutions that would purchase daily invoices of wholesale telecommunications customers and ACP Claims of ACP Provider customers. The factoring contract may be terminated upon either party providing three months’ notice, for the first time at the end of the minimum term of two years (the “Minimum Term”) and at the end of each quarter after the Minimum Term has terminated. Furthermore, either party may terminate such agreement for good cause. Upon termination, all claims offered for sale prior to the termination of the factoring contact may still be purchased by TPS AG and TPS AG may transfer already purchased but not yet due claims back to us. Payments we receive from major telecommunications carriers and the United States government to settle customer invoices and claims are remitted directly by us under the supervision of TPS AG, to the financial institution.

Summary of Risks Associated with Our Business

Our ability to execute on our business strategy is subject to a number of risks, which are discussed more fully in the section titled “Risk Factors” beginning on page 10. Investors should carefully consider these risks before making an investment in our common stock. These risks include, among others, the following:

Our Corporate History

TessPay Inc. (formerly 1172767 B.C. Ltd., 2587863 Ontario Inc. and Tess Inc.) was incorporated under the Business Corporations Act (Ontario) as TessPay Inc. on July 17, 2017. We changed our name to 2587863 Ontario Inc. on July 6, 2018, and continued under the Business Corporations Act (British Columbia) on July 20, 2018, as 1172767 B.C. Ltd. On May 24, 2019, we changed our name to TessPay Inc. On June 29, 2022, we filed a Certificate of Corporation Domestication with the Delaware Secretary of State whereby we redomesticated from British Columbia, Canada to the State of Delaware.

Corporate Information

Our principal executive offices are located at 9160 Forum Corporate Parkway, Suite 350, Fort Myers, FL 33905 and our telephone number is (239) 544-4226. Our website address is www.tesspay.io. The information contained on our website is not incorporated by reference into this prospectus, and you should not consider any information contained on, or that can be accessed through, our website as part of this prospectus or in deciding whether to purchase our shares of common stock.

Implications of Being an Emerging Growth Company

As a company with less than $1.235 billion in revenues during our last fiscal year, we qualify as an emerging growth company as defined in the Jumpstart Our Business Startups Act (“JOBS Act”) enacted in 2012. As an emerging growth company, we expect to take advantage of reduced reporting requirements that are otherwise applicable to public companies. These provisions include, but are not limited to:

We may use these provisions until the last day of our fiscal year following the fifth anniversary of the completion of this offering. However, if certain events occur prior to the end of such five-year period, including if we become a “large accelerated filer,” our annual gross revenues exceed $1.235 billion or we issue more than $1.0 billion of non-convertible debt in any three-year period, we will cease to be an emerging growth company prior to the end of such five-year period.

The JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. As an emerging growth company, we intend to take advantage of an extended transition period for complying with new or revised accounting standards as permitted by the JOBS Act.

To the extent that we continue to qualify as a “smaller reporting company,” as such term is defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), after we cease to qualify as an emerging growth company, certain of the exemptions available to us as an emerging growth company may continue to be available to us as a smaller reporting company, including: (i) not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes Oxley Act; (ii) scaled executive compensation disclosures; and (iii) the requirement to provide only two years of audited financial statements, instead of three years.

THE OFFERING

The number of shares of our common stock to be outstanding after this offering is based on 12,248,511 shares of our common stock outstanding as of February 9, 2024, and excludes as of that date:

Except as otherwise indicated herein, all information in this prospectus assumes:

Summary Financial Data

The following tables set forth our consolidated financial data as of the dates and for the periods indicated. We have derived the summary consolidated statements of operations data for the years ended December 31, 2022, and 2021, from our audited consolidated financial statements included elsewhere in this prospectus. We have derived the summary consolidated statements of operations data for the nine months ended September 30, 2023, and 2022, and our balance sheet data as of September 30, 2023, from our unaudited interim consolidated financial statements included elsewhere in this prospectus. The unaudited interim consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and reflect, in the opinion of management, all adjustments of a normal, recurring nature that are necessary for a fair presentation of the unaudited interim consolidated financial statements. Our historical results are not necessarily indicative of the results that may be expected in the future and the results in the nine months ended September 30, 2023, are not necessarily indicative of results to be expected for the full year or any other period. The following summary financial data should be read with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes and other information included elsewhere in this prospectus.

Consolidated Statements of Operations Data:

(in thousands, except share and per share data)

Balance Sheet Data:

(in thousands)

RISK FACTORS

Investing in our common stock involves a high degree of risk. You should carefully consider the following risks and uncertainties, together with all other information in this prospectus, including our financial statements and related notes and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of this prospectus before investing in our common stock. Any of the risk factors we describe below could adversely affect our business, financial condition, results of operations or prospects. The market price of our common stock could decline if one or more of these risks or uncertainties actually occur, causing you to lose all or part of your investment in our common stock. Additional risks that we currently do not know about or that we currently believe to be immaterial may also impair our business, financial condition, operating results and prospects.

Risks Related to Our Financial Position and Need for Additional Capital

We have incurred significant operating losses and negative cash flows from operation since inception, and we may continue to incur losses as we implement our business plan which raises significant doubts about our ability to generate sufficient revenue to achieve and maintain profitability.

We have never been profitable and have incurred significant losses in each year since inception. For the years ended December 31, 2022 and 2021 and the nine months ended September 30, 2023, we reported a net loss of $2,342,709, $1,234,719 and $1,597,895, respectively. As of December 31, 2022 and September 30, 2023, we had an accumulated deficit of $8,241,660 and $9,839,555, respectively. To date, we have funded our operations primarily with proceeds from the sales of our equity and debt securities.

We expect to continue to incur significant expenses and increasing operating losses for the foreseeable future. The net losses we incur may fluctuate significantly from quarter to quarter such that a period-to-period comparison of our results of operations may not be a good indication of our future performance. The size of our future net losses will depend, in part, on the rate of future growth of our expenses and our ability to continue to generate revenue. Our prior losses and expected future losses have had and may continue to have an adverse effect on our working capital, our ability to achieve and maintain profitability and the performance of our stock.

Even if this offering is successful, we will require substantial additional funding. If we are unable to raise capital on favorable terms when needed, we could be forced to curtail, delay or discontinue our operations.

As of December 31, 2022 and 2021 and September 30, 2023, we had cash and cash equivalents of $820,490, $1,206,486 and $73,194, respectively. We estimate that the net proceeds from this offering will be approximately $5.4 million, assuming an initial public offering price of $5.00 per share, the midpoint of the price range set forth on the cover of this prospectus, after deducting underwriting discounts and commissions and estimated offering expenses payable by us. We expect that the net proceeds from this offering and our existing cash will not be sufficient to fund our current operations through at least 12 months from the date of this prospectus. However, our operating plan may change as a result of many factors currently unknown to us, and we may need to seek additional funds sooner than planned, through public or private equity or debt financings or other third-party funding or a combination of these approaches. Raising funds may present challenges. Even if we believe we have sufficient funds for our current or future operating plans, we may seek additional capital if market conditions are favorable or based upon specific strategic considerations.

Any additional fundraising efforts may divert our management from their day-to-day activities, which may adversely affect our ability to expand our Platform. In addition, we cannot guarantee that future financing will be available in sufficient amounts or on terms acceptable to us, if at all. Moreover, the terms of any financing may adversely affect the holdings or the rights of our stockholders and the issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the market price of our shares to decline. The sale of additional equity or convertible securities may dilute our stockholders. The incurrence of indebtedness may result in increased fixed payment obligations and we may be required to agree to certain restrictive covenants, such as limitations on our ability to make certain dividends, incur additional debt, and other operating restrictions that could adversely impact our ability to conduct our business.

If we are unable to obtain funding on a timely basis, we may be required to significantly curtail, delay or discontinue our operations or otherwise capitalize on our business opportunities, as desired, which could materially affect our business, financial condition and results of operations.

Our independent registered public accounting firm has expressed substantial doubt about our ability to continue as a going concern, which may hinder our ability to obtain future financing.

Our financial statements as of December 31, 2022 have been prepared under the assumption that we will continue as a going concern for the next twelve months. Our independent registered public accounting firm included in its opinion for the year ended December 31, 2022 an explanatory paragraph referring to our losses from operations and expressing substantial doubt in our ability to continue as a going concern without additional capital becoming available. Our ability to continue as a going concern is dependent upon our ability to create new business opportunities and eventually attain profitable operations Our financial statements as of December 31, 2022 did not include any adjustments that might result from the outcome of this uncertainty. The reaction of investors to the inclusion of a going concern statement by our auditors, and our potential inability to continue as a going concern, in future years could materially adversely affect our share price and our ability to raise new capital or enter into strategic alliances.

Implementation and development of our Platform depends on our ability to obtain adequate funding.

Our Platform requires ongoing funding to continue the current development and operational plans and we have a history of net losses. We believe that we will continue to expend substantial resources for the foreseeable future in connection with the continued development of our software platforms. These expenditures will include costs associated with research and development activity, corporate administration, business development, and marketing and selling of our services. In addition, other unanticipated costs may arise. When our available cash and cash equivalents become insufficient to satisfy our liquidity requirements, or if and when we identify additional opportunities to do so, we may sell additional equity or debt securities or enter into credit facilities.

Failure to obtain adequate financing, when needed, or on terms acceptable to us, may substantially delay our development, slow down current operations, result in loss of customers and adversely impact our results of operations.

We are an early-stage fintech company with a limited operating history and a history of operating losses, and we may not achieve or maintain profitability in the future.

We are an early stage fintech company with a limited operating history. Our activities have principally involved raising money to develop our software, products and services (including the Platform), as well as expanding our service offerings to an increasing base of consumers. Similar to many early stage companies, we have incurred losses since our inception. We anticipate that our operating expenses will increase in the foreseeable future as we seek to continue to grow our business, attract new consumers, merchants, funding sources and originating bank partners, and further enhance and develop our Platform. As we expand our offerings to additional markets, our offerings in these markets may be less profitable than the markets in which we currently operate. These efforts may prove more expensive than we currently anticipate, and we may not succeed in offsetting such higher expenses.

If our estimates related to expenditures are inaccurate, our business may be adversely effected.

Our success is dependent in part upon the accuracy of our management’s estimates of expenditures for hiring of new personnel and development of the technological infrastructure required to market and operate the Platform for the sectors that we intend to pursue during the next twelve months and beyond. If such estimates are inaccurate, or if we encounter unforeseen expenses or delays, we may not be able to implement our business plan, which could adversely affect our business. We will also need to continue to modify and adapt the Platform to grow. Failure to make the necessary changes to our operating environment because of cost or lack of availability of qualified personnel could have a material adverse effect on our financial condition, results of operations and cash flows.

We need to grow our business and revenue in order to achieve profitability.

We need to expand our network to maintain and grow our business and revenue. If we fail to expand and maintain an effective sales force or successfully develop our relationships with new customers, our business may be materially and adversely affected. We cannot assure you that we will be able to successfully grow our client base or expand the number of services we provide. If we do not grow our revenue and business, we may not achieve profitability, which could have a material adverse effect on our financial condition, results of operations and cash flows.

Risks Related to Our Business

We have a limited operating history, which may make it difficult to evaluate our current business and predict our future performance.

Our limited operating history and our evolving business may make it difficult to evaluate and assess the success of our business to date, our future prospects and the risks and challenges that we may encounter. These risks and challenges include our ability to:

If we fail to address the risks and difficulties that we face, including those associated with the challenges listed above as well as those described elsewhere in this “Risk Factors” section, our business, financial condition, results of operations and prospects could be adversely affected.

Further, because we have limited historical financial data and our business continues to evolve, any predictions about our future revenue and expenses may not be as accurate as they would be if we had a longer operating history, operated a more predictable business or operated in a less regulated industry. We have encountered and will continue to encounter multiple risks and uncertainties that are frequently experienced by growing companies with limited operating histories and evolving business that operate in rapidly changing, highly regulated and competitive industries. If our assumptions regarding these risks and uncertainties which we use to plan and operate our business are incorrect or change, or if we do not address these risks successfully, our results of operations could differ materially from our expectations and our business, financial condition and results of operations could be adversely affected.

Our payment solution is being developed by our key technology employees and contractors, whose continued availability cannot be assured.

Our payment Platform built using blockchain technology and the related features that may be developed in the future have been and will be further developed by, among others, contracted developers and key technology employees. If we were to lose the services of any of these key employees or hired contractors, it could be difficult or impossible to replace them. As such, the loss of the services of any of these key employees or contractors could have an adverse effect on our ability to further develop, operate or maintain features of our payment Platform thereby having a material adverse effect on our business.

Cybersecurity breaches and other disruptions could adversely affect our business, and could compromise our information and expose us to liability and reputational harm.

The size and complexity of our information systems make such systems potentially vulnerable to service interruptions or to security breaches from inadvertent or intentional actions by our employees or vendors, or from attacks by malicious third parties. Such attacks are of ever-increasing levels of sophistication and are made by groups and individuals with a wide range of motives and expertise. While we have invested in the protection of data and information technology, there can be no assurance that our efforts will prevent or quickly identify service interruptions or security breaches. Any such interruption or breach of our systems could adversely affect our business operations and/or result in the loss of critical or sensitive confidential information, and could result in financial, legal, business and reputational harm to us. Similarly, we could be subject to liability or our reputation could be harmed if technologies integrated into our products fail to prevent cyberattacks, or if our customers fail to safeguard the systems with security policies that conform to industry best practices. In addition, any cyberattack or security breach that affects a competitor’s product could lead to the negative perception that our products are similarly vulnerable to attacks or breaches.

In the ordinary course of our business, we collect and store sensitive data, including proprietary and/or personally identifiable information of customers, partners, employees, and other third parties. The secure processing, maintenance and transmission of this information is critical to our operations. Despite our security measures and precautions, our information technology and infrastructure may be vulnerable to attacks by hackers or breached due to employee error, malfeasance or other disruptions. Any hack or breach could compromise our networks and the information stored there could be accessed, publicly disclosed, lost or stolen. Any unauthorized access, disclosure or other loss of information could result in legal claims or proceedings, disrupt our operations, lead to reputational harm or loss of confidence in our products and services, all of which could adversely affect our business.

If we are not able to use and protect our intellectual property, it could have a material adverse effect on our business.

Our ability to compete depends, in part, on our ability to protect our intellectual property. We rely on a combination of trade secrets and unregistered trademarks to protect our intellectual property. The know-how protection on which we rely may not be sufficient, and we may be subject to the risks of claims and litigation alleging infringement of the intellectual property rights of others. Our inability to protect our intellectual property rights or claims and litigation alleging infringement of the intellectual property rights of others may have an adverse impact on our business, results of operations and financial condition.

The unavailability, reduction or elimination of government and economic incentives, including through the ACP, could have a material adverse effect on our business, prospects, financial condition and operating results.

The FCC’s ACP is a program that aims to increase access to affordable broadband connectivity for low-income households in the United States by providing discounts towards (i) Monthly Recurring Charges; and (ii) Devices. While we are not an ACP Provider, certain of our services cater to ACP Providers. The Infrastructure Investment and Jobs Act was adopted in November 2021, and provided for an initial $14.2 billion allocation to fund the ACP. However, as of December 2023, Congress has not approved additional funding for the program.

Any policy or administrative changes to the ACP could adversely affect our ACP Provider client base, which in turn may negatively affect on our growth and scale of operations. Further, any reduction, elimination or discriminatory application of government subsidies and economic incentives due to policy changes, the reduced push for such subsidies, the exhaustion of ACP funding or other reasons may result in the diminished competitiveness of our services. There is no guarantee the ACP or other similar programs will be available in the future. If current government subsidies and economic incentives are not available in the future, our financial position could be materially and adversely affected.

The development of our Platform using blockchain and smart contract technologies could have a material adverse effect on our business, financial condition or result of operations.

Our intention is to pursue a multipoint strategy to embrace the growth potential of innovative technologies including blockchain technology, a rapidly evolving technology in which we have limited operational history or experience. Our use of blockchain and smart contract technology subjects us to risks associated with the use of new and novel technologies, including technical, operational, financial, regulatory, legal and reputational risks, as well as the risk that we may be unable to timely fully develop our blockchain-based applications or technologies or market, license or sell our blockchain-based applications or technologies successfully or profitably.

We have experienced interruptions of our blockchain technology.

Our Platform utilizes blockchain technology to provide payment assurance and liquidity through a finance supply chain. The blockchain elements of the system were in temporary abeyance during part of 2021 and 2022 with a secure database substituting for blockchain technology during a systems upgrade. The blockchain elements of the Platform returned to service during the first quarter of 2023. We intend to upgrade the functionality of the Platform on a continuing basis to accommodate new customers and changing needs of existing customers. There could be intervals during the implementation of upgrades when the blockchain component of the Platform will have to be withdrawn from operations for technical reasons and, although the blockchain component would be temporarily replaced by a secure database during these periods.

Any interruption of any of our critical business functions or technology systems could harm our ability to conduct normal business operations or cause a decrease in consumer demand for our products and services, which could materially impact our reputation and brand, financial condition and operating results.

Our business model may not be sufficient to ensure our success in our intended market.

Our operations are dependent upon the success of our efforts to gain market acceptance of digital payment services. If our target market is not as responsive to our products and services as we anticipate, we may be forced to cease or curtail our operations. Furthermore, product and services by our competitors may take a larger share of our target market than we anticipate, which could cause our revenue streams to fall below our expectations. If our competitors develop more successful services or offer competitive products at lower price, our business may suffer.

Our business may be affected by currency rate fluctuation.

We plan to provide our digital payment services worldwide. As such we may be affected by changes in foreign exchange rates. To protect our business, we may enter into foreign currency exchange contracts with major financial institutions to hedge the overseas purchase transactions and limit our exposure to those fluctuations. If we are not able to successfully protect ourselves against currency rate fluctuations, our potential profits on the products subject to those fluctuations would also fluctuate and may delay us in achieving profitability or cause us to incur losses.

We may be subject to litigation from time to time during the normal course of business, which may adversely affect our business, financial condition and results of operations.

Although we are not currently subject to any material pending litigation proceedings, from time to time in the normal course of business or otherwise, we may become subject to litigation that may result in material liability. The cost to defend such litigation may be significant and may require a diversion of our resources and management’s attention to our business. There may also be adverse publicity associated with litigation that could negatively affect customer perception of our business, regardless of whether the allegations are valid or whether we are ultimately found liable. As a result, litigation may adversely affect our business, financial condition and results of operations.

Substantial and increasingly intense competition worldwide in the financial services, payments, technology and telecommunications industries may materially and adversely affect our overall our growth and potential profitability.

Financial services, payments technology and telecommunications industries are highly competitive. Our payment solutions compete against all forms of financial services and payment systems, including, but not limited to, cash and checks, and electronic, mobile, and e-commerce payment platforms. The adoption of new technology may intensify the competition for our products and services. Some of our competitors have substantially greater financial, personnel and other resources and lending limits than we have, have greater name recognition and market presence that benefit them in attracting business, and offer certain services that we do not or cannot provide. Furthermore, certain competitors may be able to secure products from vendors on more favorable terms, devote greater resources to marketing and promotional campaigns, and adopt more aggressive pricing than we can. If we are unable to differentiate ourselves from our competitors, drive value for our clients and/or effectively align our resources with our goals and objectives, we may not be able to compete effectively. Our competitors may introduce their own services or solutions that are more effective than ours, which could adversely impact our growth. We may also compete against new entrants that have developed alternative payment systems, e-commerce payment systems, and payment systems for mobile devices. Failure to compete effectively against any of these competitors could have a material adverse effect on us. In addition, the highly competitive nature of our industry could lead to increased pricing pressure which could have a material impact on our overall business and results of operations. Potential changes in the competitive landscape, including, but not limited to, disintermediation from other participants in the payments value chain, could harm our business. The greater resources and deposit and loan products offered by some of our competitors may limit our ability to increase our interest-earning assets. Our profitability depends upon our continued ability to successfully compete in our industry.

The Platform’s total transaction volume, and consequently our revenues and profits, could be materially adversely affected if we are unable to retain our current customers and/or attract new customers.

We must maintain and expand our customer base to drive the total volume necessary to maintain and increase our revenues. Our success also depends on our ability to offer competitive prices and services in an increasingly price-sensitive business. We may be unable to retain our existing customers and/or attract new customers. If we lose a substantial number of our current customers or are unable to attract new customers, our business may be adversely affected. Furthermore, declines in the volume of transactions using the Platform may negatively impact our business, which could result in lower than expected revenues from parties using the Platform and could materially adversely affect our ability to retain our current customers and/or attract new customers.

Additionally, there is no guarantee that new customers or financial providers will continue to use our Platform after their onboarding or their initial use.

We are dependent on external, non-exclusive sources of funding to provide financing to our users and a withdrawal of a major financing source from the Platform or our inability to attract new financing providers may have a significant impact on our business and profits.

We rely on third-party lenders and other financers to finance the transactions on the Platform. Our ability to facilitate transactions is significantly tied to the availability of financing options for our users, and our ability to attract diversified financing providers. The participation of financing providers on the Platform is non-exclusive and does not prohibit financing providers from working with our competitors or from offering competing products. As a result of the foregoing, any of our financing providers could, with minimum notice, elect to enter into exclusive or more favorable relationships with our competitors.

More generally, the participation of financing providers on the Platform may cease at any time because of events which we are unable to control, such as general market disruptions, global pandemics, regulatory changes, geopolitical conflicts, fluctuation or volatility in the prices of commodities or an operational problem that affects our users or our business. For example, if the commodities market begins to decline, finance providers may begin to withdraw from the sector, which may reduce the availability of financing on the Platform. We cannot provide assurance that a current provider of financing will not withdraw from the Platform, despite otherwise profitable dealings. Any failure to facilitate sufficient third-party financing, including, on reasonable terms or in a timely manner, could have an adverse impact on our business, financial condition, and results of operations.

Rapid technological change in our market and/or changes in customer demands could cause our products to become obsolete or require us to redesign our products, which may have a material adverse effect on our business, operating results and financial condition.

The market for our services is characterized by rapid technological change, frequent new product introductions and enhancements, changing customer demands and evolving industry standards, any of which can render existing products obsolete. In the fast-evolving fintech landscape, the ability to adapt to technological changes is crucial for our business. We believe that our future success will depend in large part on our ability to develop new and effective products in a timely manner and on a cost-effective basis. As a result of the complexities inherent in our products, new products and product enhancements may require long development and testing periods, which may result in significant delays in the general availability of new releases or significant problems in the implementation of new releases. In addition, if we or our competitors announce or introduce new products or services, our current or future customers may defer or cancel purchases of our products or services, which could materially adversely affect our business, operating results and financial condition. Our failure to develop our Platform successfully, on a timely and cost effective basis, along with developing new products or new product enhancements that respond to technological change, evolving industry standards or customer requirements may have a material adverse effect on our business, operating results and financial condition.

We may not have adequate insurance to cover losses and liabilities.

We maintain insurance we consider appropriate for our business needs. However, we may not be insured against all risks either because appropriate coverage is not available or because we consider the applicable premiums to be excessive in relation to the perceived benefits that would accrue. Accordingly, we may not be insured at all or fully insured against all losses and liabilities that could unintentionally arise from our operations. The incurrence of uninsured or partially insured losses or liabilities could have a material adverse effect on our business, results of operations and financial condition.

Any inability to retain our employees or officers or recruit additional employees could adversely impact our financial position.

We are highly dependent upon our personnel, including Jeffrey Mason, our Chief Executive Officer. The loss of Mr. Mason’s services could impede the achievement of our business objectives. We have not obtained, do not own, nor are we the beneficiary of, key-person life insurance. In addition, our ability to effectively execute our growth strategy depends upon the performance and expertise of our other employees. We rely on experienced managerial and highly qualified technical employees to develop and operate our technology and to direct operational employees to manage the operational, sales, compliance and other functions of our business.

There is a risk that we may not be able to attract and retain key employees or be able to find effective replacements in a timely manner. The loss of key employees, or any delay in their replacement, could impact our ability to operate our business and achieve our growth strategies, including through the development of new systems and technology. There is a risk that we may not be able to recruit suitably qualified and talented employees in a timeframe that meets our growth objectives. This may result in delays in the integration of new systems, development of technology and general business expansion. There is also a risk that we will be unable to retain existing employees, or recruit new employees, on terms of retention that are as attractive to us. Our inability to retain our key employees or recruit additional employees, in particular key employees, may have a material adverse effect on our business, results of operation and financial condition.

We face risks associated with global operations that could harm our business.

Our operations in foreign countries subject us to various risks that may increase our costs, make our operations less efficient and require significant management attention. These risks include, but are not limited to:

If we are not able to operate a cost-effective platform, we may not be able to grow our business successfully.

Our long-term success depends on our ability to design, implement, operate, manage and maintain a reliable and cost-effective network. In addition, we rely on third parties to enable us to expand and manage our global network and to provide local, broadband Internet and mobile services. If we are unable to grow and operate a cost-effective network for our customers, our business may fail to grow or decline, which would have a material adverse effect on our financial condition and results of operations.

We are exposed to credit risk on deposits in the event of default by the financial institutions to the extent account balances exceed the amount insured by the Federal Deposit Insurance Corporation, or “FDIC”, in the United States or the Financial Services Compensation Scheme, or “FSCS”, in the United Kingdom.

We deposit our cash in depository institutions as a means of maintaining the liquidity necessary to meet our operating needs, and we also facilitate the deposit of cash awaiting investment in depository institutions on behalf of our clients. At times, the balances in our accounts with these depository institutions may exceed FDIC-insured or FSCS-insured limits. A failure of a depository institution to return these deposits could severely impact our operating liquidity, result in significant reputational damage, and adversely impacting our financial performance.

We are exposed to credit risk on receivables from the purchase of our customers’ invoices.

We purchase invoices from our customers for services relating to the supply of minutes to large telecom carriers and immediately resell such invoices to third-party lenders on a non-recourse basis. Accordingly, we do not assume a credit risk. However, the failure of a large telecom carrier to pay its invoices when due could alienate lenders and impact our ability to purchase customer invoices on a continuing basis, resulting in significant reputational damage and adversely impacting our financial performance.

We may not adjust our expenses quickly enough to match a significant deterioration in global financial markets.

Global recessions and other economic downturns may occur quickly, resulting in severe declines in the total transaction volume of the Platform and revenue, which may strain on our ability to adjust costs and expenses to match. A failure to successfully adjust our costs and expenses may reduce margins and/or result in losses. If we are unable to adjust expenses, one or more of our major customers or lenders may stop using our products or services, which may have a substantial impact on our business and operations.

We depend on a small number of customers and the loss of one or more major customers could have a material adverse effect on our business, financial condition and results of operations.

During the year ended December 31, 2022, one customer, Cpec Tech Ltd, accounted for 37% of our consolidated revenues and one service provider, FastLink Software Inc., accounted for 12% of our purchases of services. During the year ended December 31, 2021, one customer, Up2U Internet SL, accounted for 41% of our consolidated revenues and FastLink Software accounted for 13% of our purchases of services. We expect that a small number of customers and service providers will continue to account for a significant portion of our revenues and purchases of services, respectively. All of our customers and service providers have contracts that are terminable-at-will and have no fixed commitments to conduct business with us and it is possible that any of our customers and/or service providers could decide to terminate their relationship with us in the future. The loss of any such customer and/or service provider, or a substantial decrease by any such customer and/or service provider for our services could have a material adverse effect on our business, results of operations and financial condition. Additionally, our significant customers may have substantial negotiating leverage, which may require that we agree to terms and conditions that result in increased cost of sales, decreased revenues and lower average selling prices and gross margins, all of which could harm our operating results.

Risks Related to the Telecommunications Industry

Changes in the regulation of the telecommunications industry could adversely affect our business, revenue or cash flow.

We operate in a heavily regulated industry. Local laws and regulations, and the interpretation of such laws and regulations, differ significantly among the jurisdictions in which we operate. Enforcement and interpretations of these laws and regulations can be unpredictable and are often subject to the informal views of government officials. Certain foreign, U.S. federal, and state regulations and local franchise requirements have been, are currently, and may in the future be, the subject of judicial proceedings, legislative hearings and administrative proposals. Such proceedings may relate to, among other things, the rates we may charge for our services, the manner in which we offer and bundle our services, the terms and conditions of interconnection, unbundled network elements and resale rates, and could change the manner in which we operate. We cannot predict the outcome of these proceedings or the impact they will have on our business, revenue and cash flow.

Potential future regulatory, judicial, legislative, and government policy changes in jurisdictions where we operate could have a material adverse effect on us. There can be no assurance that future regulatory changes will not have a material adverse effect on us, or that regulators or third parties will not raise material issues regarding our compliance with applicable regulations, any of which could have a material adverse effect on us.

Our telecommunications line of business is highly sensitive to declining prices, which may adversely affect our revenues and margins.

The telecommunications industry is characterized by intense price competition, which has resulted in declines in both average per-minute price realizations and average per-minute termination costs. A reduction in our prices to compete with other offers in the market may not guarantee an increase in the traffic, which may result in a reduction of revenue. If these trends in pricing continue or accelerate, it could have a material adverse effect on the revenues generated by our businesses and/or our gross margins. The continued growth of VOIP calling and messaging services, such as WhatsApp, Skype and Viber has adversely affected the use of traditional phone communications, and we expect these IP-based services which offer voice communications for free to continue to increase, which may adversely affect our offerings.

The termination of carrier agreements or the inability of customers to enter into new carrier agreements in the future could materially and adversely affect our operations.

We rely upon our carrier agreements between telecommunications companies in order to provide our telecommunications services to our customers. These carrier agreements are, in most cases, for finite terms and, therefore, there can be no guarantee that these agreements will be renewed on favorable terms, or at all. Our ability to compete may be adversely affected if our customer carrier agreements were terminated or they were unable to enter into carrier agreements in the future to enable us to provide our telecommunications services to our customers, which could result in a reduction of our revenues and potential profits.

Fraud by unscrupulous telecommunications operators or others could have a material adverse effect on our business, financial condition, and results of operations.

We deploy extensive know your customer procedures to establish the identity and the telecommunications activity of all participants admitted to our Platform. In addition, we obtain technical data from the large telecom carriers who are the customers of our customers and, therefore, will send financed traffic (minutes) to the Platform to establish the origin of the minutes sent. Notwithstanding the foregoing, we may be subject to potential liability for fraudulent electronic payment transactions or credits initiated by telecom carriers or others. Examples of telecommunications fraud include the abuse of telecommunications products and services with the intention of stealing money from customers and/or their communications providers. Criminals are using increasingly sophisticated methods to engage in illegal activities such as counterfeiting and fraud. It is possible that incidents of fraud could increase in the future. Failure to effectively manage risk and prevent fraud may increase our chargeback liability or other liability which have a material adverse effect on our business, financial condition, and results of operations.

Risks Related to Blockchain and Financial Technology

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

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

We may not be successful in developing our blockchain technology solutions and, even if our Platform is developed, there are a number of risks that may prevent its widespread adoption.

We are continuing the development of our Platform that will act as a framework for a number of value-added services that we believe can connect our customers directly utilizing blockchain technology while increasing the economic efficiency of all transactions being made within the ecosystem. However, blockchain technology is new and its uses are constantly evolving. Accordingly, we may not be successful in completing and fully-implementing our blockchain technology solutions in a timely manner, or at all.

In addition, even if we are able to fully develop and implement our Platform, such technology is subject to a number of risks that may prevent its widespread adoption, including, but not limited to:

The application of blockchain technology is novel and untested and may contain inherent flaws or limitations.

Blockchain is an emerging technology that offers new capabilities which are not fully proven in use. There are limited examples of the application of private distributed ledger technology. In most cases, software used by blockchain asset issuing entities will be in an early development stage and still unproven. As with other novel software products, the computer code underpinning the Fabric blockchain may contain errors, or function in unexpected ways. Insufficient testing of smart contract code, as well as the use of external code libraries, may cause the software to crack (i.e., undesired modifications in the software that removes or disables features) or function incorrectly. Any error or unexpected functionality may cause a decline in value of our Platform and result in an adverse effect to our business.

Intellectual property rights claims may adversely affect blockchain technology.

Third parties may assert intellectual property claims relating to their source code, including blockchain technology. Regardless of the merit of any intellectual property or other legal action, any threatened action that reduces confidence in distributed ledger technology’s long-term viability may adversely affect an investment in us. Additionally, a meritorious intellectual property claim could prevent us and other end-users from accessing the distributed ledger technology. As a result, an intellectual property claim against us could adversely affect our business and an investment in us.

Smart contracts are a new type of technology and ongoing development may magnify initial problems, cause volatility on the networks that use smart contracts and reduce interest in them, which could have an adverse impact on the deployment of our smart contracts.

Smart contracts are programs that run on a blockchain that execute automatically when certain conditions are met. Since smart contracts typically cannot be stopped or reversed, vulnerabilities in their programming can have damaging effects. Initial problems and continued problems with the development and deployment of smart contracts may have an adverse effect on the success of our Platform which utilizes smart contracts to enforce the performance of financial settlements.

Some aspects of our services incorporate open source software, and our use of open source software could negatively affect our business, results of operations, financial condition, and prospects.

Some of our systems incorporate and are dependent on the use and development of open source software. Open source software is software licensed under an open source license, which may include a requirement that we make available, or grant licenses to, any modifications or derivative works created using the open source software or make our products or services available for free or for nominal amounts. If an author or other third-party that uses or distributes such open source software were to allege that we have not complied with the legal terms and conditions of one or more of these open source licenses, we could incur significant legal expenses defending against such allegations, could be subject to significant damages, and could be required to comply with these open source licenses in ways that cause substantial competitive harm to our business.

The terms of various open source licenses have not been interpreted by U.S. and international courts, and there is a risk that such licenses could be construed in a manner that imposes unanticipated conditions or restrictions on our products or services. In such an event, we could be required to re-engineer all or a portion of our technologies, seek licenses from third parties in order to continue offering our products and services, discontinue the use of our Platform in the event re-engineering cannot be accomplished, or otherwise be limited in licensing our technologies, each of which could reduce or eliminate the value of our technologies and products and services. If portions of our software are determined to be subject to an open source license, we could also be required to, under certain circumstances, publicly release or license, at no cost, our products or services that incorporate the open source software or the affected portions of our source code, which could allow our competitors or other third parties to create similar products and services with lower development effort, time, and costs, and could ultimately result in a loss of transaction volume for us. We cannot ensure that we have not incorporated open source software in our software in a manner that is inconsistent with the terms of the applicable license or our current policies, and we or our third-party contractors or suppliers may inadvertently use open source in a manner that we do not intend or that could expose us to claims for breach of contract or intellectual property infringement, misappropriation, or other violation. If we fail to comply, or are alleged to have failed to comply, with the terms and conditions of our open source licenses, we could be required to incur significant legal expenses defending such allegations, be subject to significant damages, be enjoined from the sale of our products and services, and be required to comply with onerous conditions or restrictions on our products and services, any of which could be materially disruptive to our business.

Interruptions or performance problems associated with the financial technology, infrastructure or service offerings may adversely affect our business and operating results.

The continued growth of our Platform depends in part on the ability of users to access our Platform at any time and within an acceptable amount of time. Our Platform relies on the expertise of members of our engineering, operations and software development teams for its continued performance. Disruptions to these departments and functions, some of which are outsourced, could result in product feature and enhancement delays and interruptions to or performance problems associated with our Platform.

Our Platform may experience minor disruptions, outages and performance problems due to a variety of factors, including infrastructure changes, introductions of new functionality, human or software errors, delays in scaling of the technical infrastructure (such as if we do not maintain enough excess capacity or accurately predict the infrastructure requirements of our Platform), capacity constraints due to an overwhelming number of users accessing our Platform simultaneously, and denial-of-service or other cyber-attacks or other security-related incidents. In some instances, we may not be able to identify the cause or causes of these performance problems within an acceptable period of time. It may become increasingly difficult to maintain and improve the performance of our Platform, especially during peak usage times, and as our Platform becomes more complex and its user traffic increases. As a result, our Platform may become unavailable or users may be unable to access our Platform within a reasonable amount of time. In the event of any of the factors described above, or certain other failures of our infrastructure or that of third-parties we rely on, user data may be permanently lost. If our Platform experiences significant periods of service downtime in the future, we may be subject to claims by users of our Platform. To the extent that we do not effectively address capacity constraints, upgrade our systems as needed, continually develop our technology and network architecture to accommodate actual and anticipated changes in technology and efficiently resolve interruptions or performance problems with our Platform, existing relationships with practices would be adversely affected and our Platform brand could be harmed. In addition to technological and infrastructure problems, if our customers experience other issues or are unsatisfied with the service offerings or operations of our Platform, this could result in poor relationships with practices and reputational harm to us.

Regulatory compliance in the fintech sector is evolving and any noncompliance with such regulations may have a material adverse effect on our business.

Regulatory compliance in the fintech sector is evolving, and we cannot provide assurance that we will be able to proceed with our business plans if the regulatory environment in the fintech sector changes in a manner that undermines existing business plans. Such evolving regulations may have an impact in the various countries in which we operate. Any noncompliance with evolving regulations may have a material adverse effect on our business.

Real or perceived software errors, failures, bugs, defects, or outages could adversely affect our business, results of operations, financial condition, and prospects.

Our Platform and our internal systems rely on software that is highly technical and complex. In addition, our Platform and our internal systems depend on the ability of such software to store, retrieve, process, and manage immense amounts of data. As a result, undetected vulnerabilities, errors, failures, bugs, or defects may be present in such software or occur in the future in such software, including open source software and other software we license in from third parties, especially when updates or new products or services are released.

Any real or perceived vulnerabilities, errors, failures, bugs, or defects in the software may not be found until our consumers use our Platform and could result in outages or degraded quality of service on our Platform that could adversely impact our business (including through causing us not to meet contractually required service levels), as well as negative publicity, loss of or delay in market acceptance of our products and services, and harm to our brand or weakening of our competitive position. In such an event, we may be required, or may choose, to expend significant additional resources in order to correct the problem. Any real or perceived errors, failures, bugs, or defects in the software we rely on could also subject us to liability claims, impair our ability to attract new consumers, retain existing consumers, or expand their use of our products and services, which would adversely affect our business, results of operations, financial condition, and prospects.

We also rely on online payment gateways, banking and financial institutions for settlement and collection of payments. There is a risk that these systems may fail to perform as expected or be adversely impacted by a number of factors, some of which may be outside our control, including damage, equipment faults, power failure, fire, natural disasters, computer viruses and external malicious interventions such as hacking, cyber-attacks or denial-of-service attacks.

Our success depends on our continued investment in research and development.

We intend to continue to make investments in research and development and product development in seeking to sustain and improve our competitive position and meet our customers’ needs. These investments currently include streamlining our suite of software functionalities, including modularization and improving scalability of our integrated solutions. To maintain our competitive position, we may need to increase our research and development investment, which could delay when we achieve profitability and reduce our cash flows, thereby resulting in a material and adverse effect on our financial condition and results of operations. In addition, we cannot assure you that we will achieve a return on these investments, nor can we assure you that these investments will improve our competitive position or meet our customers’ needs.

Risks Related to Regulatory Matters

Failure to comply with laws and contractual obligations related to data privacy and protection could have a material adverse effect on our business, financial condition and operating results.

We process many types of data, including personal data in the course of our business. As such, we are subject to the data privacy and protection laws and regulations adopted by federal, state and foreign governmental agencies. Data privacy and protection is highly regulated in many jurisdictions and may become the subject of additional regulation in the future. For example, lawmakers and regulators worldwide are considering proposals that would require companies, like us, that encrypt users’ data to ensure access to such data by law enforcement authorities. Privacy laws restrict our processing of personal information, provided to us by our customers as well as data we collect from our customers and employees. We strive to comply with all applicable laws, regulations, policies and legal obligations relating to privacy and data protection. However, if we fail to comply, we may be subject to fines, penalties and lawsuits, statutory damages at both the federal and state levels in the United States, and potentially substantial fines and penalties in foreign jurisdictions, and class action lawsuits, and our reputation may suffer. We may also be required to make modifications to our data practices that could have an adverse impact on our business, including increasing our operating costs, which may require us to increase our prices, making our services less competitive.

We are also subject to the privacy and data protection-related obligations in our contracts with our customers and other third parties. Any failure, or perceived failure, by us to comply with federal, state, or international laws, including laws and regulations regulating privacy, data, or consumer protection, or to comply with our contractual obligations related to privacy, could result in proceedings or actions against us by governmental entities, contractual parties, or others, which could result in significant liability to us, as well as harm our reputation. Additionally, third parties on which we rely may enter into contracts to protect and safeguard our customers’ data. Should such parties violate these agreements or suffer a breach, we could be subject to proceedings or actions against us by governmental entities, contractual parties, or others, which could result in significant liability to us as well as harm to our reputation.

We may suffer adverse tax and other financial consequences if U.S. or foreign taxing authorities do not agree with our interpretation of applicable tax laws.

Our corporate structure is based, in part, on assumptions about the various tax laws, including withholding tax, and other relevant laws of applicable non-U.S. jurisdictions. Foreign taxing authorities may not agree with our interpretations or reach different conclusions. Our interpretations are not binding on any taxing authority and, if these foreign jurisdictions were to change or to modify the relevant laws, we could suffer adverse tax and other financial consequences or have the anticipated benefits of our corporate structure materially impaired. This could have a material adverse effect on our financial condition, results of operations and cash flows.

Legislation and regulation of online businesses, including privacy and data protection regulations/restrictions, could create unexpected costs, subject us to enforcement actions for compliance failures, or cause us to change our Platform or business model, which could have a material adverse effect on our business.

Government regulation could increase the costs of doing business online. U.S. and foreign governments have enacted or are considering legislation related to online advertising and we expect to see an increase in legislation and regulation related to advertising online, the use of geo-location data to inform advertising, the collection and use of anonymous Internet user data and unique device identifiers, such as IP address or unique mobile device identifiers, and other data protection and privacy regulation. Such legislation could affect the costs of doing business online and could reduce the demand for our solution or otherwise harm our business, financial condition and results of operations. For example, a wide variety of provincial, state, national and international laws and regulations apply to the collection, use, retention, protection, disclosure, transfer and other processing of personal data. Our failure to comply with applicable laws and regulations, or to protect personal data, could result in enforcement action against us, including fines, imprisonment of our officers and public censure, claims for damages by consumers and other affected individuals, damage to our reputation and loss of goodwill, any of which could have a material adverse impact on our business, financial condition and results of operations. Even the perception of privacy concerns, whether or not valid, could harm our reputation and inhibit adoption of our solution by current and future advertisers and advertising agencies.

Failure to comply with anticorruption and anti-money laundering laws, including the Foreign Corrupt Practices Act (“FCPA”) and similar laws associated with activities outside of the United States, could subject us to penalties and other adverse consequences.

We are subject to the FCPA, the U.S. domestic bribery statute contained in 18 U.S.C. § 201, the U.S. Travel Act, the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act of 2001 (the “USA PATRIOT Act”) and possibly other anti-bribery and anti-money laundering laws in countries in which we conduct activities. We face significant risks if we fail to comply with the FCPA and other anti-corruption laws that prohibit companies and their employees and third-party intermediaries from promising, authorizing, offering, or providing, directly or indirectly, improper payments or benefits to foreign government officials, political parties, and private-sector recipients for the purpose of obtaining or retaining business, directing business to any person, or securing any advantage. Any violation of the FCPA, other applicable anti-corruption laws, and anti-money laundering laws could result in whistleblower complaints, adverse media coverage, investigations, loss of export privileges, or severe criminal or civil sanctions, which could have a material adverse effect on our reputation, business, operating results, and prospects. In addition, responding to any enforcement action may result in a significant diversion of management’s attention and resources, significant defense costs, and other professional fees.

We maintain controls designed to enable us to comply with all applicable anti-money laundering and anti-terrorism financing laws and regulations, including the Bank Secrecy Act of 1970, as amended by the USA PATRIOT Act (the “BSA”). These controls include policies, procedures, processes and other internal controls designed to identify, monitor, manage and mitigate the risk of money laundering and terrorist financing. These controls include procedures and processes to detect and report potentially suspicious transactions, perform consumer due diligence, respond to requests from law enforcement and meet all recordkeeping and reporting requirements related to particular transactions involving currency or monetary instruments. However, we cannot provide any assurance that our controls will be effective to ensure compliance with all applicable anti-money laundering and anti-terrorism financing laws and regulations we are required to comply with, and our failure to comply with these laws and regulations could result in a breach and termination of our agreements with our third-party partners or criticism by state governmental agencies, which may have a material adverse effect on our business, results of operations, financial condition and future prospects.

We operate in a complex regulatory environment, and failure to comply with applicable laws and regulations could adversely affect our business.

Our operations are subject to a broad range of complex and evolving laws and regulations. Because of our coverage in many countries, we must perform our services in compliance with the legal and regulatory requirements of multiple jurisdictions. Some of these laws and regulations may be difficult to ascertain or interpret and may change from time to time. Violation of such laws and regulations could subject us to fines and penalties, damage our reputation, constitute a breach of our client agreements, impair our ability to obtain and renew required licenses, and impair our ability to achieve profitability. If any of the foregoing were to occur, our operating results and financial condition could be adversely affected. Additionally, to serve the international markets in which conduct business, we maintain business entities in various jurisdictions around the world. Accordingly, we must maintain and operate these business entities in compliance with the applicable corporate, tax, employment and other laws of these various jurisdictions, which adds complexity to our operations. Our failure to maintain compliance with such laws and regulations could give rise to liabilities that could materially adversely affect our financial condition, results of operations and cash flows.

Risks Related to Our Common Stock and this Offering

There has been no prior public market for our common stock, the stock price of our common stock may be volatile or may decline regardless of our operating performance and you may not be able to resell your shares at or above the initial public offering price.

Prior to this offering there has been no public market for shares of our common stock. You may not be able to sell your shares quickly or at the market price if trading in shares of our common stock is not active. The initial public offering price for our common stock will be determined through negotiations with the underwriters, and the negotiated price may not be indicative of the market price of the common stock after the offering. An active or liquid market in our common stock may not develop upon the completion of this offering or, if it does develop, it may not be sustainable. As a result of these and other factors, you may be unable to resell your shares of our common stock at or above the initial public offering price.

Further, an inactive market may also impair our ability to raise capital by selling shares of our common stock and may impair our ability to enter into strategic collaborations or acquire companies or products by using our shares of common stock as consideration.

The price of our stock may be volatile, and you could lose all or part of your investment.

The trading price of our common stock following this offering is likely to be highly volatile and could be subject to wide fluctuations in response to various factors, some of which are beyond our control, including limited trading volume. We cannot predict the prices at which our common stock will trade. The market price of our common stock following this offering will depend on a number of factors, including those described in this “Risk Factors” section, many of which are beyond our control and may not be related to our operating performance. In addition, the limited public float of our common stock following this offering may increase the volatility of the trading price of our common stock. In addition to the factors discussed in this “Risk Factors” section and elsewhere in this prospectus, factors that could cause fluctuations in the market price of our common stock include:

In addition, the stock market in general, and the market for fintech companies in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies. Broad market and industry factors may negatively affect the market price of our common stock, regardless of our actual operating performance. If the market price of our common stock after this offering does not exceed the initial public offering price, you may not realize any return on your investment in us and may lose some or all of your investment. In the past, securities class action litigation has often been instituted against companies following periods of volatility in the market price of a company’s securities. This type of litigation, if instituted, could result in substantial costs and a diversion of management’s attention and resources.

Unstable market and economic conditions and adverse developments with respect to financial institutions and associated liquidity risk may have serious adverse consequences on our business, financial condition and stock price.

The global credit and financial markets have recently experienced extreme volatility and disruptions, including severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, inflationary pressure and interest rate changes, increases in unemployment rates and uncertainty about economic stability. The financial markets and the global economy may also be adversely affected by the current or anticipated impact of military conflict, including the conflict between Russia and Ukraine, Israel and Hamas, terrorism or other geopolitical events. Sanctions imposed by the United States and other countries in response to such conflicts, including the ones in Ukraine and Israel, may also adversely impact the financial markets and the global economy, and any economic countermeasures by the affected countries or others could exacerbate market and economic instability. More recently, the closures of Silicon Valley Bank and Signature Bank and their placement into receivership with the Federal Deposit Insurance Corporation, or “FDIC”, created bank-specific and broader financial institution liquidity risk and concerns. Although the Department of the Treasury, the Federal Reserve, and the FDIC jointly confirmed that depositors at Silicon Valley Bank and Signature Bank would continue to have access to their funds, even those in excess of the standard FDIC insurance limits, under a systemic risk exception, future adverse developments with respect to specific financial institutions or the broader financial services industry may lead to market-wide liquidity shortages, impair the ability of companies to access near-term working capital needs, and create additional market and economic uncertainty. There can be no assurance that future credit and financial market instability and a deterioration in confidence in economic conditions will not occur. Our general business strategy may be adversely affected by any such economic downturn, liquidity shortages, volatile business environment or continued unpredictable and unstable market conditions. If the equity and credit markets deteriorate, or if adverse developments are experienced by financial institutions, it may cause short-term liquidity risk and also make any necessary debt or equity financing more difficult, more costly and more dilutive. Failure to secure any necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance and stock price and could require us to delay or abandon our business plans. In addition, there is a risk that one or more of our current clients, financial institutions or other third parties with whom we do business may be adversely affected by the foregoing risks, which may have an adverse effect on our business.

We have broad discretion in the use of the net proceeds from this offering and may not use them effectively.

Our management will have broad discretion in the application of the net proceeds to us from this offering and could spend the proceeds in ways that do not improve our results of operations or enhance the value of our common stock. The failure by our management to apply these funds effectively could result in financial losses that could have a material adverse effect on our business, cause the price of our common stock to decline and delay the enhancement of our market position in wholesale telecommunications and major construction projects industries. Pending their use, we may invest the net proceeds from this offering in a manner that does not produce income or that loses value.

A person associated with Dominari Securities LLC, the representative of the underwriters, beneficially owns approximately 7.80% of our outstanding common stock before this offering and will own approximately 7.05% of our outstanding common stock after this offering and has an interest in this offering beyond customary underwriting commissions which may create a conflict of interest.

Revere Master SPV LLC beneficially owns approximately 7.80% of our outstanding common stock before this offering and will own approximately 7.05% of our outstanding common stock after this offering. Kyle Wool is the Manager of Revere Master SPV and in such capacity has the right to vote and dispose of the securities held by such entity. Kyle Wool is also the Chief Executive Officer of Dominari Securities LLC, the representative of the underwriters in this offering. Further, under the underwriting agreement, we will pay Dominari Securities LLC, as representative of the underwriters, fees and commissions equal to 8% of the gross proceeds raised in the offering. Accordingly, the interests of Mr. Wool may not be, at all times, the same as that of our other stockholders. Ownership of our common stock by a person associated with the underwriter may create the appearance of, or create, conflicts of interest if and when such individuals are faced with decisions that could have varying implications for us and themselves. Where those conflicts exist, our stockholders may be affected by actions taken by Mr. Wool, Revere Master SPV and/or Dominari Securities LLC. Any actual or perceived conflicts of interest may have an effect on potential actions or transactions involving the Company, which may be disadvantageous to our other stockholders.

We do not intend to pay dividends on our common stock so any returns will be limited to the value of our stock.

We have never paid or declared any cash dividends on our common stock, and we do not anticipate paying any cash dividends on our common stock in the foreseeable future. We currently anticipate that we will retain future funds and earnings for the development and expansion of our business. Any future determination to pay dividends will be at the discretion of our board of directors and will depend upon a number of factors, including our results of operations, financial condition, future prospects, restrictions imposed by applicable law and other factors our board of directors deems relevant. Furthermore, future debt or other financing arrangements may contain terms prohibiting or limiting the amount of dividends that may be declared or paid on our common stock. Any return to stockholders will therefore be limited to the appreciation of their stock.

Directors, executive officers, principal stockholders and affiliated entities own a significant percentage of our stock and will be able to exert significant control over matters subject to stockholder approval.

Immediately following the completion of this offering, our directors, executive officers, principal stockholders and their affiliates will beneficially hold, in the aggregate, approximately 18.15% of our outstanding voting stock. These stockholders, acting together, would be able to significantly influence all matters requiring stockholder approval. For example, these stockholders would be able to significantly influence elections of directors, amendments of our organizational documents, or approval of any merger, sale of assets, or other major corporate transaction. This may prevent or discourage unsolicited acquisition proposals or offers for our common stock that you may feel are in your best interest as one of our stockholders.

If you purchase our common stock in this offering, you will incur immediate and substantial dilution in the book value of your shares.

The initial public offering price will be substantially higher than the as adjusted net tangible book value per share of our common stock after this offering. Investors purchasing common stock in this offering will pay a price per share that substantially exceeds the as adjusted net tangible book value per share after this offering. As a result, investors purchasing common stock in this offering will incur immediate dilution of $4.77 per share, based on an assumed initial public offering price of $5.00 per share, the midpoint of the price range set forth on the cover page of this prospectus and the sale of our shares of common stock, representing the difference between our as adjusted net tangible book value per share after giving effect to this offering and the assumed initial public offering price. Further, investors purchasing common stock in this offering will contribute approximately 41.77% of the total amount invested by stockholders since our inception, but will own only approximately 9.67% of the shares of common stock outstanding after this offering.

This dilution is due to our investors who purchased shares prior to this offering having paid substantially less when they purchased their shares than the price offered to the public in this offering. To the extent outstanding options and/or warrants are exercised, there will be further dilution to new investors. As a result of the dilution to investors purchasing shares in this offering, investors may receive significantly less than the purchase price paid in this offering, if anything, in the event of our liquidation. For a further description of the dilution that you will experience immediately after this offering, see the section entitled “Dilution”.

General Risk Factors

We are an “emerging growth company” and a “smaller reporting company” and will be able to avail ourselves of reduced disclosure requirements applicable to emerging growth companies and/or smaller reporting companies, which could make our common shares less attractive to investors.

We are an “emerging growth company,” as defined in the JOBS Act and we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended (the “Securities Act”), for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We may take advantage of these reporting exemptions until we are no longer an “emerging growth company.” We will remain an “emerging growth company” until the earliest of (i) the last day of the fiscal year in which we have total annual gross revenues of $1.235 billion or more; (ii) the last day of our fiscal year following the fifth anniversary of the date of the completion of this offering; (iii) the date on which we have issued more than $1 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the Securities and Exchange Commission (the “SEC”).

In addition, even if we no longer qualify as an “emerging growth company,” we may still take advantage of certain reduced reporting requirements as a “smaller reporting company.” If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company, we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and have reduced disclosure obligations regarding executive compensation, and, similar to emerging growth companies, if we are a smaller reporting company, we may not be required to obtain an attestation report on internal control over financial reporting issued by our independent registered public accounting firm.

Financial reporting obligations of being a public company in the U.S. are expensive and time-consuming, and our management will be required to devote substantial time to compliance matters.

As a publicly traded company we will incur significant additional legal, accounting and other expenses that we did not incur as a private company. The obligations of being a public company in the U.S. require significant expenditures and will place significant demands on our management and other personnel, including costs resulting from public company reporting obligations under the Exchange Act and the rules and regulations regarding corporate governance practices, including those under the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, and the listing requirements of NYSE American. These rules require the establishment and maintenance of effective disclosure and financial controls and procedures, internal control over financial reporting and changes in corporate governance practices, among many other complex rules that are often difficult to implement, monitor and maintain compliance with. Moreover, despite recent reforms made possible by the JOBS Act, the reporting requirements, rules, and regulations will make some activities more time-consuming and costly, particularly after we are no longer an “emerging growth company.” In addition, we expect these rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance. Our management and other personnel will need to devote a substantial amount of time to ensure that we comply with all of these requirements and to keep pace with new regulations, otherwise we may fall out of compliance and risk becoming subject to litigation or being delisted, among other potential problems.

If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.

The trading market for our common stock will depend in part on the research and reports that securities or industry analysts publish about us or our business. Securities and industry analysts do not currently, and may never, publish research on our Company. If no securities or industry analysts commence coverage of our Company, the trading price for our stock would likely be negatively impacted. In the event securities or industry analysts initiate coverage, if one or more of the analysts who covers us downgrades our stock or publishes inaccurate or unfavorable research about our business, our stock price may decline. If one or more of these analysts ceases coverage of our Company or fails to publish reports on us regularly, demand for our stock could decrease, which might cause our stock price and trading volume to decline.

Our Certificate of Incorporation provides that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for substantially all disputes between the Company and its stockholders, which could limit stockholders’ ability to obtain a favorable judicial forum for disputes with the Company or its directors, officers or employees.

Our Certificate of Incorporation provides that unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware is the sole and exclusive forum for: (i) any derivative action or proceeding brought on behalf of us, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of our Company to us or our stockholders, (iii) any action asserting a claim against us, our directors, officers or employees arising pursuant to any provision of the Delaware General Corporation Law (the “DGCL”) or our Certificate of Incorporation or bylaws (“Bylaws”), or (iv) any action governed by the internal affairs doctrine, except for, as to each of (i) through (iv) above, any claim as to which the Court of Chancery determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery. This exclusive forum provision would not apply to suits brought to enforce any liability or duty created by the Securities Act or the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. To the extent that any such claims may be based upon federal law claims, Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder.

Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. However, our Certificate of Incorporation contains a federal forum provision which provides that unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States of America will be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act.

These choice of forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees and may result in increased costs to our stockholders, which may discourage such lawsuits against us and our directors, officers and other employees. Alternatively, if a court were to find our choice of forum provisions contained in our Certificate of Incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, results of operations, and financial condition.

We could be subject to securities class action litigation.

In the past, securities class action litigation has often been brought against a company following a decline in the market price of its securities. This risk is especially relevant for us because fintech companies have experienced significant stock price volatility in recent years. If we face such litigation, it could result in substantial costs and a diversion of management’s attention and resources, which could harm our business.

There is no guarantee that our common stock will be listed on NYSE American.

We intend to apply to have our shares of common stock listed on NYSE American. Upon completion of this offering, we believe that we will satisfy the listing requirements and expect that our common stock will be listed on NYSE American. Such listing, however, is not guaranteed. If the application is not approved for listing on NYSE American, we will not proceed with this offering. Even if such listing is approved, there can be no assurance any broker will be interested in trading our common stock. Therefore, it may be difficult to sell any shares you purchase in this offering if you desire or need to sell them. Our lead underwriter, Dominari Securities LLC, is not obligated to make a market in our common stock, and even after making a market, can discontinue market making at any time without notice. Neither we nor the underwriters can provide any assurance that an active and liquid trading market in our common stock will develop or, if developed, that the market will continue.

INFORMATION REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements that involve risks and uncertainties. You should not place undue reliance on these forward-looking statements. All statements other than statements of historical facts contained in this prospectus are forward-looking statements. The forward-looking statements in this prospectus are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. In some cases, you can identify these forward-looking statements by terms such as “anticipate,” “believe,” “continue,” “could,” “depends,” “estimate,” “expects,” “intend,” “may,” “ongoing,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would” or the negative of those terms or other similar expressions, although not all forward-looking statements contain those words. We have based these forward-looking statements on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, strategy, short- and long-term business operations and objectives, and financial needs. These forward-looking statements include, but are not limited to, statements concerning the following:

These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in “Risk Factors.” Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this prospectus may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. Moreover, except as required by law, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. We undertake no obligation to update publicly any forward-looking statements for any reason after the date of this prospectus to conform these statements to actual results or to changes in our expectations.

You should read this prospectus and the documents that we reference in this prospectus and have filed with the SEC as exhibits to the registration statement of which this prospectus is a part with the understanding that our actual future results, levels of activity, performance and events and circumstances may be materially different from what we expect.

INDUSTRY AND MARKET DATA

This prospectus contains estimates and other statistical data made by independent parties and by us relating to market size and growth and other data about our industry. We obtained the industry and market data in this prospectus from our own research as well as from industry and general publications, surveys and studies conducted by third parties. This data involves a number of assumptions and limitations and contains projections and estimates of the future performance of the industries in which we operate that are subject to a high degree of uncertainty, including those discussed in “Risk Factors.” We caution you not to give undue weight to such projections, assumptions and estimates. Further, industry and general publications, studies and surveys generally state that they have been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. While we believe that these publications, studies and surveys are reliable, we have not independently verified the data contained in them. In addition, while we believe that the results and estimates from our internal research are reliable, such results and estimates have not been verified by any independent source.

USE OF PROCEEDS

We estimate that the net proceeds from our issuance and sale of 1,300,000 shares of our common stock in this offering will be approximately $5.4 million, or approximately $6.3 million if the underwriters exercise their over-allotment option in full, based on an assumed initial public offering price of $5.00 per share, the midpoint of the price range listed on the cover page of this prospectus, after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

We intend to use the net proceeds from this offering as follows:

Any additional capital that we raise pursuant to this offering will be used for general corporate and working capital purposes.

A $1.00 increase or decrease in the assumed initial public offering price of $5.00 per share, the midpoint of the price range listed on the cover page of this prospectus, would increase or decrease the net proceeds from this offering by approximately $1.196 million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting underwriting discounts and commissions and estimated offering expenses payable by us. An increase (decrease) of 500,000 shares in the number of shares offered by us, as set forth on the cover page of this prospectus, would increase (decrease) the net proceeds from this offering by $2.3 million, assuming no change in the assumed initial public offering price per share and after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

This expected use of the net proceeds from this offering and our existing cash represents our intentions based upon our current plans, financial condition and business conditions. Predicting the cost necessary to develop and expand the Platform and our services can be difficult and the amounts and timing of our actual expenditures may vary significantly depending on numerous factors, including the progress of our development and expansion efforts, any collaborations that we may enter into with third parties, any potential acquisitions and any unforeseen cash needs. As a result, our management will retain broad discretion over the allocation of the net proceeds from this offering and our existing cash.

In the ordinary course of our business, we expect to from time to time evaluate the acquisition of, investment in or in-license of complementary technologies or businesses, and we could use a portion of the net proceeds from this offering for such activities. We currently do not have any agreements, arrangements or commitments with respect to any potential acquisition, investment or license.

Pending our use of the net proceeds from this offering, we intend to invest the net proceeds in a variety of capital preservation investments, including short-term, investment-grade, interest-bearing instruments and government securities.

DIVIDEND POLICY

We have never paid or declared any cash dividends on our common stock, and we do not anticipate paying any cash dividends on our common stock in the foreseeable future. We intend to retain all available funds and any future earnings to fund the development and expansion of our business. Any future determination to pay dividends will be at the discretion of our board of directors and will depend upon a number of factors, including our results of operations, financial condition, future prospects, contractual restrictions, restrictions imposed by applicable law and other factors our board of directors deems relevant.

CAPITALIZATION

The following table sets forth our cash and capitalization as of September 30, 2023:

The as adjusted information in this table is unaudited and is illustrative only and our capitalization following the completion of this offering will be adjusted based on the actual initial public offering price and other terms of this offering determined at pricing. You should read this table in conjunction with the information contained in “Use of Proceeds,” “Summary Financial Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operation,” as well as the financial statements and the notes included elsewhere in this prospectus.

The number of shares of our common stock to be outstanding after this offering is based on 12,148,739 shares of our common stock outstanding as of September 30, 2023, assumes no exercise by the underwriters of their over-allotment option and excludes:

DILUTION

If you invest in our common stock, your ownership interest will be diluted to the extent of the difference between the initial public offering price per share of our common stock and the as adjusted net tangible book value per share of our common stock immediately after this offering.

As of September 30, 2023, we had a historical net tangible book (deficit) of $(2,325,561), or $(0.19) per share of common stock, based on 12,148,739 shares of common stock outstanding at September 30, 2023. Our historical net tangible book value per share is the amount of our total tangible assets less our total liabilities at September 30, 2023, divided by the number of shares of common stock outstanding at September 30, 2023.

After giving effect to the sale of 1,300,000 shares of common stock in this offering at an assumed initial public offering price of $5.00 per share, and after deducting underwriting discounts and commissions and estimated offering expenses payable by us, our as adjusted net tangible book value at September 30, 2023 would have been $3,049,439 million, or $0.23 per share of common stock. This represents an immediate increase in as adjusted net tangible book value of $0.42 per share to existing stockholders and immediate dilution of $4.77 per share to new investors purchasing shares of common stock in this offering.

The following table illustrates this dilution on a per share basis:

The information discussed above is illustrative only, and the dilution information following this offering will be adjusted based on the actual initial public offering price and other terms of this offering determined at pricing. A $1.00 increase (decrease) in the assumed initial public offering price of $5.00 per share, which is the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) our as adjusted net tangible book value after this offering by $0.51 per share and the dilution to new investors purchasing common stock in this offering by $4.68 per share, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting underwriting discounts and commissions and estimated offering expenses payable by us. An increase of 500,000 shares in the number of shares offered by us, as set forth on the cover page of this prospectus, would increase our as adjusted net tangible book value after this offering by $0.57 per share and decrease the dilution to new investors purchasing common stock in this offering by $4.62 per share, assuming no change in the assumed initial public offering price per share and after deducting underwriting discounts and commissions and estimated offering expenses payable by us. A decrease of 500,000 shares in the number of shares offered by us would decrease the as adjusted net tangible book value after this offering by $0.30 per share and increase the dilution to new investors purchasing common stock in this offering by $4.90 per share, assuming no change in the assumed initial public offering price per share and after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

If the underwriters exercise their option to purchase additional shares in full, the as adjusted net tangible book value per share after giving effect to the offering would be $0.42 per share. This represents an increase in as adjusted net tangible book value of $0.61 per share to existing stockholders and dilution in as adjusted net tangible book value of $4.58 per share to new investors.

The number of shares of our common stock to be outstanding after this offering is based on 12,148,739 shares of our common stock outstanding as of September 30, 2023, assumes no exercise by the underwriters of their over-allotment option and excludes:

The following table summarizes, on the as adjusted basis described above, the total number of shares of common stock we issued and sold, the total consideration we received and the average price per share (i) paid to us by existing stockholders or (ii) to be paid by new investors purchasing our common stock in this offering at the assumed initial public offering price of $5.00 per share, the midpoint of the price range set forth on the cover page of this prospectus, before deducting underwriting discounts and commissions and estimated offering expenses payable by us and (iii) the average price per share paid by existing stockholders and by new investors who purchase shares of common stock in this offering:

A $1.00 increase (decrease) in the assumed initial public offering price of $5.00 per share, which is the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) the total consideration paid by new investors by $1.3 million and, in the case of an increase, would increase the percentage of total consideration paid by new investors by 4.49 percentage points and, in the case of a decrease, would decrease the percentage of total consideration paid by new investors by 5.31 percentage points, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same. An increase (decrease) of 500,000 shares in the number of shares offered by us, as set forth on the cover page of this prospectus, would increase (decrease) the total consideration paid by new investors by $2.5 million and, in the case of an increase, would increase the percentage of total consideration paid by new investors by 8.06 percentage points and, in the case of a decrease of 500,000 shares, would decrease the percentage of total consideration paid by new investors by 11.15 percentage points, assuming no change in the assumed initial public offering price.

The table above assumes no exercise of the underwriters’ over-allotment option in this offering. If the underwriters’ over-allotment option is exercised in full, the number of common stock held by new investors purchasing common stock in this offering would be increased to 10.96% of the total number of shares of common stock outstanding after this offering, and the number of shares held by existing stockholders would be reduced to 89.04% of the total number of shares of common stock outstanding after this offering.

To the extent that warrants are exercised or convertible debt is converted, we issue new stock options under our equity incentive plan, or we issue additional common stock in the future, there will be further dilution to investors participating in this offering. In addition, if we raise additional capital through the sale of equity or convertible debt securities, the issuance of these securities could result in further dilution to our stockholders.

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

You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes included elsewhere in this prospectus. In addition to historical information, this discussion and analysis contains forward-looking statements that are based on our current expectations, estimates and projections about our business and operations and that involve risks, uncertainties and assumptions. Our actual results may differ materially from those currently anticipated and expressed in such forward-looking statements as a result of a number of factors, including those which we discuss under “Risk Factors” and elsewhere in this prospectus. See “Information Regarding Forward-Looking Statements.” All amounts in this report are in U.S. dollars, unless otherwise noted.

Overview

We have developed a financial technology platform for securing and streamlining financial transactions that utilizes blockchain technology to provide payment assurance and liquidity through a finance supply chain. Our Platform makes use of smart contracts, as programmatic representations of the terms of a legal contract between transacting parties, to affect automated financial settlements (account balance computations) to the supply chain participants. The Platform was developed in response to a need to transition from the current payment process down the supply chain (typically triggered by a manager or trusted party) to a more modern protocol that mandates simultaneous payment of all component and sub-component suppliers when the primary party makes a payment into the supply chain.

The blockchain elements of the system were in temporary abeyance during part of 2021 and 2022 with a secure database substituting for blockchain technology during a systems upgrade. The blockchain elements of the Platform returned to service during the first quarter of 2023. We elected to initially deploy the Platform and its services within the wholesale telecommunications industry, then into funding ACP Providers under the ACP of the United States Government, operating under the FCC and subsequently into the major projects commercial construction industry. We believe the most significant issues for Telecom Carriers are a lack of payment assurances and lender funding. In order to connect calls between different countries, at least two to three Telecom Carriers are required in the international telecommunications supply chain using VOIP technology. The Platform is intended to offer security to permit lender funding, increased payment confidence, fraud mitigation and transparency throughout each step of every supply chain finance transaction.

As a finance supply chain fintech platform, the Platform utilizes a set of technology-based solutions that aim at easing access to financing and improving business efficiency for buyers and sellers linked in smart contract transactions by automating invoice preparation and lender approval and automating settlement processes, from initiation to completion. In our experience, under traditional industry practice, major telecommunications carriers, as Tier 1/2 Carriers, delay payment for 60 days or more, while the Platform Carriers, as the suppliers, benefit from payment on much shorter terms. As a solution, under our paradigm, the Tier 1/2 Carriers’ high quality credit rating permits the Platform Carriers’ invoices to serve as collateral for financing by a third-party lender or factor. We pre-authorize and arrange such financing, providing short-term credit that optimizes working capital and provides liquidity for the Platform Carrier, who is able to spend time growing its business instead of searching for financing. Similarly, ACP Providers provide ACP Services to eligible subscribers under the ACP which is administered by USAC; however, ACP Provider Claims for the ACP Services are typically settled up to 60 days after submission, necessitating the need for interim working capital financing. We believe that this delay in ACP Provider reimbursement funding is an impediment to business growth for ACP Providers, and that access to factoring on our Platform helps address this issue.

IPC Collaboration Agreement

On June 15, 2023, we entered into the IPC Collaboration Agreement with IPC, a wholesale telecommunications customer and ACP Provider. Pursuant to the IPC Collaboration Agreement, we are responsible for sourcing ACP Subscribers and IPC is responsible for providing operating infrastructure which includes, but is not limited to, the provision of devices and Internet services for the ACP Subscribers. Pursuant to the IPC Collaboration Agreement, we will finance the cost of devices and monthly recurring charges and will share in the Profits (as defined in the IPC Collaboration Agreement) generated from the provision of ACP Services. The IPC Collaboration Agreement may be terminated by either party upon twelve months’ written notice.

Recent Developments

Effective July 27, 2023, we entered into a factoring contract with TPS AG, a non-affiliated Swiss company, whereby TPS AG undertook to enter into factoring agreements with financial institutions that would purchase daily invoices of wholesale telecommunications customers and ACP Claims of ACP Provider customers. The factoring contract may be terminated upon either party providing three months’ notice, for the first time at the end of the Minimum Term and at the end of each quarter after the Minimum Term has terminated. Furthermore, either party may terminate such agreement for good cause. Upon termination, all claims offered for sale prior to the termination of the factoring contact may still be purchased by TPS AG and TPS AG may transfer already purchased but not yet due claims back to us. Payments we receive from major telecommunications carriers and the United States government to settle customer invoices and claims are remitted directly by us under the supervision of TPS AG, to the financial institution.

Results of Operations

Comparison of the Years Ended December 31, 2022, and 2021

Selected Annual Information

The following table presents selected financial information of the Company for the years ending December 31, 2022, and 2021:

As of December 31, 2022, assets of the Company amounted to $4,318,325 (2021 $3,154,740) and included cash and cash equivalents of $820,490 (2021 $1,206,486) custodial funds of $1,475,265 (2021 $1,256,226) and accounts receivable of $216,373 (2021 $2,024) mainly of the Create.iF subsidiary. As of December 31, 2022, liabilities amounted to $3,499,566 (2021 $3,154,740) and comprised of loans and notes payable of $30,189 (2021 $1,952,483), custodial funds due to lenders of $1,234,974 (2021 $918,950), custodial funds due to customers of $240,291 (2021 $337,276), trade payables and accrued liabilities of $1,039,715 (2021 $283,124) of which the Create.iF subsidiary was $399,708 and amounts due to related parties of $942,428 (2021 $796,675). Total shareholders’ equity amounted to $818,759 as of December 31, 2022 (2021, a deficit ($1,133,769)).

Revenue and Cost of Revenue

(a) Revenue

Revenue declined to $384,008 in the year ended December 31, 2022, inclusive of $32,593 from the newly acquired Create.iF consultancy, from $454,582 in the year ended December 31, 2021, as result of reduction of traffic (minutes) received by the Platform related to several customers (Platform Carriers) who received reduced volumes of minutes from the Major Carriers with whom they contract with and reduction of net fees for facilitating customer invoice financing due to rising interest rates during 2022, which increments could not be fully passed on to customers. Net fees for facilitating customer invoice financing constitute the difference between two discount rates: (a) the rate paid by the Company to the customer to acquire the invoice and (b) the rate received by the Company on concomitant resale of the invoice to the institutional factor. In periods of rapidly rising interest rates the discount rate to the customer can lag the discount rate from the institutional factor causing a certain degree of margin pressure.

Platform revenue represents service fees earned for producing daily invoices, facilitating financing through purchase and concomitant resale of daily invoices and settling transactions daily and monthly between Platform Carriers and Major Carriers. In December 2019, our Platform for the wholesale telecommunications industry commenced commercial operations. Throughout 2020, 2021 and 2022, our Platform effected secure financial settlements for telecommunications carriers without incident and earned processing and factoring fees.

In late 2019, we acquired a customer that had a large and lucrative carrier services agreement with a European Tier 1 telecommunications company that was sending this customer a significant monthly volume of minutes. This customer relationship afforded us the opportunity to scale up operations beyond our expectations on an immediate basis. The Company’s customer lost its relationship with the European Tier 1 carrier in the latter part of 2020. The onset of the COVID-19 pandemic in early 2020 stifled efforts to secure replacement customers and diminished the willingness of lenders to extend new credits to prospects might have become customers owing the economic uncertainty caused by the abrupt onset of COVID-19. Consequently, revenues for the year ended December 31, 2021 declined by 65% in relation to the comparable period in 2020 and further revenues declined by 15% for the year-ended December 31, 2022 compared to the year-ended December 31, 2021.

The wholesale telecommunications industry is noted for face-to-face regional and global meetings where industry participants do business and new business relationships are forged. The COVID-19 pandemic caused a suspension of these meetings and/or caused them to be held on a virtual basis, which, for us being a new entrant to the industry, negatively impacted our ability to acquire customers. In addition, the European Tier 1 telecommunications company underwent a change of ownership as well as internal restructuring resulting in our customer being unable to renew its 2020 contract. While we did acquire new customers during 2021, they were insufficient in volume to make up for the loss of 2020 customers. Towards the end of 2021 signs emerged that industry conditions for business development in 2022 might return to near pre-pandemic levels. As 2022 progressed, general business development conditions became more normalized but rising interest rates imposed by central banks to combat price inflation made acquisition of new lender funds to grow customer financing volumes more difficult and higher interest rates put pressure on margins (as more fully described below under “Custodial Funds”) realized by the Company from facilitating customer financing.

The Company had one customer that accounted for 37% and 41% of consolidated revenues for the years ended December 31, 2022 and 2021, respectively and one service provider that accounted for 12% and 13% of the Company’s purchases of services during the years ended December 31, 2022 and 2021, respectively.

(b) Cost of Revenue

The following table presents selected financial information of the Company that comprises the cost of sales:

The cost of revenue does not include the cost of obtaining customer funds used in factoring. Such cost is treated as an offset to revenue since the Company effectively acts as an agent when buying customer invoices and immediately reselling them to financial institutions.

The TessPay Platform is a blockchain fintech platform that requires a certain minimum level of personnel and supporting technical services to operate which is not reliant on the volume of minutes transacted through the Platform. As illustrated in the table above, operating costs did not decline even though revenue generated by the platform declined as explained above from a drop in wholesale long distance traffic processed by the platform.

Custodial Funds

We hold funds received from customers for settlement of customer transactions in the wholesale telecommunications industry. These funds are placed on deposit with banks in segregated accounts and disbursed to customers as part of the daily settlement process.

We also facilitate customer access to financing from third-party financial institutions by purchasing daily invoices of such customers issued to major telecommunications carriers at a discounted rate on a daily basis for wholesale minutes sold to these carriers. Upon purchase, invoices are concomitantly resold to third-party financial institutions, at a lesser discount, with whom we have funding agreements. The difference between the purchase price of invoices from customers and the resale price to lenders represents a source of income for the Company in respect of facilitating the ultimate lending transaction. The purchase discount rates are a function of the market, the term funds outstanding and the cost of funds. In the Company’s accounts, the gross difference between the purchase price of the invoice and the resale value to the lender is offset by interest charged by the lender on its funds utilized in the invoice purchase transaction. The purchase and resale of invoices by the Company is considered to be a “true sale” in both instances and, as such, the parties do not have recourse to one another in respect of credit losses. Typically, the third-party lenders obtain credit insurance on the payment of invoices by the large telecom carriers. The financial institutions periodically advance funds to us, which are used to purchase invoices on behalf of the financial institutions. Any excess funds advanced over invoices purchased are held in segregated accounts and are shown on the consolidated statements of financial position as custodial funds due to financial institutions.

Funds from lenders that are used to purchase daily invoices of customers for minutes sold to Tier 1/2 Carriers. At the end of a billing/payment cycle funds are received from the Tier 1/2 Carriers, lenders are allocated amounts to clear funds advanced and customers are allocated residual funds to clear their accounts. All cash amounts related to custodial funds are held by us in segregated bank accounts and remitted to lenders and customers upon request by wire transfer. Custodial funds due to customers as of December 31, 2022, and 2021 amounted to $240,291 and $337,276, respectively. Custodial funds due to lenders amounted to $1,234,974 and $918,950 as of December 31, 2022, and 2021, respectively.

Cost of Revenue

Cost of sales of the Company comprises the following:

Our cost of revenue consists primarily of direct costs of operating the Platform, including technology management costs, depreciation and amortization, billing system costs, support on core processing system, hosting and data center costs.

Depreciation

Depreciation is calculated on a straight-line basis over the estimated useful lives of the respective assets:

We recorded depreciation of $209,353 in the year ending December 31, 2022 (2021 $189,651).

Income Taxes

We account for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the consolidated financial statements or in our tax returns. Deferred tax assets and liability are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Changes in deferred tax assets and liabilities are recorded in the provision for income taxes. We assess the likelihood that our deferred tax assets will be recovered from future taxable income and, to the extent we believe, based upon the weight of available evidence, that it is more likely than not that all or a portion of the deferred tax assets will not be realized, a valuation allowance is established through a charge to income tax expense. Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected and considering prudent and feasible tax planning strategies.

We account for uncertainty in income taxes recognized in the consolidated financial statements by applying a two-step process to determine the amount of tax benefit to be recognized. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination by the taxing authorities. If the tax position is deemed more likely than not to be sustained, the tax position is then assessed to determine the amount of benefit to recognize in the consolidated financial statements. The amount of the benefit that may be recognized is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement. The provision for income taxes includes the effects of any resulting tax reserves, or unrecognized tax benefits, that are considered appropriate as well as the related net interest and penalties.

We have operations in both the United States and United Kingdom, and, as such we are subject to tax in both countries. No provisions for income taxes have been made by us as we had no taxable income for the years ended December 31, 2022 and 2021.

As of December 31, 2022, we had net operating loss carryforwards of approximately $2,944,599 (2021 $5,898,951) that may be available to offset future taxable income, if any. Upon our migration from British Columbia to Delaware effective as of June 30, 2022, we used all of our net operating loss carryforwards incurred to that date to offset capital gains and migration taxes otherwise eligible. In the six months ended December 31, 2022, we incurred an operating loss of $1,404,662 which will be available to offset future profits, if any.

As of December 31, 2022, and 2021, we had no uncertain tax positions. Our policy is to recognize interest and penalties that would be assessed in relation to the settlement value of unrecognized tax benefits as a component of income tax expense. We did not accrue either interest or penalties for the years ended December 31, 2022, and 2021, and we have not been under tax examination in any jurisdiction for the years ended December 31, 2022, and 2021.

Foreign Currency Risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. Our exposure to the risk of changes in foreign exchange rates relates primarily to our operating activities when revenues are denominated in a foreign currency, which currency for us is Euros.

We do not have significant operating subsidiaries or significant investments in foreign countries as of December 31, 2022, and 2021. We are subject to foreign currency exposure on our cash balances, custodial funds due to customers, custodial funds due to lenders, accounts payable and accrued liabilities and expenses incurred from certain supplier and service agreements denominated in Euros. We do not currently use foreign exchange contracts to hedge our exposure on our foreign currency cash flows as management has determined that this risk is not sufficient to justify the cost of hedging at this point in time.

We monitor our cash inflows and outflows denominated in foreign currency and plan the conversion of funds into foreign currency to support business needs.

Comparison of the Nine Months Ended September 30, 2023, to September 30, 2022]

Selected Nine Month Information

The following table presents selected financial information of the Company for the nine months ending September 30, 2023, and 2022:

As of September 30, 2023, assets of the Company amounted to $5,701,057 (2022 $4,560,572) and included cash and cash equivalents $73,194 (2022 $1,354,203) and custodial funds $3,669,112 (2022 $2,276,030). Liabilities comprised loans payable $33,266 (2022 $Nil), custodial funds due to customers $3,127,987 (2022 $1,269,647), custodial funds due to lenders $541,125 (2022 $1,006,383), accounts payable $1,550,025 (2022 $271,285) and amounts due to related parties $1,227,790 (2022 $894,047). Total shareholders’ deficit amounted to ($779,136) (2022, equity $1,119,211).

Revenue

Revenue in the nine months ended September 30, 2023 increased to $1,448,099 from $223,740 in 2022. The increase in revenue is attributable to three factors:

Cost of Revenue

Direct cost of revenue comprises technology management charges, technical services fees related to operation of the Platform, depreciation, and project personnel costs of the Create.iF consultancy business. Operating costs of the Platform are not highly variable whereas project costs of the Create.iF consultancy vary directly with revenue volume and run at about 55%.

Operating Costs

Sales and marketing costs increased in 2023 owing to consulting fees incurred with respect to the Company’s planned entry into the construction industry, sales costs of Create.iF and the development of a customer relation management system for the Company.

The increase in administrative expenses is principally related to the operating costs of Create.iF and to the executive contract and amortization of customer relationships both arising as part of the acquisition of the company.

Professional fees comprise charges from various legal firms in Europe and the United States for matters related to development of the Company’s business as well as costs incurred with respect to financial statement review and audit.

Income Taxes

Owing to operating losses post June 30, 2022, the Company does not have a tax liability and has not recorded deferred tax assets, given being in the development phase of building its business. As explained in more detail under “Our Corporate History”, TessPay migrated from British Columbia to Delaware effective June 30, 2022, and absorbed all its previously incurred net operating losses at that date as a consequence of Canadian tax provisions related to the migration.

Custodial Funds

As explained in more detail under “Business”, TessPay facilitates financing of amounts due to its customers from Tier 1/2 Carriers and/or the United States government under ACP. To operationalize these arrangements TessPay enters into funding agreements with lenders who will acquire (factor) customer accounts receivable. Pursuant to such agreements TessPay acts as a custodian of funds on behalf of lenders and customers as well as creating invoices and processing settlements using the Platform. These activities result in the Company holding customer and lender funds in segregated banks accounts, which amounts can vary considerably from time-to-time owing payment cycles of telecommunications carriers and the United States government who are customers of the customers of the Company.

Foreign Currency Risk

We transact in United Sates dollars and Euros and uses United Sates dollars as our reporting currency. Therefore, TessPay is exposed to foreign currency risk from fluctuations in the exchange between the currencies. In the nine months ended September 30, 2023, the Company recorded a foreign exchange gain of $176,118 (2022 $82,314).

Liquidity and Capital Resources

Since our inception, we have financed our operations primarily with proceeds from the sale of our equity and debt securities.

As of December 31, 2022, and September 30, 2023, we had cash and cash equivalents of $820,490 and $73,194, respectively. We have determined that our current levels of cash will not be sufficient to meet our anticipated cash needs for our ongoing operations. We have incurred significant operating losses since inception, and we expect to incur significant expenses and operating losses for the foreseeable future. As a result, our independent registered public accounting firm has included, in its opinion for the year ended December 31, 2022, an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern within one year from the date of the initial filing of the registration statement on Form S-1 of which this prospectus forms a part.

We will need to seek significant additional capital to hire new personnel and develop the technological infrastructure required to market and operate the Platform for the sectors that we intend to pursue, as well as for general corporate and working capital purposes. However, our ability to successfully raise sufficient funds through the sale of debt or equity securities when needed is subject to many risks and uncertainties and, even if it were successful, future equity issuances would result in dilution to its existing stockholders and any future debt securities may contain covenants that limit tour operations or ability to enter into certain transactions. There are no assurances that we will be successful in obtaining an adequate level of financing as and when needed to finance our operations on terms acceptable to us or at all, particularly during when there is market uncertainty or an economic downturn. If we are unable to secure adequate additional funding as and when needed on acceptable or commercially reasonable terms, we may have to significantly delay, scale back or discontinue our operations.

Cash Flow Activities for the Years Ended December 31, 2022, and 2021

The following table sets forth a summary of our cash flows for the years ended December 31, 2022 and 2021:

Cash Flows from Operating Activities 

During the year ended December 31, 2022, we reported cash used in operating activities of $1,862,229 (2021 $1,060,587) for the reasons explained under “Results of Operations – Comparison of the Years Ended December 31, 2022, and 2021 – Revenue” and, as a result of continuing expenditures made to develop the business system, the customer base of wholesale telecommunications companies and administrative costs of our Company.

Cash Flows from Investing Activities

Net cash used in investing activities for the year ended December 31, 2022, was $547,533 (2021 $86,010), for the purchase of property and equipment and intangible assets forming part of the Platform.

Cash Flows from Financing Activities

Net cash provided by financing activities for the year ended December 31, 2022, was $2,023,767 (2021 $2,268,212) from private placement sale of common shares.

Cash Flow Activities for the Nine Months Ended September 30, 2023, and 2022

The following table sets forth a summary of our cash flows for the nine months ended September 30, 2023, and 2022:

Cash Flows used in Operating Activities

During the nine months ended September 30, 2023, we reported cash used in operating activities of $496,951 (2022 $1,633,903) for the reasons explained under “Results of Operations – Comparison of the Nine Months Ended September 30, 2023, to September 30, 2022 – Revenue” and, as a result of continuing expenditures made to develop the business system, the customer base of Telecom Carriers, ACP and administrative costs of our Company.

Cash Flows used in Investing Activities

Net cash used in investing activities for the nine months ended September 30, 2023, was $241,453 (2022 $242,145), for the purchase of property and equipment and intangible assets forming part of the Platform.

Cash Flows used in Financing Activities

Net cash used in/provided by financing activities for the nine months ended September 30, 2023, was ($8,892) (2022 $2,023,765). No sales of common shares took place between January 1 and September 30, 2023.

Basis of Presentation

The financial statements contained herein have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the requirements of the SEC.

Critical Accounting Policies and Significant Judgments and Estimates

This management’s discussion and analysis of financial condition and results of operations is based on our financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reported period. In accordance with U.S. GAAP, we base our estimates on historical experience and on various other assumptions we believe to be reasonable under the circumstances. Actual results may differ from these estimates if conditions differ from our assumptions. While our significant accounting policies are more fully described in Note 2 in the “Notes to Financial Statements”, we believe the following accounting policies are critical to the process of making significant judgments and estimates in preparation of our financial statements.

Use of Estimates

The preparation of the financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and the related disclosures at the date of the financial statements and during the reporting period. Actual results could materially differ from these estimates. Significant estimates include the valuation of deferred tax assets, valuation of warrants issued with debt, and the value of stock-based compensation expenses.

Recently Issued and Adopted Accounting Standards

See Note 2 to our audited consolidated financial statements for the year ended December 31, 2022 included elsewhere in this prospectus.

JOBS Act

We are an “emerging growth company,” as defined in the JOBS Act. Emerging growth companies can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act, for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have chosen to take advantage of the extended transition periods available to emerging growth companies under the JOBS Act for complying with new or revised accounting standards until those standards would otherwise apply to private companies provided under the JOBS Act. As a result, our financial statements may not be comparable to those of companies that comply with public company effective dates for complying with new or revised accounting standards. For as long as we continue to be an emerging growth company, we also intend to take advantage of certain other exemptions from various reporting requirements that are applicable to other public companies including, but not limited to, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, exemptions from the requirements of holding a non-binding advisory stockholder vote on executive compensation and any golden parachute payments not previously approved, exemption from the requirement of auditor attestation in the assessment of our internal control over financial reporting and exemption from any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis). After we become a reporting company under the Exchange Act, we will remain an emerging growth company until the earliest of (i) the date on which we are deemed to be a large accelerated filer under the rules of the SEC, (ii) the end of the fiscal year in which we have total annual gross revenues of $1.235 billion or more during such fiscal year, (iii) the date on which we issue more than $1 billion in non-convertible debt in a three-year period or (iv) the end of the fiscal year following the fifth anniversary of the date of the completion of this offering.

BUSINESS

Overview 

We have developed a financial technology platform for securing and streamlining financial transactions that utilizes blockchain technology to provide payment assurance and liquidity through a finance supply chain. Our Platform makes use of smart contracts, as programmatic representations of the terms of a legal contract between transacting parties, to affect automated financial settlements (account balance computations) to the supply chain participants. The Platform was developed in response to a need to transition from the current payment process down the supply chain (typically triggered by a manager or trusted party) to a more modern protocol that mandates simultaneous payment of all component and sub-component suppliers when the primary party makes a payment into the supply chain.

Our Market Opportunity

We believe we have a substantial market opportunity in the growing global market for innovative supply chain financial services. Supply chain finance has recently been defined as a much broader category of trade financing, encompassing all the financing opportunities across a supply chain. Supply chain finance offers high-quality, low-risk financing to the small enterprises that tend to have difficulty obtaining low-cost financing on the strength of their balance sheets and history of operations. These businesses often lack the credit ratings that lenders require and are seen as too costly to underwrite for the amount of financing required. We believe the business models that reliably track data produced by the transfer of money and goods in a supply chain, are best suited to deliver supply chain finance. We believe our Platform is capable of serving a broad set of industries to provide payment assurance and liquidity through a supply chain.

According to Allied Market Research, the global supply chain finance market generated $6 billion in 2021, and is projected to reach $13.4 billion by 2031, growing at a compound annual growth rate (“CAGR”) of 8.8% from 2022 to 2031. An increase in the need for safety and security of supplying activities and surge in adoption of supply chain finance by small and mid-size enterprises in various industries is driving supply chain finance market growth, and we believe the integration of blockchain in online supply chain finance practices may create lucrative opportunities, including for our Company.

We estimate our addressable market (phone to phone) in the wholesale telecommunications industry to be $45 billion with an annual growth rate of about 3.8%.

Our goal is to evaluate additional opportunities to further expand the Platform’s range into more industries requiring supply chain financing solutions if and when we are able to successfully develop our business and Platform in the initial industries we are seeking to serve, wholesale telecommunications industry and the ACP market, including, but not limited to, the commercial construction industry, mobile phone roaming, oil and gas, commercial aircraft fabrication, automobile production, electronic device assembly and retail supply chain. Notwithstanding the foregoing, as of September 30, 2023, we had cash and cash equivalents of $73,194 and a net loss of $1,597,895. Further, our independent registered public accounting firm included in its opinion for the year ended December 31, 2022, an explanatory paragraph referring to our losses from operations and expressing substantial doubt in our ability to continue as a going concern without additional capital becoming available. Accordingly, we will need to obtain financing in order to continue to fund our operations. Any failure or delay to secure such financing could force us to delay, limit or terminate our operations.

Supply Chain Finance

As a finance supply chain fintech platform, the Platform utilizes a set of technology-based solutions that aim at easing access to financing and improving business efficiency for buyers and sellers linked in smart contract transactions by automating invoice preparation and lender approval and automating settlement processes, from initiation to completion. In our experience, under traditional industry practice, major telecommunications carriers, as Tier 1/2 Carriers, delay payment for 60 days or more, while the Platform Carriers, as the suppliers, benefit from payment on much shorter terms. As a solution, under our paradigm, the Tier 1/2 Carriers’ high quality credit rating permits the Platform Carriers’ invoices to serve as collateral for financing by a third-party lender or factor. We pre-authorize and arrange such financing, providing short-term credit that optimizes working capital and provides liquidity for the Platform Carrier, who is able to spend time growing its business instead of searching for financing. Similarly, ACP Providers provide ACP Services to eligible subscribers under the ACP which is administered by USAC; however, ACP Provider Claims for the ACP Services are typically settled up to 60 days after submission, necessitating the need for interim working capital financing. We believe that this delay in ACP Provider reimbursement funding is an impediment to business growth for ACP Providers, and that access to factoring on our Platform helps address this issue.

In traditional supply chains structures, the vast majority of the funds received by each party in the supply chain, from the top to the bottom, ends up belonging to the final supplier in the supply chain. Here, instead of requiring each party in the chain to receive and wire out large downstream payments (exposing others to the risk of credit default), all these payments occur simultaneously on the Platform with very clear documentation, leaving each participant with their respective margins.

Global Telecommunications Industry

The global telecommunications industry is comprised of about 1,200 Tier 1/2 Carriers (“Major Carriers”), with considerable network infrastructure. The Major Carriers deal directly with businesses and consumers, have significant financial resources, and are often publicly traded or government owned entities. In addition, the industry contains numerous Tier 3 (“Small Carriers”), which have limited or no network infrastructure, have limited financial resources, deal only with other telecommunications carriers and almost always are private owner operated companies. Dealings between telecommunications carriers are called “Wholesale Telecom”.

A significant activity of the Wholesale Telecom industry consists of placing long-distance voice calls between parties in widely separated geographies. In the past, these long-distance calls were often only affected between national telecommunications carriers or highly regulated Tier 1/2 Carriers through satellite link or submarine communications cables. In more recent times these calls have been affected using VOIP technology, which has afforded Small Carriers the opportunity to participate in long distance voice transmissions.

Telecommunication Supply Chain

Many of the participating international Telecom Carriers are small to medium sized businesses for whom establishing credit and trust with other Telecom Carriers is a principal challenge of the business. The existing legacy credit system requires international third-party agreements, lawyers, bankers, lenders and credit insurers as well as costly operational support personnel. This complex array engenders issues that impede the availability of credit, including: (i) chronic late and defaulted payments occasioned by limited funds, (ii) at times outright fraud, (iii) high volume but low margins, and (iv) difficulty for supply chain participants to trust one another. The present state requires many Telecom Carriers to grant credit to other Telecom Carriers who often do not have the creditworthiness to support the credit granted, and when payments are made down a supply chain, they are manual (i.e., bank wires). The net result is that (i) often Telecom Carriers purchase routes from other Telecom Carriers that have the ability to extend them credit, instead of purchasing routes with the best price/quality combination; and (ii) the manual payments are generally not paid in full or late, which is a significant impairment in the industry as the values are high, but the margins are low; and any Telecom Carrier downstream from the late or defaulted payment in the supply chain will be directly affected.

Additionally, it is important to understand that within the telecommunications industry it is the Telecom Carrier, as the originator of a call, that must pay for the termination of a call (i.e., the calling party pays for the cost of the long distance call); and it is the Tier 1/2 Carriers (i.e., Verizon, AT&T, T-Mobile) that are at the top of the supply chain, due to the fact that they have the overwhelming majority of retail customers that originate calls. Through the use of lender funding, TessPay’s services allows for daily purchases of invoices issued to Tier 1/2 Carriers, for daily payment settlements, and for the simultaneous payment to all suppliers on the Platform who are contractually connected through the use of TessPay’s Smart Contract technology.

TessPay Platform for Telecommunications

The Platform is made up of the following components:

We have initially tailored the Platform to the needs of the wholesale telecommunications industry as a payment platform with Web 3.0 technology integration for telecommunications companies engaged in transmitting cross border voice calls on behalf of Tier 1/2 Carriers. The Platform records minutes sent by Tier 1/2 Carriers to Platform Carriers and then links the Tier 1/2 Carriers, either directly or through another intermediary Telecom Carrier not on the Platform, to the call terminating Tier 1/2 Carriers in the destination country. Based on the minutes recorded, the Platform creates invoices for and on behalf of the Platform Carrier that are rendered to the Tier 1/2 Carrier in summary form at the end of each payment cycle. Thereafter, on a daily basis, TessPay Finance purchases the invoice at a discount and concomitantly resells such invoice to third-party lenders who have contracted with us and TessPay Finance to purchase such daily invoices on a non-recourse basis.

TessPay Telecommunications Settlement System

The Platform supports a lender funded fast payment business model where all parties to a cross-border voice call, except for the Tier 1/2 Carrier, quick pay on account for long distance minutes purchased from Platform Carriers. Transactions between the parties occur in the TessPay Settlement System using TessPay Smart Contracts and settlement payments are made using fiat currency held within the TessPay Wallets which are attached to the TessPay Smart Contracts. Initially, settlement payments will only be made in Euro and U.S. Dollar denominations. Funding is eligible once a TessPay Smart Contract has been signed by both parties to a transaction. Funding can be initiated either by the Platform Carrier allocating funds from its TessPay Wallet to the Smart Contract or by accessing pre-arranged funds from a lender or factor. At the end of each 24-hour period, after the Tier 1/2 Carrier has consumed minutes purchased in accordance with terms of the TessPay Smart Contract, all the participants in the chain will see a release of fiat currency into their TessPay Wallets pursuant to the exact terms of their TessPay Smart Contracts. Lenders advance daily to the Platform the value of discounted invoices purchased by TessPay Finance from the Platform Carrier and concomitantly resold to the lender. At the end of each payment cycle, the Tier 1/2 Carrier pays its outstanding balance in full, and all outstanding balances between the Platform Carrier and lenders are settled as well as all outstanding balances between Platform Carriers.

We maintain segregated accounts with certified international banks to operate and hold fiat currency funds remitted by lenders and accredited telecommunications companies. Funds may only be withdrawn by lenders and accredited telecommunications companies upon the surrender of fiat balances held within the Wallets received by them pursuant to the terms and conditions of one or more TessPay Smart Contracts. Initially, all transactions will be in Euros or U.S. Dollar denomination only and take place via wire transfer. For outgoing transfers, funds are received within one business day of any transfer request and the pass-through wire fee from the bank will be the only charges incurred by the telecommunications company.

TessPay Finance

The Platform also facilitates customer access to financing from third-party lenders by purchasing invoices of such customers issued to Tier 1/2 Carrier at a discounted rate on a daily basis. The creditworthy financial condition of the primary party, due to its status as a large public company, facilitates lender involvement in the supply chain, to effect interim payments, under the security afforded by the Platform and, as a result, alleviates financial difficulty currently faced by less creditworthy supply chain participants.

Upon purchase, invoices are concomitantly resold to third-party lenders with whom we have lending (factoring) agreements. Such lenders periodically advance funds to us which are used to purchase invoices on behalf of the lenders. Any excess funds advanced over invoices purchased are held in segregated accounts and are shown on the consolidated statements of financial position as custodial funds due to lenders. We receive a factoring fee realized through a fixed invoice discount factor that is applied daily throughout the term of the billing cycle and is computed by reference to the cost of funds and the billing/collection cycle. The creditworthy financial condition of the primary party, due to its status as a large public company, facilitates lender involvement in the supply chain, to effect interim payments, under the security afforded by the Platform and, as a result, alleviate financial difficulty currently faced by less creditworthy supply chain participants.

Services Fees

We generate revenue through our TessPay Settlement System by earning Processing Fees and Financing Fees. Our Service Fees are settled in fiat currency and are extracted from fiat balances in the Wallets when minute transactions settle and ACP Claim transactions settle in accordance with the provisions of TessPay Smart Contracts for telecom and factoring agreements for ACP.

The Depository

We have segregated accounts with recognized international banks (the “Depository”) to hold fiat currency funds remitted by lenders and accredited telecommunications companies. Such funds may only be withdrawn by lenders and accredited telecommunications companies upon the surrender of fiat balances held within TessPay Wallets received by them pursuant to one or more TessPay Smart Contracts. Transactions with the Depository take place upon request by wire transfer. For transfers out of the Depository, funds are normally received within one business day of receipt of the transfer request.

ACP Factoring

ACP is a $14.2 billion FCC benefit program that aims to increase access to affordable broadband connectivity for eligible low-income households in the United States. Serving over 20 million households since its inception in 2021, the ACP aims to increase access to affordable broadband connectivity by providing (i) discounts for Monthly Recurring Charges; and (ii) a one-time discount of up to $100 towards the purchase of Devices. ACP Providers who participate in ACP can use the Platform to factor ACP Claims quickly and to obtain funds for services rendered under ACP. Claims factoring is a financial transaction in which the ACP Provider sells accounts receivable from the United States government to a third-party at a discount to obtain cash quickly. The Platform offers financing for ACP Claims related to both Devices and Monthly Recurring Charges.

Using the Platform, ACP Providers can receive weekly advances to cover the cost of providing Devices and Monthly Recurring Charges to ACP Subscribers. Without using the Platform, the United States government settles all ACP Claims at the end of the month following the month of service. We believe that the ACP Claims factoring option offered by the Platform is especially helpful for ACP Providers who may lack the financial resources to cover the upfront costs of Devices (which must be provisioned before the Monthly Recurring Charge can be billed). We also believe the Platform can provide faster access to the necessary funds, allowing ACP Providers to reinvest the funds towards attracting new ACP Subscribers to their business.

Blockchain Technology

The supply chain finance industry has been traditionally slow to adapt to technological innovation, but we believe the Platform is on its way to disrupting and transforming the industry. The Platform utilizes multipoint strategy with traditional databases and scripting along with a private permissioned Hyperledger Blockchain to complement each other. Data is managed in a traditional database format with data outputs posted to the private permissioned Hyperledger Blockchain for immutable recordkeeping and surety. We operate and secure the blockchain ledgers in support of these transactions by running a blockchain node. Additionally, the incorporation of blockchain technology provides an additional level of permitted transparency to our clients, while developing an accurate historical data set which can be utilized for auditing, compliance, and financial transparency. We have determined that the Hyperledger Fabric is the best blockchain-based solution for the Platform. Hyperledger (or the Hyperledger project) is an open source blockchain started in December 2015 by the Linux Foundation. Hyperledger Fabric is considered an enterprise blockchain platform, which means there is a governance layer allowing for advanced privacy controls so that only the data we designate is permitted for participants to view, to share and to transact. All transactions are private between the designated participants, and we designate the protocol within the governance layer of the blockchain.

Smart Contracts

Smart contracts are computer protocols intended to facilitate, verify or enforce the performance of legally binding contracts between two or more parties. Smart contracts run on blockchain node network which puts them beyond the control of the parties to the contracts, assuring the contracts will be executed as written once performance begins. The objective of a smart contract is to provide security over execution of the terms of a contract that is superior to and less costly than conventionally monitored adherence to legal agreements. From a financial perspective, the advantages of a smart contract include minimized counterparty risk, automated daily settlement and increased transparency. In effect, payment streams are securely automated to the benefit of all the transacting parties. This means carriers using our Platform will be able to focus on connecting calls rather than chasing payments.

TessPay Smart Contracts will create a binding agreement between parties while still maintaining traditional electronic document signature protocols for established agreements. The Smart Contracts will, among other things, define invoice date and interval, payment terms, rate, billing increments, and payments and will operate on the Hyperledger Fabric blockchain.

Expansion into Commercial Construction Projects

Utilization of our Platform is not limited to the telecommunications industry. We are developing a blockchain based settlement solution for major commercial construction projects. Significant infrastructure, commercial, and industrial projects involve multiple participants with numerous payment interactions that may create financial risk in the project’s supply chain, which we believe can be mitigated by the deployment of our Platform. We believe that the current commercial construction settlement process has poor tracking and little transparency throughout the supply chain, causing lenders and developers to have a lack of visibility of payments made by general contractors. If a general contractor does not make timely payments to contract subtrades or if the general contractor were to become insolvent, the project lenders would become exposed to significant risk, including being required to find a new general contractor, which may lead to project delays and an increase in costs.

According to Research & Markets, in 2021, the global market size of the commercial construction industry was valued at $7.3 trillion and is predicted to reach $14.4 trillion by 2030 with a CAGR of 7.3% from 2022 to 2030. Construction refers to erection, maintenance, and repair of buildings or other immobile structures as well as building of roads and public service facilities. It also includes structural additions and alteration such as bearing walls, beams, and exterior walls. Moreover, each type of construction project requires a unique planning, financing, design, execution, and builds, along with repairs, maintenance, and improvement of work. The construction market consists of the sales revenues earned by entities such as sole traders, organizations, and partnerships that construct buildings and engineering projects including highways and utility systems.

The demand for commercial construction is driven economic growth in developed and developing countries and public sector expenditures in number of countries devoted to major infrastructure projects. Also, factors such as response to climate change, technological developments, and rising disposable income will influence the market during the forecast period.

Create.iF Acquisition

On November 24, 2022, we entered into the Share Purchase Agreement with TessPay Finance and Create.iF Group Limited for the acquisition of Create.iF. Create.iF is a construction project management company based in the United Kingdom that offers services relating to fund monitoring, EA/QS, design/value engineering, commercial management, dispute resolutions and contract advice. We believe that the acquisition of Create.iF will provide us the ability to expand into the commercial construction industry, by leveraging Create.iF’s current customers and partnerships.

Pursuant to the Share Purchase Agreement, on the Closing Date, we acquired all of the issued share capital of Create.iF in consideration for the issuance of an aggregate of 4,522,000 of our common shares for a total consideration of £1,900,000 ($2,261,000). Of such shares, 2,261,000 common shares were issued on the Closing Date, and the Deferred Shares shall be issued in three equal installments on each subsequent anniversary of the Closing Date, subject to certain conditions. The Deferred Shares shall be issued based upon an amount of £316,667 per installment converted to the U.S. dollar equivalent at a rate equal to the closing mid-point range for exchanges between the two currencies quoted in the Financial Times (London edition) for the nearest business day for which that rate is to be so quoted on or prior to the date of the allotment of such shares. Notwithstanding the foregoing, if our securities are not listed on The Nasdaq Capital Market, the New York Stock Exchange, or any other national securities exchange at the time the relevant anniversary dates of the Closing Date, the value of each share shall be $0.50 per share.

In July 2023, TessPay and Create.iF initiated the first sub trade financing contract with a United Kingdom contractor to demonstrate the viability of such lending structures.

TessPay Platform for Construction

We believe utilization of the Platform should not be limited to the telecommunications industry. Accordingly, we have developed a blockchain based settlement solution for global major construction projects. Large infrastructure, commercial, and industrial projects involve multiple participants with numerous payment interactions that create financial risk to the project’s supply chain which we believe can be mitigated by the Platform. Commercial construction involves the following four categories of participants:

Commercial Construction Payment Processes

Under the existing commercial construction project process (“Existing Construction Process”), once a commercial construction project has met all the requirements to be financeable (i.e., sufficient equity, GC quote matching specifications, planning permission, health & safety, etc.), then the developer and the GC enter into a contract with each other setting out a detailed set of specifications for the construction of the project, including related costs, and the completion date. After the project commences, monthly drawdowns are disbursed from the developer to the GC based on a quality control approved percentage-of-completion. The GC in turn has a similar monthly process with its subtrades. Subtrades make an application for payment (“Application for Payment”) at the beginning of each month for the work done the previous month. The GC responds with a “Certificate for Payment”, providing reasons as to why the certified amount may differ to the Application for Payment. The Subtrade then issues an invoice for the amount of the “Certificate for Payment’ due within a specified number of days (typically 35 days from date of the Application for Payment. Subject to the contract conditions, the GC may also issue a “Pay Less Notice” to the Subtrade not later than three days before the invoice becomes due. The trade then issues an invoice for the amount of the approved Application for Payment due within 35 days of such invoice. The process repeats each month until the end of the project.

The Existing Construction Process has poor tracking and little transparency throughout the supply chain, causing the lenders and developers to have a lack of visibility of the payments made by the GC. If the GC is unable to make good faith payments to its subtrades or if the GC were to become insolvent, then the lender would become exposed to significant risk, and the developer would certainly have their margin eroded, if not completely eliminated, by having to pay out liens to unpaid subtrades, materials suppliers, pay additional interest to the lenders, and/or be required to find a new GC. In addition, tracking the multitude of payments throughout the life cycle of a large commercial construction project can become unwieldly, leading to erroneous or duplicated payments.

The Platform deploys TessPay Smart Contracts (i.e., digital extensions of the project’s master development agreement) to connect funders, developers, and general contractors through to subcontractors and suppliers. Through the use of the Smart Contracts, the executable elements of each contract are tracked through the Platform and assembled in a structure that permits the system to ensure that only contracted amounts can be approved, and paid, without error or duplication. The project’s participants use our Wallet technology to record amounts due and payments made, and the linked TessPay Smart Contract permits automated payments to the project’s participants when programmed conditions are met. The Platform grants general contractors, subcontractors, and suppliers assurance of on-time payments whenever time programmed conditions are met and grants lenders and developers assurance that progress payments are to be made only when work is confirmed to have met programmed threshold conditions. This will grant general contractors, subcontractors, and suppliers assurance of on-time payments every time programmed conditions are met and will grant lenders and developers assurance that progress payments will be made only when work is confirmed to have met programmed threshold conditions. Monthly drawdowns will be transferred from the lender’s Wallet to the project’s Wallet as opposed to the current method of from the developer’s bank account to the GC’s bank account. When subtrade payments are approved (i.e., when the Application for Payment is approved and the invoices are issued), the values of the approved payments will flow (i) from the project’s Wallet to the developer’s Wallet, (ii) then to the GC Wallet, and (iii) finally to each subtrade’s or material supplier’s Wallet, causing the developer and the GC to be left with their margin on the respective payment, and the supplier with timely payment in full.

The expansion of the Platform into commercial construction provides parties with high confidence that every dollar that leaves a commercial construction project’s Wallet is for value and on behalf of such commercial construction project, free from liens, errors, or duplications; all properly documented with an indelible log of the approval and authorizations captured for each payment. Lastly, the utilization of a private permissioned blockchain on the Platform provides consistent data privacy protection, resulting in, the lenders’ and developers’ lack of knowledge and access to the identities and the details of the contractual arrangements between the GC and subtrades. For example, the lenders and developers will only have knowledge that a payment of $10,000 was made to the GC for plumbing services, and that the corresponding subtrade was paid, however, they will not know the identity of such plumber nor the GC’s margin on the payment.

Liquidity

All developers need to source funding for their commercial construction projects. Locating quality senior debt providers for experienced developers is not difficult; however, obtaining the best possible interest rates does pose problematic, as quality senior debt providers tend to work with a small closed network of local sources. For mezzanine debt, there is a similar problem, and generally the lenders will not provide the full 30% gap, requiring the developer to raise further funds from equity investors. For equity investors, smaller amounts of money tend to be unsophisticated and require significant and uncertain time for the developer to source, in addition to being expensive and cumbersome to manage. All the above reduces the scalability of project flow for a developer as they need to allocate their time to the above tasks, and based on time required to source capital, they are limited in the number of deals they can work on simultaneously.

We plan to develop a one-stop shop for developer funding needs and we will work to identify certain lenders internationally interested in providing senior debt and/or mezzanine funds to major construction projects. Developers will be able to log on to the Platform and complete an intake questionnaire, and after an initial review of the questionnaire, our staff will work with the developer to collect any further information that we believe is required. Subsequently, this information will be matched against our database of lenders and will generate customized submissions to each matched lender in the format that they are accustomed to viewing. The financing will be conditioned upon the developer and the GC executing the project and disbursing payments solely through use of the Platform, further providing lenders assurance that the project will carry acceptable risk. For qualifying projects, developers will have access to a local and international list of lenders that can fulfil their funding requirements, allowing developers to efficiently “shop their deal”, and lower their cost of capital. Additionally, we expect to execute on our plan of development for this project once we have consummated our initial public offering.

Construction Errors

It is well-known that large commercial construction projects are notorious for a high amount of build errors, resulting in delays and cost overruns. The Platform will have a Common Data Environment, or “CDE”, which provides one place as the source-of-truth for all project related documents. CDE allows all participants to have simple access to the most recent documents, to keep efficient records of the approval process for each element of contractual requirements, to change orders, etc. Consequently, confusion and lack of inclusion is eliminated by sending emails with attachments, forcing each participant to hunt through their email for the “most recent document”. The Platform will govern all elements of the Development Life-Cycle (as defined below) and will also present a holistic overview of the commercial construction project at various levels of detail. Each participant will have a view tailored to their role, depending on the rights and permissions granted to such user.

Consulting Services

TessPay’s wholly owned UK subsidiary, Create.iF Manage Ltd., has the ability to provide a range of consultancy-led, technology-supported services to assist with construction project management as needed in each stage of development (the “Development Life-Cycle”) which includes: (i) feasibility, (ii) design, (iii) procurement, (iv) construction, (v) completion, and (vi) use.

Commercial Construction Service Fees

We intend to generate revenue through the expansion of the Platform into commercial construction projects by earning (i) processing fees for managing all the supply chain data, producing invoices and settling accounts on the Platform (“Construction Processing Fees”); (ii) financing placement fees for acting as an agent in arranging lender purchase of daily invoices (“Construction Financing Fees”); (iii) subtrade financing fees for funding subtrades that take advantage of TessPay’s fast-payment service (“Subtrade Financing Fees”); and (iv) consultant services fees for consulting services determined on a project to project basis (“Construction Consultant Services Fees” and together with Construction Processing Fees, Construction Financing Fees, and Subtrade Financing Fees, the “Commercial Construction Service Fees”). We anticipate that our Commercial Construction Service Fees will be settled in fiat currency only and will be extracted from fiat balances in the Wallets when minute transactions settle in accordance with the provisions of TessPay Smart Contracts.

IPC Collaboration Agreement

On June 15, 2023, we entered into the IPC Collaboration Agreement with IPC, a wholesale telecommunications customer and ACP Provider. Pursuant to the IPC Collaboration Agreement, we are responsible for sourcing ACP Subscribers and IPC is responsible for providing operating infrastructure which includes, but is not limited to, the provision of devices and Internet services for the ACP Subscribers. Pursuant to the IPC Collaboration Agreement, we will finance the cost of devices and monthly recurring charges and will share in the Profits (as defined in the IPC Collaboration Agreement) generated from the provision of ACP Services. The IPC Collaboration Agreement may be terminated by either party upon twelve months’ written notice.

Recent Developments

Effective July 27, 2023, we entered into a factoring contract with TPS AG, a non-affiliated Swiss company, whereby TPS AG undertook to enter into factoring agreements with financial institutions that would purchase daily invoices of wholesale telecommunications customers and ACP Claims of ACP Provider customers. The factoring contract may be terminated upon either party providing three months’ notice, for the first time at the end of the Minimum Term and at the end of each quarter after the Minimum Term has terminated. Furthermore, either party may terminate such agreement for good cause. Upon termination, all claims offered for sale prior to the termination of the factoring contact may still be purchased by TPS AG and TPS AG may transfer already purchased but not yet due claims back to us. Payments we receive from major telecommunications carriers and the United States government to settle customer invoices and claims are remitted directly by us under the supervision of TPS AG, to the financial institution.

Further Expansion

We will continue to evaluate opportunities to further expand the Platform into other industries that we believe could benefit from supply chain financing solutions including, but not limited to, mobile phone roaming, oil and gas, commercial aircraft fabrication, automobile production, electronic device assembly and retail supply chain. No assurance can be given as to when, or if, any of these expansion plans will be implemented, or if they will be successful.

Competition

The fintech industry is highly competitive. The Platform is a new modality using blockchain technology. We primarily compete in the small and medium sized businesses, or “SMB”, merchant industry and compete against existing systems where payments through a supply chain are made manually. There are numerous companies in the supply chain finance industries that are introducing technology solutions to improve the efficiency of trade and the delivery of trade finance. This is strong validation for the compelling industry opportunities offered by digitization. However, most fintech companies in the space are focused on serving large corporates and banks, the traditional incumbents, and introducing incremental efficiencies to existing corporate and bank processes.

Our competitors have different business models, go-to-market strategies and technical capabilities. Competition has increased in recent years as other providers of payment processing services have established a sizable market share in the SMB merchant industry, with the largest processors presenting most of the SMB market. Competition in the payment processing - fintech industry is likely to increase, which may adversely influence the prices we can charge to merchants for our services and the compensation we can pay to our distribution partners. This may have an adverse effect on our profit margins. Currently, we believe we have no direct competitors within the telecommunications and commercial construction industries, although companies we assist in obtaining financing would, in some instances, be able to obtain credit from chartered banks and secondary lenders if their operating history and financial condition were satisfactory to those lenders.

Competition in our market involves rapidly changing technologies. If we are unable to keep pace with the evolving needs of the industry, demand for our products and services may be reduced and our business and results of operations may be harmed.

Intellectual Property

Our business is dependent upon the creation, acquisition, use and protection of intellectual property. Some of this intellectual property is expected to be in the form of software code, patented technology, copyright, and trade secrets that we will use to develop our games and the Platform. While we will develop our own intellectual property, we may also acquire and/or license other intellectual property which is owned by third parties.

We protect our intellectual property rights by relying on federal, state and common law protections, as well as contractual restrictions. We actively seek protection covering any intellectual property we believe may be useful or relevant to our business.

Our goal is to obtain, maintain and enforce protection for our intellectual property, and to operate without infringing on the rights of other parties. Our policy is to actively seek the broadest intellectual property protection possible for our intellectual property through a combination of contractual arrangements, registration of our domain names, copyrights, trademarks, service marks and/or patents. We have established business procedures designed to maintain the confidentiality of our proprietary information, including the use of confidentiality agreements with employees, independent contractors, consultants, and entities with which we conduct business. However, to date, we have not secured our ownership interest in intellectual property through registration of copyrights, trademarks and/or patents.

Government Regulations

We operate in an increasingly complex legal and regulatory environment. Our business and the products and services that we offer are subject to a variety of federal, state and local laws and regulations and the rules and standards of the payment networks that we utilize to provide our electronic payment services, as more fully described below.

Dodd-Frank Act

The Dodd-Frank Act and the related rules and regulations have resulted in significant changes to the regulation of the financial services industry. Changes impacting the electronic payments industry include providing merchants with the ability to set minimum dollar amounts for the acceptance of credit cards and to offer discounts or incentives to entice consumers to pay with cash, checks, debit cards or credit cards, as the merchant prefers. New rules also contain certain prohibitions on payment network exclusivity and merchant routing restrictions of debit card transactions. Additionally, the Durbin Amendment to the Dodd-Frank Act provides that the interchange fees that certain issuers charge merchants for debit transactions will be regulated by the Federal Reserve and must be “reasonable and proportional” to the cost incurred by the issuer in authorizing, clearing and settling the transactions. Rules released by the Federal Reserve in July 2011 to implement the Durbin Amendment mandate a cap on debit transaction interchange fees for issuers with assets of $10 billion or greater.

The Dodd-Frank Act also created the Consumer Financial Protection Bureau (the “CFPB”), which has assumed responsibility for most federal consumer protection laws, and the Financial Stability Oversight Council, which has the authority to determine whether any non-bank financial company, such as us, should be supervised by the Board of Governors of the Federal Reserve System because it is systemically important to the U.S. financial system. Any new rules or regulations implemented by the CFPB or the Financial Stability Oversight Council or in connection with Dodd-Frank Act that are applicable to us, or any changes that are adverse to us resulting from litigation brought by third parties challenging such rules and regulations, could increase our cost of doing business or limit permissible activities.

Privacy and Information Security Regulations

We provide services that may be subject to privacy laws and regulations in a variety of jurisdictions. Relevant federal privacy laws include the Gramm-Leach-Bliley Act of 1999, which applies directly to a broad range of financial institutions and indirectly, or in some instances directly, to companies that provide services to financial institutions. These laws and regulations restrict the collection, processing, storage, use and disclosure of personal information, require notice to individuals of privacy practices and provide individuals with certain rights to prevent the use and disclosure of protected information. These laws also impose requirements for safeguarding and proper destruction of personal information through the issuance of data security standards or guidelines. Our business may also be subject to the Fair Credit Reporting Act, which regulates the use and reporting of consumer credit information and also imposes disclosure requirements on entities who take adverse action based on information obtained from credit reporting agencies. In addition, there are state laws restricting the ability to collect and utilize certain types of information such as Social Security and driver’s license numbers. Certain state laws impose similar privacy obligations as well as obligations to provide notification of security breaches of computer databases that contain personal information to affected individuals, state officers and consumer reporting agencies and businesses and governmental agencies that possess data.

Laws Prohibiting Money Laundering and Terrorist Financing

Anti-Money Laundering and Counter-Terrorism Regulation

Our business is subject to U.S. federal anti-money laundering laws and regulations, including the BSA. The BSA, among other things, requires money services businesses to develop and implement risk-based anti-money laundering programs, report large cash transactions and suspicious activity and maintain transaction records. We are also subject to certain economic and trade sanctions programs that are administered by the Treasury Department’s Office of Foreign Assets Control, or “OFAC”, that prohibit or restrict transactions to or from or dealings with specified countries, their governments and, in certain circumstances, their nationals, narcotics traffickers and terrorists or terrorist organizations. Similar anti-money laundering, counter-terrorist financing and proceeds of crime laws apply to movements of currency and payments through electronic transactions and to dealings with persons specified on lists maintained by organizations similar to OFAC in several other countries and which may impose specific data retention obligations or prohibitions on intermediaries in the payment process. We have developed and continue to enhance compliance programs and policies to monitor and address related legal and regulatory requirements and developments.

U.S. Sanctions Relating to Russia and Ukraine

In response to Russia’s aggression against Ukraine in February 2022, the United States government has imposed significant sanctions and export control measures targeting Russia. In broad terms, the U.S. restrictions enacted to date include: territorial embargoes on the Donetsk People’s Republic and Luhansk People’s Republic regions of Ukraine, prohibitions on trade in certain goods and services between the United States and Russia and new investment in Russia by U.S. persons, asset blocking sanctions on a number of Russian individuals and entities, restrictions on transactions involving certain Russian financial institutions and Russia’s Central Bank, National Wealth Fund, and Ministry of Finance, and restrictions on dealing in Russian sovereign debt and debt or equity of certain Russian companies. Additional or expanded sanctions may be imposed in the future. The 2022 Russia-related sanctions are in addition to sanctions previously enacted by the United States government in response to Russia’s 2014 annexation of Crimea, including those under the U.S. Ukraine-/Russia-Related Sanctions Regulations, the Ukraine Freedom Support Act of 2014 (signed into law on December 18, 2014), as amended by the Countering America’s Adversaries Through Sanctions Act of 2017 (signed into law in August 2017) (the “UFSA” ), and “sectoral” sanctions on the financial, energy and defense sectors of the Russian economy. The UFSA mandates prohibitions or strict limitations on the opening or maintaining of correspondent or payable-through accounts in the United States by non-U.S. financial institutions determined by the United States government (i) to have knowingly engaged in on or after December 18, 2014 in significant transactions involving certain activities described in the UFSA, including those involving individuals or entities on whom sanctions are imposed pursuant to the UFSA for making a significant investment in a project for the extraction of deep-water, Arctic offshore or shale formation crude oil in Russia, or (ii) to have knowingly facilitated, on or after June 16, 2015, a significant financial transaction on behalf of any Russian individual or entity included on the Specially Designated Nationals And Blocked Persons List pursuant to Ukraine-related sanction programs.

U.S. Sanctions Relating to China

The United States government has imposed sanctions and other restrictive measures, and taken other steps, in response to a number of concerns with the actions and policies of the Chinese government. In response to Chinese actions to limit the autonomy of Hong Kong, the United States government enacted the Hong Kong Autonomy Act, or “HKA” (signed into law on July 14, 2020) which is implemented by Executive Order 13936. Among other things, the HKA provides for the imposition of asset-blocking sanctions against any non-U.S. persons determined to be materially contributing to, have materially contributed to, or have attempted to materially contribute to the failure of the Government of China to meet its obligations under the Sino-British Joint Declaration or Hong Kong’s Basic Law. The HKA also mandates the imposition of sanctions against non-U.S. financial institutions determined by the United States government to have knowingly conducted a significant transaction involving persons sanctioned under the HKA. The U.S. State and Treasury Departments are required to periodically submit reports to Congress identifying non-U.S. persons and non-U.S. financial institutions sanctioned under the HKA. To date, 42 foreign persons  (principally Chinese and Hong Kong government and security officials) have been identified as subject to asset-blocking sanctions under the HKA and Executive Order 13936. No non-U.S. financial institutions have been determined to be subject to sanctions under the HKA. The United States government has indicated that it will contact any non-U.S. financial institution it believes to be engaged in sanctionable conduct under the HKA prior to imposing sanctions against it.

In response to concerns that companies linked to the Chinese military have used access to U.S. capital markets to improve Chinese military and intelligence capabilities, in November 2020, then-President Trump issued Executive Order 13959, which was subsequently amended in January 2021 by Executive Order 13974. On June 3, 2021, President Biden issued Executive Order 14032, which further amended Executive Order 13959 to rescind the Trump administration sanctions and replace them with similar restrictions applicable to a modified list of Chinese companies operating in the defense or surveillance technology sectors of the Chinese economy. As amended by Executive Order 14032, Executive Order 13959 prohibits U.S. persons from purchasing or selling publicly traded securities issued by the companies named in the Annex to or designated pursuant to the order, as well as publicly traded securities that are derivative of or provide investment exposure to such securities. The amended order’s prohibitions became effective on August 2, 2021 with respect to securities of or linked to companies named in the Annex to the order, and will take effect 60 days after the date of listing for companies named pursuant thereto. Executive Order 13959, as amended, provides a 365-day period from the date of the relevant company’s listing in or pursuant to the order during which U.S. persons may purchase or sell affected securities for purposes of divestment.

Foreign Account Tax Compliance Act

Provisions of the Foreign Account Tax Compliance Act, or “FATCA”, which became effective on July 1, 2014, aims to prevent U.S. persons from hiding their financial assets or evading their U.S. federal income tax obligations by the use of offshore accounts. A foreign financial institution that has entered into an agreement with the U.S. Internal Revenue Service, or “IRS”, pursuant to which it agrees to comply with FATCA, referred to as a “participating foreign financial institution”, or “PFFI”, is required to perform specified due diligence, reporting and withholding functions (a “PFFI agreement”). Specifically, under FATCA, a PFFI is required to ascertain the U.S. status of customers through specified due diligence and report certain information annually to the IRS. In cases where customers are not compliant with FATCA, PFFIs are obligated to carry out specified reporting and withholding procedures as prescribed. The consequences for foreign financial institutions that are not compliant with FATCA include being subjected to a 30% withholding tax on certain withholdable payments from U.S. sources and reporting to the IRS.

The United States entered into intergovernmental agreements or reached agreements in substance with more than 100 countries in furtherance of the objectives of FATCA, which modify the operation of FATCA with respect to financial institutions located in those countries. The United States and Japan have entered into an intergovernmental agreement to facilitate the implementation of FATCA pursuant to which Japanese financial institutions (such as us and certain of SMBC Group companies) are directed by the Japanese authorities to register with the IRS and fulfill obligations consistent with those required under a PFFI Agreement. We are registered with the IRS as a PFFI. We are committed to complying with FATCA as a PFFI and abiding by the terms of our PFFI Agreement with the IRS within the jurisdictions in which we operate and in accordance with the time frame set out by the IRS. We closely monitor FATCA developments and evolving industry practices to ensure continued compliance with FATCA.

Unfair or Deceptive Acts or Practices

We and many of our merchants are subject to Section 5 of the Federal Trade Commission Act, or “FTCA”, prohibiting unfair or deceptive acts or practices (“UDAP”). In addition, the FTCA and other laws, rules and or regulations, including the Telemarketing Sales Act, may directly impact the activities of certain of our merchants, and in some cases may subject us, as the merchant’s payment processor or provider of certain services, to investigations, fees, fines and disgorgement of funds if we are deemed to have aided and abetted or otherwise provided the means and instrumentalities to facilitate the illegal or improper activities of the merchant through our services. Various federal and state regulatory enforcement agencies including the Federal Trade Commission and the states attorneys general have authority to take action against non-banks that engage in UDAP or violate other laws, rules and regulations and to the extent we are processing payments or providing services for a merchant that may be in violation of laws, rules and regulations, we may be subject to enforcement actions and as a result may incur losses and liabilities that may impact our business.

Indirect Regulatory Requirements

We anticipate that a number of our clients will be financial institutions that are directly subject to various regulations and compliance obligations issued by the CFPB, the Office of the Comptroller of the Currency and other agencies responsible for regulating financial institutions. While these regulatory requirements and compliance obligations do not apply directly to us, many of these requirements materially affect the services we provide to our clients and us overall. The banking agencies, including the Office of the Comptroller of the Currency, have imposed requirements on regulated financial institutions to manage their third-party service providers. Among other things, these requirements include performing appropriate due diligence when selecting third-party service providers; evaluating the risk management, information security, and information management systems of third-party service providers; imposing contractual protections in agreements with third-party service providers (such as performance measures, audit and remediation rights, indemnification, compliance requirements, confidentiality and information security obligations, insurance requirements, and limits on liability); and conducting ongoing monitoring of the performance of third-party service providers. Accommodating these requirements applicable to our clients imposes additional costs and risks in connection with our financial institution relationships. We have expended and expect to continue to expend significant resources on an ongoing basis in an effort to assist our clients in meeting their legal requirements.

Banking Regulations

We are considered by the Federal Financial Institutions Examination Council to be a technology service provider, or “TSP”, based on the services we provide to financial institutions. As a TSP, we are subject to audits by an interagency group consisting of the Federal Reserve System, FDIC, and the Office of the Comptroller of the Currency.

The foregoing is not an exhaustive list of the laws and regulations to which we are subject and the regulatory framework governing our business is changing continuously. We continually monitor regulations in all of our markets, and we will adjust our operations to comply as new rules become effective.

Regulations in Other Jurisdictions

Elsewhere in the world, other than the United Kingdom, we do not have a place of business and our operations are not presently subject to any specific regulation and control by regulatory authorities. We will adjust our operations as needed to comply as new rules come into effect. Our activities related to ACP are limited to the United States and do not implicate telecommunications regulatory authorities in other jurisdictions. We do provide funding to telecommunications carriers in Italy, Malta, Slovenia, Spain and Ghana. Should we elect to expand our telecommunications-related services to other jurisdictions, we may be required to comply with telecommunications regulations in those jurisdictions as well.

Employees

As of February 9, 2024, we had 24 full-time employees and 5 part-time employees. We are not a party to any collective bargaining agreements. We believe that we maintain good relations with our employees.

Facilities

Our principal address is 9160 Forum Corporate Parkway, Suite 350, Fort Myers, FL 33905. We believe our facilities are adequate to meet our current needs, although we may seek to negotiate new leases or evaluate additional or alternate space for our operations. We believe appropriate alternative space would be readily available on commercially reasonable terms.

Legal Proceedings

From time to time, we may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that will have, individually or in the aggregate, a material adverse effect on our business, financial condition or operating results.

Corporate History

TessPay Inc. (formerly 1172767 B.C. Ltd., 2587863 Ontario Inc. and Tess Inc.) was incorporated under the Business Corporations Act (Ontario) as TessPay Inc. on July 17, 2017. We changed our name to 2587863 Ontario Inc. on July 6, 2018, and continued under the Business Corporations Act (British Columbia) on July 20, 2018, as 1172767 B.C. Ltd. On May 24, 2019, we changed our name to TessPay Inc. On June 29, 2022, we filed a Certificate of Corporation Domestication with the Delaware Secretary of State whereby we migrated from British Columbia, Canada to the State of Delaware. Our registered head office changed from 301-2706 30th Avenue, Vernon, British Columbia, V1T 2B6 to 300 Creek View Road, Suite 209, City of Newark, County of New Castle, Delaware 19711.

MANAGEMENT

Directors and Executive Officers

The following table sets forth the name, age and position of each of our executive officers, key employees and directors as of February 9, 2024.

Jeffrey Mason - Chief Executive Officer, President and Director

Jeffrey Mason, a founder of the Company, has served as Chief Executive Officer and President of the Company as well as a member of the board of directors of the Company since July 2017. In addition, in 2012, Mr. Mason co-founded Limitless Mobile, a US/UK mobile virtual network operator, where he served as Chief Executive Officer until 2014. Prior to 2012, Mr. Mason founded Wiztel Inc., a VOIP telecommunications company that specialized in Wholesale Telecom cross-border voice calls and Wiznet Inc., an internet service provider. He served as Chief Executive Officer of Wiznet from 1995 until Wiznet’s sale in 2004. Mr. Mason previously worked as a business analyst at Canadian Tire, a Canadian retailer operating in the automotive, hardware, sports, leisure and housewares sector, and as a Chartered Professional Accountant at Ernst & Young LLP. Mr. Mason earned a Bachelor of Science in Commerce and Economics from the University of Toronto in 1990. We believe that Mr. Mason is qualified to serve as a member of our board of directors due to the perspective and experience he brings as our founder and Chief Executive Officer, his extensive leadership experience with technology companies and his expertise in telecommunications.

Fraser Mason - Chief Financial Officer and Director

Fraser Mason has served as Chief Financial Officer of the Company since July 2017. Since 2014, Mr. Mason has served as a member of the Advisory Board of Newcom Media, a North American business-to-business publisher and industrial trade show company. From 1981 to 2021, he served, at various times, as Chairman and Chief Executive Officer of Champion Digital Inks (formerly Champion Photochemistry), a global manufacturer of photographic chemicals and digital inks. From 1964 to 2000, Mr. Mason held various roles at Ernst & Young LLP, including Senior Partner and Executive Committee Member. Mr. Mason earned a Bachelor of Arts degree from Queens University and became a Chartered Professional Accountant in 1967. We believe that Mr. Mason is qualified to serve as a member of our board of directors because of his experience as an advisory board member of a public company and his knowledge with respect to finance, accounting, tax, and operations matters.

Edward C. Chase II – Chief Technology Officer

Edward C. Chase II has served as the Chief Technology Officer of the Company since April 2018. Since 2010, Mr. Chase has also served as the Senior Partner to Ebon Group, Inc. a technical implementation services company. Prior to 2010, Mr. Chase served as the Director of Service Management Operation Planning Office at T-Mobile USA. Mr. Chase has also served as VP of Professional Services at Xperts, Inc; Chief Information Officer (CIO) Great Bridge a Landmark Communications Company; Director of Information Technology at MediaOne now Comcast; Director of Enterprise Technology at Continental Cablevision, Media One, AT&T Broadband; and Site Director at Systems & Computer Technology, Corp., to SunGard Higher Education, now Ellucian. Mr. Chase earned his Bachelor of Science in Information Technology from Northeastern University and obtained four certificates (High Performance Management, Realizing Change, Virtual Work: Real Results, and Managing Across Differences) from Harvard Business School’s management development program. Mr. Chase is a member of the Project Management Institute with the certification of Project Management Professional. He is certified by Kepner & Tregoe in quality management, trained with the Federal Emergency Management Agency in Incident Command System, works within the Information Technology Infrastructure Library framework, and is an Agile Practitioner.

Matthew Butler – Managing Director of Create.iF Manage Ltd and Director

Matthew Butler has served as a member of the board of directors of the Company since December 2022. Since November 2005, Mr. Butler has served as the Managing Director of Create.iF, a commercial and project management services company located in the United Kingdom which was acquired by the Company in November 2022. Prior to 2005, Mr. Butler worked as a commercial manager for Laser Group and Morgan Sindall, and a project surveyor for AMEC Construction. Mr. Butler received his Bachelor of Science in Quantity Surveying and Construction Management from the University of Wolverhampton. We believe Mr. Butler is qualified to serve as a member of our board of directors due to his 29 years of experience in management, cost planning, procurement and delivery of complex schemes working with main contractors, project management consultancies and major developers.

Eric Alexander – Director

Eric Alexander has served as a member of the board of directors of the Company since December 2022. Mr. Alexander has served as the Chief Financial Officer of U.S. Gold Corporation, a gold and copper exploration company since 2020. From April 2019 to September 2020, he served as the Corporate Controlled for Helix Technologies, Inc., a software and technology company, and from September 2012 to April 2019, he served as the Vice President of Finance of Pershing Gold Corporation, a gold exploration and development company. Mr. Alexander earned a Bachelor of Science in Business Administration with a concentration in Accounting and Finance from the State University of New York at Buffalo. We believe Mr. Alexander is qualified to serve as a member of our board of directors because of his accounting and finance expertise and his leadership experience with publicly-listed companies.

Andrew Kaplan – Director

Andrew Kaplan has served as a member of the board of directors of the Company since December 2022. For the last 28 years, Mr. Kaplan has served as an Investor Relations and Capital Markets Strategist at Barry Kaplan Associates, in addition to his role as a Capital Markets Associate of Avino Silver and Gold, a mining and exploration firm, and as a Co-Chief Executive Officer of Sherman Theatrical Entertainment Ltd, a musical entertainment company. Additionally, Mr. Kaplan has served as a director of various companies throughout his career including that of The Naked Brand Group Inc. (Nasdaq: NAKD), Coral Gold Resources, U.S. Gold Corporation (Nasdaq: USAU), and Riot Blockchain, Inc. (Nasdaq: RIOT). Mr. Kaplan earned a Bachelor of Science and a Bachelor of Arts in Finance and Insurance from the University of Hartford in 1989. We believe Mr. Kaplan is qualified to serve as a member of our board of directors due to his 13 years of experience as a director on numerous boards and his deep understanding of the functionality of financial markets.

Joanna Massey – Director

Dr. Joanna Dodd Massey has served as a member of the board of directors of the Company since December 2022. Her other board roles include KULR Technology Group (NYSE American: KULR), a thermal and energy solutions company, for which she serves as Chair of nominating and corporate governance, Co-Chair of Compensation, and a member of the audit committee. Additionally, since September 2021, Dr. Massey has served as a director of The Hollywood Foreign Press Association. Dr. Massey also works as a Management Consultant for her eponymous company J.D. Massey Associates, Inc. Throughout her career, Dr. Massey has held various roles, including assisting micro-cap and small/mid-cap companies attract institutional investors and expand market share by advising them on corporate governance, managing change, and navigating risk around environmental and social issues. As a corporate communications executive, Dr. Massey has managed integration during major merger and acquisition transactions at Lionsgate, CBS, and Discovery; corporate turnaround as Condé Nast pivoted from print to video; and crisis communications with consumers, employees, investors, regulators, and politicians. Dr. Massey earned a Bachelor of Arts in Journalism from the University of Southern California, a Masters in Business Administration from the University of Southern California and a Graduate Certificate in Corporate Finance from Harvard University, as well as a Masters of Arts in Clinical Psychology from Antioch University and a Ph.D. in Psychology from Sofia University. We believe Dr. Massey is qualified to serve as a member of our board of directors because of her governance background as a public company corporate communications executive and over 30 years of experience advising chairmen and CEOs during the most challenging times, including major crises, whistleblower complaints, public-facing lawsuits, and merger and acquisition transactions, in addition to her extensive academic credentials in both finance and business administration.

Robert Strickland – Director

Robert Strickland has served as a member of the board of directors of the Company since December 2022. Mr. Strickland founded Move 37 Ventures, a technology management consulting and business solutions company, in 2014. Mr. Strickland is also co-founder of 50 Moves Ventures LLC. Through Move 37 Ventures and 50 Moves Ventures, Mr. Strickland provides consulting, advisory, board advisory, and board of director services for a range of companies, both private and public. From 2021 through mid-2023, Mr. Strickland provided advisory support and mentoring for LPL Financial’s CEO and CTIO. Until 2022, Mr. Strickland served as Interim COO for GXC.io – a 5G Private Network company. Mr. Strickland previously served as President and COO for Text+, a software-based MVNO platform with >7M subscribers, from January 2018 to March 2023. He served as Interim CTO for Kymeta Corp from September 2019 to April 2020, Interim CEO of Atonomi.io/Centri Technologies from October 2017 to September 2019, Interim Group CTO of Televisa from October 2016 to June 2017 and Interim CTO of Neustar from September 2014 to August 2015. Mr. Strickland served as Chief Technical Officer of Leap Wireless/Cricket, until its purchase by AT&T in early 2014. Mr. Strickland earned his Bachelor of Arts degree in Mathematics from Brandeis University. From 2010 to September 2019, Mr. Strickland served as a member of the board of directors of CENTRI Technology Inc. (“CENTRI”). Mr. Strickland has been named as a defendant in a class action lawsuit commenced by investors in Washington State Federal Court in relation to purported securities law violations by Atonomi LLC, a wholly owned subsidiary of CENTRI during its initial coin offering. Washington State Federal Court has set a trial date of April 1, 2024 for the class action lawsuit.

We believe Mr. Strickland is qualified to serve as a member of our board of directors because of his vast advisory and board experience with respect to both public and private companies as well as his extensive leadership skills and his focus on emerging technologies and connecting companies around the globe to enable change and growth in the telecommunications and technology industry.

Family Relationships

Jeffrey Mason, our Chief Executive Officer, President and director, is the son of Fraser Mason, our Chief Financial Officer and director. Other than the foregoing, there are no family relationships among any of our executive officers or directors.

Director Independence

Prior to the consummation of this offering, our board of directors undertook a review of the independence of our directors and considered whether any director has a relationship with us that could compromise that director’s ability to exercise independent judgment in carrying out that director’s responsibilities. Our board of directors has affirmatively determined that Andrew Kaplan, Joanna Massey, Eric Alexander and Robert Strickland will each be an “independent director,” as defined under NYSE American rules.

Committees of Our Board of Directors

Our board of directors directs the management of our business and affairs, as provided by Delaware law, and conducts its business through meetings of the board of directors and its standing committees. We will have a standing audit committee, compensation committee, nominating and corporate governance committee and merger and acquisition committee. In addition, from time to time, special committees may be established under the direction of the board of directors when necessary to address specific issues.

Audit Committee

Our audit committee will be responsible for, among other things:

Upon the consummation of this offering, our audit committee will consist of Andrew Kaplan, Joanna Massey and Eric Alexander with Eric Alexander serving as chair. Our board of directors has affirmatively determined that Andrew Kaplan, Joanna Massey and Eric Alexander each meet the definition of “independent director” under NYSE American rules, and that they meet the independence standards under Exchange Act Rule 10A-3. Each member of our audit committee meets the financial sophistication requirements of the NYSE American rules. In addition, our board of directors has determined that each of Andrew Kaplan and Eric Alexander will qualify as an “audit committee financial expert,” as such term is defined in Item 407(d)(5) of Regulation S-K. Our board of directors has adopted a written charter for the audit committee, which will be available on our principal corporate website at www.tesspay.io concurrently with the consummation of this offering.

Compensation Committee

Our compensation committee will be responsible for, among other things:

Upon the consummation of this offering, our compensation committee will consist of Andrew Kaplan, Robert Strickland and Eric Alexander with Andrew Kaplan serving as chair. Our board has determined that Andrew Kaplan, Robert Strickland and Eric Alexander are each independent directors under NYSE American rules. Our board of directors has adopted a written charter for the compensation committee, which will be available on our principal corporate website at www.tesspay.io concurrently with the consummation of this offering.

Nominating and Governance Committee

Our nominating and governance committee will be responsible for, among other things:

Upon the consummation of this offering, our nominating and corporate governance committee will consist of Andrew Kaplan, Joanna Massey and Eric Alexander with Joanna Massey serving as chair. Our board has determined that Andrew Kaplan, Joanna Massey and Eric Alexander are each independent directors under NYSE American rules. Our board of directors has adopted a written charter for the nominating and governance committee, which will be available on our principal corporate website at www.tesspay.io concurrently with the consummation of this offering.

Merger and Acquisition Committee

Our merger and acquisition committee will be responsible for, among other things:

Upon the consummation of this offering, our merger and acquisition committee will consist of Jeffrey Mason, Fraser Mason, Matthew Butler, Robert Strickland, and Eric Alexander, with Robert Strickland serving as chair.

Code of Business Conduct and Ethics

Prior to the completion of this offering, we will adopt a written code of business conduct and ethics that applies to our directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. A copy of the code will be posted on our website, www.tesspay.io. In addition, we intend to post on our website all disclosures that are required by law or the NYSE American rules concerning any amendments to, or waivers from, any provision of the code.

Limitations on Liability and Indemnification Matters

Our Certificate of Incorporation and Bylaws contain provisions that limit the liability of our current and former directors for monetary damages to the fullest extent permitted by Delaware law. Delaware law provides that directors of a corporation will not be personally liable for monetary damages for any breach of fiduciary duties as directors, except liability for: