0001826220-22-000004.txt : 20220322
0001826220-22-000004.hdr.sgml : 20220322
20220322103243
ACCESSION NUMBER: 0001826220-22-000004
CONFORMED SUBMISSION TYPE: 1-A/A
PUBLIC DOCUMENT COUNT: 10
FILED AS OF DATE: 20220322
DATE AS OF CHANGE: 20220322
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: Decentralized Crypto Financial Inc.
CENTRAL INDEX KEY: 0001826220
STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389]
IRS NUMBER: 852718015
STATE OF INCORPORATION: DE
FISCAL YEAR END: 0821
FILING VALUES:
FORM TYPE: 1-A/A
SEC ACT: 1933 Act
SEC FILE NUMBER: 024-11353
FILM NUMBER: 22757667
BUSINESS ADDRESS:
STREET 1: 4795 MEADOW WOOD LANE
STREET 2: SUITE 200
CITY: CHANTILLY
STATE: VA
ZIP: 20151
BUSINESS PHONE: (703) 955-7770
MAIL ADDRESS:
STREET 1: 4795 MEADOW WOOD LANE
STREET 2: SUITE 200
CITY: CHANTILLY
STATE: VA
ZIP: 20151
1-A/A
1
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Decentralized Crypto Financial Inc.
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2020
0001826220
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85-2718015
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4795 MEADOW WOOD LANE
SUITE 200
CHANTILLY
VA
20151
703-594-6840
Michael Blackburn
Other
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Decentralized Crypto Financial Inc.
common stock
300000000
0
Decentralized Crypto Financial was originally organized as an LLC in the state of DE on July 24, 2020, whereby Mr. Nicholas Scherling held 100% of the ownership interests. On August 20, 2020, the Company underwent a statutory conversion in DE, changing the legal structure of the Company from an LLC to a c-corp with 500m authorized shares. As the sole owner, CEO, chairman, and director of the Company, Mr Scherling retained 300m shares.
Section 4(a) of the Securities Act; issued in compliance with Rule 701
EX1A-4 SUBS AGMT
2
1.1.txt
DECENTRALIZED CRYPTO FINANCIAL, INC.
Common Stock Subscription Agreement
The securities offered hereby are highly speculative.
Investing in Shares of DECENTRALIZED CRYPTO FINANCIAL, INC.
(?DeCryptoFi? and/or the ?Company?), involves significant risks.
This investment is suitable only for persons who can afford to
lose their entire investment. Furthermore, investors must
understand that such investment could be illiquid for an
indefinite period of time. No public market currently exists for
the securities, and if a public market develops following this
offering, there is no guarantee that it will continue.
The securities offered hereby have not been registered
under the Securities Act of 1933, as amended (the "Securities
Act"), or any state securities or blue-sky laws, and as such,
are being offered and sold in reliance on exemptions from the
registration requirements of the Securities Act and state
securities regulations and blue-sky laws. Although an offering
statement has been filed with the Securities and Exchange
Commission ("SEC"), that offering statement does not include the
same information that would be included in a registration
statement under the Securities Act. The securities have not been
approved or disapproved by the SEC, any state securities
commission or other regulatory authority, nor have any of the
foregoing authorities passed upon the merits of this offering or
the adequacy or accuracy of the offering circular or any other
materials or information made available to subscriber in
connection with this offering through our web-based platform
(the "Platform"). Any representation to the contrary is
unlawful.
No sale may be made to persons in this offering who are
not "accredited investors" if the aggregate purchase price is
more than 10% of the greater of such investors' annual income or
net worth. The Company is relying on the representations and
warranties set forth by each subscriber in this subscription
agreement and the other information provided by subscriber in
connection with this offering to determine compliance with this
requirement.
Prospective investors may not treat the contents of the
subscription agreement, the offering circular or any of the
other materials made available on the Platform (collectively,
the "Offering Materials") or any prior or subsequent
communications from the Company or any of its officers,
employees or agents as investment, legal or tax advice. In
making an investment decision, investors must rely on their own
examination of the Company and the terms of this offering,
including the merits and the risks involved. Each prospective
investor should consult his or her own counsel, accountant and
other professional advisor as to investment, legal, tax and
other related matters concerning the investor's proposed
investment.
The Company reserves the right in its sole discretion and
for any reason whatsoever to modify, amend or withdraw any
portion of this offering. Further, the Company has the authority
to accept or reject in whole or in part any prospective
investment in the securities or to allot to any prospective
investor less than the amount of securities such investor
desires to purchase.
Except as otherwise indicated, the Offering Materials
speak as of the date of the most recent offering circular.
Neither the delivery nor the purchase of the securities shall,
under any
circumstances, create any implication that there has not been a
change in the affairs of the Company since said date.
This agreement (the ?Agreement") is made as of the date
set forth below by and between the undersigned ("Subscriber")
and DeCryptoFi., a Delaware corporation, and is intended to set
forth certain representations, covenants and agreements between
Subscriber and the Company with respect to the offering (the
"Offering") for sale by the Company in Shares of its common
stock (the "Shares") as described in the Company's Offering
Circular (the "Offering Circular")"a copy of which has been
provided to Subscriber, or will immediately be provided to
Subscriber. Further, a copy of the Offering Circular and all
other public filings can be found via the Electronic Data
Gathering Analysis and Retrieval system (?EDGAR?) database, at
https://www.sec.gov/edgar.shtml. The Shares are also referred to
herein as the "Securities.?
ARTICLE I SUBSCRIPTION
1.01 Subscription: Subject to the terms and conditions hereof,
Subscriber hereby irrevocably subscribes for and agrees to
purchase from the Company the number of Shares set forth on the
Subscription Agreement Signature Page, and the Company agrees to
sell such Shares to Subscriber at a purchase price of $0.10 per
Share for the total amount set forth on the Subscription
Agreement Signature Page (the "Purchase Price"), subject to the
Company's right to sell to Subscriber such lesser number of
Shares as the Company may, in its sole discretion, deem
necessary or desirable.
1.02 Delivery of Subscription Amount; Acceptance of
Subscription; Delivery of Securities: Subscriber understands and
agrees that this subscription is made subject to the following
terms and conditions:
(a) Contemporaneously with the execution and delivery of this
Agreement, Subscriber shall pay the purchase price for the
Shares via the Company?s online web platform found at
www.decryptofi.com with the instructions set forth:
(b) Payment of the purchase price shall be received by
DeCryptoFi via its online web platform at www.decryptofi.com.
(c) This subscription shall be deemed to be complete only
when this Agreement has been accepted by an authorized officer
or agent of the Company. The deposit of the payment of the
purchase price for clearance alone will not be deemed an
acceptance of this Agreement.
(d) The Company shall have the right to reject this
subscription, in whole or in part.
(e) The payment of the Subscription Amount (or, in the case
of rejection of a portion of the Subscriber's subscription, the
part of the payment relating to such rejected portion) will be
returned promptly --without interest or deduction -- if
Subscriber's subscription is rejected in whole or in part or if
the Offering is withdrawn or cancelled.
_
ARTICLE II REPRESENTATIONS AND WARRANTIES OF SUBSCRIBER
By executing this Subscription Agreement, Subscriber (and,
if Subscriber is purchasing the Securities subscribed for hereby
in a fiduciary capacity, the person or persons for whom
Subscriber is so purchasing) represents and warrants that all
statements contained herein are true and complete in all
material respects as of the date of each Closing Date:
2.01 Requisite Power and Authority: Such Subscriber has all
necessary power andauthority under all applicable provisions of
law to execute and deliver this Subscription Agreement. All
action on Subscriber's part required for the lawful execution
and delivery of this Subscription Agreement has been or will be
effectively taken. Upon execution and delivery, this
Subscription Agreement will be a valid and binding obligation of
Subscriber, enforceable in accordance with its terms, except (a)
as limited by applicable laws of general application affecting
Anti-Money Laundering (?AML?) obligations, and (b) enforcement
of creditors' rights.
2.02 Investment Representations: Subscriber understands that the
Securities have not been registered under the Securities Act.
Subscriber also understands that the Securities are being
offered and sold pursuant to an exemption from registration
contained in the Securities Act based in part upon Subscriber's
representations contained in this Subscription Agreement.
2.03 Illiquidity and Continued Economic Risk: Subscriber
acknowledges and agrees that there is no readily available
public market for the Securities and that there is no guarantee
that a market for their resale will ever exist. Subscriber must
bear the economic risk of this investment indefinitely and the
Company currently has no obligation to list the Securities on
any market or take any steps (including registration under the
Securities Act or the Securities Exchange Act of 1934, as
amended) with respect to facilitating trading or resale of the
Securities. Subscriber acknowledges that Subscriber is able to
bear the economic risk of losing Subscriber's entire investment
in the Securities. Subscriber also understands that an
investment in the Company involves significant risks and
thoroughly understands all of the risk factors relating to the
purchase of Securities.
2.04 Accredited Investor Status or Investment Limits: Subscriber
represents that either:
(a) Subscriber is an "accredited investor"1 within the
meaning of Rule 501 of Regulation D under the Securities Act.
Subscriber represents and warrants that the information set
forth in the Subscription Agreement Signature Page hereto
concerning Subscriber is true and correct; or
1 Accredited investor shall mean any person who comes within any
of the following categories, or who the issuer reasonably
believes comes within any of the following categories, at the
time of the sale of the securities to that person:
(1) Any bank as defined in section 3(a)(2) of the Act, or any
savings and loan association or other institution as defined in
section 3(a)(5)(A) of the Act whether acting in its individual
or fiduciary capacity; any broker or dealer registered pursuant
to section 15 of the Securities Exchange Act of 1934; any
insurance company as defined in section 2(a)(13) of the Act; any
investment company registered under the Investment Company Act
of 1940 or a business development company as defined in section
2(a)(48) of that Act; any Small Business Investment Company
licensed by the U.S. Small Business Administration under section
301(c) or (d) of the Small Business Investment Act of 1958; any
plan established and maintained by a state, its political
subdivisions, or any agency or instrumentality of a state or its
political subdivisions, for the benefit of its employees, if
such plan has total assets in excess of $5,000,000; any employee
benefit plan within the meaning of the Employee Retirement
Income Security Act of 1974 if the investment decision is made
by a plan fiduciary, as defined in section 3(21) of such act,
which is either a bank, savings and loan association, insurance
company, or registered investment adviser, or if the employee
benefit plan has total assets in excess of $5,000,000 or, if a
self- directed plan, with investment decisions made solely by
persons that are accredited investors;
(2) Any private business development company as defined in
section 202(a)(22) of the Investment Advisers Act of 1940;
(3) Any organization described in section 501(c)(3) of the
Internal Revenue Code, corporation, Massachusetts or similar
business trust, or partnership, not formed for the specific
purpose of acquiring the securities offered, with total assets
in excess of $5,000,000;
(b) The Purchase Price of the Subscription Agreement
Signature Page, together with any other amounts previously used
to purchase Securities in this offering, does not exceed 10% of
the greater of the Subscriber's annual income or net worth.
Subscriber represents that to the extent Subscriber has any
questions with respect to its status as an accredited investor,
or the application of the investment limits, Subscriber has
sought professional advice.
2.05 Shareholder Information: Within 5 business days after
receipt of a request from the Company, Subscriber hereby agrees
to provide such information with respect to its status as a
shareholder (or potential shareholder) and to execute and
deliver such documents as may reasonably be necessary to comply
with any and all laws and regulations to which the Company is or
may become subject, including, without limitation, the need to
determine the accredited status of the Company's shareholders.
Subscriber further agrees that in the event it transfers any
Securities, it will require the transferee of such Securities to
agree to provide relevant information to the Company as a
condition of such transfer.
2.06 Company Information: Subscriber has read the Offering
Circular filed with the SEC, including the section titled "Risk
Factors." Subscriber understands that the Company is subject to
all the risks that apply to early-stage companies, whether or
not those risks are explicitly set out in the Offering Circular.
Subscriber acknowledges that no representations or warranties
have been made to Subscriber, or to Subscriber's advisors or
representatives, by the Company or others with respect to the
business or prospects of the Company or its financial condition.
2.07 Valuation: Subscriber acknowledges that the price of the
Securities was set by the Company on the basis of the Company's
internal valuation and no warranties are made as to value.
Subscriber further acknowledges that future offerings of
Securities may be made at lower valuations, which may result
that the Subscriber's initial investment will bear a lower
valuation.
2.08 Domicile: Subscriber is domiciled in the United States and
maintains such domicile (and is not a transient or temporary
resident) at the address provided on the signature page.
2.09 No Brokerage Fees: There are no claims for brokerage
commission, finders' fees or similar compensation in connection
with the transactions contemplated by this Subscription
Agreement or related documents based on any arrangement or
agreement binding upon Subscriber. Subscriber will indemnify and
hold the Company harmless against any liability,loss or expense
(including, without limitation, reasonable attorneys' fees and
out-of-pocket expenses) arising in connection with any such
claim.
(4) Any director, executive officer, or general partner of the
issuer of the securities being offered or sold, or any director,
executive officer, or general partner of a general partner of
that issuer;
(5) Any natural person whose individual net worth, or joint net
worth with that person's spouse, exceeds $1,000,000.
(i) for purposes of calculating net worth:
(A) The person's primary residence shall not be included as an
asset.
(B) Indebtedness that is secured by the person's primary
residence, up to the estimated fair market value of the primary
residence at the time of the sale of securities, shall not be
included as a liability (except that if the amount of such
indebtedness outstanding at the time of sale of securities
exceeds the amount outstanding 60 days before such time, other
than as a result of the acquisition of the primary residence,
the amount of such excess shall be included as a liability); and
(C) Indebtedness that is secured by the person's primary
residence in excess of the estimated fair market value of the
primary residence at the time of the sale of securities shall be
included as a liability.
DECRYPTOFI SUBSCRIPTION AGREEMENT SIGNATURE PAGE
The undersigned, desiring to purchase Shares of common stock of
DeCryptoFi., by executing this signature page, hereby executes,
adopts and agrees to all terms, conditions and representations
of the Subscription Agreement.
ADDITIONAL FEES
Subscriber acknowledges that he or she will incur additional
processing fees, depending on Subscriber?s payment method. The
Company is equipped to accept payment from two payment
processors, Braintree and Bitpay.
Braintree?s fee structure is 2.9% + $.30 per transaction. There
is also a 1% fee applied when the Subscriber?s credit card is
issued outside the United States, and a $15.00 fee when someone
initiates a chargeback through the Subscriber?s credit card. For
ACH payments, Braintree charges a .75% per transaction fee,
capped at a maximum of $5.00.
Bitpay charges a 1% fee for all transactions.
Subscriber understands that he or she shall incur the cost(s) of
these fees.
Lastly, DeCryptoFi reserves the right to accept other Real
Assets not listed in exchange for shares and the subscriber
agrees to pay any fees related to the Real Assets transfer of
ownership.
Number of Shares Purchased: _ Price: $0.10 per share
Name of Subscriber:
Telephone Number: Email Address:
Tax Identification Number (TIN): Signature:
Full Name and Title of Authorized Signatory (if applicable):
Address for Mailing Purposes (street, city, state and zip code.
NO PO BOXES): Street:
City and State:
Zip Code:
ADD EXHB
3
exhibit2.1.txt
CERTIFICATE OF INCORP
State of Delaware Secretary of State Division of Corporatoi
ns
Delivered 03:20 PM 08/24/2020 FILED 03:20 PM 08/24/2020
SR 20206903529 - File Number 3311473
CERTIFICATE OF INCORPORATION OF
Decentralized Crypto Financial Inc.
FIRST: SECOND:
THIRD:
FOURTH:
FIFTH:
SIXTH:
The name of the corporation is: Decentralized Crypto Financial
Inc.*
The address of the registered office of the corporation in the*
State of Delaware is located at: 108 West 13th Street,
Wilmington, Delaware 19801*
Located in the County of New Castle
The name of the registered agent at that address is: Business*
Filings Incorporated
*
The purpose of the corporation is to engage in any lawful act or
activity for which corporations may be organized under the*
Delaware General Corporation Law.
The total number of shares of stock which the corporation is
authorized to issue is 500,000,000 shares of common stock having
a one ten thousandth of a cent ($0.0001) par value.
No director of the corporation will be personally liable to the*
corporation or its stockholders for monetary damages for breach
of fiduciary duty as a director; provided, however, that the
foregoing clause shall not apply to any liability of a director
(i) for any breach of the director's duty ofloyalty to the
corporation or its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a
knowing violation oflaw, (iii) under Section 174 of the General
Corporation Law of the State of Delaware, or (iv) for any
transaction from which the director derived an improper personal
benefit. This Article shall not eliminate or limit the liability
of a director for any act or omission occurring prior to the
time this Article became effective.
The name and address of the incorporator is Nicholas Scherling,
4795 Meadow Wood Ln, 200, Chantilly, Virginia 20151
I, the undersigned, being the incorporator, for the purpose of
forming a corporation under the laws of the State of Delaware do
make, file, and record this Certificate oflncorporation and do
certify that the facts herein are true.
Isl Nicholas Scherling
Nicholas Scherling, Incorporator Dated: 08/20/2020
EX1A-2B BYLAWS
4
3.1.txt
CORPORATE BYLAWS OF
DECENTRALIZED CRYPTO FINANCIAL, INCORPORATED.
ARTICLE 1.
CORPORATE AUTHORITY
1.1 Incorporation. Decentralized Crypto Financial,
Incorporated., (the ?Corporation?) is a duly organized
corporation authorized to do business in the State of Delaware
by the filing of the Articles of Incorporation on August 20,
2020.
1.2 State Law. The Corporation is organized under the Delaware
Statutes and except as otherwise provided herein, the Statutes
shall apply to the governance of the Corporation. The laws,
statutes, regulations and rules to which the Corporation is
subject shall be referred to herein as ?Applicable Law.?
1.3 Corporate Purpose. The purpose of the Corporation is any and
all lawful business.
ARTICLE 2.
OFFICES AND RECORDS
2.1 Registered Office and Registered Agent. The principal office
and the registered agent of the Corporation shall be as stated
in the Articles of Incorporation of the Corporation, as
amended from time to time by the Board of Directors and on
file in the appropriate public offices of the State of
Delaware as provided by law. Currently, the Company has one
Director on its Board of Directors (also, the ?Board?).
2.2 Other Offices. The Corporation maintains its principal place
of business at 4795 Meadow Wood Lane, #200, Chantilly VA 20151.
The Board may, from time to time, determine to add additional
office locations.
2.3 Books, Accounts and Records, and Inspection Rights. The
books, accounts, and records of the Corporation, except as may
be otherwise required by the laws of the State of Delaware, may
be kept outside of the State of Delaware, at such place(s) as
the Board may from time to time determine. Except as otherwise
provided by law, the Board will determine whether, to what
extent, and the conditions upon which the books, accounts and
records of the Corporation will be open to the inspection of
the stockholders of the Corporation.
ARTICLE 3.
STOCKHOLDER MEETINGS
3.1 Place of Meetings. Meetings of the stockholders may be
held at such place, either within or without the State of
Virginia, as may be determined from time to time by the
Board. The Board may, in its sole discretion, determine
that the meeting shall not be held at any place, but may
instead be held solely by means of remote communication as
provided by the Applicable Law.
3.2 Annual Meeting. The annual meeting of the stockholders
of the Corporation, for the purpose of election of
directors and for such other business as may lawfully come
before it, shall be held on such date and at such time as
may be designated from time to time by the Board. At an
annual meeting of the stockholders, only such business
shall be conducted as shall have been properly brought
before the meeting. The Chairman may cancel a regular
meeting of the Board by giving written notice of the
cancellation at least ten (10) work days prior to the
meeting where practical.
3.3 Special Meetings.
(a) Special meetings of the stockholders of the Corporation
may be called, for any purpose or purposes, by (i) the
Chairman of the Board, (ii) the Chief Executive Officer,
(iii) the President,
(iv) once applicable, the Board pursuant to a resolution
adopted by directors representing a quorum of the Board,
or (v) by the holders of shares representing at least
fifty one (51) percent of the total shares of the
Corporation eligible to vote, and shall be held at such
place, on such date, and at such time as the Board shall
fix.
(b) If a special meeting is properly called by any person
or persons other than the Board, the request shall be in
writing, specifying the general nature of the business
proposed to be transacted, and shall be delivered
personally or sent by certified or registered mail,
return receipt requested, or by telegraphic or other
facsimile transmission to the Chairman of the Board, the
Chief Executive Officer, or the Secretary. No business
may be transacted at such special meeting otherwise than
specified in such notice.
3.4 Notice of Meetings. Once applicable, whenever
shareholders are required or permitted to take any action
at a meeting, a written notice (including by email) of the
meeting shall be provided to each shareholder of record
entitled to vote at or entitled to notice of the meeting,
which shall state the place, date, and hour of the meeting,
as well as the purpose or purposes for which the meeting is
called. Unless otherwise provided by law, written notice of
any meeting shall be given not less than ten (10) nor more
than sixty (60) days before the date of the meeting to each
shareholder entitled to vote at such meeting.
3.5 Quorum. Shareholders may take action on a matter at a
meeting only if a quorum exists with respect to that
matter. Except as otherwise provided by law, Fifty One (51)
percent of the outstanding shares of the Corporation
entitled to vote, represented in person or by proxy, shall
constitute a quorum at a meeting of shareholders. Once a
share is represented for a purpose at a meeting (other than
solely to object to the holding of the meeting), it is
deemed present for
quorum purposes for the remainder of the meeting and the
shareholders present at a duly organized meeting may
continue to transact business until adjournment,
notwithstanding the withdrawal of sufficient shareholders
to leave less than a quorum. The holders of a majority of
the outstanding shares represented at a meeting, whether or
not a quorum is present, may adjourn the meeting from time
to time.
3.6 Voting Rights.
(a) Each shareholder entitled to vote at a meeting of
shareholders or to express consent or dissent to
corporate action in writing without a meeting may
authorize another person or persons to vote for him or
her by proxy, but no such proxy shall be voted or acted
upon after one (1) year from its date unless the proxy
expressly provides for a longer period. A duly executed
proxy shall be irrevocable only if it states that it is
irrevocable and if, and only as long as, it is coupled
with an interest sufficient in law to support an
irrevocable power.
(b) If a quorum exists, action on a matter (other than the
election of directors) is approved if the votes cast
favoring the action exceed the votes cast opposing the
action. Directors shall be elected by a plurality of the
votes cast by the shares entitled to vote in the election
(provided a quorum exists). Unless otherwise provided by
law or in the Corporation?s Articles of Incorporation,
and subject to other provisions of these Bylaws, each
shareholder shall be entitled to one (1) vote on each
matter, in person or by proxy, for each share of the
Corporation?s capital stock that has voting power and
that is held by such shareholder. Voting need not be by
written ballot.
3.7 List of Stockholders. The officer of the Corporation who
has charge of the stock ledger of the Corporation shall
prepare and make available to voting shareholders the books
and records that a shareholder is legally entitled to
inspect. These records can include, but may not be limited
to, the articles of incorporation, bylaws, and corporate
resolutions.
3.8 Consent in Lieu of a Meeting.
(a) Any action required to be taken or which may be taken
at any meeting of shareholders may be taken without a
meeting, without prior notice and without a vote, if a
consent in writing, setting forth the action so taken,
shall be signed by the holders of outstanding shares
having not less than the minimum number of votes that
would be necessary to take such action at a meeting at
which all shareholders entitled to vote were present and
voted. The action must be evidenced by one or more written
consents, describing the action taken, signed and dated
by the shareholders entitled to take action without a
meeting, and delivered to the Corporation at its
registered office or to the officer having charge of the
Corporation?s minute book.
(b) No consent shall be effective to take the corporate
action referred to in the consent unless the number of
consents required to take action are delivered to the
Corporation or to the officer having charge of its minute
book within sixty (60) days of the delivery of the
earliest- dated consent.
(c) Prompt notice of the taking of the corporate action
without a meeting by less than unanimous written consent
shall be given to those stockholders who have not
consented in writing or by electronic transmission and
who, if the action had been taken at a meeting, would
have been entitled to notice of the meeting if the record
date for such meeting had been the date that written
consents signed by a sufficient number of stockholders to
take action were delivered to the Corporation as provided
in the Applicable Law.
3.9 Conference Call. One or more shareholders may participate
in a meeting of shareholders by means of conference
telephone, videoconferencing, or similar communications
equipment by means of which all persons participating in
the meeting can hear each other. Participation in this
manner shall constitute presence in person at such meeting.
ARTICLE
4.
DIRECTOR
S
4.1 Powers. The business and affairs of the Corporation shall
be managed by or under the direction of the Board of
Directors, which may exercise all such powers of the
Corporation and do all lawful acts and things, subject to
any limitations set forth in these Bylaws or the Articles
of Incorporation for the corporation.
4.2 Number and Term of Office. The number of directors is
currently set at one (1) but is subject to change. Each
director shall be at least eighteen (18) years of age. The
directors need not be residents of the state of
incorporation. The directors shall be elected by the
shareholders at the annual meeting of shareholders by the
vote of shareholders holding of record in the aggregate at
least a plurality of the shares of stock of the Corporation
present in person or by proxy and entitled to vote at the
annual meeting of shareholders. Each director shall be
elected for a term until his or her successor shall be
elected and shall qualify or until his or her earlier
resignation or removal.
4.3 Vacancies. Except as otherwise provided by law, any
vacancy in the Board of Directors occurring by reason of an
increase in the authorized number of directors or by reason
of the death, withdrawal, removal, disqualification,
inability to act, or resignation of an acting director
shall be filled by the majority of directors then in office
and notice of a shareholder meeting shall be provided to
the shareholders for the purpose of electing a director to
permanently fill such vacancy. Any director may resign at
any time by giving written notice to the Board.
4.4 Resignation. Any director may resign at any time by
delivering his or her notice in writing or by electronic
transmission to the Secretary, such resignation to specify
whether it will be effective at a particular time, upon
receipt by the Secretary or at the pleasure of the Board.
If no such specification is made, it shall be deemed
effective at the pleasure of the Board.
4.5 Removal. Subject to any limitations imposed by Applicable
Law, any director may be removed from office at any time (i)
with cause by the affirmative vote of the holders of at
least 51% percent
of the voting power of all then-outstanding shares of
capital stock of the Corporation entitled to vote.
4.6 Meetings. Meetings of the Board of Directors may be
called by any director or the President on five (5) days?
notice to each director, either personally or by telephone,
express delivery service, email, or facsimile transmission,
and on ten (10) days? notice by mail (effective upon
deposit of such notice in the mail). The notice shall
specify the purpose of such meeting.
4.7 Quorum and Voting. A simple majority of the total number
of authorized directors shall constitute a quorum for
transaction of business. The act of a majority of directors
present at any meeting at which a quorum is present shall
be the act of the Board of Directors, except as provided by
law, the Articles of Incorporation, or these Bylaws. Each
director present shall have one vote, irrespective of the
number of shares of stock, if any, he or she may hold.
4.8.Super Majority Vote. The Company agrees that, except as
otherwise provided, the Company shall not take any material
actions without the affirmative vote or consent of at least
Fifty One percent (51%) of the members of the Board of
Directors (and, to the extent Delaware law requires
stockholder approval to take such action, without
affirmative vote or consent of at least sixty percent (60%)
of the issued and outstanding capital stock of the
Company). ?Material actions? shall include, but is not
limited to, matters pertaining to voting rights; dividend
payments; redemption rights; anti-dilution protections; and
rights of first refusal.
4.9 Action Without a Meeting. Any action required or
permitted to be taken at any meeting of the Board of
Directors or of any committee thereof may be taken without
a meeting of all members of the Board or committee, as the
case may be, with the written consent of a quorum of the
Directors, such writing or writings to be filed with the
minutes or proceedings of the Board or committee.
4.10 Fees and Compensation. Directors shall be entitled to
such compensation for their services as may be approved by
the Board, including, if so approved, by resolution of the
Board, a fixed sum and expenses of attendance, if any, for
attendance at each regular or special meeting of the Board
and at any meeting of a committee of the Board. Nothing
herein contained shall be construed to preclude any
director from serving the Corporation in any other capacity
as an officer, agent, employee, or otherwise and receiving
compensation therefor. Until these bylaws are amended, the
Director shall not be eligible to receive additional
compensation for his services as the sole Board member.
4.11 Conference Call. One or more directors may participate
in meetings of the Board or a committee of the Board by any
communication, including videoconference, by means of which
all participating directors can simultaneously hear each
other during the meeting. Participation in this manner shall
constitute presence in person at such meeting.
4.12 Committees. The Board of Directors, by resolution, may
create one or more committees, each consisting of one or
more directors. Each such committee shall serve at the
pleasure of the Board. All provisions under the Statutes
and these Bylaws relating to meetings, action without
meetings, notice, and waiver of notice, quorum, and voting
requirements of the Board of Directors shall apply to such
committees and their members.
4.13 Organization. At every meeting of the Board, the
Chairman of the Board, or, if a Chairman has not been
appointed or is absent, the President (if a director) shall
preside over the meeting.
ARTICLE
5.
OFFICER
S
5.1 Officers. The officers of the Corporation currently
comprise the following and is subject to change: (a) the
Chief Executive Officer and/or the President. The Board may
assign such additional titles to one or more of the officers
as it shall deem appropriate. Any one person may hold any
number of offices of the Corporation at any one time unless
specifically prohibited therefrom by law. The salaries and
other compensation of the officers of the Corporation shall
be fixed by or in the manner designated by the Board.
5.2 Tenure and Duties of Officers.
(a) Subject to any employment contracts that may be in
place, all officers shall hold office at the pleasure of
the Board and until their successors shall have been duly
elected and qualified, unless sooner removed.
(b) The Chief Executive Officer and/or the President shall
have overall responsibility and authority for management
and operations of the Corporation, shall preside at all
meetings of the Board of Directors and shareholders, and
shall ensure that all orders and resolutions of the Board
of Directors and shareholders are implemented. The
President shall have the authority to create any entity,
either as a wholly-owned subsidiary or with owners
additional to the Corporation, as the President may deem
appropriate to accomplish any legitimate objective of the
Corporation. The President shall be an ex-officio member
of all committees and shall have the general powers and
duties of management and supervision usually vested in
the office of president of a corporation.
(c) The current Director shall also act as the Board?s
Secretary. The Secretary shall attend all meetings of the
Board and all meetings of the shareholders and shall act
as clerk thereof and record all the votes of the
Corporation and the minutes of all its transactions in a
book to be kept for that purpose, and shall perform like
duties for all committees of the Board of Directors when
required. The Secretary shall give, or cause to be given,
notice of all meetings of the shareholders and special
meetings of the Board of Directors, and shall perform
such other duties as may be prescribed by the Board of
Directors or President, and under whose supervision the
Secretary shall be. The Secretary shall maintain the
records, minutes, and seal of the Corporation and may
attest any instruments signed by any other officer of the
Corporation.
(d) The Treasurer shall be the chief financial officer of
the Corporation, shall have responsibility for the
custody of the corporate funds and securities, shall
keep full and
accurate records and accounts of receipts and
disbursements in books belonging to the Corporation, and
shall keep the monies of the Corporation in a separate
account in the name of the Corporation. The Treasurer
shall provide to the President and directors, at the
regular meetings of the Board, or whenever requested by
the Board, an account of all financial transactions and
of the financial condition of the Corporation.
5.3 Execution of Instruments. All contracts, checks, drafts
or demands for money and notes and other instruments or
rights of any nature of the Corporation shall be signed by
the President and/or such other officer or officers as the
Board of Directors may from time to time designate.
ARTICLE
6.
DIVIDEN
DS
6.1 Declaration of Dividends. Dividends upon the capital
stock of the Corporation, subject to the provisions of the
Certificate and Applicable Law, if any, may be declared by
the Board. Dividends may be paid in cash, in property, or
in shares of the capital stock, subject to the provisions
of the Certificate and Applicable Law.
6.2 Dividend Reserve. There may be set aside out of any funds
of the Corporation available for dividends such sum or sums
as the Board from time to time, in their absolute
discretion, think proper as a reserve or reserves for any
purpose as the Board determines is in the interests of the
Corporation.
ARTICLE
7. FISCAL
YEAR
7.1 Fiscal Year. The fiscal year of of the Company shall
begin on the 1st day of September and end on the 31st day of
August of each year but may be changed by resolution of the
Board of Directors.
ARTICLE 8.
INDEMNIFICATION AND INSURANCE
8.1 Indemnification.
(a) The Corporation shall have the power to indemnify its
directors, officers, employees, and other agents. The
Board shall have the power to delegate the determination
of whether indemnification shall be given to any such
person (except executive officers) to such officers or
other persons as the Board shall determine.
(b) The Corporation may purchase and maintain insurance in
a reasonable amount on behalf of any person who is or was
a director, officer, agent or employee of the Corporation
against liability asserted against or incurred by such
person in such capacity or arising from such person?s
status as such. Additionally, the Corporation may
purchase life insurance on the life of any shareholder
which may, in the discretion of the Corporation or
subject to any
agreement entered into with such shareholder or his/her
estate, be used in connection with the repurchase of such
shareholder?s shares upon his/her death.
ARTICLE
9.
NOTICES
9.1 Notices.
(a) Whenever written notice is required to be given to any
person, it may be given to such person, either personally
or by sending a copy thereof through the United States
mail, or by email, or facsimile, charges prepaid, to his
or her address appearing in the books of the Corporation,
or supplied by him or her to the Corporation for the
purpose of notice. If the notice is sent by mail it shall
be deemed to have been given to the person entitled
thereto when deposited in the United States mail. If the
notice is sent by email or facsimile, it shall be deemed
to have been given at the date and time shown on a
written confirmation of the transmission of such
facsimile communication. If such notice is related to a
shareholder meeting, the notice shall specify the place,
day, time of the meeting and the purpose of and general
nature of the business to be transacted at such meeting.
(b) Whenever any written notice is required by law, or by
the Articles of Incorporation or by these Bylaws, a
waiver thereof in writing, signed by the person or
persons entitled to such notice, whether before or after
the time stated therein, shall be deemed equivalent to
the giving of such notice. Attendance of a person, either
in person or by proxy, at any meeting shall constitute a
waiver of notice of such meeting, except where a person
attends a meeting for the express purpose of objecting to
the transaction of any business because the meeting was
not lawfully convened or called.
ARTICLE
10.
AMENDMENT
S
10.1 Amendments. The Board is expressly empowered to adopt,
amend, or repeal these Bylaws (or any provision hereof).
The stockholders shall also have power to adopt, amend, or
repeal these Bylaws (or any provision hereof).
ARTICLE 11.
MISCELLANEOUS
11.1 Annual Report. The Board shall cause an annual report to
be sent to each stockholder of the Corporation after the
close of the Corporation?s fiscal year. Such report shall
include a balance sheet as of the end of such fiscal year
and an income statement and statement of changes in
financial position for such fiscal year, accompanied by any
report thereon of independent accountants or, if there is
no such report, the certificate of an authorized officer of
the Corporation that such statements were prepared without
audit from the books and records of the Corporation.
Forum. Pursuant to Section 27 of the Exchange Act, the
federal courts shall have exclusive jurisdiction for all
Exchange Act claims. Federal courts shall also hear all
claims concerning (a) any derivative action or proceeding
brought on behalf of the Corporation, (b) any action
asserting a claim of breach of a fiduciary duty owed by any
director, officer, or other employee of the Corporation to
the Corporation or the Corporation?s stockholders, (c) any
action asserting a claim against the Corporation or any
director or officer or other employee of the Corporation
arising pursuant to any provision of the Applicable Law, the
Certificate, or these Bylaws, or (d) any action asserting a
claim against the Corporation or any director or officer or
other employee of the Corporation governed by the internal
affairs doctrine. This section shall apply to actions
arising under the Securities Act or Exchange Act.
Accordingly, there is uncertainty as to whether a court
would enforce such provision, giving consideration to
Section 27 of the Exchange Act which 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. Further, 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. Please note that investors cannot
waive compliance with the federal securities laws and the
rules and regulations thereunder.
11.2 Interpretation. In interpreting these Bylaws, except
where the context otherwise requires, (a) ?including? or
?include? does not denote or imply any limitation, (b) ?or?
has the inclusive meaning ?and/or,? (c) the singular
includes the plural, and vice versa, and each gender
includes each other gender, (d) captions or headings are
only for reference and are not to be considered in
interpreting these Bylaws, (e) ?Section? refers to a
section of these Bylaws, unless otherwise stated in these
Bylaws, and (f) ?day? refers to a calendar day unless
expressly identified as a business day.
***
CERTIFICATE
The undersigned Chief Executive Officer of Decentralized
Crypto Financial, Incorporated., a Delaware corporation,
hereby certifies that the foregoing Bylaws are the original
Bylaws of the Corporation adopted by the initial director of
the Corporation.
Dated: December 11, 2020
Name: Nicholas P. Scherling
Title: Chief Executive
Officer & Chairman
This page intentionally left
blank
EX1A-12 OPN CNSL
5
exhibit4.1.txt
March 2022
Decentralized Crypto Financial, Inc. 4795 Meadow Wood Lane,
Suite 200
Chantilly, VA. 20151
*
Re: Decentralized Crypto Financial, Incorporated Offering*
Statement on Form 1-A Ladies and Gentlemen:
I have acted as counsel to Decentralized Crypto
Financial,* Incorporated (the ?Company?), a corporation
incorporated under the laws of the State of Delaware, in*
connection with the filing of the Offering Statement under
Regulation A of the Securities Act of 1933, as amended (the*
?Securities Act?), with the Securities and Exchange Commission
(?SEC?) relating to the proposed offering by the Company (the*
?Offering?) of up to 200,000,000 shares (the ?Shares?) of common
stock, at $0.0001 par value, of the Company.*
For purposes of rendering this opinion, I have examined*
originals or copies (certified or otherwise identified to my
satisfaction) of:*
1. Certificate of Formation of Decentralized Crypto Financial,*
LLC as a Limited Liability Company (?LLC?), filed with the state
of Delaware as of July 24, 2020, and further to be filed with
the Securities and Exchange Commission;
2. Action of Sole Organizer of Decentralized Crypto Financial,
LLC with the state of Delaware, as of July 28, 2020, further*
to be filed with the Securities and Exchange Commission;
3. Certification of Incorporation of Decentralized Crypto*
Financial, Inc., filed with the state of Delaware, dated August*
20, 2020, and further to be filed with the Securities and*
Exchange Commission;*
*
4. Certificate of Conversion from an LLC to a Corporation*
pursuant to Section 265 of Delaware General Corporation Law,*
as of August 24, 2020, and further to be filed with the*
Securities and Exchange Commission; and
5. Bylaws of the Company in the form to be filed with the
Securities and Exchange Commission.
I have also examined such other certificates of public
officials, such certificates of executive officers of the
Company and such other records, agreements, documents and
instruments as I have deemed relevant and necessary as a basis
for the opinion hereafter set forth.
In such examination, I have assumed: (i) the genuineness
of all signatures, (ii) the legal capacity of all natural
persons, (iii) the authenticity of all documents submitted to me
as originals, (iv) the conformity to original documents of all
documents submitted to me as certified, conformed or other
copies and the authenticity of the originals of such documents
and (v) that all records and other information made available to
me by the Company on which I have relied are complete in all
material respects. As to all questions of fact material to this
opinion, I have relied solely upon the above-referenced
certificates or comparable documents and other documents
delivered pursuant thereto, have not performed or had performed
any independent research of public records and have assumed that
certificates of or other comparable documents from public
officials dated prior to the date hereof remain accurate as of
the date hereof.
MICHAEL ROSS BLACKBURN, ESQ.
PHONE: +1 412-324-6689
Based on the foregoing and on such legal considerations as
I deem relevant, I am of the opinion that the Shares, when
issued and delivered against payment therefor as described in
the Offering Circular, will be validly issued, fully paid and
non-assessable.
The foregoing opinion is limited to the Delaware General
Corporation Law, as currently in effect, and I do not express
any opinion herein concerning any other law.
The opinion expressed herein is rendered as of the date
hereof and is based on existing law, which is subject to change.
Where my opinion expressed herein refers to events to occur at a
future date, I have assumed that there will have been no changes
in the relevant law or facts between the date hereof and such
future date. I do not undertake to advise you of any changes in
the opinion expressed herein from matters that may hereafter
arise or be brought to my attention or to revise or supplement
such opinion should the present laws of any jurisdiction be
changed by legislative action, judicial decision or otherwise.
The opinion expressed herein is limited to the matters
expressly stated herein, and no opinion is implied or may be
inferred beyond the matters expressly stated.
I hereby consent to the use of this letter as an exhibit
to the Offering Statement and to any and all references in the
offering circular that is a part of the Offering Statement. In
giving this consent, I do not admit that I am within the
category of persons whose consent is required under Section 7 of
the Securities Act, or the rules and regulations of the
Securities and Exchange Commission.
Very Truly Yours,
Michael R. Blackburn, Esq.
..
ADD EXHB
6
exhibit5.1.txt
CERTIFICATE OF CONVERSION
Delaware
The First State
Page 1
I, JEFFREY W. BULLOCK, SECRETARY OF STATE OF THE STATE OF*
DELAWARE, DO HEREBY CERTIFY THAT THE ATTACHED IS A TRUE AND
CORRECT COPY OF THE CERTIFICATE OF CONVERSION OF A DELAWARE
LIMITED LIABILITY COMPANY UNDER THE NAME OF "DECENTRALIZED
CRYPTO FINANCIAL LLC" TO A DELAWARE CORPORATION, CHANGING ITS
NAME FROM "DECENTRALIZED CRYPTO FINANCIAL LLC" TO "DECENTRALIZED
CRYPTO FINANCIAL INC.", FILED IN THIS OFFICE ON THE TWENTY-
FOURTH DAY OF AUGUST, A.D. 2020, AT 3:20 O`CLOCK P.M.
3311473 8100V Authentication: 203689528
SR# 20207363217 Date: 09-18-20
You may verify this certificate online at
corp.delaware.gov/authver.shtml
State of Delaware Secretary of State Division of Corporatoi
ns
Delivered 03:20 PM 08/24/2020 FILED 03:20 PM 08/24/2020
SR 20206903529 - File Number 3311473
STATE OF DELAWARE CERTIFICATE OF CONVERSION
FROM A LIMITED LIABILITY COMPANY TO A
CORPORATION PURSUANT TO SECTION 265 OF THE DELAWARE GENERAL
CORPORATION LAW
*
1.) The jurisdiction where the Limited Liability Company first
formed is*
De1aware
2.) The jurisdiction immediately prior to filing this
Certificate is Delaware*
3.) The date the Limited Liability Company first formed
is_0_7_12_4_12_0_2_0 _
4.The name of the Limited Liability Company immediately prior to
filing this Certificate is Decentralized Crypto Financial LLC
5.) The name of the Corporation as set forth in the Certificate
of Incorporation is Decentralized Crypto Financial Inc.
IN WITNESS WHEREOF, the undersigned being duly authorized to
sign on behalf of the converting Limited Liability Company have
executed this Certificate on the
20th day of August , A.D._20_2_0 _
By: Isl Nicholas Scherling
Name: Nicholas Scherling
Print or Type*
Title: Member
Print or Type
Delaware
The First State
Page 1
I, JEFFREY W. BULLOCK, SECRETARY OF STATE OF THE STATE OF
DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT
COPY OF THE CERTIFICATE OF INCORPORATION OF ?DECENTRALIZED
CRYPTO FINANCIAL INC.?, FILED IN THIS OFFICE ON THE TWENTY-
FOURTH DAY OF AUGUST, A.D. 2020, AT 3:20 O`CLOCK P.M.
3311473 8100 Authentication: 203689529
SR# 20207363217 Date: 09-18-20
You may verify this certificate online at
corp.delaware.gov/authver.shtml
State of Delaware Secretary of State Division of Corporatoi
ns
Delivered 03:20 PM 08/24/2020 FILED 03:20 PM 08/24/2020
SR 20206903529 - File Number 3311473
CERTIFICATE OF INCORPORATION OF
Decentralized Crypto Financial Inc.
FIRST: SECOND:
*
*
THIRD:*
*
FOURTH:
*
FIFTH:*
*
SIXTH:
The name of the corporation is: Decentralized Crypto Financial
Inc.
The address of the registered office of the corporation in the
State of Delaware is located at: 108 West 13th Street,
Wilmington, Delaware 19801
Located in the County of New Castle
The name of the registered agent at that address is: Business
Filings Incorporated
The purpose of the corporation is to engage in any lawful act or
activity for which corporations may be organized under the
Delaware General Corporation Law.
The total number of shares of stock which the corporation is
authorized to issue is 500,000,000 shares of common stock having
a one ten thousandth of a cent ($0.0001) par value.
No director of the corporation shall be personally liable to the
corporation or its stockholders for monetary damages for breach
of fiduciary duty as a director; provided, however, that the
foregoing clause shall not apply to any liability of a director
(i) for any breach of the director's duty ofloyalty to the
corporation or its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a
knowing violation oflaw, (iii) under Section 174 of the General
Corporation Law of the State of Delaware, or (iv) for any
transaction from which the director derived an improper personal
benefit. This Article shall not eliminate or limit the liability
of a director for any act or omission occurring prior to the
time this Article became effective.
The name and address of the incorporator is Nicholas Scherling,
4795 Meadow Wood Ln, 200, Chantilly, Virginia 20151
I, the undersigned, being the incorporator, for the purpose of
forming a corporation under the laws of the State of Delaware do
make, file, and record this Certificate oflncorporation and do
certify that the facts herein are true.
Isl Nicholas Scherling
Nicholas Scherling, Incorporator Dated: 08/20/2020
ADD EXHB
7
exhibit6.1.txt
ACTION OF SOLE ORGANIZER
ACTION OF SOLE ORGANIZER
OF
Decentralized Crypto Financial LLC
The undersigned, being the sole organizer of Decentralized*
Crypto Financial LLC, a Delaware Limited Liability Company (the
Company), does hereby approve and adopt the following
resolutions:
*
Election of Members
RESOLVED, that the following persons are hereby elected as the
members of the Limited Liability Company to serve until the
first annual meeting of the members or until their successors*
are duly elected and qualified:
Nicholas Scherling, 4795 Meadow Wood Ln 200, Chantilly, Virginia
20151
The undersigned, upon completion of this Action of Organizer,
shall have no further responsibilities or obligations to the
Limited Liability Company in his capacity as sole organizer.
Dated: July 28, 2020
Business Filings Incorporated, Organizer Mark Williams, A.V.P.
EX1A-9 ACCT LTR
8
exhibit7.1.txt
EXHIBIT 1.7
CONSENT OF INDEPENDENT AUDITORS
1A-11-1
Acknowledgment of independent Registered Public Accounting Firm
We agree to the inclusion in this Regulation A Offering Circular of our report*
dated December 5, 2020 with respect to the financial statements of*
DECENTRALIZED CRYPTO FINIANCIAL INC. as of August 31st, 2020, filed*
with the Securities and Exchange Commission.*
Chesapeake Financial Corp.*
Centreville, VA March 1, 2022*
PART II AND III
9
exhibit8.1.txt
Part II ? INFORMATION REQUIRED IN OFFERING CIRCULAR
An offering statement pursuant to Regulation A
relating to these shares has been filed with the U.S.
Securities and Exchange Commission (the ?Commission?).
Information contained in this preliminary offering
circular is subject to completion or amendment. These
shares may not be sold nor may offers to buy be
accepted before the offering statement filed with the
Commission is qualified. This preliminary offering
circular shall not constitute an offer to sell or a
solicitation of an offer to buy or sell any of these
shares in any state in which such offer, solicitation
or sale would be unlawful before registration or
qualification under the laws of any such state. We may
elect to satisfy our obligation to deliver a final
offering circular by sending you a notice within two
business days after the completion of our sale to you
that contains the URL where the final offering
circular or the offering statement in which such final
offering circular was filed may be obtained. Should the
Company decide to ?test the waters? prior to this
circular being qualified, all solicitating materials
will be properly filed with the Commission before its
intended use.
Preliminary Offering Circular
February 2022
Subject to Completion
DECENTRALIZED CRYPTO FINANCIAL INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware*
85-2718015
(State or Other Jurisdiction of
(I.R.S. Employer
Incorporation or Organization)
Identification Number)
4795 Meadow Wood Lane, #200.
Chantilly, Virginia 20151
(703) 340-7454
www.Decryptofi.com
Nicholas Scherling
Chief Executive Officer
Decentralized Crypto Financial Inc. (?DeCryptoFi?)
4795 Meadow Wood Lane, #200
Chantilly, Virginia 20151
(703) 340-7454
Up to 70,000,000 shares of Common Stock
3,000,000 shares are currently owned by the CEO of DeCryptoFi,
Nicholas Scherling (?Company insider? and/or ?Holder?). In
connection with the initial public offering of the Company?s
securities, the Holder agrees not to sell, make any short sale
of, loan, grant any option for the purchase of, or otherwise
dispose of any securities of the Company held immediately prior
to the effectiveness of the registration statement for such
offering (other than those included in the registration), for
such period of time (not to exceed 180 days or such longer
period of time as may be required to comply with Rule 2711 of
the Financial Industry Regulatory Authority, Inc. (or any
successor rule thereto)) two days following the effective date
of such registration statement (?lock-up period?). Further,
following the lock-up period, the Holder will be limited to
selling 6% of his holdings per year. This not only protects
against overdiluting the market share value, but also preserves
the integrity of the Company.
There is no minimum number of Offering Shares that we
must sell in order to conduct a closing in this
offering. The offering will commence within six weeks
after this offering circular has been qualified by the
Commission. The offering will exist until the date on
which the offering of any additional stock would cause
the aggregate offering price or aggregate gross sales
in this offering, as those terms are defined under
Rule 251(a) of the Securities Act, to exceed
$75,000,000.00.
The Commission does not pass upon the merits of or give
its approval to any shares offered hereby or the terms
of the offering, nor does it pass upon the accuracy or
completeness of any offering circular. The Offering
Shares are being offered pursuant to an exemption from
registration with the Commission; however, the
Commission has not made an independent determination
that the Offering Shares offered are exempt from
registration.
Re. Stock
Compensation Plan: Re. Sale of Shares
of Stock: Totals:
Public Offering Price: $1.00*
$1.00 NA
Offering Minimum: NA*
NA NA
Offering Maximum: $50,000,000.00*
$25,000,000.00 $75,000,000.00
Underwriting Discounts*
and Commissions: None*
None None
__________
_________ _________
Total Projected Gross
Proceeds to Issuer: $50,000,000.00*
$25,000.000
Decentralized Crypto Financial Inc. (?we? or the
?Company? or ?DeCryptoFi?), a Delaware incorporated
entity, is offering 75 million Shares of common stock
of our newly issued security. We are offering the
Shares of common stock in the following ways:
We are offering up to 25 million Shares of common
stock at a price of $1.00 per share to an unlimited
number of accredited investors, and to the maximum
permissible amount to non-accredited investors, as
such limitations are defined under Regulation A Tier 2
of the Securities Act of 1933, as amended (the
?Securities Act). This offering shall be referred to
as the ?general offering? and/or the ?IPO?.
We are offering up to 50,000,000 Shares for non-cash
consideration pursuant to our ?Stock Compensation
program?) in exchange for independent 1099 services of
individuals and companies. For non-cash consideration,
the aggregate offering price or aggregate sales will
be based on the value of the consideration as
established by bona fide sales of that consideration
made within a reasonable time, or, in the absence of
sales, on the fair value as determined by an accepted
standard. Valuations of all non-cash consideration
will be reasonable at the time made. Payment amounts
made through DeCryptoFi?s Stock Compensation Plan are
preset, do not fluctuate from a predetermined amount
and are not transaction-based compensation
This Offering will expire when all 50,000,000 shares
of the Stock Compensation plan has been distributed
and all 25,000,000 shares of common stock has been
initially sold.
Investing in an IPO is speculative and involves
substantial risks. You should purchase stock only if
you can afford a complete loss of your investment. See
?Risk Factors? to read about the more significant
risks you should consider before buying our stock.
Please see subsection ?Risk Factors,? beginning on
page 9 of this offering circular.
THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION
DOES NOT PASS UPON THE MERITS OF OR GIVE ITS APPROVAL
TO ANY SECURITIES OFFERED OR THE TERMS OF THE
OFFERING, NOR DOES IT PASS UPON THE ACCURACY OR
COMPLETENESS OF ANY OFFERING CIRCULAR OR OTHER SELLING
LITERATURE. THESE SECURITIES ARE BEING OFFERED
PURSUANT TO AN EXEMPTION FROM REGISTRATION WITH THE
COMMISSION; HOWEVER, THE COMMISSION HAS NOT MADE AN
INDEPENDENT DETERMINATION THAT THE SECURITIES OFFERED
HEREUNDER ARE EXEMPT FROM REGISTRATION.
GENERALLY, NO SALE MAY BE MADE TO YOU IN THIS OFFERING
IF THE AGGREGATE PURCHASE PRICE YOU PAY IS MORE THAN
TEN PERCENT (10%) OF THE GREATER OF YOUR ANNUAL INCOME
OR YOUR NET WORTH. DIFFERENT RULES APPLY TO ACCREDITED
INVESTORS AND NONNATURAL PERSONS. BEFORE MAKING ANY
REPRESENTATION THAT YOUR INVESTMENT DOES NOT EXCEED
APPLICABLE THRESHOLDS, WE ENCOURAGE YOU TO REVIEW RULE
251(D)(2)(I)(C) OF REGULATION A+. FOR GENERAL
INFORMATION ON INVESTING, WE ENCOURAGE YOU TO REFER TO
WWW.INVESTOR.GOV.
Initially, DeCryptoFi stock will not trade on a stock
exchange, securities exchange, or other trading
market. This means that it may be difficult to sell
your shares of stock.
IMPORTANT INFORMATION ABOUT THIS OFFERING
CIRCULAR
Please carefully read the information in this offering
circular and any accompanying offering circular
supplements, which we refer to collectively as the
?preliminary offering circular.? You should rely only
on the information contained in this offering
circular. We have not authorized anyone to provide you
with different information. This offering circular may
only be used where it is legal to sell these
securities. You should not assume that the information
contained in this offering circular is accurate as of
any date later than the date hereof or such other
dates as are stated herein or as of the respective
dates of any documents or other information
incorporated herein by reference.
This preliminary offering circular is part of an
offering statement that we filed with the SEC, using a
continuous offering process, and is still pending
approval. Periodically, as we make material
developments, we will provide an offering circular
supplement that may add, update or change information
contained in this offering circular. Any statement
that we make in this offering circular will be
modified or superseded by any subsequent statement
made by us in a subsequent offering circular
supplement.
Once the Offering has commenced, the Securities
will be offered on a ?best efforts? basis, and there
is no guarantee that any minimum amount will be sold.
Further, the Offering is intended to be made on an
ongoing and rolling basis to potential offerees, and
sales of Securities may be closed, and one or more
Securities sold, from time to time until the
Expiration Date (as defined below) regardless of the
then-aggregate number of Securities subscribed to
and/or sold (subject to the respective maximum amounts
per Security identified above and herein). It should
also be noted that itis intended that the offer and
sale of the Coins will be deemed a ?continuous
offering? within the meaning of 17 CFR 230.251(d)(3),
and that the Offering of the Shares will may remain
open for more than one (1) year, provided that, on or
before the date that is one (1) year from the date of
qualification of the Offering, and/or as otherwise may
be required by applicable securities laws, the Company
will file an amendment to this Offering Circular (and
all other required filings, if any) with the SEC (and
all other applicable regulatory agencies, if any).
There is no minimum required sale, and the
Company has not made any arrangements to place the
funds received from the Offering in an escrow, trust,
or similar vehicle.
We are following the ?Offering Circular? disclosure format
under Regulation A.
The date of this preliminary offering circular is
February 2022.
Table of contents
SUMMARY 5
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
7
RISK FACTORS 9
TERMS OF THIS OFFERING 15
USE OF PROCEEDS 17
DESCRIPTION OF BUSINESS 18
DESCRIPTION OF COMMON STOCK 20
REGULATORY CONSIDERATIONS 21
CHANNELS FOR DISCLOSURE OF INFORMATION AND PLAN OF DISTRIBUTION
25
DILUTION 27
MANAGEMENT?S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS 29
DIRECTORS, EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES 31
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS 32
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITY HOLDERS
33
SHARES ELIGIBLE FOR FUTURE SALE 34
FINANCIAL INFORMATION SECTION F-1
EXHIBITS i
Offering Circular
_____________________________
We have not authorized anyone to provide any
information or to make any representations other than
those contained in this offering circular or in any
free writing prospectuses we have prepared. We take no
responsibility for and can provide no assurance as to
the reliability of, any other information that others
may give you. The information contained in this
preliminary offering circularis current only as of its
date.
You should rely only on the information contained in
this offering circular. We have not authorized anyone
to provide you with different information. The
information in this offering circular assumes that all
the shares offered are sold and we have not taken
advantage of our option to sell any Additional Shares
as described herein.
?
Summary
As previously noted, this Offering Circular is part of the
Offering Statement filed by the Company with the SEC with
respect to the Offering. Please be aware that this Offering
Circular, which is part of the Offering Statement does not
contain all the information set forth in the Offering
Statement (including all of the schedules and exhibits made
a part thereto), reference to which is hereby made. Among
other things, certain provisions of the agreements,
documents, and records referred to in this Offering Circular
may be summarized. For complete information, you should
consult the original documents, which are either attached as
a schedule/exhibit hereto, made part of the Offering
Statements, and/or which are otherwise made available upon
request to the Company as provided below. To understand
this offering fully, you should read the entire
offering circular carefully, including the ?Risk
Factors? section, before making a decision to invest
in our stock. Unless the context requires otherwise,
in this offering the terms ?we,? ?us? and ?our? refer
to DeCryptoFi, the issuer of the common shares of
stock. For a more complete understanding of this
offering, you should read the entire offering circular
carefully, including the risk factors and the financial
statements.
Who we Are. We are an early-stage financial technology
company.
Our company, DeCryptoFi, has identified a glaring and
persistent issue that many privately held businesses
face; the ability for small and medium sized companies
to raise additional capital. When businesses need
capital, typically they must go through the arduous
process of seeking a loan from a bank or lending
company. It is extremely difficult for small and
medium sized companies to access public markets where
they may receive the same or better terms in return
for capital. When a small business is approved for a
loan by a bank (or other lending provider), these
institutions will often require from the business a
form of hard asset collateral, and most require a
personal guarantee from its owner, regardless of the
company?s financial stability. W2 employees, working
for a successful business, would never personally
guarantee a business loan just to keep their job, so
why should legitimate business owners?
If businesses are turned away from financial
institutions, there seems to be few alternatives
except for these businesses to seek additional capital
from Merchant Cash Advance firms, or some form of
lending company that charges usurious interest rates.
These types of lending institutions tend to benefit
from the borrower?s company failing rather than
succeeding, which then puts people out of jobs and
facing massive debts that need to be repaid.
As a result, many business owners are unable to secure
the capital they need to scale their business and
those that are able to get a good loan at a low rate
may still be unwilling to do so due to personal
guarantee requirements. No employee or business owner
wants to personally secure business loans with their
personal finances regardless of how well their
business is performing.
Our Solution. The reality is that there are numerous
additional ways that companies can raise capital, but
they simply lack the knowledge, expertise, or
personnel to facilitate alternative capital-raising
offerings.
DeCryptoFi has created a technology-driven online
platform that will allow small and mid-sized companies
to understand and be fully compliant with the public
and private offering processes. Our main goal can be
summed up in one word? simplification. Our goal is to
tap into this market and assist small and medium size
companies that want to pursue a public offering or an
alternative acceptable private offering and remain
fully compliant with SEC regulations. We strive to
make the overlooked alternative methods of raising
capital easy to achieve, easy to comprehend, and for
many aspects of the process, completely automated. The
SEC has long struggled with how to assist small and
medium size businesses get access to the public
market; we are here to help!
By answering a series of questions specific to their
company, including, but not limited to, how much
capital the company seeks to raise, who the company?s
target investors will be: current and past revenue,
profitability, growth rate, organizational structure,
and so forth, Businesses will be able to streamline
the structuring of a potential business capitalization
and the regulatory safeguards associated with these
capital raising options. DeCryptoFi?s online platform
will provide a list of currently available offerings
to our customers, as well as a list of offerings that
are just within their grasp. Once the business owner
fully comprehends the types of offerings available to
them and decides which to pursue, DeCryptoFi?s online
platform will assist in automating all relevant SEC
filings, state filings, investor notifications,
disclosures, offering circulars, registration
statements, offering memoranda, prospectuses, dividend
payments, proxy statements, and much more.
Strategy. We will pursue the following strategies:
Continue to attract top talent. To grow our business,
we recognize the need to attract experienced
professionals in technology, legal, accounting, and so
forth. While we already have a strong team of
employees and advisors with the relevant expertise
(discussed in greater detail below), we plan to
supplement key roles as we ramp up our operations.
Scale our business to become a national leader in our
sector. We are focused on growing our national and
international footprint and upon qualification, will
be testing business development and marketing efforts
in multiple
channels.
Increased awareness of our products and services will
enable us to scale and attract a whole assortment of
different types of businesses that previously did not
fall under the SEC?s purview but will now be a fully
compliant reporting company or exempt reporting
company, thereby increasing investor protection across
broad range of market tiers.
Corporate Information. We are a Delaware corporation
(C-Corp) organized on August 20, 2020. Our principal
place of business address is 4795 Meadow Wood Lane #
200, Chantilly, VA 20151, our telephone number is (703)
955-7770, and our website is www. DeCryptofi.com.
DeCryptoFi.com will officially launch its website upon
SEC qualification in order to ensure that we do not
disclose our intent to conduct a Stock Offering ahead
of SEC qualification of our Reg A filing.
Except for this offering circular and our other public
filings with the SEC pursuant to the requirements of
SEC regulation A, information found on, or accessible
through our website is not a part of, and is not
incorporated into this offering circular, and you
should not consider it part of this offering circular.
We consider these facilities adequate for our current
operations.
?
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
The statements contained in this offering circular
that are not purely historical are forward-looking
statements. Forward-looking statements include, but are
not limited to, statements regarding expectations,
hopes, beliefs, intentions, or strategies regarding the
future. In addition, any statements that refer to
projections, forecasts or other characterizations of
future events or circumstances, including any
underlying assumptions, are forward-looking statements.
The words ?anticipate,? ?believe,? ?continue,?
?could,? ?estimate,? ?expect,? ?intend,? ?may,?
?might,? ?plan,? ?possible,? ?potential,? ?predicts,?
?project,? ?should,? ?would? and similar expressions
may identify forward-looking statements, but the
absence of these words does not mean that a statement
is not forward-looking. Forward-looking statements in
this offering circular may include, for example,
statements about our:
? limited operating history and ability
to maintain or increase profitability.
? reliance on third parties for
production and distribution.
? results of operations.
? ability to manage growth.
? ability to minimize our production and
distribution costs by utilizing funding sources
provided by others.
? regulatory or operational risks.
? success in retaining or recruiting, or
changes required in, our officers, key employees
or directors.
? capital structure.
? ability to obtain additional financing
when and if needed; and
? liquidity and trading of our securities.
The forward-looking statements contained in this
offering circular are based on current expectations and
beliefs concerning future developments and their
potential effects on us. There can be no assurance
that future developments will be those that have been
anticipated. These forward-looking statements involve
a number of risks, uncertainties (some of which are
beyond our control) or other assumptions that may
cause actual results or performance to be materially
different from those expressed or implied by these
forward-looking statements. These risks and
uncertainties include, but are not limited to, those
factors described under the heading ?Risk Factors.?
Should one or more of these risks or uncertainties
materialize, or should any of our assumptions prove
incorrect, actual results may vary in material
respects from those projected in these forward-looking
statements. We undertake no obligation to update or
revise any forward-looking statements, whether as a
result of new information, future events or otherwise,
except as may be required under applicable securities
laws.
These statements involve risks, uncertainties,
assumptions, and other factors that may cause actual
results, levels of activity, performance, or
achievements to be materially different from the
information expressed or implied by these forward-
looking statements. Although we believe that we have a
reasonable basis for each forward-looking statement
contained in this offering circular, we caution you
that these statements are based on a combination of
facts and factors currently known by us and our
projections of the future, about which we cannot be
certain.
The subscription price of our common stock has been
determined by the Company's management without regard to
the Company's assets or earnings or the lack thereof, or
book value and does not represent nor is it intended to
imply that the Units being offered have a market value or
could be resold at that price, even if a sale were
permissible. The valuation was arbitrarily determined by
the Company, and not by an independent third party applying
a specified valuation criterion. Accordingly, this price
may not be indicative of the market price of the DeCryptoFi
Stock at such time as a secondary trading market does
develop, if ever, or the proceeds that you would receive
upon a commercial sale of the DeCryptoFi Stock; the
offering price may be significantly more than either such
price.
Prior to this offering there has been no public market
for any of our securities. The public offering price of
our shares was determined on a number of factors.
Factors considered in determining the prices and terms
of the Shares (and the Additional Shares) offered
hereby include:
? The history and prospects of companies
similar to our company
? Prior offerings of those companies
? Our capital structure
? Our software and online platform
? An assessment of our management
? General conditions of the securities
markets at the time of the offering; and
? Other factors as were deemed relevant
However, although these factors were considered, the
determination of the offering prices is more arbitrary
than the pricing of securities for an established
operating company.
Following this offering, the price of our common stock
may vary significantly due to general market or
economic conditions as well as other factors.
Furthermore, an active trading market for the
securities may never develop or, if developed, may not
be sustained. You may be unable to sell your securities
unless a market can be established and sustained.?
TERMS OF THIS OFFERING
Securities being offered
by Company DeCryptoFi is authorized to
issue 500,000,000 shares. We will be
offering only one class of
common stock. 25,000,000
shares will be offered
through our initial public
offering, or ?general
offering?. The Company will
also be offering up to
50,000,000 shares as stock for
non-cash consideration in
exchange for certain goods and
services. Please see the
section, Stock Compensation
Plan for additional
information.
Offering Price: We are offering Shares of DeCryptoFi
at:
? $1.00 per share to the general public in the
general offering; and
? the price of the shares distributed pursuant to
the Company?s Stock Compensation Plan in exchange for non-
cash consideration will be deemed to be $1.00 per share,
for purposes of determining whether over $50,000.000.00
have been sold pursuant to the Company?s Stock Compensation
Plan. If at any time following that 12 month period,
DeCryptoFi shares that were sold pursuant to the Company?s
Stock Compensation Plan and are traded on one or more
authorized exchanges or alternative trading systems, and
there are trades executed through or on exchanges or
alternative trading systems during any calendar month (any
such month, a ?calculation month?), then we will value the
shares paid to such persons in the following month and in
all subsequent months until and including the end of the
next calculation month at the average closing bid price for
the shares during the calculation month. We will file
supplements to this offering circular to disclose both any
changes to the price of the Shares to be distributed
pursuant to this offering circular, and whether the new
calculation price will result in a curtailment of the
number of Shares being issued in the next month.
Restricted Securities
The CEO of the Company owns
300,000,000 shares subject to
a lock-up period of 180 days,
which shall commence 2 days
after the Commission approves
this offering.
Best Efforts Offering
There is no minimum number of
Offering Shares that we must
sell in order to conduct a
closing in this offering.
Lock-up Agreement
Insider(s) of the company
have entered into an
agreement with the Company
pursuant to which he has
agreed to not sell, transfer,
or otherwise dispose of any
Company Securities for an
initial period of 180 days
which shall begin two days
after the Commission?s
approval of this circular.
Payment for Common stock
After the qualification by
the SEC of the offering statement
of which this offering
circular is a part, investors will
create a profile on DeCryptoFi?s
online platform which has been
engineered to seamlessly accept
investment online, including
verifying investor identities,
performing anti-money laundering
checks on investors, facilitating
investment document execution,
funds transfer and regulatory
compliance. by credit card if and
to the extent we can establish and
maintain relationships with
licensed currency exchange
services providers and or payment
processing entities to facilitate
such transactions and provided,
Subscriber acknowledges that he or
she will incur additional
processing fees, depending on
Subscriber?s payment method. The
Company is equipped to accept
payment from the payment
processor, Braintree. Braintree?s
fee structure is 2.9% + $.30 per
transaction. There is also a 1%
fee applied when the Subscriber?s
credit card is issued outside the
United States, and a $15.00 fee
when someone initiates a
chargeback through the
Subscriber?s credit card. For ACH
payments, Braintree charges a .75%
per transaction fee, capped at a
maximum of $5.00. Subscriber
understands that he or she shall
incur the cost(s) of these fees.
Lastly, DeCryptoFi reserves the
right to use other payment
processors in the future or do
direct exchanges for other assets
or securities. further, we are
able to do so in accordance with
FINRA and SEC guidelines. On each
closing date, the funds in the
account will be released to us and
the associated shares will be
issued to the investors in this
Offering. If any funds are
returned by us if we choose to
reject a subscription or elect not
to proceed with the Offering, such
funds will be returned by mail via
a check in U.S. dollars or through
the payment method received.
Stock Compensation Plan
We are initially offering up
to 50,000,000 shares of stock
through our Stock Compensation
Plan. For non-cash consideration,
the aggregate offering price or
aggregate sales will be based on
the value of the consideration as
established by bona fide sales of
that consideration made within a
reasonable time, or, in the
absence of sales, on the fair
value as determined by an accepted
standard. Valuations of all non-
cash consideration will be
reasonable at the time made.
Voting Rights Each holder of
the Company?s Common Stock is
entitled to one vote,
regardless of how it was
obtained, for each share on
all matters submitted to a
vote of the shareholder,
except as provided by law or
by the other provisions of
the Certificate of
Incorporation.
Lock-up agreements with our compan
Dividends We do not
intend to pay any dividends
currently. The payment of
cash dividends on our common
stock in the future will be
dependent upon our revenue
and earnings, if any,
capital requirements and
general financial condition
as well as the limitations
on dividends and
distributions that exist
under the laws and
regulations of the State of
Virginia and will be within
the discretion of the
Company. It is the present
intention of the Company to
retain all earnings, if any,
for use in our business
operations and accordingly,
the Company does not
anticipate declaring any
dividends on our common
stock in the foreseeable
future. As a result, any
gain you will realize on our
common stock will result
solely from the appreciation
of such shares.
List of securities and
proposed symbols
Prior to this offering,
there have been no public
market for our common stock.
We currently do not meet the
financial listing
requirements to be listed on
a national securities
exchange. Once the Company
reaches the applicable
thresholds, the Company
intends to register with one
or more registered
securities exchanges.
?
RISK FACTORS
The SEC requires that we identify risks that are
specific to our business and financial condition. We
are still subject to all the same risks that all
companies in our business, and all companies in the
economy, are exposed to. These include risks relating
to economic downturns, political and economic events,
and technological developments (such as hacking and
the ability to prevent hacking). Additionally, early-
stage companies are inherently riskier than more
developed companies. You should consider general risks
as well as specific risks when deciding whether to
invest.
An investment in the securities offered by this
offering circular involves a high degree of risk. You
should carefully consider all the material risks
described below, together with the other information
contained in this offering circular, before making a
decision to invest in DeCryptoFi. There can be no
assurance that any purchaser will achieve his or her
investment objective or avoid substantial losses by
investing in DeCryptoFi. All investments entail a high
degree of risk, and purchasers may lose some or all
their investment.
Risks associated with our business
? We do not have a long operating history on
which to evaluate our company. We face all the risks
faced by newer companies in similar industries,
including significant competition from existing and
emerging capital raising platforms many of which may
be significantly more established, larger, and better
financed than our company. However, we believe that
what we are offering is incredibly unique and the
market we are entering should be far less saturated.
? There is considerable uncertainty about the
asset class?s long-term viability, which could be
affected by a variety of factors, including many
market-based factors such as economic growth,
inflation, and others. In addition, the success of the
stock and other types of securities that may be issued
will depend on whether new technologies turn out to be
useful and economically viable. We do not control any
of these factors, and therefore may not be able to
control the long-term success of our company share
value.
? The offering price of our stock was not
established on an independent basis. After we commence
operations, the actual value of your investment may be
substantially less than what you pay. The most recent
pre-revenue valuation of our stock was conducted by
the Company, and it concluded our stock has a fair
market value of $0.10 per share as of October 14th,
2020.
? The market in which we participate is
intensely competitive, and we may not be able to
compete successfully with our current or future
competitors.
? This offering is being made pursuant to
recently adopted rules and regulations under
Regulation A of the Securities Act. The legal and
compliance requirements of these rules and
regulations, including ongoing reporting requirements
related thereto, are relatively untested.
? Our operating results are dependent, in
part, on management?s estimates of revenue to be
earned in the future. We will regularly review and
revise our revenue estimates. Periodic adjustments in
amortization rates may significantly affect these
results.
? We are pre revenue. We anticipate that our
revenue will begin in 2021. Until we are revenue
stable our revenue may not be evenly distributed
throughout the year but may be more evenly distributed
in the future as we expand our business and diversify,
until such time, our quarter to quarter financial
results may not be comparable within any single fiscal
year or from fiscal year to fiscal year.
? Our projections may fluctuate. As a result
of the foregoing and other factors, our results of
operations may fluctuate significantly from period to
period, and the results of any one period may not be
indicative of the results for any future period
? We are smaller and less diversified than
many of our competitors. Some of our larger
competitors have more resources with which to compete
for ideas, enhancements, and better functionality.
? We must successfully respond to rapid
technological changes and alternative forms of
delivery or storage to remain competitive. The
financial industry in general continues to undergo
significant developments as advances in technologies
and new methods of product delivery and storage, or
certain changes in consumer behavior driven by these
developments, emerge. Consumers are spending an
increasing amount of time online and on mobile
devices, and are increasingly viewing financial date
in real time, on their televisions and on handheld or
portable devices. we must adapt our businesses to
changing consumer behavior and preferences and exploit
new distribution channels. Our strategy is to seek to
take advantage of these changes and thereby to create
new revenue streams and other opportunities for our
content. If we cannot successfully utilize these and
other emerging technologies, it could have a material
adverse effect on our business, financial condition,
operating results, liquidity, and prospects.
? We must constantly be aware of any
intellectual property issues. Protecting and defending
against intellectual property claims may have a
material adverse effect on our business. Our ability
to compete depends, in part, upon successful
protection of our intellectual property relating to
our software and online platform. We will attempt to
protect proprietary and intellectual property rights
to our software and online platform through available
copyright and trademark laws and licensing and
distribution arrangements with reputable international
companies in specific territories.
? We plan to conduct business abroad and
internationally. We face risks from doing business
internationally. We intend to distribute our content
outside the U.S. and derive revenue in foreign
jurisdictions. As a result, our business is subject to
certain risks inherent in international business, many
of which are beyond our control. These risks include:
? Laws and policies affecting trade,
investment, and taxes, including laws and policies
relating to the repatriation of funds and withholding
taxes, and changes in these laws.
? The Foreign Corrupt Practices Act (?FCPA?)
and similar laws regulating interactions and dealings
with foreign government officials.
? Changes in local regulatory requirements,
including restrictions on video content.
? Differing cultural tastes and attitudes.
? Differing degrees of protection for intellectual
property
? Financial instability and increased market
concentration of buyers in foreign markets.
? The instability of foreign economies and
governments.
? Fluctuating foreign exchange rates.
? The spread of communicable diseases in such
jurisdictions, which may impact business in such
jurisdictions; and
? War and acts of terrorism.
Events or developments related to these, and other
risks associated with international trade could
adversely affect our revenue from non-U.S. sources,
which could have a material adverse effect on our
business, financial condition, operating results,
liquidity, and prospects.
Risks Specific to this Offering
? DeCryptoFi?s securities are just being
introduced to the market. Our stock has no history and
thus face significant uncertainties around its
valuation. This valuation may be highly dependent on
the demand for our online platform, which is unproven
and uncertain, and the reliability of the underlying
technology which is untested.
? The securities being offered are volatile in
nature. There is no guarantee that our securities will
hold their value or increase in value, and you may
lose the amount of your investment in the DeCryptoFi
stock in whole or in part. The shares in the initial
stock offering are highly speculative, and any return
on an investment is contingent upon numerous
circumstances, many of which (including legal and
regulatory conditions) are beyond our control. There
is no assurance that purchasers will realize any
return on their investments or that their entire
investment will not be lost. For this reason, each
purchaser should carefully read this offering circular
and should consult with his or her own attorney,
financial and tax advisors prior to making any
investment decision with respect to DeCryptoFi stock.
? There is much reliance on the Firm?s CEO,
Nicholas Scherling, regarding the ultimate success of
the company. Our chairman and chief executive officer
will effectively control our company. DeCryptoFi will
only be offering one class of common stock. Our
chairman and chief executive officer, Nicholas
Scherling, has control over the vast majority of all
the outstanding voting power and, in turn, our
company. This concentration of ownership and decision
making may make it more difficult for other
stockholders to effect substantial changes in our
company and may also have the effect of delaying,
preventing or expediting, as the case may be, a change
in control of our company.
? Dividend payments will not be made during
the inception of the Company?s offering. We do not
intend to pay any dividends on our common stock at
this time. The payment of cash dividends on our common
stock in the future will be dependent upon our revenue
and earnings, if any, capital requirements and general
financial condition as well as the limitations on
dividends and distributions that exist under the laws
and regulations of the State of Delaware and will be
within the discretion of the Company. It is the
present intention of the Company to retain all
earnings, if any, for use in our business operations
and, accordingly, the Company does not anticipate
declaring any dividends on our common stock in the
foreseeable future. As a result, any gain you will
realize on our common stock will result solely from
the appreciation of such shares.
? If our securities become subject to the
SEC's penny stock rules, broker-dealers may experience
difficulty in completing customer transactions and
trading activity in our securities may be adversely
affected. If at any time we have net tangible assets
of $5,000,000 or less and our common stock has a
market price per share of less than $5.00,
transactions in our securities may be subject to the
?penny stock? rules promulgated under the Securities
Exchange Act of 1934. Under these rules, broker-
dealers who recommend such securities to persons other
than institutional accredited investors must:
? make a special written suitability
determination for the purchaser.
? receive the purchaser's written agreement to
the transaction prior to sale.
? provide the purchaser with risk disclosure
documents which identify certain risks associated with
investing in ?penny stocks? and which describe the
market for these ?penny stocks? as well as a
purchaser's legal remedies; and
? obtain a signed and dated acknowledgment
from the purchaser demonstrating that the purchaser
has received the required risk disclosure document
before a transaction in a ?penny stock? can be
completed.
If our securities become subject to these rules, it
may be difficult to effectuate customer transactions
and trading activity in our securities may be
adversely affected. As a result, the market price of
our securities may be depressed, and you may find it
more difficult to sell our securities.
The determination for the offering price of our shares
is more arbitrary compared with the pricing of
securities for an established operating company.
? You will not be able to sell almost all of
our stock immediately after purchase, and it may
decline in value before you have a chance to sell it.
In addition, at issuance, there will be no trading
market for the Stock, and a trading market may never
develop.
? If the Stock is issued, there may not be a
trading market available for the Stock, or any
exchange on which holders of Stock may transfer or
resell their Stock. As a result, the Stock may
initially only be traded on very limited range of
venues, including U.S. registered exchanges, or
regulated alternative trading systems for which a Form
ATS will have been properly submitted to the SEC.
? Exchanges may decide not to list the
DeCryptoFi Stock for several reasons not under our
control, a perceived lack of market interest in the
DeCryptoFi Stock, and any other factors. As a result,
investors of DeCryptoFi Stock should be prepared to
hold their Stock indefinitely, as there is no
guarantee that holders will be able to sell or
exchange their Stock. In the event that the Stock
remains illiquid for a significant period of time or
indefinitely, the value of the DeCryptoFi Stock may be
materially adversely affected.
? Most securities that are publicly traded in
the U.S. have one or more broker-dealers acting as
?market makers? for the security. A market maker is a
firm that stands ready to buy and sell the security on
a regular and continuous basis at publicly quoted
prices. In the event the stock is listed on an
exchange, we cannot guarantee that the stock will have
a market maker, which could contribute to a lack of
liquidity in the DeCryptoFi stock and could have a
material adverse effect on holders? ability to trade
the stock.
? The actual value of your investment may be
substantially less than what you pay.
The determination for the offering price of our shares
is more arbitrary compared with the pricing of
securities for an established operating company.
Prior to this offering there has been no public market
for any of our securities. Factors considered in
determining the prices and terms of the Shares (and
the Additional Shares) offered hereby include:
? the history of companies similar to our
company;
? prior offerings of those companies;
? our capital structure;
? an assessment of our management;
? general conditions of the securities markets
at the time of the offering and other factors as were
deemed relevant
However, although these factors were considered, the
determination of the offering prices is more
arbitrary than the pricing of securities for an
established operating company
The value of your share value in DeCryptoFi may depend
on its supply and may be affected by how much Stock
Compensation is offered in a given year.
? Our use of Form 1-A and our reliance on
Regulation A for this offering may make it more
difficult to raise capital as and when we need it, as
compared to if we were conducting a traditional
initial public offering on Form S-1.
? Because of the exemptions from various
reporting requirements provided to us under Regulation
A and because we are only permitted to raise up to
$75,000,000 in any 12-month period under Regulation A,
this securities offering may be less attractive to
purchasers and it may be difficult for us to raise
additional capital as and when we need it. If we are
unable to raise additional capital as and when we need
it, the growth of our financial condition and results
of operations may be adversely affected, which may
have a material adverse effect on the value of our
stock.
? DeCryptoFi may evaluate and consider
strategic transactions, combinations, acquisitions, or
alliances to enhance its existing business or develop
new products and services. These transactions could be
material to its financial condition. If we do
consummate a transaction, we may be unable to obtain
the benefits or avoid the difficulties and risks of
the transaction.
? Any acquisition will involve risks commonly
encountered in business relationships, including:
? difficulties in assimilating and
integrating the operations, personnel, systems,
data, technologies, products, and services of the
acquired business.
? inability of the acquired technologies,
products, or businesses to achieve expected
levels of revenue, profitability, productivity, or
other benefits.
? difficulties in retaining, training,
motivating, and integrating key personnel.
? diversion of management?s time and
resources from our normal daily operations.
? difficulties in maintaining uniform
standards, controls, procedures, and policies
within the combined organizations.
? difficulties in retaining relationships
with customers, employees, and suppliers of the
acquired business.
? risks of entering markets in which we
have no or limited direct prior experience.
? regulatory risks, including remaining
in good standing with existing regulatory bodies
or receiving any necessary pre- closing or post-
closing approvals, as well as being subject to
new regulators with oversight over an acquired
business.
? assumption of contractual obligations
that contain terms that are not beneficial to us,
require us to license or waive intellectual
property rights or increase our risk for
liability.
? failure to successfully further develop
the acquired technology; liability for activities
of the acquired business before the acquisition,
including patent and trademark infringement
claims, violations of laws, commercial disputes,
tax liabilities and other known and unknown
liabilities.
? potential disruptions to our ongoing
businesses; and
? unexpected costs and unknown risks and
liabilities associated with the acquisition.
Risks Related to Regulations
? There are uncertainties related to the
regulatory regimes governing the issuance of new
publicly traded securities, and as such, new
regulations or policies may materially adversely
affect the development and value our securities.
? Any future regulatory actions applicable to
our related activities could severely impact our
operations and the value of DeCryptoFi. Accordingly,
DeCryptoFi may need to restructure operations
significantly to comply with any new regulation or
guidance. These efforts could be costly and could
involve fundamentally changing core portions of our
business operations and in turn negatively affect the
value of our securities. On the other hand, failure to
restructure for compliance adequately or quickly
enough could result in regulatory action (such as
investigations by the government or a self-regulatory
organization or government or private litigation or
administrative actions) that requires DeCryptoFi to
spend significant time and effort, which would pull
the Company?s attention away from the core of its
business and potentially deplete our resources. It
could also result in negative publicity.
? New or changing laws and regulations or
interpretations of existing laws and regulations, in
the United States and other jurisdictions, may
adversely impact securities, including with respect to
their value, their liquidity, the ability of
purchasers to access marketplaces or exchanges on
which to trade the security, and the structure, rights
and transferability of the security.
? Pursuant to Section 27 of the Exchange Act,
the federal courts shall have exclusive jurisdiction
for all Exchange Act claims. Federal courts shall also
hear all claims concerning (a) any derivative action
or proceeding brought on behalf of the Corporation,
(b) any action asserting a claim of breach of a
fiduciary duty owed by any director, officer, or other
employee of the Corporation to the Corporation or the
Corporation?s stockholders, (c) any action asserting a
claim against the Corporation or any director or
officer or other employee of the Corporation arising
pursuant to any provision of the Applicable Law, the
Certificate, or these Bylaws, or (d) any action
asserting a claim against the Corporation or any
director or officer or other employee of the
Corporation governed by the internal affairs doctrine.
This section shall apply to actions arising under the
Securities Act or Exchange Act. Accordingly, there is
uncertainty as to whether a court would enforce such
provision, giving consideration to Section 27 of the
Exchange Act which 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. Further, 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. Please note that investors cannot waive
compliance with the federal securities laws and the
rules and regulations thereunder.
Transfer Agent and Registrar
The Company will act as registrar and maintain the
Company?s share register. As of the date of this
offering circular, we have not engaged a transfer
agent, and do not intend to engage a transfer agent
until such time as we determine its necessary or we
are required to do so in order to satisfy the
conditional exemption contained in Rule 12g5-1(a)(7)
of the Securities Exchange Act of 1934, as amended, or
the Exchange Act. DeCryptoFi maintains its position
that the Company is not required to register as
transfer agents, both because the Company?s securities
are not currently securities required to be registered
under Section 12(b) of the Exchange Act, and because
none of the activities DeCryptoFi and its software are
involved in are described in the definition of a
transfer agent. Further, pursuant to Section 17A(c)(1)
of the Act, issuers that do not have: (1) a class of
equity securities (other than exempted securities)
held of record by 500 or more persons, and (2) total
assets exceeding $10,000,000.00 are not required to
use a registered transfer agent. In addition, to the
extent that certain activities that meet the
definition of a transfer agent are performed
automatically by our software, our software is not a
?person? that would be required to register. The
Company will establish and continuously maintain (or
otherwise cause to be continuously maintained), in as
current a form as is commercially and technologically
possible, a ledger identifying, at a minimum, the
mailing address of each shareholder (and each designee
of such holder, as applicable), and the number of all
shares held by each shareholder.
In the event the Company elects to utilize a third
party Transfer Agent, and/or any change is made with
respect to providing access to any of the foregoing
information, such change will be promptly and
expressly made known to both existing shareholders
(via electronic communication made pursuant to the
available contact information for each share holder)
and to potential share purchasers via disclosures both
on the Company Website and on any Trading Platform (if
any and if applicable) then used by the Company in
connection with the sale of the its securities.
?
USE OF PROCEEDS
We estimate that the net cash proceeds to us from the
sale of the company stock offering in this offering
will be $75 million, minus any offering expenses and
other fixed costs.
We intend to use the proceeds of this offering, net of
any federal and state income taxes for working capital
and other general corporate purposes general
operations and cash reserves, including but not
limited to payment of salaries (including those of
directors and officers) and hiring employees and
consultants. We also intend to use the proceeds of
this offering for research and development,
specifically for continued development in ways to
enhance our software and our online platform, and for
hiring costs and payment of salaries that are
allocated to research and development, as well as for
marketing and education, which includes organizing and
hosting educational and developer events.
In addition, we intend to use our proceeds for the
following:
? financing production and associated
development and operating costs and expenses for our
online platform.
? working capital and general corporate
purposes.
DeCryptoFi reserves the right to alter the use of proceeds
in this offering.?
DESCRIPTION OF BUSINESS
DeCryptoFi?s main goal is to make the public and
private offering process of raising capital easier for
small and midsized businesses to achieve. Our top
priority is to aid and facilitate with the
complexities in the alternative space of capital
raising. Many companies, even if aware of these
alternative methods of capital raising, simply lack
the legal and finance team dedicated in ensuring that
all regulatory and audit requirements are satisfied.
Without the proper personnel, small to medium sized
businesses cannot devote the time to raising capital
while simultaneously running their business. If these
business owners wish to outsource these functions, it
can drastically affect the company?s bottom line.
Our goal is to tap into this market and assist small
and medium size companies that want to pursue a public
offering or an alternative acceptable private offering
and properly navigating through the confounding but
necessary SEC regulations. . The techniques that
DeCryptoFi has developed will assist companies with
identifying options for raising capital that make
sense given their current business circumstances.
Companies interested in raising capital will be able
to use our portal and online platform allowing us to
assist them in the various options available to them
to raise capital that they otherwise may not have
known exist or to have been possible. In addition,
DeCryptoFi seeks to be able to automate the initial
and ongoing required regulatory filings (depending on
the type of offering a user chooses) on the customers
behalf. Lastly, DeCryptoFi seeks to be able to
facilitate and automate the necessary documentation
that companies are required to provide its investors.
In this day and age where investor protection,
preservation of personal identifying information, and
complete transparency with respect to businesses is
paramount, our goal is to assist companies with this
evolving landscape. Further, as the importance of
combating money-laundering continues to be a top
priority for all institutions, DeCryptoFi will
facilitate and assist with the compliance of Anti-
Money Laundering (?AML?) regulations. The language on
page 18 in our circular now reads, in part, ?Our goal
is to tap into this market and assist small and medium
size companies that want to pursue a public offering
or an alternative acceptable private offering and
properly navigating through the confounding but
necessary SEC regulations. Our techniques will allow
small and mid-sized companies to better understand the
initial and ongoing regulatory filings with respect to
the public and private offering processes. Our main
goal can be summed up in one word? simplification. We
strive to make the overlooked alternative methods of
raising capital easy to achieve, easier to comprehend,
and for many aspects of the process, completely
automated. The SEC has long struggled with how to
assist small and medium size businesses get access to
the public market; we are here to help! As an early-
stage financial technology company, we have created
techniques and processes which will allow small and
mid-sized companies to fully understand the
complexities surrounding initial public offerings,
private placement offerings, and other exempt
offerings. Our focus is on companies that seek
alternatives to the issuance of bank loans in order to
raise capital. Our company allows for the automation
of various Self-Regulatory Organizations (SRO) initial
and ongoing regulatory reporting and filings and
assists companies that lack the relevant expertise
and/or personnel to stay up to date with relevant
compliance obligations as well as the need for the
proper investor disclosures, privacy notifications,
and Anti-Money Laundering (AML) regulations.
DeCryptoFi has the capability to track various asset
classes and automate investor documentation, such
as proxy statements, dividend payments, and GDPR
notifications.
Users working with DeCryptoFi will better understand
the user?s business and what attainable capital
raising methods the user may be overlooking. Topics
for information sharing will include, but are not
limited to, how much capital the company seeks to
raise, who the company?s target investors will be,
current and past revenue, profitability, growth rate,
what its organizational structure is like, etc. In
turn, businesses will be able to streamline the
structuring of a potential business capitalization and
the regulatory safeguards associated with these
capital raising options. Once a business owner fully
comprehends the types of offerings available and
decides which to pursue, DeCryptoFi will assist in
automating filings and much more.?
We aim to assist with initial public offerings
(?IPO?), initial public debt offerings (?IPDO?),
private offerings, and private debt offerings. We
believe that average business owners are not even
aware of the ability for tapping public and private
markets simply through debt offerings and the
potential advantages associated with it. Staging an
IPO is also a very time-consuming and expensive
process. The registration process can be quite complex
and requires the company to disclose a variety of
information to potential investors. In addition, the
IPO process can take as little as six months or as
long as two years, during which time management's
attention is distracted away from day-to-day
operations. It can also conservatively cost a company
between $50,000 and $250,000 in underwriting fees,
legal and accounting expenses, and printing costs.
DeCryptoFi?s online platform will allow companies the
ability to streamline and automate SEC filings,
quarterly and annual reports, dividend payments,
privacy notifications, General Data Protection
Regulations (?GDPR?), Anti-Money laundering
provisions, and the Trust Indenture Act regulations.
By giving our customers the ability to systematize
these processes, the regulatory landscape will be
satisfied, thereby alleviating some of these hurdles
and giving them the opportunity to focus on running
their business.
DeCryptoFi has not filed for any bankruptcy
receivership, or similar proceedings, nor is
DeCryptoFi currently subject to, or has been subject
to, any legal proceedings material to the business or
its financial condition. There is no material
litigation, arbitration or governmental proceeding
currently pending against us, or any of our officers
or in their capacity acting as such and neither we,
nor our officers have been subject to any such
proceedings in the 12 months preceding the date of
this preliminary offering circular.
Trademarks and Copyrights
We own or have applied for rights to trademarks or
trade names that we use in connection with the
operation of our business, including our corporate
names, logos and website names. In addition, we own or
have the rights to copyrights, trade secrets and other
proprietary rights that protect our business. This
offering circular may also contain trademarks, service
marks and trade names of other companies, which are
the property of their respective owners. Our use or
display of third parties? trademarks, service marks,
trade names or products in this offering circular is
not intended to, and should not be read to, imply a
relationship with or endorsement or sponsorship of us.
Solely for convenience, some of the copyrights, trade
names and trademarks referred to in this offering
circular are listed without their ?, ? and ? symbols,
but we will assert, to the fullest extent under
applicable law, our rights to our copyrights, trade
names and trademarks. All other trademarks are the
property of their respective owners.
DeCryptoFi Platform
DeCryptoFi?s platform will not, ?bring together?
anyone by sorting or organizing orders in the
Company?s securities in a consolidated way nor will it
be receiving orders for processing and execution of
transactions in the Company?s shares. Rather, each
proposed transaction involving DeCryptoFi?s stock will
be individually negotiated and implemented without
DeCryptoFi?s involvement. DeCryptoFi?s software will
maintain a list of shareholders to ensure the company
knows whom to send shareholder notifications required
under the SEC. where investors can manage their
accounts. Prospective investors will create a public
address (username) and private key (password) and
indicate agreement to our terms and conditions and
privacy policy. DeCryptoFi?s platform provides the
ability for investors to login to their accounts and
view the total number of shares that they own at a
given time. The platform has the ability for investors
to send shares to other investors but does not offer
the ability to price, sell, or purchase shares. This
is for the sole purpose of DeCryptoFi to keep track of
investors that own its stock. Pricing, selling, or
purchasing shares must be done outside the platform,
person to person, or through a registered exchange
once DeCryptoFi is listed in the future.
? Available Online Directly from Us. Investors
must purchase shares of our stock directly from us.
? No Minimum Investment. Investors will be
able to build ownership over time by making purchases
as low as the initial offering price.?
DESCRIPTION OF DECRYPTOFI?S COMMON STOCK
GENERAL
DeCryptoFi has a total of 500,000,000 authorized
shares of common stock, with a par value $.0001. As of
the date of this offering circular, 300,000,000 shares
of the Company?s common stock are outstanding.
VOTING RIGHTS
As DeCryptoFi?s business expands, it is the intention
of the Company to grant voting rights to Company
shareholders. Shareholders would be entitled to one
vote per share.
NO PREEMPTIVE OR SIMILAR RIGHTS
Our common stock is not entitled to preemptive rights
and is not subject to conversion, redemption or
sinking fund provisions.
MERGER OR CONSOLODATION
In the case of any distribution or payment in respect
of the Company?s common stock upon any potential
consolidation or merger with or into any other entity,
or in the case of any other transaction having an
effect on stockholders substantially similar to that
resulting from a consolidation or merger, such
distribution or payment shall be made ratably on a per
share basis among the Company?s shareholders.
REGULATORY CONSIDERATIONS
Below is a summary of certain current areas of
government regulation that apply to our business and
potential regulatory issues of which we are aware. As
discussed below, we generally believe that our
business and the offering discussed in this offering
circular are compliant with these regulations, but in
certain cases there may be uncertainty related to that
conclusion.
Government Regulations
The regulatory treatment of securities offerings is
uncertain in many ways. In part, this uncertainty
results from the need for regulators to apply existing
law to a new and evolving set of technologies and
assets. We anticipate that regulation will evolve as
various state, federal and international government
agencies take greater interest in regulation of newly
issued securities, especially with the recent
enactment of Regulation Best Interest (?Reg BI?), and
the current Dodd Frank provisions. We anticipate new
regulations to be established, at which point, if
applicable to DeCryptoFi?s business model, we will
take all necessary steps to ensure we are compliant.
In addition, various legislative and executive bodies
in the United States and in other countries may adopt
new laws, regulations, or guidance, or take other
actions in the future.
Any future regulatory actions applicable to DeCryptoFi
and our related activities could severely impact our
operations and the value of our securities. We may need
to restructure operations significantly to comply with
any new regulation or guidance. Failure to do so
adequately or quickly enough could result in
regulatory action (such as investigations by the
government or a self-regulatory organization or
government or private litigation or administrative
actions) that requires us to spend significant time
and effort, which would pull our attention away from
the core of our business and potentially deplete our
resources. It could also result in negative publicity.
Regulatory change could even potentially result in
certain aspects of our operations being viewed as
impermissible, which could result in a need for us to
dramatically alter or cease activities
Securities Act Considerations
Typically, offerings of securities in the U.S. are
required to register under the Securities Act with the
SEC and, in compliance with state law, with applicable
state regulators (blue sky regulations). Our current
offering relies on an exemption from federal
registration under the Securities Act provided by
Regulation A, which also provides for preemption of
state registration requirements, but which also
currently limits issuances by a single issuer to
offerings of no more than $75,000,000 each year. We
have also taken the position that the commercial uses
of our stock, including transfers between owners, do
not require registration or an exemption from
registration under state securities laws.
If in subsequent years after our initial filing we
find that our ability to issue additional shares would
exceed the $50m threshold provided by Reg A Tier 2, we
recognize that we may need to fully register our
securities with the SEC and/or to register our shares
of stock with one or more U.S. state securities
regulators.
Exchange Act Considerations
Registration as Transfer Agents.
Under the Exchange Act, a transfer agent is a person
who engages, with respect to securities registered
under Section 12 of the Exchange Act, in (a)
countersigning issued securities, (b) monitoring
issued securities, with the goal of preventing
unauthorized issuances, (c) registering transfers of
issued securities, (d) exchanging or converting issued
securities, or (e) transferring record ownership of
securities by bookkeeping entry without physical
issuance of securities certificates. Transfer agents
are typically required to register with the SEC under
the Exchange Act. Because our software will record the
owner of our stock we could be viewed as engaging in
these types of activities.
We have taken the position that DeCryptoFi should not
be required to register as a transfer agent because
direct sale of stock from seller to buyer without an
exchange or marketplace is not captured or described
in the definition of a transfer agent, nor is such
action directly facilitated by DeCryptoFi. Further, we
believe that DeCryptoFi?s is not required to register
as a transfer agent. DeCryptoFi?s software for
recording shareholder information does not make
decisions, prioritize transactions, impose fees, or
facilitate a
marketplace. Our software solely records transactions
on behalf of DeCryptoFi so that the company may have
an accurate account of its investors and any
transactions they make in order to keep an accurate
legger of shareholders. Each proposed transaction
involving DeCryptoFi?s securities will be individually
negotiated and implemented between parties and is not
facilitated by DeCryptoFi?s software. The Company
recognizes that in the foreseeable future, the Company
may be required to list its securities on a registered
exchange and utilize registered transfer agents, at
which point the Company will take all reasonable steps
to remain compliant with all applicable laws.,
It is possible that the SEC or another regulator would
disagree with our position. If so, DeCryptoFi could be
forced to register as a transfer agent and comply with
applicable law, which could lead to significant costs
to DeCryptoFi and could force DeCryptoFi to change or
cease its operations. It could also lead to
considerable uncertainty as to how we would comply
with regulation, which would likely result in a need
for a relatively long registration process and could
ultimately prove prohibitive to our business model.
Any of these developments would decrease the value of
the stock sold in this offering.
Registration as Clearing Agency
Also under the Exchange Act, a clearing agency is any
person who (a) acts as an intermediary in making
payments or deliveries, or both, in connection with
transactions in securities; (b) provides facilities
for comparison of data respecting the terms of
settlement of securities transactions, to reduce the
number of settlements of securities transactions, or
for the allocation of securities settlement
responsibilities; (c) acts as a custodian of
securities in connection with a system for the central
handling of securities whereby all securities of a
particular class or series of any issuer deposited
within the system are treated as fungible and may be
transferred, loaned, or pledged by bookkeeping entry
without physical delivery of securities certificates;
or (d) otherwise permits or facilitates the settlement
of securities transactions or the hypothecation or
lending of securities without physical delivery of
securities certificates. A clearing agency does not
include any person solely by reason of performing a
transfer agent function, specifically transferring
record ownership of securities by bookkeeping entry
without physical issuance of securities certificates.
Clearing agencies are generally required to register
with the SEC and comply with applicable regulation.
Because DeCryptoFi, will be involved in recording
transfers in the stock, they could be viewed as
engaging in these types of activities.
We have taken the position that DeCryptoFi is not a
clearing agency under the Exchange Act because the
types of activities they engage in are not those
described in the definition of a clearing agency. To
the extent that transfers are recorded by our
software, the software is not a ?person? that would be
required to register.
It is possible that the SEC or another regulator would
disagree with our position. If so, we could be forced
to register as a clearing agency and comply with
applicable law, which could lead to significant costs
to DeCryptoFi and could force DeCryptoFi to change or
cease its operations. It could also lead to
considerable uncertainty as to how we would comply
with regulation, which would likely result in a need
for a relatively long registration process and could
ultimately prove prohibitive to our business model.
Any of these developments would decrease the value of
the stock sold in this offering.
Registration as an Exchange or ATS
Rule 240.3b16 of the Exchange Act requires
registration for any organization, association, or
group of persons who maintain or provide ?a
marketplace or facilities for bringing together
purchasers and sellers of securities or for otherwise
performing with respect to securities the functions
commonly performed by a stock exchange if such
organization, association, or group of persons:
(1) Brings together the orders for securities of multiple
buyers and sellers; and
(2) Uses established, non-discretionary methods (whether by
providing a trading facility or by setting rules) under
which such orders interact with each other, and the buyers
and sellers entering such orders agree to the terms of a
trade.
Entities that are engaged as ?exchanges? or ?ATS? with
respect to securities are subject to federal
registration and significant regulatory oversight by
the SEC and FINRA. Exchanges and ATSs are generally
networks that constitute, maintain, or provide a
marketplace or facilities for bringing together the
orders of multiple purchasers and multiple sellers of
securities. A system ?brings together? orders if it
displays trading interests entered on the system to
users (e.g., through consolidated quote screens) or
receives orders for processing and execution. This
does not include systems that have only one seller for
each security (e.g., the issuer), even if there are
multiple buyers.
We have taken the position that DeCryptoFi?s platform
and its software is not viewed as an exchange or an
ATS because neither will ?bring together? anyone by
sorting or organizing orders in the Company?s
securities in a consolidated way or by receiving
orders for processing and execution of transactions in
the Company?s shares. Rather, each proposed
transaction involving DeCryptoFi?s stock will be
individually negotiated and implemented without
DeCryptoFi?s involvement. DeCryptoFi?s software will
maintain a list of shareholders to ensure the company
knows whom to send shareholder notifications required
under the SEC. It is possible that the SEC or another
regulator would disagree with our position. If so, we
could be forced to register the platform and/or our
software as an exchange or ATS and comply with
applicable law, which could lead to significant costs
to DeCryptoFi and could force it to change or cease
its operations. Any of these developments could
decrease the value of the securities sold in this
offering.
Absence of Registration as a Broker-Dealer; Securities
Exchange or ATS:
The purchase and sale of securities is heavily
regulated in the United States, both federally and at
the state level. At the federal level, the Exchange
Act and its related regulation principally govern the
way in which the United States securities markets, and
its brokers and dealers, operate and are regulated.
Generally speaking, unless an exemption thereunder
applies ,any person/entity involved in affecting the
purchase/sale of securities will be subject to some
form of registration with the SEC. Such person/entity
may also be further subject to registration with one
or more self-regulatory organization (?SRO?) and/or
applicable state level agencies in the states in which
they conduct business.
Without limiting the foregoing, any person/entity
which qualifies as a ?broker? (as defined in Section
3(a)(4)(A) of the Exchange Act) and/or as a ?dealer?
(as defined in Section3(a)(5)(A) of the Exchange Act)
must register with the SEC and with the Financial
Industry Regulatory Authority (?FINRA?) as the
applicable SRO. Registration as a broker-dealer with
the SEC does not carry a fee and can be done with
minimal hassle or delay. The related registration with
FINRA however can carry a significant fee (upwards of
$55,000) and be very arduous and time consuming to
complete. Additionally, each state where the
person/entity elects to operate may have its own
registration requirements/fees, and they can vary
significantly from state to state (including in terms
of the requirements to obtain such registration and
the timeframe to process the same). Moreover, assuming
all applicable federal/state/SRO registration is
accepted (which is not guaranteed), there are
significant ongoing reporting/compliance requirements
which must be satisfied in order to maintain such
registration as well as the payment of significant
related registration renewal fees. For a person/entity
doing business in a single or limited number of
states, such reporting/compliance requirements and
fees are not onerous. However, for any person/entity
doing business across multiple states the
reporting/compliance costs and fees can be burdensome.
Additionally, unless an exemption thereunder applies,
any entity/group of persons which provides and/or
maintains a marketplace for bringing together
purchasers and sellers of securities, or for otherwise
performing functions typical of a securities exchange,
must be registered as a national securities exchange
with the SEC (pursuant to Section 6 of the Exchange
Act) and all other applicable federal and state
regulatory agencies. Registration as a national
securities exchange is an extremely onerous, costly,
and burdensome undertaking which can cost millions of
dollars, and take several months/years, to complete
(assuming the same is even accepted). Not to mention
the time and cost of complying with the costly and
onerous ongoing reporting and other requirements. As
such there is only a handful of registered exchanges;
with the various Nasdaq, NYSE and CBOE entities making
up the majority of them. Regulation ATS (17 CFR
242.300, et seq.) provides a means for operating a
securities marketplace/trading platform without
registering as a national securities exchange (or as
an exempt exchange pursuant to Section 5 of the
Exchange Act); otherwise referred to as an
?alternative trading system? (?ATS?). The process of
qualifying as an ATS however can still cost exorbitant
fees, although admittedly significantly less than what
is required for registration as a national securities
exchange. Further, in order to acquire the status of
an ATS the subject entity must first be registered as
a broker-dealer; meaning they would be subject to all
of the federal and state registration/compliance
issues discussed above.
It should also be noted that, with respect to the
initial and continued registration as a broker-dealer,
national securities exchange or ATS, many states will
have their own, often unique, administrative processes
and fees. As a result, compliance with all applicable
state level regulations can often be overly time
consuming and costly and may significantly delay or
otherwise detrimentally effect the related business
operations of the subject person/entity.
The penalties for engaging in the purchase and sale of
securities in violation of the Exchange Act and/or
other applicable federal or state regulations are
severe. The same applies to any failure to satisfy any
of the numerous required ongoing reporting/compliance
requirements. Without limiting the foregoing, federal
statute provides for both civil and criminal penalties
in the event of any such failure. Moreover, such
penalties would be in addition to any penalties levied
by the applicable states in connection with any such
failure.
The Company has not registered (and does not intend to
register) as a broker-dealer, national securities
exchange or ATS; either federally or with any state
agency. However, there is a material risk that the
Company?s core Business will be deemed to require the
Company to register as one or more of the foregoing;
either federally or in one or more of the states in
which the Company conducts its core business. If the
Company becomes required to register as a broker-
dealer, national securities exchange or ATS, even if
only in select jurisdictions, it would incur extensive
and unbudgeted registration, compliance and related
cost and expenses. Further, while the Company fully
intends to comply with all applicable federal and
state regulations concerning the required registration
as broker-dealer, national securities exchange or ATS
(as applicable), there is a material risk that the
Company may be found to be operating its core business
in violation of one or more of such regulations and
the resulting penalties would be severe as noted
above. If either of the foregoing were to occur, the
viability and/or profitability of the Company?s
Business would be materially adversely affected, if
not outright eliminated, and you would recognize a
loss of all, or a substantial part of, your investment
in a Security.
In addition, as per the Exchange Act, a ?broker? is a
person engaged in the business of effecting
transactions in securities for the account of others.
We believe that our software does not fit under this
definition, and we have updated our disclosure
language on page 23 to reflect the basis for this
conclusion. Our disclosure now reads, in part: ?[O]ur
software is responsible for recording shareholder
information so that DeCryptoFi has an accurate list of
current shareholders at any point in time. It does not
and is not capable of operate as a broker - buying and
selling securities for its own account or on behalf of
any customer. It is also not capable of acting as a
deal and executing orders on behalf of any client
which it has none. As such DeCryptoFi should not be
considered a broker-dealer, because we do not buy or
sell a security on anyone?s behalf, we simply operate
our software that is responsible for keeping an up-to-
date list of security owners on behalf of DeCryptoFi
in order for the company to facilitate its regulatory
compliance. As such, it is DeCryptoFi?s view that
recording shareholder information does not constitute
a broker dealer.
It is possible that the SEC or another regulator would
disagree with our position. If so, DeCryptoFi could be
forced to register as a broker-dealer and comply with
applicable law. This would disrupt our business
significantly, perhaps making it prohibitive to
operate, and would likely lead to a decrease or
complete loss in the value of the Stock.
Reporting Company Considerations
Under Regulation A, we will have limited ongoing
reporting obligations to investors relative to the
obligations of companies that are ?reporting
companies? for purposes of the Exchange Act. The
exemption that allows this lighter reporting, however,
is in part dependent on the use of a transfer agent
with respect to a company?s securities. We do not
intend to engage a transfer agent with respect to our
securities, in part because the types of activities a
transfer agent would normally engage in are performed
automatically by our software. As a result, as a
practical matter, we also do not think we would be
able to comply with the transfer agent requirement,
and we do not think it applies to or would provide
additional investor protections for this offering.
It is possible that a regulator would disagree with
this position and, as a result, require us to file the
full set of reports required of a reporting company.
If so, we would need to spend considerable additional
time and effort to provide the required reports. This
could have a material adverse effect on our
operations, which in turn could affect the value of
our Company stock.
Foreign Considerations
We may also subject to a variety of foreign laws and
regulations that involve matters central to our
business. These could include, for example,
regulations related to user privacy such as the
General Data Protection Regulation, potential broker-
dealer or exchange activities, data protection, and
intellectual property, among others. In certain cases,
foreign laws may be more restrictive than those in the
U.S. Although we believe we are operating in
compliance with the laws of jurisdictions in which
DeCryptoFi exists, foreign laws and regulations are
constantly evolving and can be subject to significant
change. In addition, the application and
interpretation of these laws and regulations are often
uncertain, particularly in the new and rapidly
evolving industry in which we operate. As a result, we
are involved in face an uncertain regulatory landscape
in many foreign jurisdictions, including but not
limited to the European Union. Other foreign
jurisdictions may also adopt laws, regulations or
directives that affect the similar types of securities
offerings.
We have adopted policies and procedures designed to
comply with the laws that apply to us as we understand
them. However, the growth of our business and its
expansion outside of the U.S. may increase the
potential of violating foreign laws or our own
internal policies and procedures. The risk of our
Company being found in violation of applicable laws
and regulations is further increased by the fact that
many of them are open to a variety of interpretations
given the absence of formal interpretation by
regulatory authorities or the courts.
Any action brought against us by a foreign regulator
or in a private action based on foreign law could
cause us to incur significant legal expenses and
divert our management?s attention from the operation
of the business. If our operations are found to be in
violation of any laws and regulations, we may be
subject to penalties associated with the violation,
including civil and criminal penalties, damages, and
fines; we could be required to refund payments
received by us; and we could be required to curtail or
cease operations. Any of these consequences could
seriously harm our business and financial results. In
addition, existing and proposed laws and regulations
can be costly to comply with and can delay or impede
the development of new products, result in negative
publicity, increase operating costs, require
significant management time and attention, and subject
us to claims or other remedies, including fines or
demands that we modify or cease existing business
practices.
Any applicable foreign laws, regulations or directives
may also conflict with those of the United States. The
effect of any future regulatory change is impossible
to predict, but any change could be substantial and
materially adverse to the adoption and value of the
securities and our operations.?
CHANNELS FOR DISCLOSURE OF INFORMATION AND PLAN OF DISTRIBUTION
Upon the Commission?s qualification, this offering
circular shall be an initial offering for 25,000,000
shares of our common stock. We will have the option to
sell up to 50,000,000 Additional Shares which are
currently authorized but unissued, should all of the
Offering Shares be sold in the offering. There is no
minimum number of Offering Shares that we must sell in
order to conduct a closing in this offering.
The offering price of the Offering Shares was
determined by the Company. This determination was done
without reference to our book value or asset values or
by the application of any customary, established
models for valuing companies or securities.
Accordingly, the offering price may not be indicative
of any amounts you might receive should you seek to
sell your shares or should there be a liquidation of
our company. In addition, such prices are not
necessarily indicative of any prices at which our
securities may trade, or any value that might be
ascribed to our Company after the completion of the
offering.
We may decide to close the offering early or cancel
it, in our sole discretion. If we extend the offering,
we will provide that information in an amendment to
this offering circular. If we close the offering early
or cancel it, we may do so without notice to you,
although if we cancel the offering all funds that may
have been provided by any investors will be promptly
returned without interest or deduction.
Investors, the media and others should note that,
following the completion of this offering, we intend
to announce material information to the public
regarding DeCryptoFi through filings with the SEC,
DeCryptoFi?s corporate blog at DeCryptoFi.com/blog,
DeCryptoFi?s mailing list which is available for sign-
up at www.Decryptofi.com press releases, public
conference calls and webcasts. We also intend to
announce information regarding DeCryptoFi and its
business, operating results, financial condition, and
other matters through our Twitter account, which can
be accessed at https://twitter.com/DeCryptoFi.
Investors should monitor our website and the above
social media accounts in addition to following its
press releases, SEC filings, public conference calls,
and webcasts. The social media channels that
DeCryptoFi intends to use as a means of disclosing the
information described above may be updated from time
to time.
This offering circular will be furnished to
prospective investors via electronic PDF format before
or at the time of all written offers and will be
available for viewing and download on the DeCryptoFi
website, as well as on the SEC?s website at
www.sec.gov.
PROCEDURES FOR SUBSCRIBING
Shares pursuant to this offering circular will be
offered only through DeCryptoFi?s website at
https://www.decryptofi.com and, if the Company chooses
so, through management-approved third-party platform
partners, which partners will be registered investment
advisers or broker-dealers and may, by virtue of their
registration status, be deemed to be underwriters. As
of the date of this offering circular, we do not have,
nor do we intend, to develop relationships with any
third-party platform partners.
We are offering our stock for cash through our website
www.decryptofi.com where potential investors in the
offering will be able to review an electronic version
of this offering circular and execute a subscription
agreement, attached herein as Exhibit 1.1 in part III
of this offering, as of the commencement of this
offering. In order to subscribe to purchase DeCryptoFi
stock, a prospective investor will be required to
electronically complete, sign, and deliver an executed
subscription agreement. Once submitted, an investor?s
subscription is irrevocable, except for limited
exceptions, such as if the investor?s subscription is
only partially accepted, in which case within 20 days
of the investor having been provided notice of this
fact.
There is no minimum number of shares of stock that we
must sell in order to conduct a closing in this
offering. Payment for stock sold through the cash
offering will be accepted on a rolling basis during
the term of the cash offering.
We may decide to cancel the offering entirely, in
our sole discretion. If we cancel the Offering, we may
do so without notice to you, although if we cancel the
Offering, all funds that may have been provided by any
investors will be promptly returned without interest
or deduction.
STATE LAW EXEMPTION AND PURCHASE
RESTRICTIONS
Our shares of Common stock are being offered and sold
only to ?qualified purchasers? (as defined in
Regulation A under the Securities Act). As a Tier 2
offering pursuant to Regulation A under the Securities
Act, this Offering is exempt from state law ?Blue Sky?
review, subject to meeting certain state filing
requirements and complying with certain anti-fraud
provisions, to the extent that our Class A shares
offered hereby are offered and sold only to ?qualified
purchasers? or at a time when our Class A shares are
listed on a national securities exchange. ?Qualified
purchasers? include: (i) ?accredited investors? under
Rule 501(a) of Regulation D and (ii) all other
investors so long as their investment in our Class A
shares does not represent more than 10% of the greater
of their annual income or net worth (for natural
persons), or 10% of the greater of annual revenue or
net assets at fiscal year-end (for non-natural
persons). Accordingly, we reserve the right to reject
any investor?s subscription in whole or in part for
any reason, including if we determine in our sole and
absolute discretion that such investor is not a
?qualified purchaser? for purposes of Regulation A.
To determine whether a potential investor is an
?accredited investor? for purposes of satisfying one
of the tests in the ?qualified purchaser? definition,
the investor must be a natural person who has:
? The individual must have a net worth greater
than $1 million, either individually or jointly with
the individual?s spouse. Except for the special
provisions described below, individuals should include
all their assets and all of their liabilities in
calculating net worth, excluding the value of their
primary residence; or
? persons who had an income of at least
$200,000 in each of the two most recent years (or
$300,000 together with their spouse) and have a
reasonable expectation of reaching the same income
level in the current year.
If the investor is not a natural person, different
standards apply. See Rule 501 of Regulation D for more
details.
For purposes of determining whether a potential
investor is a ?qualified purchaser,? annual income and
net worth should be calculated as provided in the
?accredited investor? definition under Rule 501 of
Regulation D. Net worth in all cases should be
calculated excluding the value of an investor?s home,
home furnishings and automobiles.
Dilution
Dilution refers to the reduction in value, control, or
earnings of the shares the investor owns.
IMMEDIATE DILUTION
An early-stage company typically sells its shares (or
grants options over its shares) to its founders and
early employees at a very low cash cost, because they
are, in effect, putting their ?sweat equity? into the
company. When the company seeks cash investments from
outside investors, like you, the new investors
typically pay a larger sum for their shares than the
founders or earlier investors, which means that the
cash value of your stake is diluted because each share
of the same type is worth the same amount, and you
paid more for your shares than earlier investors did
for theirs.
The Company acknowledges that the dilution may be
substantial under certain market conditions. The
Company further acknowledges that its obligations
under the Transaction Documents, including without
limitation its obligation to issue the Securities
(including the Underlying Shares) pursuant to the
Transaction Documents, are unconditional and absolute
and not subject to any right of set off, counterclaim,
delay or reduction, regardless of the effect of any
such dilution or any claim that the Company may have
against any Purchaser.
The following table summarizes the differences between
the total consideration and the weighted-average price
per share paid by, on the one hand, officers,
directors, promoters and affiliates of DeCryptoFi who
have acquired shares prior to the date of this
offering circular and, on the other hand, investors
participating in this offering, before deducting
estimated offering expenses, assuming that the maximum
number of shares are sold at the $0.10 per share
price. The table compares the price that new investors
are paying for their shares with the effective cash
price paid by existing shareholders, giving effect to
full conversion of all outstanding stock options. The
schedule presents shares and pricing as issued and
reflects all transactions since inception, which gives
investors a better picture of what they will pay for
their investment compared to the company?s insiders:
SHARES PURCHASED
TOTAL CONSIDERATION
TOTAL WEIGHTED AVG PRICE PER SHARE
Existing shareholders before this offering
300,000,000
$0
..000000
Public Sale
25,000,000
$25,000,000
1.00
Stock Compensation Plan
50,000,000
$50,000,000
1.100
Total Investors Participating in this Offering
75,000,000
$75,000,000
1.00
Shares in Reserve
125,000,000
$125,000,000
1.00
FUTURE DILUTION
Another important way of looking at dilution is the
dilution that happens due to future actions by the
company. The investor?s stake in a company could be
diluted due to the company issuing additional shares,
whether as part of a capital-raising event, or issued
as compensation to the company?s employees or
marketing partners. In other words, when the company
issues more shares, the percentage of the company that
you own will go down, even though the value of the
company may go up. You will own a smaller piece of a
larger company. This increase in number of shares
outstanding could result from a stock offering (such
as an initial public offering, another crowdfunding
round, a venture capital round, angel investment),
employees exercising stock options, or by conversion
of certain instruments (i.e., convertible bonds,
preferred shares or warrants) into stock.
If the company decides to issue more shares, an
investor could experience value dilution, with each
share being worth less than before, and control
dilution, with the total percentage an investor owns
being less than before. There may also be earnings
dilution, with a reduction in the amount earned per
share (though this typically occurs only if the
company offers dividends, and most development stage
companies do not pay dividends for some time).
The type of dilution that hurts early-stage investors
most occurs when the company sells more shares in a
?down round,? meaning at a lower valuation than in
earlier offerings. An example of how this might occur
is as follows (numbers are for illustrative purposes
only):
?
In June 2014, Jane invests $20,000 for shares that represent 2%
of a company valued at $1 million.
?
In December, the company is doing very well and sells $5
million in shares to venture capitalists on a
valuation (before the new investment) of $10 million. Jane now
owns only 1.3% of the company,
but her stake is worth $200,000.
?
In June 2015, the company has run into serious problems, and in
order to stay afloat, it raises $1 million
at a valuation of only $2 million (the ?down round?). Jane now
owns only 0.89% of the company,
and her stake is worth only $26,660.
If you are making an investment expecting to own a
certain percentage of the company or expecting each
share to hold a certain amount of value, it?s
important to realize how the value of those shares can
decrease by actions taken by the company. Dilution can
make drastic changes to the value of each share,
ownership percentage, voting control, and earnings per
share. In some cases, dilution can also completely
wipe out the value of investments made by early
investors, without any person being at fault.
Investors should understand how dilution works and the
availability of anti-dilution protection.
DeCryptoFi is committed to zero new share issuance
outside of the 500,000,000 shares in existence today.?
MANAGEMENT?S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Impact of COVID-19
You should read the following discussion and analysis
of our financial condition and results of operations
together with our consolidated financial statements
and the related notes and other financial information
included elsewhere in this offering circular. Some of
the information contained in this discussion and
analysis, including information with respect to our
plans and strategy for our business, includes forward-
looking statements that involve risks and
uncertainties. You should review the ?Risk Factors?
section of this offering circular for a discussion of
important factors that could cause actual results to
differ materially from the results described in or
implied by the forward-looking statements contained in
the following discussion and analysis.
In March 2020, the World Health Organization declared
the outbreak of a novel coronavirus (COVID-19) as a
pandemic, which continues to spread throughout the U.S
and other countries. As a result, Company franchisees
have temporarily closed some retail locations, reduced
or modified store operating hours, adopted a ?to-go?
only operating model, or implemented a combination of
these actions. These actions have reduced consumer
traffic, resulting in a negative impact to Company
revenues. While the disruption to our business from
the COVID-19 pandemic is currently expected to be
temporary, there is a great deal of uncertainty around
the severity and duration of the disruption, and also
the longer-term effects on our business and economic
growth and consumer demand in the U.S. and worldwide.
The effects of COVID-19 may continue to materially
adversely affect our business, results of operations
and liquidity, particularly if these effects continue
in place for a significant amount of time. As
additional information becomes available regarding the
potential impact and the duration of the negative
financial effects of the current pandemic, the Company
may determine that an impairment adjustment to the
recorded value of trademarks, goodwill and other
intangible assets may be necessary.
Effects of COVID-19 on Liquidity and Operations
While the Company expects COVID-19 to negatively
impact its business, results of operations and
financial position, the full financial impact cannot
be reasonably estimated at this time. The Company
currently believes that its working capital combined
with our disciplined management of the Company?
operating expenses, will be sufficient to meet our
current liquidity needs. However, COVID-19 pandemic
events will continue to evolve over time and the
negative effects on the operations of our franchisees
could prove to be worse than we currently estimate.
Business Overview and Outlook
Decentralized Crypto Financial Inc. uses its
proprietary online platform to assist small and medium
sized companies in determining the best approach to
raising capital. The Company will utilize proprietary
software and its online platform to further assist
with automating the navigation of public and private
offerings, as well as the applicable regulatory and
compliance components for the Company?s prospective
clients.
We do not anticipate any change to our operations
if 25%, 50%, 75% or 100% of our offering is sold. The
Company believes that it has the necessary foundation
and key components to fully maintain its operations
until 100% of the offering is sold. Further, the
proceeds from the initial offering will satisfy the
Company?s cash requirements and as such, there will be
no need to raise additional funds within the first six
(6) months that the Offering becomes qualified.
Trends and Key Factors Affecting Our Performance
Investment in Long-Term Growth.
The core elements of the Company?s growth strategy
include acquiring new customers, broadening
distribution capabilities, enhancing data and online
platform functionality, and expanding product
offerings. The Company plans to continue to invest
significant resources to accomplish these goals, and
the Company anticipates that its operating expenses
will continue to increase for the foreseeable future,
particularly sales and
marketing and technology expenses. These investments
are intended to contribute to long-term growth, but
they may affect near-term profitability.
Originations.
The Company?s future growth will continue to depend, in
part, on attracting additional investors as well as
additional companies wanting to utilize our online
platform. The Company plans to increase its sales and
marketing spending and seek to attract these investors
and companies. We expect to rely on strategic partners,
affinity networks, social media, and conference and
speaking events for investor growth. The Company
expects there to
be a consistent need of undercapitalized companies
seeking capital raising alternatives. The extent to
which the Company can satisfy this ongoing demand will
be an important factor in its continued revenue growth.
Use of GAAP Financial Measures
DeCryptoFi?s management?s discussion and analysis of
DeCryptoFi?s financial condition and results of
operations is based on its financial statements, which
have been prepared in accordance with United States
generally accepted accounting principles, or U.S. GAAP.
The preparation of these financial statements requires
DeCryptoFi to make estimates and assumptions that
affect the reported amounts of assets and liabilities
and the disclosure of contingent assets and
liabilities at the date of the financial statements,
as well as the reported revenue generated, and
expenses incurred during the reporting periods.
DeCryptoFi?s estimates are based on its comparable and
on various other factors that DeCryptoFi believes are
reasonable under the circumstances, the results of
which form the basis for making judgments about the
carrying value of assets and liabilities that are not
readily apparent from other sources. Actual results
may differ from these estimates under different
assumptions or conditions. Due to the fact that
DeCryptoFi was not formed until August 2020 DeCryptoFi
believes that the accounting policies discussed may be
of little use to understanding DeCryptoFi historical
and future performance, as these policies relate to the
more significant areas involving management?s
judgments and estimates.
When we prepare our consolidated financial statements
in conformity with GAAP, we must make estimates and
assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets
and liabilities, and the reported amounts of revenue
and expenses during each reporting period. Our
estimates may include those related to revenue
recognition, accounts receivable allowances,
intangible assets, share-based compensation expense,
income taxes and programming costs. Actual results
included in this offering circular, and in future
financial results, could differ from the original
estimates.
Under ASC 606, an entity recognizes revenue when its
customer obtains control of promised goods or
services, in an amount that reflects the consideration
which the entity expects to receive in exchange for
those goods or services. To determine revenue
recognition for arrangements that DeCryptoFi
determines are within the scope of ASC 606, the
following five steps are performed:
? Identify the contract(s) with a
customer.
? Identify the performance obligations in
the contract.
? Determine the transaction price.
? Allocate the transaction price to the
performance obligations in the contract; and
? Recognize revenue when (or as)
DeCryptoFi satisfies a performance obligation
?
DIRECTORS, EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES
As of October 2020, the Company has one executive
officer, CEO Nick Scherling. Mr. Scherling is not
represented by a labor union or covered under a
collective bargaining agreement.
NAME
POSITION
AGE
TERM OF OFFICE
Nicholas Scherling*
CEO
38? 38
August 2020
*Nicholas Scherling. Mr. Scherling has more
than 20 years of technology expertise at senior levels
serving in the Intelligence Community, DoD, and
industry. Mr. Scherling served in leadership and
technical roles in Booz Allen Hamilton, General
Dynamics, Electronic Warfare Associates, MLT
Vacations, and the Air National Guard. Although
DeCryptoFi is a newly organized C-Corp, Mr. Scherling
has been developing the systemic and automated
technology for a substantial period of time prior to
officially having his company qualified by the
Commission.
?
Compensation of Directors and Executive Officers.
Summary compensation table
The following table summarizes the compensation
of the highest paid person, the CEO, during the year
ended December 31, 2019.
Name
Capacity in which compensation was received
Cash Compensation ($)
Other Compensation ($)
Total Compensation ($)
Nicholas Scherling
Chief Executive officer
$0.00
$0.00
$0.00
Authorized Shares. A total of 125,000,000 shares of
our corporate common stock are reserved for issuance
as the Company sees fit as described in pervious
sections. Upon qualification, if the Company
determines that issuing these shares will neither
benefit its shareholders nor increase the value of the
Company, then the Company may determine that such
shares shall be available for future grant or sale. As
the Company continues grow and better understand its
strengths and weaknesses, the Company may decide to
adopt a formalized incentive plan, which will then
outline the specifications that must be met.
Currently, there is no such plan in place, nor is
there any intention to memorialize any such plan.
Stock Options. Upon qualification, the Company may
determine, at a later date, that it wishes to
compensate its employees in the form of stock options.
While no such plan is currently in place, if the
Company does decide to implement a stock option plan,
certain guidelines must be followed: The term of an
incentives stock option may not exceed 10 years; the
stock option strike price shall be equal to its fair
market value of the Company?s stock on the day the
option is granted except that with respect to
incentive stock options granted to any participant who
owns more than 10% of the voting power of outstanding
stock, the exercise price must generally equal at
least 110% of the fair market value on the grant date
and the term must not exceed five years. The Company
will determine the methods of payment of the exercise
price of an option, which may include cash, shares, or
other property acceptable to the Company, as well as
other types of consideration permitted by applicable
law. After the termination of service of an employee,
director, or consultant, he or she may exercise his or
her option for the period of time stated in his or her
option agreement. Unless otherwise provided for by the
Company, if termination is due to death or disability,
the option will remain exercisable for 12 months and
in all other cases, the option will generally remain
exercisable for three months following the termination
of service. These are simply guidelines, and the
Company may amend some or all of these guidelines if
the company introduces an incentivized stock option
plan.
Code of Ethics. Effective upon consummation of this
offering, we will adopt a code of ethics that applies
to all of our respective executive officers,
directors, and employees. The code of ethics will
codify the business and ethical principles that govern
all aspects of our business.
Code of Ethics. Effective upon consummation of this
offering, we will adopt a code of ethics that applies
to all of our respective executive officers,
directors, and employees. The code of ethics will
codify the business and ethical principles that govern
all aspects of our business.?
Security Ownership of Management and Certain Securityholders
The following table sets forth information regarding the
beneficial ownership of our shares of our common stock as of
the date of this offering circular. Since DeCryptoFi will
only be offering only one class of stock, and since our
insider is subject to a predetermined lock-up period, there
is no need to adjust to reflect the sale of all of the
Shares offered by this preliminary offering circular
(assuming none of the individuals listed purchase shares in
this offering), by:
? each person known by us to be the beneficial
owner of more than 5% of our outstanding shares.
? each of our executive officers and directors; and
? all our executive officers and directors as a
group.
Unless otherwise indicated, we believe that all persons
named in the table have sole voting and investment power
with respect to all shares beneficially owned by them.
Additionally, except as otherwise indicated, beneficial
ownership reflected in the table has been determined in
accordance with Rule 13d-3 promulgated under the Securities
Exchange Act of 1934, as amended.
Shares Beneficially Owned Prior to Offering
Shares Beneficially Owned After Offering
Name and address of
% of Total Voting
% of Total Voting
Beneficial Owner___ Shares %
Prior to Offering Shares %
After Offering
Nicholas Scherling 300M 100%
100% 300M 60%
66.67%
?
Shares Eligible for Future Sale
Rule 144
A person who has beneficially owned restricted shares
of common stock, for at least six months would be
entitled to sell their securities provided that (i)
such person is not deemed to have been an affiliate of
the subject company at the time of, or at any time
during the three months preceding, a sale and (ii) the
subject company is subject to the Exchange Act
periodic reporting requirements for at least three
months before the sale. Persons who have beneficially
owned restricted shares of common stock for at least
six months but who are an affiliate of the subject
company at the time of, or any time during the three
months preceding, a sale, would be subject to
additional restrictions under which such person would
be entitled to sell within any three-month period a
number of shares that does not exceed the greater of
either of the following:
? 1% of the number of shares of our common
stock then outstanding, and
? if our common stock is listed on a national
securities exchange, the average weekly trading volume
of the shares of common stock during the four calendar
weeks preceding the filing of a notice on Form 144
with respect to the sale.
Sales under Rule 144 are also limited by manner of
sale provisions and notice requirements and to the
availability of current public information about the
subject company.
______________________________________________________
____________________
?
Decentralized Crypto Financial Inc.
Consolidated Financial Statements
2
0
2
0
FINANCIAL INFORMATION SECTION
Decentralized Crypto Financial Inc.
INDEX TO FINANCIAL STATEMENTS
For the Fiscal Year Ending August 31, 2020
Page Number
Independent Auditors Report F-2
Consolidated Balance Sheets as of December 31, 2021 F-3
Consolidated Statements of Operations for the Fiscal Year Ending
December 31, 2021 F-4
Consolidated Statements of Changes in Stockholders'
Equity/Members? Deficiency for the Year Ending December 31, 2021
F-5
Consolidated Statements of Cash Flows for the Year Ending
December 31, 2021 F-6
Notes to Consolidated Financial Statements F-8
INDEPENDENT AUDITOR?S REPORT
Independent Auditors? Report
Board of Directors
Decentralized Crypto Financial Inc.
Chantilly, Virginia
We have audited the accompanying consolidated financial
statements of Decentralized Crypto Financial Inc., which
comprise the balance sheets as of December 31, 2021 and
the related consolidated statements of income, changes in
equity, and cash flows for the years then ended, and the
related notes to the consolidated financial statements.
Management?s Responsibility for the Financial Statements
Management is responsible for the preparation and fair
presentation of these consolidated financial statements in
accordance with accounting principles generally accepted
in the United States of America; this includes the design,
implementation, and maintenance of internal control
relevant to the preparation and fair presentation of
consolidated financial statements that are free from
material misstatement, whether due to fraud or error.
Auditors? Responsibility
Our responsibility is to express an opinion on these
consolidated financial statements based on our audits. We
conducted our audits in accordance with auditing standards
generally accepted in the United States of America. Those
standards require that we plan and perform the audits to
obtain reasonable assurance about whether the consolidated
financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit
evidence about the amounts and disclosures in the
consolidated financial statements. The procedures selected
depend on the auditors? judgment, including the assessment
of the risks of material misstatement of the consolidated
financial statements, whether due to fraud or error. In
making those risk assessments, the auditor considers
internal control relevant to the entity?s preparation and
fair presentation of the consolidated financial statements
in order to design audit procedures that are appropriate
in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the entity?s
internal control. Accordingly, we express no such opinion.
An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of
significant accounting estimates made by management, as
well as evaluating the overall presentation of the
consolidated financial statements.
We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our
audit opinion.
Opinion
In our opinion, the consolidated financial statements
referred to above present fairly, in all material
respects, the financial position of Decentralized Crypto
Financial Inc. as of December 31, 2021, and the results
of their operations and their cash flows for the years
then ended in accordance with accounting principles
generally accepted in the United States of America.
- Chesapeake Financial Corp
Centreville, VA
February 8, 2022
DECENTRALIZED CRYPTO FINIANCIAL INC.
BALANCE SHEETS
As of December 31, 2021
2021
ASSETS
Current assets:
Cash and cash equivalents $ 0
Accounts receivable 0
Prepaid expenses 0
Total current assets 0
Property and equipment, net 0
Other assets:
Goodwill, net 0
Investments in equity securities 30,000
Deposits 0
Total assets $ 30,000
LIABILITIES AND MEMBER'S EQUITY
Current liabilities:
Line of credit
$
0
Accounts payable and accrued expenses
0
Accrued payroll and related liabilities
0
Notes payable, current portion
0
Deferred rent and other current liabilities
0
Deferred compensation liability
0
Total current liabilities 0
Notes payable, less current portion 0
Total liabilities 0
Member's equity 30,000
Total liabilities and member's equity $ 30,000
DECENTRALIZED CRYPTO FINIANCIAL INC.
STATEMENTS OF OPERATIONS
For the period ending December 31, 2021
2021
Revenue
$
0
Revenue
0
Total revenue
0
Direct cost of revenue
0
Gross profit
0
Indirect costs of revenue Costs
0
not allocable
0
Operating income
0
Other income (expense):
Other expense
0
Interest expense
0
Other income
0
Total other income
0
Net income
$ 0
Basic Earnings Per Share $ 0
Diluted Earnings Per Share $ 0
See accompanying notes.
DECENTRALIZED CRYPTO FINIANCIAL INC.
STATEMENTS OF STOCKHOLDERS? EQUITY
For the period ending December 31, 2021
__Member?s Equity__
Balance, December 31, 2021
Common Stock Shares
Amount
Balance as of December 31, 2021
300,000,000
$ 30,000
Stock-based compensation
----
---
Shares issued upon vesting of restricted stock awards
--
--
Exercise of stock options
--
--
Year Ended December 31, 2021
See accompanying notes.
DECENTRALIZED CRYPTO FINIANCIAL INC.
STATEMENTS OF CASH FLOWS
For the period ending December 31, 2021
2021
Cash flows from operating activities:
Net income $ 0
Adjustments to reconcile
net income to net cash
(used in) provided by
operating activities:
Depreciation and amortization 0
Amortization of goodwill 0
Loss on disposal of assets
Gain on investments 0
Deferred rent and other current liabilities 0
Change in:
Accounts receivable 0
Prepaid expenses 0
Deposits
Accounts payable and accrued expenses 0
Accrued payroll and related liabilities 0
Deferred compensation liability 0
Net cash provided by (used in) operating activities 0
Cash flows from investing activities:
Purchase of life insurance policies 0
Proceeds from sale of property and equipment
Purchase of property and equipment 0
Net cash used in investing activities 0
Cash flows from financing activities:
Net borrowings on (repayments on) line of credit
0
Repayments on notes payable
0
Contributions from member
0
Distributions to member
Net cash provided by (used in) financing activities
0
Net change in cash and cash equivalents
0
Cash and cash equivalents, beginning of year
0
Cash and cash equivalents, end of year
$ 0
Supplemental disclosure of cash flow information:
Cash paid for interest
$ 0
DECENTRALIZED CRYPTO FINIANCIAL INC.
NOTES TO FINANCIAL STATEMENT
Notes to Consolidated Financial Statements
The accompanying notes are an integral part of this
consolidated financial statement.
Organization and Nature of Business
We are an early-stage financial technology company that has
created a proprietary software that will allow small and mid-
sized companies to fully understand the complexities
surrounding initial public offerings and private placement
offerings. Our software is geared towards companies that seek
alternatives to the issuance of bank loans in order to raise
capital. Our company allows for the automation of various
Self-Regulatory Organizations (SRO) initial and ongoing
regulatory reporting and filings, and assists companies that
lack the relevant expertise and/or personnel to be fully
compliant with investor disclosure obligations, privacy
notifications, Anti-Money laundering regulations, etc. Our
proprietary software also has the capability to track various
asset classes and automate investor documentation, such as
proxy statements, dividend payments, and GDPR notifications.
Summary of Significant Accounting Policies
Basis of presentation
The accounting policies of the Company are in accordance with
accounting principles generally accepted in the United States of
America applied on a basis consistent with that of the
preceding years. Outlined below are those policies considered
particularly significant.
Estimates
The preparation of financial statements in accordance with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates and
may have impact on future periods.
STOCKHOLDERS? EQUITY
Equity Structure
The Company is authorized to issue 500,000,000 shares of common
stock, par value $.0001 (?Common Stock?). As of December 31,
2021, the Company has 300,000,000 shares of Common Stock
outstanding. A general description of these securities is as
follows:
Common Stock
Holders of Common Stock are entitled to one vote per share.
For the fiscal year ending December 31, 2021, the authorized
capital of the Company consists of common stock of 500,000,000
shares with 300,000,000 shares issued and outstanding with a
$0.0001 par value.
Preferred Stock
The company is not issuing any preferred stocks, warrants, or
options with this filing (ASC 505-10). Additionally, there will
be no equity-based payments to Non-employees (ASC 505-50).
Income taxes
The Company, with the consent of its stockholders, has elected C
corporation status.
EARNINGS PER SHARE (EPS)
The Company adopted calculating basic EPSs (FASB ASC 260) by
dividing income available to common stockholders by the weighted
average of number of common shares outstanding.
THIS PAGE LEFT INTENTIONALLY BLANK
PART III- EXHIBITS
Index to Exhibits. *
Exhibit No. Description
? Subscription Agreement
? Certificate of Incorporation
? By-laws of Decentralized Crypto Financial
Inc.
? Legal Opinion of Michael R. Blackburn, Esq.
as to the legality of the securities being qualified
? Certification of Conversion from a Limited
Liability Company to a Corporation
? Action of Sole Organizer
? Consent of Chesapeake Financial Corporation
? Draft offering statement previously
submitted pursuant to Rule 252(d)
*To be filed separately with SEC
?
SIGNATURES
Pursuant to the requirements of Regulation A, the
issuer certifies that it has reasonable grounds to
believe that it meets all of the requirements for
filing on Form 1-A and has duly caused this Offering
Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Chantilly,
Virginia, on, August, _____, 2021
Decentralized Crypto Financial Inc.
By /s/ Nicholas
Scherling________________________________*
Nicholas Scherling
Decentralized Crypto Financial Inc.
Date:____________________
The following persons in the capacities and on the dates
indicated have signed this Offering Statement.
By /s/ Nicholas
Scherling_________________________________*
Nicholas Scherling
Decentralized Crypto Financial Inc.
Date:____________________
ADD EXHB
10
responseletter.txt
SEC RESPONSE LETTER
ATTN: Division of Corporation Finance Office of Trade &
Services
c/o Nicholas Lamparski
c/o Mara Ransom
Re: Decentralized Crypto Financial Inc.
Amendment No. 3 to Offering Statement on Form 1-A
Filed June 4, 2021
File No. 024-11353
ATTN: Division of Corporation Finance Office of Trade &
Services
We have reviewed your third official comment letter with
respect to our amended offering statement. Please note that we
have submitted a third Form 1-A as well as our amended offering
circular and necessary exhibits via the EDGAR database. It is
our hope that our changes and explanations fully satisfy and
incorporate your comments and concerns. Below you will find
your suggested amendments from your most recent comment letter,
with our responses keyed to those comments. In many of our
responses, we are directing you to specific locations in our
amended offering circular where you will be able to find our
changes or amendments. We have also provided you, when
applicable, the amended language now contained in the offering
circular. We appreciate your helpful and insightful review. We
request your favorable consideration of our adjustments.
Cover Page
1. We note your response to prior comment 1. Revise to state
that you are offering 200,000,000 shares in total, in light of
the 50,000,000 additional shares you intend to offer. If,
instead, you intend for this offering to be for a minimum amount
of 150,000,000 shares and a maximum amount of 200,000,000
shares, please revise to state as much and tell us where you
intend to hold subscriptions for the minimum amount and under
what conditions the consideration will be released to you and
shares issued to investors. Please also revise to state a date
by which your offering will conclude; currently you state that
the offering will conclude when you have raised $50,000,000,
however, this amount far exceeds the amount of consideration you
will receive, assuming a maximum offering of 200,000,000 shares
at $0.10 per share.
DeCryptoFi Response: DeCryptoFi has amended its cover page
and other relevant sections of its offering circular to
properly show that the offering will conclude on the
earlier date when DeCryptoFi sells 70,000,000 shares at
$1.00 per share or the equivalent of $1.00 per share in the
form of non-cash compensation, pursuant to its Stock
Compensation Plan, or August 1, 2023. The initial offering
will consist of 20 million Shares of common stock at a
price of $1.00 per share to an unlimited number of
accredited investors, and to the maximum permissible amount
to non-accredited investors, as such limitations are
defined under Regulation A of the Securities Act of 1933,
as amended (the ?Securities Act). This offering shall be
referred to as the ?general offering? and/or the ?IPO?. In
addition, we are offering up to 50,000,000 Shares for non-
cash consideration pursuant to our ?Stock Compensation
program?) in exchange for the Noncash consideration shares
will be given to 1099 individuals or companies in exchange
for compute resources (much like Amazon compute instances)
in order to operate our global computer software. For non-
cash consideration, the?aggregate offering price?or
aggregate sales will be based on the value of the
consideration as established by?bona fide?sales of that
consideration made within a reasonable time, or, in the
absence of sales, on the fair value as determined by an
accepted standard. Valuations of all non-cash consideration
will be reasonable at the time made. DeCryptoFi will keep
130,000,000 shares in reserve, broken down in the following
manner: (1) DeCryptoFi may generate additional revenue
through our additional sale of common stock, including
pursuant to this offering circular. An additional
30,000,000 shares have been allocated to DeCryptoFi?s
treasury, and we may sell any and all of these shares in
the form of a Private Placement, if deemed necessary, or in
the form of a secondary public offering in order to raise
additional capital. Should DeCryptoFi exercise the
right, the Company will be sure to make the necessary
filings with the SEC in a timely fashion.
There is no minimum number of Offering Shares that we must
sell in order to conduct a closing in this offering. The
offering will commence within two calendar days after this
offering circular has been qualified by the Commission. All
DeCryptoFi?s initial offering will be offered directly to
the investor. Payment for DeCryptoFi?s securities will be
accepted on a rolling basis during the term of the initial
offering upon, or shortly after submission of a
subscription agreement by a potential investor. DeCryptoFi
will deliver its common stock to a purchaser?s online
account. Upon any receipt of a subscription or our failure
to deliver the common stock sold in this offering, all
funds received in connection with such subscription will be
promptly returned to such investor without interest. Such
refund will be paid in the same currency and in the same
amount as paid by such investor.
DeCryptoFi Platform, page 19
2. We note your response to prior comment 3, and re-issue the
comment in part. Please consistently remove the disclosure that
you "will operate an online platform where investors can manage
their accounts and purchase shares of [y]our company," or
clarify that the platform does not offer these features, as you
do later in this section. Also, revise your disclosure to state
that your platform is not yet operational, given that your
response letter states that your securities must be registered
pursuant to Section 12 of the Securities Exchange Act and it
does not appear that this event has taken place.
DeCryptoFi Response: The language on page 19 has been
amended to state, inter alia, ?DeCryptoFi?s platform
will not, ?bring together? anyone by sorting or
organizing orders in the Company?s securities in a
consolidated way nor will it be receiving orders for
processing and execution of transactions in the
Company?s shares. Rather, each proposed transaction
involving DeCryptoFi?s stock will be individually
negotiated and implemented without DeCryptoFi?s
involvement or our software. DeCryptoFi?s software
will maintain a list of shareholders to ensure the
company knows whom to send shareholder notifications
required under the SEC, where investors can manage
their accounts?? It is important to note that
DeCryptoFi?s online platform, which is not yet
operational, shall allow investors to manage their
Personal Identifiable Information, as well as the
ability to transfer shares that were purchased or sold
outside of the online platform, minus any bank
transaction fees that may apply.
Regulatory Considerations, page 20
3. We note your response to prior comment 4, and re-issue the
comment in part. In regards to your online platform and software
referenced in this section, please revise your disclosures to
address the following:
* As requested in our prior comments, please provide us
with a detailed analysis of the specific activities that
your software will perform in comparison to the
activities typically performed by a transfer agent.
DeCryptoFi response: When a share is purchased, the
shareholder registers with his or her name and other
personal information in order for the share to be
issued to the shareholder. This information is stored
in DeCryptoFi?s software database. When a user
transfers shares to another user, under any
circumstance, the transferring shareholder must input
the unique ID of the recipient shareholder. In turn,
DeCryptoFi?s software will transfer the number of
shares inputted by the sending shareholder.
DeCryptoFi?s software will then update the amount of
shares held by the sending shareholder and received by
the recipient shareholder so that DeCryptoFi can
maintain the exact amount of shareholders and number
of shares to facilitate shareholder notifications.
DeCryptoFi?s software in no way matches offers,
connects buyers and sellers, or facilitates pricing of
DeCryptoFi?s shares. Rather, the proprietary software
simply maintains certain shareholder information and
the number of shares held, as well as the ability to
transfer shares. DeCryptoFi?s software does not
conduct many of the activities that a registered
Transfer Agent would be required to do, including:
DeCryptoFi?s software does maintain the record of all
shares transferred between 2 parties, the amounts of
each shares each parties hold, and the parties
Personal Identifiable Information (?PII). The
information held in DeCryptoFi?s software is the same
but more limited information and functionality held by
PBA described in the recent SEC no-action letter
regarding Portland Brewing Company. PBA had raised the
question of whether these passive electronic bulletin
boards previously addressed by the SEC would also
apply to securities that were registered under Section
12(g) of the Exchange Act but were not listed on an
exchange or trade over the counter. (See?Portland
Brewing Co., Federal Securities Law Reporter ?
Transfer Binders (1993-2001) 77,664 (Dec. 14, 1999)).
Specifically, PBA requested guidance on how the SEC
would respond to a trading platform that could be
accessed by participants directly through PBA?s web
site and would include (i) the names, addresses and
telephone numbers (or other contact mechanisms, such
as electronic mail addresses) of interested buyers and
sellers; (ii) the number of shares or units of the
Covered Security being offered for sale or desired to
be purchased; (iii) the price offered or desired; and
(iv) the date on which the information was entered
into the trading platform.
* Unlike the responsibilities of a registered
Transfer Agent, DeCryptoFi?s software does not track
any payments or provide any reporting of payments.
* To Date DeCryptoFi?s software in no way provides
IPO services for any interested party. In the
future, if the Company decides to provide relevant
IPO services, the Company?s software will need to be
updated, and the Company will utilize the services
of a registered transfer agent while also gaining
SEC approval.
* Unlike the role of a registered Transfer Agent,
DeCryptoFi?s software does not facilitate the
precision and regularity of IPO activity.
* Unlike the responsibility of a Transfer Agent,
DeCryptoFi?s software does not maintain a log of
buyers and sellers. Rather. it only maintains a log
of shares held by each shareholder and where they
originated from.
DeCryptoFi?s software records shareholder stock
amounts for DCF shareholders in the same way that the
aforementioned SEC no-action letter relating to PBA
granted relief. In the no-action letter, the Division
of Market Regulation granted no-action relief to PBA
and its personnel with respect to the broker and
dealer registration provisions under Section 15(a) of
the Exchange Act and the Commission?s Division of
Corporation Finance granted no-action relief with
respect to registration of the offers and sales in the
Covered Security made through the platform under the
Securities Act of 1933.
Currently, DeCryptoFi?s software does not facilitate
in shareholder distributions. If, in the future,
DeCryptoFi does offer distributions services and the
Company software is able to facilitate such, then
DeCryptoFi will be sure to timely comply with all
applicable regulations and file all necessary
amendments.
* Because your software operators do not satisfy
Exchange Act Rule 3a4-1(c)(1)'s definition of "associated
person of the issuer," it appears that they are
ineligible to rely on Rule 3a4-1. Please revise your
disclosure to remove any statements that suggest
otherwise.
DeCryptoFi Response: DeCryptoFi has removed the suggestive
language pertaining to ?associated person of the issuer??
(pg. 23). DeCryptoFi acknowledges that its previous
language may have been misconstrued by potential investors
and we agree that the prior language posed unnecessary
ambiguity.
* Please tell us who will be offering the shares in this
offering, given the purpose and functionality of your
platform and the fact that your disclosure suggests that
there is not an underwriter, broker-dealer, and/or
placement agent involved in this offering.
DeCryptoFi Response: As mentioned, DeCryptoFi will be
making this initial general offering available
directly to the consumer, which shall consist of an
unlimited number of accredited investors, and to the
maximum permissible amount to non-accredited
investors, as such limitations are defined under
Regulation A of the Securities Act of 1933, as amended
(the ?Securities Act).
4. We re-issue prior comment 5 in part, as you have not removed
the disclosure about your intent to retire stock. As requested
in prior comment 5, please revise to remove this disclosure or
tell us why you believe it is appropriate, as it is not clear
how the mechanism you describe here will result in the
retirement of your stock.
DeCryptoFi Response: DeCryptoFi has determined that
the following disclosure is not currently necessary
and has opted to remove it. Should the Company
determine that a disclosure will be required, the
Company is prepared to file Form 1-U with the
appropriate language and necessary disclosures.
Exhibits
5. We note your response to prior comment 7, and that the
exclusive forum provision contained in Article 11, Section 11.2
of your bylaws applies to actions arising under the Securities
Act and Exchange Act. In this regard, because your provision
identifies a state court as the exclusive forum and you are
applying such provision to claims made under the Exchange Act,
tell us how this applicability is consistent with Section 27 of
the Exchange Act, which grants exclusive jurisdiction to the
federal courts for all Exchange Act claims, and Section 29(a),
which prohibits investors from waiving their rights under the
Exchange Act. Also, as requested in prior comment 7, please
revise the disclosure in your offering statement to discuss the
provision, acknowledge uncertainty as to whether a court would
enforce such provision and that investors cannot waive
compliance with the federal securities laws and the rules and
regulations thereunder. Lastly, please ensure that you provide
corresponding disclosure in your Risk Factors section,
describing the risks to investors associated with such provision
(including increased costs to bring a claim and the limitation
of investors' ability to bring a claim in a judicial forum that
they find favorable), and address any uncertainty about the
provision's enforceability.
DeCryptoFi Response: The language in DeCryptoFi?s
bylaws, and DeCryptoFi?s Risk Factors section of its
offering circular (pg. 14) have been amended to state
that, ?Pursuant to Section 27 of the Exchange Act, the
federal courts shall have exclusive jurisdiction for
all Exchange Act claims. Federal courts shall also
hear all claims concerning (a) any derivative action
or proceeding brought on behalf of the Corporation,
(b) any action asserting a claim of breach of a
fiduciary duty owed by any director, officer, or other
employee of the Corporation to the Corporation or the
Corporation?s stockholders, (c) any action asserting a
claim against the Corporation or any director or
officer or other employee of the Corporation arising
pursuant to any provision of the Applicable Law, the
Certificate, or these Bylaws, or (d) any action
asserting a claim against the Corporation or any
director or officer or other employee of the
Corporation governed by the internal affairs doctrine.
This section shall apply to actions arising under the
Securities Act or Exchange Act. Accordingly, there is
uncertainty as to whether a court would enforce such
provision, giving consideration to Section 27 of the
Exchange Act which 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. Further, 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. Please note that investors cannot waive
compliance with the federal securities laws and the
rules and regulations thereunder.?
General
6. Please update the financial statements included in the filing
in compliance with Part F/S, (c)(1) and (b)(3)(B) of Form 1-A,
to include the financial statements for the relevant interim
period in 2021. Update any associated financial information in
relevant sections of the filing as necessary.
DeCryptoFi Response: DeCryptoFi and its auditor have
updated the financial statements and any associated
information throughout the offering circular for the
relevant interim period in 2021.