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

PRELIMINARY OFFERING CIRCULAR DATED September 30, 2022

NIXPLAY, INC.

12301 Whitewater Dr.

Ste 115

Minnetonka, MN 55343-3932

Phone: (213) 407-8763

UP TO 2,094,534 SHARES OF SERIES A PREFERRED STOCK

UP TO 2,094,536 SHARES OF COMMON STOCK INTO WHICH THE SERIES A PREFERRED STOCK MAY CONVERT*

PRICE: $7.1615 PER SHARE

MINIMUM INVESTMENT: $1,002.61

SEE “SECURITIES BEING OFFERED” AT PAGE 47

*The Series A Preferred Stock is convertible into Common Stock either at the discretion of the investor or automatically upon the occurrence of certain events, like effectiveness of registration of the Common Stock in an initial public offering. The total number of shares of the Common Stock into which the Preferred Stock may be converted will be determined by dividing the original issue price per share by the conversion price per share. See “Securities Being Offered” at page 47 for additional details.

** The Company has engaged SI Securities, LLC (“SeedInvest”) to serve as its sole and exclusive placement agent to assist in the placement of its securities. The Company will pay SeedInvest in accordance with the terms of the Issuer Agreement between the Company and SeedInvest, a copy of which is filed as an exhibit to the offering statement of which this offering circular is a part. SeedInvest will receive an 8.0% commission on the first $10,000,000 in proceeds raised from investors that SeedInvest identifies in this offering – which will be reduced to a 7.0% commission on proceeds raised in excess of this amount. If SeedInvest identifies all the investors and the maximum amount of securities is sold, the maximum amount the Company would pay SeedInvest is $1,150,000. This does not include transaction fees paid directly to SeedInvest by investors. See “Plan of Distribution and Selling Securityholders” for details of compensation and transaction fees to be paid to SeedInvest on page 14.

*** Investors will be required to pay directly to SeedInvest a Transaction Fee equal to 2% of the investment amount at the time of the investors’ subscription, up to $300. The Transaction Fee paid by any individual investor will be included as part of the aggregate purchase price paid by the investor when calculating the maximum amount non-accredited investors may invest under Rule 251(d)(2)(i)(C) of Regulation A under the Securities Act. The offering table shows the effect of this Transaction Fee as if all investors paid the Transaction Fee equal to 2% of the amount invested. This fee will be promptly refunded in the event the Company does not reach its minimum target amount of $2,500,000 (the “Minimum Target Amount”), excluding the Transaction Fee paid directly to SeedInvest. Investors may invest directly with the Company, without utilizing the SeedInvest platform, to avoid paying the Transaction Fee equal to 2% of the investment amount at the time of the investors’ subscription. The Company must reach its Minimum Target Amount via subscriptions through SeedInvest prior to accepting direct investments. See “Plan of Distribution and Selling Securityholders” for additional discussion of this Transaction Fee. Assuming the offering is fully subscribed and all investors utilized the SeedInvest platform, and all investors paid the Transaction Fee equal to 2% of the amount invested, investors would pay SeedInvest total Transaction Fees of $300,000. This amount is included in the Total Maximum offering amount since it counts towards the rolling 12-month maximum offering amount that the Company is permitted to raise under Regulation A. However, it is not included in the “Proceeds to Issuer” column of the table above.

The Company has engaged The Bryn Mawr Trust Company of Delaware as an escrow agent (the “Escrow Agent”) to hold funds tendered by investors, and assuming we sell a minimum of $2,500,000 worth of shares of Series A Preferred Stock, may hold a series of closings at which we receive the funds from the Escrow Agent and issue the shares to investors.  This offering (the “Offering”) will terminate at the earlier of the date at which the maximum offering amount has been sold, and the date at which the Offering is earlier terminated by the Company, in its sole discretion. At least every 12 months after this Offering has been qualified by the United States Securities and Exchange Commission (the “Commission”), the Company will file a post-qualification amendment to include the Company’s recent financial statements. The Offering is being conducted on a best-efforts basis. The Company may undertake one or more closings on a rolling basis. After each closing, funds tendered by investors will be available to the Company.

INVESTING IN THE SERIES A PREFERRED STOCK OF NIXPLAY, INC. IS SPECULATIVE AND INVOLVES SUBSTANTIAL RISKS. YOU SHOULD PURCHASE THESE SECURITIES ONLY IF YOU CAN AFFORD A COMPLETE LOSS OF YOUR INVESTMENT. SEE “RISK FACTORS” BEGINNING ON PAGE4 TO READ ABOUT THE MORE SIGNIFICANT RISKS YOU SHOULD CONSIDER BEFORE BUYING THE SERIES A PREFERRED STOCK OF THE COMPANY.

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

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

Sales of these securities will commence on approximately on [   ].

This offering is inherently risky. See “Risk Factors” on page 4.

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

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

TABLE OF CONTENTS

In this offering circular, unless context indicates otherwise, the terms “Nixplay”, “the Company”, “we”, “us”, or “our” refers to Nixplay, Inc. and its subsidiaries on a consolidated basis.

Other than in the table on the cover page, dollar amounts have been rounded to the closest whole dollar.

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

SUMMARY

Overview

Nixplay, Inc. is a corporation formed under the laws of the State of Delaware on June 10, 2022. Nixplay produces smart, Wi-Fi enabled digital photo frames that are supported by the “Nixplay Platform” – our private platform that enables families to share, store, and view their photos, videos, and other digital content through our frames and Nixplay mobile app. Through the Nixplay Platform and our digital photo frames, we have created a content-sharing ecosystem that allows our users to effortlessly store and manage their content and their frame through an easy-to-use mobile app. Nixplay’s products and technology are all geared towards helping us achieve our mission, which is to enable our users to share moments of joy and preserve memories.

The Offering

Implications of Being an Emerging Growth Company

We are not subject to the ongoing reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) because we are not registering our securities under the Exchange Act. Rather, we will be subject to the more limited reporting requirements under Regulation A, including the obligation to electronically file:

In addition, at any time after completing reporting for the fiscal year in which our offering statement was qualified, if the securities of each class to which this offering statement relates are held of record by fewer than 300 persons and offers or sales are not ongoing, we may immediately suspend our ongoing reporting obligations under Regulation A.

If and when we become subject to the ongoing reporting requirements of the Exchange Act, as an issuer with less than $1.07 billion in total annual gross revenues during our last fiscal year, we will qualify as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) and this status will be significant. An emerging growth company may take advantage of certain reduced reporting requirements and is relieved of certain other significant requirements that are otherwise generally applicable to public companies. In particular, as an emerging growth company we:

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

Under the JOBS Act, we may take advantage of the above-described reduced reporting requirements and exemptions for up to five years after our initial sale of common equity pursuant to a registration statement declared effective under the Securities Act of 1933, as amended, or such earlier time that we no longer meet the definition of an emerging growth company. Note that this offering, while a public offering, is not a sale of common equity pursuant to a registration statement, since the offering is conducted pursuant to an exemption from the registration requirements. In this regard, the JOBS Act provides that we would cease to be an “emerging growth company” if we have more than $1.07 billion in annual revenues, have more than $700 million in market value of our common stock held by non-affiliates, or issue more than $1 billion in principal amount of non-convertible debt over a three-year period.

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

Selected Risks Associated with Our Business

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

RISK FACTORS

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

Risks Related to our Business and Industry

If we are unsuccessful in establishing and increasing awareness of our brand and recognition of our products, or if we incur excessive expense promoting and maintaining our brand or our products, our potential revenues could be limited, our costs could increase and our operating results and financial condition would be harmed.

We believe that acceptance of our products by an expanding customer base depends in large part on increasing awareness of the Nixplay brand and that brand recognition will be even more important as competition in our market increases. Successful promotion of our brand depends largely on the effectiveness of our marketing efforts and on our ability to develop reliable and quality products at competitive prices, as well as our ability to improve, expand, and grow the Nixplay Platform. In addition, globalizing and extending our brand and recognition of our products and services is costly and involves extensive management time to execute successfully. Further, the markets in which we operate are highly competitive.. Our future promotion activities may involve significant expense and may not generate desired levels of increased revenue, and even if such activities generate some increased revenue, such increased revenue may not offset the expenses we incurred in endeavoring to build our brand. If we fail to successfully promote and maintain our brand, or incur substantial expenses in our attempts to promote and maintain our brand, we may fail to attract enough new customers or retain our existing customers to the extent necessary to realize a sufficient return on our brand-building efforts, and as a result our operating results and financial condition would suffer.

We may be subject to declining average selling prices, which may harm our results of operations.

Consumer electronic devices such as those we offer are from time to time subject to declines in average selling prices due to evolving technologies, industry standards and consumer preferences. Consumer electronics products are subject to technological changes, which often cause product obsolescence. Companies within the consumer electronics industry are continuously developing new products with heightened performance and functionality. This puts pricing pressure on existing products and threatens to make them, or causes them to become, obsolete.

If we fail to accurately anticipate the introduction of new technologies, we may possess obsolete inventory that can only be sold at lower prices and profit margins than we anticipated. In addition, if we fail to accurately anticipate the introduction of new technologies, we may be unable to compete effectively due to our failure to offer products most demanded by the marketplace. If any of these failures occur, our sales, profit margins and profitability will be adversely affected.

We are subject to intense competition in the industry in which we operate, which could cause material reductions in the selling price of our products or losses of our market share.

The consumer electronics industry is highly competitive, especially with respect to pricing and the introduction of new products and features. Our products compete in the medium- to high- priced sector of the consumer electronics market and compete primarily on the basis of:

Our competitors may be able to:

These factors could materially adversely affect our operations and financial condition. In addition, competition could increase if:

An increase in competition could result in material price reductions or loss of our market share.

Our revenues and earnings could be materially and adversely affected if we cannot anticipate market trends or enhance existing products or achieve market acceptance of new products.

Consumers for electronic devices such as our digital photo frames have other options to choose from and we must compete with other producers of digital photo frames in order to sell our products and generate revenues. Our success is dependent on our ability to successfully anticipate and respond to changing consumer demands and trends in a timely manner. We may not be successful in effectively marketing our products, and we may not be successful in developing new products and/or updating our existing products in response to technological developments or changing customer needs and preferences. In either case, our sales volume may decline and our earnings could be materially and adversely affected. In addition, new products or enhancements by our competitors may cause customers to defer or forego purchases of our products, which could also materially and adversely affect our revenues and earnings.

If we do not correctly forecast demand for our products, we could have costly excess production or inventories and we may not be able to secure sufficient or cost effective quantities of our products or production materials and our revenues, cost of revenues and financial condition could be adversely affected.

The demand for our products depends on many factors, including pricing and inventory levels, and is difficult to forecast due in part to variations in economic conditions, changes in consumer and business preferences, relatively short product life cycles, changes in competition, seasonality and reliance on key third party carriers. Our inability to correctly forecast demand for our products could result in costly excess production or inventories or the inability to secure sufficient, cost-effective quantities of our products or production materials. This could adversely impact our revenues, cost of revenues and financial condition.

Our products may contain errors or defects, which could result in the rejection of our products, damage to our reputation, lost revenues, diverted development resources and increased service costs, warranty claims and litigation.

Our products are complex and must meet stringent user requirements. In addition, we must develop our products to keep pace with the rapidly changing technologies. Sophisticated electronic products like ours may contain undetected errors or defects, especially when first introduced or when new models or versions are released. Our products may not be free from errors or defects after commercial shipments have begun, which could result in the rejection of our products and jeopardize our relationship with carriers. End users may also reject or find issues with our products and have a right to return them even if the products are free from errors or defects. In either case, returns or quality issues could result in damage to our reputation, lost revenues, diverted development resources, increased customer service and support costs, and warranty claims and litigation which could harm our business, results of operations and financial condition.

The loss or significant reduction in business of any of our key customers could materially and adversely affect our revenues and earnings.

Amazon (Vendor) and Best Buy accounted for 51% and 9% of our total sales, respectively, during the year ended December 31, 2021. All purchases of our products by customers are made through purchase orders and we do not have long-term contracts with any of our customers. It is possible that these customers could discontinue purchases of our products. While we believe we could potentially recoup all or a majority of these sales through direct sales to customers on these retailer’s marketplaces in such an event, there is no guarantee we would be able to match the level of sales made to these retailers’ purchases of our products. The loss of the above customers, or any of our other customers to which we sell a significant amount of our products or any significant portion of orders from the above customers, or such other customers or any material adverse change in the financial condition of such customers could negatively affect our revenues and decrease our earnings.

We cannot rely on long-term purchase orders or commitments to protect us from the negative financial effects of a decline in demand for our products. The limited certainty of product orders can make it difficult for us to forecast our sales and allocate our resources in a manner consistent with our actual sales. Moreover, our expense levels are based in part on our expectations of future sales and, if our expectations regarding future sales are inaccurate, we may be unable to reduce costs in a timely manner to adjust for sales shortfalls.

The loss or significant reduction in business on any of our sales channels could materially and adversely affect our revenue and earnings.

We are highly dependent on third party sales channels to distribute and sell our products. In 2021 84% of our sales were through third party sales channels such as Amazon, Best Buy, Walmart etc. Loss of access to these sales channels will impact the long term ability to generate profit.

Certain disruptions in supply of and changes in the competitive environment for raw materials integral to our products may adversely affect our profitability.

We use a broad range of materials and supplies, including displays, Wifi modules, and other electronic components in our products. A significant disruption in the supply of these materials could decrease production and shipping levels, materially increase our operating costs and materially adversely affect our profit margins. Shortages of materials or interruptions in transportation systems, labor strikes, work stoppages, war, acts of terrorism or other interruptions to or difficulties in the employment of labor or transportation in the markets in which we purchase materials, components and supplies for the production of our products, in each case may adversely affect our ability to maintain production of our products and sustain profitability. If we were to experience a significant or prolonged shortage of critical components from any of our suppliers and could not procure the components from other sources, we would be unable to meet our production schedules for some of our key products and to ship such products to our customers in a timely fashion, which would adversely affect our sales, margins and customer relations.

Our operations would be materially adversely affected if third-party carriers were unable to transport our products on a timely basis.

All of our products are shipped through third party carriers. If a strike or other event prevented or disrupted these carriers from transporting our products, other carriers may be unavailable or may not have the capacity to deliver our products to our customers. If adequate third party sources to ship our products were unavailable at any time, our business would be materially adversely affected.

The seasonality of our business, as well as changes in consumer spending and economic conditions, may cause our quarterly operating results to fluctuate and cause our stock price to decline.

Our net revenue and operating results may vary significantly from year to year. The main factors that may cause these fluctuations are:

In addition, our quarterly operating results could be materially adversely affected by political instability, war, acts of terrorism or other disasters.

Sales of our products are somewhat seasonal due to consumer spending patterns, which tend to result in significantly stronger sales in our third and fourth fiscal quarters, especially as a result of the holiday season. This pattern will probably not change significantly in the future. Although we believe that the seasonality of our business is based primarily on the timing of consumer demand for our products, fluctuations in operating results can also result from other factors affecting us and our competitors, including new product developments or introductions, availability of products for resale, competitive pricing pressures, changes in product mix, pricing and product reviews. Due to the seasonality of our business, our results for interim periods are not necessarily indicative of our results for the year.

As a result of these and other factors, revenues for any interim period are subject to significant variation, which may adversely affect our results of operations and the market price for our common stock.

We are dependent on certain key personnel and loss of these key personnel could have a material adverse effect on our business, financial condition and results of operations.

Our success is, to a certain extent, attributable to the management, sales and marketing, and operational and technical expertise of certain key personnel. Each of the named executive officers performs key functions in the operation of our business. The loss of a significant number of these employees could have a material adverse effect upon our business, financial condition, and results of operations.

Our failure to attract and retain highly qualified personnel in the future could harm our business. 

As the Company grows, it will be required to hire and attract additional qualified professionals such as regulatory professionals, tech professionals, sales and marketing professionals, accounting, and finance experts. We may not be able to locate or attract qualified individuals for such positions, which will affect our ability to grow and expand our business.

If we fail to comply with federal, state, and foreign laws relating to privacy and data protection, we may face potentially significant liability, negative publicity, an erosion of trust, and increased regulation, any of which could materially adversely affect our business, results of operations, and financial condition.

Privacy and data protection laws, rules, and regulations are complex, and their interpretation is rapidly evolving, making implementation and enforcement, and thus compliance requirements, ambiguous, uncertain, and potentially inconsistent. Compliance with such laws may require changes to our data collection, use, transfer, disclosure, other processing, and certain other related business practices and may thereby increase compliance costs or have other material adverse effects on our business. As part of the registration process for our Nixplay Platform, we may collect and use personal data, such as names, dates of birth, email addresses, phone numbers, photos and videos, as well as payment card or other financial information that users of the Nixplay Platform provide to us for registration purposes. The laws of many states and countries require businesses, which maintain such personal data to implement reasonable security measures to keep such information secure and otherwise restrict the ways in which such information can be collected, processed, disclosed, transferred and used.

The U.S. government, including Congress, the Federal Trade Commission and the Department of Commerce, has announced that it is reviewing the need for greater regulation for the collection of information concerning consumer behavior on the Internet, including regulation aimed at restricting certain targeted advertising practices. In addition, numerous states have enacted or are in the process of enacting state level data privacy laws and regulations governing the collection, use, and processing of state residents’ personal data. For example, the California Consumer Privacy Act (the “CCPA”) took effect on January 1, 2020. The CCPA establishes a new privacy framework for covered businesses such as ours, and may require us to modify our data processing practices and policies and incur compliance related costs and expenses. The CCPA provides new and enhanced data privacy rights to California residents, such as affording consumers the right to access and delete their information and to opt out of certain sharing and sales of personal information. The law also prohibits covered businesses from discriminating against consumers (for example, charging more for services) for exercising any of their CCPA rights. The CCPA imposes potentially severe statutory damages as well as a private right of action for certain data breaches that result in the loss of personal information. This private right of action is expected to increase the likelihood of, and risks associated with, data breach litigation. It remains unclear how various provisions of the CCPA will be interpreted and enforced. In November 2020, California voters passed the California Privacy Rights and Enforcement Act of 2020 (the “CPRA”). The CPRA further expands the CCPA with additional data privacy compliance requirements that may impact our business, and establishes a regulatory agency dedicated to enforcing those requirements. Further, on March 2, 2021, Virginia enacted the Virginia Consumer Data Protection Act (the “CDPA”), a comprehensive privacy statute that shares similarities with the CCPA and CPRA. Similar laws have been proposed in other states and at the federal level, reflecting a trend toward more stringent privacy legislation in the United States. The effects of the CCPA, CPRA, CDPA, and any enactment of any other similar state or federal laws, are and will continue to be significant and may require us to modify our data processing practices and policies and may thereby increase compliance costs (and our potential liability) or have other material adverse effects on our business.

In the European Union, the GDPR, which became effective on May 25, 2018, which, among other things, obligates us to handle and safeguard all personal data we collected from EU residents in accordance with the GDPR for as long as we retain such personal data. This obligation extends to compliance with laws, rules, and regulations regarding cross-border transfers of personal data.

Failure to comply with the GDPR may result in fines of up to 20 million Euros or up to 4% of the annual global revenue of the infringer, whichever is greater. It may also lead to civil litigation, with the risks of damages or injunctive relief, or regulatory orders adversely impacting the ways in which our business can use personal data. Canada is in the process of passing comparable or other robust data privacy legislation or regulation, which may lead to additional costs and increase our overall risk exposure.

Various other governments and consumer agencies around the world have also called for new regulation and changes in industry practices and many have enacted different and often contradictory requirements for protecting personal information collected and maintained electronically. Compliance with numerous and contradictory requirements of different jurisdictions is difficult and costly for a business such as ours, which collects personal information from our users. If any jurisdiction in which we operate adopts news laws or changes its interpretation of its laws, rules, or regulations relating to data residency or localization such that we are unable to comply in a timely manner or at all, we could risk losing our rights to operate in such jurisdictions. While we have invested and continue to invest significant resources to comply with applicable privacy regulations around the world, many of these regulations expose us to the possibility of material penalties, significant legal liability, changes in how we operate or offer our products, and interruptions or cessation of our ability to operate in key geographic regions, any of which could materially adversely affect our business, results of operations, and financial condition.

Any failure or perceived failure by us to comply with privacy and data protection policies, notices, laws, rules, and regulations could result in proceedings or actions against us by individuals, government agencies, or others. We could incur significant costs in investigating and defending such claims and, if found liable, pay significant damages or fines or be required to make changes to our business. Further, these proceedings and any subsequent adverse outcomes may subject us to significant negative publicity, and an erosion of trust. If any of these events were to occur, our business, results of operations, and financial condition could be materially adversely affected.

If we or our third-party service providers fail to prevent data security breaches, there may be damage to our brand and reputation, material financial penalties, and legal liability, along with a decline in use of our platform, which would materially adversely affect our business, results of operations, and financial condition.

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

We may become involved in litigation to protect our intellectual property or enforce our intellectual property rights, which could be expensive, time-consuming and may not be successful.

Competitors may infringe our patents or misappropriate or otherwise violate our intellectual property rights. To counter infringement or unauthorized use, we may engage in litigation to, among others, enforce or defend our intellectual property rights, determine the validity or scope of our intellectual property rights and those of third parties, and protect our trade secrets. Such actions may be time-consuming and costly and may divert our management’s attention from our core business and reduce the resources available for our development, manufacturing and marketing activities, and consequently have a material and adverse effect on our business and prospects, regardless of the outcome.

In addition, in an infringement proceeding, a court may decide that a patent owned by, or licensed to, us is invalid or unenforceable, or may refuse to stop the other party from using the technology in question on the ground that our patents do not cover such technology. An adverse result in any litigation proceeding could put one or more of our patents at risk of being invalidated, held unenforceable or interpreted narrowly. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that our confidential information may be compromised by disclosure.

We may be subject to claims from third parties that our products infringe their intellectual property rights.

Our commercial success depends in large part upon our ability to manufacture, market and sell our products without infringing on the patents or other proprietary rights of third parties. It is not always clear to industry participants, including us, what the scope of a patent covers. There is always a risk that third parties will claim that our product or technologies infringe their intellectual property rights.

Claims for infringement of intellectual property which are brought against us, whether with or without merit, and which are generally uninsurable, could result in time-consuming and costly litigation, diverting our management’s attention from our core business and reducing our resources for business development activities, and consequently have a material and adverse effect on our business and prospects, regardless of the outcome. Moreover, such proceedings could put our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not being issued. We also may not prevail in any lawsuits that we initiate, and the damages or other remedies awarded, if any, may not be commercially meaningful. Uncertainties resulting from the initiation and continuation of litigation or other proceedings could also have a material and adverse effect on our ability to compete in the market. Third parties making claims against us could obtain injunctive or other equitable relief against us, which could prevent us from further developing or commercializing our product candidates.

Infringement claims may be brought against us in the future, and we cannot assure you that we will prevail in any ensuing litigation given the complex technical issues and inherent uncertainties involved in intellectual property litigation. Our competitors may have substantially greater resources than we do and may be able to sustain the costs of such litigation more effectively than we can.

Risks Related to the Securities in this Offering

The subscription agreement has a forum selection provision that requires disputes be resolved in state or federal courts in the State of Delaware, regardless of convenience or cost to you, the investor.

In order to invest in this offering, investors agree to resolve disputes arising under the subscription agreement other than those arising under the federal securities laws in state or federal courts located in the State of Delaware, for the purpose of any suit, action or other proceeding arising out of or based upon the agreement. This forum selection provision may limit your ability to obtain a favorable judicial forum for disputes with us. Although we believe the provision benefits us by providing increased consistency in the application of Delaware law in the types of lawsuits to which it applies and in limiting our litigation costs, to the extent it is enforceable, the forum selection provision may limit investors’ ability to bring claims in judicial forums that they find favorable to such disputes, may increase investors’ costs of bringing suit and may discourage lawsuits with respect to such claims. Alternatively, if a court were to find the provision inapplicable to, or unenforceable in an action, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business, financial condition or results of operations. You will not be deemed to have waived the Company’s compliance with the federal securities laws and the rules and regulations thereunder.

Investors in this offering may not be entitled to a jury trial with respect to claims arising under the subscription agreement, which could result in less favorable outcomes to the plaintiff(s) in any action under the agreement.

Investors in this offering will be bound by the subscription agreement, which includes a provision under which investors waive the right to a jury trial of any claim they may have against the Company arising out of or relating to the agreement other than those arising under the federal securities laws.

If we opposed a jury trial demand based on the waiver, a court would determine whether the waiver was enforceable based on the facts and circumstances of that case in accordance with the applicable state and federal law. In determining whether to enforce a contractual pre-dispute jury trial waiver provision, courts will generally consider whether the visibility of the jury trial waiver provision within the agreement is sufficiently prominent such that a party knowingly, intelligently and voluntarily waived the right to a jury trial. We believe that this is the case with respect to the subscription agreement. You should consult legal counsel regarding the jury waiver provision before entering into the subscription agreement.

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

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

We expect to raise additional capital through equity and/or debt offerings to support our working capital requirements and operating losses.

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

This investment is illiquid.

There is no currently established market for reselling these securities. If you decide that you want to resell these securities in the future, you may not be able to find a buyer.

The value of your investment may be diluted if the Company issues additional classes of securities.

In order to advance its program, the Company is likely to raise funds again in the future, either by offerings of securities or through borrowing from banks or other sources. The terms of future capital raising, such as loan agreements, may include covenants that give creditors greater rights over the financial resources of the Company.

Some investors have more rights than others.

Pursuant to the terms of the Investors’ Rights Agreement that investors must sign in order to purchase shares of our Series A Preferred Stock, investors who invest $100,000 or more in this offering will be provided the right to participate in future financings on more favorable terms compared to investors that invest less than $100,000.

Investors in this offering must vote their shares to approve of certain future events, including our sale. The Investors' Rights Agreement that purchasers of Series A Preferred Stock must sign will contain a “drag-along provision” related to the sale of the Company whereby investors and their transferees agree to vote any shares they own in the same manner as the majority holders of our other classes of voting stock. Specifically, and without limitation, if the board of directors and majority holders of our other classes of stock may determine to sell the Company, depending on the nature of the transaction, investors will be forced to sell their stock in that transaction regardless of whether they believe the transaction is the best or highest value for their shares, and regardless of whether they believe the transaction is in their best interests. Furthermore, if the consideration in such a sale includes securities and an investor’s receipt of such securities requires registration or qualification under securities laws or the provision to the investor of any information other than such information as would generally be available in an offering under Regulation D, the Company may instead pay the investor in cash in lieu of such securities.

DILUTION

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

Immediate dilution

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

The following table demonstrates the price that new investors are paying for their shares of Series A Preferred Stock with the effective cash price paid by existing stockholders and assuming that the shares are sold at $7.1615 per share. The table 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 than just including such transactions for the last 12 months, which is what the Commission requires. Since Nixplay, Inc. was incorporated on June 10, 2022, the share numbers and amounts in this table reflect the instruments issued and outstanding as of the date of this offering circular.

Future dilution

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

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

The type of dilution that hurts early-stage investors most occurs when 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):

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

If you are making an investment expecting to own a certain percentage of the company or expecting each share to hold a certain amount of value, it’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.

PLAN OF DISTRIBUTION AND SELLING SECURITYHOLDERS

Plan of Distribution

The Company is offering a minimum of 349,089 shares of Series A Preferred Stock and a maximum of 2,094,534 shares of Series A Preferred Stock, as described in this offering circular. The Company has engaged SeedInvest as its sole and exclusive placement agent to assist in the placement of its securities. SeedInvest is under no obligation to purchase any securities or arrange for the sale of any specific number or dollar amount of securities.

Commissions and Discounts

The following table shows the total discounts and commissions payable to the SeedInvest in connection with this offering, assuming a fully subscribed offering.

Except as set forth above, the Company is not under any contractual obligation to engage SeedInvest to provide any services to the Company after this offering and has no present intent to do so. However, SeedInvest may, among other things, introduce the Company to potential target businesses or assist the Company in raising additional capital, as needs may arise in the future. If SeedInvest provides services to the Company after this offering, the Company may pay SeedInvest fair and reasonable fees that would be determined at that time in an arm’s length negotiation. SeedInvest will receive an 8.0% commission the first $10,000,000 in proceeds raised from investors that SeedInvest identifies in this offering – which will be reduced to a 7.0% commission on proceeds raised in excess of this amount.

If the SeedInvest identifies all the investors and the maximum amount of securities is sold, the maximum amount the Company would pay SeedInvest is $1,150,000.

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

Selling Securityholders

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

Transfer Agent and Registrar 

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

Investors’ Tender of Funds

After the offering statement has been qualified by the Commission, the Company will accept tenders of funds to purchase the Series A Preferred Stock. The Company may close on investments on a “rolling” basis (so not all investors will receive their securities on the same date), provided that the minimum offering amount for this offering has been met. Investors may subscribe by tendering funds via debit card, wire or ACH only (checks will not be accepted) to the escrow account to be setup by the Escrow Agent. Tendered funds will remain in escrow until both the minimum offering amount has been reached and a closing has occurred. However, in the event the Company has not sold the minimum amount of shares by ___________, 2023, the date six months after qualification, or sooner terminated the offering, any money tendered by potential investors will be promptly returned by the Escrow Agent. Upon closing, funds tendered by investors will be made available to the Company for its use.

In order to invest, investors will be required to subscribe to the offering via the Online Platform and agree to the terms of the offering, subscription agreement, and any other relevant exhibit attached thereto.

In the event that it takes some time for the Company to raise funds in this offering, the Company will rely on income from sales, funds raised in any offerings from accredited investors.

Perks

Investors in this offering are eligible to receive certain perks depending on their investment amount. Additionally, “Bonus Reservation Perks” are available to investors who “reserve” shares during the “Testing the Waters” phase of our offering, and subsequently subscribe for shares of our Series A Preferred Stock within two weeks of the date the offering is qualified and commences.

Reserving Shares. Prior to the qualification by the SEC of the Company’s offering, the Company will offer investors the opportunity to “reserve” shares via the Company’s page on the SeedInvest website. To reserve shares, an investor must create and login to his or her SeedInvest account and navigate to the Company’s campaign page and follow the instructions to reserve shares in this offering. Investors who reserve shares in this manner will be eligible to receive the applicable “Bonus Reservation Perks” listed below if they complete their purchase within two weeks of the offering commencing. For example, if an investor reserves 1,000 shares, and subsequently confirms this reservation and purchases the 1,000 shares within two weeks of the offering commencing, such investor will receive the Tier 2 Bonus Reservation Perk, as well as the Tier 2 investment amount perk. “Reserving” shares is simply an indication of interest. There is no binding commitment for investors that reserve shares in this manner to ultimately invest and purchase the shares reserved of the Company, or to purchase any shares of the Company whatsoever.

Investors that meet the following criteria will receive the following perks:

Tier 1

Tier 2:  

Tier 3: 

TAX CONSEQUENCES FOR RECIPIENT (INCLUDING FEDERAL, STATE, LOCAL AND FOREIGN INCOME TAX CONSEQUENCES) WITH RESPECT TO THE INVESTMENT PURCHASE PACKAGES ARE THE SOLE RESPONSIBILITY OF THE INVESTOR. INVESTORS MUST CONSULT WITH THEIR OWN PERSONAL ACCOUNTANT(S) AND/OR TAX ADVISOR(S) REGARDING THESE MATTERS.

Provisions of Note in our Investors’ Rights Agreement

Drag Along Right

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

Right of First Offer

Investors in this offering will execute an investors’ rights agreement that contains a “right of first offer” provision as follows. Holders of Series A Preferred Stock who invest $100,000 or more in this offering (“Major Investors”) will receive participation rights to purchase the portion of New Securities (as defined below) that the Company may issue which equals the proportion that the Common Stock then held by such Major Investor (including all shares of Common Stock then issuable (directly or indirectly) upon conversion of the Series A Preferred Stock then held by such Major Investor) bears to the total Common Stock of the Company then outstanding (assuming full conversion of all Series A Preferred Stock then outstanding). The holder will have no right to purchase any New Securities if the investor cannot demonstrate to the Company’s reasonable satisfaction that the investor is at the time of the proposed issuance of New Securities eligible to purchase such New Securities under applicable securities laws.

“New Securities” means collectively, equity securities of the Company, whether or not currently authorized, as well as rights, options, or warrants to purchase such equity securities, or securities of any type whatsoever that are, or may become, convertible or exchangeable into or exercisable for such equity securities. “New Securities” does not include: (i) shares of Common Stock issued or issuable upon conversion of any outstanding shares of preferred stock; (ii) Common Stock or preferred stock issued in any offering concurrent with the offering in which the holder is investing; (iii) shares of Common Stock or preferred stock issuable upon exercise of any options, warrants, or rights to purchase any securities of the Company outstanding as of the date the offering statement is qualified by the Commission and any securities issuable upon the conversion thereof; (iv) shares of Common Stock or preferred stock issued in connection with any stock split or stock dividend or recapitalization; (v) shares of Common Stock (or options, warrants or rights therefor) granted or issued after the date the offering statement is qualified by the Commission to employees, officers, directors, contractors, consultants or advisers to, the Company or any subsidiary of the Company pursuant to incentive agreements, stock purchase or stock option plans, stock bonuses or awards, warrants, contracts or other arrangements that are approved by the board of directors; (vi) any other shares of Common Stock or preferred stock (and/or options or warrants therefor) issued or issuable primarily for other than equity financing purposes and approved by the board of directors; (vii) shares of Common Stock issued or issuable by the Company to the public pursuant to a registration statement filed under the Securities Act; and (viii) any other shares of the Company’s capital stock, the issuance of which is specifically excluded by approval of the board of directors.

The terms of the right of first offer require the Company to send the Major Investors, or their proxies, if applicable, a notice describing the type of New Securities and the price and the general terms upon which it proposes to issue the New Securities. Under the terms of the right of first offer, a Major Investor has twenty (20) days from the date of notice, to agree to purchase a quantity of New Securities, up to their proportionate share. If a Major Investor fails to exercise in full the right of first offer within the 20-day period, then the Company has one hundred eighty (180) days after that to sell the New Securities with respect to which the Major Investor’s right of first offer was not exercised. Under the terms of the right of first offer, if the Company has not issued and sold the minimum amount of New Securities to be sold in the financing within the 180-day period, then the Company will not issue or sell any New Securities without again first offering those New Securities to Major Investors in accordance with the terms of the certificate of incorporation.

This right will terminate and be of no further force or effect (i) on the date the Company becomes subject to the periodic reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934 or (ii) upon the closing of a Deemed Liquidation Event, whichever event occurs first. A “Deemed Liquidation Event” shall mean (a) a merger or consolidation in which (i) the Company is a constituent party or (ii) a subsidiary of the Company is a constituent party and the Company issues shares of its capital stock pursuant to such merger or consolidation, except any such merger or consolidation involving the Company or a subsidiary in which the shares of capital stock of the Company outstanding immediately prior to such merger or consolidation continue to represent, or are converted into or exchanged for shares of capital stock that represent, immediately following such merger or consolidation, at least a majority, by voting power, of the capital stock of (1) the surviving or resulting corporation; or (2) if the surviving or resulting corporation is a wholly owned subsidiary of another corporation immediately following such merger or consolidation, the parent corporation of such surviving or resulting corporation; or (b) (i) the sale, lease, transfer, exclusive license or other disposition, in a single transaction or series of related transactions, by the Company or any subsidiary of the Company of all or substantially all the assets of the Company and its subsidiaries taken as a whole, or (ii) the sale or disposition (whether by merger, consolidation or otherwise, and whether in a single transaction or a series of related transactions) of one (1) or more subsidiaries of the Company if substantially all of the assets of the Company and its subsidiaries taken as a whole are held by such subsidiary or subsidiaries, except where such sale, lease, transfer, exclusive license or other disposition is to a wholly owned subsidiary of the Company.

Provisions of Note in Our Subscription Agreement

Forum Selection Provision

The subscription agreement that investors will execute in connection with the offering includes a forum selection provision that requires any claims against the Company based on the subscription agreement to be brought in a state or federal court of competent jurisdiction in the State of Delaware, for the purpose of any suit, action or other proceeding arising out of or based upon the agreement. Although we believe the provision benefits us by providing increased consistency in the application of Delaware law in the types of lawsuits to which it applies and in limiting our litigation costs, to the extent it is enforceable, the forum selection provision may limit investors’ ability to bring claims in judicial forums that they find favorable to such disputes and may discourage lawsuits with respect to such claims. The Company has adopted the provision to limit the time and expense incurred by its management to challenge any such claims. As a company with a small management team, this provision allows its officers to not lose a significant amount of time travelling to any particular forum so they may continue to focus on operations of the Company. 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. We believe that the exclusive forum provision applies to claims arising under the Securities Act, but there is uncertainty as to whether a court would enforce such a provision in this context. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. As a result, the exclusive forum provision will not apply to suits brought to enforce any duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. Investors will not be deemed to have waived the Company’s compliance with the federal securities laws and the rules and regulations thereunder.

Jury Trial Waiver

The subscription agreement that investors will execute in connection with the offering provides that subscribers waive the right to a jury trial of any claim they may have against us arising out of or relating to the agreement, other than claims arising under federal securities laws. If we opposed a jury trial demand based on the waiver, a court would determine whether the waiver was enforceable given the facts and circumstances of that case in accordance with applicable case law. In addition, by agreeing to the provision, subscribers will not be deemed to have waived the Company’s compliance with the federal securities laws and the rules and regulations promulgated thereunder.

USE OF PROCEEDS TO ISSUER

Assuming a maximum raise of $15,000,000, the net proceeds of this offering would be approximately $12,232,500 after subtracting estimated offering costs of $1,150,000 to SeedInvest in commissions, $165,000 in audit fees, $2,500 in Edgarization fees, $50,000 in legal fees and $1,400,000 in advertising fees.

Assuming a raise of $7,500,000, representing 50% of the maximum offering amount, the net proceeds of this offering would be approximately $5,982,500 after subtracting estimated offering costs of $600,000 to SeedInvest in commissions, $165,000 in audit fees, $2,500 in Edgarization fees, $50,000 in legal fees and $700,000 in advertising fees.

Assuming a raise of the minimum of $2,500,000, representing approximately 17% of the maximum offering amount, the net proceeds of this offering would be approximately $1,844,500 after subtracting estimated offering costs of $200,000 to SeedInvest in commissions, $165,000 in audit fees, $2,500 in Edgarization fees, $50,000 in legal fees and $238,000 in advertising fees.

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

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

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

THE COMPANY’S BUSINESS

Overview

Nixplay, Inc. is a corporation formed under the laws of the State of Delaware on June 10, 2022. Nixplay produces smart, Wi-Fi enabled digital photo frames that are supported by the “Nixplay Platform” – our private platform that enables families to share, store, and view their photos, videos, and other digital content through our frames and/or Nixplay mobile app. Through the Nixplay Platform and our digital photo frames, we have created a content-sharing ecosystem that allows our users to effortlessly store and manage their content and their frame through an easy-to-use mobile app. Nixplay’s products and technology are all geared towards helping us achieve our mission, which is to enable our users to share moments of joy and preserve memories.

Organizational History

The Company’s origins began with Creedon Technologies USA, LLC, a Minnesota limited liability company formed in 2009. The initial focus of the Company was online sales of digital picture frames. To facilitate sales in various geographic areas in which digital picture frames were being sold, the Company established entities (or utilized already established entities) in the United Kingdom (Creedon Technologies Limited), Canada (Creedon Technologies Canada Limited), and Hong Kong (Creedon Technologies HK Limited).

In 2014, the Company effected a reorganization whereby one newly established entity, Creedon Technologies Holding Limited (formed under the laws of the Cayman Islands in June 2014) became the 100% owner of all the various operating entities of the Company (the “2014 Reorganization”). The purpose of the 2014 Reorganization was primarily to better organize the Company to facilitate fundraising through selling equity in the Company. Creedon Technologies HK Limited became the primary operational entity and headquarters for the Company’s operations after the 2014 Reorganization and was also an intermediary holding company between the Cayman entity and the other entities (i.e., Creedon Technologies Holding Limited owned 100% of Creedon Technologies HK Limited, which in turn owned 100% of all other subsidiaries of the Company).

The Company continued its strategy of establishing subsidiaries in different geographic regions to facilitate sales in those regions, forming Creedon Technologies DE GmbH in Germany in 2018. In March 2019, Creedon Technologies Holding Limited changed its name to “Nixplay” (which we refer to as “Nixplay Cayman” - a different entity than Nixplay, Inc., our Company).

Effective September 11, 2022, the Company underwent another reorganization (the “2022 Reorganization”), pursuant to which Nixplay, Inc. (our Company) was formed, and became the majority owner of Nixplay Cayman. As a result, Nixplay, Inc. is now a majority owner of Nixplay Cayman, which in turn owns 100% of Creedon Technologies HK Limited, which in turn owns all other operating subsidiaries of the Company. A copy of the primary transactional document governing the 2022 Reorganization is included as exhibit 7.1 to the offering statement of which this offering circular forms a part.

The purpose of the 2022 Reorganization was to move the Company’s operational hub from Hong Kong (under Creedon Technologies HK Limited) to the United States (under Nixplay, Inc.), along with the majority of the Company’s executive officers.

As of the date of this offering circular, however, the Company’s executive officers lack the appropriate work visas to migrate from Creedon Technologies HK Limited to Nixplay, Inc. Those executive officers do, however, have work visas enabling them to work at Creedon Technologies USA, LLC, the Company’s United States operating subsidiary. As such, Nixplay, Inc. is contracting with Creedon Technologies USA, LLC for management services pursuant to an agreement (the “Services Agreement”) until such time as those executive officers are able to obtain work visas enabling them to work directly at Nixplay, Inc. While we expect that such work visas could be obtained by early 2023, there is no guarantee we will be able to obtain such visas by this time. See “Operations – Services Agreement with Creedon Technologies USA, LLC” further below in this section for a description of this management agreement between Nixplay, Inc. and Creedon Technologies USA, LLC.

The chart below reflects the current organizational structure of the Company after the 2022 Reorganization.

Our Subsidiaries

Nixplay Cayman. Nixplay Cayman is a holding company incorporated in 2014 in the Cayman Islands. Nixplay Cayman is a holding company of Creedon Technologies HK Limited, and has no material operations. Prior to the 2022 Reorganization, Nixplay Cayman was the primary holding company for all Nixplay entities. Through the 2022 Reorganization, the Company took over this role, acquiring a majority interest of Nixplay Cayman.

Creedon Technologies Limited. Creedon Technologies Limited is a United Kingdom limited company formed in 2006. Previously, this entity handled product distribution and sales in the United Kingdom. We are in the process of winding down this business.

Creedon Technologies DE GmbH. As described above, Creedon Technologies DE GmbH is a German company formed in 2018 through which product sales are made in Germany, France, Italy, and Spain.

Creedon Technologies HK Limited. Creedon Technologies HK Limited is a limited company incorporated in 2010 in Hong Kong. Prior to the 2022 Reorganization, Creedon Technologies HK Limited was the primary operational hub of the Company, and the Company’s headquarters. As of the date of this offering circular, these operations have shifted to Nixplay, Inc. Creedon Technologies HK Limited will now primarily be a sourcing entity for inventory- overseeing production by manufacturers of our digital photo frames. Further, Creedon Technologies HK Limited will support the operations of Creedon Technologies PH Limited, which is a branch office of Creedon Technologies HK Limited. Finally, Creedon Technologies HK owns all of the Company’s patents.

Creedon Technologies Canada Limited. Creedon Technologies Canada Limited is a Canadian limited company formed in 2013. Product sales (and related operations) in Canada are conducted through this entity.

Creedon Technologies PH. Creedon Technologies PH is a company formed in 2013 in the Philippines. Product sales operations and customer services (and related operations) in the Philippines are conducted through this entity. It is a branch office of Creedon Technologies HK Limited.

Creedon Technologies USA, LLC. Creedon Technologies USA, LLC is a Minnesota limited liability company formed in 2009. Historically, product sales (and related operations) were handled through this entity. As of the date of this offering circular, and as a result of the 2022 Reorganization, this entity provides management services to the Company, and is the direct employer of the majority of the executive officers that will ultimately become employees of Nixplay, Inc. once appropriate U.S. work visas have been obtained, as described further above under “Organizational History”. Additionally, sales activities in the United States will still be conducted through Creedon Technologies USA, LLC, and Creedon Technologies USA, LLC will contract and interface directly with our U.S. customers and logistics partners.

Nixplay UK Limited. Nixplay UK Limited is a UK limited company formed in 2021 to be the distribution and commercial entity of the Company in the UK. It also provides support functions for the European market for product refurbishment, logistics, and administration.

Nixplay Design Limited. Nixplay Design Limited is a UK limited company formed in 2021 for the purposes of holding certain of the Company’s trademarks.

Principal Products and Services

Nixplay Platform

The Nixplay Platform allows users to share digital content such as photos and video directly to a Nixplay digital photo frame. Users can:

The Nixplay Platform allows users to create a photo-sharing network that is private, secure, and GDPR and CCPA-compliant. Data is both encrypted and stored in the United States.

The Nixplay Platform is accessible via the “Nixplay” mobile application, available on IOS and Google Playstore, as well as through our website at www.nixplay.com. The Nixplay Platform has integrations with Google Photos, Dropbox, Facebook, and Instagram, allowing users to connect their content from wherever they store it.

There is no charge for downloading or using the Nixplay Platform – however, we do offer a “premium” version of the Nixplay Platform for a fee, via our “Nixplay Plus” membership described further below.

Nixplay Digital Photo Frames

Nixplay produces a number of types of smart, Wi-Fi enabled digital photo frames that connect to the Nixplay Platform.

Each Nixplay digital photo frame comes with:

Engineered to deliver the widest possible viewing angle, while still maintaining crisp and vibrant color reproduction of a user’s photos and videos.

When activated, our frame's proprietary A.I. automatically positions people nearer the center of the frame for the best viewing experience.

A smart sensor that wakes the frame when someone is in the room and sleeps the frame when no one is present.

Nixplay Print Shop

Through a partnership with FujiFilm, the Nixplay Platform offers a “Print Shop” that allows users to print photos from our website www.nixplay.com with Fujifilm's quality print service. This printing service launched in November 2021 with Fujifilm in the United States.

Our printing services include the ability to create:

Users simply choose which printing services they would like on our Nixplay App, and orders are automatically sent to FujiFilm for printing. FujiFilm charges us a set fee for the printing and delivery. We charge a margin on top of this for our users.

Prices of the services above vary - the cheapest options being standard photo prints at $0.29 per photo, with the more expensive options such as Metal Wall Art and Blankets ranging from approximately $40 to $80. Customers may also be entitled to certain savings depending on the mixture and volume of products purchased.

Members of “Nixplay Plus” described below are eligible to receive discounts on printing services.

Nixplay Plus Membership

The “Nixplay Plus” membership offers enhanced user benefits and features and offers wider gifting options through our Print Shop.

The benefits of the Nixplay Plus membership include:

* Occasionally, Nixplay will release a limited run frame that will be made available to Nixplay Plus subscribers only.

We currently offer two Nixplay Plus membership options:

Market

The United States is our key market, comprising 82% of our total revenues during the year ended December 31, 2021. Our next biggest markets (in order of significance) are Germany, the United Kingdom (UK), and Canada, France, and Japan.

Our end-customers of our digital frames are:

The age demographics of our customers are:

We believe our Total Addressable Market (TAM) consists of the markets for Smart Home Devices, Photo Printing, and Gifting (as we are a heavily gifted product).

The future outlook of these markets in the United States are as follows:

We believe we are well-positioned to capitalize on the forecasted growth of these markets in the United States.

Further, we believe we are well-positioned to grow with the growth of the elderly population in the United States, as predicted by the U.S. Census Bureau in March 2018 based on 2017 National Population Projections. Purchasers of our digital photo frames report very often that the products are being purchased as a gift to elder family members. Our current advertising strategy consists of digital marketing and PR publications, predominantly in online publications with a focus on the US market. We have also engaged in TV and other offline advertising campaigns.

Further, our products are often gifted - and we believe this allows us to benefit from a strong network effect, as our customers often organically increase awareness of our Company by gifting our products to individuals that may have previously been unaware of us.

Distribution

Nixplay sells its digital photo frames worldwide through either retail channels or direct-to-consumer channels. We sell direct-to-consumer via our website (www.nixplay.com), as well through online marketplaces of third-party retailers such as Amazon (Seller Central), Target, Walmart, and (through which we sell directly to consumers with a commission to each sale applied by the retailer’s marketplace).

Retailers in our network include Amazon (Vendor), Best Buy, Walmart, and Kohls. The Company receives purchase orders for our products from retailers, and fulfils those purchase orders. The purchase orders received by the Company are singular in nature, obligating the Company to provide a certain amount of product in exchange for a certain purchase price as set forth in the applicable purchase order. Retailers may generally cancel or reschedule orders without penalty, and delivery schedules requested by retailers in their purchase orders frequently vary based upon each customer’s particular needs. Additionally, shipments to customers may be delayed due to inventory constraints. None of these purchase orders obligate the purchaser to make future purchases, and do not guarantee any future revenue to the Company.

For the year ended December 31, 2021, approximately 35% of our sales were comprised of direct-to-consumer sales (19% through Amazon (Seller Central), and 16% through nixplay.com), and the remainder was sold through retailers (Amazon, Best Buy, Kohls, etc.) who purchased and resold our products.

We utilize various third-party logistics providers to help us facilitate shipping and order fulfilment in the various territories in which we make product sales. The services providers bill Nixplay on a monthly basis based on work completed. Our total logistics costs, including freight shipping, were $1,944,685 for the year ended December 31, 2021.

Customers

During the year ended December 31, 2021, approximately 51% of our sales were generated from sales to Amazon (Vendor), from bulk-purchases of our products that were re-sold to end-customers directly. As described above, sales made to Amazon (Vendor) are on a purchase-order basis, with such purchase orders being satisfied once the products are delivered as specified in the order.

Best Buy was the next most significant purchaser of our products during the year ended December 31, 2021, representing 9% of our total product sales during 2021.

No other single customer accounted for more than 3% of our sales in 2021.

As of December 2021, we had approximately 2.5 million user accounts on the Nixplay Platform and 643,000 Monthly Active Users (MAUs) on the Nixplay Platform. Monthly Active Users are defined as users that have connected to the Nixplay Platform (via our Mobile App or Web App).

Competition

We face competition from a number of companies. We believe our most direct competitors are Aura and Skylight, which each offer digital photo frames that can display digital content. We also compete indirectly with larger, well-known companies in the tech industry that that offer similar products and services that our Company offers, such as Amazon and Google (via their “Echo” and “Nest” devices, respectively, which can also display digital content), and Shutterfly and Moonpig (each of which facilitate sharing and gifting of personalized photos).

Our Advantage

We believe that we have a number of competitive advantages against other participants in this market. We are the only brand in the space creating a private content sharing platform that integrates with multiple content providers (Google, Dropbox, Facebook, etc.) and that this level of integration enables easier sharing and engagement between family and friends.

Furthermore, our Nixplay Plus Membership subscription differentiates us by providing other market place enhancements (e.g. extended warranty and print discounts) and software upgrades (e.g. enhanced editing and extended video playback).

The Nixplay Platform encourages sharing of digital content and engagement with that content. This creates a rich dataset that will enable more predictive products and services in the future. By capturing the relationship data between two users, Nixplay will be able to provide pre-curated gifting ideas through the print store. We are not aware of any companies in our specific market that have this capability.

As Nixplay is encouraging users to share content and create engagement around that content (through likes and comments), we believe this provides an advantage in offering curated printed products. Our model of continuous engagement keeps us front of mind with our consumers and provides relational data between users that enables direct targeting for printed goods services.

Printing is just the beginning for us. Nixplay intends to build an ecosystem of services in the form of a “marketplace” with a diverse set of vendor partners that provide a number of types of goods and services for Nixplay users beyond the photo printing services we currently offer. We are firm believers that the winners in this market will be the team that builds the best ecosystem for its users.

A summary of some of the key features of our product and service offerings, and how those compare to those of our competitors, is illustrated below.

Manufacturing

For production of our digital photo frames, we utilize contract manufacturing with a factory in Shenzhen, China. The factory sources the necessary component parts for our frames, and assembles and packages those units on-site. Depending on market conditions, we have, on occasion, precured our own parts in bulk to get better pricing, which we provide to our manufacturer to assemble into our frames. Once assembled and packaged, the finished products are sent from Shenzhen to the applicable market for onward distribution to customers. The majority of our stock is shipped to Los Angeles (for the US market) for onward distribution.

We contract with our manufacturer in Shenzhen on a purchase-order basis. We do not have any ongoing, binding agreement with this manufacturer. While we currently produce all of our products through a single manufacturer in Shenzhen, we are currently in conversations with other potential manufacturers to expand capabilities and de-risk our supply chain.

Operations – Services Agreement with Creedon Technologies USA, LLC

On September 1, 2022, we entered into a Services Agreement (the “Services Agreement”) with Creedon Technologies USA, an affiliate. Creedon Technologies USA is a Minnesota limited liability company formed in 2009. As of the date of this offering circular, and as a result of the 2022 Reorganization, this entity provides management services to the Company, and is the direct employer of the majority of the executive officers of the Company.

Under the terms of the Services Agreement, Creedon Technologies USA agreed to provide to the Company certain personnel, administrative services, and office facilities, including all equipment and supplies, that are reasonable, necessary or useful for the day-to-day operations of the business of the Company, subject to direction provided by the Company to Creedon Technologies USA.

Pursuant to the Services Agreement, the Company agreed to pay Creedon Technologies USA a monthly administrative service fee equal to the costs incurred by Creedon in providing the staff, facilities, and other services contemplated under the Service Agreement. The Company can make such payments to Creedon Technologies USA from the proceeds of this offering or from its income from operations.

The monthly administrative service fee due under the Services Agreement will consist of both a to-be-determined portion of the annual salaries and employee benefits of our executive officers and the other personnel employed by Creedon Technologies USA based upon the amount of time they devote to operation of the Company, as well as a pro-rata allocation of office expenses.

Pursuant to the Services Agreement, Creedon Technologies USA also agreed to certain indemnification provisions, whereby Creedon Technologies USA agreed to indemnify, defend, and hold harmless our Company, including its members, officers, directors, and other agents against claims, liabilities, and expenses of whatever kind, including reasonable attorneys’ fees, which arise out of or are related Creedon Technologies USA’ services to the Company pursuant to the Services Agreement.

The term of the Services Agreement will continue until it is terminated. The Services Agreement can be terminated at any time upon 30 days’ prior written notice from one party to the other.

For additional information, please see the Services Agreement, which is filed as exhibit 6.1 to the offering statement of which this offering circular forms a part.

Employees

As of the date of this offering circular, Nixplay, Inc. has no direct employees. All of the Company’s employees are currently employed directly at the Company’s subsidiaries. Through its subsidiaries, the Company has 80 full-time employees, 1 part time employee, and 4 contractors.

Regulation

We are subject to a variety of data privacy and security laws and regulations across multiple jurisdictions where we have operations – primarily in the United States and Europe.

United States

On June 28, 2018, California adopted the California Consumer Privacy Act of 2018, or CCPA, which took effect on January 1, 2020. The CCPA gives California residents expanded rights to access and delete their personal information, opt out of certain personal information sharing, and receive detailed information about how their personal information is used. The CCPA also provides for civil penalties for violations and contains a private right of action for data breaches that is expected to increase litigation involving misuse of personal information of California residents.

Europe

In May 2018, the General Data Protection Regulation, or GDPR, went into effect in the European Union. The GDPR imposes stringent data protection requirements and grants certain rights to individuals to control how we collect, use, disclose, retain, and process their personal data. The GDPR also provides for more robust regulatory enforcement and greater penalties for noncompliance than previous data protection laws, including fines of up to €20 million or 4% of global annual revenue of any noncompliant company for the preceding financial year, whichever is greater. Violations of the GDPR can result in prohibitions on data processing, other corrective action, and class action litigation.

European data protection laws, including the GDPR, also generally prohibit the transfer of personal information from Europe to the United States and most other countries unless the parties to the transfer have implemented specific safeguards to protect the transferred personal information.

The United Kingdom’s decision to leave the European Union, often referred to as Brexit, has created uncertainty about the regulation of data protection in the United Kingdom, including with respect to whether laws or regulations will apply to us consistent with the GDPR in the future and how data transfers to and from the United Kingdom will be regulated. Following December 31, 2020, and the expiry of transitional arrangements between the United Kingdom and European Union, the data protection obligations of the GDPR continue to apply to U.K.-related processing of personal data in substantially unvaried form under the so-called “U.K. GDPR” (i.e., the GDPR as it continues to form part of U.K. law by virtue of section 3 of the EU (Withdrawal) Act 2018, as amended). However, going forward, there is a chance for divergence in application, interpretation, and enforcement of the data protection laws as between the United Kingdom and the rest of Europe.

Intellectual Property

Our Company (through its subsidiaries) holds a number of patents and trademarks and has a number of patent and trademark applications that are under review. A summary of the Company’s current intellectual property portfolio is summarized in the table below.

Patent Registrations

Patent Applications

Trademark Registrations

Trademark Applications

Litigation

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

Planned Products and Services

In the short term, we have four clear goals for development of products and services:

Enhanced gifting propositions. This involves creating a bespoke gifting experience for all customers.  It will enable our users to preload a frame with photos/videos and curate personal messages that can be displayed on those frames. It will also allow the user to invite other friends or family members to contribute photos, videos, and/or messages to the frame. We anticipate this will greatly enhance the gifting experience of our digital frames, creating a greater moment of joy when receiving the gift. It also has the benefits of encouraging wider adoption of Nixplay products and services by promoting collaboration from other friends and family, thus onboarding more new users.

NFT integrations. We plan to enable our users to display verified Non-Fungible Tokens (NFTs) on their Nixplay digital photo frames. As NFT technology continues to play a more prevalent role in high value content ownership, we believe this is a technology that Nixplay should keep current with. As this technology evolves, it may provide Nixplay with access to a wider audience and create the opportunity for new features around tokenized content on our Nixplay Platform and products. Nixplay recently built a prototype NFT integration for our digital photo frames, and we plan to continue to work towards developing products and services catered towards this market.

Enhance sharing & engagement. We intend to expand and enhance the social features offered to our customers. Our goal in this endeavor is to provide active feedback loops with every interaction in the Nixplay Platform. For example, implementing features whereby a user is notified when a photo the user shared is being regularly displayed on another Nixplay photo frame. By creating positive feedback loops with each interaction, we encourage more usage and engagement with the Nixplay platform.  This provides more relationship data that can be used to provide more value added services.

Enhance Marketplace and Services. We intend to expand our marketplace services offered on www.nixplay.com and the Nixplay mobile app. At present, we partner with Fujifilm to provide our users with services around printed goods. Nixplay is exploring additional products and services to offer its users from third-party vendors and service providers.

The Company’s Property

The Company is headquartered at 12301 Whitewater Drive Suite 115, Minnetonka, MN 55343, which is office space leased by Nixplay, Inc. The Company also leases an office space in:

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

Overview

Nixplay, Inc. is a corporation formed under the laws of the State of Delaware on June 10, 2022. Nixplay produces smart, Wi-Fi enabled digital photo frames that are supported by the “Nixplay Platform” – our private platform that enables families to share, store, and view their photos, videos, and other digital content through our frames and/or Nixplay mobile app. Through the Nixplay Platform and our digital photo frames, we have created a content-sharing ecosystem that allows our users to effortlessly store and manage their content and their frame through an easy-to-use mobile app. Nixplay’s products and technology are all geared towards helping us achieve our mission, which is to enable our users to share moments of joy and preserve memories.

Organizational History

The Company’s origins began with Creedon Technologies USA, LLC, a Minnesota limited liability company formed in 2009. The initial focus of the Company was online sales of digital picture frames. To facilitate sales in various geographic areas in which digital picture frames were being sold, the Company established entities (or utilized already established entities) in the United Kingdom (Creedon Technologies Limited), Canada (Creedon Technologies Canada Limited), and Hong Kong (Creedon Technologies HK Limited).

In 2014, the Company effected a reorganization whereby one newly established entity, Creedon Technologies Holding Limited (formed under the laws of the Cayman Islands in June 2014) became the 100% owner of all the various operating entities of the Company (the “2014 Reorganization”). The purpose of the 2014 Reorganization was primarily to better organize the Company to facilitate fundraising through selling equity in the Company. Creedon Technologies HK Limited became the primary operational entity and headquarters for the Company’s operations after the 2014 Reorganization and was also an intermediary holding company between the Cayman entity and the other entities (i.e., Creedon Technologies Holding Limited owned 100% of Creedon Technologies HK Limited, which in turn owned 100% of all other subsidiaries of the Company).

The Company continued its strategy of establishing subsidiaries in different geographic regions to facilitate sales in those regions, forming Creedon Technologies DE GmbH in Germany in 2018. In March 2019, Creedon Technologies Holding Limited changed its name to “Nixplay” (which we refer to as “Nixplay Cayman” - a different entity than Nixplay, Inc., our Company).

Effective September 11, 2022, the Company underwent another reorganization (the “2022 Reorganization”), pursuant to which Nixplay, Inc. (our Company) was formed, and became the majority owner of Nixplay Cayman. As a result, Nixplay, Inc. is now a majority owner of Nixplay Cayman, which in turn owns 100% of Creedon Technologies HK Limited, which in turn owns all other operating subsidiaries of the Company. A copy of the primary transactional document governing the 2022 Reorganization is included as exhibit 7.1 to the offering statement of which this offering circular forms a part.

The purpose of the 2022 Reorganization was to move the Company’s operational hub from Hong Kong (under Creedon Technologies HK Limited) to the United States (under Nixplay, Inc.), along with the majority of the Company’s executive officers.

The financial data included in this section reflects the data in the Company’s audited condensed combined financial statements for the years ended December 31, 2021 and 2020, which have been prepared as if the 2022 Reorganization had already occurred for the years ended December 31. 2021 and 2020.

Results of Operations

Revenues. The Company generated revenues of $57,865,975 for the year ended December 31, 2021, a 4.2% increase compared to $55,521,838 in revenues for the year ended December 31, 2020. The Company’s revenues in 2021 and 2020 were almost entirely comprised of sales of Nixplay digital photo frames – and the increase in revenues in 2021 was the result of higher product sales in 2021 compared to 2020.

Cost of Sales. The Company’s cost of sales for the year ended December 31, 2021 was $36,452,328, compared to $34,645,885 for the year ended December 31, 2020. Cost of sales were comprised of manufacturing costs (including raw materials and components for manufacturing), quality control, inspection, distribution and logistics expenses and commissions on sales through third-party retailers. The cost of sales increased by 5.2% for the year ended December 31, 2021 compared to the year prior as a result of increased sales and increased cost of component parts for our products, caused by shortages (primarily attributable to supply and logistical challenges stemming from the COVID-19 pandemic). Consequently, our Gross Margin reduced from 37.6% for the year ended December 31, 2020 to 37.0% for the year ended December 31, 2021.

Operating Expenses. The Company incurred $18,631,785 in operating expenses for the year ended December 31, 2021 – 2.6% more than during the year ended December 31, 2020, for which the Company incurred $18,167,065 in operating expenses. The largest component of operating expenses for each of the years ended December 31, 2021 and 2020 were development, general and administrative expenses. Development, general and administrative expenses were $12,352,409 and $12,423,027 for the years ended December 31, 2021 and 2020, respectively, and were comprised primarily of salaries, development costs, consultancy fees, cost of servers and data management. The second largest component of operating expenses were selling expenses. Selling expenses increased by 10.3% from $5,107,209 in 2020 to $5,633,172 in 2021. Those mainly include digital advertising expenses. Increased competition on the main digital advertising platforms we utilize was driving higher cost of advertising in 2021 compared to 2020. This was particularly noticeable during the peak of the COVID-19 pandemic.

Net Operating Income. As a result of the foregoing, the Company generated a net operating income of $2,781,861 and $2,708,888 for the years ended December 31, 2021 and 2020, respectively.

Government grants including PPP loan forgiveness. The Company received $221,149 and $159,098 for the years ended December 31, 2021 and 2020, respectively. This mainly includes $144,506 obtained in February 2021 and $142,636 obtained in August 2020 from the Employment Support Scheme (ESS) under the Anti-epidemic Fund launched by the Hong Kong SAR Government supporting the payroll of the Company’s Hong Kong subsidiary employees. In May 2020, Creedon Technologies USA, LLC acquired a loan of $76,666 from a U.S. financial institution bearing interest at 1% per annum payable monthly in arrears commencing in October 2021. The loan was issued by the Small Business Administration (SBM) under the Paycheck Protection Program, under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The loan was eligible for forgiveness and was forgiven in 2021.

Interest Income. The Company received interest income of $83,929 and $61,734 for the years ended December 31, 2021 and 2020, respectively. Interest income received during these years was mainly comprised of interests generated by bank deposits attached to two life insurance contracts of which the Company is the sole beneficiary.

Interest expenses. The Company incurred interest expenses of $1,012,599 and $959,930 for the years ended December 31, 2021 and 2020, respectively, related to interest accrued on Bank Loans and loans to various officers, directors, and shareholders (or their family members) of a number of different subsidiaries of the Company pursuant to various loan agreements. Those loans are mainly short term and mainly utilized to finance the inventory.

Income Tax Expense. The Company’s income tax expense was significantly lower for the year ended December 31, 2021 ($145,055) compared to the year ended December 31, 2020 ($305,329). The primary reason for this decrease was the unrecognized tax losses in one subsidiary in 2020 were utilized and set-off the taxable profit in the year-end December 2021.

Net Operating Income. As a result of the foregoing, the Company generated net income of $1,929,286 – a 15.9% increase compared to net income of $1,664,462 for the year ended December 31, 2020.

Liquidity and Capital Resources

The Company is generating profits. As of December 31, 2021, the Company had $9,060,578 in cash and cash equivalents, and had a positive working capital of $6,414,583. The Company believes that it can fund its operations from its positive cash flow for the foreseeable future without the need to raise additional capital from this offering or any future offering.

Indebtedness

Bank Loans

As of December 31, 2021, the Company had amounts due under various loans for a total amount of $9,400,893. Short term (less than one year) bank loans represented a total of $8,521,849 in total principal and interest (“Bank Loans”). Those loans are used to finance the trade cycle and mainly the inventory. At the end of the year (December) the outstanding amount due under these Bank Loans is usually at its peak as the proceeds from the Christmas season are not yet allocated to the repayment of those loans. The Company also had $879,044 in Bank Loans due for repayment after one year which contain a repayment on demand clause through which the lender can demand repayment at any time.

Other Financial Liabilities (Including Loans to Certain Related Parties of the Company)

As of December 31, 2021, the Company owed a total of $4,176,632 to various officers, directors, and shareholders (or their family members) of a number of different subsidiaries of the Company pursuant to various loan agreements. The amounts due under these loan agreements are unsecured. Out of the total of $4,176,632 owed as of December 31, 2021, $3,604,440 bear interest at 10% per annum and $572,192 bear no interest. As of December 31, 2021, $766,287 of the $4,176,632 owed under these agreements was owed to Mark Palfreeman and certain of his family members, with $481,851 of this amount bearing interest at 10% per annum. The rest of the amount owed under these agreements was not owed to any current officer, director, or holder of more than 10% of any class of securities of Nixplay, Inc.

Of the $4,176,632 in principal and interest outstanding as of December 31, 2021, $3,898,562 was represented by loans that were due for repayment on February 28, 2022, and $278,069 by loans that are repayable upon on demand. On February 28, 2022, $3,254,119 of the loans originally due at this date were renewed until February 28, 2023.

As of the date of this offering circular, the Company has taken out an additional $533,919 in loans from various officers, directors, and shareholders (or their family members) of a number of different subsidiaries of the Company, and subsequent to December 31, 2021, we have repaid $514,481 in principal and interest on these loans. As of September 30, 2022, there was $4,196,070 in outstanding loan principal and interest due on these loans, $1,064,328 of which is comprised of loans from Mark Palfreeman and certain of his family members. Of this $1,064,328, $522,388 bear interest at 10% per annum, with the rest being interest free. Further, of this $1,064,328, $544,408 are due on February 28, 2023, and $519,821 are repayable at any time upon request of the lender.

A copy of the form of loan agreement governing the loans described above is included as Exhibit 3.2.

Trend Information

Production. 2021 was a challenging year with significant increase in our cost of sales due to component part shortages and increased cost of logistics owing to increased demand. 2022 has seen a reverse of that trend with cost of goods decreasing from their 2021 highs and logistical supply chains starting to normalize.

Inventory. At the end of 2021, general market conditions led to many consumer sales companies being overstocked with inventory.  Nixplay was overstocked at the end of 2021 and has used the 2022 fiscal year to rebalance inventory, ensuring our inventory is well positioned for the 2022 Christmas sales period.  Most recently, inventory is being purchased at a significantly lower cost than 2021 due to the Company's ability to negotiate more competitive prices (supply chains are returning to normal post COVID-19).

Sales. In line with current macroeconomic conditions, Nixplay has seen a year-over-year decrease in sell-through (i.e. Nixplay direct sales or retailer sales directly to end customers) of 29.8% as of the end of August 2022. Nixplay is seeing an improvement in the year-over-year trend and the majority of Nixplay sales occur in Q4 of each year.

Users. In the first half of 2022, Nixplay increased its user base on the Nixplay Platform by approximately 270,000 users. This is a 11% increase from our 2021 year end and a positive sign that the Nixplay Platform is continuing to grow.

Subscriptions. In the first half of 2022, Nixplay increased its Nixplay Plus subscriber base by approximately 3,260 users. This is a nearly 13% increase from our 2021 year end and a positive sign that the subscription proposition continues to attract customers..

NFT Market Growth. We also believe that also well positioned to take advantage of recent significant growth seen in digital content ownership in the form of NFTs. The NFT market generated over $23 billion in trading volume according to data published in the 2021 DappRadar Industry Report – and the global non-fungible token market size is expected to reach $211.72 billion by 2030 according to a April 2022 report published by Research and Markets. We believe the growing demand for digital art worldwide is one of the major factors driving the NFT market growth, and that collectors will want devices that enable them to display and share such digital content. Nixplay recently built a prototype and NFT integration, and we plan to continue to work towards developing products and services catered towards this market.

Increased Data Privacy Regulation. Additionally, we believe that increased stringent regulation on data privacy will become increasingly prevalent in the United States and Europe in the coming years. We believe this will work in our favor, given the fact that we take stringent measures to protect users’ data, and such data is not monetized outside of our Nixplay Platform’s ecosystem (in contrast to companies like Google and Amazon).

U.S. – China Relations. As 70% of our purchases are made in the United States and most of our manufacturing is conducted in China, tensions between these two countries can affect inventory and cost of goods sold. It will not, however, affect our services and subscription revenues. These are not only our fastest growing products but will also be where we intend to push hardest in future as a growth point for our business.

Relaxed Ongoing Reporting Requirements

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

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

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

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

DIRECTORS, EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES

As of the date of this offering circular, the executive officers and directors of Nixplay, Inc. are as follows:

*Contracted through Creedon Technologies USA, LLC pursuant to the Services Agreement. These individuals are not direct employees of the Company.

** Represents the date that the individual joined Nixplay prior to the 2022 Reorganization (i.e. prior to the incorporation of Nixplay, Inc.).

Mark Palfreeman, Chief Executive Officer, Director

Mark is the founder and CEO of Nixplay and has held the position since 2014. He leads Sales, Ecommerce, Marketing, Production, Treasury and Industrial Design. Mark also holds a board seat on Nixplay Inc and Nixplay Cayman. Prior to this role he was CEO of the Creedon Technologies Group founded in 2006,where he led the full development, production and sales of Nix frames. Mark’s early career was in media where he worked for film studios primarily in the UK.

Joel Durbridge, Chief Operating Officer

Joel is the Chief Operating Officer at Nixplay, taking up the role in January 2021. He leads Technology, Product, Corporate Development and Business Operations including Human Resources and Legal. Prior to joining Nixplay, Joel was the Head of Strategy for Financial Markets Operations at Standard Chartered Bank (December 2019 – January 2021) and completed a number of roles at HSBC (April 2017 – December 2019) in Corporate Innovation, culminating in creating spin out fintech for the bank where he served as Chief of Staff, leading Delivery across the business. Joel’s early career was in the British Military where he served close to 10 years as an Officer in the Royal Marine Commandos and the Special Forces.

Mr. Durbridge will act as principal financial officer and principal accounting officer of the Company on an interim basis until the Company’s CFO can obtain the appropriate visa to work in the United States, which is expected to occur in the first quarter of 2023.

Philippe Tartavull, Director (Chairman)

Philippe has held the position of Director and Chairman with Nixplay since 2017. He has more than 35 years of experience leading public and private global technology companies in the infrastructure, industrials, payments and telecommunications, convergence of technologies, hardware and software sectors. He is the Co-Founder and Managing Partner of TKB Capital (May 2021 – present). Prior to this Philippe co-founded a lead Tartavull Ventures in 2016. Philippe is a highly experienced CEO, president and director of leading public and private global technology companies, including: Xura/Comverse (2012 -2017) (NASDAQ: MESG), Hypercom (NYSE: HYC), Oberthur Card Systems North America and Syseca USA – A Thales Company. His current and previous board experience on both public and private companies includes Composecure, Hypercom, Xura/Comverse, MRV Communications and Wilcox. He is on the board of trustees of American University in Paris and holds an MBA from the Institut d’Administration des Enterprises, Sorbonne University, M.S. in Engineering from Ecole Nationale Superieure des Pétroles et des Moteurs and B.S. in Engineering from SUPMECA (previously called Centre d’Etudes Supérieures des Techniques Industrielles).

COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS

Nixplay, Inc. was incorporated on June 10, 2022. Therefore, no compensation was paid by Nixplay, Inc. to any officer or director of the Company during the year ended December 31, 2021.

As such, the below table represents compensation paid to Nixplay, Inc.’s current directors and executive officers during the year ended December 31, 2021.

For the fiscal year ended December 31, 2021, the Company’s current directors as a group (2) received a total of $29,500 in compensation.

The Company has not yet determined the compensation it will pay to its current officers and directors. Compensation for the Company’s officers and directors going forward may include cash and/or equity compensation, and will depend on a number of factors, including the amount raised under this offering, and prevailing market conditions.

SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITYHOLDERS

The following table displays, as of September 30, 2022 the voting securities beneficially owned by (1) any individual director or officer who beneficially owns more than 10% of any class of our capital stock, (2) all executive officers and directors as a group and (3) any other holder who beneficially owns more than 10% of any class of our capital stock:

INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS

As described under “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources -- Indebtedness”, prior to the 2022 Reorganization, certain of the Company’s subsidiaries entered into various loan agreements with various officers, directors, and shareholders of those subsidiaries. As of December 31, 2021, a total of $4,176,632 was owed these loans – however, only $766,287 owed under these agreements was owed to a current officer, director, or holder of more than 10% of any class of securities Nixplay, Inc or their family members.

Of the $4,176,632 in principal and interest outstanding as of December 31, 2021, $3,898,562 was represented by loans that were due for repayment on February 28, 2022, and $278,069 by loans that are repayable upon on demand. On February 28, 2022, $3,254,119 of the loans originally due at this date were renewed until February 28, 2023.

As of the date of this offering circular, the Company has taken out an additional $533,919 in loans from various officers, directors, and shareholders (or their family members) of a number of different subsidiaries of the Company, and subsequent to December 31, 2021, we have repaid $514,481 in principal and interest on these loans. As of September 27, 2022, there was $4,196,070 in outstanding loan principal and interest due on these loans, $1,064,328 of which is comprised of loans from Mark Palfreeman and certain of his family members. Of this $1,064,328, $522,388 bear interest at 10% per annum, with the rest being interest free. Further, of this $1,064,328, $544,408 are due on February 28, 2023, and $519,821 are repayable at any time upon request.

A copy of the form of loan agreement governing the loans described above is included as Exhibit 3.2.

SECURITIES BEING OFFERED

The Company is offering shares of Series A Preferred Stock in this offering. The Series A Preferred Stock may be converted into shares of the Common Stock of the Company at the discretion of each investor, or automatically upon the occurrence of certain events, like an initial public offering. The Company is therefore qualifying up to 2,237,599 shares of Series A Preferred Stock, convertible into an additional 2,237,599 shares of Common Stock, under the offering statement of which this offering circular is a part.

Immediately prior to the initial closing of this offering, the Company will amend its certificate of incorporation to authorize additional shares of Common Stock and to authorize Preferred Stock. The form of amended and restated certificate of incorporation setting forth the terms of the Series A Preferred Stock is filed as Exhibit 2.2 to the offering statement of which this offering circular is a part. The following description summarizes the most important terms of the Company’s capital stock in accordance with the amended and restated certificate of incorporation. This summary does not purport to be complete and is qualified in its entirety by the provisions of the Company’s amended and restated certificate of incorporation and bylaws. For a complete description of the Company’s capital stock, you should refer to the amended and restated certificate of incorporation and bylaws of the Company and to the applicable provisions of Delaware law.

Description of Capital Stock

The authorized capital stock of the Company currently consists of 10,000,000 shares of Common Stock, par value $0.0001 per share. Upon the filing of the amended and restated certificate of incorporation, the total number of authorized shares of Common Stock of the Company, par value $0.0001 per share will be 10,232,887 and the total number of authorized shares of Preferred Stock, par value $0.0001 per share, will be 2,094,534, all of which will be designated as Series A Preferred Stock.

As of the date of this offering circular, the outstanding shares of the Company consist of 4,000,000 shares of Common Stock and no shares of Preferred Stock.

Common Stock

Voting Rights

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

Dividend Rights

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

Liquidation Rights

In the event of a voluntary or involuntary liquidation, dissolution, or winding up of the Company, the holders of Common Stock are entitled to share ratably in the net assets legally available for distribution to stockholders after the payment of all debts and other liabilities of the Company and the satisfaction of any liquidation preference granted to the holders of all shares of the outstanding Preferred Stock.

Rights and Preferences

Holders of the Company's Common Stock have no preemptive, conversion, or other rights, and there are no redemptive or sinking fund provisions applicable to the Company's Common Stock.

Preferred Stock

Voting Rights

Each holder of Series A Preferred Stock is entitled to one vote for each share of Common Stock into which such share of Preferred Stock could be converted. Fractional votes will not be permitted and if the conversion results in a fractional share, it will be disregarded. Holders of Series A Preferred Stock are entitled to vote on all matters submitted to a vote of the stockholders, including the election of directors, as a single class with the holders of Common Stock, on an as converted to Common Stock basis.

Dividend Rights

Holders of Series A Preferred Stock are entitled to receive dividends as may be declared from time to time by the Board of Directors out of legally available funds and on a pari passu basis with holders of Common Stock. The Company has never declared or paid cash dividends on any of its capital stock and currently does not anticipate paying any cash dividends after this offering or in the foreseeable future.

Conversion Rights

Shares of Series A Preferred Stock are convertible, at the option of the holder, at any time, into fully paid and nonassessable shares of the Company’s Common Stock at the then-applicable conversion rate. Initially, the conversion rate for the Series A Preferred Stock is one share of Common Stock per share of Series A Preferred Stock. The conversion rate is subject to adjustment in the event any stock dividend, stock split, combination or other similar recapitalization with respect to the Common Stock.

Additionally, each share of Series A Preferred Stock will automatically convert into Common Stock immediately prior to the closing of a firm commitment underwritten public offering, registered under the Securities Act or upon the affirmative election of the holders of a majority of the outstanding shares of Preferred Stock, voting as a single class and on an as-converted basis. The shares will convert in the same manner as a voluntary conversion.

Right to Receive Liquidation Distributions

In the event of a liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, or certain other events (each a “Deemed Liquidation Event”) such as the sale or merger of the Company, as further set forth in the amended and restated certificate of incorporation, all holders of Series A Preferred Stock will be entitled to a liquidation preference that is senior to holders of the Common Stock. Holders of Series A Preferred Stock will receive a liquidation preference equal to the greater of (a) an amount for each share equal to the Original Issue Price for such share, adjusted for any stock dividends, combinations, splits, recapitalizations and the like (the “liquidation preference”) plus any declared but unpaid dividends with respect to such shares or (b) such amount per share as would have been payable had all shares of Series A Preferred Stock been converted into Common Stock immediately prior to such liquidation, dissolution or winding up or Deemed Liquidation Event. Initially, the liquidation preferences for the shares of Series A Preferred Stock is $7.1615 per share (the “Series A Original Issue Price”).

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

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

Preferred Stock Protective Provisions

While at least 25% of the Preferred Stock are outstanding, approval of a majority of the shares Preferred Stock will be required to adversely change rights of the Preferred Stock. In addition, approval of a majority of the shares of Preferred Stock, voting as a single class, will be required to (i) change the authorized number of authorized shares of Common Stock and Preferred Stock; (ii) authorize a new series of Preferred Stock having rights senior to or on parity with the Preferred Stock; (iii) redeem or repurchase any shares (other than pursuant to employee or consultant agreements); (iv) declare or pay any dividend; or (v) liquidate or dissolve, including any sale of the Company or substantially all of its assets.   In the event that an insufficient number of shares of Preferred Stock cast a vote on the matter following a fourteen (14) day notice period, the Board will be authorized to vote on behalf of such shares that failed to vote in the Board’s discretion.

Drag Along Rights and Right of First Offer

See “Plan of Distribution and Selling Securityholders -- Provisions of Note in our Investors’ Rights Agreement” for a description of these rights provided to Series A Preferred Stockholders in the Investors’ Rights Agreement.

ONGOING REPORTING AND SUPPLEMENTS TO THIS OFFERING CIRCULAR

We will be required to make annual and semi-annual filings with the SEC. We will make annual filings on Form 1-K, which will be due by the end of April each year and will include audited financial statements for the previous fiscal year. We will make semi-annual filings on Form 1-SA, which will be due by September 28 each year, which will include unaudited financial statements for the six months to June 30. We will also file a Form 1-U to announce important events such as the loss of a senior officer, a change in auditors or certain types of capital-raising. We will be required to keep making these reports unless we file a Form 1-Z to exit the reporting system, which we will only be able to do if we have less than 300 shareholders of record and have filed at least one Form 1-K.

At least every 12 months, we will file a post-qualification amendment to the Offering Statement of which this offering circular forms a part, to include the Company’s recent financial statements.

We may supplement the information in this offering circular by filing a Supplement with the SEC.

All these filings will be available on the SEC’s EDGAR filing system. You should read all the available information before investing.

NIXPLAY, INC.

CONSOLIDATED FINANCIAL STATEMENTS

AND

INDEPENDENT AUDITOR'S REPORT

AS OF DECEMBER 31, 2021 AND 2020

AND

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

NIXPLAY, INC.

INDEX TO FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm

To the shareholders and the board of directors of Nixplay Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Nixplay Inc. as of December 31, 2021 and 2020, the related statements of operations, stockholders' equity (deficit), and cash flows for the years then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

/S/ BF Borgers CPA PC

BF Borgers CPA PC

PCAOB ID 5041

We have served as the Company's auditor since 2022

Lakewood, CO

September 28, 2022

NIXPLAY INC.

CONSOLIDATED BALANCE SHEET

AS OF DECEMBER 31, 2021 AND 2020

NIXPLAY INC.

CONSOLIDATED STATEMENT OF INCOME AND COMPREHENSIVE INCOME

FOR THE YEAR ENDED DECEMBER 31, 2021 AND 2020

NIXPLAY INC.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
AS AT DECEMBER 31, 2021 AND 2020

NIXPLAY INC.

CONSOLIDATED STATEMENT OF CASH FLOWS

AS AT DECEMBER 31, 2021 AND 2020

NIXPLAY INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS AT DECEMBER 31, 2021

Note 1 – Organization and Operations

Nixplay Inc. (“The Company”) was incorporated in the state of Delaware in June 2022. The Company does not have any business or operating activities. Nixplay (“Nixplay Cayman”), a private company was incorporated in Cayman Islands in July 2014. Nixplay Cayman’s principal activity is investment holding while its subsidiaries are engaged in the design and trading of digital photo frames and signage.

Effective September 11, 2022, Nixplay Inc. issued 3,990,000 shares of common stock in exchange for 73.77% ownership interest in Nixplay Cayman. This transaction resulted in the owners of Nixplay Cayman obtaining a majority voting interest in Nixplay Inc. The merger of Nixplay Cayman into Nixplay Inc., which has nominal net assets, results in Nixplay Cayman having control of the combined entity. Accordingly, this is considered to be a capital transaction, rather than a business combination, equivalent to the issuance of ownership interests by Nixplay Cayman for the net assets of Nixplay Inc, accompanied by a recapitalization. The accounting is identical to that resulting from a reverse acquisition, except that no goodwill or other intangible is recorded.

The condensed combined balance sheet has been prepared as if the transaction had occurred as of December 31, 2021:

The pro forma condensed combined statements of operations have been prepared as if this transaction had occurred for the year 2021:

The consolidated financial statements represent the activity of Nixplay Cayman from July 2014 forward, and the consolidated activity of Nixplay Inc. and Nixplay Cayman from September 11, 2022 forward. Nixplay Inc., Nixplay Cayman and its subsidiaries are hereinafter referred to collectively as the “Group” or “We”.

Note 2 – Summary of Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles as promulgated in the United States of America (“US GAAP”). In the opinion of management, all adjustments considered necessary for the fair presentation of the financial statements for the years presented have been included.

Functional and presentation currency

The consolidated financial statements are presented in U.S. dollars (“$”), which is the functional currency of the Company. The functional currency of the Company’s subsidiaries is the currency of primary economic environment in which it operates.

Business combination and principles of Consolidation

The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries. We have eliminated all intercompany transactions and balances between entities together with unrealized profits are eliminated in full in preparing the consolidated financial statements.

Use of Estimates

The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and disclosures thereto. Actual results could differ from these estimates. It is reasonably possible that changes in estimates will occur in the near term.

Significant estimates inherent in the preparation of the accompanying financial statements include valuation of provision for refunds and chargebacks, allowance for doubtful accounts, stock-based compensation, income taxes and valuation of the financial assets.

Financial Instruments

Pursuant to Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures and ASC 825, Financial Instruments, an entity is required to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 and 825 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 and 825 prioritizes the inputs into three levels that may be used to measure fair value:

Level 1: Quoted prices for identical assets or liabilities in active markets or observable inputs;

Level 2: Significant observable inputs that can be corroborated by observable market data; and

Level 3: Significant unobservable inputs that cannot be corroborated by observable market data.

The Group’s financial instruments consist primarily of cash, trade and other receivables, trade and other payables, bank borrowings, amount due from/ (to) and loans from directors, non-controlling interests and related parties. Pursuant to ASC 820 and 825, the fair value of certain financial assets and liabilities are determined based on “Level 3” inputs as shown below. We believe that the recorded values of all of our other financial instruments approximate their current fair values because of the short-term nature of these items.

The following table presents assets and liabilities that are measured and recognized at fair value as of December 31, 2021 and December 31, 2020: