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      Section 4(a)(2) of the Securities Act
    
  




 

An Offering Statement pursuant to Regulation A relating to these securities has been filed with 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 22, 2021

 

Rebrain.ai Inc.

 1330 Orange Avenue, Suite 322
Coronado, CA 92118

 

https://rebrain.ai

 

UP TO 12,450,000 SHARES OF PREFERRED STOCK

 

UP TO 12,450,000 SHARES OF COMMON STOCK INTO WHICH THE PREFERRED STOCK MAY CONVERT*

 

 SEE “SECURITIES BEING OFFERED” AT PAGE 26

MINIMUM INVESTMENT: $300

  

Common Shares  Price to Public  

Placement

Agent

Discounts and Commissions**

  

Proceeds to Issuer

Before Expenses***

 
Per share  $4.00   $N/A   $4.00 
Total maximum  $49,800,000   $N/A   $49,800,000 

 

*The Preferred Stock is convertible into shares of Common Stock of the company upon the occurrence of certain events, such as the IPO of the company. 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.”

 

**We have not engaged any placement agent or underwriter in connection with this offering. To the extent that we do so, we will file a supplement to the Offering Statement of which this Offering Circular is a part.

 

*** Does not include expenses of the offering. See “Use of Proceeds” and “Plan of Distribution.”

 

The company expects that the amount of expenses of the offering that it will pay will be approximately $1,000,000 not including commissions or state filing fees.

 

 

 

The company entered into an agreement with FundAthena, Inc., d/b/a Manhattan Street Capital (“Manhattan Street Capital”) in connection with the use of its online platform for this offering. Under that agreement, the company will pay Manhattan Street Capital fees of (1) $90,000 in cash as a project management retainer fee, plus ten-year cashless exercise warrants to purchase the same value of Preferred Stock at an exercise price of $4.00 per share, or 22,500 shares of Preferred Stock, (2) $5,000 per month while the offering is live for investment or reservations, including any “testing the waters,” plus ten-year cashless exercise warrants to purchase the same value Preferred Stock at an exercise price of $4.00 per share, and (3) a technology and administration fee of $25 per investor, in cash, paid by the company when each investor deposits funds into the escrow account plus ten-year cashless exercise warrants to purchase the same value of Preferred Stock at an exercise price of $4.00 per share. See “Plan of Distribution – Online Platform.” The total number of warrants and underlying shares of Preferred Stock issuable pursuant to clauses (2) and (3) above will not be determined until the offering is terminated. None of the shares of Preferred Stock issuable upon the exercise of warrants issued to Manhattan Street Capital are included in the 12,450,000 shares being offered by the company.

 

The company has engaged Prime Trust, LLC as an escrow agent (the “Escrow Agent”) to hold funds tendered by investors and may hold a series of closings at which we receive the funds from the escrow agent and issue the securities to investors.  The offering will terminate at the earlier of: (1) the date at which the maximum offering amount has been sold, (2) the date which is three years from this offering being qualified by the United States Securities and Exchange Commission (the “Commission”), or (3) the date at which the offering is earlier terminated by the company in its sole discretion. The company may undertake one or more closings on a rolling basis and, after each closing, funds tendered by investors will be available to the company.

 

The offering is being conducted on a “best-efforts” basis.

 

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.

 

This offering is inherently risky. See “Risk Factors” on page 6.

 

Sales of these securities will commence on approximately _______, 2021.

 

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 “Implications of Being an Emerging Growth Company.”

 

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TABLE OF CONTENTS 

 

Summary 5
Risk Factors 6
Dilution 14
Use of Proceeds 15
The Company’s Business 16
The Company’s Property 19
Management Discussion and Analysis of Financial Condition and Results of Operations 20
Directors, Executive Officers and Significant Employees 22
Compensation of Directors and Officers 23
Security Ownership of Management and Certain Securityholders 24
Interest of Management and Others in Certain Transactions 25
Securities Being Offered 26
Plan of Distribution 28
Financial Statements 32

 

In this Offering Circular, the term “Rebrain,” “Rebrain.ai, ”we,” “us” or “the company” refers to Rebrain.ai Inc.

 

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.

 

Implications of Being an Emerging Growth Company

 

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 if and when we become subject to the ongoing reporting requirements of the Exchange Act of 1934, as amended (the “Exchange Act”). 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:

 

  will not be required to obtain an auditor attestation on our internal controls over financial reporting pursuant to the Sarbanes-Oxley Act of 2002;

 

  will not be required to provide a detailed narrative disclosure discussing our compensation principles, objectives and elements and analyzing how those elements fit with our principles and objectives (commonly referred to as “compensation discussion and analysis”);

 

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  will not be required to obtain a non-binding advisory vote from our stockholders on executive compensation or golden parachute arrangements (commonly referred to as the “say-on-pay,” “say-on-frequency” and “say-on-golden-parachute” votes);

 

  will be exempt from certain executive compensation disclosure provisions requiring a pay-for-performance graph and CEO pay ratio disclosure;

 

  may present only two years of audited financial statements and only two years of related Management’s Discussion and Analysis of Financial Condition and Results of Operations, or MD&A; and

 

  will be eligible to claim longer phase-in periods for the adoption of new or revised financial accounting standards.

 

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 (the “Securities Act”), 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.

 

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SUMMARY

 

Our Company

 

Rebrain.ai is an AI-driven Quantitative Trading firm, market maker and liquidity provider active in the cryptocurrency markets. The company was incorporated on February 27, 2017 in Delaware. Rebrain operates as a proprietary trading firm and trades financial products for its own account to provide liquidity in cryptocurrency markets. The company doesn’t have any clients and does not provide direct investment services.

 

As a financial technology company, Rebrain.ai improves financial markets through a scientific approach. Using our proprietary trading platform, we provide liquidity to crypto markets with fair and competitive prices which aims to improve market efficiency and to create value from efficiencies for end investors. As a market-maker, Rebrain.ai provides deep liquidity in crypto exchanges by simultaneously quoting bid(buy) and ask(sell) prices for various crypto currencies using its technology.

 

The Offering

 

Securities offered:  

Maximum of 12,450,000 shares of Preferred Stock and

Maximum of 12,450,000 shares of Common Stock into which the Preferred Stock may convert.

     
Voting Common Stock outstanding before the offering (1)   50,000,000
Total Number of Voting Common Stock Authorized   62,500,000
Preferred Stock outstanding before the offering:   50,000 shares
     
     
     
Use of proceeds:   The net proceeds of the offering will be used as trading capital. We will use this trading capital to increase liquidity to the cryptocurrency markets by providing fair prices for buyers and sellers. The trading capital is the fuel of our activity. The higher the trading capital, the more market inefficiencies we can fix and the more revenues and profits are expected to be generated. We also intend to use the proceeds to expand into other exchanges beyond Kraken, if we raise sufficient capital to do so.

 

(1)Does not include shares of Common Stock into which the Preferred Stock may convert. See “Securities Being Offered” for details.

 

5

 

 

Selected Risks Associated with Our Business

 

Our business is 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:

 

We are an early-stage company with a limited operating history.
New or different regulations governing digital assets may have a material impact on our ability to operate our business.
We may not have enough capital as needed and may be required to raise more capital and the terms of subsequent financings may adversely impact your investment.
Our revenues and profitability depend on trading volume and volatility in the cryptocurrency markets in which we operate, and therefore are subject to factors beyond our control, are prone to significant fluctuations and are difficult to predict.
We may incur losses in our trading activities and our execution services businesses due to failures of our customized trading platform, due to market risk or from a lack of perfect information.
Our company is subject to regulations in the U.S., and our foreign subsidiaries are subject to regulations abroad, in each case covering all aspects of their business.
We face substantial competition and other competitive dynamics which could harm our financial performance.
Our reliance on our computer systems and software could expose us to material financial and reputational harm if any of our computer systems or software were subject to any material disruption or corruption.
The prices of blockchain currencies are extremely volatile. Fluctuations in the price of blockchain currencies and digital assets generally could materially and adversely affect our business.
Our business may be harmed by computer and communication systems malfunctions, failures and delays.
We do not currently have intellectual property and we may be unable to register or adequately protect our intellectual property interests in the future. We may also be found infringing on intellectual property interests of others.
We may be impacted by the worldwide economic downturn due to the COVID-19 pandemic.

 

RISK FACTORS

 

The Commission 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 hacking and the ability to prevent hacking). Additionally, early-stage companies are inherently riskier than more developed companies. You should consider general risks as well as specific risks when deciding whether to invest.

 

Risks Related to our Business

 

We are an early-stage company with a limited operating history. Our company was formed on February 27, 2017 in Delaware as a non-stock corporation and only recently converted to a stock corporation. Accordingly, we have a limited history upon which an investor can evaluate our performance and future prospects. The company has a short history, no customers, and limited revenue. Our current and proposed operations are subject to all business risks associated with new enterprises. These include likely fluctuations in operating results as we react to developments in our markets, difficulty in managing our growth and the entry of competitors into the market. We have been profitable to date, however our financial statements do not necessarily reflect our operating revenues going forward. We cannot assure you that we will continue to be profitable in the foreseeable future or generate sufficient profits to pay dividends to the holders of the shares.

 

New or different regulations governing digital assets may have a material impact on our ability to operate our business. The regulatory environment governing digital assets, like cryptocurrencies is relatively new and changing rapidly. For example, the Commission views some digital assets as securities requiring registration under the Securities Act. Digital assets may also be subject to commodities laws, trade sanctions, and banking laws, among others. In addition, the US Internal Revenue Service has provided guidance on taxing income from cryptocurrency trading and intends to explore additional measures, which may impact the company’s income and results in the United States. While we currently restrict our trading activities in the United States to cryptocurrencies that are designed in conformity with the Commission’s no action letter guidance and other applicable rules and regulations as they exist today, changes to the regulatory environment affecting our business could materially impair our ability to operate our business profitability or at all.

 

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We may not have enough capital as needed and may be required to raise more capital and the terms of subsequent financings may adversely impact your investment. We anticipate needing access to credit in order to support our working capital requirements as we grow. Although interest rates are low, it is still a difficult environment for obtaining credit on favorable terms. If we cannot obtain credit when we need it, we may issue debt or equity securities to raise funds, modify our growth plans, or take some other action. Interest on debt securities could increase costs and negatively impact operating results and convertible debt securities could result in diluting your interest in the company. Issuance of additional classes of preferred stock, in addition to diluting your interests in the company, may be done on terms more advantageous to those investors than to the holders of shares of the Preferred Stock in this offering. If we are unable to find additional capital on favorable terms, then it is possible that we will choose to cease our business activity. Even if we are not forced to cease our sales activity, the unavailability of capital could result in our performing below expectations, which could adversely impact the value of your investment.

 

Our revenues and profitability depend on trading volume and volatility in the cryptocurrency markets in which we operate, and therefore are subject to factors beyond our control, are prone to significant fluctuations and are difficult to predict. Our revenues and profitability depend in part on the level of trading activity of cryptocurrency products on exchanges and in other trading venues in the U.S. and abroad, which are directly affected by factors beyond our control, including economic and political conditions, emergencies and pandemics, broad trends in business and finance and changes in the markets in which such transactions occur. Weaknesses in the markets in which we operate, including economic slowdowns in recent years, have historically resulted in reduced trading volumes for us. Declines in trading volumes generally result in lower revenues from market making and transaction execution activities. Lower levels of volatility generally have the same directional impact. Declines in market values of cryptocurrencies can also result in illiquid markets, which can also result in lower revenues and profitability from market making and transaction execution activities. 

 

Lower price levels of cryptocurrencies, as well as compressed bid/ask spreads, which often follow lower pricing, can further result in reduced revenues and profitability. These factors can also increase the potential for losses on cryptocurrencies held in inventory and failures of buyers and sellers to fulfill their obligations and settle their trades, as well as claims and litigation. Declines in the trading activity of institutional or “buy-side” market participants may result in lower revenue and/or diminished opportunities for us to earn commissions from execution activities. Any of the foregoing factors could have a material adverse effect on our business, financial condition, results of operations and cash flows. In the past, our revenues and operating results have varied significantly from period to period due primarily to movements and trends in the underlying markets and to fluctuations in trading volumes and volatility levels. As a result, period to period comparisons of our revenues and operating results may not be meaningful, and future revenues and profitability may be subject to significant fluctuations or declines.

 

We may incur losses in our trading activities and our execution services businesses due to failures of our customized trading platform, due to market risk or from a lack of perfect information. The success of our business is substantially dependent on the accuracy and performance of our customized trading platform, which evaluates and monitors the risks inherent in our market making strategies and execution services business, assimilates market data and reevaluates our outstanding quotes and positions continuously throughout the trading day. Our strategies are designed to automatically rebalance our positions throughout the trading day to manage risk exposures on our positions. Flaws in our strategies, order management system, risk management processes, latencies or inaccuracies in the market data that we use to generate our quotes, or human error in managing risk parameters or other strategy inputs, may lead to unexpected and unprofitable trades, which may result in material trading losses and could have a material adverse effect on our business, financial condition, results of operations and cash flows.

 

7

 

 

Our revenues are derived from our trading as principal in our role as a formal or registered market maker and liquidity provider on various exchanges and markets. We may incur trading losses relating to these activities since each primarily involves the purchase, sale or short sale of cryptocurrencies, futures and other financial instruments for our own account. In any period, we may incur significant trading losses for a variety of reasons, including price changes, performance, size and volatility, lack of liquidity in cryptocurrencies in which we have positions and the required performance of our market making obligations. Furthermore, we may from time to time develop large position concentrations in a single cryptocurrency, which would result in the risk of higher trading losses than if our concentration were lower.

 

These risks may limit or restrict, for example, our ability to either resell cryptocurrencies we have purchased or to repurchase cryptocurrencies we have sold.

 

In our role as a market maker, we attempt to derive a profit from bid/ask spreads. However, competitive forces often require us to match or improve upon the quotes that other market makers display, thereby narrowing bid/ask spreads, and to hold long or short positions in cryptocurrencies. We may at times trade with others who have information that may be more accurate or complete than the information we have, and as a result we may accumulate unfavorable positions preceding large price movements in a given cryptocurrency. We cannot assure you that we will be able to manage these risks successfully or that we will not experience significant losses from such activities, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

 

Our risk management activities related to our on exchange market making strategies utilize a four-pronged approach, consisting of strategy lockdowns, centralized strategy monitoring, aggregate exposure monitoring and operational controls. In particular, messages that leave our trading environment first must pass through a series of preset risk controls or “lockdowns” that are intended to minimize the likelihood of unintended activities. In certain cases, this layer of risk management, which adds a layer of latency to our process, may limit our ability to profit from acute volatility in the markets. This would be the case, for example, where a particular strategy being utilized by one of our traders is temporarily locked down for generating revenue in excess of the preset risk limit. Even if we are able to quickly and correctly identify the reasons for a lockdown and quickly resume the trading strategy, we may limit our potential upside as a result of our risk management policies.

 

We face substantial competition and other competitive dynamics which could harm our financial performance. Revenues from our market making and related trading activities depend on our ability to offer to buy and sell cryptocurrencies at prices that are attractive and represent the best bid and/or offer in a given cryptocurrency at a given time. To attract order flow, we compete with other firms not only on our ability to provide liquidity at competitive prices, but also on other factors such as order execution speed and technology. Similarly, revenues from our technology services and agency execution services depend on our ability to offer cutting edge technology and risk management solutions. Across our business could be adversely impacted by competitive dynamics across the industry, including but not limited to consolidation in the cryptocurrency trading industry.

 

Many of our competitors are more established than we are and generate revenues far in excess of our current revenues. Our competitors include registered market makers, as well as unregulated or lesser-regulated trading and technology firms that also compete to provide liquidity and execution services in cryptocurrencies. Our competitors range from sole proprietors with very limited resources to highly sophisticated groups, hedge funds, well-capitalized broker-dealers and proprietary trading firms or other market makers that have substantially greater financial and other resources than we do. These larger and better capitalized competitors may be better able to respond to changes in the market making industry, to compete for skilled professionals, to finance acquisitions, to fund internal growth, to manage costs and expenses and to compete for market share generally. Trading firms that may in some instances have certain advantages over more regulated firms, including our subsidiaries that may allow them to bypass regulatory restrictions and trade more cheaply than more regulated participants on some markets or exchanges. In addition, we may in the future face enhanced competition from new market participants that may also have substantially greater financial and other resources than we do, which may result in compressed bid/ask spreads in the marketplace that may negatively impact our financial performance. Moreover, current and potential competitors may establish cooperative relationships among themselves or with third parties or may consolidate to enhance their services and products. The trend toward increased competition in our business is expected to continue, and it is possible that our competitors may acquire increased market share. Increased competition or consolidation in the marketplace could reduce the bid/ask spreads on which our business and profitability depend, and may also reduce commissions paid by institutional clients for execution services, negatively impacting our financial performance. As a result, there can be no assurance that we will be able to compete effectively with current or future competitors, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

 

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Our reliance on our computer systems and software could expose us to material financial and reputational harm if any of our computer systems or software were subject to any material disruption or corruption. We rely significantly on our computer systems and software to receive and properly process internal and external data and utilize such data to generate orders and other messages. A disruption or corruption of the proper functioning of our computer systems or software could cause us to make erroneous trades or result in other negative circumstances, which could result in material losses or reputational harm. We cannot guarantee that our efforts to maintain competitive computer systems and software will be successful. Our computer systems and software may fail or be subject to bugs or other errors, including human error, resulting in service interruptions or other unintended consequences. If any of these risks materialize, they could have a material adverse effect on our business, financial condition, results of operations and cash flows.

 

We are dependent on our information systems, which may be vulnerable to cyber-attacks or other events. Our operations are dependent on our information systems and the information collected, processed, stored, and handled by these systems. We rely heavily on our computer systems to manage our client account balances, booking, pricing, processing and other processes. We receive, retain and transmit certain confidential information, including personally identifiable information in our capacity as market makers. For these operations, we depend in part on the secure transmission of confidential information. Our information systems are subject to damage or interruption from power outages, facility damage, computer and telecommunications failures, computer viruses, security breaches, including credit card or personally identifiable information breaches, coordinated cyber-attacks, vandalism, catastrophic events and human error. Any significant disruption or cyber-attacks on our information systems, particularly those involving confidential information being accessed, obtained, damaged, or used by unauthorized or improper persons, could harm our reputation and expose us to regulatory or legal actions and impair our ability to operate our business and our financial results.

 

Our company is subject to regulations in the U.S., and our foreign subsidiaries are subject to regulations abroad, in each case covering all aspects of their business. Our mode of operation and profitability may be directly affected by additional legislation and changes in rules promulgated by various domestic and foreign government agencies and self-regulatory organizations (“SROs”) that oversee our businesses, as well as by changes in the interpretation or enforcement of existing laws and rules, including the potential imposition of additional capital and margin requirements and/or transaction taxes. While we endeavor to timely deliver required annual filings in all jurisdictions, we cannot guarantee that we will meet every applicable filing deadline globally. Noncompliance with applicable laws or regulations could result in sanctions being levied against us, including fines, penalties, disgorgement and censures, suspension or expulsion from a certain jurisdiction, SRO or market. Noncompliance with applicable laws or regulations could also negatively impact our reputation, prospects, revenues and earnings. In addition, changes in current laws or regulations or in governmental policies could negatively impact our operations, revenues and earnings.

 

Fluctuations in currency exchange rates could negatively impact our earnings. A significant portion of our international business is conducted in currencies other than the U.S. dollar, and changes in foreign exchange rates relative to the U.S. dollar can therefore affect the value of our non-U.S. dollar net assets, revenues and expenses. Although we closely monitor potential exposures as a result of these fluctuations in currencies, and where cost-justified we adopt strategies that are designed to reduce the impact of these fluctuations on our financial performance but there can be no assurance that we will be successful in managing our foreign exchange risk. Our exposure to currency exchange rate fluctuations will grow if the relative contribution of our operations outside the U.S. increases. Any material fluctuations in currencies could have a material effect on our financial condition, results of operations and cash flows.

 

9

 

 

Our business may be harmed by computer and communication systems malfunctions, failures and delays. Our business activities are heavily dependent on the integrity and performance of the computer and communications systems supporting them. Our systems and operations are vulnerable to damage or interruption from human error, software bugs and errors, electronic and physical security breaches, natural disasters, economic or political developments, pandemics, weather events, power loss, utility or internet outages, computer viruses, intentional acts of vandalism, war, terrorism and other similar events. Extraordinary trading volumes or other events could cause our computer systems to operate in ways that we did not intend, at an unacceptably low speed or even fail. While we have invested significant amounts of capital to upgrade the capacity, reliability and scalability of our systems, there can be no assurance that our systems will always operate properly or be sufficient to handle such extraordinary trading volumes. Any disruption for any reason in the proper functioning or any corruption of our software or erroneous or corrupted data may cause us to make erroneous trades or suspend our services and could have a material adverse effect on our business, financial condition, results of operations and cash flows.

 

Although our systems and infrastructure are generally designed to accommodate additional growth without redesign or replacement, we may need to make significant investments in additional hardware and software to accommodate growth. Failure to make necessary expansions and upgrades to our systems and infrastructure could not only limit our growth and business prospects but could also cause substantial losses and have a material adverse effect on our business, financial condition, results of operations and cash flows.

 

Since the timing and impact of disasters and disruptions are unpredictable, we may not be able to respond to actual events as they occur. Business disruptions can vary in their scope and significance and can affect one or more of our facilities. These disruptions may occur as a result of events that affect only our buildings or systems or those of such third parties, or as a result of events with a broader impact globally, regionally or in the cities where those buildings or systems are located, including, but not limited to, natural disasters, economic or political developments, pandemics, weather events, war, terrorism and other similar events.

 

Further, the severity of the disruption can also vary from minimal to severe. Although we have employed efforts to develop, implement and maintain reasonable disaster recovery and business continuity plans, we cannot guarantee that our systems will fully recover after a significant business disruption in a timely fashion or at all. Our ability to conduct business may be adversely impacted by a disruption in the infrastructure that supports our businesses and the communities in which we are located. This may include a disruption involving electrical, satellite, undersea cable or other communications, internet, transportation or other services facilities used by us, our employees or third parties with which we conduct business. If we are prevented from using any of our current trading operations, or if our business continuity operations do not work effectively, we may not have complete business continuity, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

 

Failure or poor performance of third-party software, infrastructure or systems on which we rely could adversely affect our business. We depend on third parties to provide and maintain certain infrastructure that is critical to our business. For example, we rely on third parties to provide software, data center services and dedicated fiber optic, microwave, wireline and wireless communication infrastructure. This infrastructure may malfunction or fail due to events outside of our control, which could disrupt our operations and have a material adverse effect on our business, financial condition, results of operations and cash flows. Any failure to maintain and renew our relationships with these third parties on commercially favorable terms, or to enter into similar relationships in the future, could have a material adverse effect on our business, financial condition, results of operations and cash flows.

 

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We also rely on certain third-party software, third-party computer systems and third-party service providers, including clearing systems, exchange systems, alternate trading systems, order routing systems, internet service providers, communications facilities and other facilities. Any interruption in these third-party services or software, deterioration in their performance, or other improper operation could interfere with our trading activities, cause losses due to erroneous or delayed responses, or otherwise be disruptive to our business. If our arrangements with any third party are terminated, we may not be able to find an alternative source of software or systems support on a timely basis or on commercially reasonable terms. This could also have a material adverse effect on our business, financial condition, results of operations and cash flows.

 

The prices of blockchain currencies are extremely volatile. Fluctuations in the price of blockchain currencies and digital assets generally could materially and adversely affect our business. We trade in blockchain currencies for our own account and our market making activity is focused solely on the cryptocurrency markets. The market value of these blockchain currencies is highly volatile. As a result, our results may be subject to significant currency fluctuations despite efforts on our part to rapidly convert blockchain currencies into U.S. dollars. Furthermore, a decrease in the price of a single blockchain asset may cause volatility in the entire blockchain asset industry and may affect other blockchain assets. For example, a security breach that affects investor or user confidence in Bitcoin, or Ethereum may also cause negative consequences to our business and operations.

 

We do not currently have intellectual property and we may be unable to register or adequately protect our intellectual property interests in the future. We may also be found infringing on intellectual property interests of others. We currently do not have any registered intellectual property in the United States. We intend to file certain patents and trademarks in the future. However, we may be subject to claims by other parties asserting interests in such trademarks and domain names or infringement of their intellectual property rights. In addition, our business is subject to the risk of third parties infringing our trademarks. We may not always be successful in securing protection for, or stopping infringements of, our trademarks and we may need to resort to litigation in the future to enforce our rights in this regard. Any such litigation could result in significant costs and a diversion of resources. We may not have the funds to adequately protect our intellectual property rights, which may undermine the credibility of our intellectual property, reducing our ability to enter into sub-licenses and weakening our attempts to prevent competitors from entering the market.

 

We may not have enough funds to sustain the business until it becomes profitable. Even if we raise funds through this offering, we may not accurately anticipate how quickly we may use the funds and whether these funds are sufficient to bring the business to profitability.

 

We may be impacted by the worldwide economic downturn due to the COVID-19 pandemic. In December 2019, a novel strain of coronavirus, or COVID-19, was reported to have surfaced in Wuhan, China. COVID-19 has spread to many countries, including the United States, and was declared to be a pandemic by the World Health Organization. Efforts to contain the spread of COVID-19 have intensified and the U.S., Europe and Asia have implemented severe travel restrictions and social distancing. The impacts of the outbreak are unknown and rapidly evolving. A widespread health crisis has adversely affected and could continue to affect the global economy, resulting in an economic downturn that could negatively impact the value of the company’s shares and investor demand for shares generally.

 

To date, our company and cryptocurrency markets have not been significantly negatively impacted by the pandemic. However, the extent to which COVID-19 affects our financial results will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the COVID-19 outbreak and the actions to contain the outbreak or treat its impact, among others. Moreover, the COVID-19 outbreak has had and may continue to have indeterminable adverse effects on general commercial activity and the world economy, and our business and results of operations could be adversely affected to the extent that COVID-19 or any other pandemic harms the global economy generally.

 

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Risks Related to the Securities and the Offering

 

Any valuation at this stage is difficult to assess. The valuation for the offering was established by the company. Unlike listed companies that are valued publicly through market-driven stock prices, the valuation of private companies, especially startups, is difficult to assess and you may risk overpaying for your investment.

 

Investors will be holders of Preferred Stock that has limited voting rights compared with our shares of Common Stock owned by our founders. You will have a limited ability to influence the company’s decisions.  The shares of Preferred Stock in this offering are entitled to one vote per share and voting control is in the hands of our two founders who own all the Common Stock. Each share of Common Stock is entitled to five votes and therefore, investors in this offering will have a limited ability to influence our policies or any other corporate matter, including the election of directors, changes to our company’s governance documents, creating an employee option pool, and any merger, consolidation, sale of all or substantially all of our assets, or other major action requiring stockholder approval. Holders of our Preferred Stock will have limited rights to influence changes to our corporate documentation in accordance with the Certificate of Incorporation. See “Securities Being Offered -- Preferred Stock -- Voting Rights.”

 

This offering involves "rolling closings," which may mean that earlier investors may not have the benefit of information that later investors have. We may instruct the escrow agent to disburse offering funds to us at any time. At that point, investors whose subscription agreements have been accepted will become our stockholders. In light of our early stage of development, our business may change during the offering period. We will file supplements to our Offering Circular reflecting material changes and investors whose subscriptions have not yet been accepted will have the benefit of that additional information. These investors may withdraw their subscriptions and get their money back. Investors whose subscriptions have already been accepted, however, will already be our stockholders and will have no such right.

 

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 optionsThe company does not currently have a stock option plan. The company may in the future create such a plan and reserve shares for issuance under the plan. The issuance of option or stock grants under a plan or other stock based incentive program may dilute the value of your holdings. The company views stock based incentive compensation as an important competitive tool, particularly in attracting both managerial and technological talent.

 

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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 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. Section 22 of the Securities Act of 1934, as amended (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 Securities Exchange Act of 1943, as amended (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. You will not be deemed to have waived the company’s compliance with the federal securities laws and the rules and regulations thereunder. This forum selection provision may limit your ability to obtain a favorable judicial forum for disputes with us. 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.

 

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, including any claims made under the federal securities laws. By signing the agreement, the investor warrants that the investor has reviewed this waiver with his or her legal counsel, and knowingly and voluntarily waives the investor’s jury trial rights following consultation with the investor’s legal counsel.

 

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. To our knowledge, the enforceability of a contractual pre-dispute jury trial waiver in connection with claims arising under the federal securities laws has not been finally adjudicated by a federal court. However, we believe that a contractual pre-dispute jury trial waiver provision is generally enforceable, including under the laws of the State of Delaware, which governs the agreements, by a federal or state court in the State of Delaware. 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.

 

Using a credit card to purchase shares may impact the return on your investment as well as subject you to other risks inherent in this form of payment.  Investors in this offering have the option of paying for their investment with a credit card, which is not usual in the traditional investment markets. Transaction fees charged by your credit card company (which can reach 5% of transaction value if considered a cash advance) and interest charged on unpaid card balances (which can reach almost 25% in some states) add to the effective purchase price of the shares you buy. See "Plan of Distribution." The cost of using a credit card may also increase if you do not make the minimum monthly card payments and incur late fees. Using a credit card is a relatively new form of payment for securities and will subject you to other risks inherent in this form of payment, including that, if you fail to make credit card payments (e.g. minimum monthly payments), you risk damaging your credit score and payment by credit card may be more susceptible to abuse than other forms of payment. Moreover, where a third-party payment processor is used, as in this Offering, your recovery options in the case of disputes may be limited. The increased costs due to transaction fees and interest may reduce the return on your investment. 

 

The Commission’s Office of Investor Education and Advocacy issued an Investor Alert dated February 14, 2018 entitled: "Credit Cards and Investments – A Risky Combination", which explains these and other risks you may want to consider before using a credit card to pay for your investment.

 

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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. 

 

After giving effect to our sale of the maximum offering amount of $49,800,000 in securities, with an estimated issuance cost of $3,500,000, our net offering proceeds would be approximately $46,300,000. The net tangible book value of the company was $559,547 as of December 31, 2020, which is calculated as the company’s equity of $568,945, less intangible assets of $9,398. At an offering price of $4.00 per share, this represents an immediate dilution in net tangible book value of $3.25, $3.58 or $3.90 per share to investors in this offering, as illustrated in the following table, which details the range of possible outcomes from the offering assuming the sale of 100%, 50% and 10% of the available shares.

 

      100%       50%       10%  
Gross Offering Proceeds   $ 49,800,000     $ 25,000,000     $ 5,000,000  
Offering expenses   $ 3,500,000     $ 1,750,000     $ 350,000  
Net offering proceeds   $ 46,300,000     $ 23,250,000     $ 4,650,000  
Shares issued in this offering     12,450,000       6,250,000       1,250,000  
Total outstanding shares after offering     62,550,000       56,300,000       51,300,000  
Net tangible book value per share before offering   $ 0.0112     $ 0.0112     $ 0.0112  
Net tangible Book value per share after offering   $ 0.7498      $ 0.4229     $ 0.1016  
Increase in net tangible value per share to existing shareholders   $ 0.7386      $ 0.4117     $ 0.0904  
Price per share paid by investors   $ 4     $ 4     $ 4  
Dilution in net tangible book value per share to investors in this offering   $ 3.25      $ 3.58     $ 3.90  
Percentage dilution     81.26 %      89.43 %     97.46 %
Percentage of Outstanding shares post financing     19.92 %      11.10 %     2.44 %

 

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 Regulation A 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):

 

  In June 2017 Jane invests $20,000 for shares that represent 2% of a company valued at $1 million.

 

  In December the company is doing very well and sells $5 million in shares to venture capitalists on a valuation (before the new investment) of $10 million. Jane now owns only 1.3% of the company but her stake is worth $200,000.

 

  In June 2018 the company has run into serious problems and in order to stay afloat it raises $1 million at a valuation of only $2 million (the “down round”). Jane now owns only 0.89% of the company and her stake is worth only $26,660.

 

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 number of shares of Common Stock underlying convertible notes that the company 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.

 

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USE OF PROCEEDS

 

We estimate that, at a per share price of $4.00, the net proceeds from the sale of the 12,450,000 shares in this offering will be approximately $46,300,000, after deducting the estimated maximum offering expenses of approximately $3,500,000.

 

Use of proceeds   10%    50%    100% 
Capital Raised  $5,000,000   $25,000,000   $49,800,000 
Offering Costs  $350,500   $1,750,000   $3,500,000 
Net Offering Proceeds  $4,654,500   $23,250,000   $46,300,000 
Trading Capital  $4,654,500   $23,250,000   $46,300,000 

 

Until such time as we deploy any of the net proceeds as trading capital, we will hold the net proceeds as cash.

 

The above figures represent only estimated costs. This expected use of net proceeds from this offering represents our intentions based upon our current plans and business conditions. The amounts and timing of our actual expenditures may vary significantly depending on numerous factors. As a result, our management will retain broad discretion over the allocation of the net proceeds from this offering. We may find it necessary or advisable to use the net proceeds from this offering for other purposes, and we will have broad discretion in the application of net proceeds from this offering. Furthermore, we anticipate that we will need to secure additional funding to fully implement our business plan. Please see the section entitled “Risk Factors” on page 6.

 

We reserve the right to change the above use of proceeds if management believes it is in the best interests of our company. 

 

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THE COMPANY’S BUSINESS

 

Overview

 

Rebrain.ai, Inc. is an AI-driven Quantitative Trading firm, market maker and liquidity provider active in the cryptocurrency markets. The company was incorporated on February 27, 2017 in Delaware. Rebrain operates as a proprietary trading firm and trades financial products for its own account to provide liquidity in cryptocurrency markets. The company doesn’t have any clients and does not provide direct investment services. The company has two wholly-owned subsidiaries:

 

1. Rebrain.ai Investment Management LLC, a California-based Registered Investment Adviser regulated by the National Futures Association (NFA). This company is not currently active and has no assets under management. This investment management company was set up because the initial project was to manage hedge funds in stocks and futures markets before focusing only on a proprietary trading activity in the cryptocurrency markets. In the future, the company plans to develop this investment management activity.

 

2. Rebrain.ai Labs, a technology and trading company incorporated in France. This company focuses on R&D. The primary purpose of our French subsidiary is to research, test and develop enhancements to our AI technology and engages in limited test trading only. None of the proceeds of the current offering will flow to the French subsidiary.

 

As a financial technology company, Rebrain.ai improves financial markets through a scientific approach. Using our proprietary trading platform, we provide liquidity to crypto markets with fair and competitive prices that aim to improve the market efficiency and to create value from efficiencies for end investors. As a market-maker, Rebrain.ai provides deep liquidity in crypto exchanges by simultaneously quoting bid (buy) and ask (sell) prices for various cryptocurrencies using its technology.

 

Market Strategy

 

Using trading capital Rebrain aims to track and fix short-term market inefficiencies by engaging in arbitrage. We buy and sell cryptocurrencies with our AI-driven technology 24 hours a day, 7 days a week and 365 days a year to fix short-term market inefficiencies making a trading profit in the process. The larger our trading capital, the more market inefficiencies we can fix and the more revenue we can generate. An inefficient market is one in which an asset's market prices do not always accurately reflect its true value. Buying and selling volatile assets at the same time in different markets can generate profits with fewer risks.

 

Our activity and trading models seek to eliminate the price risk in any positions held. Our revenue generation is driven primarily by transaction volume. We avoid the risk of long or short positions in favor of seeking to earn small bid/ask spreads on large trading volumes across thousands of cryptocurrency transactions.

 

Our market making activities strategy involves quoting a two-sided market in a single instrument with the intention of profiting by capturing the spread between the bid and offer price. This strategy places buy orders, or bids, and sell orders, or offers, in the market for the subject instrument at or near the inside of the market with the intention of achieving an execution. If another market participant executes against the strategy’s bid or offer by crossing the spread, the strategy will attempt to exit the position by continuing to quote on the opposite side of the market in order to execute an offsetting position.

 

As a market maker dedicated to providing improved efficiency and liquidity in the US Bitcoin market, we aim to provide critical market functionality and robust price competition, leading to reduced trading costs and more efficient pricing. This contribution to the crypto markets provides added liquidity and transparency, which we believe are necessary and valued components to the efficient functioning of market infrastructure and benefit all market participants. We support transparent and efficient, technologically advanced marketplaces.

 

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Market inefficiencies strategy

 

Market inefficiency opportunities like arbitrage arise many times per second in all the financial markets, including crypto markets.

 

Science and technology, more specifically AI technologies, drive the company business. Through an innovative approach of collective intelligence, we combine the most sophisticated AI technologies with evolutionary algorithms to develop trading agents able to detect and fix short-term market inefficiencies.

 

At the core of our trading model are market-neutral, market making, and volatility-based strategies which minimize our exposure to market direction.

 

We do not engage in the types of principal investing and predictive, momentum and signal trading in which many other trading firms engage. Our risk management system monitors in real time the trading activity and is able to immediately shutdown a strategy that has a performance outside an acceptable range. If a strategy is shut down, it has to be manually restarted, so that there is a human intervention to check unexpected events. Although this approach may prevent us from maximizing potential returns in times of extreme market volatility, we believe the reduction in risk is an appropriate trade-off that is in keeping with our aim of generating consistently strong revenue from our trading activity.

 

Market making strategies

 

As a market-maker, Rebrain.ai provides deep liquidity in crypto exchanges by quoting both bid(buy) and ask(sell) prices for various crypto currencies using its technology.

 

We refer to our market making activities as being “market neutral”, which means that we are not dependent on the direction of any particular market nor do we speculate. Our market making activities are designed to minimize capital at risk at any given time by limiting the notional size of our positions. Our strategies are also designed to lock in returns through precise hedging in the primary instrument or in one or more economically equivalent instruments,

 

Crypto exchanges

 

Currently, Rebrain operates mainly on one crypto exchange (Kraken.com, a US-based exchange) due its low trading capital. We started with $500K in January 2020 and increased our trading capital to $1,000,000 during the last quarter of 2020 and deal in Bitcoin only. Over 2020, our monthly trading volume evolved in a range between $100 million and $500 million due to volatility in cryptocurrency markets and the increasing trading capital month over month based on a profits reinvestment strategy. 

 

As Bitcoin expands further, we expect that the number of exchanges and markets that we can enter will increase and enable us to scale up our business.

 

Our Technology

 

We have built a proprietary trading technology able to trade 24/7/365 in crypto markets on all major cryptocurrency exchanges and crypto assets. Our proprietary trading platform enables low-latency, fully systematic, and highly automated trading. We have combined innovative trading ideas with sophisticated technologies, resulting in high value added-trading systems.

 

Technology and operational efficiency are at the core of our business, and our focus on market making or market inefficiencies trading models is a key element of our success. Our proprietary technology platform is highly reliable, scalable and modular. Our market data, order routing, transaction processing, risk management and market surveillance technology modules manage our trading activities in an efficient manner and enable us to scale our them without significant incremental costs or third-party licensing or processing fees.

 

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Our core software technology is developed internally, and we do not generally rely on outside vendors for software development or maintenance. To achieve optimal performance from our systems, we continuously test and upgrade our software.

 

Competition and Competitive Advantage

 

The competitors in this fast-growing crypto industry are both players coming from the traditional financial markets (like Jump Trading : https://www.jumptrading.com ) and crypto native players (like Alameda Research : https://www.alameda-research.com ). Most of the competitors are not known, as they tend to keep their technology and activities volume secret.

 

According to the company, Alameda Research, a US trading firm, manages over $100 million in digital assets and trades $600 million to $1.5 billion daily across thousands of products: major coins and altcoins, as well as their derivatives. It claims doing 5% of global daily volume.

 

In the financial trading industry and more specifically in the market making industry, the differentiation is expressed by the trading results themselves. If a market maker on a market is profitable, then it has competitive advantages over the others market makers otherwise it would not create value and generate profit.

 

We believe that our main competitive advantages come from our AI-driven technology built on 20 years of strong quantitative trading experience from its founders.

 

Risk Management

 

Our systems are monitored 24 hours a day, seven days a week.

 

We are intensely focused on risk management and monitor our activities on a continuous basis using our fully integrated technology systems. Our strategies are designed to lock in returns through precise hedging in the primary instrument or in one or more economically equivalent instruments, as we seek to eliminate the price risk in any positions held.

 

If our risk management system detects that a trading strategy is generating losses in excess of our preset limits, it will lockdown that strategy and alert management.

 

Operating plan and roll out

 

The company’s plans are based on its strong technology background. The company has already invested intensively in its technology and its trading models over the last four years and even before the creation of the company, mainly brought from the founders. Its technology investment represents a large equivalent research and Development amount.

 

In 2020, the company has demonstrated its ability to generate a monthly revenue growth of about 12% to 15% depending on the cryptomarkets volatility. In 2020, the company has generated more than $1 million net trading gains for a traded volume above $2.5 billion with a 67.9% pre-tax net income.

 

Our development strategy is leveraging the power of compound interest. The core of our trading model’s approach consists of focusing on generating regular daily profit by making the maximum numbers of trades each day. Although its performance depends on market volatility and varies each day, this daily target allows it to generate a regular monthly performance and benefit from the leverage of compound interests.

 

Depending on the success of this offering and increases in trading capital increase, Rebrain.ai plans to scale its activities onto various crypto exchanges.

 

Intellectual Property

 

The company does not currently own any intellectual property.

 

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Employees

 

We currently have 2 full-time employees. In France we have one full time employee and 4 interns based in our Lyon, France, office.

 

Regulation

 

We believe that we are not currently subject to any US federal regulations specific to our business with respect to cryptocurrencies. However, the regulatory environment governing digital assets, like cryptocurrencies is relatively new and changing rapidly. For example, the Commission views some digital assets as securities requiring registration under the Securities Act and is in the process of exploring additional potential regulatory response to cryptocurrency trading. Its recently issued regulatory investor protection agenda for 2022 specifically mentions reviewing investing in cryptocurrencies. Digital assets may also be subject to commodities laws, trade sanctions, and banking laws, among others. While we currently restrict our trading activities in the United States to cryptocurrencies that are designed in conformity with the Commission’s no action letter guidance and other applicable rules and regulations as they exist today, there could be changes to the regulatory environment which will affect our business in the future.

 

THE COMPANY’S PROPERTY

 

The company leases space for its corporate headquarters from Coronado Plaza LLC. The company does not own any real property.

 

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

 

The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes included in this Offering Circular. The following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements.

 

Results of Operations

 

The following description presents, for the periods indicated, information from our consolidated statements of operations expressed as percentages of change from the fiscal year ended December 31, 2019 to the fiscal year ended December 31, 2020.

 

Our revenues consist of net trading gains and commissions.

 

Our expenses consist of operating costs for ongoing operations including professional fees, and other expenses. The components of other expenses include payroll and payroll processing, employee benefits and rent and lease expenses. The company’s expenses also include impairment on digital assets and depreciation and amortization. As discussed below in “—Liquidity and Capital Resources – Indebtedness,” the company has borrowed funds from its 2 founders and incurs interest expense.

 

We began earning net trading gains in 2019. We expect to also generate net trading gains in 2021.

 

Year Ended December 31, 2020 Compared to Year Ended to December 31, 2019

 

Our net trading gains and commissions for the year ended December 31, 2019 were $210,845 and increased to $1,009,624 during the year ended December 31, 2020. The increase was due to the deployment of new AI models and as we generated increased trading capital we traded with that higher amount of capital and increased our profits further.

 

Our expenses for the year ended December 31, 2019 were $111,421 compared with $227,941 for the year ended December 31, 2020. An increase of $119,124 in other expenses was offset by a lower impairment loss on digital assets. The increase in other expenses during 2020 primarily consisted of compensation-related expenses as the company began to pay its officers. These expenses included $61,346 in payroll and payroll processing charges and $35,348 for employee benefits, including healthcare. Rent and lease payments increased in 2020 to $18,191 as the company entered into an additional office lease.

 

The company has incurred an impairment loss on digital assets in 2019 and 2020 on cryptocurrency positions held by its French subsidiary. In 2017 the Company acquired the French subsidiary which was holding a few cryptocurrencies that are unrelated to our research activities. The Company liquidated some of the positions in 2021 and has elected to maintain some others, which may fluctuate in value. As of this filing, the current market value of this position is approximately $26,000.

 

Interest expense increased from $28,418 for the year ended December 31, 2019 to $96,042 for the year ended December 31, 2021. The balance of debt owed to the founders as of December 31, 2019 was $485,826 and the interest rate on the debt was 10%. On December 27, 2019, the company incurred an additional $167,609.40 in debt. On January 1, 2020, the interest rate on all balances owed to the founders increased to 20%. As a result of these changes, the company incurred increased interest expense during 2020. The company used the proceeds from the loan to finance its operations, including trading capital.

 

Our net income after expenses was $51,329 for the year ended December 31, 2019, compared to $495,998 for the year ended December 31, 2020.

 

20

 

 

Liquidity and Capital Resources

 

The company had $1,262,438 cash on hand as of December 31, 2020. After December 31, 2020, the company deposited $1,011,896 of this amount with the Kraken exchange to enable it to trade on that exchange. The funds held at Kraken are not insured bank deposits. The company considers all highly-liquid instruments with original maturities of three months or less to be cash equivalents. To date, the company has been funded by its founders and retained profits.

 

Indebtedness 

 

The company has borrowed funds from its 2 founders. Borrowings under the founders at December 31, 2020 and 2019 totaled $582,369 and $ 485,826, respectively. Of these amounts, the total due to Sylvain Morel (through a solely-owned company, Leromy’s Capital) as of December 31, 2020 and 2019, respectively, was $566,851 and $472,894. The total balance due to Sebastien Robert as of those dates was $15,518 and $12,932, respectively. For the years ended December 31, 2020 and 2019, interest expense related to the member debt totaled, $96,042 and $28,418, respectively. Payment of the debt agreements is scheduled to begin in 2021. These are interest only instruments. Prior to January 1, 2020, interest on the debt accrued at 10%, and increased to 20% on that date, payable quarterly. The balance of the loans are repayable within 30 days of the member providing the company with written notice of demand. The company considers its principal owners, members of management, members of their immediate families, and entities under common control to be related parties. The company does not intend to use any of the net proceeds of this offering to repay the indebtedness or the interest on the indebtedness.

 

Trend Information 

 

Our business and operations are sensitive to general business and economic conditions in the U.S. and worldwide along with local, state, and federal governmental policy decisions. A host of factors beyond our control could cause fluctuations in these conditions. Adverse conditions may include but are not limited to: blockchain asset regulations by authorities, changes to financial regulations, market acceptance of our business model and COVID-19 issues. These adverse conditions could affect our financial condition and the results of operations. Extended periods of low volatility might reduce our revenue and or profitability.

 

On January 30, 2019, the World Health Organization declared the COVID-19 coronavirus outbreak a “Public Health Emergency of International Concern” and on March 10, 2020, declared it to be a pandemic. Our business has benefited from market conditions favorable to the cryptocurrency markets and the most significant market trend in 2021 was that Bitcoin became more broadly accepted and used. During this year market movement in Bitcoin tended to endorse our trading methodology. The increase of the market trading volume in 2021 has been helping us become more profitable. We cannot predict how the pandemic or the end of the pandemic may affect our ability to replicate our past performance, however, we believe that cryptocurrencies will continue to be an important part of financial markets in the next 12 months.

 

See the section entitled “Implications of Being an Emerging Growth Company” at the beginning of this Offering Circular for a discussion of the modified reporting requirements for “emerging growth” companies that we may take advantage of should be become a public reporting company.

 

21

 

 

DIRECTORS, EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES

 

The following table sets forth the name and position of each of our current executive officers, directors and significant employees. Our CEO and president are full-time employees.

 

Name   Position   Age   Term of Office
Executive Officers:            
Sylvain Morel   Chief Executive Officer   44   02/27/2017
Sebastien Robert   President   46   02/27/2017
Directors:            
Sylvain Morel   Director   44   02/27/2017
Sebastien Robert   Director   46   02/27/2017

 

Sylvain Morel, Chief Executive Officer

 

Sylvain Morel is currently the CEO and co-founder of Rebrain.ai Inc. He has served in that position since the inception of the company in 2017.

 

Prior to founding Rebrain.ai, he was the Executive Chairman and co-founder of Adthink.com, a French digital performance advertising company which has been listed on Euronext Growth since 2007. He ran and developed Adthink into a company generating $40 million in revenues. The company had raised $500,000 prior to its IPO and was listed shortly thereafter.

 

Sylvain Morel holds an engineering degree and an MA in computer science from CPE Lyon in France. He holds several U.S. securities industry licenses including the Series 65 qualification (Investment Adviser) administered by the Financial Industry Regulatory Authority (FINRA) and Series 3 qualification by (National Futures Association).

 

Sebastien Robert, President

 

Sebastien is currently the Executive Chairman and co-founder of Rebrain.ai Inc. He has served in that position since the inception of the company in 2017.

 

In the early 2000s, Mr. Robert developed market making algorithms for the French stock exchange, with his deep mathematical experience and belief that mathematics should underlie the markets. Subsequently, he extended his research to U.S. stock exchanges, commodities, and currencies including cryptocurrencies. In 2005, he introduced machine learning to his algorithms and became a consultant in 2009 for companies with financial markets issues. In 2013, he joined Quant Research Finance, a French research company, leading the development of quantitative algorithms.

 

Sebastien Robert holds an engineering degree and an MA in mechanical from ECAM in France. He holds several U.S. securities industry licenses including the Series 65 qualification (Investment Adviser) administered by the Financial Industry Regulatory Authority (FINRA) and Series 3 qualification by (National Futures Association).

 

22

 

 

COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS

 

For the fiscal year ended December 31, 2020 we compensated our two highest-paid directors and executive officers as follows:

 

Name  Position**  Cash
Compensation ($)
   Other
Compensation ($)
   Total
Compensation ($)
 
Sylvain Morel  CEO  $24,000   $0   $24,000 
Sebastien Robert  President  $24,000   $0   $24,000 

 

The company has not compensated Mr. Morel and Mr. Robert in their capacity as directors. For fiscal year 2021 the company plans to compensate Mr. Morel and Mr. Robert in their capacity as executives as follows: $80,000 to $100,000 per year, depending on trading performance.

 

23

 

 

 

SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITYHOLDERS

 

The tables below show, as of August 31, 2021, the security ownership of the company’s directors, executive officers owning 10% or more of any class of the company’s voting securities and other investors who own 10% or more of any class of the company’s voting securities.

 

Name and address of beneficial owner (1)  Title of class  Amount and nature of beneficial ownership   Amount and
nature of
beneficial
ownership
acquirable
   Percent of
class
 
Sylvain Morel (2)  Common Stock   25,000,000    0    50%
Sebastien Robert  Common Stock   25,000,000    0    50%
Officers and directors as a group (2 in this group)  Common Stock   50,000,000    0    100%
Rod Turner (3)  Preferred Stock   50,000    0    100%
Officers and directors as a group (2 in this group)  Preferred Stock   0    0    0%

 

(1)The address for all the executive officers and directors is c/o Rebrain.ai Inc., 1330 Orange Avenue, Suite 322 Coronado, CA 92118.
(2)Includes 2,500,000 shares of Common Stock owned by Leromys Capital, which is controlled by Mr. Morel.
(3)Rod Turner has purchased 50,000 shares of the company’s Preferred Stock at $1 per share pursuant to a subscription agreement dated April 19, 2021. This does not include warrants issuable to Manhattan Street Capital.

 

24

 

 

INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS

 

The company has entered into loan agreements with its founders and executive officers as follows:

 

The company has borrowed funds from its 2 founders. Borrowings from the founders at December 31, 2020 and 2019 totaled $ 582,369 and $ 485,826, respectively. Of these amounts, the total due to Sylvain Morel (through a solely-owned company, Laromy’s Capital) as of December 31, 2020 and 2019, respectively, was $ 566,851 and $ 472,894 . The total balance due to Sebastien Robert as of those dates was $ 15,518 and $ 12,732, respectively. For the years ended December 31, 2020 and 2019, interest expense related to the member debt totaled $96,042 and $28,418, respectively. Payment of the debt agreements is scheduled to begin in 2021. These are interest only instruments. Prior to January 1, 2020, interest on the debt accrued at 10%, and increased to 20% on that date, payable quarterly. The balance of the loans are repayable within 30 days of the member providing the company with written notice of demand. The company considers its principal owners, members of management, members of their immediate families, and entities under common control to be related parties.

 

The company intends to use the proceeds from this capital raise to scale up trading volume and does not intend to repay these loans or interest with the proceeds.

 

25

 

 

SECURITIES BEING OFFERED

 

The company is offering Preferred Stock to investors in this offering. The Preferred Stock may be converted into the Common Stock of the company automatically upon the occurrence of certain events, like an Initial Public Offering. As such, under this Offering Statement, of which this Offering Circular is part, the company is qualifying up to 12,450,000 shares of Preferred Stock and up to 12,450,000 shares of Common Stock into which the Preferred Stock may convert.

 

The following description summarizes important terms of our capital stock in accordance with the Certificate of Incorporation. This summary does not purport to be complete and is qualified in its entirety by the provisions of our certificate of incorporation, as amended (the “Certificate of Incorporation”) and our Bylaws. For a complete description of our capital stock, you should refer to our Certificate of Incorporation and our Bylaws, which are filed as exhibits to the Offering Statement of which this Offering Circular forms a part, and applicable provisions of Delaware law.

 

Our authorized capital stock consists of 62,500,000 shares of Common Stock $0.0001 par value per share and 12,500,000 shares of Preferred Stock $0.0001 par value per share.

 

Preferred Stock

 

Voting Rights

 

The holders of the Preferred Stock are entitled to one vote for each share of Preferred Stock held at all meetings of stockholders (and written actions in lieu of meetings). Holders of Preferred Stock will generally vote together with the holders of Common Stock as a single class with Common Stockholders who will be entitled to five votes per share. Preferred stockholders will be entitled to notice of any stockholder meeting.

 

Dividend Rights

 

The company is under no obligation to declare or pay any dividends. The Board of Directors may declare dividends from time to time from available funds therefor. No class of shares shall enjoy any dividend payment preference.

 

Conversion Rights

 

Each share of the Preferred Stock will automatically convert into Common Stock upon either (a) the closing of a firm commitment underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended, covering the offer and sale of Common Stock (an “IPO”), (b) the Common Stock is listed for trading on the Nasdaq Stock Market, the New York Stock Exchange or another exchange or marketplace approved the Board of Directors, or (c) the date and time, or the occurrence of an event, specified by vote or written consent of the majority of holders of the Common Stock in accordance with the Certificate of Incorporation. For the purpose of effecting the conversion of the Preferred Stock, the company will at all times while any share of Preferred Stock is outstanding, reserve and keep available out of its authorized but unissued capital stock, that number of its duly authorized shares of Common Stock as may from time to time be sufficient to effect the conversion of all outstanding Preferred Stock.

 

Liquidation Rights

 

In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation or any Deemed Liquidation Event (as defined in the company’s Certificate of Incorporation attached as Exhibit 2.1 to the Offering Statement), the holders of Preferred Stock shall be entitled to receive the original issue price per share, adjusted as set out in the Certificate of Incorporation, plus any declared and unpaid dividends thereon to the date fixed for such distribution, from the assets of the Corporation available for distribution to its stockholders before any payment shall be made to the holders of Common Stock. Deemed Liquidation Events include a merger or consolidation in which the company or one of its affiliates is a constituent party or the sale of substantially all of the company’s assets. The funds and assets deemed paid or distributed to the holders of Preferred Stock upon any such merger, consolidation, sale, transfer or other disposition described in the Certificate of Incorporation will be the cash or the value of the property, rights or securities paid or distributed to such holders or the acquiring person, firm or other entity. The value of such property, rights or securities shall be determined in good faith by the company’s board of directors.

 

26

 

 

Common Stock

 

The voting, dividend and liquidation rights of the holders of the Common Stock qualified by the rights, powers and privileges of the holders of the Preferred Stock.

 

Voting Rights

 

The holders of the Common Stock are entitled to five votes for each share of Common Stock held at all meetings of stockholders (and written actions in lieu of meetings) except as required by applicable law on amendment to the Certificate of Incorporation that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such series of Preferred Stock are entitled, either separately or together with holders of one or more other such series, to vote thereon.

 

27

 

 

PLAN OF DISTRIBUTION

 

We are offering a up to $49,800,000 in shares of our Preferred Stock. The offering is being conducted on a best-efforts basis without any minimum number of shares or amount of proceeds required to be sold. There is no minimum subscription amount required (other than a per investor minimum purchase of $300) to distribute funds to the company. All subscribers will be instructed by the company or its agents to transfer funds by wire or ACH, check, debit or credit card directly to the bank account established for this offering. The company may terminate the offering at any time for any reason at its sole discretion.

 

The company intends to engage a broker-dealer after this offering has been qualified by the SEC. In the meantime, no shares will be offered in the states of Florida, Texas and North Dakota.

 

The company has engaged Manhattan Street Capital to perform the following administrative and technology related functions in connection with this offering, but not for underwriting or placement agent services. Manhattan Street Capital will contract the services of a third party, FundAmerica, for the purpose of payment processing and storage of confidential investor data.

 

1. Accept investor data from potential investors on behalf of the company;

 

2. Reject investors that do not pass anti-money laundering (“AML”) or that do not provide the required information;

 

3. Process subscription agreements and reject investors that do not complete subscription agreements;

 

4. Reject investments from potential investors who do not meet requirements for permitted investment limits for investors pursuant to Regulation A, Tier 2;

 

5. Reject investments from potential investors with inconsistent, incorrect or otherwise flagged (e.g. for underage or AML reasons) subscriptions;

 

6. Oversee transmittal by FundAmerica of data to the company’s transfer agent in the form of book-entry data for maintaining the company’s responsibilities for managing investors (investor relationship management, aka “IRM”) and record keeping; and

 

7. Receive and transmit investor data to FundAmerica to store investor details and data confidentially and not disclose to any third party except as required by regulators, by law or in our performance under this Agreement (e.g. as needed for AML).

 

The company will pay FundAthena, Inc., DBA Manhattan Street Capital (“Manhattan Street Capital” or “MSC” as applicable) for its services in hosting the Offering of the shares on its online platform. Further, the company has entered into an Engagement Agreement with MSC effective 11/16/2020 (the “Engagement Agreement”) which includes consulting services and technology services. The company will pay MSC the following:

 

A project management retainer fee of $10,000 USD paid monthly in advance for a 9-month, and the same value of ten-year cashless exercise warrants priced at the lowest price at which securities will be sold in the Offering.

 

A listing fee of $5,000 USD per month while the offering is live for investment or reservations, and the same value of ten-year cashless exercise warrants priced at the lowest price at which securities were sold in the Offering.

 

A technology admin and service fee of $25.00 USD per investment in the offering, plus the same value of ten-year cashless exercise warrants priced at the lowest price at which securities were sold in the Offering.

 

AML fee of $5 per investor or $15 per Trust or Company

 

28

 

 

All fees are due to MSC regardless of whether investors are rejected after AML checks or the success of the Offering.

 

Manhattan Street Capital does not directly solicit or communicate with investors with respect to offerings posted on its site, although it does advertise the existence of its platform, which may include identifying issuers listed on the platform. The Offering Circular will be furnished to prospective investors in this offering via download 24 hours a day, 7 days a week on the www.manhattanstreetcapital.com website.

 

Funds will be deposited in an account at Prime Trust. Payments are processed via Fundamerica and will be made immediately available to the company. A segregated escrow account will be utilized. If a subscription is rejected, funds will be returned to subscribers within thirty days of such rejection without deduction or interest. Upon acceptance by us of a subscription, a confirmation of such acceptance will be sent to the subscriber by the company. Manhattan Street Capital has not investigated the desirability or advisability of investment in the shares nor approved, endorsed or passed upon the merits of purchasing the Shares. Manhattan Street Capital is not participating as an underwriter and under no circumstance will it solicit any investment in the company, recommend the company’s securities or provide investment advice to any prospective investor, or make any securities recommendations to investors. Manhattan Street Capital is not distributing any securities offering prospectuses or making any oral representations concerning the securities offering prospectus or the securities offering. Based upon Manhattan Street Capital’s anticipated limited role in this offering, it has not and will not conduct extensive due diligence of this securities offering and no investor should rely on Manhattan Street Capital’s involvement in this offering as any basis for a belief that it has done extensive due diligence. Manhattan Street Capital does not expressly or impliedly affirm the completeness or accuracy of the Form 1-A and/or Offering Circular presented to investors by the company. All inquiries regarding this offering should be made directly to the company.

 

Process of Subscribing

 

You will be required to complete a subscription agreement in order to invest. The subscription agreement includes a representation by the investor to the effect that, if you are not an “accredited investor” as defined under securities law, you are investing an amount that does not exceed the greater of 10% of your annual income or 10% of your net worth (excluding your principal residence).

 

If you decide to subscribe for the Preferred Stock in this Offering, you should complete the following steps:

 

1. Go to www.manhattanstreetcapital.com/rebrain-ai.

2. Click on the "Invest Now" button;

3. Complete the online investment form;

4. Deliver funds directly by check, wire, debit card, credit card (which may incur a processing fee of 3.75%), or electronic funds transfer via ACH to the specified account or deliver evidence of cancellation of debt;

5. Once funds or documentation are received an automated AML check will be performed to verify the identity and status of the investor;

6. Once AML is verified, investors will electronically receive, review, execute and deliver to us a subscription agreement.

 

Upon confirmation that an investor’s funds have cleared, the company will instruct the Transfer Agent to issue shares to the investor. The Transfer Agent will notify an investor when shares are ready to be issued and the Transfer Agent has set up an account for the investor.

 

Each investor must represent in writing that he/she/it meets the applicable requirements set forth above and in the Subscription Agreement, including, among other things, that (i) he/she/it is purchasing the Preferred Stock for his/her/its own account and (ii) he/she/it has such knowledge and experience in financial and business matters that he/she/it is capable of evaluating without outside assistance the merits and risks of investing in the Preferred Stock, or he/she/it and his/her/its purchaser representative together have such knowledge and experience that they are capable of evaluating the merits and risks of investing in the Preferred Stock. Broker-dealers and other persons participating in the offering must make a reasonable inquiry in order to verify an investor’s suitability for an investment in the company. Transferees of the Preferred Stock will be required to meet the above suitability standards.

 

29

 

 

In the case of sales to fiduciary accounts (Keogh Plans, Individual Retirement Accounts (IRAs) and Qualified Pension/Profit Sharing Plans or Trusts), the above suitability standards must be met by the fiduciary account, the beneficiary of the fiduciary account, or by the donor who directly or indirectly supplies the funds for the purchase of the Preferred Stock. Investor suitability standards in certain states may be higher than those described in Offering Circular. These standards represent minimum suitability requirements for prospective investors, and the satisfaction of such standards does not necessarily mean that an investment in the company is suitable for such persons. Different rules apply to accredited investors.

 

The Preferred Stock may not be offered, sold, transferred, or delivered, directly or indirectly, to any person who (i) is named on the list of “specially designated nationals” or “blocked persons” maintained by the U.S. Office of Foreign Assets Control (“OFAC”) at www.ustreas.gov/offices/enforcement/ofac/sdn or as otherwise published from time to time, (ii) an agency of the government of a Sanctioned Country, (iii) an organization controlled by a Sanctioned Country, or (iv) is a person residing in a Sanctioned Country, to the extent subject to a sanctions program administered by OFAC. A “Sanctioned Country” means a country subject to a sanctions program identified on the list maintained by OFAC and available at www.ustreas.gov/offices/enforcement/ofac/sdn or as otherwise published from time to time. Furthermore, the Preferred Stock may not be offered, sold, transferred, or delivered, directly or indirectly, to any person who (i) has more than fifteen percent (15%) of its assets in Sanctioned Countries or (ii) derives more than fifteen percent (15%) of its operating income from investments in, or transactions with, sanctioned persons or Sanctioned Countries.

 

We maintain the right to accept or reject subscriptions in whole or in part, for any reason or for no reason. All monies from rejected subscriptions will be returned by us to the investor, without interest or deductions.

 

Escrow Agent Fees

 

The company has agreed to pay the Escrow Agent:

 

$300.00 Escrow account setup fee $25.00 per month escrow account fee for so long as the Offering is being conducted $250.00 Escrow Extensions $250.00 per month Escrow Cloud Hosting Fee Technology Transaction Fee of $7.50 for investments equal to or greater than $500.00 and $2.00 for transaction less than $500.00 Investor and Capitalization Table management fee of $25.00 per month Accounting batch fee of $25.00 per batch Compliance fee of $2.00 per US individual and $25 per US entity Compliance fee of $5.00 per UK/Canadian individual investor Compliance fee of $60.00 per individual international investor and $75.00 per international entity Processing fees of $2.00 per ACH transaction, $5.00 per check, $15.00 per domestic wire and $35.00 per international wire Cash management fee of 0.5% of funds processed (up to a maximum of $8,000) Support and administration fees as needed on an hourly basis ranging from $85.00 per hour for Administrative Assistants to $750.00 per hour for the Chief Trust Officer. A credit card processing fee equal to 4.00% of the amount processed (which will be paid by the investor)

 

Transfer Agent

 

The company has also engaged Colonial Stock Transfer, a registered transfer agent with the SEC, who will serve as transfer agent to maintain shareholder information on a book-entry basis. The company estimates the aggregate fee due for the above services to be approximately $5,000 annually.

 

30

 

 

ONGOING REPORTING AND SUPPLEMENTS TO THIS OFFERING CIRCULAR

 

We will be required to make annual and semi-annual filings with the Commission. 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 Commission. 

 

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

 

31

 

 

Rebrain.ai Inc.

 

Consolidated Financial Statements and Independent Auditor’s Report

As of December 31, 2020 and 2019 and for the years then ended

 

32

 

 

Contents

 

Independent Auditor’s Report F-1-F-2
   
Consolidated Financial Statements as of December 31, 2020 and 2019 and for the years then ended  
   
Consolidated Balance Sheets F-3
   
Consolidated Statements of Operations F-4
   

Consolidated Statements of Changes in Members’ Equity 

F-5
   

Consolidated Statements of Cash Flows

F-6
   
Notes to Consolidated Financial Statements F-7-F-16
   

 

 

 

 

 

 

To the Board of Directors of

Rebrain.ai, Inc.

Coronado, California

 

INDEPENDENT AUDITOR’S REPORT

 

Opinion

 

We have audited the accompanying consolidated financial statements of Rebrain.ai, Inc. and subsidiaries (the “Company”) which comprise the consolidated balance sheets as of December 31, 2020 and 2019, and the related consolidated statements of operations, changes in members’ equity, and cash flows for the years then ended, and the related notes to the consolidated financial statements.

 

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2020 and 2019, and the results of its consolidated operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

 

Basis for Opinion

 

We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are required to be independent of the Company and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

 

Responsibilities of Management for the Consolidated Financial Statements

 

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

 

In preparing the consolidated financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the consolidated financial statements are available to be issued.

 

Artesian CPA, LLC

1624 Market Street, Suite 202 | Denver, CO 80202

p: 877.968.3330 f: 720.634.0905

info@ArtesianCPA.com | www.ArtesianCPA.com

 

F-1

 

 

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

 

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements, including omissions, are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the consolidated financial statements.

 

In performing an audit in accordance with generally accepted auditing standards, we:

 

·Exercise professional judgment and maintain professional skepticism throughout the audit.

 

·Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

 

·Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. Accordingly, no such opinion is expressed.

 

·Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the consolidated financial statements.

 

·Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for a reasonable period of time.

 

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.

 

/s/ Artesian CPA, LLC

 

Denver, Colorado

August 4, 2021

 

Artesian CPA, LLC

1624 Market Street, Suite 202 | Denver, CO 80202

p: 877.968.3330 f: 720.634.0905

info@ArtesianCPA.com | www.ArtesianCPA.com

 

F-2

 

 

Rebrain.ai Inc.

 

Consolidated Balance Sheets

As of December 31, 2020 and 2019

 

   2020   2019 
Assets          
           
Current Assets:          
Cash and cash equivalents  $1,262,438   $94,234 
Receivable from broker   123    497,212 
Accounts receivable   12    - 
Prepaid expenses   90,427    - 
Total current assets   1,353,000    591,446 
           
Non-current assets:          
Property and equipment, net accumulated depreciation (2020 - $1,485)   8,479    - 
Intangible assets - digital assets (cost of 2019 - $13,845, 2020 - $19,971)   9,398    3,321 
Total non-current assets   17,877    3,321 
           
Total assets  $1,370,877   $594,767 
           
Liabilities and Members' Equity          
           
Current liabilities:          
Tax payable  $172,273   $13,969 
Due to members   -    17,474 
Other liabilities   47,290    6,357 
Total current liabilities   219,563    37,800 
           
Non-current liabilities:          
Notes payable to members   582,369    485,826 
Total non-current liabilities   582,369    485,826 
           
Total liabilities   801,932    523,626 
           
Members' Equity:          
Additonal paid-in capital   29,903    29,903 
Retained earnings/(accumulated deficit)   539,597    43,599 
Accumulated other comprehensive income/(loss)   (555)   (2,361)
Total members' equity   568,945    71,141 
           
Total liabilities and members' equity  $1,370,877   $594,767 

 

See Independent Auditor's Report and accompanying notes to the consolidated financial statements, which are an integral part of these consolidated financial statements

 

F-3

 

 

Rebrain.ai Inc.

 

Consolidated Statements of Operations

For the years ended December 31,

 

   2020   2019 
Net trading gains and commissions  $1,009,624   $210,845 
           
Expenses:          
Professional fees   38,211    31,826 
Other operating expense   188,195    69,071 
Impairment loss on digital assets   50    10,524 
Depreciation and amortization   1,485    - 
Total expenses   227,941    111,421 
           
Income from operations   781,683    99,424 
           
Other Income/(Expense):          
Interest expense   (96,042)   (28,418)
           
Income before tax provision   685,641    71,006 
           
Tax Provision:          
Tax expense   189,643    19,677 
           
Net Income   495,998    51,329 
           
Other Comprehensive Income/(Loss)          
Gain/(loss) on foreign currency translation   1,806    (2,361)
           
Other Comprehensive Income  $497,804   $48,968 

 

See Independent Auditor's Report and accompanying notes to the consolidated financial statements, which are an integral part of these consolidated financial statements 

  

F-4

 

 

Rebrain.ai Inc.

 

ConsolidatedStatements of Changes in Members' Equity

For the years ended December 31, 2020 and 2019

 

                   Accumulated Other     
   Common Stock   Additional Paid-   Retained Earnings/   Comprehensive   Total 
   Shares   Amount   In Capital   (Accumulated Deficit)   Income/(Loss)   Members' Equity 
Balance December 31, 2018   -   $-   $29,903   $(7,730)  $-   $22,173 
Net income   -    -    -    51,329    -    51,329 
Other comprehensive income/(loss)   -    -    -    -    (2,361)   (2,361)
                               
Balance December 31, 2019   -    -    29,903    43,599    (2,361)   71,141 
Net income   -    -    -    495,998    -    495,998 
Other comprehensive income   -    -    -    -    1,806    1,806 
                               
Balance December 31, 2020   -   $-   $29,903   $539,597   $(555)  $568,945 

 

See Independent Auditor's Report and accompanying notes to the consolidated financial statements, which are an integral part of these consolidated financial statements

 

F-5

 

 

Rebrain.ai Inc.

 

Consolidated Statements of Cash Flows

For the years ending December 31,

 

   2020   2019 
Cash Flows from Operating Activities:          
Net Income  $497,804   $48,968 
Adjustments to reconcile net income to net cash provided by (used in) operating activities          
Depreciation   1,485    - 
Impairment loss on digital assets   50    10,524 
Interest capitalized   96,042    28,418 
Changes in operating assets and liabilities          
(Increase)/Decrease in receivable from broker   497,088    (305,326)
Increase in accounts receivable   (12)   - 
Increase in prepaid expenses   (90,427)   - 
Increase in income taxes payable   158,304    10,699 
Increase/(decrease) in reimbursements payable to related parties   (17,474)   12,651 
Increase in other liabilities   40,933    6,357 
           
Net cash provided by (used in) operating activities   1,183,793    (187,709)
           
Cash Flows from Investing Activities:          
Purchase of property and equipment   (9,964)   - 
Purchase of intangible assets   (6,126)   (13,845)
Net cash used in investing activities   (16,090)   (13,845)
           
Cash Flows from Financing Activities:          
Proceeds from related party loans   501    173,223 
           
Net cash provided by financing activities   501    173,223 
           
Net increase (decrease) in cash and cash equivalents   1,168,204    (28,331)
           
Cash and cash equivalents, beginning of period   94,234    122,565 
           
Cash and cash equivalents, end of period  $1,262,438   $94,234 
           
Supplemental cash flow disclosure          
Cash paid for income taxes, net  $33,437   $10,397 
Cash paid for interest  $-   $- 

 

See Independent Auditor's Report and accompanying notes to the consolidated financial statements, which are an integral part of these consolidated financial statements

 

F-6

 

 

Rebrain.ai Inc.

 

Notes to Consolidated Financial Statements

As of December 31, 2020 and 2019 and for the years then ended 

 

Note 1 — Organization and Business

 

Rebrain.ai Inc. (the “Company”), was organized as a Delaware Corporation on February 27, 2017. Rebrain.ai is an artificial intelligence-driven quantitative trading firm, market maker and liquidity provider active in the cryptocurrency markets.

 

The Company operates as a proprietary trading firm and trades cryptocurrencies for its own account to provide liquidity in cryptocurrency markets. The Company doesn’t have any clients and does not provide direct investment services.

 

As a financial technology company, the Company aims to improve financial markets through a scientific approach. Using our proprietary trading platform, we provide liquidity to cryptocurrency markets aiming to improve the market efficiency and to create value from efficiencies for end investors. As a market-maker, the Company provides liquidity in cryptocurrency exchanges by simultaneously quoting bid(buy) and ask(sell) prices for various crypto currencies using its technology.

 

The Company has two wholly owned subsidiaries:

 

1.Rebrain.ai Investment Management, LLC, a Delaware LLC formed March 7th, 2017, is a California-based Registered Investment Adviser regulated by the National Futures Association (NFA). This Company is not currently active and has no assets under management. This investment management company was set up because the initial project was to manage hedge funds in stocks and futures markets before focusing only on a proprietary trading activity in the cryptocurrency markets. In the future, the Company plans to develop this investment management activity.
2.Rebrain.ai Labs is a technology and trading company founded in 2013 and incorporated in France (Lyon). This company was acquired by Rebrain.ai Inc. in Dec 2017. This company focuses on research & development. The primary purpose of our French subsidiary is to research, test and develop enhancements to our AI technology and engages in limited test trading only.

 

Note 2 — Summary of Significant Accounting Policies

 

Principles of Accounting: The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) as detailed in the Financial Accounting Standards Boards’ (“FASB”) Accounting Standards Codification (“ASC” or “Codification). The Company has adopted the calendar year as its fiscal year.

 

Principles of Consolidation: The accompanying consolidated financial statements include the accounts of Rebrain.AI, Inc. and its subsidiaries, Rebrain Investment Management, LLC and Rebrain.ai Labs. All intercompany accounts and transactions have been eliminated in consolidation.

 

Use of Estimates: The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates, and such differences could be material. The determination of the fair value of digital assets represents a significant estimate.

 

F-7

 

 

Rebrain.ai Inc.

 

Notes to Consolidated Financial Statements

As of December 31, 2020 and 2019 and for the years then ended 

 

Note 2 — Summary of Significant Accounting Policies (continued)

 

Cash and Cash Equivalents: The Company considers all highly-liquid instruments with original maturities of three months or less to be cash equivalents. The Company maintains deposits with financial institutions in amounts that generally exceed federally insured limits; however, the Company does not believe it is exposed to any significant credit risk. The amounts that exceed FDIC insured limits as of December 31, 2020 and 2019 were $930,456 and $0, respectively.

 

Receivable from Broker: The Company holds funds with a cryptocurrency exchange, which are valued in US dollars. The balances receivable from the broker as of December 31, 2020 and 2019 were $123 and $497,212, respectively.

 

Intangible Assets – Digital Assets:

The Company owns digital assets consisting of cryptocurrencies. We have ownership of and control over our digital assets and may use third-party custodial services to secure it.

 

Under ASC 350, Intangibles – Goodwill and Other, the digital assets owned by the Company meet the definition of indefinite lived intangible assets because the digital assets lack physical substance and there is no inherent limit on their useful life. Accordingly, these digital assets are not subject to amortization. Instead, they must be tested for impairment annually and more frequently if events or circumstances change that indicate that it’s more likely than not that the asset is impaired. The Company reviews the carrying value of its digital assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

 

We determine the fair value of digital assets on a nonrecurring basis in accordance with ASC 820, Fair Value Measurement, based on quoted prices on the active exchange(s) that we have determined is its principal market for digital assets (Level 3 inputs). We perform an analysis annually to identify whether events or changes in circumstances, principally decreases in the quoted prices on active exchanges, indicate that it is more likely than not that our digital assets are impaired. In determining if an impairment has occurred, we consider the lowest market price quoted on the active exchange. If the then current carrying value of a digital asset exceeds the fair value so determined, an impairment loss has occurred with respect to those digital assets in the amount equal to the difference between their carrying values and the price determined.

 

Impairment losses are recognized in the consolidated statements of operations in the period in which the impairment is identified. The impaired digital assets are written down to their fair value at the time of impairment and this new cost basis will not be adjusted upward for any subsequent increase in fair value.

 

F-8

 

 

Rebrain.ai Inc.

 

Notes to Consolidated Financial Statements

As of December 31, 2020 and 2019 and for the years then ended 

 

Note 2 — Summary of Significant Accounting Policies (Continued)

 

Property and Equipment: Property and equipment are stated at cost. Depreciation is provided utilizing straight-line over the estimated useful lives for owned assets, ranging from three to seven years.

 

Property, Plant and Equipment  2020   2019 
Furniture and Fixtures  $7,086   $- 
Less: Accumulated Depreciation   (1,314)   - 
Net Furniture and Fixtures   5,772    - 
           
Equipment   2,878    - 
Less: Accumulated Depreciation   (171)   - 
Net Furniture and Fixtures   2,707      
           
Net Property, Plant and Equipment  $8,479   $- 

 

The Company continually monitors events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets.

 

The depreciation expense for the years ended December 31, 2020 and 2019 were $1,485 and $0.

 

Net Trading Gains and Commissions: Net trading gains and commissions on the consolidated statements of operations are derived from the purchasing and selling of digital assets. The Company realizes gains or losses on its trading activities upon the execution of trades for the change in value from its cost basis to its selling price. The Company’s trading strategy is generally holding periods of five days or less.

 

Income Taxes: We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements. Under this method, we determine deferred tax assets and liabilities on the basis of the differences between the consolidated financial statements and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

 

F-9

 

 

Rebrain.ai Inc.

 

Notes to Consolidated Financial Statements

As of December 31, 2020 and 2019 and for the years then ended 

 

Note 2 — Summary of Significant Accounting Policies (continued)

 

We recognize deferred tax assets to the extent that we believe that these assets are more likely than not to be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations.

 

If we determine that we would be able to realize our deferred tax assets in the future in excess of their net recorded amount, we would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes.

 

We record uncertain tax positions on the basis of a two-step process in which (1) we determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority.

 

As of December 31, 2020 and 2019 the deferred tax assets were determined to be immaterial and no deferred tax asset or deferred tax liability was booked. The total income tax payable at December 31, 2020 and 2019 was $172,273 and $13,369, respectively.

 

The total tax expense for the years ended December 31, 2020 and 2019 was $189,643 and $19,677, respectively. The Company’s federal tax and California state tax rates of 21% and 8.84% provide for a combined effective tax rate of approximately 27.7%.

 

Earnings per Share: Basic net income (loss) per share of common stock attributable to common stockholders is calculated by dividing net income (loss) attributable to common stockholders by the weighted-average shares of common stock outstanding for the period. As of December 31, 2020 and 2019 the Company had no shares outstanding and therefore earnings per share is not presented in the consolidated statements of operations.

 

Translation of Foreign Currencies: Assets and liabilities denominated in foreign currencies are translated at the rate of exchange on the statement of consolidated balance sheet date. The Company and each subsidiary operate using the US Dollar as its functional currency for consolidated financial statement presentation.

 

Recent Accounting Pronouncements: The Company annually reviews recent accounting pronouncements not yet adopted.

 

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842). This ASU requires a lessee to recognize a right-of-use asset and a lease liability under most operating leases in its consolidated balance sheet. The ASU is effective for annual and interim periods beginning after December 15, 2021. Early adoption is permitted. The Company is currently evaluating the impact on its consolidated financial statements.

 

F-10

 

 

Rebrain.ai Inc.

 

Notes to Consolidated Financial Statements

As of December 31, 2020 and 2019 and for the years then ended 

 

Note 2 — Summary of Significant Accounting Policies (continued)

 

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) Disclosure Framework— Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”), which changes the fair value measurement disclosure requirements of ASC 820. As of this recent issuance, the following disclosure requirements were removed from Topic 820: (1) The amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy (2) The policy for timing of transfers between levels (3) The valuation processes for Level 3 fair value measurements and (4) For nonpublic entities, the changes in unrealized gains and losses for the period included in net income for recurring Level 3 fair value measurements held at the end of the reporting period. The following disclosure requirements were modified in Topic 820: (1) In lieu of a rollforward for Level 3 fair value measurements, a nonpublic entity is required to disclose transfers into and out of Level 3 of the fair value hierarchy and purchases and issues of Level 3 assets and liabilities (2) For investments in certain entities that calculate net asset value, an entity is required to disclose the timing of liquidation of an investee’s assets and the date when restrictions from redemption might lapse only if the investee has communicated the timing to the entity or announced the timing publicly and (3) The amendments clarify that the measurement uncertainty disclosure is to communicate information about the uncertainty in measurement as of the reporting date. The amendments in this update are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company adopted this update as of January 1, 2020 with no material impact on the Company’s consolidated financial statements.

 

Management does not believe that any other recently issued, but not yet effective, accounting standards could have a material effect on the accompanying consolidated financial statements. As new accounting pronouncements are issued, the Company will adopt those that are applicable under the circumstances.

 

Note 3 – Fair Value Measurements

 

As described in Note 2, the Company recorded its digital assets the lower of cost or fair value at each reporting date. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company utilized valuation techniques to maximize the use of observable inputs and minimize the use of unobservable inputs. Assets and liabilities recorded at fair value were categorized within the fair value hierarchy based upon the level of judgment associated with the inputs used to measure their value. Inputs are broadly defined as assumptions market participants would use in pricing an asset or liability. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:

 

Level 1. Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

 

F-11

 

 

Rebrain.ai Inc.

 

Notes to Consolidated Financial Statements

As of December 31, 2020 and 2019 and for the years then ended 

 

Note 3 – Fair Value Measurements (continued)

 

Level 2. Quoted prices for identical or similar assets or liabilities in markets that are less active, that is, markets in which there are few transactions for the asset or liability that are observable for substantially the full term.

 

Level 3. Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

 

The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety, is determined based on the lowest level input that is significant to the fair value measurement in its entirety. Cash and cash equivalents, receivables, prepaid expenses, other assets, accounts payable, tax payable, other liabilities, due to members, and notes payable to members approximate fair value and are therefore excluded from the leveling table. The cost basis is determined to approximate fair value due to the short-term duration of the financial instruments.

 

The Company’s digital asset holdings are valued using level 3 valuation inputs as of December 31, 2020 and 2019. The level 3 inputs used in the valuations are the active trading pricing on the reporting date as reported by active cryptocurrency exchanges.

 

A market is active if there are sufficient transactions on an ongoing basis to provide current pricing information for the asset or liability, pricing information is released publicly, and price quotations do not vary substantially either over time or among market makers. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity.

 

The Company assessed the levels of the investments at each measurement date, and transfers between levels were recognized on the actual date of the event or change in circumstances that caused the transfer in accordance with the Company’s accounting policy regarding the recognition of transfers between levels of the fair value hierarchy. There were no transfers among Levels 1, 2, and 3 during the year ended December 31, 2020 and 2019.

 

F-12

 

 

Rebrain.ai Inc.

 

Notes to Consolidated Financial Statements

As of December 31, 2020 and 2019 and for the years then ended 

 

Note 3 – Fair Value Measurements (continued)

 

The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs or methodology used for valuing investments are not necessarily an indication of the risk associated with investing in those investments.

 

Note 4 – Financial Instruments with Off-Balance-Sheet Risk

 

The Company is exposed to both market risk, the risk arising from changes in the market value of the contracts, and credit risk, the risk of failure by another party to perform according to the terms of a contract.

 

Market Risk: Exposure to market risk is influenced by a number of factors, including the relationships between financial instruments, and the volatility and liquidity in the markets in which the financial instruments are traded. The Company attempts to control its exposure to market risk through various analytical monitoring techniques.

 

Credit Risk: Credit risk arises primarily from the potential inability of the clearing broker and financial institutions (the counterparties) to perform in accordance with the terms of a contract. The Company’s exposure to credit risk associated with counterparty nonperformance includes all capital and any gains held with uninsured counterparties, primarily the cryptocurrency exchange holding the Company’s assets throughout the year.

 

Concentration of Credit Risk: In the normal course of business, the Company maintains its cash balances in financial institutions, which at times may exceed federally insured limits. The Company is subject to credit risk to the extent any financial institution with which it conducts business is unable to fulfill contractual obligations on its behalf. The Company monitors the financial condition of such financial institutions and does not anticipate any losses from these counterparties.

 

At the end of 2020, funds were moved to cash as a matter of policy to verify the liquidity and authenticity of holdings held at third parties throughout the year.

 

Digital Assets: The Company holds and will continue to acquire and sell digital assets subject to volatile market prices, impairment, and unique risks of loss. The Company continuously updates and reviews its investment policy to maximize returns and to provide flexibility and diversify its holdings. The prices of digital assets have been in the past and may continue to be highly volatile, including as a result of various associated risks and uncertainties.

 

For example, the prevalence of such assets is a relatively recent trend, and their long-term adoption by investors, consumers and businesses is unpredictable. Moreover, their lack of a physical form, their reliance on technology for their creation, existence and transactional validation and their decentralization may subject their integrity to the threat of malicious attacks and technological obsolescence. Finally, the extent to which securities laws or other regulations apply or may apply in the future to such assets is unclear and may change in the future. If the Company holds digital assets and their values decrease the financial condition may be harmed.

 

F-13

 

 

Rebrain.ai Inc.

 

Notes to Consolidated Financial Statements

As of December 31, 2020 and 2019 and for the years then ended 

 

Note 4 – Financial Instruments with Off-Balance-Sheet Risk (continued)

 

Digital assets are currently considered indefinite-lived intangible assets under applicable accounting rules, meaning that any decrease in their fair values below our carrying values for such assets at any time subsequent to their acquisition will require us to recognize loss, whereas we may make no upward revisions for any market price increases until a sale, which may adversely affect our operating results. There is no guarantee that future changes in GAAP will not require us to change the way we account for digital assets held.

 

The Company reviews the carrying value of its digital assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Due to a change in market conditions, uncertainty and increased volatility among other factors, the Company recorded impairment on digital assets of $50 and $10,524 as of December 31, 2020 and 2019, respectively. Impairment losses are reflected within digital assets impairment in the accompanying consolidated statements of operations.

 

Derivative Contracts: In the normal course of business, the Company utilizes derivative contracts in connection with its proprietary trading activities. Investments in derivative contracts are subject to additional risks that can result in a loss of all or part of an investment. The Company’s derivative activities and exposure to derivative contracts are classified by the following primary underlying risks: interest rate, credit, foreign currency exchange rate, commodity price, and equity price. In addition to its primary underlying risks, the Company is also subject to additional counterparty risk due to inability of its counterparties to meet the terms of their contracts.

 

For some derivatives, the Company may be exposed to counterparty risk from the potential that a seller of an option does not sell or purchase the underlying asset as agreed under the terms of the contract. The maximum risk of loss from counterparty risk to the Company is the fair value of the contracts and the premiums paid to purchase the contract. In these instances, the Company considers the credit risk of the intermediary counterparty to its option transactions in evaluating potential credit risk.

 

Note 5 – Due to Members and Notes Payable to Members

 

Due to members balances at December 31, 2020 and 2019 were $0 and $17,474, respectively. The balances bear no interest and were considered repayable on demand.

 

Borrowings under member debt agreements at December 31, 2020 and 2019 are owed to the members of the Company total $582,369 and $485,826. Total balance due as of December 31, 2020 and 2019 was Laromy’s Capital of $566,851 and $472,894 and Sebastien Robert of $15,518 and $12,932, each respectively. Laromy’s Capital is solely owned by Sylvain Morel. The loans bore interest at 10% for the year ended December 31, 2019 and at 20% for the year ended December 31, 2020.

 

F-14

 

 

Rebrain.ai Inc.

 

Notes to Consolidated Financial Statements

As of December 31, 2020 and 2019 and for the years then ended 

 

Note 5 – Due to Members and Notes Payable to Members (continued)

 

For the years ended December 31, 2020 and 2019, interest expense related to the member debt totaled, $96,042 and $28,418, respectively. Payment of the debt agreements begin in 2021 and are interest only at a 20% rate, payable quarterly. The entire loans are repayable within 30 days of the member providing the Company with written notice of demand. The Company considers its principal owners, members of management, members of their immediate families, and entities under common control to be related parties.

 

Note 6 – Members’ Equity

 

The Company is a non-stock corporation as of December 31, 2020 and 2019. The Company has two members, both of which are on the Company’s board of directors and fully control the operating decisions of the Company. Refer to Note 10 for changes to the Company’s capital structure in 2021.

 

Note 7 – Off-Balance Sheet Risk

 

The purchase and sale of cryptocurrency derivatives requires margin deposits with a third-party cryptocurrency exchange equal to a certain percentage of the contract amount. Subsequent payments (variation margin) are made or received by the Company each day, depending on the daily fluctuations in the value of the contract. The Company recognizes a gain or loss equal to the daily variation margin.

 

A customer's cash and other equity deposited with a third-party brokerage are considered commingled with all other customer funds. In the event of broker insolvency, recovery may be limited to the Company’s pro rata share of segregated customer funds available. It is possible that the recovery amount could be less than the total of cash and other equity deposited.

 

Note 8 – Indemnifications

 

In the normal course of business, the Company entered into contracts and agreements that contain a variety of representations and warranties that provide indemnifications under certain circumstances. The Company’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Company that have not yet occurred. Management expects the risk of any future obligations under these indemnifications to be remote.

 

Note 9 – Commitment and Contingencies

 

In connection with a consulting agreement entered into during 2020, the Company agreed to issue to a consultant $90,000 of cashless exercise warrants in exchange for future services to be performed and exercisable into the number of shares determined by the pricing of the shares in the Company’s Regulation A offering, expected to commence in 2021. The Company expects to recognize the fair value of the warrants in 2021 upon performance of the services and issuance of the warrants.

 

F-15

 

 

Rebrain.ai Inc.

 

Notes to Consolidated Financial Statements

As of December 31, 2020 and 2019 and for the years then ended 

 

Note 9 – Commitment and Contingencies (continued)

 

The Company may be subject to pending legal proceedings and regulatory actions in the ordinary course of business. The results of such proceedings cannot be predicted with certainty, but the Company does not anticipate that the final outcome, if any, arising out of any such matters will have a material adverse effect on its business, financial condition or results of operations.

 

Note 10 – Subsequent Events

 

The Company has evaluated subsequent events for potential recognition and/or disclosure through August 5, 2021, the date the consolidated financial statements were available to be issued and noted the following:

 

On April 5th, 2021 the Company converted from a non-stock corporation to a stock corporation. The Company shall henceforth be a stock corporation with authority to issue 62,500,000 shares of common stock, $0.0001 par value (“Common Stock”) and 12,500,000 shares of preferred stock, $0.0001 par value (“Preferred Stock”). Common stock in the amount of 50 million shares have been issued, 25 million each to Sebastien Robert and Sylvain Morel. Also, 50,000 shares of Class A preferred stock has been issued to Rod Turner during 2021 at $1.00 per share.

 

·Common Stock - The voting, dividend and liquidation rights of the holders of the Common Stock are subject to and qualified by the rights, powers and preferences of the holders of the Preferred Stock. Common Stock holders are entitled to 5 votes per share.
·Preferred Stock - The Preferred Stock authorized by this certificate of incorporation may be issued from time to time in one or more series by the Board of Directors. The Board of Directors is hereby authorized to fix or alter the rights, preferences, privileges, and restrictions granted to or imposed upon any series of Preferred Stock, and the number of shares constituting any such series and the designation thereof as may be permitted by the Delaware General Corporation Law. The Board of Directors is also expressly authorized to increase or decrease the number of authorized shares of any series subsequent to the issuance of shares of that series, but not below the number of shares of such series then outstanding. Holders of Preferred Stock are entitled to one vote per share, are entitled to a liquidation preference equal to the original purchase price of the Preferred Stock and subject to protections for dilution events and stock splits, and certain other provisions. The Preferred Stock are subject to automatic conversion upon an initial public offering, listing on a public exchange, or upon vote of the holders of Common Stock.

 

F-16

 

 

PART III

INDEX TO EXHIBITS

 

2.1 Certificate of Incorporation, as amended
2.2 Bylaws
4      Form of Subscription Agreement*
6.1 Stockholder Loan Agreements between Rebrain.ai Inc. and Leromys Capital, as amended
6.2 Stockholder Loan Agreements between Rebrain.ai Inc. and Sebastien Robert, as amended
8.1 Form of Escrow Agreement*
11 Auditor Consent
12 Opinion of CrowdCheck Law LLP*
13 Testing the Waters Materials*

 

 

* To be filed by amendment.

 

33

 

 

SIGNATURES

 

Pursuant to the requirements of Regulation A, the issuer certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form 1-A and has duly caused this Offering Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Coronado, State of California, on September 22, 2021.

 

REBRAIN.AI INC.  
   
  /s/ Sylvain Morel  
   
By Sylvain Morel  
CEO  

 

 

This Offering Statement has been signed by the following persons in the capacities and on the dates indicated.

 

  /s/ Sylvain Morel  
Sylvain Morel, Chief Executive Officer and Director  
Date: September 22, 2021  

 

 

  /s/ Sebastien Robert  

Sebastien Robert, President, Director, Chief Financial Officer and Principal Accounting Officer

Date: September 22, 2021

 

34

 


Exhibit 2.1

 

STATE OF DELAWARE

CERTIFICATE OF AMENDMENT

(A CORPORATION WITHOUT CAPITAL STOCK)

 

The corporation, Rebrain.AI Inc., (the “Corporation”) organized and existing under the laws of the State of Delaware, hereby certifies as follows:

 

(1)That, at a meeting, a vote of the members of the Corporation’s board of directors (“Board of Directors”) was taken for and against a duly proposed amendment to the Certificate of Incorporation, said amendment being as follows:

 

RESOLVED, that the Certificate of Incorporation of the Corporation be amended to state that the Corporation is a Stock Corporation and that Articles Fourth and Fifth of the Certificate of Incorporation be replaced by the following language:

 

Fourth: The corporation shall henceforth be a stock corporation with authority to issue 62,500,000 shares of common stock, $0.0001 par value (“Common Stock”) and 12,500,000 shares of preferred stock, $0.0001 par value (“Preferred Stock”).

 

The following is a statement of the designations and the powers, privileges and rights, and the qualifications, limitations or restrictions thereof in respect of each class of capital stock of the Corporation.

 

A. Common Stock.

 

1. General. The voting, dividend and liquidation rights of the holders of the Common Stock are subject to and qualified by the rights, powers and preferences of the holders of the Preferred Stock set forth herein.

 

2. Voting. The holders of the Common Stock are entitled to five votes for each share of Common Stock held at all meetings of stockholders (and written actions in lieu of meetings) provided, however, that except as required by applicable law, holders of Common Stock shall not be entitled to vote on any amendment to this Certificate of Incorporation that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such series of Preferred Stock are entitled, either separately or together with holders of one or more other such series, to vote thereon. The number of authorized shares of Common Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of shares of capital stock of the corporation representing a majority of the votes represented by all outstanding shares of capital stock of the Corporation entitled to vote thereon, irrespective of the provisions of Section 242(b)(2) of the Delaware General Corporation Law (“DGCL”).

 

B. Preferred Stock.

 

1.            General. The Preferred Stock authorized by this Certificate of Incorporation may be issued from time to time in one or more series by the Board of Directors. The Board of Directors is hereby authorized to fix or alter the rights, preferences, privileges and restrictions granted to or imposed upon any series of Preferred Stock, and the number of shares constituting any such series and the designation thereof as may be permitted by the DGCL. The Board of Directors is also expressly authorized to increase or decrease the number of authorized shares of any series subsequent to the issuance of shares of that series, but not below the number of shares of such series then outstanding. In case the number of shares of any series shall be decreased in accordance with the foregoing sentence, the shares constituting such decrease shall resume the status that they had prior to the adoption of the resolution originally fixing the number of shares of such series. The number of authorized shares of Preferred Stock or any series thereof, as applicable, may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of shares of capital stock of the Corporation representing a majority of the votes represented by all outstanding shares of capital stock of the Corporation entitled to vote thereon, without a separate vote of the holders of the Preferred Stock or series thereof, as applicable, irrespective of the provisions of Section 242(b)(2) of the DGCL, unless a vote of any such holders is required pursuant to the terms of any certificate of designation filed with respect to any series of Preferred Stock.

 

 

 

 

2.            Voting. The holders of the Preferred Stock are entitled to one vote for each share of Preferred Stock held at all meetings of stockholders (and written actions in lieu of meetings). Holders of Preferred Stock will generally vote together with the holders of Common Stock as a single class, will have full voting rights and powers equal to the voting rights and powers of the holders of Common Stock, and will be entitled to notice of any stockholder meeting.

 

3.            Dividends. The Company is under no obligation to declare or pay any dividends. The Board of Directors may declare dividends from time to time from available funds therefor. No class of shares shall enjoy any dividend payment preference.

 

4.            Distribution of Assets Upon Liquidation, Dissolution or Winding Up. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation or any Deemed Liquidation Event (as defined below), the holders of Preferred Stock shall be entitled to receive the original issue price per share, adjusted as set out in this Certificate of Incorporation, plus any declared and unpaid dividends thereon to the date fixed for such distribution, from the assets of the Corporation available for distribution to its stockholders before any payment shall be made to the holders of Common Stock. After the payment of such amount to the holders of the Preferred Stock, the remaining assets of the Corporation available for distribution to its stockholders shall be distributed among the holders of the shares of Preferred Stock and Common Stock, pro rata based on the number of shares held by each such holder. If upon any such liquidation, dissolution, or winding up or Deemed Liquidation Event of the Corporation, the funds and assets available for distribution to the stockholders of the Corporation are insufficient to pay the holders of shares of Preferred Stock the full amount to which they are entitled under this Article 4.1, the holders of shares of Preferred Stock will share ratably in any distribution of the funds and assets available for distribution in proportion to the respective amounts that would otherwise be payable in respect of the shares of Preferred Stock held by them upon such distribution if all amounts payable on or with respect to such shares were paid in full.

 

 

 

 

4.2          Deemed Liquidation Events.

 

4.2.1       Definition. Each of the following events is a “Deemed Liquidation Event” unless the Requisite Holders elect otherwise by written notice received by the Corporation at least five days prior to the effective date of any such event:

 

(a)            a merger or consolidation in which (i) the Corporation is a constituent party or (ii) a subsidiary of the Corporation is a constituent party and the Corporation issues shares of its capital stock pursuant to such merger or consolidation, except any such merger or consolidation involving the Corporation or a subsidiary in which the shares of capital stock of the Corporation outstanding immediately prior to such merger or consolidation continue to represent, or are converted into or exchanged for equity securities that represent, immediately following such merger or consolidation, at least a majority, by voting power, of the equity securities of (1) the surviving or resulting party or (2) if the surviving or resulting party is a wholly owned subsidiary of another party immediately following such merger or consolidation, the parent of such surviving or resulting party; provided that, for the purpose of this Article 4.2.1, all shares of Common Stock issuable upon exercise of options outstanding immediately prior to such merger or consolidation or upon conversion of convertible securities outstanding immediately prior to such merger or consolidation shall be deemed to be outstanding immediately prior to such merger or consolidation and, if applicable, deemed to be converted or exchanged in such merger or consolidation on the same terms as the actual outstanding shares of Common Stock are converted or exchanged; or

 

(b)            the sale, lease, transfer, exclusive license or other disposition, in a single transaction or series of related transactions, by the Corporation or any subsidiary of the Corporation of all or substantially all the assets of the Corporation and its subsidiaries taken as a whole, or, if substantially all of the assets of the Corporation and its subsidiaries taken as a whole are held by such subsidiary or subsidiaries, the sale or disposition (whether by merger or otherwise) of one or more subsidiaries of the Corporation, except where such sale, lease, transfer or other disposition is to the Corporation or one or more wholly owned subsidiaries of the Corporation.

 

4.2.2        Amount Deemed Paid or Distributed. The funds and assets deemed paid or distributed to the holders of capital stock of the Corporation upon any such merger, consolidation, sale, transfer or other disposition described in this Article 4.2 will be the cash or the value of the property, rights or securities paid or distributed to such holders by the Corporation or the acquiring person, firm or other entity. The value of such property, rights or securities shall be determined in good faith by the Board of Directors.

 

5.            Automatic Conversion.

 

5.1          Trigger Events. Upon either (a) the closing of a firm commitment underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended, covering the offer and sale of Common Stock (b) the Common Stock is listed for trading on the Nasdaq Stock Market, the New York Stock Exchange or another exchange or marketplace approved the Board of Directors, or (c) the date and time, or the occurrence of an event, specified by vote or written consent of the majority of holders of the Common Stock (the time of such closing or listing or the date and time specified or the time of the event specified in such vote or written consent is referred to herein as the “Mandatory Conversion Time”) then (i) all outstanding shares of Preferred Stock shall automatically be converted into shares of Common Stock, at the then effective conversion rate as calculated at the time of the occurrence of the Trigger Event and (ii) such shares may not be reissued by the Corporation.

 

 

 

 

5.2            Procedural Requirements. All holders of record of shares of Preferred Stock shall be sent written notice of the Mandatory Conversion Time and the method of conversion, as determined by the Board of Directors. Upon receipt of such notice, each holder of shares of Preferred Stock shall follow the instructions in such notice to formally accept the terms of such conversion. All rights with respect to the Preferred Stock converted pursuant to Subsection 5.1, including the rights, if any, to receive notices and vote (other than as a holder of Common Stock), will terminate at the Mandatory Conversion Time. As soon as practicable after the Mandatory Conversion Time, the Corporation shall either (i) instruct the transfer agent to note the conversion of the shares on the stock ledger of the Corporation or (ii) issue to such holder, or to his, her or its nominees, a certificate or certificates for the number of full shares of Common Stock issuable on such conversion in accordance with the provisions hereof and pay cash as in lieu of any fraction of a share of Common Stock otherwise issuable upon such conversion and the payment of any declared but unpaid dividends on the shares of Preferred Stock converted. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such surrender of the shares of Preferred Stock to be converted (except that, in the case of an automatic conversion upon an initial public offering pursuant to Article 5.1, such conversion shall be deemed to have been made immediately prior to the closing of the offering) and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Common Stock on such date. The converted Preferred Stock shall be retired and cancelled and may not be reissued as shares of such series, and the Corporation may thereafter take such appropriate action (without the need for stockholder action) as may be necessary to reduce the authorized number of shares of Preferred Stock accordingly.

 

5.3            Reservation of Shares. For the purpose of effecting the conversion of the Preferred Stock, the Corporation shall at all times while any share of Preferred Stock is outstanding, reserve and keep available out of its authorized but unissued capital stock, that number of its duly authorized shares of Common Stock as may from time to time be sufficient to effect the conversion of all outstanding Preferred Stock; and if at any time the number of authorized but unissued shares of Common Stock is not sufficient to effect the conversion of all then-outstanding shares of the Preferred Stock, the Corporation shall use its best efforts to cause such corporate action to be taken as may be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes, including, without limitation, engaging in best efforts to obtain the requisite stockholder approval of any necessary amendment to this Restated Certificate. Before taking any action that would cause an adjustment reducing the conversion rate of a series of Preferred Stock below the then-par value of the shares of Common Stock issuable upon conversion of such series of Preferred Stock, the Corporation shall take any corporate action that may be necessary so that the Corporation may validly and legally issue fully paid and nonassessable shares of Common Stock at such adjusted conversion rate.

 

 

 

 

5.4            Adjustment for Stock Splits and Combinations. If the Corporation at any time or from time to time after the date on which the first share of a series of Preferred Stock is issued by the Corporation (such date referred to herein as the “Original Issue Date” for such series of Preferred Stock) effects a subdivision of the outstanding Common Stock, the Conversion Price for each series of Preferred Stock in effect immediately before that subdivision shall be proportionately decreased so that the number of shares of Common Stock issuable on conversion of each share of that series will be increased in proportion to the increase in the aggregate number of shares of Common Stock outstanding. If the Corporation at any time or from time to time after the Original Issue Date for a series of Preferred Stock combines the outstanding shares of Common Stock, the Conversion Price for each series of Preferred Stock in effect immediately before the combination will be proportionately increased so that the number of shares of Common Stock issuable on conversion of each share of such series shall be decreased in proportion to such decrease in the aggregate number of shares of Common Stock outstanding. Any adjustment under this Article 5.4 becomes effective at the close of business on the date the subdivision or combination becomes effective.

 

5.5          Adjustment for Certain Dividends and Distributions. If the Corporation at any time or from time to time after the Original Issue Date for a series of Preferred Stock makes or issues, or fixes a record date for the determination of holders of Common Stock entitled to receive, a dividend or other distribution payable on the Common Stock in additional shares of Common Stock, then and in each such event the Conversion Price for such series of Preferred Stock in effect immediately before the event will be decreased as of the time of such issuance or, in the event a record date has been fixed, as of the close of business on such record date, by multiplying such Conversion Price then in effect by a fraction:

 

(a)          the numerator of which is the total number of shares of Common Stock issued and outstanding immediately prior to the time of the issuance or the close of business on the record date, and

 

(b)          the denominator of which is the total number of shares of Common Stock issued and outstanding immediately before the time of such issuance or the close of business on the record date plus the number of shares of Common Stock issuable in payment of such dividend or distribution.

 

Notwithstanding the foregoing, (i) if such record date has have been fixed and the dividend is not fully paid or if such distribution is not fully made on the date fixed therefor, such Conversion Price shall be recomputed accordingly as of the close of business on such record date and thereafter such Conversion Price shall be adjusted pursuant to this Article 5.5 as of the time of actual payment of such dividends or distributions; and (ii) no such adjustment shall be made if the holders of such series of Preferred Stock simultaneously receive a dividend or other distribution of shares of Common Stock in a number equal to the number of shares of Common Stock that they would have received if all outstanding shares of such series of Preferred Stock had been converted into Common Stock on the date of the event.

 

5.6          Adjustments for Other Dividends and Distributions. If the Corporation at any time or from time to time after the Original Issue Date for a series of Preferred Stock shall makes or issues, or fixes a record date for the determination of holders of Common Stock entitled to receive, a dividend or other distribution payable in securities of the Corporation (other than a distribution of shares of Common Stock in respect of outstanding shares of Common Stock), then and in each such event the Corporation shall make, simultaneously with the distribution to the holders of Common Stock, a dividend or other distribution to the holders of the series of Preferred Stock in an amount equal to the amount of securities as the holders would have received if all outstanding shares of such series of Preferred Stock had been converted into Common Stock on the date of such event.

 

 

 

 

5.7          Adjustment for Reclassification, Exchange and Substitution. If at any time or from time to time after the Original Issue Date for a series of Preferred Stock the Common Stock issuable upon the conversion of such series of Preferred Stock is changed into the same or a different number of shares of any class or classes of stock of the Corporation, whether by recapitalization, reclassification, or otherwise (other than by a stock split or combination, dividend, distribution, merger or consolidation covered by Articles 5.4, 5.5, 5.6 or 5.8 or by Article 4.2.1 regarding a Deemed Liquidation Event), then in any such event each holder of such series of Preferred Stock may thereafter convert such stock into the kind and amount of stock and other securities and property receivable upon such recapitalization, reclassification or other change by holders of the number of shares of Common Stock into which such shares of Preferred Stock could have been converted immediately prior to such recapitalization, reclassification or change.

 

5.8          Adjustment for Merger or Consolidation. Subject to the provisions of Article 4.2, if any consolidation or merger occurs involving the Corporation in which the Common Stock (but not a series of Preferred Stock) is converted into or exchanged for securities, cash, or other property (other than a transaction covered by Articles 5.5, 5.6 or 5.7), then, following any such consolidation or merger, the Corporation shall provide that each share of such series of Preferred Stock will thereafter be convertible, in lieu of the Common Stock into which it was convertible prior to the event, into the kind and amount of securities, cash, or other property which a holder of the number of shares of Common Stock of the Corporation issuable upon conversion of one share of such series of Preferred Stock immediately prior to the consolidation or merger would have been entitled to receive pursuant to the transaction; and, in such case, the Corporation shall make appropriate adjustment (as determined in good faith by the Board) in the application of the provisions in this Article 5 with respect to the rights and interests thereafter of the holders of such series of Preferred Stock, to the end that the provisions set forth in this Article 5 (including provisions with respect to changes in and other adjustments of the Conversion Price of such series of Preferred Stock) shall thereafter be applicable, as nearly as reasonably may be, in relation to any securities or other property thereafter deliverable upon the conversion of such series of Preferred Stock.

 

Fifth: No stockholder of the Corporation has a right to purchase shares of capital stock of the Corporation sold or issued by the Corporation except to the extent that such a right may from time to time be set forth in a written agreement between the Corporation and the stockholder.

 

(2)That said amendment was duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware.

 

 

 

 

IN WITNESS WHEREOF, said corporation has caused this certificate to be signed this 5th day of April, 2021.

 

  By:               
    Authorized Officer
     
    Sébastien Robert

 

 

 


Exhibit 2.2

 

BYLAWS

OF

REBRAIN.AI INC.

 

A Delaware Stock Corporation

 

ARTICLE I

Offices

 

Section 1.01      Offices. The address of the registered office of Rebrain.ai Inc. (the “Corporation”) in the State of Delaware shall be at The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County of Newcastle, Zip Code 19801. The Corporation may have other offices, both within and without the State of Delaware, as the board of directors of the Corporation (the “Board of Directors”) from time to time shall determine or the business of the Corporation may require.

 

Section 1.02      Books and Records. Any records administered by or on behalf of the Corporation in the regular course of its business, including its stock ledger, books of account, and minute books, may be maintained on any information storage device, method, or one or more electronic networks or databases (including one or more distributed electronic networks or databases); provided that the records so kept can be converted into clearly legible paper form within a reasonable time, and, with respect to the stock ledger, the records so kept comply with Section 224 of the Delaware General Corporation Law. The Corporation shall so convert any records so kept upon the request of any person entitled to inspect such records pursuant to applicable law.

 

ARTICLE II

Meetings of the Stockholders

 

Section 2.01      Place of Meetings. All meetings of the stockholders shall be held at such place, if any, either within or without the State of Delaware, or by means of remote communication, as shall be designated from time to time by resolution of the Board of Directors and stated in the notice of meeting.

 

Section 2.02      Annual Meeting. The annual meeting of the stockholders for the election of Directors and for the transaction of such other business as may properly come before the meeting shall be held at such date, time and place, if any, as shall be determined by the Board of Directors and stated in the notice of the meeting.

 

Section 2.03      Special Meetings. Special meetings of stockholders for any purpose or purposes shall be called pursuant to a resolution approved by the Board of Directors and may not be called by any other person or persons. The only business which may be conducted at a special meeting shall be the matter or matters set forth in the notice of such meeting.

 

Section 2.04      Adjournments. Any meeting of the stockholders, annual or special, may be adjourned from time to time to reconvene at the same or some other place, if any, and notice need not be given of any such adjourned meeting if the time, place, if any, thereof, and the means of remote communication, if any, are announced at the meeting at which the adjournment is taken. At the adjourned meeting, the Corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than 30 days, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. If after the adjournment a new record date is fixed for stockholders entitled to vote at the adjourned meeting, the Board of Directors shall fix a new record date for notice of the adjourned meeting and shall give notice of the adjourned meeting to each stockholder of record entitled to vote at the adjourned meeting as of the record date fixed for notice of the adjourned meeting.

 

 

 

 

Section 2.05      Notice of Meetings. Notice of the place, if any, date, hour, the record date for determining the stockholders entitled to vote at the meeting (if such date is different from the record date for stockholders entitled to notice of the meeting) and means of remote communication, if any, of every meeting of stockholders shall be given by the Corporation not less than 10 days nor more than 60 days before the meeting (unless a different time is specified by law) to every stockholder entitled to vote at the meeting as of the record date for determining the stockholders entitled to notice of the meeting. Notices of special meetings shall also specify the purpose or purposes for which the meeting has been called. Notices of meetings to stockholders may be given by mailing the same, addressed to the stockholder entitled thereto, at such stockholder’s mailing address as it appears on the records of the corporation and such notice shall be deemed to be given when deposited in the U.S. mail, postage prepaid. Without limiting the manner by which notices of meetings otherwise may be given effectively to stockholders, any such notice may be given by electronic transmission in accordance with applicable law. Notice of any meeting need not be given to any stockholder who shall, either before or after the meeting, submit a waiver of notice or who shall attend such meeting, except when the stockholder attends for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Any stockholder so waiving notice of the meeting shall be bound by the proceedings of the meeting in all respects as if due notice thereof had been given.

 

Section 2.06      List of Stockholders. The Corporation shall prepare a complete list of the stockholders entitled to vote at any meeting of stockholders (provided, however, if the record date for determining the stockholders entitled to vote is less than ten days before the date of the meeting, the list shall reflect the stockholders entitled to vote as of the tenth day before the meeting date), arranged in alphabetical order, and showing the address of each stockholder and the number of shares of each class of capital stock of the Corporation registered in the name of each stockholder at least ten days before any meeting of the stockholders. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, on a reasonably accessible electronic network if the information required to gain access to such list was provided with the notice of the meeting or during ordinary business hours, at the principal place of business of the Corporation for a period of at least ten days before the meeting. If the meeting is to be held at a place, the list shall also be produced and kept at the time and place of the meeting the whole time thereof and may be inspected by any stockholder who is present. If the meeting is held solely by means of remote communication, the list shall also be open for inspection by any stockholder during the whole time of the meeting as provided by applicable law. Except as provided by applicable law, the stock ledger of the Corporation shall be the only evidence as to who are the stockholders entitled to examine the stock ledger and the list of stockholders or to vote in person or by proxy at any meeting of stockholders.

 

Section 2.07      Quorum. Unless otherwise required by law, the Corporation’s Certificate of Incorporation (the “Certificate of Incorporation”) or these Bylaws, at each meeting of the stockholders, a majority in voting power of the shares of the Corporation entitled to vote at the meeting, present in person or represented by proxy, shall constitute a quorum. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power, by the affirmative vote of a majority in voting power thereof, to adjourn the meeting from time to time, in the manner provided in Section 2.04, until a quorum shall be present or represented. A quorum, once established, shall not be broken by the subsequent withdrawal of enough votes to leave less than a quorum. At any such adjourned meeting at which there is a quorum, any business may be transacted that might have been transacted at the meeting originally called.

 

2

 

 

Section 2.08      Conduct of Meetings. The Board of Directors may adopt by resolution such rules and regulations for the conduct of the meeting of the stockholders as it shall deem appropriate. At every meeting of the stockholders, the President, or in his or her absence or inability to act, the Treasurer or, in his or her absence or inability to act, the person whom the President shall appoint, shall act as chairman of, and preside at, the meeting. The Secretary or, in his or her absence or inability to act, the person whom the chairman of the meeting shall appoint a secretary of the meeting, shall act as secretary of the meeting and keep the minutes thereof. Except to the extent inconsistent with such rules and regulations as adopted by the Board of Directors, the chairman of any meeting of the stockholders shall have the right and authority to prescribe such rules, regulations, and procedures and to do all such acts as, in the judgment of such chairman, are appropriate for the proper conduct of the meeting. Such rules, regulations, or procedures, whether adopted by the Board of Directors or prescribed by the chairman of the meeting, may include, without limitation, the following: (a) the establishment of an agenda or order of business for the meeting; (b) the determination of when the polls shall open and close for any given matter to be voted on at the meeting; (c) rules and procedures for maintaining order at the meeting and the safety of those present; (d) limitations on attendance at or participation in the meeting to stockholders of record of the corporation, their duly authorized and constituted proxies or such other persons as the chairman of the meeting shall determine; (e) restrictions on entry to the meeting after the time fixed for the commencement thereof; and (f) limitations on the time allotted to questions or comments by participants.

 

Section 2.09      Voting; Proxies. Unless otherwise required by law or the Certificate of Incorporation the election of Directors shall be by written ballot and shall be decided by a plurality of the votes cast at a meeting of the stockholders by the holders of stock entitled to vote in the election. Unless otherwise required by law, the Certificate of Incorporation, or these bylaws, any matter, other than the election of Directors, brought before any meeting of stockholders shall be decided by the affirmative vote of the majority of shares present in person or represented by proxy at the meeting and entitled to vote on the matter. Each stockholder entitled to vote at a meeting of stockholders or to express consent to corporate action in writing without a meeting may authorize another person or persons to act for such stockholder by proxy, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. A proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A stockholder may revoke any proxy which is not irrevocable by attending the meeting and voting in person or by delivering to the secretary of the Corporation a revocation of the proxy or a new proxy bearing a later date. Voting at meetings of stockholders need not be by written ballot.

 

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Section 2.10      Inspectors at Meetings of Stockholders. The Board of Directors, in advance of any meeting of stockholders, may, and shall if required by law, appoint one or more inspectors, who may be employees of the Corporation, to act at the meeting or any adjournment thereof and make a written report thereof. The Board of Directors may designate one or more persons as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act at a meeting, the person presiding at the meeting shall appoint one or more inspectors to act at the meeting. Each inspector, before entering upon the discharge of his or her duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his or her ability. The inspectors shall (a) ascertain the number of shares outstanding and the voting power of each, (b) determine the shares represented at the meeting, the existence of a quorum and the validity of proxies and ballots, (c) count all votes and ballots, (d) determine and retain for a reasonable period a record of the disposition of any challenges made to any determination by the inspectors, and (e) certify their determination of the number of shares represented at the meeting and their count of all votes and ballots. The inspectors may appoint or retain other persons or entities to assist the inspectors in the performance of their duties. Unless otherwise provided by the Board of Directors, the date and time of the opening and the closing of the polls for each matter upon which the stockholders will vote at a meeting shall be announced at the meeting. No ballot, proxies, votes, or any revocation thereof or change thereto, shall be accepted by the inspectors after the closing of the polls unless the Court of Chancery of the State of Delaware upon application by a stockholder shall determine otherwise. In determining the validity and counting of proxies and ballots cast at any meeting of stockholders, the inspectors may consider such information as is permitted by applicable law. No person who is a candidate for office at an election may serve as an inspector at such election.

 

Section 2.11      Written Consent of Stockholders Without a Meeting. Any action to be taken at any annual or special meeting of stockholders may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action to be so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered (by hand or by certified or registered mail, return receipt requested) to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Every written consent shall bear the date of signature of each stockholder who signs the consent, and no written consent shall be effective to take the corporate action referred to therein unless, within 60 days of the earliest dated consent delivered in the manner required by this Section 2.11, written consents signed by a sufficient number of holders to act are delivered to the Corporation as aforesaid. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall, to the extent required by applicable law, be given to those stockholders who have not consented in writing, and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for notice of such meeting had been the date that written consents signed by a sufficient number of holders to take the action were delivered to the Corporation.

 

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Section 2.12      Fixing the Record Date.

 

(a)            In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than 60 nor less than ten days before the date of such meeting. If the Board of Directors so fixes a date, such date shall also be the record date for determining the stockholders entitled to vote at such meeting unless the Board of Directors determines, at the time it fixes such record date, that a later date on or before the date of the meeting shall be the date for making such determination. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the determination of stockholders entitled to vote at the adjourned meeting and in such case shall also fix as the record date for stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for the determination of stockholders entitled to vote therewith at the adjourned meeting.

 

(b)            In order that the Corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than ten days after the date upon which the resolution fixing the record date is adopted by the Board of Directors. If no record date has been fixed by the Board of Directors, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting: (i) when no prior action by the Board of Directors is required by law, the record date for such purpose shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation by delivery (by hand, or by certified or registered mail, return receipt requested) to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded and (ii) if prior action by the Board of Directors is required by law, the record date for such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution taking such prior action.

 

(c)            In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion, or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than 60 days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.

 

ARTICLE III

Board of Directors

 

Section 3.01      General Powers. The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors. The Board of Directors may adopt such rules and procedures, not inconsistent with the Certificate of Incorporation, these Bylaws, or applicable law, as it may deem proper for the conduct of its meetings and the management of the Corporation.

 

Section 3.02      Number; Term of Office. The Board of Directors shall consist of not less than two nor more than fifteen directors. The initial Board of Directors shall have two Directors, with such number subject to change by action of the Board of Directors. Each Director shall hold office until a successor is duly elected and qualified or until the Director’s earlier death, resignation, disqualification, or removal.

 

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Section 3.03      Newly Created Directorships and Vacancies. Any newly created directorships resulting from an increase in the authorized number of Directors and any vacancies occurring in the Board of Directors, may be filled by the affirmative votes of a majority of the remaining members of the Board of Directors, although less than a quorum, or by a sole remaining Director. A Director so elected shall be elected to hold office until the earlier of the expiration of the term of office of the Director whom he or she has replaced, a successor is duly elected and qualified, or the earlier of such Director’s death, resignation or removal.

 

Section 3.04      Resignation. Any Director may resign at any time by notice given in writing or by electronic transmission to the Corporation. Such resignation shall take effect at the date of receipt of such notice by the Corporation or at such later time as is therein specified. Oral resignation shall not be deemed effective until confirmed by the Director in writing or by electronic transmission to the Corporation.

 

Section 3.05      Removal. Except as prohibited by applicable law or the Certificate of Incorporation, the stockholders entitled to vote in an election of Directors may remove any Director from office at any time, with or without cause, by the affirmative vote of a majority in voting power thereof.

 

Section 3.06      Fees and Expenses. Directors shall receive such fees and expenses as the Board of Directors shall from time to time prescribe.

 

Section 3.07      Regular Meetings. Regular meetings of the Board of Directors may be held without notice at such times and at such places as may be determined from time to time by the Board of Directors or its Chairman.

 

Section 3.08      Special Meetings. Special meetings of the Board of Directors may be held at such times and at such places as may be determined by the Chairman or the President on at least 24 hours’ notice to each Director given by one of the means specified in Section 3.11 hereof other than by mail or on at least three days’ notice if given by mail. Special meetings shall be called by the President in like manner and on like notice on the written request of any two or more Directors.

 

Section 3.09      Telephone Meetings. Board of Directors or Board of Directors committee meetings may be held by means of telephone conference or other communications equipment by means of which all persons participating in the meeting can hear each other and be heard. Participation by a Director in a meeting pursuant to this Section 3.09 shall constitute presence in person at such meeting.

 

Section 3.10      Adjourned Meetings. A majority of the Directors present at any meeting of the Board of Directors, including an adjourned meeting, whether or not a quorum is present, may adjourn and reconvene such meeting to another time and place. At least 24 hours’ notice of any adjourned meeting of the Board of Directors shall be given to each Director whether or not present at the time of the adjournment, if such notice shall be given by one of the means specified in Section 3.11 hereof other than by mail, or at least three days’ notice if by mail. Any business may be transacted at an adjourned meeting that might have been transacted at the meeting as originally called.

 

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Section 3.11      Notices. Subject to Section 3.08, Section 3.10, and Section 3.12 hereof, whenever notice is required to be given to any Director by applicable law, the Certificate of Incorporation, or these Bylaws, such notice shall be deemed given effectively if given in person or by telephone, mail addressed to such Director at such Director’s address as it appears on the records of the Corporation, facsimile, email, or by other means of electronic transmission.

 

Section 3.12      Waiver of Notice. Whenever notice to Directors is required by applicable law, the Certificate of Incorporation, or these Bylaws, a waiver thereof, in writing signed by, or by electronic transmission by, the Director entitled to the notice, whether before or after such notice is required, shall be deemed equivalent to notice. Attendance by a Director at a meeting shall constitute a waiver of notice of such meeting except when the Director attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business on the ground that the meeting was not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special Board of Directors or committee meeting need be specified in any waiver of notice.

 

Section 3.13      Organization. At each meeting of the Board of Directors, the Chairman or, in his or her absence, another Director selected by the Board of Directors shall preside. The Secretary shall act as Secretary at each meeting of the Board of Directors. If the Secretary is absent from any meeting of the Board of Directors, an Assistant Secretary shall perform the duties of Secretary at such meeting; and in the absence from any such meeting of the Secretary and all Assistant Secretaries, the person presiding at the meeting may appoint any person to act as secretary of the meeting.

 

Section 3.14      Quorum of Directors. Except as otherwise permitted by the Certificate of Incorporation, these Bylaws, or applicable law, the presence of a majority of the Board of Directors shall be necessary and sufficient to constitute a quorum for the transaction of business at any meeting of the Board of Directors.

 

Section 3.15      Action by Majority Vote. Except as otherwise expressly required by these Bylaws, the Certificate of Incorporation, or by applicable law, the vote of a majority of the Directors present at a meeting at which a quorum is present shall be the act of the Board of Directors.

 

Section 3.16      Action Without Meeting. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting if all Directors or members of such committee, as the case may be, consent thereto in writing or by electronic transmission, and the writings or electronic transmissions are filed with the minutes of proceedings of the Board of Directors or committee in accordance with applicable law.

 

Section 3.17      Committees of the Board of Directors. The Board of Directors may designate one or more committees, each committee to consist of one or more of the Directors of the Corporation. The Board of Directors may designate one or more Directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. If a member of a committee shall be absent from any meeting, or disqualified from voting thereat, the remaining member or members present at the meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent permitted by applicable law, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation and may authorize the seal of the Corporation to be affixed to all papers that may require it to the extent so authorized by the Board of Directors. Unless the Board of Directors provides otherwise, at all meetings of such committee, a majority of the then authorized members of the committee shall constitute a quorum for the transaction of business, and the vote of a majority of the members of the committee present at any meeting at which there is a quorum shall be the act of the committee. Each committee shall keep regular minutes of its meetings. Unless the Board of Directors provides otherwise, each committee designated by the Board of Directors may make, alter, and repeal rules and procedures for the conduct of its business. In the absence of such rules and procedures each committee shall conduct its business in the same manner as the Board of Directors conducts its business pursuant to this Article III.

 

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ARTICLE IV

Officers

 

Section 4.01      Positions and Election. The officers of the Corporation shall be elected annually by the Board of Directors and shall include a President, a Treasurer and a Secretary. The Board of Directors, in its discretion, may also elect a Chairman (who must be a Director), one or more Vice Chairmen (who must be Directors), and one or more Vice Presidents, Assistant Treasurers, Assistant Secretaries, and other officers. Any two or more offices may be held by the same person.

 

Section 4.02      Term. Each officer of the Corporation shall hold office until such officer’s successor is elected and qualified or until such officer’s earlier death, resignation, or removal. Any officer elected or appointed by the Board of Directors may be removed by the Board of Directors at any time, with or without cause, by the majority vote of the members of the Board of Directors then in office. The removal of an officer shall be without prejudice to his or her contract rights, if any. The election or appointment of an officer shall not of itself create contract rights. Any officer of the Corporation may resign at any time by giving written notice of his or her resignation to the President or the Secretary. Any such resignation shall take effect at the time specified therein or, if the time when it shall become effective shall not be specified therein, immediately upon its receipt. Unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. Should any vacancy occur among the officers, the position shall be filled for the unexpired portion of the term by appointment made by the Board of Directors.

 

Section 4.03      The President. The President shall have general supervision over the business of the Corporation and other duties incident to the office of President, and any other duties as may be from time to time assigned to the President by the Board of Directors and subject to the control of the Board of Directors in each case.

 

Section 4.04      Vice Presidents. Each Vice President shall have such powers and perform such duties as may be assigned to him or her from time to time by the Chairman of the Board of Directors or the President.

 

Section 4.05      The Secretary. The Secretary shall attend all sessions of the Board of Directors and all meetings of the stockholders and record all votes and the minutes of all proceedings in a book to be kept for that purpose, and shall perform like duties for committees when required. He or she shall give, or cause to be given, notice of all meetings of the stockholders and meetings of the Board of Directors, and shall perform such other duties as may be prescribed by the Board of Directors or the President. The Secretary shall keep in safe custody the seal of the Corporation and have authority to affix the seal to all documents requiring it and attest to the same.

 

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Section 4.06      The Treasurer. The Treasurer shall have the custody of the corporate funds and securities, except as otherwise provided by the Board of Directors, and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors. The Treasurer shall disburse the funds of the Corporation as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the President and the Directors, at the regular meetings of the Board of Directors, or whenever they may require it, an account of all his or her transactions as Treasurer and of the financial condition of the Corporation.

 

Section 4.07      Duties of Officers May be Delegated. In case any officer is absent, or for any other reason that the Board of Directors may deem sufficient, the President or the Board of Directors may delegate for the time being the powers or duties of such officer to any other officer or to any Director.

 

ARTICLE V

Stock Certificates and Their Transfer

 

Section 5.01      Certificates Representing Shares. The shares of stock of the Corporation shall be represented by certificates; provided that the Board of Directors may provide by resolution or resolutions that some or all of any class or series shall be uncertificated shares that may be evidenced by a book-entry system maintained by the registrar of such stock. If shares are represented by certificates, such certificates shall be in the form, other than bearer form, approved by the Board of Directors. The certificates representing shares of stock of each class shall be signed by, or in the name of, the Corporation by any two authorized officers of the Corporation. Any or all such signatures may be facsimiles. Although any officer, transfer agent, or registrar whose manual or facsimile signature is affixed to such a certificate ceases to be such officer, transfer agent, or registrar before such certificate has been issued, it may nevertheless be issued by the Corporation with the same effect as if such officer, transfer agent, or registrar were still such at the date of its issue.

 

Section 5.02      Transfers of Stock. Stock of the Corporation shall be transferable in the manner prescribed by law and in these Bylaws. Transfers of stock shall be made on the books of the Corporation only by the holder of record thereof, by such person’s attorney lawfully constituted in writing and, in the case of certificated shares, upon the surrender of the certificate thereof, which shall be cancelled before a new certificate or uncertificated shares shall be issued. No transfer of stock shall be valid as against the Corporation for any purpose until it shall have been entered in the stock records of the Corporation by an entry showing from and to whom transferred. To the extent designated by the President or any Vice President or the Treasurer, the Corporation may recognize the transfer of fractional uncertificated shares, but shall not otherwise be required to recognize the transfer of fractional shares.

 

Section 5.03      Transfer Agents and Registrars. The Board of Directors may appoint, or authorize any officer or officers to appoint, one or more transfer agents and one or more registrars.

 

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Section 5.04      Lost, Stolen, or Destroyed Certificates. The Board of Directors may direct a new certificate or uncertificated shares to be issued in place of any certificate theretofore issued by the Corporation alleged to have been lost, stolen, or destroyed upon the making of an affidavit of that fact by the owner of the allegedly lost, stolen, or destroyed certificate. When authorizing such issue of a new certificate or uncertificated shares, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of the lost, stolen, or destroyed certificate, or the owner’s legal representative to give the Corporation a bond sufficient to indemnify it against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost, stolen, or destroyed or the issuance of such new certificate or uncertificated shares.

 

ARTICLE VI

General Provisions

 

Section 6.01      Seal. The Board of Directors may adopt a seal of the Corporation, which shall be in such form as shall be approved by the Board of Directors. The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise, as may be prescribed by law or custom or by the Board of Directors.

 

Section 6.02      Fiscal Year. The fiscal year of the Corporation shall be determined by the Board of Directors.

 

Section 6.03      Checks, Notes, Drafts, Etc. All checks, notes, drafts, or other orders for the payment of money of the Corporation shall be signed, endorsed, or accepted in the name of the Corporation by such officer, officers, person, or persons as from time to time may be designated by the Board of Directors or by an officer or officers authorized by the Board of Directors to make such designation.

 

Section 6.04      Dividends. Subject to applicable law and the Certificate of Incorporation, dividends upon the shares of capital stock of the Corporation may be declared by the Board of Directors at any regular or special meeting of the Board of Directors. Dividends may be paid in cash, in property, or in shares of the Corporation’s capital stock, unless otherwise provided by applicable law or the Certificate of Incorporation.

 

Section 6.05      Conflict with Applicable Law or Certificate of Incorporation. These Bylaws are adopted subject to any applicable law and the Certificate of Incorporation. Whenever these Bylaws may conflict with any applicable law or the Certificate of Incorporation, such conflict shall be resolved in favor of such law or the Certificate of Incorporation.

 

ARTICLE VII

Amendments

 

Section 7.01      Amendments. These Bylaws may be adopted, amended, or repealed or new Bylaws adopted by the Board of Directors. The stockholders may make additional Bylaws and may adopt, amend, or repeal any Bylaws whether such Bylaws were originally adopted by them or otherwise.

 

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Exhibit 6.1

 

STOCKHOLDER LOAN AGREEMENT

 

THIS STOCKHOLDER LOAN AGREEMENT (this "Agreement") dated this 1st day of January, 2019

 

BETWEEN:

 

Leromys Capital of 79 Rue Francois Mermet, 69160 TASSIN

(the "Stockholder")

 

OF THE FIRST PART

 

and

 

Rebrain.ai Inc of 1330 Orange Avenue, Ste 322, Coronado, CA,92118

(the "Corporation")

 

OF THE SECOND PART

 

BACKGROUND:

 

A.The Corporation is duly incorporated in the State of Delaware.

 

B.The Stockholder holds stocks in the Corporation and agrees to loan certain monies to the Corporation.

 

IN CONSIDERATION OF the Stockholder providing the Loan to the Corporation, and the Corporation repaying the Loan to the Stockholder, both parties agree to keep, perform, and fulfill the promises, conditions and agreements below:

 

Loan Amount & Interest

 

1.The Stockholder promises to loan two hundred five thousand EUROS (205,000€) to the Corporation (the "Loan") and the Corporation promises to repay this principal amount to the Stockholder at 79 Rue François Mermet, 69160 Tassin, or at such address as may be provided in writing, with interest payable on the unpaid principal at the rate of 10 percent per annum, calculated yearly not in advance.

 

Page 1 of 3

 

 

Payment

 

2.The Loan will be repaid in consecutive monthly installments of interest only on the 1st of each month commencing January 1, 2021 until the Stockholder has provided the Corporation with written notice of demand and the balance owing under this Agreement will be paid within 30 day(s) of any such notice of demand.

 

3.At any time while not in default under this Agreement, the Corporation may pay the outstanding balance then owing under this Agreement to the Stockholder without further bonus or penalty.

 

Default

 

4.Notwithstanding anything to the contrary in this Agreement, if the Corporation defaults in the performance of any obligation under this Agreement, then the Stockholder may declare the principal amount owing under this Agreement at that time to be immediately due and payable.

 

Governing Law

 

5.This Agreement will be construed in accordance with and governed by the laws of the State of Delaware.

 

Costs

 

6.All costs, expenses and expenditures including, and without limitation, the complete legal costs incurred by enforcing this Agreement as a result of any default by the Corporation, will be added to the principal then outstanding and will immediately be paid by the Corporation.

 

Assignment

 

7.This Agreement will pass to the benefit of and be binding upon the respective heirs, executors, administrators, successors and assigns of the Corporation. The Corporation waives presentment for payment, notice of non-payment, protest, and notice of protest.

 

Amendments

 

8.This Agreement may only be amended or modified by a written instrument executed by both the Corporation and the Stockholder.

 

Severability

 

Page 2 of 3

 

 

STOCKHOLDER LOAN AGREEMENT

 

THIS STOCKHOLDER LOAN AGREEMENT (this "Agreement") dated this 1st day of January, 2019

 

BETWEEN:

 

Leromys Capital of 79 Rue Francois Mermet, 69160 TASSIN

(the "Stockholder")

 

OF THE FIRST PART

 

and

 

Rebrain.ai Inc of 1330 Orange Avenue, Ste 322, Coronado, CA,92118

(the "Corporation")

 

OF THE SECOND PART

 

BACKGROUND:

 

A.The Corporation is duly incorporated in the State of Delaware.

 

B.The Stockholder holds stocks in the Corporation and agrees to loan certain monies to the Corporation.

 

IN CONSIDERATION OF the Stockholder providing the Loan to the Corporation, and the Corporation repaying the Loan to the Stockholder, both parties agree to keep, perform, and fulfill the promises, conditions and agreements below:

 

Loan Amount & Interest

 

1.The Stockholder promises to loan twenty four thousand ninee seventy five USD ($24,975.00) to the Corporation (the "Loan") and the Corporation promises to repay this principal amount to the Stockholder at 79 Rue François Mermet, 69160 Tassin, or at such address as may be provided in writing, with interest payable on the unpaid principal at the rate of 10 percent per annum, calculated yearly not in advance.

 

Page 1 of 3

 

 

Payment

 

2.The Loan will be repaid in consecutive monthly installments of interest only on the 1st of each month commencing January 1, 2021 until the Stockholder has provided the Corporation with written notice of demand and the balance owing under this Agreement will be paid within 30 day(s) of any such notice of demand.

 

3.At any time while not in default under this Agreement, the Corporation may pay the outstanding balance then owing under this Agreement to the Stockholder without further bonus or penalty.

 

Default

 

4.Notwithstanding anything to the contrary in this Agreement, if the Corporation defaults in the performance of any obligation under this Agreement, then the Stockholder may declare the principal amount owing under this Agreement at that time to be immediately due and payable.

 

Governing Law

 

5.This Agreement will be construed in accordance with and governed by the laws of the State of Delaware.

 

Costs

 

6.All costs, expenses and expenditures including, and without limitation, the complete legal costs incurred by enforcing this Agreement as a result of any default by the Corporation, will be added to the principal then outstanding and will immediately be paid by the Corporation.

 

Assignment

 

7.This Agreement will pass to the benefit of and be binding upon the respective heirs, executors, administrators, successors and assigns of the Corporation. The Corporation waives presentment for payment, notice of non-payment, protest, and notice of protest.

 

Amendments

 

8.This Agreement may only be amended or modified by a written instrument executed by both the Corporation and the Stockholder.

 

Page 2 of 3

 

 

Severability

 

9.The clauses and paragraphs contained in this Agreement are intended to be read and construed independently of each other. If any part of this Agreement is held to be invalid, this invalidity will not affect the operation of any other part of this Agreement.

 

General Provisions

 

10.Headings are inserted for the convenience of the parties only and are not to be considered when interpreting this Agreement. Words in the singular mean and include the plural and vice versa. Words in the masculine mean and include the feminine and vice versa.

 

Entire Agreement

 

11.This Agreement constitutes the entire agreement between the parties and there are no further items or provisions, either oral or otherwise.

 

IN WITNESS WHEREOF, the parties have duly affixed their signatures under hand and seal on this 1st day of January, 2019

 

 

Rebrain.ai Inc

 

 

 

 

Per:

 
  (Seal)  
     
   
 

Leromys Capital

 

Page 3 of 3

 

 

CONTRACT AMENDMENT

 

THIS CONTRACT AMENDMENT dated this 1st day of January, 2020

 

BETWEEN:

 

Leromys Capital

 

OF THE FIRST PART

 

- AND-

 

Rebrain.ai Inc

 

OF THE SECOND PART

 

Background

 

A.Leromys Capital and Rebrain.ai Inc (the "Parties") entered into the contract (the "Contract") dated January 1, 2019, for the purpose of Shareholder loan agreement for an amount of 205,000 EUROS.

 

B.The Parties desire to amend the Contract on the terms and conditions set forth in this Contract Amendment (the "Agreement").

 

C.This Agreement is the first amendment to the Contract.

 

D.References in this Agreement to the Contract are to the Contract as previously amended or varied.

 

IN CONSIDERATION OF the Parties agreeing to amend their obligations in the existing Contract, and other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree to keep, perform, and fulfill the promises, conditions and agreements below:

 

Amendments

 

1.The Contract is amended as follows:

 

a.Clause "Loan Amount & Interest" is hereby amended by increasing the interest rate from 10 percent per annum to 20 percent per annum.

 

Page 1 of 2

 

 

No Other Change

 

2.Except as otherwise expressly provided in this Agreement, all of the terms and conditions of the Contract remain unchanged and in full force and effect.

 

Miscellaneous Terms

 

3.Capitalized terms not otherwise defined in this Agreement will have the meanings ascribed to them in the Contract. Headings are inserted for the convenience of the parties only and are not to be considered when interpreting this Agreement. Words in the singular mean and include the plural and vice versa. Words in the masculine include the feminine and vice versa. No regard for gender is intended by the language in this Agreement.

 

Governing Law

 

4.Subject to the terms of the Contract, it is the intention of the Parties that this Agreement, and all suits and special proceedings under this Agreement, be construed in accordance with and governed, to the exclusion of the law of any other forum, by the laws of the State of Delaware, without regard to the jurisdiction in which any action or special proceeding may be instituted.

 

IN WITNESS WHEREOF the Parties have duly affixed their signatures under hand and seal on this 1st day of January, 2020.

 

   

Leromys Capital

   

 

 

 

Per:

 
       

WITNESS: ______________________

  (Seal)  
       
   

Rebrain.ai Inc

       
   

 

 

 

Per:

 
       

WITNESS: ______________________

 

(Seal)

 

Page 2 of 2

 

 

9.The clauses and paragraphs contained in this Agreement are intended to be read and construed independently of each other. If any part of this Agreement is held to be invalid, this invalidity will not affect the operation of any other part of this Agreement.

 

General Provisions

 

10.Headings are inserted for the convenience of the parties only and are not to be considered when interpreting this Agreement. Words in the singular mean and include the plural and vice versa. Words in the masculine mean and include the feminine and vice versa.

 

Entire Agreement

 

11.This Agreement constitutes the entire agreement between the parties and there are no further items or provisions, either oral or otherwise.

 

IN WITNESS WHEREOF, the parties have duly affixed their signatures under hand and seal on this 1st day of January, 2019

 

 

Rebrain.ai Inc

 

 

 

 

Per:

 
  (Seal)  
     
   
 

Leromys Capital

 

Page 3 of 3

 

 

CONTRACT AMENDMENT

 

THIS CONTRACT AMENDMENT dated this 1st day of January, 2020

 

BETWEEN:

 

Leromys Capital

 

OF THE FIRST PART

 

- AND-

 

Rebrain.ai Inc

 

OF THE SECOND PART

 

Background

 

A.Leromys Capital and Rebrain.ai Inc (the "Parties") entered into the contract (the "Contract") dated January 1, 2019, for the purpose of Shareholder loan agreement for an amount of $24,975.

 

B.The Parties desire to amend the Contract on the terms and conditions set forth in this Contract Amendment (the "Agreement").

 

C.This Agreement is the first amendment to the Contract.

 

D.References in this Agreement to the Contract are to the Contract as previously amended or varied.

 

IN CONSIDERATION OF the Parties agreeing to amend their obligations in the existing Contract, and other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree to keep, perform, and fulfill the promises, conditions and agreements below:

 

Amendments

 

1.The Contract is amended as follows:

 

a. Clause "Loan Amount & Interest" is hereby amended by increasing the interest rate from 10 percent per annum to 20 percent per annum.

 

Page 1 of 2

 

 

No Other Change

 

2.Except as otherwise expressly provided in this Agreement, all of the terms and conditions of the Contract remain unchanged and in full force and effect.

 

Miscellaneous Terms

 

3.Capitalized terms not otherwise defined in this Agreement will have the meanings ascribed to them in the Contract. Headings are inserted for the convenience of the parties only and are not to be considered when interpreting this Agreement. Words in the singular mean and include the plural and vice versa. Words in the masculine include the feminine and vice versa. No regard for gender is intended by the language in this Agreement.

 

Governing Law

 

4.Subject to the terms of the Contract, it is the intention of the Parties that this Agreement, and all suits and special proceedings under this Agreement, be construed in accordance with and governed, to the exclusion of the law of any other forum, by the laws of the State of Delaware, without regard to the jurisdiction in which any action or special proceeding may be instituted.

 

IN WITNESS WHEREOF the Parties have duly affixed their signatures under hand and seal on this 1st day of January, 2020.

 

   

Leromys Capital

   

 

 

 

Per:

 
       

WITNESS: ______________________

  (Seal)  
       
   

Rebrain.ai Inc

       
   

 

 

 

Per:

 
       

WITNESS: ______________________

 

(Seal)

 

Page 2 of 2

 

 

STOCKHOLDER LOAN AGREEMENT

 

THIS STOCKHOLDER LOAN AGREEMENT (this "Agreement") dated this 1st day of January, 2020

 

BETWEEN:

 

Leromys Capital of 79 Rue Francois Mermet, 69160 TASSIN

(the "Stockholder")

 

OF THE FIRST PART

 

and

 

Rebrain.ai Inc of 1330 Orange Avenue, Ste 322, Coronado, CA,92118

(the "Corporation")

 

OF THE SECOND PART

 

BACKGROUND:

 

A.The Corporation is duly incorporated in the State of Delaware.

 

 

B.The Stockholder holds stocks in the Corporation and agrees to loan certain monies to the Corporation.

 

IN CONSIDERATION OF the Stockholder providing the Loan to the Corporation, and the Corporation repaying the Loan to the Stockholder, both parties agree to keep, perform, and fulfill the promises, conditions and agreements below:

 

Loan Amount & Interest

 

1.The Stockholder promises to loan one hundred fifty thousand EUROS (150,000€) to the Corporation (the "Loan") and the Corporation promises to repay this principal amount to the Stockholder at 79 Rue François Mermet, 69160 Tassin, or at such address as may be provided in writing, with interest payable on the unpaid principal at the rate of 20 percent per annum, calculated yearly not in advance.

 

Page 1 of 3

 

 

Payment

 

2.The Loan will be repaid in consecutive monthly installments of interest only on the 1st of each month commencing January 1, 2021 until the Stockholder has provided the Corporation with written notice of demand and the balance owing under this Agreement will be paid within 30 day(s) of any such notice of demand.

 

3.At any time while not in default under this Agreement, the Corporation may pay the outstanding balance then owing under this Agreement to the Stockholder without further bonus or penalty.

 

Default

 

4.Notwithstanding anything to the contrary in this Agreement, if the Corporation defaults in the performance of any obligation under this Agreement, then the Stockholder may declare the principal amount owing under this Agreement at that time to be immediately due and payable.

 

Governing Law

 

5.This Agreement will be construed in accordance with and governed by the laws of the State of Delaware.

 

Costs

 

6.All costs, expenses and expenditures including, and without limitation, the complete legal costs incurred by enforcing this Agreement as a result of any default by the Corporation, will be added to the principal then outstanding and will immediately be paid by the Corporation.

 

Assignment

 

7.This Agreement will pass to the benefit of and be binding upon the respective heirs, executors, administrators, successors and assigns of the Corporation. The Corporation waives presentment for payment, notice of non-payment, protest, and notice of protest.

 

Amendments

 

8.This Agreement may only be amended or modified by a written instrument executed by both the Corporation and the Stockholder.

 

Page 2 of 3

 

 

Severability

 

9.The clauses and paragraphs contained in this Agreement are intended to be read and construed independently of each other. If any part of this Agreement is held to be invalid, this invalidity will not affect the operation of any other part of this Agreement.

 

General Provisions

 

10.Headings are inserted for the convenience of the parties only and are not to be considered when interpreting this Agreement. Words in the singular mean and include the plural and vice versa. Words in the masculine mean and include the feminine and vice versa.

 

Entire Agreement

 

11.This Agreement constitutes the entire agreement between the parties and there are no further items or provisions, either oral or otherwise.

 

IN WITNESS WHEREOF, the parties have duly affixed their signatures under hand and seal on this 1st day of January, 2019

 

 

Rebrain.ai Inc

 

 

 

 

Per:

 
  (Seal)  
     
   
 

Leromys Capital

 

Page 3 of 3

 


 

Exhibit 6.2

 

STOCKHOLDER LOAN AGREEMENT

 

THIS STOCKHOLDER LOAN AGREEMENT (this "Agreement") dated this 1st day of January, 2019

 

BETWEEN:

 

Sébastien Robert of 859 I Avenue, Coronado, CA, 92118
(the "Stockholder")

 

OF THE FIRST PART

 

and

 

Rebrain.ai Inc of 1330 Orange Avenue, Ste 322, Coronado, CA,92118 (the "Corporation")

 

OF THE SECOND PART

 

BACKGROUND:

 

A.The Corporation is duly incorporated in the State of Delaware.

 

B.The Stockholder holds stocks in the Corporation and agrees to loan certain monies to the Corporation.

 

IN CONSIDERATION OF the Stockholder providing the Loan to the Corporation, and the Corporation repaying the Loan to the Stockholder, both parties agree to keep, perform, and fulfill the promises, conditions and agreements below:

 

Loan Amount & Interest

 

1.The Stockholder promises to loan ten thousand EUROS (10,000€) to the Corporation (the "Loan") and the Corporation promises to repay this principal amount to the Stockholder at 859 I Avenue, Coronado, CA, 92118, or at such address as may be provided in writing, with interest payable on the unpaid principal at the rate of 10 percent per annum, calculated yearly not in advance.

 

Payment

 

2.The Loan will be repaid in consecutive monthly installments of interest only on the 1st of each month commencing January 1, 2021 until the Stockholder has provided the Corporation with written notice of demand and the balance owing under this Agreement will be paid within 30 day(s) of any such notice of demand.

 

3.At any time while not in default under this Agreement, the Corporation may pay the outstanding balance then owing under this Agreement to the Stockholder without further bonus or penalty.

 

Page 1 of 3

 

 

Default

 

4.Notwithstanding anything to the contrary in this Agreement, if the Corporation defaults in the performance of any obligation under this Agreement, then the Stockholder may declare the principal amount owing under this Agreement at that time to be immediately due and payable.

 

Governing Law

 

5.This Agreement will be construed in accordance with and governed by the laws of the State of Delaware.

 

Costs

 

6.All costs, expenses and expenditures including, and without limitation, the complete legal costs incurred by enforcing this Agreement as a result of any default by the Corporation, will be added to the principal then outstanding and will immediately be paid by the Corporation.

 

Assignment

 

7.This Agreement will pass to the benefit of and be binding upon the respective heirs, executors, administrators, successors and assigns of the Corporation. The Corporation waives presentment for payment, notice of non-payment, protest, and notice of protest.

 

Amendments

 

8.This Agreement may only be amended or modified by a written instrument executed by both the Corporation and the Stockholder.

 

Severability

 

9.The clauses and paragraphs contained in this Agreement are intended to be read and construed independently of each other. If any part of this Agreement is held to be invalid, this invalidity will not affect the operation of any other part of this Agreement.

 

General Provisions

 

10.Headings are inserted for the convenience of the parties only and are not to be considered when interpreting this Agreement. Words in the singular mean and include the plural and vice versa. Words in the masculine mean and include the feminine and vice versa.

 

Entire Agreement

 

11.This Agreement constitutes the entire agreement between the parties and there are no further items or provisions, either oral or otherwise.

 

Page 2 of 3

 

 

IN WITNESS WHEREOF, the parties have duly affixed their signatures under hand and seal on this 1st day of January, 2019

 

  Rebrain.ai Inc
 
  Per:
 
  (Seal)
   
  Sébastien Robert

 

Page 3 of 3

 

 

 

CONTRACT AMENDMENT

 

THIS CONTRACT AMENDMENT dated this 1st day of January, 2020

 

BETWEEN:

 

Sébastien Robert

 

OF THE FIRST PART

 

- AND-

 

Rebrain.ai Inc

 

OF THE SECOND PART

 

Background

 

A.Sébastien Robert and Rebrain.ai Inc (the "Parties") entered into the contract (the "Contract") dated January 1, 2019, for the purpose of Shareholder loan agreement for an amount of 10,000 EUROS.

 

B.The Parties desire to amend the Contract on the terms and conditions set forth in this Contract Amendment (the "Agreement").

 

C.This Agreement is the first amendment to the Contract.

 

 

D.References in this Agreement to the Contract are to the Contract as previously amended or varied.

 

IN CONSIDERATION OF the Parties agreeing to amend their obligations in the existing Contract, and other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree to keep, perform, and fulfill the promises, conditions and agreements below:

 

Amendments

 

1.The Contract is amended as follows:

 

a.Clause "Loan Amount & Interest" is hereby amended by increasing the interest rate from 10 percent per annum to 20 percent per annum.

 

Page 1 of 2

 

 

No Other Change

 

2.Except as otherwise expressly provided in this Agreement, all of the terms and conditions of the Contract remain unchanged and in full force and effect.

 

Miscellaneous Terms

 

3.Capitalized terms not otherwise defined in this Agreement will have the meanings ascribed to them in the Contract. Headings are inserted for the convenience of the parties only and are not to be considered when interpreting this Agreement. Words in the singular mean and include the plural and vice versa. Words in the masculine include the feminine and vice versa. No regard for gender is intended by the language in this Agreement.

 

Governing Law

 

4.Subject to the terms of the Contract, it is the intention of the Parties that this Agreement, and all suits and special proceedings under this Agreement, be construed in accordance with and governed, to the exclusion of the law of any other forum, by the laws of the State of Delaware, without regard to the jurisdiction in which any action or special proceeding may be instituted.

 

IN WITNESS WHEREOF the Parties have duly affixed their signatures under hand and seal on this 1st day of January, 2020.

 

    Sébastien Robert
    Per:
WITNESS: ______________________   (Seal)                            
       
    Rebrain.ai Inc
       
    Per:
WITNESS: ______________________   (Seal)  

 

Page 2 of 2

 

 

STOCKHOLDER LOAN AGREEMENT

 

THIS STOCKHOLDER LOAN AGREEMENT (this "Agreement") dated this 1st day of June, 2021

 

BETWEEN:

 

Sébastien Robert of 859 I Avenue, Coronado, CA, 92118
(the "Stockholder")

 

OF THE FIRST PART

 

and

 

Rebrain.ai Inc of 1330 Orange Avenue, Ste 322, Coronado, CA,92118
(the "Corporation")

 

OF THE SECOND PART

 

BACKGROUND:

 

A.The Corporation is duly incorporated in the State of Delaware.

 

B.The Stockholder holds stocks in the Corporation and agrees to loan certain monies to the Corporation.

 

IN CONSIDERATION OF the Stockholder providing the Loan to the Corporation, and the Corporation repaying the Loan to the Stockholder, both parties agree to keep, perform, and fulfill the promises, conditions and agreements below:

 

Loan Amount & Interest

 

1.The Stockholder promises to loan one hundred one thousand USD ($101,000) to the Corporation (the "Loan") and the Corporation promises to repay this principal amount to the Stockholder at 859 I Avenue, Coronado, CA, 92118, or at such address as may be provided in writing, with interest payable on the unpaid principal at the rate of 20 percent per annum, calculated yearly not in advance.

 

Page 1 of 3

 

 

Payment

 

2.The Loan will be repaid in consecutive monthly installments of interest only on the 1st of each month commencing January 1, 2022 until the Stockholder has provided the Corporation with written notice of demand and the balance owing under this Agreement will be paid within 30 day(s) of any such notice of demand.

 

3.At any time while not in default under this Agreement, the Corporation may pay the outstanding balance then owing under this Agreement to the Stockholder without further bonus or penalty.

 

Default

 

4.Notwithstanding anything to the contrary in this Agreement, if the Corporation defaults in the performance of any obligation under this Agreement, then the Stockholder may declare the principal amount owing under this Agreement at that time to be immediately due and payable.

 

Governing Law

 

5.This Agreement will be construed in accordance with and governed by the laws of the State of Delaware.

 

Costs

 

6.All costs, expenses and expenditures including, and without limitation, the complete legal costs incurred by enforcing this Agreement as a result of any default by the Corporation, will be added to the principal then outstanding and will immediately be paid by the Corporation.

 

Assignment

 

7.This Agreement will pass to the benefit of and be binding upon the respective heirs, executors, administrators, successors and assigns of the Corporation. The Corporation waives presentment for payment, notice of non-payment, protest, and notice of protest.

 

Amendments

 

8.This Agreement may only be amended or modified by a written instrument executed by both the Corporation and the Stockholder.

 

Page 2 of 3

 

 

Severability

 

9.The clauses and paragraphs contained in this Agreement are intended to be read and construed independently of each other. If any part of this Agreement is held to be invalid, this invalidity will not affect the operation of any other part of this Agreement.

 

General Provisions

 

10.Headings are inserted for the convenience of the parties only and are not to be considered when interpreting this Agreement. Words in the singular mean and include the plural and vice versa. Words in the masculine mean and include the feminine and vice versa.

 

Entire Agreement

 

11.This Agreement constitutes the entire agreement between the parties and there are no further items or provisions, either oral or otherwise.

 

IN WITNESS WHEREOF, the parties have duly affixed their signatures under hand and seal on this 1st day of June, 2021

 

  Rebrain.ai Inc
 
  Per:
  (Seal)
 
  Sébastien Robert
 

 

Page 3 of 3


 

Exhibit 11

 

 

 

CONSENT OF INDEPENDENT AUDITOR

 

We consent to the use in the Offering Circular constituting a part of this Offering Statement on Form 1-A, as it may be amended, of our Independent Auditor’s Report dated August 4, 2021 relating to the consolidated balance sheets of Rebrain.ai, Inc. and subsidiaries as of December 31, 2020 and 2019, the related consolidated statements of operations, changes in members’ equity, and cash flows for the years then ended, and the related notes to the consolidated financial statements.

 

/s/ Artesian CPA, LLC

Denver, CO

 

September 22, 2021

 

 

Artesian CPA, LLC

 

1624 Market Street, Suite 202 | Denver, CO 80202

p: 877.968.3330 f: 720.634.0905

info@ArtesianCPA.com | www.ArtesianCPA.com