# EDGAR Filing Document

**Accession Number:** 0001736308
**File Stem:** 0001669191-23-000074
**Filing Date:** 2023-1
**Character Count:** 259940
**Document Hash:** 594ed423d052525d06a69c3c344fdc15
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001669191-23-000074.hdr.sgml**: 20230119

**ACCESSION NUMBER**: 0001669191-23-000074

**CONFORMED SUBMISSION TYPE**: C/A

**PUBLIC DOCUMENT COUNT**: 9

**FILED AS OF DATE**: 20230119

**DATE AS OF CHANGE**: 20230119

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Demand Derivatives Corp.
- **CENTRAL INDEX KEY:** 0001736308
- **IRS NUMBER:** 822682029
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 0630

**FILING VALUES:**
- **FORM TYPE:** C/A
- **SEC ACT:** 1933 Act
- **SEC FILE NUMBER:** 020-26373
- **FILM NUMBER:** 23536806

**BUSINESS ADDRESS:**
- **STREET 1:** 99 WALL STREET
- **STREET 2:** SUITE 3901
- **CITY:** NEW YORK
- **STATE:** NY
- **ZIP:** 10005
- **BUSINESS PHONE:** 1-888-865-9267

**MAIL ADDRESS:**
- **STREET 1:** 99 WALL STREET
- **STREET 2:** SUITE 3901
- **CITY:** NEW YORK
- **STATE:** NY
- **ZIP:** 10005

## Ex-99

html![](offeringpage.jpg)

### Attached PDF Documents

**Attachment 1:** `offeringstatement.pdf`

# Offering Statement for Demand Derivatives Corp. (“Demand Derivatives”)

This document is generated by a website that is operated by Netcapital Systems LLC (“Netcapital”), which is not a registered broker-dealer. Netcapital does not give investment advice, endorsement, analysis or recommendations with respect to any securities. All securities listed here are being offered by, and all information included in this document are the responsibility of, the applicable issuer of such securities.

Netcapital has not taken any steps to verify the adequacy, accuracy or completeness of any information. Neither Netcapital nor any of its officers, directors, agents and employees makes any warranty, express or implied, of any kind whatsoever related to the adequacy, accuracy or completeness of any information in this document or the use of information in this document.

All Regulation CF offerings are conducted through Netcapital Funding Portal Inc. (“Portal”), an affiliate of Netcapital, and a FINRA/SEC registered funding-portal. For inquiries related to Regulation CF securities activity, contact Netcapital Funding Portal Inc.:

**Paul Riss:**

paul@netcapital.com

Netcapital and Portal do not make investment recommendations and no communication, through this website or in any other medium, should be construed as a recommendation for any security offered on or off this investment platform. Equity crowdfunding investments in private placements, Regulation A, D and CF offerings, and start-up investments in particular are speculative and involve a high degree of risk and those investors who cannot afford to lose their entire investment should not invest in start-ups. Companies seeking startup investments through equity crowdfunding tend to be in earlier stages of development and their business model, products and services may not yet be fully developed, operational or tested in the public marketplace. There is no guarantee that the stated valuation and other terms are accurate or in agreement with the market or industry valuations. Additionally, investors may receive illiquid and/or restricted stock that may be subject to holding period requirements and/or liquidity concerns. In the most sensible investment strategy for start-up investing, start-ups should only be part of your overall investment portfolio. Further, the start-up portion of your portfolio may include a balanced portfolio of different start-ups. Investments in startups are highly illiquid and those investors who cannot hold an investment for the long term (at least 5-7 years) should not invest.

The information contained herein includes forward-looking statements. These statements relate to future events or to future financial performance, and involve known and unknown risks, uncertainties, and other factors, that may cause actual results to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by these forward-looking statements. You should not place undue reliance on forward-looking statements since they involve known and unknown risks, uncertainties, and other factors, which are, in some cases, beyond the company’s control and which could, and likely will, materially affect actual results, levels of activity, performance, or achievements. Any forward-looking statement reflects the current views with respect to future events and is subject to these and other risks, uncertainties, and assumptions relating to operations, results of operations, growth strategy, and liquidity. No obligation exists to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

## The Company

**1. What is the name of the issuer?**

Demand Derivatives Corp.

99 Wall Street
Suite 3901
New York, NY 10005

## Eligibility

**2. The following are true for Demand Derivatives Corp.:**

- Organized under, and subject to, the laws of a State or territory of the United States or the District of Columbia.
- Not subject to the requirement to file reports pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934.
- Not an investment company registered or required to be registered under the Investment Company Act of 1940.
- Not ineligible to rely on this exemption under Section 4(a)(6) of the Securities Act as a result of a disqualification specified in Rule 503(a) of Regulation Crowdfunding. (For more information about these disqualifications, see Question 30 of this Question and Answer format).
- Has filed with the Commission and provided to investors, to the extent required, the ongoing annual reports required by Regulation Crowdfunding during the two years immediately preceding the filing of this offering statement (or for such shorter period that the issuer was required to file such reports).
- Not a development stage company that (a) has no specific business plan or (b) has indicated that its business plan is to engage in a merger or acquisition with an unidentified company or companies.

**3. Has the issuer or any of its predecessors previously failed to comply with the ongoing reporting requirements of Rule 202 of Regulation Crowdfunding?**

No.

## Directors, Officers and Promoters of the Company

**4. The following individuals (or entities) represent the company as a director, officer or promoter of the offering:**

*Name*

Jeromee Johnson

*Principal occupation and employment responsibilities during at least the last three (3) years with start and ending dates*

| Start Date | End Date | Company | Position / Title |
| --- | --- | --- | --- |
| 01/01/2018 | Present | Demand Derivatives Corp. | Director |
| 09/01/2017 | Present | Jabek Holdings, LLC | Managing Partner |
| 03/01/2018 | Present | Ambisafe | Director |
| 02/01/2019 | Present | FasterCapital | Mentor |
| 02/01/2019 | Present | FinTech4Good | Board of Advisors |
| 05/01/2021 | Present | The Ayadee Foundation | Mentor |
| 08/01/2020 | Present | Tellus | President & CTO |

Short Bio: Jeromee Johnson serves as a Board Director for Demand Derivatives Corp. (since January 2018). He is an experienced start-up executive and an investor, entrepreneur, and technologist with a passion for global markets and market structure. He is a widely recognized industry executive, electronic trading and capital markets systems expert, and has been acknowledged globally for sharing insight in the areas of trading technology, financial markets regulation, and the connection between them. Jeromee was Executive Vice President and a member of the executive team at Miami International Holdings (Sep 2015 to Sep 2017), where he was responsible for their global market initiatives. Prior to that, he was responsible for the options business at BATS Global Markets. At BATS, he led their entry into derivatives and was responsible for the creation, management, and strategy of BATS Options. During his seven years on the management team at BATS, the company scaled from a single U.S. equity exchange to operate almost a dozen of the largest cross-asset exchanges, globally. Mr. Johnson was President of 3D Markets - the first options “dark pool” - a crossing network for equity options, designed to help bring large institutional OTC trades back to the listed, regulated environment. At 3D, he was responsible for strategy, product development, technology, sales, and brokerage operations. Prior to 3D, at the TABB Group, Jeromee advised capital market participants, and their providers, on technology and strategy issues. He is the author of a number of seminal industry titles including Locating the Invisible: Aggregating Dark Book Liquidity, Groping in the Dark: Navigating Crossing Networks, and Other Dark Pools of Liquidity, and Trading at Light Speed: Analyzing Low Latency Market Data Infrastructure. Work experience: https://www.linkedin.com/in/jeromee/

#### **Name**

Richard Heckinger

#### ***Principal occupation and employment responsibilities during at least the last three (3) years with start and ending dates***

| Start Date | End Date | Company | Position / Title |
| --- | --- | --- | --- |
| 01/01/2018 | Present | Demand Derivatives Corp. | Director |

Short Bio: Richard Heckinger is a Board Director of Demand Derivatives Corp. (since January 2018). Prior to this, he had a short period of semi-retirement (July 2015 to Dec 2017). He was formerly Vice President and Senior Policy Advisor, Financial Markets Group, at the Federal Reserve Bank of Chicago. He started his career in financial markets at the Chicago Board Options Exchange in 1973. His career has included executive positions and project management of financial market operations, products, and risks. He has a wide range of international experience including Vice President, Operations and Director of the Montreal (Stock) Exchange and its options clearing corporation, respectively. After serving as Clearing House Manager, he was Vice President, Financial Marketing at the Chicago Mercantile Exchange (CME) which included a four-year posting as Executive Director of CME’s London Representative Office. Following the market crisis in 1987 he was recruited to be the Chief Operating Officer of the Stock Exchange of Hong Kong (SEHK). In that position he was responsible for the development of a screen-based trading system for equities, fixed income and unit trusts (mutual funds). Equity options trading was introduced soon after. He served as a Council (board) Member of SEHK as well as a Member of the Board of Directors of its subsidiary, the Hong Kong Securities Clearing Corporation (HKSCC). He subsequently became Chief Executive of HKSCC, also continuing as a Board Member. He oversaw the project to migrate securities

settlement and custody from paper and check-based manual processes to a centralized clearing and depository book-entry structure that exceeded international standards. After six years in Hong Kong, he joined State Street Corp. in Boston as Senior Vice President, Global Operations where he was responsible for corporate-wide management for the conversion of all operations, funds, trusts, custody, payments systems and corporate affairs to the Euro. Following that successful conversion project, that comprised 17 business units and worldwide (90 countries) customer relationships, he was responsible for collective investments on State Street's Global Link platform in its treasury area. Returning to Chicago he was Head of the U.S. Representative Office for Deutsche Boerse AG and several of its subsidiaries including Eurex. Following that he joined the Federal Reserve Bank of Chicago where he worked on market risks, infrastructure and regulations related to the financial crisis and its aftermath. He retired from the Fed in 2015. Throughout his career, he has served on international committees, including a Federal Reserve Bank of New York working group, the OTC Derivatives Regulators' Forum, SWIFT, and the International Securities Services Association (ISSA). He has spoken at numerous conferences on financial market topics as well as authored papers on financial market topics. Presently, he is a Contributing Editor to the Central Banking Journal, Associate Editor of the Journal of Financial Market Infrastructure and a Member of the Editorial Advisory Board of the Global Commodities Applied Research Digest. He has a Master of Philosophy degree in Economics from the London School of Economics, a B.A. degree in Mathematics from the Illinois State University and completed the Advanced Management Course at the University of Chicago.

# **Name**

Donald Schlesinger

# ***Principal occupation and employment responsibilities during at least the last three (3) years with start and ending dates***

| Start Date | End Date | Company | Position / Title |
| --- | --- | --- | --- |

08/08/2017 Present Demand Derivatives Corp. President

Donald Schlesinger is the President of Demand Derivatives Corp. (since inception in August 2017) Prior to the merging of the individual product companies under the DDC corporate umbrella, he was instrumental in directing the companies separately (Jul 2010 to Aug 2017). Donald Schlesinger was the Vice Chairman and Chief Strategy Officer of The VolX Group Corporation and RealDay Options Corporation- after a period of semi-retirement. Before this he was an Executive Director in Morgan Stanley Dean Witter's Worldwide Equity Derivatives department. As the Director of Derivatives Education and Training, some of Don's responsibilities included the creation, supervision, and delivery of in-house programs, as well as educational seminars for clients. In 1993, Don helped establish and perfect risk-management techniques and systems for global equity derivatives traders at the firm. Schlesinger was a member of the Institutional Equity Division's derivatives risk-management committee and served as a liaison between that unit and the firm's head of global risk management. Prior to assuming these roles, he was a Proprietary Trader and Options Strategist at Morgan Stanley, from 1984 to 1994, where he managed the firm's domestic over-the-counter options book and priced structured products for clients. Schlesinger has lectured extensively on options theory and hedging techniques, having participated in many industry-sponsored events, and has written numerous published papers and articles on options strategies. Among them are: 'Options Alphabet Soup,' 'Looking Askew at Volatility,' 'Hedging First- and Second-Order Sensitivities of Options' ('Learning Curve' article in Derivatives Week), 'Volatility Cones Come in Many Flavors' (co-authored with Robert Krause, for Futures Magazine), 'Hedging Imperfect Baskets' (co-authored with Robert Krause, for Derivatives Strategy magazine), and 'Volatility Trading: RealVol futures Jump into the Mix' (co-authored with Robert Krause, for Swiss Derivatives Review). In 1996, Don was part of the third-place 'All-America Research Team,' named by Institutional Investor, which commented: 'The group's 'top notch' educational seminars, under the direction of Donald Schlesinger, demystify derivatives, according to a participant.' In 1991-92, Schlesinger was the featured speaker in over 100 presentations of Morgan Stanley's PERCS product to institutional clients in the U.S. and Europe. Since leaving the firm, Don has continued to lecture at Morgan Stanley and has also done training and presentations for Goldman Sachs,

Lehman Brothers, Deutsche Bank, Credit Suisse First Boston, the Options Industry Council, and Electronic Trading Group. As a former teacher in the New York City school system, Schlesinger taught high school-level mathematics and French for 16 years. He holds Master of Philosophy and M.A. degrees in French from the City University of New York, and a B.S. in mathematics, cum laude, from The City College of New York. Work experience: https://www.linkedin.com/in/don-schlesinger-75226847/

**Name**

Robert Krause

**Principal occupation and employment responsibilities during at least the last three (3) years with start and ending dates**

| Start Date | End Date | Company | Position / Title |
| --- | --- | --- | --- |
| 01/01/2018 | Present | Demand Derivatives Corp. | General Counsel |
| 03/01/2018 | 03/31/2020 | O'Neill & Partners, LLC | Of Counsel |
| 09/01/2019 | Present | Law Office of Wendy E. Robinson, LLC | Managing Partner |

Short Bio: Wendy E. Robinson is General Counsel of Demand Derivatives Corp. (since January 2020). She has been Of Counsel to O'Neill & Partners LLC for the past two years (Jan 2018 to present), specializing in assisting existing and start-up businesses with tokenized offerings. She has worked for over 30 years in the financial services industry, serving as General Counsel for The VolX Group Corporation (Jul 2010 to Aug 2017), RealDay Options Corporation (Jan 2014 to Aug 2017), and Event Capital Markets. Prior to these positions, Ms. Robinson was Senior Counsel in PaineWebber's Legal Department, specializing in derivative transactions, stock lending, and corporate governance. Ms. Robinson also worked in the Legal Departments of Smith Barney, Merrill Lynch Futures, and E.F. Hutton, as well as in the Options and Commodities Departments of E.F. Hutton. She served as arbitration counsel with the National Association of Securities Dealers (NASD) and as staff counsel in the Trading and Markets Division of the Commodity Futures Trading Commission (CFTC). Ms. Robinson graduated summa cum laude from the University of Bridgeport and received her J.D. from Rutgers University School of Law - Newark. Ms. Robinson is admitted to the bar in New York, New Jersey, and California, and admitted to practice in the U.S. District Courts for the District of New Jersey and the Northern District of California, as well as the U.S. Court of Appeals for the Ninth Circuit. She has served as a member of the National Futures Association (NFA) Business Conduct Committee and as chairperson of hearing panels of the NFA Hearing Committee. Work experience: https://www.linkedin.com/in/wendy-robinson-49490a32/

**Name**

Robert Krause

**Principal occupation and employment responsibilities during at least the last three (3) years with start and ending dates**

| Start Date | End Date | Company | Position / Title |
| --- | --- | --- | --- |
| 08/08/2017 | Present | Demand Derivatives Corp. | CEO |

Short Bio: Prior to founding Demand Derivatives, Mr. Robert Krause was Chairman and Chief Executive Officer of both The VolX Group Corporation (realized volatility indices and derivative instruments) and RealDay Options Corporation (delayed-strike daily options). Robert was also the Founder and Manager of HFDDX Corporation, a pioneering firm promoting cost sharing of comprehensive hedge fund due diligence services. Previously, Robert was Senior Vice President at Zurich Capital Markets. Within the Risk Management Division, he headed the group performing credit assessment for a portfolio of over 700 hedge funds with exposure close to $14 billion. He was also a senior member on the investment committee for Javelin, an actively managed fund of funds with assets over $1 billion. Previously, he was Executive Vice President, Alternative Investments at Mitsui Commodities where he oversaw the managed-futures, hedge fund, and private equity product lines. Before that, Robert was Vice President, Institutional Equity Derivatives at Morgan Stanley. There, he led the institutional training and education effort, and was the

Editor-in-Chief of the quantitative research monthly magazine. Mr. Krause was a registered Commodity Trading Advisor, who brought volatility trading to the managed-futures industry. He was also with the Chicago Mercantile Exchange (CME) as the Manager, Option Products Marketing, and Director, GLOBEX Marketing. Work experience: https://www.linkedin.com/in/robert-krause-33303920/

## Principal Security Holders

5. Provide the name and ownership level of each person, as of the most recent practicable date, who is the beneficial owner of 20 percent or more of the issuer's outstanding voting equity securities, calculated on the basis of voting power. To calculate total voting power, include all securities for which the person directly or indirectly has or shares the voting power, which includes the power to vote or to direct the voting of such securities. If the person has the right to acquire voting power of such securities within 60 days, including through the exercise of any option, warrant or right, the conversion of a security, or other arrangement, or if securities are held by a member of the family, through corporations or partnerships, or otherwise in a manner that would allow a person to direct or control the voting of the securities (or share in such direction or control - as, for example, a co-trustee) they should be included as being "beneficially owned." You should include an explanation of these circumstances in a footnote to the "Number of and Class of Securities Now Held." To calculate outstanding voting equity securities, assume all outstanding options are exercised and all outstanding convertible securities converted.

### Robert Krause

| Securities: | 732,631 |
| --- | --- |
| Class: | Preferred Stock |
| Voting Power: | 33.6% |

## Business and Anticipated Business Plan

6. Describe in detail the business of the issuer and the anticipated business plan of the issuer.

Demand Derivatives Corp. is the parent company for the forthcoming innovative, vertically integrated futures exchange RealDemand Board of Trade ("RealBOTTM") and its dedicated clearing house RealDemand Clearing ("RealClearTM") (upon CFTC and SEC approval). The company's four unique instrument designs and pioneering blockchain technology aim to pose a significant competitive challenge to the legacy systems, "unlimited" risk instruments, high costs, and inefficient products of existing exchanges and clearing houses. TODAY'S PROBLEMS: Our opinion is that exchange-traded derivatives are on a collision course with destiny. The financial system must still obey the immutable law of risk vs. reward. On a macro scale, there have been instances where the financial system has been stressed to the point of near collapse. On a micro-scale, costs are high and few options exist for participants to control risk. Because of the near-monopolies in this industry, there is a single point of failure with no viable competitor/backup option. Even if there is no failure, exchanges and clearing houses seem to be concerned only with extracting higher and higher fees from the trading community. SOLUTION: Demand Derivatives aims to provide much-needed competition in this industry. We hope to break through those near monopolies by offering better products at lower costs with reduced risk and greater precision. This could be accomplished by launching a U.S.-regulated futures exchange and clearing house. The key to its success will be the combination of four innovative instrument designs, fully collateralized positions, and a modified form of blockchain clearing.

Demand Derivatives currently has 4 employees.

## Risk Factors

*A crowdfunding investment involves risk. You should not invest any funds in this offering unless you can afford to lose your entire investment.*

*In making an investment decision, investors must rely on their own examination of the issuer and the terms of the offering, including the merits and risks involved. These securities have not been recommended or approved by any federal or state securities commission or regulatory authority. Furthermore, these authorities have not passed upon the accuracy or adequacy of this document.*

*The U.S. Securities and Exchange Commission does not pass upon the merits of any securities offered or the terms of the offering, nor does it pass upon the accuracy or completeness of any offering document or literature.*

*These securities are offered under an exemption from registration; however, the U.S. Securities and Exchange Commission has not made an independent determination that these securities are exempt from registration.*

### 7. Material factors that make an investment in Demand Derivatives Corp. speculative or risky:

1. We may not obtain all the regulatory approvals to operate as either an exchange or a clearing firm. Our business will be required to obtain approval to operate as an exchange or as a clearing firm. Failure to complete the application process, qualify all of our control persons, including board members and officers, hire a sufficient number of qualified individuals and obtain the full amount of capital that we seek to raise in this offering statement will have a significant impact on our ability to commence business operations. To become a clearing member, a firm is required to meet certain minimum capital requirements and to deposit collateral to meet the performance bond and guaranty fund requirements. To the extent a clearing firm is not compliant with capital, margin, or guaranty fund requirements, it may be required to come into compliance promptly by adding capital or collateral, decreasing its proprietary trading activity, and/or transferring customer accounts to another clearing firm. If we are unable to bring enough cash into the business to be compliant with capital requirements and to pay the staff, you will lose your entire investment.
2. We will likely face intense competition from other companies. If we are not able to compete successfully, our business, financial condition, and operating results will be materially harmed. The industry in which we will operate is highly competitive and we expect competition to continue to intensify, especially in light of the implementation of Dodd-Frank and other reforms of the financial services industry. There are currently at least eight other U.S. futures exchange operators, including CME Group, the Intercontinental Exchange (ICE) and the Chicago Board Options Exchange, three of the largest exchanges, by market share, in our industry. We believe portions of Dodd-Frank and the corresponding regulations with respect to mandatory clearing and organized trading provide opportunities for our business. However, other reforms could negatively impact us and our ability to compete effectively. We will likely encounter competition in all aspects of our business, including from entities having substantially greater capital and resources, offering a wide range of products and services, and in some cases operating under a different and possibly less stringent regulatory regime. We face competition from other futures, securities, and securities option exchanges; over-the-counter markets; clearing organizations; consortia formed by our members and large industry participants; swap execution facilities; alternative trade execution facilities; technology firms, including market data distributors and electronic trading system developers, and others. Many of our competitors and potential competitors have greater financial, marketing, technological, and personnel resources than we do. Our competitors may: respond more quickly to competitive pressures, including responses based upon their corporate governance structures, which may be more flexible and efficient than ours; develop products that are preferred by our customers; develop competitive risk transfer and volatility

control products; price their products and services more competitively; develop, expand, market, and promote their product and service offerings more effectively; deploy and expand their network infrastructure more efficiently; adopt and utilize more user-friendly and reliable technology; form more effective alliances and partnerships and take better advantage other strategic opportunities such as mergers and acquisitions, and exploit regulatory disparities between traditional regulated exchanges and alternative markets that benefit from a reduced regulatory burden and lower-cost business model. Our contract volume, and consequently our revenues and profits, would be adversely affected if we are unable to attract and retain customers as we anticipate. If our products and services are not competitive, our ability to attract and retain customers will be negatively impacted and our revenues could be lower than expected, resulting in lower-than-expected profitability, and our business, financial condition, and operating results would be materially harmed.

3. The success of our business will depend, in part, on our ability to generate and maintain contract volume. To do so, we must offer an innovative suite of product offerings in order to attract customers to our new exchange and clearing facilities, RealBOT and RealClear. Our success will also depend on our ability to offer competitive products and services in an increasingly price-sensitive business. For example, some of our competitors have engaged in aggressive pricing strategies in the past, such as lowering the fees that they charge for taking liquidity and increasing liquidity payments or rebates. We cannot provide assurances that we will be able to continue to develop and expand our product lines, that we will be able to attract and retain customers and continue to attract new customers, or that we will not be required to modify our pricing structure to compete effectively. Changes in our pricing structure may result in a decrease in our profit margin. Additionally, from time to time, certain customers may represent a significant portion of the open interest in our individual product lines or contracts. If we fail to maintain our contract volume, fail to expand our product offerings or execution facilities, fail to attract and retain a substantial number of new customers, or lose a subset of customers representing a significant percentage of contract volume in a particular product line, our business and revenues will be adversely affected. Furthermore, declines in contract volume due to loss of customers may negatively impact market liquidity, which could lead to further loss of contract volume.

4. Our role in the global financial marketplace could place us at greater risk than many other companies for a cyber attack and other cybersecurity risks. Our technology, our people, our partners, our third-party service providers, and our customers may be vulnerable to cybersecurity threats, which could result in the wrongful use of our information or cause interruptions in our operations that lead us to lose customers and contract volume, and could give rise to substantial liabilities. We also could be required to incur significant expense to protect our systems and/or investigate any alleged attack. We regard the secure transmission of confidential information and the ability to continuously transact and clear on our electronic trading platforms as critical elements of our operations. Our technology, our people, our partners, our third-party service providers, and our customers may be vulnerable to targeted attacks, unauthorized access, fraud, computer viruses, denial of service attacks, terrorism, "ransom" attacks, firewall or encryption failures, and other security problems. Criminal groups, political activist groups, and nation-state actors have targeted the financial services industry and our role in the global marketplace could place us at greater risk than many other companies for a cyber attack and other information security threats. The company will design its cyber defense program to mitigate such attacks by a preventative, detective, and responsive measures. Our usage of mobile and cloud technologies may increase our risk of a cyber attack. Our security measures may also be breached due to employee error, malfeasance, system errors, or vulnerabilities. Additionally, outside parties may attempt to fraudulently induce employees, partners, or customers to disclose sensitive information in order to gain access to our technology systems and data, or our customers' data. Any such breach or unauthorized access could result in significant legal and financial exposure, damage to our reputation and a loss of confidence in the services we provide that could potentially have an adverse effect on our business while resulting in regulatory penalties or the imposition of burdensome obligations by regulators. In addition, as the regulatory environment related to information security, data collection, and use, and privacy becomes increasingly rigorous, with new and constantly changing requirements applicable to our business, compliance with those requirements could also result in additional costs and may carry significant penalties for non-compliance. Additionally, our anticipated

role as a leading derivatives marketplace and the operation of our technology platforms may place us at greater risk for misappropriation of our intellectual property, and persons who circumvent security measures could wrongfully use or steal our information or cause interruptions or malfunctions in our operations. As part of our global information security program, we will employ resources to monitor and protect our technology infrastructure and employees against such cyber attacks, including the rapid response to zero-day vulnerabilities, and the potential misappropriation of our intellectual property assets. However, our security measures or those of our partners and third-party service providers, including any cloud-based technologies, may prove insufficient depending upon the attack or threat posed. Any security attack or breach could result in system failures and delays, loss of customers and lower contract volume, loss of competitive position, damage to our reputation, disruption of our business, legal liability or regulatory fines, and significant costs, which in turn, may cause our revenues and earnings to decline. Though we will have insurance against some cyber risks and attacks, we may be subject to litigation and financial losses that exceed our policy limits or are not covered under any of our prospective insurance policies.

5. As a financial services provider, we will be subject to significant litigation risk and potential commodity and securities law liability. Many aspects of our business will involve substantial litigation risks. While we generally will be protected by our rules limiting liability for system failures and certain forms of negligence and by statutory limits on the ability to bring private causes of action in cases where we have not acted in bad faith, we could be exposed to substantial liability under federal and state laws and court decisions, as well as rules and regulations promulgated, and/or direct actions brought, by the CFTC and the SEC. These risks include, among others, potential liability from disputes over terms of trade, the claim that a system failure or delay caused monetary losses to a customer, that we entered into an unauthorized transaction, that we provided materially false or misleading statements in connection with a transaction, or that we failed to effectively fulfill our regulatory oversight responsibilities. We may be subject to disputes regarding the quality of trade execution, the settlement or clearing of trades, or other matters relating to our services. We may become subject to these claims as a result of failures or malfunctions of our systems and services we will provide. We could incur significant legal expenses defending claims, even those without merit. In addition, an adverse resolution of any future lawsuit or claim against us could have a material adverse effect on our business and our reputation. To the extent we are found to have failed to fulfill our regulatory obligations, we could lose our authorizations or licenses or become subject to conditions that could make future operations more costly, impairing our profitability.
6. In recent years, some independent clearing firms have indicated their belief that clearing facilities should not be owned or controlled by exchanges and should be operated as utilities and not for profit. These clearing firms have sought, and may seek in the future, legislative or regulatory changes that would, if adopted, enable them to use alternative clearing services for positions established on our exchanges or to freely move open positions among clearing houses in order to take advantage of our liquidity. Even if they are not successful, these factors may cause them to limit the use of our markets. Our clearing house will seek to offer customers, intermediaries, and clearing firms universal access in order to maximize the efficient use of capital, exercise appropriate oversight of value at risk and maintain operating leverage from clearing activities. Our strategic business plan is to operate an efficient and transparent, vertically integrated transaction execution, clearing, and settlement business for our futures and options on futures business. We expect that the business model will appeal to our prospective customers, but market participants who have relationships with other clearing organizations may welcome the ability to clear trades executed on our exchange with such other clearing organizations, and thereby reduce the revenue we would realize from clearing such trades.
7. We may be at greater risk from terrorism than other companies: We may be more likely than other companies to be a direct target of, or an indirect casualty of, attacks by terrorists or terrorist organizations. It is impossible to accurately predict the likelihood or impact of any terrorist attack on the derivatives industry generally or on our business. While we plan to implement significant physical security protection measures, business continuity plans, and established backup sites, in the event of an attack or a threat of an attack, these security measures, and contingency plans may be inadequate to prevent significant disruptions in our business, technology, or access to the infrastructure necessary to

maintain our business. Such attacks may result in the closure of our trading and clearing facilities or render our backup data and recovery systems inoperable. Damage to our facilities due to terrorist attacks may be significantly in excess of any amount of insurance we carry, or we may not be able to insure against such damage at a reasonable price or at all. The threat of terrorist attacks may also negatively affect our ability to attract and retain employees. Any of these events could have a material adverse effect on our business, financial condition, and operating results.

8. Indemnification Obligations: The Company is obligated to indemnify a person or entity who is or was an officer, director or stockholder of the Company or an affiliate of an officer, director or stockholder of the Company against certain liabilities incurred because such person or entity is or was acting as an officer, director or stockholder of the Company if such person's or entity's conduct was not the result of gross negligence or willful misconduct on the part of such person, for violations of federal or state securities laws or for any intentional or criminal wrongdoing. If the Company was required to indemnify such parties, the Company would have to expend the Company's capital, thereby reducing the number of funds available for use in the Company to distribute to the Stockholders.
9. No guarantee of dividends: The cash flow of the Company will depend entirely on the cash flow from the licensing of its proprietary products to exchanges or financial institutions and, therefore, if the licensing agreements do not produce licensing revenue for the Company, then the Company will be unable to make dividends to the Stockholders.
10. The Company will be heavily dependent on the capacity, reliability and security of the computer and communications systems and software supporting its operations. The Company will conduct a large portion of its operations through electronic means, such as through public and private communications networks. Its systems, or those of its third-party providers, may fail or be shut down or, due to capacity constraints, may operate slowly, causing one or more of the following to occur: We cannot assure you that the Company will not experience systems failures from power or telecommunications failure, acts of God, war or terrorism, human error on our part or on the part of vendors, natural disasters, fire, sabotage, hardware or software malfunctions or defects, computer viruses, cyber-attacks, acts of vandalism or similar occurrences. If any of the Company's systems do not operate properly, are compromised or are disabled, including as a result of system failure, employee or customer error or misuse of its systems, we could suffer financial loss, liability to customers, regulatory intervention or reputational damage that could affect demand by current and potential users of the Company's products. Damage to our reputation could damage our business. Maintaining our reputation is critical to attracting and retaining customers and investors and for maintaining our relationships with regulators. Negative publicity regarding our company or actual, alleged or perceived issues regarding the Company's products or services could give rise to reputational risk which could significantly harm our business prospects. These issues may include, but are not limited to, any of the risks discussed in this section, including risks from trading disputes, system failures or intrusions, failures to meet regulatory obligations, third party suppliers, misconduct and ineffective risk management. The success of our markets will depend on our ability to complete the development of, successfully implement, and maintain electronic trading and clearing systems that have the functionality, performance, reliability, and speed required by our customers.
11. The success of our business will depend in large part on our ability to create interactive electronic marketplaces, in a wide range of derivatives products, that have the required functionality, performance, capacity, reliability, and speed to attract and retain customers. We must continue to enhance our electronic trading platform and other technology offerings to remain competitive. As a result, we will continue to be subject to risks, expenses, and uncertainties encountered in the rapidly evolving market for electronic transaction services. These risks include our failure or inability to: provide reliable, cost-effective services to our customers; develop the required functionality to support electronic trading in our key products in a manner that is competitive with the functionality offered by other electronic markets; maintain a competitive cost and fee structure; attract independent software vendors to develop front-end user interface systems to effectively access our electronic trading system and automated order routing system; respond to technological developments or service offerings by competitors, and generate sufficient revenue to justify the substantial capital investment required to enhance our electronic trading platform and other technology offerings. If we do not successfully

enhance our electronic trading systems and technology offerings, if we are unable to develop them to include other products and markets or if they do not have the required functionality, performance, capacity, reliability, and speed desired by our customers, our ability to successfully compete and our revenues and profits will be adversely affected. Additionally, we will rely on our customers' ability to have the necessary back-office functionality to support our new products and our trading and clearing functionality. To the extent our customers are not prepared and/or lack the resources or infrastructure, the success of our new initiatives may be compromised. If we experience systems failures or capacity constraints, our ability to conduct our operations and execute our business strategy could be materially harmed and we could be subjected to significant costs and liabilities.

12. Our business will be highly dependent on our ability to process and monitor, on a daily basis, a large number of transactions that occur at high volume and frequencies across multiple systems. We will be heavily reliant on the capacity, reliability, and security of the computer and communications systems and software supporting our operations. Our systems, or those of our partners and third-party providers, including cloud providers, may fail or be shut down or, due to capacity constraints, may operate slowly, causing one or more of the following to occur: unanticipated disruptions in service to our customers; slower response times and delays in our customers' trade execution and processing; failed settlement of trades; incomplete or inaccurate accounting, recording, or processing of trades; financial losses; security breaches; litigation or other customer claims; loss of customers; and regulatory sanctions. We will also be highly dependent on our key technology partner, GMEX Technology Limited, a wholly owned subsidiary of GMEX Group ('GMEX'), a provider of exchange trading, clearing house, depository, and warehouse receipts technology. GMEX will provide DDC with a high-performance multi-asset exchange trading system, a market surveillance system, a web-deployable order management system, a clearing system, a depository system, and a registry system in addition to a system to trade and settle warehouse receipts. Our exchange, RealBOT, and our clearing house, RealClear, will each utilize these systems provided by GMEX. We cannot assure you that we or our partners or service providers will not experience systems failures from power or telecommunications failure, acts of God, war or terrorism, human error on our part or on the part of our vendors, natural disasters, fire, sabotage, hardware or software malfunctions or defects, computer viruses, cyber attacks, acts of vandalism or similar occurrences. If any of our systems or the systems of our partners and third-party providers do not operate properly, are compromised, or are disabled, including as a result of system failure, or employee or customer error or misuse of our systems, we could suffer financial loss, liability to customers, regulatory intervention, or reputational damage that could adversely affect customer demand for our products and services. From time to time, system errors and failures may occur that result in some customers being unable to connect to our electronic trading platforms and technology offerings, or that result in erroneous reporting, such as transactions that were not authorized by any customer or reporting of filled orders as canceled. Such errors may result in DDC being liable, or in our voluntary assumption of financial liability. We cannot assure you that if we experience system errors or failures in the future that they will not have a material adverse impact on our business. Any such system failures that cause an interruption in service or decrease our responsiveness could impair our reputation, damage our brand, or have a material adverse effect on our business, financial condition, and operating results. Our status as a CFTC registrant will generally require that our trade execution and communications systems be able to handle anticipated present and future peak contract volume. Heavy use of our computer systems during peak trading times or at times of unusual market volatility could cause our systems to operate slowly or even to fail for periods of time. We will constantly monitor system loads and performance, and regularly implement system upgrades to handle estimated increases in contract volume. However, we cannot assure you that our estimates of future contract volume and order messaging traffic will be accurate or that our systems will always be able to accommodate actual contract volume and order messaging traffic without failure or degradation of performance. Increased contract volume and order messaging traffic may result in connectivity problems or erroneous reports that may affect customers. System failure or degradation could lead our customers to file formal complaints with industry regulatory organizations, to file lawsuits against us, or to cease doing business with us, or could lead the CFTC or other

regulators to initiate inquiries or proceedings for failure to comply with applicable laws and regulations.

13. We will need to continue to upgrade, expand and increase the capacity of our systems as our business grows and as we execute our business strategy. Although many of our systems are designed to accommodate additional volume and products and services without redesign or replacement, we will need to continue to make significant investments in additional hardware and software to accommodate the increases in the volume of transactions and order transaction traffic and to provide processing services to third parties. If we cannot increase the capacity and capabilities of our systems to accommodate an increasing volume of transactions and to execute our business strategy, our ability to maintain or expand our businesses would be adversely affected.
14. We, as well as many of our customers, will depend on third-party suppliers and service providers for a number of services that are important. Interruption or cessation of a vital supply or service by any third party could have a material adverse effect on our business, including revenues derived from our customers' trading activity. We will depend on a number of additional suppliers, such as banking, other clearing and settlement organizations, telephone companies, on-line service providers, data processors, cloud hosting providers, data center providers, and software and hardware vendors, for elements of our trading, clearing, and other systems, as well as communications and networking equipment, computer hardware and software, and related support and maintenance. Many of our customers will likely rely on third parties, such as independent software vendors, to provide them with front-end systems to access our platform and other back-office systems for their trade processing and risk management needs. While we will undertake to assist these service providers in keeping current with our enhancements and changes to our interfaces and functionality, we cannot guarantee that they will continue to make the necessary monetary and time investments to keep up with our changes. To the extent any of our service providers or the organizations that provide services to our customers in connection with their trading activities cease to provide these services in an efficient, cost-effective manner or fail to adequately expand their services to meet the needs of our customers, we could experience decreased contract volume, lower revenues, and higher costs.
15. Our clearing house operations will expose us to the substantial credit risk of our clearing firms and, consequently, a diminishment in their financial resources could adversely affect us. Our clearing house operations will expose us to counterparties with differing risk profiles. We will routinely guarantee transactions submitted by our clearing firms with counterparties in the financial industry, including brokers and dealers, commercial banks, investment banks, mutual and hedge funds, and other institutional customers. We could be adversely impacted by the financial distress or failure of one or more of our clearing firms. A substantial part of our working capital may be at risk if a clearing firm defaults on its obligations to the clearing house and its margin and guaranty fund deposits are insufficient to meet its obligations. Although we have policies and procedures to help ensure that our clearing firms can satisfy their obligations, these policies and procedures may not succeed in detecting problems or preventing defaults. We also have in place various measures intended to enable us to cure any default and maintain liquidity. However, we cannot assure you that these measures will be sufficient to protect market participants from a default or that we will not be adversely affected in the event of a significant default. The required capital and posted collateral of our clearing firms may lose value given the volatility of the market. To become a clearing member, a firm may be required to meet certain minimum capital requirements and to deposit collateral to meet performance bond and guaranty fund requirements. We will likely accept only cash as collateral to satisfy these requirements. To the extent a clearing firm is not compliant with capital, margin, or guaranty fund requirements, it may be required to come into compliance promptly by adding capital or collateral, decreasing its proprietary trading activity, and/or transferring customer accounts to another clearing firm. These actions could result in a decrease in trading activity in our products.
16. Intellectual property rights licensed from third-party price reporting agencies form the basis for many of our products from which we will derive a significant portion of our volume and revenue. Regulatory scrutiny into such benchmarks could have a negative impact on our ability to offer such products. We will be significantly dependent on the contract volume of products that are based on the intellectual property rights of indexes derived from third-party price reporting agencies. To comply

with CFTC core principles, we must be able to demonstrate that our products may not be readily subject to manipulation. If we are unable to meet that standard, we may be prohibited from employing the indexes to structure our products. Our inability to offer products based on these indexes could have a negative impact on our contract volume and revenues.

1. 17. Our market data revenues may be reduced by decreased demand, poor overall economic conditions, or a significant change in how market participants trade and use market data. We will sell our market data to individuals, trading institutions, and other organizations that use our information services to participate in our markets and/or monitor general economic conditions. A decrease in overall contract volume in our markets, or more broadly in U.S. or global markets, may lead to a decreased demand for our market data and reduce its value as a revenue source that contributes to our overall financial condition.
2. 18. We may have difficulty executing our growth strategy and maintaining our growth effectively. We continue to focus on strategic initiatives to differentiate our business, including our efforts to develop, list, and trade new and innovative instruments such as forward-starting daily options and limited risk futures. There is no guarantee that our efforts will be successful. Our growth and success will require additional investment in personnel, facilities, information technology infrastructure, and financial and management systems and controls and may place a significant strain on our management and resources. For example, if we encounter limited resources, we may be required to increase our expenses to obtain the necessary resources, defer existing initiatives, or not pursue certain opportunities. We may not be successful in implementing all of the processes that are necessary to support our growth organically or, as described below, through acquisitions, other investments, or strategic alliances. Our growth strategy also may subject us to increased legal, compliance, and regulatory obligations. Unless our growth results in an increase in our revenues that is proportionate to the increase in our costs associated with our growth, our future profitability could be adversely affected, and we may have to incur significant expenditures to address the additional operational and control requirements as a result of our growth. We may explore acquisitions, other investments, and strategic alliances. We may not be successful in identifying opportunities or in integrating the acquired businesses. Any such transaction may not produce the results we anticipate, which could adversely affect our business and our Share value. We may explore and pursue acquisitions and other strategic opportunities to strengthen our business and grow our company. We may make acquisitions or investments or enter into strategic partnerships, joint ventures, and other alliances. The market for such transactions is highly competitive, especially in light of historical merger and acquisition activity in our industry. As a result, we may be unable to identify strategic opportunities or we may be unable to negotiate or finance future transactions on terms favorable to us, which could impact our ability to identify growth opportunities. We may finance future transactions by issuing additional equity and/or debt. The issuance of additional equity in connection with any future transaction could be substantially dilutive to our existing shareholders. The issuance of additional debt could increase our leverage substantially. The process of integration also may produce unforeseen regulatory and operating difficulties and expenditures and may divert the attention of management from the ongoing operation of our business. To the extent we enter into joint ventures and alliances, we may experience difficulties in the development and expansion of the business of any newly formed ventures, in the exercise of influence over the activities of any ventures in which we do not have a controlling interest, as well as encounter potential conflicts with our joint venture or alliance partners. We may not realize the anticipated growth and other benefits from our growth initiatives and investments, which may have an adverse impact on our financial condition and operating results. We also may be required to take an impairment charge in our financial statements relating to our acquisitions and/or investments, which could negatively affect our Shares' value.
3. 19. Our compliance and risk management programs might not be effective and may result in outcomes that could adversely affect our reputation, financial condition, and operating results. In the normal course of our business, we anticipate the need to discuss matters with our regulators raised during regulatory examinations, or we may otherwise become subject to their inquiry and oversight. The CFTC and SEC have broad enforcement powers to censure, fine, issue cease-and-desist orders, prohibit us from engaging in some of our businesses or suspend or revoke our designation as a

contract market or the registration of any of our officers or employees who violate applicable laws or regulations. Our ability to comply with applicable laws and rules is largely dependent on our establishment and maintenance of compliance, review, and reporting systems, as well as our ability to attract and retain qualified compliance and other risk management personnel. We face the risk of significant intervention by regulatory authorities, including extensive examination and surveillance activity. In the case of alleged non-compliance with applicable laws or regulations, we could be subject to investigations and judicial or administrative proceedings that may result in substantial penalties or civil lawsuits, including by customers, for damages, which could be significant. Any of these outcomes may adversely affect our reputation, financial condition, and operating results. In extreme cases, these outcomes could adversely affect our ability to conduct our business. Our policies and procedures to identify, monitor, and manage our risks may not be fully effective. Some of our risk management methods will depend upon the evaluation of information regarding markets, customers, or other matters that are publicly available or otherwise accessible by us. That information may not in all cases be accurate, complete, up-to-date, or properly evaluated. Management of operational, financial, legal, regulatory, and strategic risk requires, among other things, policies and procedures to record properly and verify a large number of transactions and events. We cannot assure you that our policies and procedures will always be effective or that we will always be successful in monitoring or evaluating the risks to which we are or may be exposed.

20. We could be harmed by misconduct or errors that are difficult to detect and deter. There have been a number of highly publicized cases involving fraud or other misconduct by employees of financial services firms in the past. Misconduct by our employees and agents could include hiding unauthorized activities from us, improper or unauthorized activities on behalf of customers, or improper use or unauthorized disclosure of confidential information. Misconduct could subject us to financial losses or regulatory sanctions and seriously harm our reputation. It is not always possible to deter misconduct, and the precautions we will take to prevent and detect this activity may not be effective in all cases. Our employees and agents also may commit errors that could subject us to financial claims for negligence, as well as regulatory actions, or result in our voluntary assumption of financial liability.
21. We may not be able to protect our intellectual property rights, which may materially harm our business. We have the rights to nine derivative instrument patents and/or patents pending and a large number of trademarks, service marks, domain names and trade names in the United States. We attempt to protect our intellectual property rights by relying on trademarks, copyright, database rights, trade secrets, restrictions on disclosure, and other methods. Notwithstanding the precautions we take to protect our intellectual property rights, it is possible that third parties may copy or otherwise obtain and use our proprietary technology without authorization or otherwise infringe on our rights. Alternatively, third parties may formally challenge our intellectual property rights, as CME Group did, unsuccessfully, in both 2015 and again in 2016. We may need to rely on litigation or administrative proceedings to enforce our intellectual property rights, protect our trade secrets, determine the validity and scope of the proprietary rights of others, or defend against claims of infringement or invalidity. Any such litigation, whether successful or unsuccessful, could result in substantial costs to us and diversions of our resources, either of which could adversely affect our business. Any infringement by us on the patent rights of others could result in litigation and adversely affect our ability to continue to provide or increase the cost of providing our products and services. Patents of third parties may have an important bearing on our ability to offer certain products and services. Our competitors, as well as other companies and individuals, may obtain and may be expected to obtain in the future, patents related to the types of products and services we offer or plan to offer. We cannot assure you that we are or will be aware of all patents containing claims that may pose a risk of infringement by our products and services. In addition, some patent applications in the United States are confidential until a patent is issued and, therefore, we cannot evaluate the extent to which our products and services may be covered or asserted to be covered by claims contained in pending patent applications. These claims of infringement are not uncommon in our industry. In general, if one or more of our products or services were to infringe on patents held by others, we may be required to stop developing or marketing the products or services, to obtain licenses to develop and market the services from the holders of the patents, or to redesign the products or services in such a way as to avoid infringing on the patent

claims. We cannot assess the extent to which we may be required in the future to obtain licenses with respect to patents held by others, whether such licenses would be available or, if available, whether we would be able to obtain such licenses on commercially reasonable terms. If we were unable to obtain such licenses, we may not be able to redesign our products or services to avoid infringement, which could materially adversely affect our business, financial condition, and operating results.

1. 22. Loss of exclusive licenses could materially harm our business: We may obtain exclusive licenses to list various index futures and contracts. In the future, litigation or regulatory action may limit the right of owners to grant exclusive licenses for index futures and contracts trading to a single exchange, and our competitors may succeed in providing economically similar products in a manner or jurisdiction not otherwise covered by our exclusive license. For example, MiFID II introduced a harmonized approach to the licensing of services relating to commodity derivatives across Europe and the legislation requires open access to any benchmarks (a benchmark is an index or other measure used to determine the value of a financial instrument, for example, LIBOR or the S&P 500) used in Europe. If unlicensed trading of any index product where we hold an exclusive license was permitted, we could lose trading volume for these products, which would adversely affect our revenues associated with the license and the related index products. The Company will be subject to the impact of domestic and international market, economic and political conditions that are beyond our control and that could significantly reduce its contract volumes and make our financial results more volatile. The revenue of the Company will be substantially dependent on the contract volume in the markets it serves. The contract volume is directly affected by domestic and international factors that are beyond our control, including: Any one or more of these factors may contribute to reduced activity in our markets. Material decreases in trading volume would have a material adverse effect on our financial condition and operating results. The Company's will be subject to the risk of a cyber-attack and other cybersecurity risks. The Company's technology, its employees and its third-party service providers may be vulnerable to cybersecurity threats, which could result in the wrongful use of the Company's information or cause interruptions in its operations that cause it to lose customers and contract volume, and result in substantial liabilities. We also could be required to incur significant expense to protect the Company's systems and/or investigate any alleged attack. We believe that the secure transmission of confidential information and the ability to continuously transact and clear the Company's products on the trading platforms will be critical elements of its operations. The Company's technology, its employees, its third-party service providers, and its customers may be vulnerable to targeted attacks, unauthorized access, fraud, computer viruses, denial of service attacks, terrorism, firewall or encryption failures and other security problems. Criminal groups, political activist groups, and nation-state actors have targeted the financial services industry and the Company's role in the global marketplace places will place us at greater risk than other companies for a cyber-attack and other information security threats. The Company's security measures may be breached due to employee error, malfeasance, system errors or vulnerabilities. Additionally, outside parties may attempt to fraudulently induce employees, users, or customers to disclose sensitive information in order to gain access to the Company's technology systems and data, or its customers' data. Any such breach or unauthorized access could result in significant legal and financial exposure, damage to the Company's reputation and a loss of confidence in the services it provides that could potentially have an adverse effect on its business while resulting in regulatory penalties or the imposition of burdensome obligations by regulators. In addition, as the regulatory environment related to information security, data collection, and use, and privacy becomes increasingly rigorous, with new and constantly changing requirements applicable to the Company's business, compliance with those requirements could also result in additional costs. The Company will employ resources to monitor and protect its technology infrastructure and employees against such cyber-attacks and the potential misappropriation of its intellectual property assets. However, these measures may prove insufficient depending upon the attack or threat posed, which could result in system failures and delays, loss of customers and lower contract volume, and negatively affect its competitive advantage and result in substantial costs and liabilities.
2. 23. As a financial services provider, the Company will be subject to significant litigation risk and potential commodity and securities law liability. Many aspects of the Company's business will involve substantial litigation risks. While the Company generally will be protected by its rules limiting liability

for system failures and certain forms of negligence and by statutory limits on the ability to bring private causes of actions in cases where it has not acted in bad faith, we could be exposed to substantial liability under federal and state laws and court decisions, as well as rules and regulations promulgated and/or direct actions brought by the SEC and the CFTC. These risks include, among others, potential liability from disputes over terms of a trade, the claim that a system failure or delay caused monetary losses to a customer, that the Company provided materially false or misleading statements in connection with a transaction or that the Company failed to effectively fulfill its responsibilities. The Company's products may be subject to disputes regarding the quality of trade execution, the settlement of trades or other matters relating to its services. The Company may become subject to these claims as a result of failures or malfunctions of its systems and the services it provides. We could incur significant legal expenses defending claims, even those without merit. In addition, an adverse resolution of any future lawsuit or claim against us could have a material adverse effect on our business and our reputation. To the extent we are found to have failed to fulfill our regulatory obligations, the Company could lose its authorizations or licenses or become subject to conditions that could make future operations more costly and impairing our profitability.

24. Additional risks relating to an investment in our Securities: We may incur indebtedness that could adversely affect our financial condition and operations, especially if we are unable to fulfill our debt service obligations. We might still be able to incur more debt, intensifying these risks. In the event that we incur indebtedness, it could have important consequences. For example, any indebtedness may: require us to dedicate a significant portion of our cash flow from operations to payments on our debt, thereby reducing the availability of our cash flows to fund capital expenditures and operations, or to pursue strategic investments or transactions; increase our vulnerability to general adverse economic conditions; limit our flexibility in planning for, or reacting to changes in or challenges to our business and industry, and place us at a competitive disadvantage against any less-leveraged competitors. The occurrence of any one of these events could have a material adverse effect on our business, financial condition, results of operations, prospects, and ability to satisfy our debt service obligations if any. In addition, the agreements governing any indebtedness we incur may not significantly limit our ability to incur additional indebtedness, which could increase the risks described above to the extent that we incur additional debt. U.S. exchanges and clearing houses also are required to maintain capital as defined by the CFTC, and any obligations we must meet in this regard could limit the resources we have available to service our debt, maintain operations, or pursue our growth strategy. Any reduction in our credit rating could increase the cost of our funding from the capital markets. In light of the difficulties in the financial services industry and the financial markets over the last several years, there can be no assurance that we would be able to earn and maintain an investment-grade credit rating. If we cannot do so it could adversely affect the cost and other terms upon which we are able to obtain funding and increase our cost of capital. The average rate we will charge per contract will be subject to fluctuation due to a number of factors. As a result, you may not be able to rely on our average rate per contract in any particular period as an indication of our future average rate per contract. The average fees we receive per contract, which impacts our operating results, will be subject to fluctuation due to shifts in the mix of products traded, the trading venue, and the mix of customers (whether the customer receives member or non-member fees or participates in one of our various incentive programs) and the impact of our tiered pricing structure. In addition, our members and participants in our various incentive programs generally will be charged lower fees than our non-member customers. Variation in each of these factors is difficult to predict and will have an impact on our average rate per contract in a particular period. Because of this fluctuation, you may not be able to rely on our average rate per contract in any particular period as an indication of our future average rate per contract. If the average amount we receive per contract declines and causes a corresponding decline in revenue that is not offset by an increase in any other income source, the value of our Shares could decline substantially. We anticipate that our cost structure will be largely fixed. If our revenues do not meet expectations and we are unable to reduce our costs, our profitability will be adversely affected. After our initial start-up phase is complete and our contracts begin trading, we anticipate that our cost structure will be largely fixed. If demand for our products and services is less than we expect, we may not be able to adjust our cost structure on a timely basis. In that event, our profitability would be

adversely affected and our capacity for achieving growth would be limited, which could impact the value of our Shares.

25. CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS: This offering statement along with any other presented documents contains forward-looking statements within the meaning of the federal securities laws. These forward-looking statements are not historical facts, but rather are based on our current expectations, estimates, and projections about our Company and our industry. Investors can identify these forward-looking statements by our use of words such as “expect,” “anticipate,” “estimate,” “forecast,” “plan,” “believe,” “seek,” “project,” “strive” and other similar expressions that are intended to identify forward-looking statements. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, these statements are not guarantees of future performance and are subject to certain risks, uncertainties, and other factors, some of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted. All statements other than statements of historical facts included in the Memorandum including, without limitation, the statements regarding financial projections, and elsewhere in this Memorandum, including the SEC Documents incorporated by reference in the Memorandum are forward-looking statements. These risks and uncertainties include those described in “Risk Factors.” Investors should not place undue reliance on these forward-looking statements, which reflect our management’s view only on the date of this Memorandum. The Company undertakes no obligation to update these statements or to report the result of any revision to the forward-looking statements that the Company may make to reflect events or circumstances after the date of this Memorandum or to reflect the occurrence of unanticipated events. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the Cautionary Statements.

26. Risks associated with our industry: Our business will be subject to the impact of the domestic and international market, economic, and political conditions that are beyond our control and that could significantly reduce our contract volumes and make our financial results more volatile. Our revenue will be substantially dependent on the contract volume in our markets. Our contract volume will be directly affected by domestic and international factors that are beyond our control, including: economic, political, and geopolitical market conditions; legislative and regulatory changes affecting our business; restrictions on or increases in costs associated with trading in our markets; financial market trends; trends in industries related to our markets and products; changes in price levels, contract volumes, and volatility in the derivatives markets and in underlying equity, foreign exchange, interest rate, and commodity markets; shifts in global or regional demand or supply in commodities underlying our products; competition; changes in domestic and foreign monetary policy, especially central bank decisions related to quantitative easing; availability of capital to market participants; volume of speculative and hedging activities by market participants; levels of assets under management by market participants; extreme or volatile weather patterns including droughts, hurricanes, and other natural disasters; pandemics affecting our customer base or our ability to operate our markets; and consolidation or expansion within our customer base and our industry. Anyone or more of these factors may contribute to reduced activity in our markets. Historically, periods of heightened uncertainty associated with market disruptions related to any one or more of the above factors have tended to increase futures trading volume due to added hedging activity and the amplified need to manage the risks associated with, or speculate on, volatility in the U.S. equity markets, fluctuations in interest rates, and price changes in the foreign exchange, commodity, and other markets. However, in the period after a material market disturbance, there may persist extreme uncertainties, which may lead to decreased volume due to factors such as reduced risk exposure, lower interest rates, central bank asset purchase programs, and lack of available capital. The shifts in market trading patterns we experienced as a result of the financial crisis of 2008 may or may not recur in the future, and our business will be affected by future economic uncertainties, which could result in decreased trading volume and a more difficult business environment for us. Material decreases in trading volume would have a material adverse effect on our financial condition and operating results.

27. We will operate in a heavily regulated environment that imposes significant costs and competitive burdens on our business. We will be primarily subject to the jurisdiction of regulatory agencies in the

United States, such as the Commodity Futures Trading Commission (“CFTC”) and the Securities and Exchange Commission (“SEC”). Due to the global financial crisis that began in 2008, the United States and numerous other governments have undertaken reviews of the legal framework governing financial markets and have either passed new laws and regulations or are in the process of debating or enacting new laws and regulations that will impact our business. More recently, in the aftermath of the 2016 U.S. Presidential election, the U.S. government has indicated a goal of reforming many aspects of existing financial services regulations. Some of these changes could adversely affect our exchange trading and clearing businesses. In February 2017, President Trump signed an executive order calling for the current U.S. presidential administration to review U.S. financial laws and regulations to determine their consistency with a set of core principles identified in the order. Some areas identified as subject to potential change, amendment, or repeal include the Dodd-Frank Act and the authorities of the Federal Reserve and Financial Stability Oversight Council. In December 2017, the 2017 Tax Act was signed into law and the ultimate impact on our business remains uncertain. While some of these changes may have a positive impact on our business, others could adversely affect our business. Compliance with regulations may require us and our customers to dedicate significant financial and operational resources that could result in some participants leaving our markets or decreasing their trading activity, which would negatively affect our profitability. We have incurred and expect to continue to incur significant additional costs to comply with the extensive regulations that apply to our business. To the extent, the regulatory environment is less beneficial for us or our customers, our business, financial condition, and operating results could be negatively affected. If we fail to comply with applicable laws, rules or regulations, we may be subject to censure, fines, cease-and-desist orders, suspension of our business, removal of personnel or other sanctions, including revocation of our designations as a contract market and derivatives clearing organization. Market disruptions and government intervention in response thereto could have a material impact on our business. World financial markets have from time to time experienced widespread and systemic disruptions, which have produced and may produce government reaction and intervention. Such intervention has in certain instances occurred on an “emergency” basis without giving market participants an opportunity to adapt their trading strategies or undertake risk management over their existing positions. Given the breadth of impact and the speed with which such government action has sometimes occurred, these interventions have also tended to increase uncertainty in various markets and, although perhaps unintentionally, contributed to overall market instability. This situation can be compounded by the sometimes-apparent inconsistency with which government action has been formulated and applied. Such inconsistency has tended to have a further destabilizing effect on world financial markets and, as a result, tended to reduce liquidity in many of these markets. Government intervention may include limiting or prohibiting selected types of trading, making such trading either increasingly difficult or impossible to implement. Any regulatory limitations on selected trading could have a materially adverse impact on our customers’ ability to implement certain trading methods, thereby reducing volume and/or liquidity on our markets, and negatively affect our revenue. It is impossible to predict what impact such disruptions and interventions if they occur, might have on our business.

28. Pandemic Risks: We face risks related to health epidemics and other outbreaks, which could significantly disrupt the Company’s operations and could have a material adverse impact on us. The outbreak of pandemics and epidemics could materially and adversely affect the Company’s business, financial condition, and results of operations. If a pandemic occurs in areas in which we have material operations or sales, the Company’s business activities originating from affected areas, including sales, materials, and supply chain related activities, could be adversely affected. Disruptive activities could include the temporary closure of facilities used in the Company’s supply chain processes, restrictions on the export or shipment of products necessary to run the Company’s business, business closures in impacted areas, and restrictions on the Company’s employees’ or consultants’ ability to travel and to meet with customers, vendors or other business relationships. The extent to which a pandemic or other health outbreak impacts the Company’s results will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of a virus and the actions to contain it or treat its impact, among others. Pandemics can also result in social, economic, and labor instability which may adversely impact the Company’s business.

If the Company's employees or employees of any of the Company's vendors, suppliers or customers become ill or are quarantined and in either or both events are therefore unable to work, the Company's operations could be subject to disruption. The extent to which a pandemic affects the Company's results will depend on future developments that are highly uncertain and cannot be predicted.

29. No governmental agency has reviewed the Company's offering and no state or federal agency has passed upon either the adequacy of the disclosure contained herein or the fairness of the terms of this offering. The exemptions relied upon for this offering are significantly dependent upon the accuracy of the representations of the investors to be made to the Company in connection with this offering. In the event that any such representations prove to be untrue, the registration exemptions relied upon by the Company in selling the securities might not be available and substantial liability to the Company would result under applicable securities laws for rescission or damages.
30. The Company has the right to extend the Offering deadline. The Company may extend the Offering deadline beyond what is currently stated herein. This means that your investment may continue to be held in escrow while the Company attempts to raise the maximum offering amount even after the Offering deadline stated herein is reached. Your investment will not be accruing interest during this time and will simply be held until such time that Offering is closed, at which time it will be released to the Company to be used as set forth herein. Upon or shortly after release of such funds to the Company, the Securities will be issued and distributed to you.
31. Any valuation at this stage is difficult to assess. 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. In addition, there may be additional classes of equity with rights that are superior to the class of equity being sold.
32. Start-up investing is risky. Investing in early-stage companies is very risky, highly speculative, and should not be made by anyone who cannot afford to lose their entire investment. Unlike an investment in a mature business where there is a track record of revenue and income, the success of a startup or early-stage venture often relies on the development of a new product or service that may or may not find a market. Before investing, you should carefully consider the specific risks and disclosures related to both this offering type and the Company
33. Our ability to succeed depends on how successful we will be in our fundraising effort. We plan to diversify fund-raising beyond this campaign, in order to use resources to build the necessary business infrastructure to be successful in the long-term. In the event of competitors being better capitalized than we are, that would give them a significant advantage in marketing and operations.
34. The U.S. Securities and Exchange Commission does not pass upon the merits of any securities offered or the terms of the offering, nor does it pass upon the accuracy or completeness of any offering document or literature.

You should not rely on the fact that our Form C, and if applicable Form D is accessible through the U.S. Securities and Exchange Commission's EDGAR filing system as an approval, endorsement or guarantee of compliance as it relates to this Offering.

35. Neither the Offering nor the Securities have been registered under federal or state securities laws, leading to an absence of certain regulation applicable to the Company.

The securities being offered have not been registered under the Securities Act of 1933 (the "Securities Act"), in reliance on exemptive provisions of the Securities Act. Similar reliance has been placed on apparently available exemptions from securities registration or qualification requirements under applicable state securities laws. No assurance can be given that any offering currently qualifies or will continue to qualify under one or more of such exemptive provisions due to, among other things, the adequacy of disclosure and the manner of distribution, the existence of similar offerings in the past or in the future, or a change of any securities law or regulation that has retroactive effect. If, and to the extent that, claims or suits for rescission are brought and successfully concluded for failure to register any offering or other offerings or for acts or omissions constituting offenses under the Securities Act, the Securities Exchange Act of 1934, or applicable state securities laws, the Company could be

materially adversely affected, jeopardizing the Company's ability to operate successfully. Furthermore, the human and capital resources of the Company could be adversely affected by the need to defend actions under these laws, even if the Company is ultimately successful in its defense.

36. *The Company has the right to extend the Offering Deadline, conduct multiple closings, or end the Offering early.*

The Company may extend the Offering Deadline beyond what is currently stated herein. This means that your investment may continue to be held in escrow while the Company attempts to raise the Minimum Amount even after the Offering Deadline stated herein is reached. While you have the right to cancel your investment up to 48 hours before an Offering Deadline, if you choose to not cancel your investment, your investment will not be accruing interest during this time and will simply be held until such time as the new Offering Deadline is reached without the Company receiving the Minimum Amount, at which time it will be returned to you without interest or deduction, or the Company receives the Minimum Amount, at which time it will be released to the Company to be used as set forth herein. Upon or shortly after release of such funds to the Company, the Securities will be issued and distributed to you. If the Company reaches the target offering amount prior to the Offering Deadline, they may conduct the first of multiple closings of the Offering prior to the Offering Deadline, provided that the Company gives notice to the investors of the closing at least five business days prior to the closing (absent a material change that would require an extension of the Offering and reconfirmation of the investment commitment). Thereafter, the Company may conduct additional closings until the Offering Deadline. The Company may also end the Offering early; if the Offering reaches its target offering amount after 21-calendar days but before the deadline, the Company can end the Offering with 5 business days' notice. This means your failure to participate in the Offering in a timely manner, may prevent you from being able to participate - it also means the Company may limit the amount of capital it can raise during the Offering by ending it early.

37. *The Company's management may have broad discretion in how the Company uses the net proceeds of the Offering.*

Despite that the Company has agreed to a specific use of the proceeds from the Offering, the Company's management will have considerable discretion over the allocation of proceeds from the Offering. You may not have the opportunity, as part of your investment decision, to assess whether the proceeds are being used appropriately.

38. *The Securities issued by the Company will not be freely tradable until one year from the initial purchase date. Although the Securities may be tradable under federal securities law, state securities regulations may apply, and each Investor should consult with his or her attorney.*

You should be aware of the long-term nature of this investment. There is not now and likely will not be a public market for the Securities. Because the Securities offered in this Offering have not been registered under the Securities Act or under the securities laws of any state or non-United States jurisdiction, the Securities have transfer restrictions and cannot be resold in the United States except pursuant to Rule 501 of Regulation CF. It is not currently contemplated that registration under the Securities Act or other securities laws will be affected. Limitations on the transfer of the shares of Securities may also adversely affect the price that you might be able to obtain for the shares of Securities in a private sale. Investors should be aware of the long-term nature of their investment in the Company. Investors in this Offering will be required to represent that they are purchasing the Securities for their own account, for investment purposes and not with a view to resale or distribution thereof.

39. *Investors will not be entitled to any inspection or information rights other than those required by Regulation CF.*

Investors will not have the right to inspect the books and records of the Company or to receive financial or other information from the Company, other than as required by Regulation CF. Other security holders of the Company may have such rights. Regulation CF requires only the provision of an annual report on Form C and no additional information - there are numerous methods by which the Company can terminate annual report obligations, resulting in no information rights, contractual, statutory or otherwise, owed to Investors. This lack of information could put Investors at a disadvantage in general and with respect to other security holders.

40. *The shares of Securities acquired upon the Offering may be significantly diluted as a consequence of subsequent financings.*

Company equity securities will be subject to dilution. Company intends to issue additional equity to future employees and third-party financing sources in amounts that are uncertain at this time, and as a consequence, holders of Securities will be subject to dilution in an unpredictable amount. Such dilution may reduce the purchaser’s economic interests in the Company.

41. The amount of additional financing needed by Company will depend upon several contingencies not foreseen at the time of this Offering. Each such round of financing (whether from the Company or other investors) is typically intended to provide the Company with enough capital to reach the next major corporate milestone. If the funds are not sufficient, Company may have to raise additional capital at a price unfavorable to the existing investors. The availability of capital is at least partially a function of capital market conditions that are beyond the control of the Company. There can be no assurance that the Company will be able to predict accurately the future capital requirements necessary for success or that additional funds will be available from any source. Failure to obtain such financing on favorable terms could dilute or otherwise severely impair the value of the investor’s Company securities.

42. *There is no present public market for these Securities and we have arbitrarily set the price.*

The offering price was not established in a competitive market. We have arbitrarily set the price of the Securities with reference to the general status of the securities market and other relevant factors. The Offering price for the Securities should not be considered an indication of the actual value of the Securities and is not based on our net worth or prior earnings. We cannot assure you that the Securities could be resold by you at the Offering price or at any other price.

43. In addition to the risks listed above, businesses are often subject to risks not foreseen or fully appreciated by the management. It is not possible to foresee all risks that may affect us. Moreover, the Company cannot predict whether the Company will successfully effectuate the Company’s current business plan. Each prospective Investor is encouraged to carefully analyze the risks and merits of an investment in the Securities and should take into consideration when making such analysis, among other, the Risk Factors discussed above.

44. THE SECURITIES OFFERED INVOLVE A HIGH DEGREE OF RISK AND MAY RESULT IN THE LOSS OF YOUR ENTIRE INVESTMENT. ANY PERSON CONSIDERING THE PURCHASE OF THESE SECURITIES SHOULD BE AWARE OF THESE AND OTHER FACTORS SET FORTH IN THIS OFFERING STATEMENT AND SHOULD CONSULT WITH HIS OR HER LEGAL, TAX AND FINANCIAL ADVISORS PRIOR TO MAKING AN INVESTMENT IN THE SECURITIES. THE SECURITIES SHOULD ONLY BE PURCHASED BY PERSONS WHO CAN AFFORD TO LOSE ALL OF THEIR INVESTMENT.

## The Offering

Demand Derivatives Corp. (“Company”) is offering securities under Regulation CF, through Netcapital Funding Portal Inc. (“Portal”). Portal is a FINRA/SEC registered funding portal and will receive cash compensation equal to 4.9% of the value of the securities sold through Regulation CF. Investments made under Regulation CF involve a high degree of risk and those investors who cannot afford to lose their entire investment should not invest.

The Company plans to raise between $10,000 and $411,744 through an offering under Regulation CF. Specifically, if we reach the target offering amount of $10,000, we may conduct the first of multiple or rolling closings of the offering early if we provide notice about the new offering deadline at least five business days prior to such new offering deadline (absent a material change that would require an extension of the offering and reconfirmation of the investment commitment). Oversubscriptions will be allocated on a first come, first served basis. Changes to the offering, material or otherwise, occurring after a closing, will only impact investments which have yet to be closed.

In the event The Company fails to reach the offering target of $10,000, any investments made under the offering will be cancelled and the investment funds will be returned to the investor.

#### **8. What is the purpose of this offering?**

Funds raised in our second crowdfunding round are aimed to be used to advance the company toward launch. Specifically, we plan to use funds to clean up the balance sheet, secure our IP protection, and complete our regulatory applications.

#### **9. How does the issuer intend to use the proceeds of this offering?**

| Uses | If Target Offering Amount Sold | If Maximum Amount Sold |
| --- | --- | --- |
| Intermediary Fees | $490 | $20,175 |
| Compensation for managers | $0 | $80,000 |
| Attorneys for IP Protection | $0 | $40,000 |
| Attorney for Regulatory Applications | $9,510 | $160,000 |
| Accounts Payable | $0 | $111,569 |
| Total Use of Proceeds | $10,000 | $411,744 |

#### **10. How will the issuer complete the transaction and deliver securities to the investors?**

In entering into an agreement on the Netcapital Funding Portal to purchase securities, both investors and Demand Derivatives Corp. must agree that a transfer agent, which keeps records of our outstanding Preferred Stock (the “Securities”), will issue digital Securities in the investor’s name (a paper certificate will not be printed). Similar to other online investment accounts, the transfer agent will give investors access to a web site to see the number of Securities that they own in our company. These Securities will be issued to investors after the deadline date for investing has passed, as long as the targeted offering amount has been reached. The transfer agent will record the issuance when we have received the purchase proceeds from the escrow agent who is holding your investment commitment.

#### **11. How can an investor cancel an investment commitment?**

You may cancel an investment commitment for any reason until 48 hours prior to the deadline identified in the offering by logging in to your account with Netcapital, browsing to the Investments screen, and clicking to cancel your investment commitment. Netcapital will notify investors when the target offering amount has been met. If the issuer reaches the target offering amount prior to the deadline identified in the offering materials, it may close the offering early if it provides notice about the new offering deadline at least five business days prior to such new offering deadline (absent a material change that would require an extension

of the offering and reconfirmation of the investment commitment). If an investor does not cancel an investment commitment before the 48-hour period prior to the offering deadline, the funds will be released to the issuer upon closing of the offering and the investor will receive securities in exchange for his or her investment. If an investor does not reconfirm his or her investment commitment after a material change is made to the offering, the investor's investment commitment will be cancelled and the committed funds will be returned.

#### **12. Can the Company perform multiple closings or rolling closings for the offering?**

If we reach the target offering amount prior to the offering deadline, we may conduct the first of multiple closings of the offering early, if we provide notice about the new offering deadline at least five business days prior (absent a material change that would require an extension of the offering and reconfirmation of the investment commitment). Thereafter, we may conduct additional closings until the offering deadline. We will issue Securities in connection with each closing. Oversubscriptions will be allocated on a first come, first served basis. Changes to the offering, material or otherwise, occurring after a closing, will only impact investments which have yet to be closed.

## Ownership and Capital Structure

### The Offering

#### **13. Describe the terms of the securities being offered.**

We are issuing Securities at an offering price of $16 per share.

#### **14. Do the securities offered have voting rights?**

The Securities are being issued with voting rights. However, so that the crowdfunding community has the opportunity to act together and cast a vote as a group when a voting matter arises, a record owner will cast your vote for you. Please refer to the record owner agreement that you sign before your purchase is complete.

#### **15. Are there any limitations on any voting or other rights identified above?**

You are giving your voting rights to the record owner, who will vote the Securities on behalf of all investors who purchased Securities on the Netcapital crowdfunding portal.

#### **16. How may the terms of the securities being offered be modified?**

We may choose to modify the terms of the securities before the offering is completed. However, if the terms are modified, and we deem it to be a material change, we need to contact you and you will be given the opportunity to reconfirm your investment. Your reconfirmation must be completed within five business days of receipt of the notice of a material change, and if you do not reconfirm, your investment will be canceled and your money will be returned to you.

### Restrictions on Transfer of the Securities Offered

The securities being offered may not be transferred by any purchaser of such securities during the one-year period beginning when the securities were issued, unless such securities are transferred:

- to the issuer;

- to an accredited investor;
- as part of an offering registered with the U.S. Securities and Exchange Commission; or
- to a member of the family of the purchaser or the equivalent, to a trust controlled by the purchaser, to a trust created for the benefit of a member of the family of the purchaser or the equivalent, or in connection with the death or divorce of the purchaser or other similar circumstance.

The term “accredited investor” means any person who comes within any of the categories set forth in Rule 501(a) of Regulation D, or who the seller reasonably believes comes within any of such categories, at the time of the sale of the securities to that person.

The term “member of the family of the purchaser or the equivalent” includes a child, stepchild, grandchild, parent, stepparent, grandparent, spouse or spousal equivalent, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law of the purchaser, and includes adoptive relationships. The term “spousal equivalent” means a cohabitant occupying a relationship generally equivalent to that of a spouse.

## Description of Issuer’s Securities

17. What other securities or classes of securities of the issuer are outstanding? Describe the material terms of any other outstanding securities or classes of securities of the issuer.

### Securities

| Class of Security | Amount Authorized | Amount Outstanding | Voting Rights | Other Rights |
| --- | --- | --- | --- | --- |
| Preferred Stock | 4,350,000 | 2,178,703 | Yes | In the event of a liquidation of Company's assets, the holders thereof shall be entitled to a pro rata distribution of such assets in satisfaction of the full value of their holdings prior to the distribution of any remaining assets to any other class of stockholders. |
| Common Stock | 650,000 | 0 | No |  |

### Options, Warrants and Other Rights

| Type | Description | Reserved Securities |
| --- | --- | --- |
| Options | Six tranches of options expire on 31-Jan-2025 with a strike price of $12.92 for 13,546 options (1), $12.92 for 3,870 options (2), $10.03 for 968 options (3), $9.25 for 3,243 options (4), $11.55 for 1,559 options (5) and (6) $11.54 for 2,167 options. Four tranches of options expire on 31-Dec-2025 with a strike price of $12.92 for a total of 18,095 options. One tranche of options expire on 31-Jan-2031 with a strike price of $15.00 for 5,745 options. One tranche of options expire on 31-Jul-2032 with a strike price of $16.00 for 21,875 options. One tranche of options expire on 31-Jan-2027 with a strike price of $16.00 for 1,563 options. | 72,631 |
| Voting shares (Equity Incentive Plan) | Shares Granted (vested) 108,108 Shares Granted (but under vesting schedule) 54,054 Shares Available for Grant 637,838 | 800,000 |

# **18. How may the rights of the securities being offered be materially limited, diluted or qualified by the rights of any other class of securities?**

There are 49,193 securities reserved for option contracts and 800,000 securities reserved under the Equity Incentive Plan if those securities are exercised, your ownership in the Company will get diluted.

# **19. Are there any differences not reflected above between the securities being offered and each other class of security of the issuer?**

The Company has granted a perpetual waiver of the transfer restrictions listed in the Bylaws of Demand Derivatives Corp. for all Securities sold in this Offering.

# **20. How could the exercise of rights held by the principal owners identified in Question 5 above affect the purchasers of Securities being offered?**

The Company's bylaws can be amended by the shareholders of the Company, and directors can be added or removed by shareholder vote. As minority owners, you are subject to the decisions made by the majority owners. The issued and outstanding common stock gives management voting control of the company. As a minority owner, you may be outvoted on issues that impact your investment, such as the issuance of additional shares, or the sale of debt, convertible debt or assets of the company.

# **21. How are the securities being offered being valued? Include examples of methods for how such securities may be valued by the issuer in the future, including during subsequent corporate actions.**

The price of the Securities was determined solely by the Management and bears no relation to traditional measures of valuation such as book value or price-to-earnings ratios. We expect that any future valuation will take the same approach.

# **22. What are the risks to purchasers of the securities relating to minority ownership in the issuer?**

As the holder of a majority of the voting rights in the company, our majority shareholders may make decisions with which you disagree, or that negatively affect the value of your investment in the company, and you will have no recourse to change those decisions. Your interests may conflict with the interests of other investors, and there is no guarantee that the company will develop in a way that is advantageous to you. For example, the majority shareholders may decide to issue additional shares to new investors, sell convertible debt instruments with beneficial conversion features, or make decisions that affect the tax treatment of the company in ways that may be unfavorable to you. Based on the risks described above, you may lose all or part of your investment in the securities that you purchase, and you may never see positive returns.

**23. What are the risks to purchasers associated with corporate actions including:**

- additional issuances of securities,
- issuer repurchases of securities,
- a sale of the issuer or of assets of the issuer or
- transactions with related parties?

The issuance of additional shares of our common stock will dilute your ownership. As a result, if we achieve profitable operations in the future, our net income per share will be reduced because of dilution, and the market price of our common stock, if there is a market price, could decline as a result of the additional issuances of securities. If we repurchase securities, so that the above risk is mitigated, and there are fewer shares of common stock outstanding, we may not have enough cash available for marketing expenses, growth, or operating expenses to reach our goals. If we do not have enough cash to operate and grow, we anticipate the market price of our stock would decline. A sale of our company or of the assets of our company may result in an entire loss of your investment. We cannot predict the market value of our company or our assets, and the proceeds of a sale may not be cash, but instead, unmarketable securities, or an assumption of liabilities. In addition to the payment of wages and expense reimbursements, we may need to engage in transactions with officers, directors, or affiliates. By acquiring an interest in the Company, you will be deemed to have acknowledged the existence of any such actual or potential related party transactions and waived any claim with respect to any liability arising from a perceived or actual conflict of interest. In some instances, we may deem it necessary to seek a loan from related parties. Such financing may not be available when needed. Even if such financing is available, it may be on terms that are materially averse to your interests with respect to dilution of book value, dividend preferences, liquidation preferences, or other terms. No assurance can be given that such funds will be available or, if available, will be on commercially reasonable terms satisfactory to us. If we are unable to obtain financing on reasonable terms, we could be forced to discontinue our operations. We anticipate that any transactions with related parties will be vetted and approved by executives(s) unaffiliated with the related parties.

**24. Describe the material terms of any indebtedness of the issuer:**

| Creditor(s): | Related party loan |
| --- | --- |
| Amount Outstanding: | $17,500 |
| Interest Rate: | 6.0% |
| Maturity Date: | Payable On Demand |
| Other Material Terms: | The shareholder loans accrue interest at 6% and the total interest accrued to the shareholders for these loans and other reimbursements are $9,683. |
| Creditor(s): | Due to related parties |
| Amount Outstanding: | $124,340 |
| Interest Rate: | 0.0% |
| Maturity Date: | Payable On Demand |
| Other Material Terms: | The amounts are unsecured, non-interest bearing and are due on demand. These amounts are the result of deferred compensation, unreimbursed expenses and shareholder loans. |

**25. What other exempt offerings has Demand Derivatives Corp. conducted within the past three years?**

| Date of Offering: | 09/2019 |
| --- | --- |
| Exemption: | Section 4(a)(2) |
| Securities Offered: | Common Stock |

| Securities Offered: | Common Stock |
| --- | --- |
| Amount Sold: | $25,000 |
| Use of Proceeds: | General fund to continue operations. The company issued an aggregate of 2,167 shares of common stock to an existing stockholder for cash proceeds of $25,000 at $11.59 per share. |
| Date of Offering: | 07/2021 |
| Exemption: | Reg. CF (Crowdfunding, Title III of JOBS Act, Section 4(a)(6)) |
| Securities Offered: | Common Stock |
| Amount Sold: | $122,685 |
| Use of Proceeds: | General fund to continue operations. The company issued an aggregate of 8,179 shares of common stock to an existing stockholder for cash proceeds of $123,090 at $15.00 per share. |

26. Was or is the issuer or any entities controlled by or under common control with the issuer a party to any transaction since the beginning of the issuer's last fiscal year, or any currently proposed transaction, where the amount involved exceeds five percent of the aggregate amount of capital raised by the issuer in reliance on Section 4(a)(6) of the Securities Act during the preceding 12-month period, including the amount the issuer seeks to raise in the current offering, in which any of the following persons had or is to have a direct or indirect material interest:

1. any director or officer of the issuer;
2. any person who is, as of the most recent practicable date, the beneficial owner of 20 percent or more of the issuer's outstanding voting equity securities, calculated on the basis of voting power;
3. if the issuer was incorporated or organized within the past three years, any promoter of the issuer; or
4. any immediate family member of any of the foregoing persons.

Yes.

If yes, for each such transaction, disclose the following:

| Specified Person | Relationship to Issuer | Nature of Interest in Transaction | Amount of Interest |
| --- | --- | --- | --- |
| Donald Schlesinger | President | Expense Reimbursement | $26,471 |
| Louis Burke | Related Party | Expense Reimbursement | $16,750 |
| Rich Heckinger | Director | Expense Reimbursement | $2,600 |
| Robert Krause | CEO | Expense Reimbursement | $57,393 |
| Wendy Robinson | General Counsel | Expense Reimbursement | $16,600 |

## Financial Condition of the Issuer

27. Does the issuer have an operating history?

Yes.

# **28. Describe the financial condition of the issuer, including, to the extent material, liquidity, capital resources and historical results of operations.**

Demand Derivatives is a relatively new company. The company has average monthly operating expenses in the last twelve months of approximately $7,500 and is operating with minimal current capital. The company expects to advance significantly with the influx of investment. The Company's main resource is their intellectual property, which would be the source of future income for the Company. With the funds from this offering, the Company plans to allocate funds to the process of securing their regulatory licenses as a Designated Contract Market and Designated Clearing Organization with the CFTC. Thereafter, capital is aimed to be used to install the exchange and clearing house technology and test those systems; advance their U.S. patents and proliferate those patents in select countries around the world and embark on a strong marketing campaign to gather traders for their day-one launch. For the year ended June 30, 2022, total operating expenses amount to $91,588, while the Company generated $4,480 in revenue and $744 in interest expense, resulting in an overall net loss of $87,852. Comparatively, for the year ended on June 30, 2021, total operating expenses amounted to $143,622 while the Company generated $1,280 in revenues and $608 in other expenses resulting in a $142,950 net loss. Lastly, for the year ended on June 30, 2020, total operating expenses amounted to $112,188 while the Company generated $436 in revenues and $4,131 in other income resulting in a $107,621 net loss. During the fiscal three-year period between 2020-2022, the Company was able to raise $135,201 from sale of securities net of issuance costs and $20,409 via related party borrowings. In connection with the Company's reorganization as of September 1, 2017, the Company assumed certain estimated liabilities of the previous entities. As of June 1, 2022, the remaining balance of these reorganization liabilities amounted to $702,473, of which $473,430 was Due to related parties. Effective June 30, 2022, the Company's Board of Directors adopted a policy to derecognize liabilities no longer subject to collection under New York State's statute of limitations and meeting criteria they would not be paid ('overstated'). The Company identified $639,551 of overstated reorganization liabilities and recorded their adjustment as of June 30, 2022. These liabilities included $455,000 of deferred compensation due to a former Company officer and shareholder, and $184,551 of legal services and other amounts due to nonaffiliated entities. As a result, the Company currently only owes $141,840 to related parties, the amounts are unsecured, non-interest bearing and are due on demand. These amounts are the result of deferred compensation, unreimbursed expenses, and related party loans. Included in the $141,840 is a related party loan with an outstanding balance of $17,500. The related party loan accrues interest at 6%. There are 72,631 option contracts currently outstanding, divided into several tranches set to expire between January 31, 2023, and July 31, 2032. In addition, 800,000 shares are currently reserved under the Equity Incentive Plan. Subsequent to June 30, 2021, the Company converted all Common Stock to Preferred Stock. In the event of a liquidation of Company's assets, the holders of Preferred Stock shall be entitled to a pro rata distribution of such assets in satisfaction of the full value of their holdings prior to the distribution of any remaining assets to any other class of stockholders.

## Financial Information

# **29. Include the financial information specified by regulation, covering the two most recently completed fiscal years or the period(s) since inception if shorter.**

See attachments:

CPA Review Report:

reviewletter.pdf

30. With respect to the issuer, any predecessor of the issuer, any affiliated issuer, any director, officer, general partner or managing member of the issuer, any beneficial owner of 20 percent or more of the issuer's outstanding voting equity securities, calculated in the same form as described in Question 6 of this Question and Answer format, any promoter connected with the issuer in any capacity at the time of such sale, any person that has been or will be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with such sale of securities, or any general partner, director, officer or managing member of any such solicitor, prior to May 16, 2016:

1. Has any such person been convicted, within 10 years (or five years, in the case of issuers, their predecessors and affiliated issuers) before the filing of this offering statement, of any felony or misdemeanor:
1. in connection with the purchase or sale of any security?
2. involving the making of any false filing with the Commission?
3. arising out of the conduct of the business of an underwriter, broker, dealer, municipal securities dealer, investment adviser, funding portal or paid solicitor of purchasers of securities?

2. Is any such person subject to any order, judgment or decree of any court of competent jurisdiction, entered within five years before the filing of the information required by Section 4A(b) of the Securities Act that, at the time of filing of this offering statement, restrains or enjoins such person from engaging or continuing to engage in any conduct or practice:
1. in connection with the purchase or sale of any security?;
2. involving the making of any false filing with the Commission?
3. arising out of the conduct of the business of an underwriter, broker, dealer, municipal securities dealer, investment adviser, funding portal or paid solicitor of purchasers of securities?

3. Is any such person subject to a final order of a state securities commission (or an agency or officer of a state performing like functions); a state authority that supervises or examines banks, savings associations or credit unions; a state insurance commission (or an agency or officer of a state performing like functions); an appropriate federal banking agency; the U.S. Commodity Futures Trading Commission; or the National Credit Union Administration that:
1. at the time of the filing of this offering statement bars the person from:
1. association with an entity regulated by such commission, authority, agency or officer?
2. engaging in the business of securities, insurance or banking?
3. engaging in savings association or credit union activities?

2. constitutes a final order based on a violation of any law or regulation that prohibits fraudulent, manipulative or deceptive conduct and for which the order was entered within the 10-year period ending on the date of the filing of this offering statement?

4. Is any such person subject to an order of the Commission entered pursuant to Section 15(b) or 15B(c) of the Exchange Act or Section 203(e) or (f) of the Investment Advisers Act of 1940 that, at the time of the filing of this offering statement:
1. suspends or revokes such person's registration as a broker, dealer, municipal securities dealer, investment adviser or funding portal?
2. places limitations on the activities, functions or operations of such person?
3. bars such person from being associated with any entity or from participating in the offering of any penny stock?

If Yes to any of the above, explain:

5. Is any such person subject to any order of the Commission entered within five years before the filing of this offering statement that, at the time of the filing of this offering statement, orders the person to cease and desist from committing or causing a violation or future violation of:

1. any scienter-based anti-fraud provision of the federal securities laws, including without limitation Section 17(a)(1) of the Securities Act, Section 10(b) of the Exchange Act, Section 15(c)(1) of the Exchange Act and Section 206(1) of the Investment Advisers Act of 1940 or any other rule or regulation thereunder?
2. Section 5 of the Securities Act?
6. Is any such person suspended or expelled from membership in, or suspended or barred from association with a member of, a registered national securities exchange or a registered national or affiliated securities association for any act or omission to act constituting conduct inconsistent with just and equitable principles of trade?
7. Has any such person filed (as a registrant or issuer), or was any such person or was any such person named as an underwriter in, any registration statement or Regulation A offering statement filed with the Commission that, within five years before the filing of this offering statement, was the subject of a refusal order, stop order, or order suspending the Regulation A exemption, or is any such person, at the time of such filing, the subject of an investigation or proceeding to determine whether a stop order or suspension order should be issued?
8. Is any such person subject to a United States Postal Service false representation order entered within five years before the filing of the information required by Section 4A(b) of the Securities Act, or is any such person, at the time of filing of this offering statement, subject to a temporary restraining order or preliminary injunction with respect to conduct alleged by the United States Postal Service to constitute a scheme or device for obtaining money or property through the mail by means of false representations?

Demand Derivatives Corp. answers 'NO' to all of the above questions.

## Other Material Information

31. In addition to the information expressly required to be included in this Form, include: any other material information presented to investors; and such further material information, if any, as may be necessary to make the required statements, in the light of the circumstances under which they are made, not misleading.

The following documents are being submitted as part of this offering:

Governance:

| Certificate of Incorporation: | certificateofincorporation.pdf |
| --- | --- |
| Corporate Bylaws: | corporatebylaws.pdf |

Opportunity:

| Offering Page JPG: | offeringpage.jpg |
| --- | --- |
| Pitch Deck: | pitchdeck.pdf |

Financials:

| Additional Information: | otherfinancial.pdf |
| --- | --- |

## Ongoing Reporting

32. The issuer will file a report electronically with the Securities & Exchange Commission annually and post the report on its web site, no later than 120 days after the end of each fiscal year covered by the report:

Once posted, the annual report may be found on the issuer's web site at: https://demandderivatives.com

The issuer must continue to comply with the ongoing reporting requirements until:

- the issuer is required to file reports under Section 13(a) or Section 15(d) of the Exchange Act;
- the issuer has filed at least one annual report pursuant to Regulation Crowdfunding and has fewer than 300 holders of record and has total assets that do not exceed $10,000,000;
- the issuer has filed at least three annual reports pursuant to Regulation Crowdfunding;
- the issuer or another party repurchases all of the securities issued in reliance on Section 4(a)(6) of the Securities Act, including any payment in full of debt securities or any complete redemption of redeemable securities; or
- the issuer liquidates or dissolves its business in accordance with state law.

**Attachment 2:** `reviewletter.pdf`

# **DEMAND DERIVATIVES CORP.  
CONSOLIDATED FINANCIAL STATEMENTS  
(Unaudited)  
FOR THE YEARS ENDED  
JUNE 30, 2022 and 2021**

# CONTENTS

|  | Page(s) |
| --- | --- |
| Independent Accountants' Review Report | 1 |
| Consolidated Balance Sheets (Unaudited) - As of June 30, 2022 and 2021 | 2 |
| Consolidated Statements of Operations (Unaudited) - For the Years Ended June 30, 2022 and 2021 | 3 |
| Consolidated Statements of Cash Flows - (Unaudited) For the Years Ended June 30, 2022 and 2021 | 4 |
| Consolidated Statements of Changes in Stockholders' Equity (Deficit) - (Unaudited) For the Years Ended June 30, 2022 and 2021 | 5 |
| Notes to Consolidated Financial Statements - (Unaudited) | 6-16 |

**berkower**  
Certified Public Accountants & Advisors

517 Route One, Suite 4103  
Iselin, NJ 08830  
☎ (732) 781-2712  
Berkower.io

# **Independent Accountants' Review Report**

# **To the Stockholders of Demand Derivatives Corp.:**

We have reviewed the accompanying consolidated financial statements of Demand Derivatives Corp. and its subsidiaries (the “Company”), which comprise the consolidated balance sheets as of June 30, 2022 and 2021, and the related consolidated statements of operations, changes in stockholders’ equity (deficit), and cash flows for the years then ended, and the related notes to the consolidated financial statements (the “Consolidated Financial Statements”). A review includes primarily applying analytical procedures to the Company’s consolidated financial data and making inquiries of the Company’s management. A review is substantially less in scope than an audit, the objective of which is the expression of an opinion regarding the Consolidated Financial Statements as a whole. Accordingly, we do not express such an opinion.

# ***Management's Responsibility for the Consolidated Financial Statements***

Management is responsible for the preparation and fair presentation of these Consolidated Financial Statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). This responsibility includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of Consolidated Financial Statements that are free from material misstatement whether due to fraud or error.

# ***Accountants' Responsibility***

Our responsibility is to conduct the review engagements in accordance with Statements on Standards for Accounting and Review Services promulgated by the Accounting and Review Services Committee of the American Institute of Certified Public Accountants. Those standards require us to perform procedures to obtain limited assurance as a basis for reporting whether we are aware of any material modifications that should be made to the Consolidated Financial Statements for them to be in accordance with U.S. GAAP. We believe that the results of our procedures provide a reasonable basis for our conclusion.

We are required to be Independent of the Company and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements related to our reviews.

# ***Accountants' Conclusion***

Based on our reviews, we are not aware of any material modifications that should be made to the accompanying Consolidated Financial Statements in order for them to be in accordance with U.S. GAAP.

# ***Emphasis of Matter***

The accompanying Consolidated Financial Statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the Consolidated Financial Statements, the Company has earned limited revenue and has experienced significant losses and stockholders’ deficit since its inception. As a result of these conditions and events, substantial doubt exists about the Company’s ability to continue as a going concern. The Company’s assessment and it’s plans to mitigate these conditions and events are also described in Note 2. The Consolidated Financial Statements do not include any adjustments that might result from the outcome of this uncertainty. Our conclusion is not modified with respect to this matter.

Berkower LLC

Iselin, New Jersey December 30, 2022

Miami • Los Angeles • Cayman Islands

# **Demand Derivatives Corp.**  
 **Consolidated Balance Sheets (Unaudited)**

|  | June 30, 2022 | June 30, 2021 |
| --- | --- | --- |
| Assets |  |  |
| Current Assets |  |  |
| Cash | $11,050 | $34,379 |
| Prepaid expenses | - | 25,000 |
| Total Current Assets | 11,050 | 59,379 |
| Fixed assets, net | 9,698 | 14,163 |
| Total Assets | $20,748 | $73,542 |
| Liabilities and Stockholders’ Deficit |  |  |
| Current Liabilities |  |  |
| Accounts payable and accrued expenses | $50,442 | $243,991 |
| Due to related parties | 141,840 | 734,739 |
| Total Current Liabilities | 192,282 | 978,730 |
| Stockholders’ Deficit |  |  |
| Preferred stock, $0.001 par value, 4,350,000 shares authorized; 2,179,665 and 0 issued and outstanding as of June 30, 2022 and June 30, 2021, respectively. | 2,180 | - |
| Common stock, $0.001 par value, 650,000 shares authorized; 0 and 2,178,399 issued and outstanding as of June 30, 2022 and June 30, 2021, respectively. | - | 2,178 |
| Additional paid in capital | 402,513 | (418,991) |
| Accumulated deficit | (576,227) | (488,375) |
| Total Stockholders’ Deficit | (171,534) | (905,188) |
| Total Liabilities and Stockholders’ Deficit | $20,748 | $73,542 |

See Independent Accountants’ Review Report and Accompanying Notes

2

# **Demand Derivatives Corp.**  
 **Consolidated Statements of Operations (Unaudited)**

|  | For the Years Ended June 30, |  |
| --- | --- | --- |
|  | 2022 | 2021 |
| Sales | $4,480 | $1,280 |
| Operating expenses: |  |  |
| General and administrative expenses | 87,123 | 105,905 |
| Stock based compensation | - | 10,000 |
| Depreciation and amortization | 4,465 | 27,717 |
| Total operating expenses | 91,588 | 143,622 |
| Net operating loss | (87,108) | (142,342) |
| Other income (expenses): |  |  |
| Interest expense | (744) | (608) |
| Other income | - | - |
| Other income (expenses): | (744) | (608) |
| Net loss before provision (benefit) for income taxes | (87,852) | (142,950) |
| Provision (benefit) for income taxes | - | - |
| Net loss | $(87,852) | $(142,950) |

See Independent Accountants' Review Report and Accompanying Notes

3

# **Demand Derivatives Corp.**  
 **Consolidated Statements of Cash Flows (Unaudited)**

|  | For the Years Ended June 30, |  |
| --- | --- | --- |
|  | 2022 | 2021 |
| CASH FLOWS FROM OPERATING ACTIVITIES |  |  |
| Net loss | $(87,852) | $(142,950) |
| Adjustments to reconcile net loss to net cash used in operating activities: |  |  |
| Depreciation and amortization | 4,465 | 27,717 |
| Stock based compensation | - | 10,000 |
| Changes in operating assets and liabilities |  |  |
| (Increase) decrease in prepaid expenses | 25,000 | (25,000) |
| Increase in accounts payable and accrued expenses | 28,103 | 56,751 |
| Net Cash used In Operating Activities | (30,284) | (73,482) |
| CASH FLOWS FROM FINANCING ACTIVITIES |  |  |
| Proceeds from sale of common stock, net of issuance costs of $223 and $7,129, respectively | 4,337 | 95,831 |
| Proceeds from sale of preferred stock, net of issuance costs of $12,774 | 2,618 | - |
| Net Cash Provided By Financing Activities | 6,955 | 95,831 |
| Net increase (decrease) in cash | (23,329) | 22,349 |
| Cash - beginning of year | 34,379 | 12,030 |
| Cash - end of year | $11,050 | $34,379 |
| Supplemental Disclosures of Cash Flow Information: |  |  |
| Cash paid during the period for: |  |  |
| Interest | $ - | $ - |
| Income taxes | $ - | $ - |
| Supplemental Disclosures of Noncash Activity: |  |  |
| Adjustment to capital balances for liquidation of reorganization liabilities | $639,551 | $ - |
| Stock options issued in exchange for payable liabilities | $175,000 | $43,088 |
| Stock issued in exchange for debt | $ - | $10,501 |
| Conversion of Common Stock to Preferred Stock: |  |  |
| 2,178,703 shares; $0.001 Par Value | $2,179 | $ - |

See Independent Accountants' Review Report and Accompanying Notes

4

# **Demand Derivatives Corp.**  
 **Consolidated Statements of Changes in Stockholders' Equity (Deficit) (Unaudited)**  
 **For the Years Ended June 30, 2022 and June 30, 2021**

|  | Preferred Stock, $.001 Par Value |  | Common Stock, $.001 Par Value |  | Additional Paid in Capital | Accumulated Deficit | Total Stockholders' Deficit |
| --- | --- | --- | --- | --- | --- | --- | --- |
|  | Shares | Amount | Shares | Amount |  |  |  |
| Balance - June 30, 2020 |  |  | 2,170,169 | $2,170 | $(578,403) | $(345,425) | $(921,658) |
| Issuance of common stock, net of issuance costs |  |  | 6,864 | 7 | 95,824 | - | 95,831 |
| Stock based compensation |  |  | 666 | - | 10,000 |  | 10,000 |
| Stock issued in exchange for debt |  |  | 700 | 1 | 10,500 |  | 10,501 |
| Issuance of stock options |  |  |  |  | 43,088 |  | 43,088 |
| Net loss for the year ended June 30, 2021 |  |  | - | - | - | (142,950) | (142,950) |
| Balance - June 30, 2021 | - | $ - | 2,178,399 | $2,178 | $(418,991) | $(488,375) | $(905,188) |
| Issuance of common stock, net of issuance costs |  |  | 304 | 1 | 4,336 | - | 4,337 |
| Conversion of common stock to preferred stock | 2,178,703 | 2,179 | (2,178,703) | (2,179) | - | - | - |
| Issuance of preferred stock, net of issuance costs | 962 | 1 |  |  | 2,617 | - | 2,618 |
| Adjustment to capital balances for liquidation of reorganization liabilities |  |  |  |  | 639,551 |  | 639,551 |
| Stock options issued in exchange for payable liabilities |  |  |  |  | 175,000 |  | 175,000 |
| Net loss for the year ended June 30, 2022 | - | - | - | - | - | (87,852) | (87,852) |
| Balance - June 30, 2022 | 2,179,665 | $2,180 | - | $(0) | $402,513 | $(576,227) | $(171,534) |

See Independent Accountants' Review Report and Accompanying Notes

5

# **DEMAND DERIVATIVES CORP.**  
**Notes to Consolidated Financial Statements (Unaudited)**  
**June 30, 2022 and 2021**

# **NOTE 1- ORGANIZATION AND DESCRIPTION OF BUSINESS**

# **Background**

Demand Derivatives Corp. (“the Company”) is a Delaware Corporation that was incorporated on August 8, 2017. On September 1, 2017, the Company effectuated a merger of entities under common control with VolX Group Corporation and RealDay Options Corporation. Both of these entities were merged into newly formed surviving subsidiaries, RealVol LLC and RealDay LLC (See Note 5)

The Company is the holding company for the forthcoming innovative, vertically integrated futures exchange RealDemand Board of Trade (“RealBOTTM”) and its dedicated clearing house RealDemand Clearing (“RealClearTM”) (scheduled to launch upon CFTC and SEC approval). The Company’s four unique instrument designs and pioneering blockchain technology will pose a significant competitive challenge to the legacy systems’, “unlimited” risk instruments, high costs, and inefficient products of existing exchanges and clearing houses.

# **NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

# **Liquidity and Going Concern**

The financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company had a net loss of $87,852 as of the year ended June 30, 2022. The Company has an accumulated deficit of $576,227 and a stockholders’ deficit of $171,534 as of June 30, 2022 and used $30,284 in cash flow from operating activities for the year then ended.

Management believes these conditions raise substantial doubt about the Company’s ability to continue as a going concern for the next twelve months from the date these financial statements were issued. The ability to continue as a going concern is dependent upon profitable future operations, positive cash flows, and additional financing.

Management intends to continue to raise money through private equity offerings. Currently the Company is seeking a Series A round of $6 million, to install and test exchange systems, obtain regulatory licenses, obtain intellectual property protection, fund pre-launch marketing, and provide one-year’s operating capital as per CFTC rules. It is management’s opinion that the Series A offering should take the Company to launch. Near the launch, the Company expects to seek approximately $20 million Series B funding that it expects will take the exchange through the ramp-up period after launch. Because building a liquid market takes time-Series B funding will be used primarily for operations and to gain critical mass and liquidity via a very ambitious marketing effort. Management cannot provide any assurances that the Company will be successful in completing these financings and accomplishing any of its plans.

6

# **DEMAND DERIVATIVES CORP.**  
**Notes to Consolidated Financial Statements (Unaudited)**  
**June 30, 2022 and 2021**

# **NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)**

# **Principles of Consolidation**

The consolidated financial statements include the accounts of the following wholly owned subsidiaries: RealVol LLC, RealDay LLC and RealLimit LLC.

All intercompany balances and transactions have been eliminated in consolidation. Certain account balances as of June 30, 2021 have been reclassified to match the presentation as of June 30, 2022 and the year then ended.

# **Concentration of Credit Risk**

The Company’s financial instruments that are exposed to concentrations of credit risk primarily consist of its cash. The Company places its cash with financial institutions of high credit worthiness. At times, its cash with a particular financial institution may exceed any applicable government insurance limits. The Company’s management plans use other investment vehicles to reduce any such credit risk exposure and to carefully assess the financial strength and credit worthiness of any parties to which it is a credit counterparty, and as such, it believes that any associated credit risk exposures are limited.

# **Use of Estimates**

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Such estimates and assumptions impact, among others, the following: the fair value of share-based payments and deferred taxes.

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from estimates.

# **Cash Equivalents**

Cash equivalents consist of investments with original maturities to the Company of three months or less. The Company had no cash equivalents at June 30, 2022 or 2021.

7

# **DEMAND DERIVATIVES CORP.**  
**Notes to Consolidated Financial Statements (Unaudited)**  
**June 30, 2022 and 2021**

# **NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)**

# **Risks and Uncertainties**

The Company is undertaking a new business venture that is inherently subject to significant risks and uncertainties, including financial, operational, technological and other risks that could potentially have a risk of business failure.

# **Revenue Recognition**

In accordance with ASC 606 revenue is recognized upon transfer of control of promised products and/or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products and services. The Company recognizes revenue when persuasive evidence of a customer agreement exists, performance obligations are completed, the price is fixed or determinable, and the revenues are considered collectible. Subject to these criteria, the Company recognizes revenue at the time services are rendered.

# **Property and Equipment**

Property and equipment are stated at cost, less accumulated depreciation. Depreciation is provided principally on the straight-line method over the estimated useful lives of the assets, which is generally 3 to 10 years for furniture fixtures and equipment. The cost of repairs and maintenance is charged to expense as incurred. Expenditures for property betterments and renewals are capitalized. Upon the sale or other disposition of a depreciable asset, cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in other income (expense). The Company will periodically evaluate whether events and circumstances have occurred that may warrant revision of the estimated useful lives of fixed assets or whether the remaining balance of property and equipment should be evaluated for possible impairment.

# **Impairment of Long-Lived Assets**

The Company accounts for impairment of long-lived assets in accordance with Accounting Standards Codification (“ASC”) 360, *Property, Plant and Equipment*, (“ASC 360”). Long-lived assets consist primarily of property, plant and equipment and in accordance with ASC 360, the Company periodically evaluates long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. When triggering event indicators are present, the Company obtains appraisals on an asset-by-asset basis and will recognize an impairment loss when the sum of the appraised values is less than the carrying amounts of such assets. Determining the appropriate appraised values requires significant judgment as to the most reasonable, supportable assumptions and estimates, as well as the probability of resultant outcomes. The Company has not recognized any impairment losses since inception.

8

# **DEMAND DERIVATIVES CORP.**  
**Notes to Consolidated Financial Statements (Unaudited)**  
**June 30, 2022 and 2021**

# **NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)**

# **Income Taxes**

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and the respective tax bases. Deferred tax assets, including tax loss and credit carryforwards, and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred income tax expense represents the change during the period in the deferred tax assets and deferred tax liabilities. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

The effect of income tax positions is recognized only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs.

The Company measures and recognizes the tax implications of positions taken or expected to be taken in its tax returns on an ongoing basis. The Company’s tax returns are subject to examination by federal and state taxing authorities according to the applicable statute of limitations, generally three years from the filing date.

The Company has incurred net operating losses since inception which may be carried forward indefinitely for tax purposes to be applied against future taxable income, subject to a limitation of 80% of taxable income in any given tax year. These NOL tax carryforwards amounted to $336,000 and $262,000 as of June 30, 2022 and June 30, 2021, respectively.

# **Research and Development Expense**

Costs related to research and development, which primarily consist of consulting, materials and facility costs, are charged to expense as incurred.

9

# **DEMAND DERIVATIVES CORP.**  
**Notes to Consolidated Financial Statements (Unaudited)**  
**June 30, 2022 and 2021**

# **NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)**

# **Stock Based Compensation**

The Company applies the fair value method of ASC 718, Share Based Payment, formerly Statement of Financial Accounting Standards ('SFAS') No. 123R '*Accounting for Stock Based Compensation*', in accounting for its stock-based compensation. This accounting standard states that compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period, if any. As the Company does not have sufficient, reliable, and readily determinable values relating to its common stock, the Company has used the stock value pursuant to its most recent sale of stock for purposes of valuing stock-based compensation.

# **Intangible Assets**

The Company capitalizes external costs, such as filing fees and associated attorney fees, incurred to obtain issued patents and patent license rights. The Company expenses costs associated with maintaining and defending patents subsequent to their issuance in the period incurred. The Company will amortize capitalized patent costs for internally generated patents on a straight-line basis over ten years, which represents the estimated useful lives of the patents. The ten-year estimated useful life for internally generated patents is based on management's assessment of such factors as the integrated nature of the portfolios being licensed, the overall makeup of the portfolio over time, and the length of license agreements for such patents. The Company assesses the potential impairment to all capitalized net patent cost when events or changes in circumstances indicate that the carrying amount of its patent portfolio may not be recoverable. The Company has not capitalized any patent costs to date.

# **Deferred Offering Costs**

Deferred offering costs are expenses directly related to the raising of capital such as legal, accounting, printing, and filing fees. These costs will be classified to additional paid in capital in the event the Company completes an offering with any remaining deferred offering costs charged to the results of operations. The Company has not recorded any deferred offering costs since inception.

10

# **DEMAND DERIVATIVES CORP.**  
 **Notes to Consolidated Financial Statements (Unaudited)**  
 **June 30, 2022 and 2021**

# **NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)**

# **Internal-Use Software**

Costs incurred to develop internal-use software during the application development stage are capitalized and reported at cost. Application development stage costs generally include costs associated with internal-use software configuration, coding, installation and testing. Costs of significant upgrades and enhancements that result in additional functionality are also capitalized whereas costs incurred for maintenance and minor upgrades and enhancements are expensed as incurred. Capitalized costs are amortized using the straight-line method over three years once placed in service. For the years ended June 30, 2022 and 2021, Internal-use software costs totaled $137,620. Amortization of these costs totaled $0 and $23,252, respectively. Internal-use software was fully amortized as of June 30, 2021.

# **Recent Accounting Pronouncements**

Regulatory authorities make ongoing revisions to the GAAP standards applicable to the preparation of the Company’s financial statements. The Company has evaluated or is currently evaluating the impact of pending GAAP pronouncements. The Company believes that these future standards will not have a material impact on its financial statements.

# **NOTE 3 - PROPERTY AND EQUIPMENT**

|  | June 30, 2022 | June 30, 2021 |
| --- | --- | --- |
| Furniture and equipment | $31,252 | $31,252 |
| Less: accumulated depreciation | 21,554 | 17,089 |
|  | $9,698 | $14,163 |

Depreciation expense amounted to $4,465 for each of the years ended June 30, 2022 and 2021, respectively.

# **NOTE 4 - RELATED PARTY TRANSACTIONS**

At June 30, 2022 and 2021 there is $141,840 and $734,739, respectively due to directors and shareholders of the Company. Other than $17,500 of shareholder loans at June 30, 2022 and 2021, the amounts are unsecured, non-interest bearing and are due on demand. These amounts are the result of deferred compensation, unreimbursed expenses and shareholder loans. The shareholder loans accrue interest at 6% and the total interest accrued to the shareholders for these loans are $4,526 and $3,782 as of June 30, 2022 and 2021, respectively.

These transactions were in the normal course of operations and were measured at a value that represents the amount of consideration established and agreed to by the related parties.

11

# **DEMAND DERIVATIVES CORP.**
**Notes to Consolidated Financial Statements (Unaudited)**
**June 30, 2022 and 2021**

# **NOTE 4 - RELATED PARTY TRANSACTIONS (continued)**

# *Royalty and License Agreements*

On March 21, 2018, the Company was granted a license for the following:

- RealLimit Patents and/or Patents Pending
- RealDay Patents and/or Patents Pending
- RealVol Patents and/or Patents Pending
- RealGlobe Patents and/or Patents Pending

These license agreements provide the Company the exclusive right to exploit these patents for a period of 9 years ending December 31, 2026 with an automatic extension period of 9 years to December 31, 2035, unless the Company notifies the licensee 90 days in advance of its intent not to renew. This license was granted to the Company by Volatility Partners, LLC which is a family partnership in which the partners are also Company shareholders, the Chief Executive Officer and General Counsel. In consideration of the grant the Company will pay a royalty of 5% of the proceeds from the sale of any product that utilizes the patents noted above.

On February 15, 2020, the Company executed a royalty agreement with its key officers and shareholders that provide for a royalty of 2.96% of gross revenue that begins after the Company has recorded $1 million of gross revenue. The royalty is then payable on the next $100 million of gross revenue. The total royalty will be paid to the respective officer based upon their agreement. After the first $100 million in gross revenue no further royalty will be due. As of June 30, 2022, no amounts have been accrued as a result of these licenses and royalty agreements.

As of June 30, 2022, the Company issued preferred stock options for 21,875 shares in exchange for the total liability of $175,000 due to the Company's head of technology, in accordance with a Company Board of Directors' resolution. This transaction was accounted for as a non-cash exchange in the accompanying Consolidated Statements of Cash Flows and Changes in Stockholders' Equity (Deficit).

See Note 5 concerning an adjustment to related party liabilities as of June 30, 2022.

# **NOTE 5 - STOCKHOLDERS' EQUITY**

In connection with the Company's reorganization as of September 1, 2017, as described in Notes 1 and 2, the Company assumed certain estimated liabilities of the previous entities. As of June 1, 2022, the remaining balance of these reorganization liabilities amounted to $702,473, of which $473,430 was Due to related parties.

12

# **DEMAND DERIVATIVES CORP.**
**Notes to Consolidated Financial Statements (Unaudited)**
**June 30, 2022 and 2021**

# **NOTE 5 - STOCKHOLDERS’ EQUITY (continued)**

Effective June 30, 2022, the Company’s Board of Directors adopted a policy to derecognize liabilities no longer subject to collection under New York State’s statute of limitations and meeting criteria they would not be paid (“overstated”). The Company identified $639,551 of overstated reorganization liabilities and recorded their adjustment as of June 30, 2022. These liabilities included $455,000 of deferred compensation due to a former Company officer and shareholder, and $184,551 of legal services and other amounts due to non-affiliated entities.

The adjustment to overstated liabilities is included in the accompanying Consolidated Statements of Cash Flows and Changes in Stockholders’ Equity (Deficit).

The Company identified $44,492 of reorganization liabilities projected to become overstated during the year ended June 30, 2023.

# ***Reorganization - September 1, 2017***

On September 1, 2017, in connection with the merger with VolX Group Corporation and RealDay Options Corporation as described in Note 1, the Company issued 2,000,000 shares to effectuate the merger and issued 162,162 shares to officers and directors. As the merger was with entities under common control, all such shares were considered founder’s shares and did not result in the recording of goodwill or share compensation. In addition, losses incurred by these entities prior to the date of recapitalization are reflected in additional paid in capital as of the recapitalization date.

# ***Common and Preferred Stock Restructuring - November 10, 2021***

Effective November 10, 2021, the Company converted all its Common Stock to Preferred Stock and amended the Common Stock class in accordance with a Company Board of Directors’ resolution (“Resolution”). The Resolution further provided and resulted in the following:

- Common Stock - September 1, 2017
  Upon its conversion to Preferred Stock as of November 10, 2021, the Common Stock class was amended as stated below;
- Preferred Stock - November 10, 2021
  Conversion rate from Common Stock 1:1; no change to par value and paid-in-capital balances; full voting rights; priority over all classes of Common Stock in the event of a liquidation; 4,350,000 authorized shares; no change to issued and outstanding share balances.

*continued*

13

# **DEMAND DERIVATIVES CORP.**
**Notes to Consolidated Financial Statements (Unaudited)**
**June 30, 2022 and 2021**

# **NOTE 5 - STOCKHOLDERS’ EQUITY (continued)**

# ***Common and Preferred Stock Restructuring - November 1 (continued)***

- Common Stock - November 10, 2021
  Changed to non-voting; par value of $0.001; 650,000 shares authorized; 0 shares issued and outstanding as of June 30, 2022;
- Stock Options - November 10, 2021
  All Common Stock options existing as of November 10, 2021 were converted to Preferred Stock options under the same terms stated above; subsequent stock option transactions through June 30, 2022 were Preferred Stock; there were no Common Stock options outstanding as of June 30, 2022.

At June 30, 2022, the Company’s capital structure consisted of 2,179,665 shares of Preferred Stock and 0 shares of Common Stock issued and outstanding. The rights and responsibilities of the Company’s Common Stock class were transferred to the Preferred Stock class, and the Common Stock class changed to non-voting, as a result of the November 10, 2021 restructuring. The Company plans to issue Common Stock shares during the year ended June 30, 2023.

# ***Common and Preferred Stock Issuances***

During the year ended June 30, 2021 the Company issued an aggregate 6,864 shares of common at an average price of $13.96 per share to new shareholders for cash proceeds of $95,831, net of issuance costs of $7,129

The Company also issued 666 shares at an average price of $15.00 in exchange for services and issued 700 shares at $15.00 to cancel debts.

On July 9, 2021 the Company issued 304 common shares at $15.00 and on June 17, 2022 issued 962 preferred shares at $16.00 per share. Net proceeds were reduced by issuance costs of $12,997, including the program’s fixed costs through its projected end March 31, 2023.

14

# **DEMAND DERIVATIVES CORP.**  
 **Notes to Consolidated Financial Statements (Unaudited)**  
 **June 30, 2022 and 2021**

# **NOTE 5 - STOCKHOLDERS’ EQUITY, continued**

# ***Preferred Stock Options***

The Company has granted stock options to investors and vendors. Details of the option activity under the Plan for the years ended June 30, 2022 and 2021 are as follows:

|  | Number of Shares | Weighted Average Exercise Price |
| --- | --- | --- |
| Balance, June 30, 2020 | 43,448 | $12.46 |
| Exercisable June 30, 2020 | 43,448 | $12.46 |
| Granted during the period | 5,745 | $15.00 |
| Expired or forfeited during the period | - | - |
| Balance, June 30, 2021 | 49,193 | $12.76 |
| Exercisable June 30, 2021 | 49,193 | $12.76 |
| Granted during the period | 23,438 | $16.00 |
| Expired or forfeited during the period | - | - |
| Balance, June 30, 2022 | 72,631 | $13.81 |
| Exercisable June 30, 2022 | 72,631 | $13.81 |

The Company uses the Black-Scholes option pricing model to determine the fair value of its stock, stock options and warrant issuance. The determination of the fair value of stock-based payment awards on the date of grant using an option-pricing model that is affected by the Company’s stock price, as well as assumptions regarding a number of complex and subjective variables. These variables include the Company’s expected stock price, volatility over the term of the awards, actual employee exercise behaviors, risk-free interest rate and expected dividends set forth below and are the weighted-average assumptions used in valuing the stock options granted and a discussion of the Company’s methodology for developing each of the assumptions used:

|  | 2022 | 2021 |
| --- | --- | --- |
| Expected dividend yield | 0% | 0% |
| Expected volatility | 50% | 50% |
| Risk-free interest rate | 2.25% | 2.25% |
| Expected average life of Options | 7.0 years | 7.0 years |

- ○ Expected dividend yield - The Company does not pay regular dividends on its common or preferred stock and does not anticipate paying any dividends in the foreseeable future.

15

# **DEMAND DERIVATIVES CORP.**
**Notes to Consolidated Financial Statements (Unaudited)**
**June 30, 2022 and 2021**

# **NOTE 5 - STOCKHOLDERS’ EQUITY, continued**

- ○ Expected volatility - Volatility is a measure of the amount by which a financial variable, such as share price, has fluctuated (historical volatility) or is expected to fluctuate (expected volatility) during a period. The Company analyzed the expected historical volatility used by similar companies.
- ○ Risk-free interest rate - this is the range of U.S. Treasury rates with a term that most closely resembles the expected life of the option as of the date on which the option was granted.
- ○ Expected average life of options - this is the period of time that the granted options are expected to remain outstanding.

# **NOTE 6- INCOME TAXES**

As stated in Note 2, the Company has certain NOL tax carryforwards at June 30, 2022 and June 30, 2021. Due to the uncertainty of their realization, the associated deferred tax assets have been fully offset by valuation allowances in the accompanying financial statements.

# **NOTE 7- COMMITMENTS AND CONTINGENCIES**

From time to time, the Company may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise that may harm its business. As of June 30, 2022, and 2021 there was no pending or threatened litigation.

# **NOTE 8-COVID-19**

The COVID-19 pandemic has caused a significant disruption world-wide since early 2020. The Company is unable to reasonably determine the pandemic’s effect on its financial statements to-date or predict its future impact.

# **NOTE 9-SUBSEQUENT EVENTS**

These financial statements were approved by management and issued on December 30, 2022. The Company has evaluated subsequent events through this date for matters required to be recognized or disclosed in the accompanying financial statements. During October 2022, the Company received cash proceeds of $30,619, net of issuance costs of $1,893, for the issuance of 2,032 shares of preferred stock at an average share price of $16.00.

16

**Attachment 3:** `certificateofincorporation.pdf`

# **STATE OF DELAWARE  
CERTIFICATE OF AMENDMENT  
OF CERTIFICATE OF INCORPORATION**

The corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware does hereby certify:

**FIRST:** That at a meeting of the Board of Directors of

Demand Derivatives Corp.

resolutions were duly adopted setting forth a proposed amendment of the Certificate of Incorporation of said corporation, declaring said amendment to be advisable and calling a meeting of the stockholders of said corporation for consideration thereof. The resolution setting forth the proposed amendment is as follows:

**RESOLVED**, that the Certificate of Incorporation of this corporation be amended by changing the Article thereof numbered 'IV--Capital Stock' so that, as amended, said Article shall be and read as follows:

Total Number of shares of Capital Stock that the Corporation shall have the authority to issue is Five Million (5,000,000), composed of 4,350,000 Preferred Shares (voting) and 650,000 Common Shares (non-voting) each at a Par Value of $0.001 per share.

**SECOND:** That thereafter, pursuant to resolution of its Board of Directors, a special meeting of the stockholders of said corporation was duly called and held upon notice in accordance with Section 222 of the General Corporation Law of the State of Delaware at which meeting the necessary number of shares as required by statute were voted in favor of the amendment.

**THIRD:** 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 15 day of November, 2021.

By: _________________________

Authorized Officer

Title: CEO _________________________

Name: Robert Krause _________________________

Print or Type

# Delaware

The First State

Page 1

I, JEFFREY W. BULLOCK, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF INCORPORATION OF "DEMAND DERIVATIVES CORP.", FILED IN THIS OFFICE ON THE EIGHTH DAY OF AUGUST, A.D. 2017, AT 11:27 O'CLOCK A.M.

A FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE COUNTY RECORDER OF DEEDS.

![img-0.jpeg](img-0.jpeg)

A handwritten signature in black ink, appearing to read 'Jeffrey W. Bullock'.

6505268 8100
SR# 20175620021

You may verify this certificate online at corp.delaware.gov/authver.shtml

Authentication: 203025059
Date: 08-08-17

State of Delaware
Secretary of State
Division of Corporations
Delivered 11:27 AM 08/08/2017
FILED 11:27 AM 08/08/2017
SR 20175620021 - File Number 6505268

# CERTIFICATE OF INCORPORATION

# OF

# DEMAND DERIVATIVES CORP.

The undersigned, a natural person (the "Sole Incorporator"), for the purpose of organizing a corporation to conduct the business and promote the purposes hereinafter stated, under the provisions and subject to the requirements of the laws of the State of Delaware hereby certifies that:

# ARTICLE I
NAME

The name of the corporation is Demand Derivatives Corp. (hereinafter referred to as the "Corporation").

# ARTICLE II
REGISTERED AGENT

The address of the registered office of the Corporation in the State of Delaware is 1209 Orange Street, in the City of Wilmington, County of New Castle, 19801. The name of its registered agent at that address is The Corporation Trust Company.

# ARTICLE III
CORPORATE PURPOSE

The purpose of the Corporation is to engage in any lawful act or activity for which a corporation may now or hereafter be organized under the General Corporation Law of the State of Delaware, as in effect from time to time (the "DGCL").

# ARTICLE IV
CAPITAL STOCK

The total number of shares of capital stock that the Corporation shall have authority to issue is Five Million (5,000,000) shares of Common Stock, par value $0.001 per share ("Common Stock").

# ARTICLE V
MANAGEMENT OF THE CORPORATION

A. The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors of the Corporation. The number of directors of the Corporation shall be as from time to time fixed by, or in the manner provided in, the bylaws of the Corporation. Election of directors need not be by written ballot unless the bylaws so provide.

B. The Board of Directors is expressly empowered to adopt, amend or repeal the bylaws of the Corporation. The stockholders shall also have power to adopt, amend or repeal the bylaws of the Corporation.

# ARTICLE VI
LIMITATION OF LIABILITY; INDEMNIFICATION

A. No director shall be personally liable to the Corporation or any of its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) pursuant to Section 174 of the DGCL or (iv) for any transaction from which the director derived an improper personal benefit. If the DGCL is amended to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the DGCL, as so amended.

B. To the fullest extent permitted by the DGCL, the Corporation is authorized to provide indemnification of (and advancement of expenses to) directors, officers and agents of the Corporation (and any other persons to which applicable law permits the Corporation to provide indemnification) through bylaw provisions, agreements with such agents or other persons, vote of stockholders or disinterested directors or otherwise in excess of the indemnification and advancement otherwise permitted by such applicable law.

C. Any repeal or modification of this Article VI by the stockholders of the Corporation shall not adversely affect any right or protection of a director of the Corporation existing at the time of such repeal or modification with respect to acts or omissions occurring prior to such repeal or modification.

# ARTICLE VII
AMENDMENT

The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation.

# ARTICLE VIII
SOLE INCORPORATOR

The name and the mailing address of the Sole Incorporator is as follows:

Stephen Hinton
One Federal Place, 1819 Fifth Avenue North
Birmingham, AL 35203-2119

IN WITNESS WHEREOF, this Certificate has been signed as of August 8, 2017, by the undersigned who affirms that the statements made herein are true and correct.

Stephen Hinton

Sole Incorporator

# **STATE OF DELAWARE**
**CERTIFICATE OF AMENDMENT**
**OF CERTIFICATE OF INCORPORATION**

The corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware does hereby certify:

**FIRST:** That at a meeting of the Board of Directors of
February 13, 2020

resolutions were duly adopted setting forth a proposed amendment of the Certificate of Incorporation of said corporation, declaring said amendment to be advisable and calling a meeting of the stockholders of said corporation for consideration thereof. The resolution setting forth the proposed amendment is as follows:

**RESOLVED**, that the Certificate of Incorporation of this corporation be amended by changing the Article thereof numbered "IV--Capital Stock" so that, as amended, said Article shall be and read as follows:

Total number of shares of Capital Stock that the Corporation shall have the authority to issue is Five Million (5,000,000), composed of 4,450,000 voting shares and 550,000 non-voting shares each at par value of $0.001 per share.

**SECOND:** That thereafter, pursuant to resolution of its Board of Directors, a special meeting of the stockholders of said corporation was duly called and held upon notice in accordance with Section 222 of the General Corporation Law of the State of Delaware at which meeting the necessary number of shares as required by statute were voted in favor of the amendment.

**THIRD:** 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 4th day of May, 2020.

By:

Authorized Officer

Title: CEO

Name: Robert Krause

Print or Type

**Attachment 4:** `corporatebylaws.pdf`

# **BYLAWS**  
**OF**  
**DEMAND DERIVATIVES CORP.**  
a Delaware corporation

1/4306469.5

## TABLE OF CONTENTS

### ARTICLE 1.
OFFICES

| Section 1.1 | Registered Office | 1 |
| --- | --- | --- |
| Section 1.2 | Additional Offices | 1 |

### ARTICLE 2.
MEETINGS OF STOCKHOLDERS

| Section 2.1 | Place of Meeting | 1 |
| --- | --- | --- |
| Section 2.2 | Annual Meetings | 1 |
| Section 2.3 | List of Stockholders | 1 |
| Section 2.4 | Special Meetings | 1 |
| Section 2.5 | Notice of Meetings | 2 |
| Section 2.6 | Business at Special Meetings | 2 |
| Section 2.7 | Quorum | 2 |
| Section 2.8 | Voting | 2 |
| Section 2.9 | Proxies | 2 |
| Section 2.10 | Organization | 3 |
| Section 2.11 | Order of Business | 3 |
| Section 2.12 | Action by Consent | 3 |

### ARTICLE 3.
DIRECTORS

| Section 3.1 | Number and Term | 4 |
| --- | --- | --- |
| Section 3.2 | Vacancies; Removal | 4 |
| Section 3.3 | Resignation | 5 |
| Section 3.4 | Powers | 5 |
| Section 3.5 | Place of Meetings | 5 |
| Section 3.6 | Annual Meetings | 5 |
| Section 3.7 | Regular Meetings | 6 |
| Section 3.8 | Special Meetings | 6 |
| Section 3.9 | Organization | 6 |
| Section 3.10 | Quorum; Voting; Meetings by Electronic Communication | 6 |
| Section 3.11 | Action by Consent | 6 |
| Section 3.12 | Committees | 6 |
| Section 3.13 | Compensation | 7 |
| Section 3.14 | Conflict of Interest | 8 |

### ARTICLE 4.
NOTICES

| Section 4.1 | Notice to Stockholders | 8 |
| --- | --- | --- |
| Section 4.2 | Notice to Directors | 8 |
| Section 4.3 | Form of Notice | 9 |
| Section 4.4 | Waiver of Notice | 9 |

### ARTICLE 5.
OFFICERS

| Section 5.1 | Officers | 9 |
| --- | --- | --- |

1/4306469.5

| Section 5.2 | Term of Office; Removal; Vacancies | 9 |
| --- | --- | --- |
| Section 5.3 | Duties of Officers | 10 |

# **ARTICLE 6.**
**CERTIFICATES OF STOCK**

| Section 6.1 | Certificates | 11 |
| --- | --- | --- |
| Section 6.2 | Lost, Stolen or Destroyed Certificates | 12 |
| Section 6.3 | Transfer of Stock | 12 |
| Section 6.4 | Record Date | 12 |
| Section 6.5 | Registered Stockholders | 13 |

# **ARTICLE 7.**
**INDEMNIFICATION**

| Section 7.1 | Indemnification | 13 |
| --- | --- | --- |
| Section 7.2 | Advancement of Expenses | 13 |
| Section 7.3 | Insurance | 14 |
| Section 7.4 | Binding Effect | 14 |
| Section 7.5 | Procedural Rights | 14 |
| Section 7.6 | Survival of Right | 15 |

# **ARTICLE 8.**
**GENERAL PROVISIONS**

| Section 8.1 | Dividends | 15 |
| --- | --- | --- |
| Section 8.2 | Reserves | 15 |
| Section 8.3 | Checks | 15 |
| Section 8.4 | Fiscal Year | 15 |
| Section 8.5 | Seal | 15 |
| Section 8.6 | Contracts | 15 |
| Section 8.7 | Voting of Corporation's Securities | 16 |

# **ARTICLE 9.**
**AMENDMENT**

| Section 9.1 | Procedure | 16 |
| --- | --- | --- |

1/4306469.5

# BYLAWS OF DEMAND DERIVATIVES CORP.

## ARTICLE 1.

**Section 1.1 Registered Office.** The registered office of the corporation shall be in the City of Wilmington, County of New Castle, State of Delaware, or such other place as the board of directors may designate.

**Section 1.2 Additional Offices.** The corporation may also have offices at such other places both within and without the State of Delaware as the board of directors may from time to time determine or the business of the corporation may require.

## MEETINGS OF STOCKHOLDERS

**Section 2.1 Place of Meeting.** Meetings of the stockholders of the corporation may be held at such place, either within or without the State of Delaware, as may be determined from time to time by the board of directors.

**Section 2.2 Annual Meetings.** Annual meetings of stockholders shall be held each year at such time and place as determined by the board of directors of the corporation and stated in the notice of the meeting, at which meeting the stockholders shall elect a board of directors and transact such other business as may properly be brought before the meeting.

**Section 2.3 List of Stockholders.** The officer who has charge of the stock ledger of the corporation shall prepare and make, at least ten (10) days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten (10) days prior to the meeting, at the corporation's principal place of business. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.

**Section 2.4 Special Meetings.** Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by the law of the State of Delaware or by the certificate of incorporation, may be called by the chairman of the board of directors, or, in the absence of the chairman, by the CEO or the secretary at the request in writing of a majority of the board of directors or at the request in writing of stockholders owning a majority of the shares of the issued and outstanding capital stock of the corporation (on an as-converted to common stock basis) then entitled to vote at the requested meeting of the stockholders. Such request shall state the purpose or purposes of the proposed meeting.

1

**Section 2.5 Notice of Meetings.** Unless otherwise required by law, written notice of an annual or special meeting stating the place, date and hour of the meeting and, in the case of special meetings, the purpose or purposes for which the meeting is called, shall be given to each stockholder entitled to vote at such meeting not less than ten (10) nor more than sixty (60) days before the date of the meeting.

**Section 2.6 Business at Special Meetings.** Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice or in the waiver of such notice pursuant to Section 4.4 hereof.

**Section 2.7 Quorum.** The holders of one vote more than fifty percent (i.e., 50% plus one share) of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by the law of the State of Delaware or by the certificate of incorporation. The stockholders present at a duly called or convened meeting at which a quorum is present may continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum.

**Section 2.8 Adjournment.** At any meeting of stockholders, whether annual or special, or any adjournment thereof, including any such meeting at which a quorum is not present or represented, the chairman of the meeting shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting. At such adjourned meeting at which a quorum shall be present or represented any business may be transacted which might have been transacted at the meeting as originally notified. If the adjournment is for more than thirty (30) days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.

**Section 2.9 Voting.** When a quorum is present at any meeting, the vote of the holders of shares of stock having a majority of the voting power present in person or represented by proxy at such meeting shall decide any question, other than the election of directors, brought before such meeting, except to the extent a different vote is required by express provision of the law of the State of Delaware or of the certificate of incorporation. All elections of directors by the stockholders of the corporation shall be by plurality vote, except to the extent a different vote is required by express provision of the law of the State of Delaware or the certificate of incorporation.

**Section 2.10 Proxies.** Unless otherwise provided in the certificate of incorporation, each stockholder shall at every meeting of the stockholders be entitled to one vote in person or by proxy for each share of the capital stock having voting power held by such stockholder, but no proxy shall be voted or acted upon after three (3) years from its date, unless the proxy provides for a longer period.

2

**Section 2.11 Organization.** At each meeting of stockholders, the chairman of the board of directors or, in the absence of the chairman, the CEO, or if there is no CEO or if there be one and the CEO is absent, a vice president, and in case more than one vice president shall be present, that vice president designated by the board of directors (or in the absence of any such designation, the most senior vice president, based on age, present), shall act as chairman of the meeting. The secretary, or in his or her absence, one of the assistant secretaries, shall act as secretary of the meeting. In case none of the officers above designated to act as chairman or secretary of the meeting, respectively, shall be present, a chairman or a secretary of the meeting, as the case may be, shall be chosen by a majority of the votes cast at such meeting by the holders of shares of capital stock present in person or represented by proxy and entitled to vote at the meeting.

**Section 2.12 Order of Business.** The board of directors shall be entitled to make such rules or regulations for the conduct of meetings of stockholders as it shall deem necessary, appropriate or convenient. Subject to such rules and regulations of the board of directors, if any, the chairman of the meeting 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 necessary, appropriate or convenient for the proper conduct of the meeting, including, without limitation, establishing an agenda or order of business for the meeting, but the order of business to be followed at any meeting at which a quorum is present may be changed by a majority of the votes cast at such meeting by the holders of shares of capital stock present in person or represented by proxy and entitled to vote at the meeting.

# **Section 2.13 Stockholder Action by Consent.**

(a) Unless otherwise provided in the certificate of incorporation, any action required or permitted to be taken at any annual or special meeting of stockholders of the corporation may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action 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 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. Delivery made to the corporation's registered office shall be by hand or by certified or registered mail, return receipt requested.

(b) 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 sixty (60) days of the earliest dated consent delivered to the corporation in the manner required by paragraph (a) of this Section 2.12, written consents signed by a sufficient number of holders to take action are delivered to the corporation in the manner provided in said paragraph (a).

(c) Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders (i) who have not consented in writing and (ii) who if the action had been taken at a meeting, would have been

3

entitled to notice of the meeting if the record date for such meeting had been the date that written consents signed by a sufficient number of holders or members to take the action were delivered to the corporation in the manner required by Section 2.12(a). Failure to provide such notice will not impair or invalidate any corporate action taken by written consent in accordance with this Section 2.12.

(d) An electronic mail, facsimile or other electronic transmission consenting to an action to be taken and transmitted by a stockholder or proxyholder shall be deemed to be written, signed and dated for the purposes of this Section 2.12, provided that any such electronic mail, facsimile or other electronic transmission sets forth or is delivered with information from which the corporation can determine (i) that the electronic mail, facsimile or other electronic transmission was transmitted by the stockholder or proxyholder or by a person or persons authorized to act for the stockholder and (ii) the date on which such stockholder or proxyholder or authorized person or persons transmitted such electronic mail, facsimile or electronic transmission. The date on which such electronic mail, facsimile or electronic transmission is transmitted shall be deemed to be the date on which such consent was signed. No consent given by electronic mail, facsimile or other electronic transmission shall be deemed to have been delivered until such consent is reproduced in paper form and until such paper form shall be delivered 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. Delivery made to a corporation's registered office shall be made by hand or by certified or registered mail, return receipt requested. Notwithstanding the foregoing limitations on delivery, consents given by electronic mail, facsimile or other electronic transmission may be otherwise delivered to the principal place of business of the corporation or to an officer or agent of the corporation having custody of the book in which proceedings of meetings of stockholders are recorded if, to the extent and in the manner provided by resolution of the board of directors of the corporation. Any copy, facsimile or other reliable reproduction of a consent in writing may be substituted or used in lieu of the original writing for any and all purposes for which the original writing could be used, provided that such copy, facsimile or other reproduction is a complete reproduction of the entire original writing.

## ARTICLE 3.

**Section 3.1 Number and Term.** The number of directors which shall constitute the board of directors shall be fixed by resolution of the board of directors from time to time. Directors shall be elected at the annual meeting of the stockholders, except as provided in Section 3.2 of this Article, and each elected director shall hold office until such director's successor is elected and qualified or until the earlier of the director's death, resignation or removal. Directors need not be stockholders.

**Section 3.2 Vacancies; Removal.** Subject to the provisions of the certificate of incorporation, vacancies resulting from death, resignation, disqualification, removal or other causes and newly created directorships resulting from any increase in the authorized number of directors may be filled by the affirmative vote of a majority of the directors then in office, though

4

less than a quorum, or by a sole remaining director, and the directors so chosen shall hold office until the next annual meeting of stockholders and until their successors are duly elected and qualified, unless sooner removed; provided, however, that whenever the holders of any class or classes of stock or series thereof are entitled to elect one or more directors by the provisions of the certificate of incorporation, vacancies and newly created directorships of such class or classes or series shall, unless the board of directors determines by resolution that any such vacancies or newly created directorships shall be filled by stockholders, be filled by a majority of the directors elected by such class or classes or series thereof then in office, or by a sole remaining director so elected. If there are no directors in office, then an election of directors may be held in the manner provided by the law of the State of Delaware. Subject to the provisions of the certificate of incorporation, any director of the corporation may be removed from office at any time with or without cause, by the holders of a majority of shares of the corporation then entitled to vote at an election of directors.

**Section 3.3 Resignation.** Any director may resign at any time by delivering his or her notice in writing or by electronic transmission to the secretary of the corporation, such resignation to specify whether it will be effective at a particular time, upon receipt by the secretary or at the pleasure of the board of directors. If no such specification is made, it shall be deemed effective at the pleasure of the board of directors. When one or more directors shall resign from the board of directors, effective at a future date, a majority of the directors then in office, including those who have so resigned, shall have power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective, and each director so chosen shall hold office for the unexpired portion of the term of the director whose place shall be vacated and until his successor shall have been duly elected and qualified.

**Section 3.4 Powers.** The business and operations of the corporation shall be managed by or under the direction of its board of directors which may exercise all such powers of the corporation and do all such lawful acts and things as are not by the law of the State of Delaware or by the certificate of incorporation or by these bylaws directed or required to be exercised or done by the stockholders or any stockholder. The board of directors may adopt such rules and regulations, not inconsistent with the law of the State of Delaware, the certificate of incorporation or these bylaws, or as it may deem proper for the conduct of its meetings and the management of the corporation.

**Section 3.5 Place of Meetings.** The board of directors of the corporation may hold meetings, both regular and special, either within or without the State of Delaware.

**Section 3.6 Annual Meetings.** The first meeting of each newly elected board of directors shall be held at the same place as the annual meeting of the stockholders immediately following the adjournment thereof, and no notice of such meeting shall be necessary to the newly elected directors in order legally to constitute the meeting, provided a quorum shall be present. In the event of the failure of the board of directors to hold such meeting at the same place as the annual meeting of the stockholders immediately following the adjournment thereof, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the board of directors, or as shall be specified in a written waiver signed by all of the directors.

5

**Section 3.7 Regular Meetings.** Regular meetings of the board of directors may be held without further notice at such time and at such place as shall from time to time be determined by the board and publicized among the directors in the manner provided in Section 4.2 of these bylaws.

**Section 3.8 Special Meetings.** Special meetings of the board may be called by the chairman of the board of directors, or in the absence of the chairman, by the CEO, the secretary, or two (2) or more directors on twenty-four (24) hours notice to each director, delivered in the manner provided in Section 4.2 of these bylaws.

**Section 3.9 Organization.** At each meeting of the board of directors, the chairman of the board of directors, or in the absence of the chairman, the CEO, or in the absence of the CEO, a chairman chosen by a majority of the directors present, shall preside. Unless otherwise determined by the board of directors, the secretary shall act as secretary at each meeting of the board of directors. In case the secretary shall be 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 3.10 Quorum; Voting; Meetings by Electronic Communication.** At all meetings of the board, a majority of the directors then constituting the total number of the board shall constitute a quorum for the transaction of business and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the board of directors, except as may be otherwise specifically provided by the law of the State of Delaware or by the certificate of incorporation. If a quorum shall not be present at any meeting of the board of directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present. Any director may participate in any meeting of the board of directors or a committee of the board of directors by means of conference telephone or other communications equipment by means of which all persons participating in such meeting can hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting.

**Section 3.11 Board Action by Consent.** 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 members of the board or committee, as the case may be, consent thereto in writing, or by electronic transmission, and the writing(s) and the electronic transmission(s) are filed with the minutes of proceedings of the board or committee.

**Section 3.12 Committees.** The board of directors may, by resolution passed by a majority of the whole board, designate one or more committees, each committee to consist of one or more of the directors of the corporation. The board 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. Any such committee, to the extent provided in the resolution of the board of directors, shall have and may exercise the powers and authority of the board of directors in the management of the business and operations of the corporation, and may authorize the seal

6

of the corporation to be affixed to all papers which may require it, but no such committee shall have the power or authority in reference to amending the certificate of incorporation (except that a committee may, to the extent authorized in any resolution or resolutions providing for the issuance of shares of stock adopted by the board of directors as provided in Section 151(a) of the General Corporation Law of the State of Delaware, or any successor provision thereto and only to the extent consistent with the certificate of incorporation and these bylaws, fix the designation and any of the preferences or rights of such shares relating to dividends, redemption, dissolution, any distribution of assets of the corporation or the conversion into, or the exchange of such shares for, shares of any other class or classes or any other series of the same or any other class or classes of stock of the corporation or fix the number of shares of any series of stock or authorize the increase or decrease of the shares of any series), adopting an agreement of merger or consolidation, recommending to the stockholders the sale, lease or exchange of all or substantially all of the corporation's property and assets, recommending to the stockholders a dissolution of the corporation or a revocation of a dissolution, or amending the bylaws of the corporation; and, unless the resolution or the certificate of incorporation expressly so provides and then only to the extent consistent with the certificate of incorporation and these bylaws, no such committee shall have the power or authority to declare a dividend or to authorize the issuance of stock, or to adopt a certificate of ownership and merger pursuant to Section 253 of the General Corporation Law of the State of Delaware, or any successor provision thereto. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the board of directors and shall keep regular minutes of its meetings and report the same to the board of directors when required. The board of directors, subject to any requirements of any outstanding series of preferred stock, may at any time increase or decrease the number of members of a committee or terminate the existence of a committee. The membership of a committee member shall terminate on the date of his or her death or voluntary resignation from the committee or from the board of directors. The board of directors may at any time for any reason remove any individual committee member and the board of directors may fill any committee vacancy created by death, resignation, removal or increase in the number of members of the committee.

**Section 3.13 Compensation.** Unless otherwise restricted by the certificate of incorporation, the board of directors shall have the authority to fix the compensation of directors. The directors may be paid their expenses, if any, of attendance at each meeting of the board of directors and may be paid a fixed sum for attendance at each meeting of the board of directors or a stated salary as director, together with reimbursement for the reasonable out-of-pocket expenses, if any, incurred by such director in connection with the performance of his or her duties. Each director who shall serve as a member of any committee of directors in consideration of serving as such shall be entitled to such additional amount per annum or such fees for attendance at committee meetings, or both, as the board of directors may from time to time determine, together with reimbursement for the reasonable out-of-pocket expenses, if any, incurred by such director in the performance of his or her duties. No such payment shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed like compensation for attending committee meetings.

7

### Section 3.14 Conflict of Interest.

(a) No contract or other transaction between the corporation and one or more of its directors or officers, or between the corporation and any other corporation, partnership, association or other organization in which one or more of the corporation's directors or officers are directors or officers or have a financial interest, shall be void or voidable solely for such reason, or solely because such director or directors or officer or officers are present at or participates in the meeting of the board of directors or a committee thereof which authorizes or approves the contract or transaction, or solely because such director's or directors' votes are counted for such purpose, if (i) the material facts as to such director's or directors' relationships or interests and as to the contract or transaction are disclosed or are known to the board of directors or the committee, and the board or committee in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested directors, even though the disinterested directors be less than a quorum; or (ii) the material facts as to such director's or directors' relationships or interests as to the contract or transaction are disclosed or are known to the stockholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the stockholders; or (iii) the contract or transaction is fair as to the corporation as of the time it is authorized, approved or ratified, by the board of directors, a committee thereof, or the stockholders.

(b) Common or interested directors may be counted in determining the presence of a quorum at a meeting of the board of directors or of a committee which authorizes the contract or transaction.

## ARTICLE 4.

### Section 4.1 Notice to Stockholders.

Whenever, under the provisions of the law of the State of Delaware or of the certificate of incorporation or of these bylaws, notice is required to be given to any stockholder, it shall not be construed to mean personal notice only, but such notice may be given in writing, by first class mail addressed to such stockholder at such stockholder's address as it appears on the records of the corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail.

### Section 4.2 Notice to Directors.

Whenever, under the provisions of the law of the State of Delaware or of the certificate of incorporation or of these bylaws, notice is required to be given to any director, it shall be delivered by the chairman, the CEO or the secretary to such director within the time provided in Article 3 of these bylaws. Such notice either: (i) may be in writing (A) delivered personally, (B) delivered by first class mail to a director at such director's address as it appears in the records of the corporation, or (C) delivered by electronic mail or other means of electronic transmission; or (ii) may be given orally either in person or by telephone. If mailed, such notice shall be deemed to be delivered three (3) days after being deposited in the United States mail, so addressed, with postage thereon prepaid. If by electronic mail or other electronic means of transmission, such notice shall be deemed delivered upon completion of transmittal from the

8

sender thereof, provided that it shall have been directed to such a place as is reasonably calculated to cause actual receipt of such notice by such director. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the board of directors, need be specified in any notice of such meeting.

**Section 4.3 Form of Notice.** It shall not be necessary that the same method of giving notice be employed in respect of all recipients of notice, but one permissible method may be employed in respect of any one or more, and any other permissible method or methods may be employed in respect of any other or others.

**Section 4.4 Waiver of Notice.** Whenever any notice is required to be given under the provisions of the law of the State of Delaware or of the certificate of incorporation or of these bylaws to a stockholder or director, a waiver thereof in writing (which may be made by electronic transmission) by such person, signed or, in the case of an electronic transmission, transmitted by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto. Attendance by a person at a meeting shall constitute a waiver of notice of such meeting except when the person 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 has not been lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders, directors, or members of a committee of directors need be specified in any written waiver of notice unless so required by the certificate of incorporation.

## ARTICLE 5.

**Section 5.1 Officers.** The officers of the corporation shall be chosen by the board of directors. The board of directors may choose a chairman of the board of directors, a CEO, a president, one (1) or more senior vice presidents, a chief financial officer and a secretary (collectively, the 'Senior Officers') and one (1) or more vice presidents, assistant secretaries, treasurers, assistant treasurers and such other officers or agents as the board of directors may deem desirable or appropriate, and may give any of them such further designations or alternate titles as it considers desirable. In addition, the board of directors at any time and from time to time may authorize any officer of the corporation to appoint one (1) or more officers of the kind described in the immediately preceding sentence (other than any Senior Officers). Any number of offices may be held by the same person unless the certificate of incorporation otherwise provides. Officers and agents appointed by the board of directors shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the board of directors. The salaries and other compensation of all officers and agents of the corporation shall be fixed by the board of directors.

**Section 5.2 Term of Office; Removal; Vacancies.** The officers of the corporation shall serve at the pleasure of the board of directors and shall hold office until their successors are duly elected and qualified or until their earlier resignation or removal. Any officer elected or appointed by the board of directors may be removed at any time with or without cause by the

9

affirmative vote of a majority of the board of directors. Any vacancy occurring in any office of the corporation shall be filled by the board of directors.

**Section 5.3 Duties of Officers.** The following officers of the corporation, if and when elected by the board of directors of the corporation, shall have the following duties (except to the extent otherwise determined by the board of directors):

(a) **Chairman.** The chairman of the board of directors, if one shall have been appointed, shall preside at all meetings of the board of directors and shall exercise such powers and perform such other duties as shall be determined from time to time by the board of directors.

(b) **CEO.** The CEO shall be the chief executive officer of the corporation. The CEO shall, subject to the direction of the board of directors, have general and active management, supervision and control of the business and all operations of the corporation and, in the absence of the chairman, shall preside at all meetings of the stockholders and the board of directors. The CEO shall carry into effect, or shall cause to be carried into effect, all orders and resolutions of the board of directors. The CEO may execute certificates for shares of the corporation and bonds, mortgages, deeds, contracts or other instruments on behalf of the corporation except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the board of directors to some other officer or agent of the corporation.

(c) **President.** In the absence or disability of the CEO or if the office of CEO is vacant, the president shall be the chief executive officer of the corporation and shall, subject to the direction of the board of directors, have general and active management, supervision and control of the business and all operations of the corporation and, in the absence of the chairman, shall preside at all meetings of the stockholders and the board of directors. The President shall perform other duties commonly incident to the office (including, in the absence or disability of the CEO or if the office of CEO is vacant, the duties of the CEO set forth above) and shall also perform such other duties and have such other powers as the board of directors or CEO may from time to time prescribe.

(d) **Chief Financial Officer.** The chief financial officer shall keep or cause to be kept the books of account of the corporation in a thorough and proper manner and shall render statements of the financial affairs of the corporation in such form and as often as required by the board of directors or the CEO. The chief financial officer shall perform other duties commonly incident to his or her office and shall also perform such other duties and have such other powers as the board of directors or CEO may from time to time prescribe.

(e) **Vice presidents.** In the absence of the CEO or in the event of the CEO's inability or refusal to act, the vice president (or in the event there be more than one vice president, the vice presidents in the order designated, or in the absence of any designation, then in the order of their election) shall perform the duties of the CEO, and when so acting, shall have all the powers of and be subject to all the restrictions upon the CEO. The vice presidents shall perform such other duties and have such other powers as the board of directors or CEO may from time to time prescribe.

10

(f) **Secretary.** Unless otherwise determined by the board of directors, the secretary shall attend all meetings of the board of directors and all meetings of the stockholders and record all the proceedings of the meetings of the stockholders and of the board of directors in a book to be kept for that purpose and shall perform like duties for the standing committees when required. The secretary shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the board of directors, and shall perform such other duties as may be prescribed by the board of directors or CEO, under whose supervision the secretary shall be. The secretary shall have custody of the corporate seal of the corporation and the secretary, or an assistant secretary, shall have authority to affix the same to any instrument requiring it and when so affixed, it may be attested by the secretary's signature or by the signature of such assistant secretary. The board of directors may give general authority to any other officer to affix the seal of the corporation and to attest the affixing by such officer's signature.

(g) **Assistant Secretaries.** The assistant secretary, or if there be more than one, the assistant secretaries in the order determined by the board of directors (or if there be no such determination, then in the order of their election), shall, in the absence of the secretary or in the event of the secretary's inability or refusal to act, perform the duties and exercise the powers of the secretary and shall perform such other duties and have such other powers as the board of directors or CEO may from time to time prescribe.

(h) **Treasurer.** The treasurer shall have the custody of the corporate funds and securities 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 or CEO.

(i) **Assistant Treasurers.** The assistant treasurer, or if there shall be more than one, the assistant treasurers in the order determined by the board of directors (or if there be no such determination, then in the order of their election), shall, in the absence of the treasurer or in the event of the treasurer's inability or refusal to act, perform the duties and exercise the powers of the treasurer and shall perform such other duties and have such other powers as the board of directors or CEO may from time to time prescribe.

## CERTIFICATES OF STOCK

**Section 6.1 Certificates.** Shares of stock in the corporation may be certificated or uncertificated. If certificated, each holder of stock in the corporation shall be entitled to have a certificate, signed by, or in the name of the corporation by, the CEO or a vice president, and by the treasurer or an assistant treasurer or the secretary or an assistant secretary of the corporation, certifying the number of shares owned by such holder of stock in the corporation. Certificates may be issued for partly paid shares and in such case upon the face or back of the certificates issued to represent any such partly paid shares, the total amount of the consideration to be paid therefor and the amount paid thereon shall be stated. In case any officer, transfer agent or registrar who has signed a certificate shall have ceased to be such officer, transfer agent or registrar before such

11

certificate is issued, it may be issued by the corporation with the same effect as if such person were such officer, transfer agent or registrar at the date of issue.

**Section 6.2 Lost, Stolen or Destroyed Certificates.** A new certificate or certificates shall be issued in place of any certificate or certificates theretofore issued by the corporation alleged to have been lost, stolen, or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen, or destroyed. The corporation may require, as a condition precedent to the issuance of a new certificate or certificates, the owner of such lost, stolen, or destroyed certificate or certificates, or the owner's legal representative, to agree to indemnify the corporation in such manner as it shall require or to give the corporation a surety bond in such form and amount as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificate alleged to have been lost, stolen, or destroyed.

**Section 6.3 Transfer of Stock.** Transfers of record of shares of stock of the corporation shall be made only upon its books by the holders thereof, in person or by attorney duly authorized, and, if certificated, upon the surrender of a certificate or certificates for a like number of shares, properly endorsed.

# **Section 6.4 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 sixty (60) nor less than ten (10) days before the date of such meeting. 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 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 date shall not be more than ten (10) 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, when no prior action by the board of directors is required, 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 in the manner provided by Section 2.12(a) hereof. If no record date has been fixed by the board of directors and prior action by the board of directors is required, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the

12

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 sixty (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.

**Section 6.5 Registered Stockholders.** The corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of the State of Delaware.

## INDEMNIFICATION

**Section 7.1 Indemnification.** To the extent not prohibited by law, the corporation shall indemnify any person who is or was made, or threatened to be made, a party to any threatened, pending or completed action, suit or proceeding (a 'Proceeding'), whether civil, criminal, administrative or investigative, including, without limitation, an action by or in the right of the corporation to procure a judgment in its favor, by reason of the fact that such person, or a person of whom such person is the legal representative, is or was a director or officer of the corporation, or, at the request of the corporation, is or was serving as a director or officer of any other corporation or in a capacity with comparable authority or responsibilities for any limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise (an 'Other Entity'), against judgments, fines, penalties, excise taxes, amounts paid in settlement and costs, charges and expenses (including attorneys' fees, disbursements and other charges). Persons who are not directors or officers of the corporation (or otherwise entitled to indemnification pursuant to the preceding sentence) may be similarly indemnified in respect of service to the corporation or to an Other Entity at the request of the corporation to the extent the board of directors at any time specifies that such persons are entitled to the benefits of this Article 7. The indemnification and advancement of expenses pursuant to this Article 7 shall be in addition to, and not exclusive of, any other right that the person seeking indemnification may have under these bylaws, the certificate of incorporation, any separate contract or agreement or applicable law.

**Section 7.2 Advancement of Expenses.** The corporation shall, from time to time, reimburse or advance to any director or officer or other person entitled to indemnification hereunder the funds necessary for payment of expenses, including attorneys' fees and

13

disbursements, incurred in connection with any Proceeding, in advance of the final disposition of such Proceeding; provided, however, that, if required by the law of the State of Delaware or by the board of directors, such expenses incurred by or on behalf of any director or officer or other person may be paid in advance of the final disposition of a Proceeding only upon receipt by the corporation of an undertaking, by or on behalf of such director or officer (or other person indemnified hereunder), to repay any such amount so advanced if a court of competent jurisdiction determines that such director, officer or other person is not entitled to be indemnified for such expenses.

**Section 7.3 Insurance.** The corporation may purchase and maintain insurance on behalf of any person who is or was a director or officer of the corporation, and may purchase and maintain insurance on behalf of any person who is or was an employee or agent of the corporation, or any person who is or was serving at the request of the corporation as a director, officer, employee, or agent of an Other Entity, against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person's status as such, whether or not the corporation would have the power to indemnify such person against such liability under applicable law.

**Section 7.4 Binding Effect.** The provisions of this Article 7 shall be a contract between the corporation, on the one hand, and each director and officer who serves in such capacity at any time while this Article 7 is in effect and any other person entitled to indemnification hereunder, on the other hand, pursuant to which the corporation and each such director, officer or other person intend to be, and shall be, legally bound. No repeal or modification of this Article 7 shall affect any rights or obligations with respect to any state of facts then or theretofore existing or thereafter arising or any proceeding theretofore or thereafter brought or threatened based in whole or in part upon any such state of facts. If this Article 7 or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the corporation shall nevertheless indemnify each director, officer, employee and agent, as applicable, to the full extent not prohibited by any applicable portion of these bylaws that shall not have been invalidated, or by any other applicable law. If this Article 7 shall be invalid due to the application of the indemnification provisions of another jurisdiction, then the corporation shall indemnify each director, officer, employee and agent, as applicable, to the full extent permitted under applicable law.

**Section 7.5 Procedural Rights.** The rights to indemnification and reimbursement or advancement of expenses provided by, or granted pursuant to, this Article 7 shall be enforceable by any person entitled to such indemnification or reimbursement or advancement of expenses in any court of competent jurisdiction. The burden of proving that such indemnification or reimbursement or advancement of expenses is not appropriate shall be on the corporation. Neither the failure of the corporation (including its board of directors, its independent legal counsel and its stockholders) to have made a determination prior to the commencement of such action that such indemnification or reimbursement or advancement of expenses is proper in the circumstances nor an actual determination by the corporation (including its board of directors, its independent legal counsel and its stockholders) that such person is not entitled to such indemnification or reimbursement or advancement of expenses shall constitute a defense to the action or create a presumption that such person is not so entitled. Such a person shall also be indemnified for any

14

expenses incurred in connection with successfully establishing his or her right to such indemnification or reimbursement or advancement of expenses, in whole or in part, in any such proceeding.

**Section 7.6 Survival of Right.** Any right to indemnification or advancement of expenses provided by or granted pursuant to this Article 7 shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors, administrators and personal representatives of such a person.

## GENERAL PROVISIONS

**Section 8.1 Dividends.** Dividends upon the capital stock of the corporation, subject to the provisions of the certificate of incorporation, if any, may be declared by the board of directors at any regular or special meeting. Dividends may be paid in cash, property or shares of capital stock, subject to the provisions of the certificate of incorporation.

**Section 8.2 Reserves.** Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or for such other purpose as the directors shall think conducive to the interests of the corporation, and the directors may modify or abolish any such reserve in the manner in which it was created.

**Section 8.3 Checks.** All checks or demands for money and notes of the corporation shall be signed by such officer or officers or such other person or persons as the board of directors may from time to time designate.

**Section 8.4 Fiscal Year.** The fiscal year of the corporation shall be fixed by resolution of the board of directors.

**Section 8.5 Seal.** The corporate seal, if any, shall have inscribed thereon the name of the corporation and the words 'Corporate Seal' and 'Delaware.' The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.

**Section 8.6 Contracts.** The board of directors may authorize any officer, agent or employee to enter into any contract, instrument or agreement on behalf of the corporation, and the authority granted may be general or confined to specific instances. Except as provided in this section or as authorized by the board of directors, no officer, agent, or employee, other than the CEO, any vice president, the secretary or the treasurer, shall have any power or authority to bind the corporation by any contract, instrument or agreement, to pledge its credit, or to render it liable, for any purpose or any amount.

15

**Section 8.7 Voting of Corporation’s Securities.** Unless otherwise ordered by the board of directors, the CEO or any vice president, or, such other officer as may be designated by the board of directors to act in the absence of the CEO or any vice president, shall have full power and authority on behalf of the corporation to attend and to act and to vote, and to execute a proxy or proxies empowering others to attend and to act and to vote, at any meetings of security holders of any corporation in which the corporation may hold securities, and at such meetings the CEO, or such other officer of the corporation, or such proxy shall possess and may exercise any and all rights and powers incident to the ownership of such securities, and which as the owner thereof the corporation might have possessed and exercised, if present. The secretary or any assistant secretary may affix the corporate seal to any such proxy or proxies so executed by the CEO, or such other officer, and attest the same. The board of directors by resolution from time to time may confer like powers upon any other person or persons.

## ARTICLE 9.

**Section 9.1 Procedure.** These bylaws may be altered, amended or repealed or new bylaws may be adopted by the stockholders or by the board of directors taking action in accordance with these bylaws.

As adopted August 11, 2017

16

**Attachment 5:** `pitchdeck.pdf`

![img-0.jpeg](img-0.jpeg)

![img-1.jpeg](img-1.jpeg)

![img-2.jpeg](img-2.jpeg)

![img-3.jpeg](img-3.jpeg)

# **Demand Derivatives**

*The Exchange of IdeasTM*

![img-4.jpeg](img-4.jpeg)

![img-5.jpeg](img-5.jpeg)

![img-6.jpeg](img-6.jpeg)

A Revolutionary
Futures Exchange and Clearing House
Trading the World's Major Assets in a Creative New Way*

*Subject to CFTC and SEC approval

# The Opportunity

- By far, derivatives trading is the largest industry in the world
  - $15 trillion trades each day on futures exchanges
  - $10 billion per minute
  - 15,000 times bigger than Amazon's daily sales
- The CME is the largest exchange
  - 91% market share of U.S. futures volume - a near monopoly
  - $82 billion market cap (as of 31 Dec 2021)
- However, there are big structural problems and inefficiencies lurking under the surface

# Their Problems

# Our Solutions

Risk

Speed

Safety

Cost

![img-7.jpeg](img-7.jpeg)

"Best Efforts"
Stops on Trades

![img-8.jpeg](img-8.jpeg)

Overnight
Clearing

**BBB -**

Clearing houses
Striving for Good
Credit Rating

![img-9.jpeg](img-9.jpeg)

Fees Keep Rising

![img-10.jpeg](img-10.jpeg)

Absolute
Loss Limits

![img-11.jpeg](img-11.jpeg)

Instant
Clearing

**AAA+**

Our clearing
house is fully
collateralized
(no default risk)

![img-12.jpeg](img-12.jpeg)

Cost Reductions of
50% to 90%

# More Problems

# More Solutions

Payments

Middlemen

Collateral

Trades

![img-13.jpeg](img-13.jpeg)

Current Exchanges
Cannot Guarantee
Payment on Winnings

![img-14.jpeg](img-14.jpeg)

Clearing
Members
Required

![img-15.jpeg](img-15.jpeg)

Billions of Idle
Assets in
"Guarantee Fund"

![img-16.jpeg](img-16.jpeg)

"Close Enough"
Execution

![img-17.jpeg](img-17.jpeg)

A Fully Collateralized
Process Means
Winnings Always
Paid in Full.

![img-18.jpeg](img-18.jpeg)

No
"Middleman"
Needed

![img-19.jpeg](img-19.jpeg)

No "Rainy-Day"
Fund Required

![img-20.jpeg](img-20.jpeg)

Precise Close-to-
Close Exposure

# Exchange and Clearing House

RealBOTTM

RealDemand Board of Trade

Regulated futures exchange* focusing on a suite of four proprietary instruments

RealClearTM

RealDemand Clearing

Vertically integrated, regulated, clearing house* dedicated to RealBOT instruments, including blockchain clearing

* Upon CFTC and SEC approval

# Proprietary Instrument Designs

RealVol®

A suite of realized volatility indices and instruments (trade risk itself)

RealDayTM

A true daily option
(perfect for hedging daily events at low cost)

RealGlobeTM

A "World Index Exchange" concept bringing country indices on a global platform with global liquidity

RealLimitTM

A novel redesign of a futures contract with the ability to limit risk to posted collateral

# Industry Growth

Quarterly Futures and Options Volume
2012 to 2021

![img-21.jpeg](img-21.jpeg)

Source: FIA

# Industry Metrics

- Statistic relevant to Demand Derivatives:
$15 trillion trades each day globally. The CME commands a near monopoly in the U.S. with 91% of U.S. futures trading.
- Statistic relevant to RealVol products:
1⁄2 million VIX® futures and options trade each day
- Statistic relevant to RealDay options:
131 million options trade each day on global exchanges
- Statistic relevant to RealGlobe products:
165 million equity index futures and options trade each day worldwide
- Statistic relevant to RealLimit futures:
115 million futures contracts trade each day at all exchanges
- Statistic relevant to RealClear:
The OCC has a true monopoly clearing 100% of U.S. securities-options volume.

# Competition

- RealVol: to compete with Cboe's VIX® contract
- RealDay: to compete with options exchanges
- RealGlobe: to compete with exchanges trading equity indices
- RealLimit: to compete with the CME's top 6 assets
- RealClear: to compete with OCC clearing

In short, only one or two successful products could thrust us into the top 10 exchanges in the world. Additional successes would make us a formidable competitor with the potential to rival the largest exchange.

9

# Potential Benefits

- Unique, in demand, risk/reward profiles
- Instant clearing
- Fully collateral-backed payments
- Loss limited to posted collateral
- Immutable record of all transactions
Market microstructure advancements
- Perfect execution at the close
- No clearing members required
- No guarantee fund required
- No risk-modeling required
- Dramatic fee cuts

Others

RealBOT

![img-22.jpeg](img-22.jpeg)

![img-23.jpeg](img-23.jpeg)

# Valuations

![img-0.jpeg](img-0.jpeg)

Demand Derivatives:
starting regulatory
process, $32m valuation,
**6 major assets plus
39 country indices**

ABAXX Exchange:
Nearing regulatory
approval, $245m valuation
(end of 2021), pre-revenue
startup, **2 proposed assets**

Cboe Exchange
(end of 2021):
1/2 trading revenue
from top **2 assets**

CME Group Exchanges
(end of 2021):
1/3 trading revenue
from top **6 assets**

# The Plan

- Pre-launch: Secure U.S.-regulation, proliferate IP, install technology, and pre-launch marketing campaign
- Phase I: list our three novel instrument designs on six key assets: gold, crude, corn, 10yr T-Note, EUR/USD, and a major stock index.
- Phase II: list roughly 40 country indices.
- Phase III (wish list): Partner with two more exchanges (one in Europe and one in Asia) to offer near-24-hour regional coverage and global liquidity - similar to an airline alliance - add satellite exchanges as desired.

Pre-Launch

Phase I

Phase II

Phase III

# Successes to Date (Mar 2022)

- Currently disseminating indices on Bloomberg® and Nasdaq
- Agreement in place with ICE DATA SERVICES to distribute trade data
- License agreement with BOXTM to list our instruments on securities
- Signed LOI with a U.S. options exchange to clear securities options
- Launching Round A2 on crowdfunding platform
- Exchange technology agreement in place with GMEX GROUP
- Custodial account at USbancorp Asset Management, Inc.
- Retained prominent CFTC/SEC/NFA attorney for regulatory applications
- Marketing staff identified and on standby
- Patents and trademarks recently updated

# Historical and Anticipated Timeline

- ✓ RealVol patent granted 2008
- ✓ Raised seed capital rounds ~$4m 2009-2020
- ✓ RealDay created 2014
- ✓ RealGlobe created 2016
- ✓ Demand Derivatives created 2017Q3
- ✓ Merger completed (union of “old” companies) 2018Q1
- ✓ RealLimit created 2018Q1
- ✓ Bloomberg and Nasdaq (index distribution) 2018Q1
- ✓ GMEX agreement (exchange technology) 2018Q2
- ✓ U.S. Bank agreement (custody of collateral) 2018Q2
- ✓ Options exchange agrees in principle to clear using RealClear 2021Q3
- ○ Pre-launch $6m round A funding 2022
- ○ Apply for exchange and clearing licenses with CFTC and SEC 2022
- ○ International IP protection 2022
- ○ Exchange technology implementation 2022
- ○ Pre-launch marketing 2022
- ○ Systems testing 2023
- ○ Exchange launch 2023
- ○ List RealLimit, RealVol, and RealDay on six major assets 2023
- ○ Round B funding ($20m) 2023
- ○ Expand to additional assets 2023
- ○ List RealGlobe assets 2024

# Team

![img-1.jpeg](img-1.jpeg)

- Robert Krause, CEO (founder and innovator, former CME and Morgan Stanley executive)
- Jeromee Johnson, Director (former executive at BATS and MIAX)
- Richard Heckinger, Director (former official of Federal Reserve Bank of Chicago)
- Donald Schlesinger, President (former executive at Morgan Stanley)
- Wendy Robinson, GC (CFTC and in-house counsel at large investment banks)
- Andrew Kumiega, Ph.D. CQE, CQA, CSQE, CISA, CISM, CGEIT, CRISC - Senior IT Governance and Reliability Advisor (multiple director and partner-level positions in financial services firms)
- Norman Wattenberger, Head of IT (no photo) (former Citibank lead in Strategy and Architecture Area)

# Products Differentiation

Issue with Current Instruments

RealVol®

VIX is based on implied volatility, not a very useful construct for hedging (~72% correlated to the index).

RealDayTM

Standard daily options would need dozens of fixed strikes on thousands of assets and replicated every day - overloading current systems.

RealGlobeTM

All country index futures are trading on local venues, generally and exclusively in the country of origin with large cost and operational complexities.

RealLimitTM

No amount of posted collateral can cover all risks to standard futures. Enormous financial stresses were felt in 2008, 2018, 2019, 2020, and 2022.

Company Solution

RealVol is based on realized volatility, the same measure as the successful and liquid OTC volatility swap market. (~0% correlated to the index).

Existing systems can easily handle the marginal load of RealDay, which requires only two options each day (one call and one put).

The RealGlobe concept aims to replace those disparate, local-only-liquidity markets with one truly global marketplace - with global liquidity and very large cost savings.

The RealLimit approach guarantees that all losses are constrained and fully collateralized - saving the system from a possible financial collapse.

# Technology

Demand Derivatives has partnered with GMEX (an “exchange in a box” solution including private blockchain clearing)

![img-2.jpeg](img-2.jpeg)

# IP Protections and Approvals

|  | Patents and Patents Pending | Index IP | Trademarks | SEC Approval (instruments) | CFTC Approval (instruments) |
| --- | --- | --- | --- | --- | --- |
| RealVol | ✓✓ | 1,600 Indices | RealVol® | ✓ | ✓ |
| RealDay | ✓ | N/A | RealDayTM BattleTM ReachTM ShockTM ScreamTM | ✓ | TBD |
| RealGlobe | ✓✓ | 39 Indices | RealGlobeTM | TBD | TBD |
| RealLimit | ✓ | N/A | RealLimitTM | TBD | TBD |

# Cost Reduction Targets

| RealVol | RealDay | RealGlobe | RealLimit |
| --- | --- | --- | --- |
| As compared to gaining the same exposure with delta-neutral hedging. | As compared to achieving daily protection using standard weekly options. | As compared to executing institutional transactions on existing global exchanges. | Estimate, as compared to listing standard futures with “unlimited” risk. |
| 91% Delta Neutral RealVol | 62% Weekly Options RealDay | 98% Equity Indices RealGlobe | ~90% Standard Futures RealLimit |

# Exchange Profit Margins

![img-3.jpeg](img-3.jpeg)

# Comprehensive Marketing Campaign

Personal Visits To:

CTAs
Hedge Funds
Market Makers
Investment Banks
Large Prop Shops

![img-0.jpeg](img-0.jpeg)

Institutional
One-on-Ones

Magazine/
Online Ads

Video Tutorials

![img-1.jpeg](img-1.jpeg)

![img-2.jpeg](img-2.jpeg)

News Releases
for Key Events

![img-3.jpeg](img-3.jpeg)

Show Types:

Futures
Options
Volatility
Hedge Funds
Equity
Risk Management
Pension Funds
Insurance

| No | Item # | Address | Address | City | City | Business | Business | City |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 1 | 1 | 1040 East Street | 1040 East Street | Palace City | Palace City | Laurel | Laurel | New |
| 2 | 2 | 154 Bala Mall | 154 Bala Mall | Eclipse | Eclipse | Evans | Evans | Elba |
| 3 | 3 | 802 Tennessee Avenue | 802 Tennessee Avenue | Delaware | Delaware | Harold | Harold | New |
| 4 | 4 | 100 Fourth Lane | 100 Fourth Lane | Tennessee | Tennessee | Chad | Chad | New |
| 5 | 5 | 1070 Beach Way | 1070 Beach Way | Coeur d'Alene | Coeur d'Alene | Garcia | Garcia | San |
| 6 | 6 | 700 North Lane | 700 North Lane | North Beach | North Beach | Hallman | Hallman | New |
| 7 | 7 | 970 Eighth Mall | 722 Arrow Lane | Wabash Park | Columbus | Parade | Parade | New |
| 8 | 8 | 247 Fifth Place | 247 Fifth Place | Auburn Addition | Auburn Addition | Baby | Baby | New |
| 9 | 9 | 840 Dallas Street | 840 Dallas Street | New Valley | New Valley | Verona | Verona | Carl |
| 10 | 10 | 740 Washington Street | 740 Washington Street | One Center | One Center | William | William | One |
| 11 | 11 | 302 Tennessee Place | 302 Tennessee Place | Yukonah West | Yukonah West | Wesley | Wesley | One |

Email List

Academic Papers

Brochures

Daily Social Media

![img-4.jpeg](img-4.jpeg)

![img-5.jpeg](img-5.jpeg)

Robert Krause, CEO
Donald Schlesinger, President
Wendy Robinson, General Counsel

Demand Derivatives Corp.
99 Wall Street
Suite 3901
New York, NY 10005
1-888-865-9267
dd@demandderivatives.com
demandderivatives.com

# Notice

The information contained herein is subject to change and must not be relied upon. Specifics vary according to the underlying asset. Assumptions and the projections upon which they are based are purely speculative. There is no warranty or guarantee that any estimate can be achieved. This document is for informational purposes only and is not an offer to buy or sell, nor a solicitation of an offer to buy or sell, any securities in Demand Derivatives Corp. ("DDC"), or any other security or financial instrument. Investment interests in DDC, if offered, will be available only to sophisticated investors who are interested in investing in DDC on their own behalf. Any offering or solicitation will be made only to qualified prospective investors pursuant to a subscription document, which should be read in its entirety.

This material is neither advice nor a recommendation to enter into any transaction. Certain information provided herein is obtained from sources, including publicly and privately available information, that DDC considers to be reliable; however, we cannot guarantee and make no representation as to, and accept no responsibility or liability for, the accuracy or completeness of this information. None of DDC, its subsidiaries, or affiliated companies, any of their respective licensees, successors, or assigns, or their respective officers, directors, employees, agents, or representatives, will be liable for actions taken or not taken in reliance thereon. Past performance is not necessarily indicative of future results.

The information contained in this document is confidential and proprietary to DDC. This document is presented with the express understanding that it will be held in strict confidence and will not be duplicated or used for any purpose, in whole or in part, other than for the evaluation of an investment opportunity, without written consent. Disclosure of the receipt of this document and the matters described herein is limited to the recipient and any individuals to whom disclosure is necessary in order for the recipient to make an informed decision whether to pursue a business relationship with DDC; provided, however, that disclosure may be made to other individuals who have signed a nondisclosure agreement with DDC. This document is intended only for the use of the individual or entity to which it is addressed and contains information that is privileged and confidential. If the reader of this message is not the intended recipient, you are hereby notified that any dissemination, distribution, or copying of this communication is strictly prohibited.

© 2022, Demand Derivatives Corp. All rights reserved. No use without prior, written permission. Trademarks (words, phrases, and logos), copyrights (text, figures, and layout), patents, and patents pending are owned or controlled by Demand Derivatives Corp.

- RealBOTTM, RealClearTM, RealDayTM, RealGlobeTM, and RealLimitTM are trademarks of Demand Derivatives Corp and/or its wholly owned subsidiaries. RealVol® is a registered trademark of RealVol LLC.
- Nasdaq® is a registered trademark of The Nasdaq Stock Market, Inc.
- ICE® is a registered trademark of Intercontinental Exchange Holdings, Inc.
- Bloomberg® is a registered trademark of Bloomberg Finance One L.P. Bloomberg (GP) Finance LLC
- BOX Options Exchange is a registered trademark of BOX Market LLC
- Cboe®, The Cboe Volatility Index®, and VIX® are registered trademarks of The Chicago Board Options Exchange, Incorporated

**Attachment 6:** `otherfinancial.pdf`

# Custodial and Voting Agreement

This Custodial and Voting Agreement (this “Agreement”) is entered into as of the date of electronic consent by the parties on the NetCapital Funding Portal Inc. (the “Portal”), by and among Portal, Netcapital Systems LLC, a Delaware limited liability company (“Agent”), and the undersigned investor (“Investor”). Portal is signing this Agreement on behalf of the Investor pursuant to a power of attorney granted by Investor to Portal, but Investor is fully bound by this Agreement as if Investor had signed the Agreement.

Custodian has agreed to open and maintain the Account (as defined below) for Investor and to provide other services to Investor in connection with the Account. This Agreement sets out the terms under which Custodian will provide those services to Investor and the arrangements that will apply in connection with those services.

In consideration of the mutual promises herein made and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound, the parties hereto agree as follows:

## 1. Interpretation

### 1.1 Definitions

In this Agreement:

- • “Account” means the account constituted by Investor’s purchase of beneficial interests in the Shares that were offered for sale by the Issuer on the Portal.
- • “Account Balance” means, in relation to the Account, the number of Shares beneficially owned by Investor, including all of Investor’s rights to and interest in the balance from time to time on that Account.
- • “Business Day” means a weekday that is not a federal holiday.
- • “Fees” means the fees and charges referred to in clause 5.1 of this Agreement.
- • “Issuer” means each issuer of the Shares.
- • “Shares” means the beneficial interests in the uncertificated shares of common stock or preferred stock or the units of convertible debt, limited liability company membership interests or limited partnership interests that were beneficially purchased by Investor on the Portal.
- • “Transfer Agent” means Netcapital Systems LLC, or a successor transfer agent.
- • “Withdrawal Date” means the Business Day on which Investor wishes to withdraw Investor’s Account Balance.

### 1.2. Headings

The headings in this Agreement do not affect its interpretation.

### 1.3. Singular and plural

References to the singular include the plural and vice versa.

## 2. Account

### 2.1. Opening Account

Custodian shall open and maintain the Account for the beneficial interests in the Shares beneficially held by Investor.

### 2.2. Deposits and withdrawals

The balance of Investor's Account shall reflect the Shares beneficially held by Investor. A deposit is made into Investor's Account when the escrow agent sends money to the Issuer or a seller of Shares, as the case may be, and Custodian receives a record from the Transfer Agent of the number of Shares that Investor beneficially holds. A withdrawal occurs when Custodian receives notice from the Transfer Agent that the Shares have been beneficially sold or transferred.

### 2.3. Reports

Reports relating to deposits into and withdrawals from the Account and the Account Balance will be available to Investor daily by means of a section on the Portal to which Investor may login (the 'Website').

## 3. Custody Services

### 3.1. Appointment

Investor hereby appoints Custodian to act as custodian of the Shares in accordance with this Agreement and applicable law.

### 3.2. Ownership of Securities

Custodian will be the sole holder of legal title to the Shares while Investor will hold beneficial ownership of the Shares. The Custodian will be the sole record holder of the Shares on the books and records of the Issuer. The sole dispositive record of Investor's beneficial ownership of the Shares will be in the books and records of the Transfer Agent.

### 3.3. Voting of Securities

Prior to the Withdrawal Date, at every meeting of the equity or interest holders of the Issuer called with respect to any matter, and at every adjournment or postponement thereof, and on every action or approval by written consent or resolution of the equity or interest holders of the Issuer, Investor agrees that Custodian shall vote Investor's Shares, in the event Investor's Shares contain voting rights.

### 3.4. Insurance

Custodian undertakes that Custodian may maintain insurance in support of Custodian's custodial obligations under this Agreement including covering any loss of the Shares. In the event that Custodian elects to reduce, cancel or not to renew such insurance, Custodian may give Investor prior written notice as follows: in the case of a reduction, Custodian may endeavor to provide such notice at least 30 days prior to the effective date of the reduction; and in the event of a cancellation or expiration of the insurance without renewal Custodian may provide such notice at least 30 days prior to the last day of insurance coverage. Investor acknowledges that any such insurance is held for Custodian's benefit and not for the benefit of Investor, and that Investor may not submit any claim under the terms of such insurance.

### 3.5. Notice of Changes

Custodian may notify Investor promptly in writing of the following: (i) Custodian receives notice of any claim against the Account other than a claim for payment of safe custody or administration permitted by this Agreement; (ii) Custodian otherwise fails to comply with any of the provisions of this Agreement; or (iii) any of Custodian's representations and warranties in clause 4 shall cease to be true and correct.

## 4. Representations and Warranties

### 4.1. Investor's representations

Investor represents and warrants to us that:

1. Investor is the beneficial owner of the Shares;
2. Investor has all necessary authority, powers, consents, licenses and authorizations and has taken all necessary action to enable Investor lawfully to enter into and perform Investor's duties and obligations under this Agreement; and
3. this Agreement and the obligations created under it are binding upon Investor and enforceable against Investor in accordance with its terms (subject to applicable principles of equity) and do not and will not violate the terms of the rules or any order, charge or agreement by which Investor is bound.

### 4.2. Custodian's representations

Custodian represents and warrants to Investor that:

1. this Agreement has been duly authorized, executed and delivered on Custodian's behalf and constitutes Custodian's legal, valid and binding obligation; and
2. the execution, delivery and performance of this Agreement by Custodian does not and will not violate any applicable law or regulation and does not require the consent of any governmental or other regulatory body except for such consents and approvals as have been obtained.

## 5. Fees and Expenses

### 5.1. Fees

Custodian's fees will be paid in accordance with the fee agreement that has been executed by the Portal. There are no fees payable by the Investor.

## 6. Scope of Responsibility

### 6.1. Exclusion of liability

Custodian may use reasonable care in the performance of its duties under this Agreement and will only be responsible for any loss or damage suffered by Investor as a direct result of any gross negligence, fraud or willful misconduct on Custodian's part in the performance of Custodian's duties, and in which case Custodian's liability will not exceed the aggregate market value of the Shares at the time of such gross negligence, fraud or willful misconduct.

### 6.2. Force majeure

Neither Custodian, nor any of Custodian's directors, employees, agents or affiliates shall incur any liability to Investor if, by reason of any provision of any present or future law or regulation of any governmental or regulatory authority or stock exchange, or by reason of any act of God or war or terrorism or other circumstances beyond Custodian's control, Custodian is prevented or forbidden from, or would be subject to any civil or criminal penalty on account of, or are delayed in, doing or performing any act or thing which by the terms of this Agreement it is provided shall be done or performed and accordingly Custodian does not do that thing or does that thing at a later time than would otherwise be required.

### 6.3. Exculpation in respect of offer document

Custodian and its officers, directors, employees, agents and sub-custodians shall not be responsible or liable in any manner for any recitals, statements, representations or warranties made by any person other than Custodian.

## 7. Termination

## **7.1. Method**

Custodian may terminate this Agreement by giving not less than 60 Business Days written notice to Investor and Portal, provided that Custodian may terminate this Agreement immediately on written notice in the event that any of the statements set out in clause 4.1(a)-(c) become untrue. Clauses 6, 7.2 and 9 shall survive termination of this Agreement.

## **7.2. Existing rights**

Termination shall not affect rights and obligations then outstanding under this Agreement, which shall continue to be governed by this Agreement until all obligations have been fully performed.

## **7.3. Website**

Effective upon the Termination Date, the use of the Website will automatically be terminated and no further access to the Website will be permitted.

# **8. Notices and Record-Keeping**

## **8.1. Form**

A notice or other communication under or in connection with this Agreement may be given using the contact information Investor provided to the Portal.

## **8.2. Method of transmission**

Any notice or other communication required to be in writing may be delivered by email.

# **9. General**

## **9.1. No advice**

Custodian's duties and obligations under this Agreement do not include providing Investor with investment advice. In asking Custodian to open and maintain the Account, Investor does so in reliance upon Investor's own judgment and Custodian shall not owe to Investor any duty to exercise any judgment on Investor's behalf as to the merits or suitability of any deposits into, or withdrawals from, an Account.

## **9.2. Assignment**

This Agreement is for the benefit of and binding upon the parties and their respective heirs, successors and assigns. Investor may not assign, transfer or encumber, or purport to

assign, transfer or encumber, Investor’s right, title or interest in relation to any Account or any right or obligation under this Agreement or any part of any of the foregoing unless Custodian otherwise agrees in writing.

### 9.3. Amendments

amendment to this Agreement must be agreed in writing and be signed by all parties. Unless otherwise agreed, an amendment will not affect any legal rights or obligations that may already have arisen.

### 9.4. Partial invalidity

If any of the clauses (or part of a clause) of this Agreement becomes invalid or unenforceable in any way, the validity of the remaining clauses (or part of a clause) will not in any way be affected or impaired.

### 9.5. Entire agreement

This document represents the entire agreement, and supersedes any previous agreements among the parties relating to the subject matter of this Agreement.

### 9.6. Joint and several liability

Investor’s responsibilities under this Agreement are joint and several if applicable.

### 9.7. Counterparts

This Agreement may be executed in any number of counterparts each of which when executed and delivered is an original, but all the counterparts together constitute the same agreement.

### 9.8. Governing Law and Jurisdiction

This Agreement is governed by the laws of the State of Delaware without regard to its conflicts of laws principles.

### UNITED STATES SECURITIES AND EXCHANGE COMMISSION
**Washington, D.C. 20549**

## FORM C

### UNDER THE SECURITIES ACT OF 1933

### Issuer Information

**Is this an amendment?** Yes

**Nature of Amendment:** the issuer provided the updated 2022 review report and reactivated their offering page.

**Name of Issuer:** Demand Derivatives Corp.

**Legal Status:** Corporation

**Jurisdiction of Incorporation/Organization:** DE

**Date of Organization:** 08-08-2017

**Physical Address:** 99 Wall Street, New York, NY, 10005

**Issuer Website:** https://demandderivatives.com

**Is there a Co-Issuer?:** No

**Intermediary Name:** NetCapital Funding Portal Inc.

**Intermediary CIK:** 0001669191

**Intermediary File Number:** 007-00035

**Intermediary CRD Number:** 283596

### Offering Information

**Compensation to Intermediary:** Up to 4.9% of amount raised for a successful offering and a listing fee of up to $10,000

**Financial Interest in Issuer:** None.

**Type of Security Offered:** Preferred Stock

**Number of Securities Offered:** 625

**Price per Security:** $16.00

**Method for Determining Price:** The price of the Securities was determined solely by the Management and bears no relation to traditional measures of valuation such as book value or price-to-earnings ratios. We expect that any future valuation will take the same approach.

**Target Offering Amount:** $10,000.00

**Oversubscription Accepted:** Yes

**Oversubscription Allocation Type:** First-come, first-served basis

**Maximum Offering Amount:** $411,744.00

**Deadline to Reach Target Amount:** 03-20-2023

### Annual Report Disclosure Requirements

**Current Number of Employees:** 4

**Total Assets (Most Recent Fiscal Year):** $20,748.00

**Total Assets (Prior Fiscal Year):** $53,910.00

**Cash & Cash Equivalents (Most Recent Fiscal Year):** $11,050.00

**Cash & Cash Equivalents (Prior Fiscal Year):** $12,030.00

**Accounts Receivable (Most Recent Fiscal Year):** $0.00

**Accounts Receivable (Prior Fiscal Year):** $0.00

**Short-Term Debt (Most Recent Fiscal Year):** $24,375.00

**Short-Term Debt (Prior Fiscal Year):** $0.00

**Long-Term Debt (Most Recent Fiscal Year):** $0.00

**Long-Term Debt (Prior Fiscal Year):** $0.00

**Revenues/Sales (Most Recent Fiscal Year):** $4,480.00

**Revenues/Sales (Prior Fiscal Year):** $1,280.00

**Cost of Goods Sold (Most Recent Fiscal Year):** $0.00

**Cost of Goods Sold (Prior Fiscal Year):** $0.00

**Taxes Paid (Most Recent Fiscal Year):** $0.00

**Taxes Paid (Prior Fiscal Year):** $0.00

**Net Income (Most Recent Fiscal Year):** $-87,852.00

**Net Income (Prior Fiscal Year):** $-142,950.00

**Jurisdictions Offered:**

ALABAMA, ALASKA, ARIZONA, ARKANSAS, CALIFORNIA, COLORADO, CONNECTICUT, DELAWARE, DISTRICT OF COLUMBIA, FLORIDA, GEORGIA, HAWAII, IDAHO, ILLINOIS, INDIANA, IOWA, KANSAS, KENTUCKY, LOUISIANA, MAINE, MARYLAND, MASSACHUSETTS, MICHIGAN, MINNESOTA, MISSISSIPPI, MISSOURI, MONTANA, NEBRASKA, NEVADA, NEW HAMPSHIRE, NEW JERSEY, NEW MEXICO, NEW YORK, NORTH CAROLINA, NORTH DAKOTA, OHIO, OKLAHOMA, OREGON, PENNSYLVANIA, RHODE ISLAND, SOUTH CAROLINA, SOUTH DAKOTA, TENNESSEE, TEXAS, UTAH, VERMONT, VIRGINIA, WASHINGTON, WEST VIRGINIA, WISCONSIN, WYOMING, B5, GU, 1V, PR, VI

### Signatures

**Issuer:** Demand Derivatives Corp.

**Signature:** Robert Krause

**Title:** Principal Executive Officer

---

**Signature:** Robert Krause

**Title:** Principal Executive Officer

**Date:** 01-19-2023

---

**Signature:** Robert Krause

**Title:** Principal Financial Officer

**Date:** 01-19-2023

---

**Signature:** Robert Krause

**Title:** Principal Accounting Officer

**Date:** 01-19-2023

---

**Signature:** Richard Heckinger

**Title:** Board Member

**Date:** 01-19-2023

---

**Signature:** Robert Krause

**Title:** Board Member

**Date:** 01-19-2023

---

**Signature:** Jeromee Johnson

**Title:** Board Member

**Date:** 01-19-2023